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Volume 787, October 26 – October 29, 1944
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Volume 787, October 26 – October 29, 1944
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Henry Morgenthau, Jr. Papers
Diaries of Henry Morgenthau, Jr.
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DIARY
Book 787
October 26-29, 1944
Regraded Unclassified
- A -
Book Page
American Federation of Labor
HMJr asked to address convention in New Orleans,
November 17-24 - 10/27/44
787
166
Argentina
See Latin America
If Lend-Lease: United Kingdom - Phase 2 for meat discussions
- C -
China
Congressman Judd's talk at dinner given by Chinese-
American Cultural Institute reported by Friedman -
10/28/44
274
Commerce, Department of
To inspect income, etc., tax returns in connection with
balance of international payments - Executive Order sent
to FDR for approval - 10/28/44
264
Correspondence
Mrs. Forbush's mail report - 10/27/44
172
- E -
Eisenhower, General Dwight D.
See Financing, Government: War Savings Bonds
(6th War Loan Drive - -
European Theatre of Operations)
European Theatre of Operations
See Financing, Government: War Savings Bonds (Odegard plan)
- r -
Financing, Government
War Savings Bonds
European Theatre of Operations
Odegard plan for drive there - 10/28/44
212
HMJr letter to Eisenhower discussed in Gamble
memorandum - 10/30/44: See Book 788, page 21
HMJr letter to General Cobbs, Fiscal Director, ETO:
Book 788, page 23
Eisenhower letter from FDR proposed by HMJr - 10/31/44:
Book 789, page 41
Foreign Funds Control
France
Assets - status reviewed by O'Connell - 10/26/44
9
Stettinius press conference relative to French funds -
10/30/44: See Book 788, page 199
France
See Foreign Funds Control
If Lend-Lease
Regraded Unclassified
- G -
Book Page
Germany
See Post-War Planning
Glasser, Harold
See Post-War Planning: Germany (Treasury Plan)
- H - -
Harms, Sam J.
See Production for Use
- I -
Internal Revenue, Bureau of
Department of Commerce to inspect income, etc., tax
returns in connection with balance of international
payments Executive Order sent to FDR for approval -
10/28/44
787
264
- J -
Judd, Walter H. (Congressman, Minnesota)
Talk at dinner given by Chinese-American Cultural
Institute reported by Friedman (in China) 10/28/44
274
- L -
Latin America
Argentina
Delay in instituting strong program by United States
brought to Stettinius' attention by HMJr - 10/26/44..
2
See also Lend-Lease: United Kingdom - Phase 2 for
meat discussions
Lend-Lease
France: Negotiations discussed by Stettinius and HMJr
at lunch - 10/26/44
2
a) White House message to HMJr at Quebec
September 14 given to Stettinius
5
United Kingdom - Phase 2
See also Book 785
Argentina (Meat)
Discussions by Stettinius and Cherwell reviewed by
HMJr and Stettinius - 10/29/44
303
Discussion by HMJr, Stettinius, Acheson, and White -
10/30/44: See Book 788, page 34
Conference; present: HMJr, Keynes, Cherwell, and
White - 10/31/44: Book 789, page 1
- 0 -
Odegard, Peter H.
See Financing, Government: War Savings Bonds
(European Theatre of Operations)
Regraded Unclassified
- P -
Book Page
Post-War Planning
Germany: Treasury Plan
See also Book 783
"Leak"
Discussed by Stettinius and HMJr at lunch - 10/26/44.. 787
1
a) Stimson and Hull sent copies of Treasury plan
on September 6 - Stettinius so informed
2
Discussed by HMJr and Glasser; Glasser asked whether
he had discussed plan at UNRRA meeting in Montreal
in September - 10/26/44
10
a) Stettinius-HMJr conversation concerning Glasser
and Collado
18
Discussed by HMJr, White, and Glasser - 10/27/44
157
#
If
#
#
#
If
- 10/28/44
202
a) Stettinius-HMJr conversation
206
1) Stettinius questions White's attitude
toward him
208,303
Production for Use
Harms (Sam J.)-Mrs. FDR-Treasury correspondence - 10/26/44
79
- w -
White, Harry D.
Attitude toward Stettinius discussed by HMJr and Stettinius:
See Post-War Planning (Germany - Treasury Plan)
Regraded Unclassified
1
October 26, 1944
2:10 p.m.
CONVERSATION WITH MR. STETTINIUS
H.M.JR: I had lunch with Stettinius today. He
brought up the question of the leak on the so-called
"Morgenthau plan. He evidently had got his people
together this morning and discussed it with them.
He read from a memorandum evidently prepared for him
by McDermott, the Press Section man, who had sent for
Hightower, the A.P. man. Hightower said that this story
was around, that he had got it in part from the War
Department and State. I can't remember whether he said
Treasury or not, but that he had cleared the story with
the European Section of the State Department; that they
had gone over his story and made numerous corrections.
All this to me, as I told Stettinius, is very
shocking. I said, "Why should the European Section of
the State Department correct Hightower's story? Why
didn't they refer him either to Steve Early or to me?"
Stettinius inferred that his story was friendly to
me and that therefore it must have come from the Treasury.
I said to Stettinius, "You know that the matter was approved
at Quebec, that I went there under difficult circumstances,
and why should I come back and talk about it? There is
nothing in it for me." He agreed.
Hightower said that Krock, before him, had written a
story, as had the Wall Street Journal, and that the Wall
Street Journal and Crider, of the New York Times, were
very friendly to the Treasury.
So I said, "Well, that is meaningless." Then I
said, "This I can tell you firsthand, that Krock told a
very responsible man whom you know that he got this story
from very high sources in the State Department. Also
Swing said that he got this story from the State
Department."
Regraded Unclassified
2
- 2 -
So he said, "Well, that must mean Mr. Hull."
I said, "I am not saying whether it is Mr. Hull or
not, but I do know that Krock is a very intimate friend
of Mr. Hull's and of McCloy's."
"Well," he said, "I can't imagine Mr. Hull doing
this. He has been a very sick man. I can't imagine his
doing it."
So I said, "Well, I am not saying he did or didn't
do it."
He said, "Well, let me ask you a question. The story
is around that you and White slipped this thing through
the back door to the President, and that neither Hull
nor Stimson ever saw it." He said, "That is the impression
that the English have."
So I said, "Well, all I can tell you"--and I
verified it by Miss Chauncey--"is that on September 6 I
sent a copy to Stimson and Hull."
He said, "Well, that puts an entirely different
light on the thing. Nobody in the State Department seems
to know that. I'll tell it to them tomorrow at the
Policy Committee of the State Department, and take it
from me, I am going to get this story around that you did
this thing in the regular way and that they had this
document of yours one week before you went to Quebec.
I am going to see that that story gets around.
/I'll believe it when I see it!7
So then I brought up the French matter and read
him Bell's telegram, and when I got through or half
way through, he said, "Well, I am opposed to giving the
French any Lend Lease for reconstruction. That is all
contrary to the spirit of the Act. I am opposed to it."
So I said, "Well, I'll send to you a paraphrase."
(Secretary dictates memorandum to Mr. Heffelfinger
and letter to Mr. Stettinius)
Regraded
3
- 3 -
I showed this thing (referring to attached memor-
andum from Mr. Ò'Connell) to Stettinius, and he said he
never said that about the French gold, but this is some-
thing that is up before the Treasury and that he would
send me a verbatim report of his remarks.
Then we got onto the Argentinian Lend Lease. I
reminded him that there was still a letter from the
President to me which I had asked to take up with Hull
several months ago, and I have never been able to see
Hull.
He said that he hoped that before I finally came to
an agreement with the British on the new Lend Lease that
I would give him a chance to bring in this question about
the English making a four-year contract with the
Argentinians, and that the next time there was a meeting
in this office he, Stettinius, wanted to come.
Regraded Unclassified
4
October 26, 1944
Dear Ed:
filed 9/15 -
I am sending you a paraphrase of the telegram
that Dan Bell sent me on September 14 to Quebec.
On looking up my records, I find that at a
meeting in Ar. null's office on September 20, at
nine-thirty, 1 explained to Ar. Hull and other
people present in great detail the telegram that
Dan Bell had sent me in regard to French Lend-Lease.
I am sure that if you will ask Matthews about
this he can tell you more about it in detail, because
he was present when I made my report on what happened
in regard to Lend-Lease for the French at Quebec.
Yours sincerely,
(Signed) Henry
Honorable Edward R. Stettinius, Jr.,
Under Secretary of State,
State Department,
Washington, D. C.
Regraded Unclassified
5
TOP
PARAPERASE or MESSAGE SENT TO SECRETARY MORGENTHAN st QUESTION
BY WHITE HOUSE VIRE SEPTEM 14, 1944
SECRE
As of September 14 negotiations concerning French lend-lease were
in following status:
1. We have told the French authorities that w are awaiting a
decision by the President concerning the time limit of the Lend-Lease
Agreement and the scepe of such agreement.
2. The sixth draft of a lend-lease agreement (dated September 11)
has been agreed upon by yea and the State Department, which permits
(a) Under Section 30 of the Lend-Lease Ast the French would
be given long-term credits under which they could receive goods necessary
for long life industrial reconstruction. Under this provision FEA will
be permitted to ascept requisitions until the end of the war with Japan,
at least, and these requisitions would be filled once they have been
accepted, regardless of the termination of the war with Japan.
Consequently, & program of reconstruction for France could be under-
taken on & large scale. (Mar understand Monnet proposes to have placed
ready.) immediately requisitions under a program of $2 billions which he has
(b) Materials purportedly for French var production and
short-lived industrial goods could be given under the agreement to the
French until at least the end of the war with Japan, on a straight
lend-lease basis.
3. A memorandum has been sent to the President through Harry
Hopkins by the Secretary of State pointing out
(a) The above-mentioned draft of agreement goes beyond the
memorandum approved by the President on July 15.
(b) The memerandum of Secretary Hall suggests that PRA be
required to submit to someone in the White House all program and
preposals for lend-lease assistance before requisitiens are accepted
by TRA in order that the possibility of excessive leaisary in the
administration be controlled.
The President has this memorandum before him at Quobee for
approval.
We have net been given a copy of the neuorandum by the
State Department, although that department promised to clear the
membership with us before transmitting 1t to the President.
TOP
SECRET Unclassified
TOP
6
- 2 -
SECRET
Regraded Unclassified
me You will recall that the original memorandum sent to the
President on July 15. during the course of negotiations with the
French, had as its objective the limiting of lond-lease to France
until hestilities in Barope come to an ond. The War Department,
through Mr. No01oy and General Hilldring, has made definite statements
that no help in fighting the var in Europe can be expected through
French industrial production and that my help to u in fighting the
Japanese war, which reconstructed French industry will give us. can be
placed is your right optic.
Attention is called to the importance of the phrase to limit
the scope of the program to the termination of the var, because under
this phrase the requisitions to be submitted immediately for aid will
be such greater in volume if there is prospect of the war against
Japan lasting a long time than would be the case under the certainty
of the war in Europe ending shertly.
5. In order to justify breadening the scepe of the Lond-Lease
Agreement the argument has been made that the President should be
given the fullest possible discretion, but it does not appear that
this argument has say basis in fact. The Lend-Lease Ast already gives
the President all the discretion that is needed by his, There is
nothing to prevent the President from entering into a new agreement
after the and of the war in Europe, if at that time he feels the var
in the Pacific is being aided by France or if for other reasons it is
determined that the resonstruction of France should be aided under
land-lease. It appears that by signing the agreement, as recommended
by State and THA, and making large scale commitments thereander
imediately gains very little additional discretion other than to
present Congress, as well as the public, with a fist prosepli when
the was ends in Burope. No one can predict what the Congress my do,
but if it should out off lend-lease after the end of war in Europe,
my attempt to rely on large requisitions which had been acted upon
under say previously existing agreement with the French (not having
say relationship to the Barepesa war) permitting the reconstruction
of France, would carry hanardous pelitical implications and seem
highly undesirable.
6. The effects free the broadened seeps of the nemorandum, as 18
appears to us, are all fellows:
(a) The French have been placed on notice w a
which indicates that the scepe of lend-lease will be limited to
hostilities in Theope and any change at this time indicating that
lend-lease will be permitted at least to the termination of the
Japances war will undoubtodly cause the French to think that the
President is agreeable to a reconstruction program for France. The
TOP
SECRET
7
TOP
- 3 -
SECRET
think this is especially true because we understand commitments by
various people in yea and State have been informally given to the
French to this effect, Fellowing through on these lines we believe
the French will consider this a pelitical victory of great importance
which resulted from their strategy of playing one department of the
United States against another, especially is matters involving
financial operations.
(b) We believe the White House is not and should not be
placed in a position where it is expected to police detailed supply
programs, but the program presented to the President contains a
suggestion for approval by the White House before requisitiens are
accepted by years There will be no limitation for reconstructing
France under the Land-Lease 4ct, while on the other hand we will
have no understanding as to the roll of France in the future of
Barepo and the world and there will be no indication as to the
extent which France may participate in our var against Japan.
7. Ve believe, in conclusion, that the practical effect of the
pending proposal before the President will be to tie his hands in
our future dealings with the French at the end of the European war
more than otherwise would be the case,rather than to give more
discretion to the President.
TOP
SECRET
WTH:mlb 10-26-44
Regraded Unclassified
8
THE UNDER SECRETARY OF STATE
WASHINGTON
October 27, 1944
Dear Henry,
I appreciate your having sent
me with your note of the 26th a para-
phrase of the telegram that Dan Bell
sent to you in Quebec. It is most
helpful for me to have this.
Many thanks and best wishes,
Sincerely,
Ea
The Honorable Henry Morgenthau
and OCL SS w The Secretary of the Treasury
Washington, D.C.
OELICE De Lbs
9
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
Date
OCT 26
TO Secretary Morgenthau
FROM Joseph J. O'Connell, Jr.
French assets, both Government-owned and private,
are, today, in the same status as they have occupied
since the fall of France; that is, subject to our
freezing control.
With respect to the Government-owned assets, an
attachment obtained in an action started by the Belgian
Government against the French Government at the moment
effectively ties up almost all of the French Government
funds, but this obstacle will in all probability be
removed in the near future. Subject only to this, the
recent recognition of the Provisional Government in
France will make it possible for us to release such
funds for legitimate purposes on certification by the
State Department that named representatives of the
DeGaulle Government are authorized to draw on the funds
in question.
With respect to the funds of French nationals,
there is no immediate intention to release them from
our freezing controls, although there will be increasing
pressure to do so as time goes on.
The day before yesterday Under Secretary of State
Stettinius made a statement at a press conference which
was widely interpreted to mean that all controls of
French property, both Government-owned and privately-
owned, would be released as an almost automatic result
of the recognition of the Provisional Government. We
do not have the exact text of Mr. Stettinius' remarks,
but we have interpreted him, in answering inquiries, to
mean that he was referring primarily to the Government-
owned funds, and that the privately-owned funds will be
handled in accordance with the needs of the situation as
it develops.
Regraded Unclassified
10
October 26, 1944
2:20 p.m.
QUEBEC CONFERENCE NEWS LEAK
Present: Mr. Glasser
Mrs. Klotz
H.M.JR: Hello, Harold. How are you? Sit down.
Harold, when you were up in Montreal at the UNRRA
meeting, did you talk about a plan for Germany at all?
MR. GLASSER: No.
H.M.JR: Are you sure of that?
MR. GLASSER: I am positive.
H.M.JR: Because the statement has been made to me
flatly that you boasted all over the place what the
Treasury had done and that the newspaper reports came
out of Montreal based on what you said.
MR. GLASSER: That is utterly fantastic. I never
talked about Germany either in Montreal or anywhere else.
H.M.JR: On the Treasury plan?
MR. GLASSER: No. As a matter of fact, I think I
went up there on September 15, and if I remember correctly
no work had been done here. It was after I came back
before. from Montreal that I began to work on Germany, and not
(The Secretary holds telephone conversation with
Judge Rosenman, as follows:)
Regraded Unclassified
11
October 26, 1944
11:48 a.m.
HMJr:
Hello.
Operator:
Judge Rosenman is out of his office and they
don't know what time to expect him.
HMJr:
Well, leave word I called.
Operator:
Right.
2:22 p.m.
HMJr:
Hello.
Sam
Rosenman:
Hello.
HMJr:
Sam.
R:
Yes, Henry.
HMJr:
You most likely have already gotten the message,
that page on taxes -- we have no objection to it.
R:
Yeah.
HMJr:
I don't ....
R:
I have this message from Blough.
HMJr:
Yeah.
R:
This memo.
HMJr:
Yeah.
R:
I think it's all right.
HMJr:
Well, I mean, we're not crazy about it but there's
nothing we can object to on technical grounds.'
R:
And I don't think it -- what you say is you'd hate
to have it appear as -- as the post-war policy.
Well, it really isn't; it's just as applied to
business.
HMJr:
Well, I mean I -- I could only object to it --
I mean, there's nothing that I could object to it
on -- on technical tax grounds.
Regraded Unclassifie
12
- 2 -
R:
Yeah. Don't hold me for the "piffle" paragraph.
HMJr:
I mean I don't like it, but that -- that -- you
didn't ask me that.
R:
(Laughs)
HMJr:
Which is something else.
R:
Henry, don't blame me for the "piffle" paragraph.
HMJr:
Well, that was one of the things.
R:
Yeah. Well, I'm going to take out the word
piffle".
HMJr:
You are?
R:
If I can keep it out, but he's very proud of it.
HMJr:
He likes it. Now, is this talk on business?
R:
Well, half of it is and half 1s on the war.
HMJr:
I see. Well, some time later this afternoon
I hope that my talk on business will be available
and I -- I'm going to send it over to you.
R:
Good.
HMJr:
See?
R:
All right.
HMJr:
And I'm giving it -- I speak immediately after
the President tomorrow in New York.
R:
Fine. That's at that dinner. Huh?
HMJr:
In New York.
R:
Yeah.
HMJr:
Fifty dollars.
R:
Uh - (Laughs)
HMJr:
But no special privileges go with it.
R:
Any amusement tax?
Regraded Unclassified
13
- 3 -
HMJr:
No special privileges go with it.
R:
Say, who wrote that damn letter?
HMJr:
How -- what are they going to do about that?
R:
Well, Hannegan has issued a denial
....
HMJr:
Yeah.
R:
....
saying it was wholly unauthorized.
Hannegan's denial isn't bad. It's in the
afternoon papers.
HMJr:
I see.
R:
I don't know who does those things. I assure
you I'm not consulted on those as on many others.
HMJr:
No, there'll be an amusement tax up there all
right -- thirty percent.
R:
On the fifty bucks?
HMJr:
(Laughs)
R:
My God!
HMJr:
I mean they'll be amused because they're hearing
me.
R:
(Laughs) All right, Henry.
HMJr:
Thank you.
R:
Will I have to look for a job after January ninth --
nineteenth?
HMJr:
January ....
R:
Huh? You and I?
HMJr:
Well, you won't.
R:
I mean it.
HMJr:
And I don't expect to.
R:
I mean it.
Regraded Unclassified
14
- 4 -
HMJr:
You mean after the election?
R:
Yes.
HMJr:
You're asking me?
R:
Yes.
HMJr:
Well, I won't give you better than three
to one.
R:
Most people are betting four to one.
HMJr:
I know. But we farmers, we're a little
cautious.
R:
All right, boy.
HMJr:
They tell me there's no Dewey money around.
R:
No.
HMJr:
They say there's absolutely no Dewey money
around.
R:
Jesus! You know I read his speech last night.
It was just the speech of a fellow running for
District Attorney in -- in the -- in the County
of Dutchess.
HMJr:
Yeah.
R:
That's exactly what it was.
HMJr:
Yeah.
R:
Okay. Good luck, boy.
HMJr:
Bye.
R:
Thank you.
Regraded Unclassifie
15
- 2 -
MR. GLASSER: Wait, I was wrong on that. It was
between September 1 and September 15 that we worked on
Germany.
But I'd like to say this, Mr. Secretary. I have
been in the Treasury for eighteen years. I never talk
outside about Treasury business. Now, I never talked
to reporters on any subject, if it came from any of the
reporters. At Montreal my circle of acquaintances was
very narrow - only those on the American Delegation.
I know the dangers of talking outside better than
anyone. I never talk outside and I never talk on sub-
jects such as subjects that appear in the press.
Now, I don't know who made the comment--maybe I
didn't even know the person--but I never talked even to
my room-mate, who was Pete Collado. I never discussed
Germany. I read the newspaper reports as they appeared.
I said, "Did you read the report in the New York Times
this morning?" He'd make some comment, but I never dis-
cussed it even with my room-mate.
But that doesn't apply only to Germany. I have been
here too long to get caught talking outside, and I never
even when I was at Atlantic City or Montreal--or even
in Algiers or anywhere--talked to reporters. They make
me uncomfortable. I don't like reporters, because they
do misquote.
H.M.JR: I wouldn't say this thing, as I say--
well, it was somebody in the State Department who told
me this, in defense of their own position that it didn't
come out of State.
MR. GLASSER: Pete Collado was the one I saw most of
and the others I met only at meetings and occasionally at
cocktail parties. If I didn't talk to Pete, I certainly
wouldn't have talked to anyone else, and I did not talk
about Germany to Pete. He tried to talk to me about it,
but I never permitted that discussion to come up, because
it was in the press. I mean, I am no novice at this.
It was in the press. I remember now, the report appeared
Regraded Unclassified
16
- 3 -
in the Times and he tried to get me in discussion, but I
refused, as I always would, whether it is on that subject
or any other.
H.M.JR: Well, you keep your own counsel on this,
will you please for the time being?
MR. GLASSER: All right.
H.M.JR: You can tell White or I will tell White, but
outside of that I don't want you to discuss this. I'll
take further steps about Collado and that kind of thing
and I'll advise you, but don't you begin to make your
own investigation.
MR. GLASSER: I won't do a thing about it.
H.M.JR: And don't say anything other than to White,
if you please. Thank you.
MR. GLASSER: I'm awfully sorry.
H.M.JR: No, the statement was made flatly and I
said I would put it up to you.
MR. GLASSER: Well, that is the sort of thing--
H.M.JR: But I am not in any way accusing you. I
am just repeating that somebody, trying to prove to me
that it wasn't the State Department, said that the
thing broke from remarks that you had dropped.
MR. GLASSER: To reporters?
H.M.JR: No, they didn't say to reporters - remarks
that you dropped, that you were boastful about what the
Treasury had done on the German thing.
MR. GLASSER: Ha!
H.M.JR:
....at Montreal, and that the telephones
and telegraph wires buzzed as a result of that.
MR. GLASSER: It's just too fantastic. I never
realized I had so much power!
Regraded Unclassified
17
- 4 -
H.M.JR: I believe you. I haven't made any
accusation.
MR. GLASSER: No, I understand that, Mr. Secretary;
but somebody else has. I'll forget about it.
H.M.JR: It will be much better to let me handle it.
Regraded Unclassified
18
October 26, 1944
3:40 p.m.
Operator:
There you are.
HMJr:
Ed.
Edward R.
Stettinius:
Henry.
HMJr:
I'm so situated I can listen but I can't talk.
S:
Yeah. Well, you -- all you can do is to listen.
HMJr:
Yes.
S:
Those two fellows did room together.
HMJr:
Yes.
S:
Your man talked to our man very frankly in the
middle of the night
HMJr:
Yes.
S:
in great confidence and great secrecy
HMJr:
Yes.
S:
....
and they exchanged many views.
HMJr:
Yes.
S:
My man at no time saw any evidence of any
indiscreet conversation around town generally
HMJr:
Yes.
S:
that would be subject to criticism.
HMJr:
Yes.
S:
However, when my man returned to Washington
HMJr:
Yes.
S:
he heard on -- from several different
sources that the information had come from that
place up there from your man.
HMJr:
Yes.
Regraded Unclassified
19
- 2 -
S:
But he can not -- he can't trace that.
HMJr:
He can not?
S:
No.
HMJr:
Well, then, based on your man -- he -- he does
not give any evidence that my man was indiscreet?
S:
He does not. He says that as far as he knows that
he 18 the only one that he talked to and he talked
in his room late at night in a very private manner.
HMJr:
On this particular subject?
S:
On this particular subject exhaustively.
HMJr:
Oh, he did?
S:
Yep. To my man in the middle of the night,
exhaustively.
HMJr:
I see.
S:
But did nothing indiscreet.
HMJr:
I see. And -- but he didn't hear him do anything
around town?
S:
No, sir. He did -- and he did not hear any -- see
any evidence of it.
HMJr:
Well, on that wouldn't you -- wouldn't you give
him a clean bill of health?
S:
I would.
HMJr:
You would?
S:
I would.
HMJr:
Well, that's one -- one rumor "scotched".
S:
All right, old boy.
HMJr:
I'm very much obliged.
S:
Henry, my press conference was all right.on the --
on the French part.
Regraded Unclassifie
20
- 3 -
HMJr:
Good.
S:
I've sent the transcript -- the record over to
you by hand now.
HMJr:
Good.
S:
I said that this was a joint Treasury-State
matter; that it was under active study and
there was nothing I could say this morning
to them about the matter.
HMJr:
I see. Right. Let's have some more meetings.
S:
Righto.
HMJr:
Thank you.
Regraded Unclassified
21
Copy from which
reading copy was made
I have come here tonight to talk to you
to
business men about your som business and discuss
18/26/44-
with you how you have fared under Mr. Roosevelt's
Administration. during the seven years preceding the
World War and during the period of the war itself.
should if lat the outsel my beling
I would also like to to you that I-feel I that
business conducted itself by and large extremely
asawhole has - magnificantly
have carried on the for of was production in all its varied fohares.
well during the war years and that those of you who
are in production of muni tions have every reason to
national cause,
feel proud of your contribution to the wor effort.
Now let's take a look at the record of
the seven years previous to this war.
Regraded Unclassified
Secretary's Address 10/24/94-
New York City
22
has
Every age me its mythology - ours no less than times gons
by. Myths, I think, are something like currency, and Gresham's
law is about as applicable to the one as to the other. This is
to say, paraphrasing Gresham & little bit, that, of two forms of
myth, the inferior or more depreciated tends to drive the other
out of circulation. And this is particularly true in a period
when propaganda has been elevated into something of & science.
For propaganda is a form of counterfeiting. It puts into of
culation fancies instead of facts, mandfactures nostrams,
coins phrases end passes them off on cheer-gosyel
8
I make this somewhat philosophical approach because I want
Aay something
to talk you about myths this evening -- in particular about
one myth which seems to me one of the most remarkable propaganda
achievements of our time. Let me state the myth for you as it
by the Republican presidential candidate in his
was expounded earlier this year in a famous acceptance address by
acceptance address:
8 femous young prosecuting atterney with & Lemous fondness for
sweeping indictments and extravagent accusations. *The present
Administration4 I quote his own words -- said the young.
"has been consistently hostile to and abusive of
American business and American industry, although it is in
business and industry that most of us make our living."
New
HI
do
not
Regraded Unclassified
23
- 2 -
Now I do not mean for a moment to suggest that the myth -
in this particular instance - was invented by the candidate. On
the contrary, it is one of the most hackneyed, time-worn and
over-worked myths of the present day. It has been in circulation,
I should guess, for pretty nearly a full decade. It was tried
out with great gusto by campaign orators in 1936, was dusted off
and trotted forth as a brand new discovery in 1940; and today -
such is the originality of its sponsors - it is being tried
again, evidently on the assumption that if it is repeated often
enough somebody may believe it. The technique is a well-known
one.
It is about time, I think,
to take a good close
look at this myth. Let us leave the war years altogether out
of account for the moment and go back instead to the 7-year
period before 1940 when the Administration halted the pre-
cipitous deflation of the early '30's and built up steam
in a cold boiler to start industry once more on the upgrade.
It is this period which the Republican Candidate is pleased to
call "The Roosevelt depression".
I am glad to think that time has dimmed the memory of
the dark days before Franklin D. Roosevelt revived our faith
in ourselves by telling us that the only thing we had to fear
Regraded Unclassified
24
- 3 -
was fear itself. In 1932, the year before he took office,
corporations reporting to the Bureau of Internal Revenue
showed an aggregate loss of more than 4 billion dollars.
By 1934, the present Administration had abused business
and industry to such an extent that they began to report profits
instead of losses to the Bureau of Internal Revenue. The
profits of corporations that year - after payment of taxes -
amounted to $2,374,000,000. Net profits rose steadily each
year after that, except during the recession of 1938, until by
1939 they stood at about six billions.
All right, now let's take a look at the record of retail
trade during this period. Total retail sales in 1933 amounted
to 241 billion dollars. In 1939, they were better than 42
billions, an increase of 35 per cent. If this was abuse, I
have an idea that most retailers would like to be abused
constantly.
The steel industry affords a pretty good clue to our
general economic health. In 1932, it was operating at
20 per cent of its capacity. In 1939, before the war orders
began to come in, at 65 per cent.
Regraded Unclassified
25
- 4 -
The United States Steel Corporation had a net income in
1932 of minus 71 million dollars. That was when it was
functioning under an Administration that professed great
friendship for business. In 1939, U. S. Steel was ruthlessly
forced to relinquish the pleasure of taking such a loss; the
New Deal abused it into accepting a net profit of 41 millions.
The General Motors Corporation, to take another example,
had net sales in 1932 worth 432 million dollars. In 1939,
its sales amounted to $1,377,000,000. It had less than a
million dollars of net income available for dividends in
the earlier year, more than 180 millions in 1939. Yet Mr.
Alfred P. Sloan, the President of General Motors, in a speech
last August, demanding revision of the Wagner Act, referred to
the Government as dealing - I quote him "with two groups,
one equitably and the other inequitably." And last year he
spoke of the "destructive" policies of the New Deal.
There wasn't anything special about the experience of
the United States Steel Corporation. Manufacturing concerns in
general reported themselves in the red for 1932 to the tune
of $1,600,000,000. In 1939, they were three billion dollars in
the black.
Regraded Unclassified
INSERT B
26
Well, here is the record, open for examination to anyone who
wants to read it. If it is a record of hostility and abuse, then
words, I think, have altogether lost their meaning. Businessmen
are generally known to be pretty practical fellows not easily
terrified by phony labels. Your presence here tonight testifies
to this. You have found the proof of your pudding in the eating.
- 5 -
Dusert B
If this be hostility, I should think the motto of business-
men might very well be - Lord, protect us from our friends;
we can take care of our enemies.
Of course, there is not now, and there never has been,
any enmity on the part of the Roosevelt Administration toward
business and industry. What there is, and has been from its
inception, is a firm determination to avoid the kind of quick-
sand crust of fake-prosperity on which this Nation danced such
8. frenzied jig during the twenties. There was nothing solid
underneath it because millions upon millions of Americans were
unemployed or employed at such low wages that they could not
maintain a decent standard of living. It was inevitable that
we should crash through such a crust as we did so tragically in
1929.
(cande
This Administration has sought, instead, to develop a
balanced and expanding economy, based on a high volume of
purchasing power. It has recognized that enduring prosperity
must have a solid foundation, that it must be built from the
ground up. It has operated on the premise that what advances the
general welfare of the people of the United States also advances
the welfare of the business and industry in which they engage.
Regraded Unclassified
27
- 6 -
And this is the very simple explanation for the growth in
corporate profits which I have noted for the increase in
dividend payments, for the mounting volume of trade, for the
expansion of production. Under this Administration, the
American people as a whole have been earning the money with which
to buy the goods and services which business and industry have for
sale.
The Roosevelt Administration has had SO much faith - and
such genuine faith - in the free enterprise system that it has
sought to keep it free. I think that no young man who wants to
start in business for himself will feel abused by an Administra-
tion which protects him from the shackling influence competition of monopoly.
I think that no banker or broker who wants the public to invest
in an honest enterprise will feel abused by an Administration
which protects him from the competition of irresponsible market
manipulators and gold brick salesmen. I think that no honest
employer will feel abused by an Administration which protects
him from the competition of sweatshops.
These and other measures instituted under the New Deal have
given American enterprise real freedom. To speak of them as
abusive is as absurd as to speak of a surgeon as abusive because
he cuts out an inflamed appendix or a cancerous growth.
Regraded Unclassified
28
- 7 -
Business and industry in America are healthier today and have
greater opportunities for the future because this Administration
has been a true friend to them. Oh, yes, I know that the op-
position now endorses these reforms and any evening on the air
you can hear the Johnnies-come-lately hollering "me, too." But
you can also hear them hollering that the present Administration
"has been consistently hostile to and abusive of American
business and industry." And I think that you can get from
this a fair measure of their sincerity.
There are,
These, I think, are-the real enemies of business - They
important and powerful enemies - some of them within the
ranks of business itself who would undermine the very foundations
of free enterprise.
They are the "business as usual boys" who opposed the con-
version of industry from peace to war. They are the men who
fought price control and renegotiation - who would have risked
the danger of inflation for extra profits for themselves.
They are the labor haters who fought against collective bargain-
ing, minimum wages, social security and the other social
gains of this Administration. They are the monopolists
and ustricted credit at high interest rates
who favor restricted industrial output and restricted markets
at home and abroad.
Regraded Unclassified
29
- 8 -
The real enemies of business in America are the economic
isolationists, the men who oppose international economic as
well as political cooperation. They are the men who want to
restrict credit, who want high interest rates. They are the
few bankers who bring pressure against the Treasury to increase
interest rates knowing full well that every increase of one
per cent means an additional burden of $2 billion a year on the
American business men and the taxpayer.
But they are not, Jain certain, representative of america dresiness
Yes, business has its enemies. But they are not in the
air
Roosevelt Administration.
Now, I want to turn for & moment to the war years
Business
itself has fared pretty well in the performance of its magnificent
production job. The total of corporate profits for the year
1943, after payment of taxes and after renegotiation, was the
highest in the history of this Nation - higher even than in the
frenzied boom of 1929.
This war prosperity has been well balanced. I am glad to
say that it has created few war millionnaires, for the rise
in profits has been distributed throughout the business
community. The virtual absence of war-made fortunes represents
the combined results of a wise policy of military procurement,
the success of the policy of economic stabilization, the operation
of the excess profits tax, and the commendable restraint exercised
by business itself.
Regraded Unclassified
29
INSERT C
Now, I want to turn for a moment to the war years. The
achievement of the American industrial machine during this war
has brought heart and hope and wonder to our friends, consternation
and despair to our enemies. We have kept our pledge to serve
as the arsenal of democracy. We have built and equipped a
mammoth army of our own and the greatest navy in the world. And
at the same time we have met all the essential needs of our
civilian economy. Business itself deserves immense credit for
this accomplishment. But does anyone seriously think these
things could have been done without a well balanced economy
developed before the war began?
30
- 9 -
The prosperity of the smaller concerns is less easily
observed than that of the large publicly owned corporations,
but it has been actually even greater. A survey of the relative
movement of the profits of large and small companies in eight
major industrial groups, made jointly by the Board of Governors
of the Federal Reserve System and Robert Morris Associates,
shows that in each group the smaller concerns have, during
the wartime period, improved their profit position relative to
the larger companies.
But what is much more important to business in the long
run than its profits during the war itself is the fact that,
despite the conversion of our resources to war production,
the domestic economy has been kept sound and stable. There
has been no out-of-hand inflation in the course of this conflict.
The purchasing power of the American dollar has been kept firm.
You must certainly credit this in large measure, I believe, to
the stabilization program and the methods of war finance
undertaken by your Government. The economic policies pursued
in the war years have safeguarded business and industry not only
against inflation but also against the disastrous sort of defla-
tion which struck this country in 1920 and 1921.
Jusert
Regraded Unclassified
31
INSERT D
We in the Treasury have conducted our fiscal operations
in such a way as to minimize the post-war burden of the debt
and to promote mass buying power and balance in the post-war
economy. Business will have these assets in meeting the problems
of reconversion:
have purchased
(1) 85 million individual investors now hold bonds of their
Government with an aggregate value of 23 billion dollars. These
bonds,non-negotiable and with a guarnateed redemption value,
assure their holders against market fluctuations and give them
a sense of security which will enable them to spend their current
incomes for consumer goods when these become available.
(2) Interest rates have been kept low, averaging about
1-3/4 percent in comparison with 4-1/4 percent in the first
World War; the reduction will not only save about four Gillion
dollarsinally postwar Federal budget but will also give business
much more favorable borrowing opportunities than it had at the
end of World War I.
(3) Securities sold to banks and corporations, all of them
of short maturity, have provided an unparalleled liquidity which
should assist greatly in the financing of postwar reconversion
and expansion.
(4) Provision has been made for the refunding of excess
profits taxes to guarantee corporations against losses in the
Regraded Unclassified
32
INSERT D (2)
years immediately following the war.
Can any reasonable man find in such measures an indication
of hostility to American business and American industry? No,
the
I think A Republican candidate has been engaged -- and not for
the firsttime -- in the prosecution of a myth.
Regraded Unclassified
33
- 10 -
Business and industry have a role of vital responsibility
to play in the development of the future. They must serve as
its generators. They must be, in the future as they have been
in the past, the initiators of economic progress. Theirs must
be the ingenuity, the know-how, the enterprise needed to find
new products, build new plants, develop new techniques. It is
to them that Americans look for the expansion of production and
the creation of new jobs and the lifting of our living standards.
fulfill these hopes
Business can de this and will do this. But it can do it
fulfiel them
only in partnership with an Administration which will support
it, not morely with fair words and special benefits, favors, but with
a dynamic program of economic development for all the people.
alhare
It is this kind of friendship for business, as for agriculture
last
Time
are
and labor, which the Roosevelt Administration has practiced
york
R
and will continue to practice while it is in office.
S
3
1 3 s 14th
$
w
with
1
-
1
Regraded Unclassified
Sami Ketyped Final reading 34
10/26/44
I have come here tonight to talk to you business
men about business and to discuss with you how you
have fared under Mr. Roosevelt's Administration.
I should like to express to you at the outset my feeling
that business as a whole has conducted itself magnificently
during the war years and that those of you who have
carried on the job of war production in all its varied
phases have every reason to feel proud of your
contribution to the national cause.
Every age has its mythology - ours no less than
times gone by. Myths, I think, are something like
currency, and Gresham's law is about as applicable to
the one as to the other.
2380
114
Regraded plassified
35
- 2 -
This is to say, paraphrasing Gresham a little bit, that,
of two forms of myth, the inferior or more depreciated
tends to drive the other out of circulation. And this
is particularly true in a period when propaganda has
been elevated into something of a science. For
propaganda is a form of counterfeiting.
I make this somewhat philosophical approach because
I want to say something about myths this evening - in
particular about one myth which seems to me one of the
most remarkable propaganda achievements of our time.
Let me state the myth for you as it was expounded
earlier this year by the Republican Presidential
Candidate in his acceptance address:
2764
2153
Regraded Unclassified
36
- 3 -
The present Administration - I quote his own words -
"has been consistently hostile to and abusive of
American business and American industry, although
it 1s in business and industry that most of us make
our living."
Now I do not mean for a moment to suggest that
the myth - in this particular instance was invented
by the candidate. On the contrary, it is one of the
most hackneyed, time-worn and over-worked myths of
the present day. It has been in circulation, I should
guess, for pretty nearly a full decade.
2153
9.1
Regraded Unclassified
37
- 4 -
It was tried out with great gusto by campaign orators
in 1936, was dusted off and trotted forth as a brand
new discovery in 1940; and today . - such is the
originality of its sponsors - it 1s being tried again,
evidently on the assumption that if it is repeated
often enough somebody may believe it. The technique
is a well-known one.
It is about time, I think, to take a good close
look at this myth. Let us leave the war years altogether
out of account for the moment and go back instead to
the 7-year period before 1940 when the Administration
halted the precipitous deflation of the early '30's
and built up steam in a cold boiler to start industry
once more on the upgrade. It is this period which the
Republican Candidate is pleased to call "The Roosevelt
depression".
9,062
Regraded Unclassified 146
38
- 5 -
I am glad to think that time has dimmed the memory
of the dark days before Franklin D. Roosevelt revived
our faith in ourselves by telling us that the only
thing we had to fear was fear itself. In 1932, the
year before he took office, corporations reporting
to the Bureau of Internal Revenue showed an aggregate
loss of more than 4 billion dollars.
By 1934, the present Administration had abused
business and industry to such an extent that they began
to report profits instead of losses to the Bureau
of Internal Revenue. The profits of corporations
that year - - after payment of taxes - amounted to
$2,374,000,000.
1912
Regraded Unclassified
39
- 6 -
Net profits rose steadily each year after that, except
during the recession of 1938, until by 1939 they
stood at about six billions. 1/4
All right, now let's take a look at the record
of retail trade during this period. Total retail
sales in 1933 amounted to 24-1/2 billion dollars. In
1939, they were better than 42 billions, an increase
of 71 per cent. If this was abuse, I have an idea
that most retailers would like to be abused constantly.
The steel industry affords a pretty good clue to
our general economic health. In 1932, it was operating
at 20 per cent of its capacity. In 1939, before the
war orders began to come in, at 65 per cent.
1800
1665
Regraded Unclassified
40
- 7 -
The United States Steel Corporation had a net
income in 1932 of minus 71 million dollars. That was
when it was functioning under an Administration that
professed great friendship for business. In 1939,
U. S. Steel was ruthlessly forced to relinquish the
pleasure of taking such a loss; the New Deal abused
it into accepting a net profit of 41 millions.
There wasn't anything special about the experience
of the United States Steel Corporation. Manufacturing
concerns in general reported themselves in the red
for 1932 to the tune of $1,600,000,000. In 1939, they
were three billion dollars in the black.
1665
Regraded Unclassified
41
- 8 -
Well, here is the record, open for examination
to any one who wants to read it. If it 1s a record of
hostility and abuse, then words, I think, have altogether
lost their meaning. Businessmen are generally known
to be pretty practical fellows not easily terrified by
phoney labels. Your presence here tonight testifies
to this. You have found the proof of your pudding in
the eating.
Of course, there 1s not now, and there never
has been, any enmity on the part of the Roosevelt
Administration toward business and industry. What
there is, and has been from its inception, is a firm
determination to avoid the kind of quicksand crust of
fake prosperity on which this Nation danced such a
frenzied J1g during the twenties.
1553
126
Regraded Unclassified
42
- 9 -
There was nothing solid underneath it because millions
of Americans were unemployed or employed at such low
wages that they could not maintain a decent standard
of living. It was inevitable that we should crash
through such a crust as we did so tragically in
1929.
This Administration has sought, instead, to
develop a balanced and expanding economy, based on a
high volume of purchasing power. It has recognized
that enduring prosperity must have a solid foundation,
that it must be built from the ground up. It has
operated on the premise that what advances the
general welfare of the people of the United States also
advances the welfare of the business and industry in
which they engage.
1427
120
1307
Regraded Unclassified
43
- 10 -
And this is the very simple explanation for the growth
in corporate profits which I have noted - for the
increase in dividend payments, for the mounting volume
of trade, for the expansion of production. Under this
Administration, the American people as a whole have
been earning the money with which to buy the goods and
services which business and industry have for sale.
The Roosevelt Administration has had so much faith -
and such genuine faith - in the free enterprise system that
it has sought to keep it free. I think that no young
man who wants to start in business for himself will feel
abused by an Administration which protects him from the
shackling influence of monopoly. 1/2
1303
Regraded Unclassified
43
- 10 -
And this is the very simple explanation for the growth
in corporate profits which I have noted - for the
increase in dividend payments, for the mounting volume
of trade, for the expansion of production. Under this
Administration, the American people as a whole have
been earning the money with which to buy the goods and
services which business and industry have for sale.
The Roosevelt Administration has had so much faith -
and such genuine faith - in the free enterprise system that
it has sought to keep it free. I think that no young
man who wants to start in business for himself will feel
abused by an Administration which protects him from the
shackling influence of monopoly. 1/2
1303
Regraded Unclassified
44
- 11 -
I think that no banker or broker who wants the public
to invest in an honest enterprise will feel abused by
an Administration which protects him from the competition
of irresponsible market manipulators and gold brick
salesmen. I think that no honest employer will feel
abused by an Administration which protects him from the
competition of sweatshops.
These and other measures instituted under the
New Deal have given American enterprise real freedom.
To speak of them as abusive is as absurd as to speak
of a surgeon as abusive because he cuts out an inflamed
appendix or a cancerous growth. Business and industry
in America are healthier today and have greater opportunities
for the future because this Administration has been a
true friend to them.
1190
Regraded assified
45
- 12 -
Oh, yes, I know that the opposition now endorses
these reforms and any evening on the air you can hear
the Johnnies-come-lately hollering "me, too." But
you can also hear them hollering that the present
Administration "has been consistently hostile to and
abusive of American business and industry." And I think
that you can get from this a fair measure of their
sincerity.
There are, I think, real enemies of business -
important and powerful enemies - some of them within the
ranks of business itself who would undermine the very
foundations of free enterprise.
1065
Regraded classified
46
- 13 -
They are the "business as usual boys" who opposed
the conversion of industry from peace to war. They
are the men who fought price control and renegotiation -
who would have risked the danger of inflation for extra
profits for themselves. They are the men who fought
collective bargaining, minimum wages, social security
and the other social gains of this Administration.
They are the monopolists who favor restricted industrial
output and restricted credit at high interest rates
and restricted markets at home and abroad.
Yes, business has its enemies. But they are not,
I am certain, representative of American businessmen
and they are not in the Roosevelt Administration.
970
102
Regraded Unclassified
47
- 14 -
Now, I want to turn for a moment to the war years.
The achievement of the American industrial machine
during this war has brought heart and hope and wonder
to our friends, consternation and despair to our enemies.
We have kept our pledge to serve as the arsenal of
democracy. We have built and equipped a mammoth army
of our own and the greatest navy in the world. And
at the same time we have met all the essential needs
of our civilian economy. Business itself deserves
immense credit for this accomplishment. But does any
one seriously think these things could have been done
without a well balanced economy developed before the
war began?
863
Regraded Unclassified 749
48
- 15 -
Business itself has fared pretty well in the
performance of its magnificent production job. The
total of corporate profits for the year 1943, after
payment of taxes and after renegotiation, was the
highest in the history of this Nation - higher even
than in the frenzied boom of 1929.
This war prosperity has been well balanced. I
am glad to say that it has created few war millionaires,
for the rise in profits has been distributed throughout
the business community. The virtual absence of war-made
fortunes represents the combined results of a wise policy
of military procurement, the success of the policy of
economic stabilization, the operation of the excess
profits tax, and the commendable restraint exercised
by business itself. 3/4
749
695
Regraded Unclassified
49
- 16 -
The prosperity of the smaller concerns 1s less
easily observed than that of the large publicly owned
corporations, but it has been actually even greater.
A survey of the relative movement of the profits of
large and small companies in eight major industrial
groups, made jointly by the Board of Governors of
the Federal Reserve System and Robert Morris Associates,
shows that in each group the smaller concerns have,
during the wartime period, improved their profit position
relative to the larger companies.
But what is much more important to business in the
long run than its profits during the war itself is the
fact that, despite the conversion of our resources to
war production, the domestic economy has been kept
sound and stable.
605
103
500
Regraded Unclassified
50
- 17 -
There has been no out-of-hand inflation in the course
of this conflict. The purchasing power of the American
dollar has been kept firm. You must certainly credit
this in large measure, I believe, to the stabilization
program and the methods of war finance undertaken by
your Government. The economic policies pursued in
the war years have safeguarded business and industry
not only against inflation but also against the
disastrous sort of deflation which struck this country
in 1920 and 1921.
We in the Treasury have conducted our fiscal
operations in such a way as to minimize the post-war
burden of the debt and to promote mass buying power
and balance in the post-war economy. Business will have
these assets in meeting the problems of reconversion:
Regraded Unclassified
51
- 18 -
(1) 85 million individual investors have purchased
bonds of their Government with an aggregate value of 23
billion dollars. These bonds, non-negotiable and with
a guaranteed redemption value, assure their holders
against market fluctuations and give them a sense of
security which will enable them to spend their current
incomes for consumer goods when these become available.
(2) Interest rates have been kept low, averaging
about 1-3/4% in comparison with 4-1/4% in the first
World War; the reduction will not only save about four
billion dollars annually in the post-war Federal budget
but will also give business much more favorable borrowing
opportunities than it had at the end of World War I.
370
119
251
Regraded
Inclassified
52
- 19 -
(3) Securities sold to banks and corporations,
all of them of short maturity, have provided an unparalleled
liquidity which should assist greatly in the financing
of post-war reconversion and expansion.
(4) Provision has been made for the refunding
of excess profits taxes to guarantee corporations
against losses in the years immediately following the
a
war.
Can any reasonable man find in such measures an
indication of hostility to American business and
American industry? No, I think the Republican candidate
has been engaged - and not for the first time - in
the prosecution of a myth.
251
94
157
Regraded Unclassified
53
- 20 -
Business and industry have a role of vital
responsibility to play in the development of the future.
They must serve as its generators. They must be, in
the future as they have been in the past, the initiators
of economic progress. Theirs must be the ingenuity,
the know-how, the enterprise needed to find new products,
build new plants, develop new techniques. It is to
them that Americans look for the expansion of production
and the creation of new jobs and the lifting of our
living standards.
157
87
Regraded riclassifie
54
- 21 -
Business can and will fulfill these hopes. But
it can fulfill them only in partnership with an
Administration which will support it, not with fair
words and special benefits, but with a dynamic program
of economic development for all the people. It is
this kind of friendship for business, as for
agriculture and labor, which the Roosevelt Administration
has practiced and will continue to practice while
it is in office.
70
70
Regraded Unclassified
10/26/44
Copy which Mr.
55
Gaston approved
and from which
I have come here tonight to talk to you business
final
men about business and to discuss with you how you reaching
copy
have fared under Mr. Roosevelt's Administration.
was
I should like to express to you at the outset my feeling
that business as a whole has conducted itself magnificently
during the war years and that those of you who have
carried on the job of war production in all its varied
phases have every reason to feel proud of your
contribution to the national cause.
Every age has its mythology - ours no less than
times gone by. Myths, I think, are something like
currency, and Gresham's law 18 about as applicable to
the one as to the other.
wr
Regraded Unclassified
56
- 2 -
This 18 to say, paraphrasing Gresham a little bit, that,
of two forms of myth, the inferior or more depreciated
tends to drive the other out of circulation. And this
16 particularly true in a period when propaganda has
been elevated into something of a science. For
propaganda 18 a form of counterfeiting.
I make this somewhat philosophical approach because
I want to say something about myths this evening - in
particular about one myth which seems to me one of the
most remarkable propaganda achievements efforts of our time.
Let me state the myth for you as it was expounded
earlier this year by the Republican Presidential
Candidate in his acceptance address:
wrr
Regraded Unclassified
57
- 3 -
The present Administration - I quote his own words -
"has been consistently hostile to and abusive of
American business and American industry, although
it is in business and industry that most of us make
our living."
Now I do not mean for a moment to suggest that
the myth - in this particular instance was invented
by the candidate. On the contrary, it 18 one of the
most hackneyed, time-worn and over-worked myths of
the present day. It has been in circulation, I should
guess, for pretty nearly a full decade.
2522
Regraded Unclassified
58
- 4 -
It was tried out with great gusto by campaign orators
in 1936, was dusted off and trotted forth as a brand
new discovery in 1940; and today - such is the
originality of its sponsors - it 18 being tried again,
evidently on the accumption that 11 10 to repeated
often enough somebody may believe it. The technique
to
It is about time, I think, to take a good close
look at this myth. Let us leave the war years altogether
out of account for the moment and go back instead to
the 7-year period before 1940 when the Administration
halted the precipitous deflation of the early '30's
and built up steam in a cold boiler to start industry
once more on the upgrade. It 18 this period which the
Republican Candidate is pleased to call "The Roosevelt
depression
Regraded w Unclassified
59
- 5 -
I am glad to think that time has dimmed the memory
of the dark days before Franklin D. Roosevelt revived
our faith in ourselves by telling us that the only
thing we had to fear was fear itself. In 1932, the
year before he took office, corporations reporting
to the Bureau of Internal Revenue showed an aggregate
loss of more than 4 billion dollars.
By 1934, the present Administration had abused
business and industry to such an extent that they began
to report profits instead of losses to the Bureau
of Internal Revenue. The profits of corporations
that year after payment of taxes - amounted to
$2,374,000,000.
ml
Regraded Unclassifie
60
- 6 -
Net profits rose steadily each year after that, except
during the recession of 1938, until by 1939 they
stood at about six billions.
All right, now let's take a look at the record
of retail trade during this period. Total retail
sales in 1933 amounted to 24-1/2 billion dollars. In
1939, they were better than 42 billions, an increase
of 71 per cent. If this was abuse, I have an idea
that most retailers would like to be abused constantly.
The steel industry affords a pretty good clue to
our general economic health. In 1932, it was operating
at 20 per cent of its capacity. In 1939, before the
war orders began to come in, at 65 per cent.
we
Regraded Unclassified
61
- 7 -
The United States Steel Corporation had a net
- that is, it suffered a net loss of that, americant.
income in 1932 of minus 71 million dollars That was
when it was functioning under an Administration that
professed great friendship for business. In 1939,
U. S. Steel was ruthlessly forced to relinquish the
pleasure of taking such a loss; the New Deal abused
it into accepting a net profit of 41 millions.
There wasn't anything special about the experience
of the United States Steel Corporation. Manufacturing
concerns in general reported themselves in the red
for 1932 to the tune of $1,600,000,000. In 1939, they
were three billion dollars in the black.
Regraded wr Unclassified
62
- 8 -
Well, here 1s the record, open for examination
to any one who wants to read it. If it 18 a record of
hostility and abuse, then words, I think, have altogether
lost their meaning. Businessmen are generally known
to be pretty practical fellows not easily terrified by
phoney labels. Your presence here tonight testifies
to this. You have found the proof of your pudding in
the eating.
of course, there is
enmity on the part of the Roosevelt
Administration toward business and industry.
simply
there
1sA
and
lies
been
a firm
determination to avoid the kind of quicksand crust of
fake prosperity on which this Nation danced such a
frenzied Jig during the twenties.
FA
Regraded Unclassified
63
- 9 -
There nothing solid underneath It because millions
of
were
they
could
standard
0$ living It inevitable
through
such
a-crust
This Administration has sought, instead, to
14
develop a balanced and expanding economy, based on a
high volume of purchasing power. It has recognized
that enduring prosperity must have a solid foundation,
that it must be built from the ground up. It has
operated on the premise that what advances the
general welfare of the people of the United States also
advances the welfare of the business and industry in
which they engage.
769
Regraded Unclassified
64
- 10 -
And this is the very simple explanation for the growth
in corporate profits which I have noted - for the
increase in dividend payments, for the mounting volume
of trade, for the expansion of production. Under this
Administration, the American people as a whole have
been earning the money with which to buy the goods and
services which business and industry have for sale.
The Roosevelt Administration has had 80 much faith -
and such genuine faith - in the free enterprise system that
it has sought to keep it free. I think that no young
man who wants to start in business for himself will feel
abused by an Administration which protects him from the
shackling influence of monopoly.
ver
Regraded Unclassified
65
- 11 -
I think that no banker or broker who wants the public
to invest in an honest enterprise will feel abused by
an Administration which protects him from the competition
of irresponsible market manipulators and gold brick
salesmen. I think that no honest employer will feel
abused by an Administration which protects him from the
competition of sweatshops.
These and other measures instituted under the
New Deal have given American enterprise real freedom.
To speak of them as abusive is as absurd as to speak
of a surgeon as abusive because he cuts out an inflamed
appendix or a cancerous growth. Business and industry
in America are healthier today and have greater opportunities
for the future because this Administration has been a
true friend to them.
1R4
Regraded Unclassified
66
- 12 -
Oh, yes, I know that the opposition now endorses
the Roosevelt
reforms and any evening on the air you can hear
the Johnnies-come-lately hollering "me, too." But
you can also hear them hollering that the present
Administration "has been consistently hostile to and
abusive of American business and industry." And I think
that you can get from this a fair measure of their
sincerity.
There are, I think, real enemies of business -
important and powerful enemies - some of them within the
ranks of business itself.
foundations of free.enterprise.
we
Regraded Unclassified
67
- 13 -
They are the "business as usual"boys who opposed
the conversion of industry from peace to war. They
are the men who fought price control and renegotiation -
who would have risked the danger of inflation for extra
profits for themselves. They are the men who fought
collective bargaining, minimum wages, social security
and the other social gains of this Administration.
They are the monopolists who favor restricted industrial
output and restricted credit at high interest rates
and restricted markets at home and abroad.
Yes, business has its enemies. But they are not,
I am certain, representative of American businessmen,
And they are not in the Roosevelt Administration.
will
Regraded Unclassified
68
- 14 -
Now, I want to turn for a moment to the war years.
The achievement of the American industrial machine
during this war has brought heart and hope and wonder
:
to our friends, consternation and despair to our enemies.
We have kept our pledge to serve as the arsenal of
democracy. We have built and equipped a mammoth army
of our own and the greatest navy in the world. And
at the same time we have met all the essential needs
of our civilian economy. Business itself deserves
immense credit for this accomplishment. But does any
one seriously think these things could have been done
without a well balanced economy developed before the
war began?
usy
Regraded Unclassified
69
- 15 -
Business itself has fared pretty well in the
performance of its magnificent production job. The
total of corporate profits for the year 1943, after
payment of taxes and after renegotiation, was the
highest in the history of this Nation - higher even
than in the frenzied boom of 1929.
This war prosperity has been well balanced. I
am glad to say that it has created few war millionaires,
for the rise in profits has been distributed throughout
the business community.
virtual
fortunes
the
combined
results
of
os
evonomic
stabilization,
the
operation of
the
profits tax, and the commendable
119
Regraded Unclassified
70
Robert morris associates,
- 16 -
The prosperity of the smaller concerns is less
easily observed than that of the large
put, according to a survey made jourtly by the Tederal Reserve Septem and
corporations, but it has been actually even greater.
the smaller corporators herelea
There has been an even greater increase
in
in the propits of the A smaller
groups jointly by the Board of Governors
business
shows
that
in
each
group
profit
position
What is much more important to business in the
long run than its profits during the war itself is the
fact that, despite the conversion of our resources to
war production, the domestic economy has been kept
sound and stable.
Crr
Regraded Unclassified
71
- 17 -
There has been no out-of-hand inflation in the course
of this conflict. The purchasing power of the American
dollar has been kept firm. You must certainly credit
this in large measure, I believe, to the stabilization
program and the methods of war finance undertaken by
your Government. The economic policies pursued in
the war years have safeguarded business and industry
not only against inflation but also against the
disastrous sort of deflation which struck this country
in 1920 and 1921.
We in the Treasury have conducted our fiscal
operations in such a way as to minimize the post-war
burden of the debt and to promote mass buying power
and balance in the post-war economy. Business will have
these assets in meeting the problems of reconversion:
(Ath
Regraded Unclassified
72
- 18 -
more Than
(1) L⁸⁵ million individual investors have purchased
and The
bonds of their Government with an aggregate value of
funds held by individuals is now 48
billion dollars. These bonds
veluey assure their holders
against market fluctuations and give them a sense of
their holders generally
security which will enable them to spend their current
incomes for consumer goods when these become available.
(2) Interest rates have been kept low, averaging
about 1-3/4% in comparison with 4-1/4% in the first
World War; the reduction will not only save about four
billion dollars annually in the post-war Federal budget
but will also give business much more favorable borrowing
opportunities than it had at the end of World War I.
wr
Regraded Unclassified
73
- 19 -
(3) Securities sold to banks and corporations,
of them of short maturity, have provided an unparalleled
liquidity which should assist greatly in the financing
of post-war reconversion and expansion.
(4) Provision has been made for the refunding
cushion
of excess profits taxes to guarantee corporations
against losses in the years immediately following the
war.
Can any reasonable man find in such measures an
indication of hostility to American business and
American industry? No, I think the Republican candidate
has been engaged - and not for the first time - in
the prosecution of a myth.
1159
Regraded
- 20 -
74
Business and industry have a role of vital
responsibility to play in the development of the future.
They must be, in
the future as they have been in the past, the initiators
of economic progress. Theirs must be the ingenuity,
the know-how, the enterprise needed to find new products,
build new plants, develop new techniques. It 18 to
is
them that Americans look for the expansion of production
and the creation of new Jobs and the lifting of our
living standards.
or
Regraded Unclassified
75
- 21 -
Business can and will fulfill these hopes. But
it can fulfill them only in partnership with an
Administration which will support it, not with fair
words and special benefits, but with a dynamic program
of economic development for all the people. It is
this kind of friendship for business, as for
agriculture and labor, which the Roosevelt Administration
has practiced and will continue to practice while
it is in office.
+
7PM
Regraded Unclassified
76
October 26, 1944
MEMORANDUM FOR THE SECRETARY
From: Mr. Blough
(For your information; no action required)
Judge Rosenman's secretary indicated that he
would be glad for any comments on the page from
the proposed speech which I showed you this
morning, 80 I prepared and sent him the attached
letter.
RB
Attachment
Regraded Unclassified
77
COPY
October 26, 1944
My dear Judge Rosenman:
In response to your request the following comments
are made regarding the page being returned herewith.
I assume that the emphasis on risk capital and
plant expansion and the interruption of the flow of
thought on that subject to introduce the paragraph on
tax reduction, grow out of the preceding part of the
speech, and that this page will in its setting in the
speech not be interpreted a.8 8. statement of policy on
postwar taxes. I would regret having this narrow seg-
ment of policy 80 interpreted by listeners or readers.
The second sentence in the first paragraph gives
the impression that all rates will be reduced by the
same proportion or to the same level. In view of the
fact that in the next paragraph the general level of
rates is made to depend on security considerations and
not on employment considerations, it might be well in
the first paragraph to speak of "levels" instead of
"a level. This change would give the idea of different
djustments for different taxes. Thus, the sentence
would read: "They must be fixed after the war at levels
which
The sentence "I have yet to meet any taxpayer who
wants to see higher taxes, may suggest to some that the
Administration admits it was wrong in asking for higher
taxes a year ago and that the President was wrong in
vetoing a tax bill which was too small. Perhaps it 1s
not the taxpayer but responsible policymakers whose
opinion should be used in comparison, and 1s it not
lower taxes instead of higher taxes that should be
emphasized? Perhaps the sentence might be revised to
read: "I have yet to meet anyone who will not be very
happy to see lower taxes."
Regraded Unclassified
78
- 2 -
The grammatical construction of the middle sentence
of the last paragraph might be improved by revising part
of the middle sentence in the last paragraph to read
somewhat as follows: "By substantially accelerating
the rate of depreciation for tax purposes on newly con-
structed plants and facilities, we provide businessmen
with additional incentives to expand their plants and
to replace old and obsolete machinery with modern
equipment.
Sincerely yours,
(s) Roy Blough
Director of Tax Research
The Honorable Samuel I. Rosenman
The White House
Enclosure
Regraded Unclassified
79
OCT 26 1944
- Elements
I have had the Treasury statt the Lettern
1944 $ I 1 2944 I s I y E
I % I I I : I I 6
8 a I I I I I a
Treasury - production the - to enclosed, together
- I I k 1
Additionalis
(Signed) Henry
In I I
I
EMB 10/25/44
Regraded Unclassified
80
By production for we we usually man production which is
notivated net for the sake of prefits but is undertaken directly
for the satisfaction of human wants.
The method of production - generally use is production for
profit. the kinds and amounts of goods produced depend on prices
and profits. That - business produces these things which can
be sold at prices that cover costs plus a reasonable profit. It
also mass that when there is no likelihood of profits, there is
unemployment. In the broad same, preduction for use means pro-
dustion of goods in kinds and amounts to meet a program of planned
was for the goods produced. An economic system based on such a
rethod of production and consumption 10 a socialist system.
He have, of course, same production for use in this special
dende in our present system. In time of war a good deal
of the output is directly planned to met the devertment's war
needs, although the production yields profits to business. Itven
in peace - of our putput is not produced primarily for profit.
The TVA and the operation of public utilities w our municipalities
represent a form of production for use rather than for profit.
Nearly all of the dovernment's activities are not primarily for
profit. And even - private undertskings, much as hespitals
and educationsl institutions, are operated on a production for use
primiple. This is true even though the services may be sold as
a - for distribution.
It may be found desirable even in a predominantly capitalist
system to extend production for we by the Government into are
fields. Thus, in - countries the government has taken over
railreads, telephones and telegraphs an other injustries which
are of special CORBERN to the public. The chief advantage of govern-
ment comerably and operation is supposed to be that preduction, dis-
tribution and investments policies can be determined in the 11ght of
the mede of the community rather than from the standpoint of maxi-
mising profits. On the other hand, many people regard the price
and prefit mathod of production as giving mere range to individual
shales and as mere efficient technically in production.
During the depression of the early 1930's a - concept of
production for use - advanced according to which the product
would not be sold on the market but would be consumed directly by
the probusure. When Upton Sinclair - runding for of
California he advented a plan under which the unsuployed would be
Regraded Unclassified
81
- 2 -
put to work miding things to be contrast by themselves w traded
arong themselves and not sold on the murket. This type of yre-
duction for wee is - attempt to solve the paradam of uncoployment
and wash 1m the midst of market surpluses. It is based on the
view that it is better for workers to produce something for them-
selves rather than to remain idle because there is no market for
their products.
Even though production for home consumption or for barter is
far better then and murt, 18 is by no - the best
solution to the problem. Production under such a system will be
inefficient because of a lask of capital and the absense of speciali-
nation. It would be far better to put unemployed people to work
efficiently producing things that are needed and earning enough
with which to buy the efficiently produced commedities of modern
industry.
There are Many things that 10 all need even when people are
unsuployed. We need houses and apartments to eliminate - slame.
No need more TVA'S to provide shoop electricity, more productive
farm lands and flood control. No right open the continent with
wide highways which, if measurery, could be unde self-liquidating
by charging tells. These and many other things could be done to
provide employment within the capitalist system during depression.
And these things would be more useful to the people and name No-
munerative to the workers than making things to be consumed directly
by the unsuployed.
Regraded Unclassified
White
THE WHITE HOUSE
WASHINGTON
October 16, 1944.
Dear Henry:
I am enclosing letters from
Mr. Sam J. Harms of Salem, Oregon.
Do your experts think some
production for use is necessary on a
non-profit basis?
I will appreciate the return
of the enclosed letters.
Affectionately,
M
83
SAM s. HARMS
c
Printing
o
379 North Cottage Street
P
Phone 3339
Y
Selem, Oregon
Oct. 10, 1944
Mrs. Eleaner Roosevelt
The White House
Washington, D. C.
Dear Mrs. Receevelt:
Thanks for the acknowledgemt of my recent letter.
I regret that I did not make my position sufficiently clear.
My phrase, "Not on a competitive basis can this
(world passe) be accomplished", 1s, of course, the basis for
all arguments for a change in our esonomy. And a "plenty for all"
program requires world-seoperation. This is being suggested thru
various mothods, including the Soviet Union's example.
of all these patterns, the mest American one, I would
say, is a combination of various progressive movements, includ-
ing Technosresy, a production-for-use program for our wonderfully
developed technology.
To everooms that murchas which private injustry earmot
help but produce, which surplins is the reck on which our economy
periodically feunders, with its chaotic depressions and wars, -
it is my convistion that the majority of our people would get the
podnt If the matter were explained by the president who really
comman an nationse of millions as compared to the small -
bare listening to other speakers. In that way would we lead the
world for pease, which course other nations would be only too
willing to follow.
Let w be done with forever "maddling thru."
Most sincerely yours
(signed) 8am J. Herms
Regraded Unclassified
84
SAM J. HARMS
Printing
379 North Costage Street
Phone 3339
Salem, Oregon
Sept. 21, 1944
Mrs. Eleanor Roosevelt
The White House
Washington, D. C.
Dear Mrs. Roosevelt:
In conversing with an exceptionally well informed humanist only
yesterday, I was strengthened in my desire to write you, in the hope that I may
add whatever is in my power to assist in the establishment of permanent peace
on earth.
The point that my friend made was this: "We won the last war; W will
win this ones but I an not so sure that we can win the next one," (going into
the proportion of Caucasians VS. Colored races.)
There is, I firmly believe, a way out of these over resurring conflicts.
Not on & competitive basis, however, can this be accomplished, as history only
too wall proves. What is true in our own country is equally true elsewheres
a system which earnot maintain itself without depressions here carnot but do
likewise throughout the world. Therefore, why not in the name of Immunity change
to a better way, where there would be plenty for all, including those who for
utterly selfish reasons insist on much more than their proportionate share,
depriving the majority of their necessary portion? Why should this small group
bring periodic chaos to the world with its terrible slaughter and suffering?
My dear Mrs. Roosevels, it may be a big orders but I believe permanent
peace is within grasp of the world if our president will sky the word. It my
be dangerous, but the opportunity is at hand, Reason and experience desand it,
and no greater cause was ever placed into any man's decision than what now
confronts the president.
What an unfathomable oppertunity! Regardless of personal consequences
to Mr. Receevelt, the future would designate this particular time as the turning
point in history from war to pease, Force andreparedness will not guarantee
passe, but good will and a lifting up of all mankind through tekhnology, can and
will accemplish just that
How I hope you can ⑉ this vision) The time to ast is now. Were the
president sold on these fasts, and were he to & on the radio and talk to the
people in his materful way, be would be called blessed by 9% of the people the
world over. Wky should the very small persentage selfishly desduate the world
to the utter ruination and destruction of the great mjority?
Regraded Unclassified
85
- 2 -
Yes, it would take courage to do this, but the average American
would & along with such a program. It would assure the re-election of our
humanitarian administration, which, however, would be as nothing compared
to the glorious example set for the world by its leading nation.
Cordially and most sinserely yours
(signed) Sam J. Harms
Regraded Unclassified
86
COMBINED COMMITTEE ON
LEND LEASE
October 26, 1944
MEMORANDUM TO COMMITTEE MEMBERS
This memorandum has been furnished by the
British Delegation to indicate more precisely in
writing the suggestions which Lord Keynes made
orally the other day.
Frank Coe
Secretary, CCLL
Regraded Unclassified
87
TOP SECRET
REASONS FOR FIXING DECEMBER 1st AS THE DATE FOR
THE ABOLITION OF WHITE PAPER RESTRICTIONS ON BRITISH
EXPORTS AND SUGGESTIONS FOR DEALING WITH THE PROBLEM OF STOCKS
There is no question now or during Stage II of
allowing exports to take priority over war needs. The vast
bulk of British exports cannot be produced until after the
military Stage II programme comes into effect, and will then be
subject always to prior military requirements. The manpower
figures in the British document (page 1 of Annex C) show that
in comparison with earlier periods, employment directly on
exports in the first year of Stage II is planned as follows:-
No.employed
in '000
Mid 1939
1,300
Mid 1944
300
Stage II - Average of 1st year
610
If
- End of 1st year
1,150
In this context the "lst year of Stage II" can only
mean the twelve months after V-E day, so that it can be
asserted with reasonable confidence that there is no possibil-
ity of a substantial increase in British exports for at least
three months after December 1st, 1944. On the other hand,
some cutbacks have already taken place in the U.K. (as they
have in the U.S.A.) and more may follow as V-E day approaches.
There are also some sparo pockots of available capacity which
appear from time to time.
Under the present regime of the White Paper,
manufacturers who have such spare capacity (as a result either
of cutbacks or for other reasons) are in most cases prevented
not only from exporting, but in practice from taking orders
with any kind of certainty about delivery dates, since although
supply considerations permit manufacture, export licences have
to be withheld solely on White Paper grounds.
It is an additional difficulty that the goods which
could be exported after, and only after, the fixed date would
Regraded Unclassified
88
have to be defined. The exports to which the White Paper
restrictions apply have been determined administratively, but
could not be publicly defined in any way which would be either
clear or acceptable. It is for this reason also that we
think it essential that an early date of complete release
should be fixed.
That this date should be as soon as immediately
practicable is demonstrated first by the fact that some cut-
backs have already taken place, and secondly by the enormous
short fall in exports which has directed British political and
industrial opinion to the need for an early removal of all
obstacles to exports, subject to the over-riding need to
prosecute the war against Germany and then against Japan.
It was to assist an agreement on the early date of
December 1st, 1944, that we proposed to take certain materials
off Lend-Lease at the same fixed date, whereas the military
programmes, which were couched in terms of Stage II, provided
for reconsideration if the German war should be prolonged
beyond January 1st, 1945. We have not asked for any similar
proviso about raw materials.
If this is accepted, there remains the question how
to deal with stocks of Lend-Lease materials -
(a) in respect of those remaining on Lend-Lease
(b) in respect of those coming off Lend-Lease on December
1st, in so far as there are Lend-Lease stocks remaining.
On (a) we have proposed two solutions. First we
suggest that no restrictions on use need apply in the case e.g.
of rubber, where we supply natural rubber on Mutual Aid and
obtain synthetic on Lend-Lease. Secondly, as in the case e.g.
of cotton, wood pulp and lumber, we undertake to pay cash in
so far as our use in export exceeds our supply from sources
other than Lend-Lease. (This principle has applied for over
three years to cotton). In so far as there are significant
stocks of any of the latter class of materials, the net rise or
fall over a period in stocks either of Lend-Lease or of other
2.
Regraded Unclassified
89
material, could be counted as an increase or decrease in our
current supply from these sources respectively.
On (b) we suggest that a combination of the follow-
ing principles as appropriate might account for the stocks of
Lend-Lease material remaining on December 1st:-
(1) A declaration that the stock would be assigned to
military (or alternatively military and civil) end use with-
in say the next six months after the fixed date. This is
in accordance with the principle by which we have trans-
ferred to the military programme certain materials such as
nylon for parachutes.
(11) A process of setting off against stocks of Lend-
Lease material at December 1st, the net cash stock at the
date of the White Paper, i.e. the stock which we had paid
for or produced ourselves, but which the White Paper
stopped us from using. (By net is meant stock of
materials purchased for dollars, or imported from else-
where than the U.S.A. or produced in the U.K., less any
Lend-Lease supplies received before the date of the White
Paper).
(111) Agreement that the existing Lend-Lease stocks or its
likely use in exports is insignificant. (This concession
has been in force under the White Paper regime).
(iv) Declaration of some stock as unusable and there-
fore surplus, leading to its recapture by the U.S.G.
Until we have precise figures it is not possible to
say how these principles would apply to the various items
proposed for taking off Lend-Lease. It seems likely, however,
that steel, which is by far the biggest single item, could be
dealt with under a combination of principles (1) and (11) above,
with perhaps some items dealt with under (iv). Molybdenum
might be dealt with under (1), while for many chemical items
(111) might be appropriate.
25th October 1944.
3.
Regraded Unclassified
90
CABLE TO AMBASSADOR WINANT, LONDON, FROM WAR REFUGEE BOARD
Please deliver the following message to Sir Herbert Emerson from
Mr. Joseph Schwartz, American Jewish Joint Distribution Committee:
QUOTE JEWISH AGENCY REPRESENTATIVES HERE HAVE INFORMED US
CONFIDENTIALLY OF CABLE ADVICE THEY RECEIVED FROM PALESTINE
THAT PALESTINE GOVERNMENT HAS APPROVED IMMIGRATION SCHEDULE
FOR NEXT SIX MONTHS FOR 10,000 INCLUDING 3,200 CHILDREN FROM
FRANCE BELGIUM SWITZERLAND STOP WE EXPLORING WITH OUR
AUTHORITIES TRANSPORTATION POSSIBILITIES WHICH UNDER PRESENT
CONDITIONS ONLY GOVERNMENTS CAN MAKE AVAILABLE ALSO SIZE AND
SCOPE THIS PROJECT PLACES IT IN OUR OPINION BEYOND THE RE-
SOURCES OF VOLUNTARY AGENCIES STOP VIEW FACT MANY OF THESE
CHILDREN STATELESS ORPHANS OR CHILDREN WHOSE PARENTS HAVE BEEN
DEPORTED WOULD APPRECIATE ANY SUGGESTIONS YOU MIGHT HAVE RE-
GARDING THEIR EARLY EVACUATION STOP HOPE DISCUSS THIS WITH
YOU IN PERSON ON MY ARRIVAL LONDON UNQUOTE
THIS IS WRB LONDON CABLE NO. 17.
4:30 p.m.
October 26, 1944
Regraded Unclassified
91
EK
Distribution of true
reading only by special
October 26, 1944
arrangement. (SECRET)
11 p.m.
AMEMBASSY
LONDON
8948
The following for Mann from Pehle is WRB 16.
Reference is made to program of Queen Wilhelmina Fund (similar
to Czechoslovak, French and Polish projects being operated from
London). Queen Wilhelmina Fund remitted $90,000 for its project
to McClelland and for disbursing by trustees, Clement and Krier,
in Switzerland. We and interested groups here have just been
advised that Oldenbruck, Dutch Trade Union representative in London,
with whom labor relief organizations discussed project at time
Oldenbruck was in United States, negotiated (without prior notice
to interested groups here) with Dutch Government which arranged
for the equivalent of $90,000 to be made available in Holland.
Dutch
overnment now desires to be reimbursed by payment to Dutch
Minister in Bern. We are authorizing McClelland, Clement and Krier
to make such payment to the Dutch Minister, provided assurances are
received that equivalent has been made available in Holland.
Interested groups here request that you advise Oldenbruck
that any future transactions of the foregoing type should be cleared
by him with the interested groups in this country before effectua-
tion. Since license requires reports, please obtain report from
Oldenbruck concerning use of the $90,000 in question.
STETTINIUS
(Acting)
WRB:MMV:KG 10/25/44
(SHW)
Regraded Unclassified
ORIGINAL THAT OF TELEGRAM SENT
92
FROM:
Secretary of State, Washington
TO:
American Vatican, Rome
DATE:
October 26, 1944
NUMBER:
56
SECRET
For Myron Taylor, Rame, Italy.
With reference to Bern's 6938 of October 19 repeated to Ampolad
for Ackermenn, the following letter has been addressed to the Apostolic
Delegate in Washington by WRB:
QUOTE The following is the substance of a message 10-
ceived by the Board from its representative in Bern under
date of October 19:
INNER QUOTE A courier who recently arrived
in Switserland from Bratislava reports that 300 to
400 Jews holding Latin American documents have been
arrested in that city. He further reports that, al-
though they were first interned at Mariathal near
Bratislava, they were summarily transported, possibly
to Germany, on or about October 8. The Slovak Govern-
ment, according to the courier, is aware of their
destination. Of this group, 90 hold nationality
certificates of KL Salvador while Paraguayan pass-
porte are held by the others. END OF INNER QUOTE
You will note that the report above quoted speaks as of
a date subsequent to the reports referred to in your letter
of October 14.
It would be of invaluable assistance to the Board if
it could ascertain where the Germane intend to locate this
group. For this reason, the Board would greatly appreciate
it if the Holy See were to find it appropriate to attempt
to secure through the Nuncisture at Bratislava, or otherwise,
such and any other information which may be available regard-
ing the group mentioned or any similar groups. It would
greatly facilitate the Board's efforts if the Holy See would
make such information, when received, directly available to
the American Mesions in Bern and Madrid. UNQUOTE
The Board would appreciate any assistance you can lend in this
matter.
STETTINIUS
ACTING
Visa Charmecy (for the Sec'y) Abrahemson, Akain, Cohn, Drury, DuBois,
Friedman, Gaston, Hodel, Lesser, Marke, Manson, McCorneck, Pehle, Files.
93
CABLE TO AMERICAN CONSULATE, JERUSALEM, FROM WAR REFUGEE BOARD
Please deliver the following message to Charles Passmann, from
Dr. Schwartz, American Jewish Joint Distribution Committee:
QUOTE IN VIEW CRITICAL SITUATION RUMANIA, BULGARIA STRONGLY
URGE YOU RETURN ISTANBUL SOONEST ORDER PROCEED FROM THERE TO
BALKANS AT EARLIEST OPPORTUNITY STOP WE HAVE UNDERTAKEN ALL
POSSIBLE STEPS HERE FACILITATE YOUR ENTRY AND HOPE HAVE
DEFINITE INFORMATION SHORTLY STOP BELIEVE HOWEVER YOUR EARLY
RETURN ISTANBUL HIGHLY DESIRABLE UNQUOTE
9:45 a.m.
October 26, 1944
Regraded Unclassified
94
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Embassy, Lisbon
TO:
Secretary of State, Washington
DATED:
October 26, 1944
NUMBER:
3263
CONFIDENTIAL
Embassy does not know to what news service to attribute
Governor Dewey's statement, nor source of issuance. Does Depart-
ment authorize release of statement?
The foregoing message is in reference to the Department's
circular of October 24.
NORWEB
DCR:MAS#MIM 11-4-44
Miss Chauncey (for the Sec'y) Abrahamson, Ackermann, Aksin, Cohn,
Drury, DuBois, Friedman, Gaston, Hodel, Leaser, Marks, Mannon,
McCormack, Pehle, Files.
Regraded Unclassified
95
DCG-389
PLAIN
Lisbon
Dated October 26, 1944
Rec'd 10:50 a.m. 27th
Secretary of State,
Washington.
3269, Twenty-sixth, 9:00 p.m.
FOR LEAVITT FROM PILPEL JDC 99 WRB 234.
151 children 8 adults arrived Istanbul by
train from Roumania leaving for Palestine October
27.
308 passengers embarked GUINE Cadiz high spirits.
GUINE left Cadis 4 a.m. October 27 for Tangier.
NORWEB
CSB
Regraded Unclassified
96
PLAIN
DCG-392
Lisbon
Dated October 26, 1944
Rec'd 10:52 a.m. 27th
Secretary of State,
Washington.
3270, Twenty-sixth, 10:00 p.m.
FOR LEAVITT FROM PILPEL JDC 100 BRB 233.
Greenleigh Home advises October 23 received
notice of opportunity send 900 persons monthly from
Italy to Palestine and arranging fully utilise this
opportunity for next several months.
MORREB
CSM
Regraded Unclassified
97
KEM-266
Distribution of true
Lisbon
reading only by special
arrangement. (SECRET W)
Dated October 26, 1944
Rec'd 10:10 p.m.
Secretary of State,
Washington.
3271, October 26, 10 p.m.
THIS IS WRB 235 JDC 102 FOR LEAVITT FROM PILPEL
REFERRING JDC 92.
Saly reports revocation of Rumanian anti-Semitic
regulations mere formality. Nothing done to return
property taken by Nazis and Rumanians and all Jews
barred from ployment. Urges necessity of strong
representations to Rumanian Government.
Mayer states 6,000,000 Swiss francs needed for
feeding 200,000 Jews for 3 months in Rumania plus
1,600,000 Swiss francs for clothing 40,000 for same
period. Figures checked by Intercross.
NORWEB
RB
Regraded Unclassified
Distribution of true
reading only by special
98
arrangement. (SECREF-W)
Ceteber 26, 1944
2 p.m.
AMENDASSY
MADRID
2002
The fellowing is the substance of a cable received from Amlogation
Born under date of October 29:
QUOTE I an infermed that courier recently arrived Switserland from
Bratislava reperts that 300 to 400 Jews helding Latin American decuments are
rested in Bratislava were first interned as recult intervention Central Jewish
effice as Mariathal near Bratislava. On or about October 8 they were summarily
transported, it is believed to Germany. Courier declared Slevak Government
knows where they have been taken. Apparently about 90 were bearers El Salvader
nationality certificates balance Paraguayan passporte. UNQUOTE
The Vationn to aware of this situation and say communicate to you
directly say additional information bearing on the matter.
without, bewever, awaiting information from Vations, you 670 re-
quested immediately to appreach Spanish Government with the suggestion that
as protective power for Paraguay, 10 would be appropriate for Spain to take
immediate steps to pretect the Paraguayan passport-heldere among the deportees
from Slovakia. Specifically, it is suggested that Spanish Government say find
10 possible (a) to inquire of the German Government of the truth of the report
that Jews from Slevakia in possonsion of documents issued in the BASI of Para-
play have been removed to Germany or areas under German centrel, (b) to in-
quire of the German Government of the dectination of such persene, (e) to de-
clare to the German Ocvernment that such persons fall under the protection of
Spain as protecting power, and (a) be request German Government to afford
Spanish authorities immediate facilities for exercising such protection.
(AGTING)
(GHW)
WXB:MMV:KG
VS
RPA
10/24/44
99
CABLE TO MINISTER JOHNSON, STOCKHOLM, FOR OLSEN FROM WAR REFUGEE BOARD.
In connection with Board's program to ship 300,000 food
parcels from United States for unassimilated persons in concentration
camps in German-occupied territory, Board has been advised through
Minister Harrison and McClelland that the 15,003 three-kilo parcels
shipped from here on S.S. Gripsholm and off loaded Gothenburg
arrived somewhat damaged, requiring some rehabilitation before being
forwarded camps for unassimilated persons German controlled territory.
Glen Whisler of Amcross and Intercross Delegate in Sweden aware of
this situation. Please check the exact status this shipment and
advise Board.
THIS IS WRB STOCKHOLM CABLE NO. 223.
9:30 a.m.
October 26, 1944
Regraded Unclassified
100
October 26, 1944
8 p.m.
AMIROATION
STOCKHOLM
2152
The following for Olsen is WRB 223.
In comection with Board's program to ship 300,000 food
parcels from United States for unassimilated persons in con-
centration camps in Garman-occupied territory, Board has been
advised through Minister Harrison and McClelland that the
15,002 three-kilo parcels shipped from here on S.S. Gripsholm
and off loaded Gothenburg arrived somewhat damaged, requiring
some rehabilitation before being forwarded camps for unse-
similated persons German controlled territory. Glen Whisler
of Ameross and Intercross Delegate in Sweden aware of this
situation. Please check the exact status this shipment and
advise Board.
STETTINIUS
ACTING
(GHN)
WRB:MMV:AO
NOE
SWP
I
10/26/44
Miss Channey (for the Secty) Abrahamson, Aksin, Cohn, Drury,
DuBois, Friedman, Gaston, Hodel, Lesser, Marks, Mennon, NoCermack,
Pshle, Files.
Regraded Unclassified
101
Resident
ALH-353
PLAIN
Stookholm
Dated Ogtober 26, 1944
RR
Rec'd 7:30 a.m.
Secretary of State,
Washington.
4365, Twenty-sixth.
AMCROSS NICHOLSON FROM AMCROSS WHISLER.
This our 24. Reference your 25. Swedcross
agreeable accept and handle funds for Latvian refugees.
Money should be sent in Swedish oroms and made payable
Swedcross. LILLIE HATTIESSEN left today with approxi-
mately 1100 tons POW cargo. Exact cargo report tomorrow.
Our 23 involving POW natters was sent to Pate at London
and Geneva without repeating washington. as JAMAICA same
tonnage as LILLIE is available but subsequent shipments
must wait for Imbeck reports.
JOHNSON
ne
Regraded Unclassified
102
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
American Legation Bern
DATED:
October 26, 1944
NUMBER:
3633
SECRET
MCCLELLAND FROM WAR REFUGEE BOARD.
Re your 6927, October 19. For your information food parcel program
from Sweden to unassimilated persons Bergenbelsen and other German-controlled
camps was presented for approval to MEN, Department and FEA without
reference to WRB. FEA and department in accord with MEW on October 20
authorized the program calling for shipment of 93 tons of parceled food
to German-controlled camps. Plan as developed by World Jewish Congress
representative in Sweden calls for distribution of these parcels under
supervision of Swedish W.M.C.A.
With respect to WRB program calling for shipment of 300,000 parcels
from United States, Amerose will have all of remaining 285,000 three-kilo
parcels ready for shipment via Marseille in November. All instructions con-
tained in your 6263, September 21, being observed by Ameross.
THIS IS WRB BERN CABLE NO. 240.
STETTINIUS
(ACTING)
Miss Channcey (for the Sec'y) Abrahamson, Aksin, Com, Drury, DaBois,
Friedman, Gaston, Hodel, Lesser, Marks, Manmon, McCormack, Pehle, Files.
Regraded Unclassified
103
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
American Legation, Bern
DATE:
October 26, 1944
NUMBERs
3648
SECRET
To Minister Harrison and McClelland.
Information and suggestion contained in your 6938 of October 19
are appreciated. Vatican is being approached accordingly and has been
asked to communicate information to you directly.
Without, however, awaiting Vatican's reply, you are requested in-
modiately to approach Swies government requesting it as protective
power for Salvador and certain other American republics to take
immediate steps to protect the persons concerned in line with Depart-
ment's na of April 7, 1221 of April 10, 1921 of June 6, 2490 of
July 21, 3180 of September 14, and all other communications regarding
holders of Latin American documents. Specifically, it is suggested
that Swiee government may find it possible (a) to inquire of the German
government of the truth of the report that June from Slovalde in posses-
sion of documents issued in the name of Salvador and other American
republics have been removed to Germany or areas under German control,
(b) to inquire of the German government of the destination of such
persons, (e) to declare to the German government that such persons fall
under the protestion of Switserland as protecting power, and (d) to
request German government to afford Swiss authorities immediate facili-
ties for exercising such protection.
In view of large proportion of Salvadoran passport-holders
among deportees reported in your 6938, Salvadoren declaration con-
municated in your 3871 of June 17 paragraph six will undorbtedly
facilitate your task.
Amembassy Madrid is being similarly approached regarding
Paraguayan passport holders.
THIS IS WRB BERN CABLE NO. 235.
STETTINIUS
ACTING
Miss Chauncey (for the Sec'y) Abrahamson, Akain, Cohn, Drury, DuBsie,
Friedman, Gaston, Hodel, Lesser, Marks, McCormack, Pehle, Files.
Regraded Unclassified
ORIGINAL TEXT OF TELEGRAM SENT
104
FROM:
Secretary of State, Washington
TO:
American Legation, Bern
DATED:
October 26, 1944
NUMBER:
3653
SECRET
MCCLELLAND FROM WAR REFUGEE BOARD.
1. your 6927, October 19. For your information food parcel program
from Sweden to unassimilated persons Bergenbelsen and other German-controlled
camps was presented for approval to MEW, Department and FEA without
reference to WRB. FEA and Department in accord with MEW on October 20
authorised the program calling for shipment of 93 tons of parceled food
to German-controlled camps. Plan as developed by World Jewish Congress
representative in Sweden calls for distribution of these parcels under
supervision of Swedish Y.M.C.A.
With respect to WRB program calling for shipment of 300,000 parcels
from United States, Amcross will have all of remaining 285,000 three-kilo
parcels ready for shipment via Marseille in November. All instructions
contained in your 6263, September 21, being observed by Amcross.
THIS IS WRB BERN CABLE NO. 240,
STETTINIUS
(Acting)
Note: This is for correction of number which was previously sent through
as #3633 instead of #3653
Miss Chauncey (for the See'y) Abrahamson, Ackermann, Akzin, Cohn, Drury,
DuBois, Friedman, Gaston, Hodel, Lesser, Marks, Mannon, McCormack, Pehle, Files.
Regraded Unclassified
105
C
0
P
Y
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
American Legation, Bern
DATED:
October 26, 1944
NUMBER:
3655
SECRET
FOR MCCLELLAND FROM WAR REFUGEE BOARD.
Reference your No. 6512 of September 30, 1944.
(1) $25,000 mentioned in Department's 3314 of September 26th is
in addition to $90,000 for which original license was issued and which
you report having received in installments by September 27th.
(2) WRB and interested groupshere have just been informed that
Oldenbruck (who had discussed this project with Labor groups at time of
his visits to United States) had arranged for transfer through Dutch
Government of equivalent of $90,000 to Holland, with understanding that
Dutch Government would be reimbursed by Queen Wilhelmina Fund.
(3) Accordingly, you and Clement and Krier are authorized to pay
Swiss franc equivalent of $90,000 to Dutch Minister in Bern, provided you
received adequate assurances that the equivalent has been made available
in Holland as stated by Oldenbruck. For your information, Oldenbruck is
being advised that in the future transactions of foregoing type should be
cleared with interested American groups before effectuation.
THIS IS WRB BERN CABLE NO. 239.
STETTINIUS
(Acting)
Regraded Unclassified
106
CABLE TO MINISTER HARRISON, HERN, AND MCCLELLAND FROM WAR REFUGEE BOARD
Re your 6927, October 19. For your information food parcel program
from Sweden to unassimilated persons Bergenbelsen and other German-controlled
camps was presented for approval to MEW, Department and FEA without
reference to WRB. FEA and Department in accord with MEW on October 20
authorized the program calling for shipment of 93 tons of parceled food
to German-controlled camps. Plan as developed by World Jewish Congress
representative in Sweden calls for distribution of these parcels under
supervision of Swedish Y.M.C.A.
With respect to WRB program calling for shipment of 300,000 parcels
from United States, Amcross will have all of remaining 285,000 three-kilo
parcels ready for shipment via Marseille in November. All instructions
contained in your 6263, September 21, being observed by Amcross.
THIS IS WRB BERN CABLE NO. 240.
9:30 a.m.
October 26, 1944
Regraded Unclassified
107
CABLE TO HARRISON, BERN, FROM WAR REFUGEE BOARD
Please deliver the following message to Saly Mayer from the
American Jewish Joint Distribution Committee:
QUOTE UNDERSTAND 6,000 JEWS MAINLY HUNGARIANS BETWEEN
AGES 16 AND 60 LIBERATED WHEN BOR YUGOSLAVIA WAS
OCCUPIED BY ALLIED ARMIES STOP THEY WORKED COPPER
MINES 5,000 FOR 15 MONTHS AND 1500 SINCE JUNE 1944 STOP
ALTHOUGH LIBERATED AND ABLE TRAVEL WHEREVER THEY WISH
NO ARRANGEMENTS MADE FOR THEIR RECEPTION ELSEWHERE NOR
CAN THEY REMAIN IN BOR STOP CAN YOU EXPLORE SITUATION
AND BRING SUCH EMERGENCY AID AS POSSIBLE KEEPING US
ADVISED UNQUOTE
THIS IS WRB BERN CABLE NO. 241.
(9:45 a.m.
October 26, 1944
C
0
108
P
Y
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
American Legation, Bern
DATED:
October 26, 1944
NUMBER:
3657
SECRET
FOR MCCLELLAND FROM WAR REFUGEE BOARD
1. Interested groups here have requested that you inform
Clement and Krier that during the last quarter of 1944 there
probably (repeat probably) will be available $75,000 for the
Belgium project, $100,000 for the Dutch and $12,500 for the
Luxembourg program. These amounts are in addition to sums already
regitted or authorized by Treasury licenses. The funds will be
available only for work in enemy-occupied territory, The foregoing
information may be of assistance to Clement and Krier in developing
their projects and if they feel that the additional amounts will
be of assistance, please advise the Board at once so that necessary
arrangements for allocation of the above-mentioned funds from the
National War Fund can be made.
2. You will be advised later concerning question raised in
your No. 6837 of October 13.
THIS IS WRB BERN CABLE NO. 238.
STETTINIUS
(Acting)
Regraded Unclassified
109
MFD-33
This telegram must be
Bern
paraphrased before being
communicated to anyone
Dated October 26, 1944
other than a Government
Agency. (SECRET w)
Rec'd 11:39 a.m.
Secretary of State,
Washington.
7111, October 26, 1 p.m.
FOR WRB FROM NCCLELLAND.
Leon Kubowitski World Jewish Congress from Gerhat
Reigner.
"Your 155 regarding alarming news Hungary proceeded
immediately requested interventions Interoross and
Swies Political Department. ICRC possesses cable
their Budapest delegate, Schirner, dated October 17
indicating that on that date situation Jews caln but
expressing fear that any moment new neasures might
be taken. Schirmer also stated Jewish Council
had opposed marking Jewish houses with special placards
indicating protection. Political Department received
later news stating that authorities already proceeding
ovacuation inhabitants Sewish houses to surroundings of
Budapest and government not recognising foreign inter-
vention and protection documents. Kraus director PAL
office Budapest cabled October 23 urgently appealing
for USA help which indicates that situation deteri-
orated very much last days. I understand that also
official American intervention was made last days
with Swies Government. All this information confi-
dential. You should use all propaganda seans your
disposal to influence Hungarian Government and people."
6260.
HARRISON
CSB
Regraded Unclassified
110
BJR - 286
Bern
This telegram must be
paraphrased before being
Dated October 26, 1944
communicated to anyone
other than a Government
Rec'd 11:32 p.m.
Agency. (SECRET 0)
Secretary of State,
Washington.
7115, October 26, 3 p.m.
FOR PEHLE OF WRB FROM MCCLELLAND
Greatly concerned over question of what steps might be initiated by
WRB and other interested departments of our government in attempt to counter-
act increasing Nazi ruthlessness which threatens with death at least two
million innocent men and women of all nationalities, races and faiths con-
fined as political prisoners in Nazi prisons, concentration and extermination
camps. Trustworthy reports coming from Germany indicate reign of terror has
followed events of July 20 with arrests, executions and suicides both among
foreign prisoners and on an unprecedented scale amongst German population
itself. This relentless policy shows unmistakable signs of increasing
violence particularly amongst foreigners. These prisoners represent
valuable political and social elements their respective countries whose loss
apart from human considerations involved would severely retard future recon-
struction of Europe.
At this important psychological juncture when Nazis are entering last
desperate stage of their rule I strongly recommend that serious consideration
be given to addressing a concerted and powerful warning to Germany in specific
effort to save lives of these political prisoners who are totally at mercy
of Nazism fanaticism. Such & warning should be solemnly made in name of
every Allied country whose nationals are concerned as well as Italy and
France which alone has over 200,000 political deportees. Soviet Government
in particular in name of countless thousands of their own war prisoners
whom Nazis have mistreated and starved and of their labor deportees
threatened with extermination should be urged to associate themselves
vigorously and unequivocally with this warning. The voice of the major
organized churches should also be joined to this pronouncement.
Made on as high and authoritative level possible such a warning should
re-emphasize fact that all Allied and associate nations will hold each indi-
vidual German as well as members of Nazi Party and of German military
organizations regardless of rank responsible both directly and where appro-
priate as an accessory for safeguarding life and welfare of Allies defenseless
countrymen in their custody or immediate neighborhood. Further any crime
committee against persons imprisoned on political or racial grounds whom
Nazis consider stateless (i.e. major part of close to a million surviving
European Jews) will be considered as punishable as though against an Allied
national. This pronouncement should be made in name of dignity and inviol-
ability of human personality for preservation of which Allied nations are
waging war.
Regraded Unclassified
111
-2- #7115, October 26, 3 p.m., from Bern.
This special warning with regard to political prisoners should be given
most effective and far-reaching publicity planned and directed by competent
members of respective Allied services. It should be repeated and hammered
home by radio and leaflets until it penetrates throughout Germany. I suggest
that correct and up to date information about the principal concentration
camps and prisons be used with appropriate and dramatic commentary by persons
intimately acquainted with such matters. Since many Germans have only
limited idea of organization of these camps and of treatment meted out in
them care should be taken to keep propaganda references sober, factual and
unexaggerated. If overdone they will not be believed and quickly branded
by Nazis as horror propaganda.
Majority of hardened murderers of ruling Nazi clique are probably
impervious to warning of ultimate punishment as war criminals. Even if so
it might nevertheless deter many lesser members of Nazis hierarchy from
minor Gestapo officials to SS guards in concentration camps who soon may be
called upon to execute orders of mass murder as well as possibly inspire
other individuals to positive acts. It has been evident for instance in
Hungarian negotiations with SS that definite rifts within their ranks exist
(Legation's 5588, August 26) which should be thoroughly exploited.
It might be effective in addressing this warning with respect to
foreigners imprisoned within their country to remind Germans that at least
200,000 of their own fellow citizens who have been arbitrarily arrested by
Nazis will doubtless share ultimate fate of these foreigners. Such an
Allied reminder of plight of German political prisoners might serve to
kindle & certain feeling of solidarity between the terrorized individual
German and all these prisoners including his own countrymen whose lives
are threatened by Nazis. Evidence of Allied concern for fate of imprisoned
German liberals as well as of foreign political prisoners might also help
to discredit belief fostered by Nazi propaganda that Allies intend to
enslave and eventually destroy Germans as a people.
Effect of a warning along these lines might be increased by stressing
that individually the German can grasp this last chance to assert his claim
to be considered apart from Nazi criminals by doing all in his power to
prevent or mitigate in any way open to him this final crime against his own
self respect against humanity and civilized world in which individual
German certainly hopes some day again to take his place.
HARRISON
WSB
Regraded Unclassified
Bern
112
other than a Government
Dated October 26, 1944
Agency. (RESTRICTED)
Rec'd 6:56 p.m.
Secretary of State,
Washington.
7123, October 26, 6 p.m.
FOR WRB FROM MCCIELLAND.
For Union of Orthodox Rabbis Emergency Committee
from Sternbuch.
"According cables received from Klarmann for ITA
financial situation of Jews in Runania has become
catastrophic. Griffel requesting money for support
of Orthodox Jews in Rumania who have been liberated
from camps. He attempting also organize ship transport
from Russia to Turkey for 10,000 persons. Expecting
details shortly. According your orders NO using funds
only for rescue work in enemy or enemy occupied
territory. Awaiting your instructions and news success
your efforts induce all other organisations undertake
concerted action. of 100,000 Swiss france we sent
to Bucharest, 26,000 are still at disposal of committee.
The Camp of Krottingen is reported to have been
dissolved".
HARRISON
RR
Regraded Unclassified
113
C
0
P
Y
MRQ-329
Ankara
This telegram must be
paraphrased before being
Dated October 26, 1944
communicated to anyone
other then a Government
Rec'd 4:41 a.m., 27th
Agency. (RESTRICTED)
Secretary of State,
Washington.
2043, October 26, 8 a.m.
FROM KATZKI TO PEHLE WAR REFUGEE BOARD
Ankara's No. 169
Group of 156 children arrived in Istanbul by
railroad direct from Rumania on October 25. These
children, immigrating to Palestine, include
repatriates from Transnistria, Polish refugees who
had been in Rumania and Rumanian nationals. They
received visas, including Turkish, pursuant to the
so-called "children's scheme" for evacuating Jewish
children from the Balkans to Palestine and constitute
the first group to be evacuated from Rumania
thereunder since its inception in 1943. It is planned
that the children leave Istanbul for Palestine by
railroad on October 27.
The foregoing is for your information. Further
news will be sent when available.
STEINHARDT
WTD
Regraded Unclassified
114
-
Ankara
communicated to anyone
other than a Government
Dated October 26, 1944
Agency. (RESTRICTED)
Rec'd 11:35 a.m., 28th.
Secretary of State,
Washington.
2059, October 26, 7 p.m.
FROM THE AMBASSADOR AND KATZKI TO PEHILE WAR
REFUGES BOARD. ANKARA'S No. 170.
Alexander and Otto Scheleifer accompanied by
their Aunt Margaret B. Houlander (see Department's
650 of July 21 WRB 81 and Department's of October 21
WRB 118) arrived in Istanbul October 25 with a group
of children from Rumania en route to Palestine. They
received necessary Turkish transit visas upon the basis
of their Palestine certificates. The regret to advise
you that Hiss Neulander informs us that the children
Judith and Mound. Schleifer were passengers on the 88
NEFEURA which was sunk in the Black Sea in August.
As these Schleifer children were not among the known
MEFEURA survivors they must be presumed to be lost.
Avra M. Schledfer, for whom a Palestine certificate
has been authorised, remained in Rumania for family
reasons.
Margaret B. Heulander is reluctant to consent to
the unaccompanded voyage to the United States of
Alexander and Otto Schleifer. All three, therefore,
will proceed to Falestine during the next days to
await the instructions of the Schleifer parents. They
may be addressed care of Elstein, 5 Benyehuda Street,
Jerusalem. The American Consulate General, Istenbul,
is transferring the entire file on the Schleifer case
Jarusalem.
Further details including a letter from Margaret
B. Neulander will be sent via pouch.
STEINHARDT
RD
Regraded Unclassified
115
NOT TO BE RE-TRANSMITTED
COPY NO. 11
SECRET
OPTEL No. 348
Information received up to 10 a.m., 26th October, 1944.
1. NAVAL
Yesterday one of H.M. Canadian Destroyers driven
ashore near Reykjavik during a gale and temporarily abandoned.
Some fatal casualties. One of H.M. Frigates and a Norwegian
Corvette in collision this morning mid-Atlantic. Corvette
reported sinking.
2. MILITARY
WESTERN EUROPE. British troops have made good pro-
gress all along the front from Hertogenbosch to the Scheldt
pocket. They are within one mile of Tilburg and have advanced
from three to five miles on a 16 mile front east of Esschen.
Canadians have made further progress along the Beveland Isth-
mus and have captured Fort Frederik Hendrik, but Germans still
hold out in Oostburg.
ITALY. Eighth Army have advanced to points ten
miles north of Cesena and eight miles S.E. of Forli.
GREECE. British troops have occupied Lamia with
patrols to Larissa (found held by Greek Partisans) and Kharditsa.
RUSSIA. Russians have captured Kirkenes in Norway
and have completed liberation of Tranysylvan ia capturing Satul
Mare.
BURMA. In the Tiddim area British troops are in
contact with small parties of Japanese seven miles S.E. and
13 miles east of the town. In the Kabaw Valley our troops
have advanced south to within 15 miles of Kalemyo. In N.E.
Burma, advancing down Myitkyina-Mandalay railway, they are 25
miles beyond Hopin.
3. AIR OPERATIONS
WESTERN FRONT. 25th. Bomber Command. Essen. 740
aircraft dropped 3,719 tons, mostly H.E. Almost complete cloud
but one convenient gap for short time. Bombing mostly on sky
markers. Attack appeared fairly well cencentrated. Homberg
synthetic oil plant - 220 aircraft dropped about 975 tons H,B,
through cloud.
U.S. 8th Air Force. 1250 aircraft despatched:-
Hamburg 1656 tons, Gelsenkirchen synthetic oil 220, railway
centres Hamm 204, Munster 91, Neumunster airfield and repair
works 527. All objectives cloud covered. Pathfiner technique
employed all cases. Four R.A.F. and two U.S. Bombers missing.
MEDITERRANEAN. 24th. 751 aircraft (6 missing)
operated over Italian battle area and against communications
Po Valley. 26 locomotives and 186 rolling stock destroyed or
damaged.
4. HOME SECURITY
25th/26th. 12 flying bombs plotted.
Regraded Unclassified
116
10/27/44
Reading copy of Secy's speech before the
businessmen for Roosevelt, Inc., at the Waldorf-
Astoria Hotel,
117
I have come here tonight to talk to you business
men about business and to discuss with you how you
have fared under Mr. Roosevelt's Administration.
I should like to express to you at the outset my feeling
that business as a whole has conducted itself magnificently
during the war years and that those of you who have
carried on the job of war production in all its varied
phases have every reason to feel proud of your
contribution to the national cause.
Every age has its mythology - ours no less than
times gone by. Myths, I think, are something like
currency, and Gresham's law is about as applicable to
the one as to the other.
2027
116
Regraded 2111 Unclassifie
118
- 2 -
This is to say, paraphrasing Gresham a little bit, that,
of two forms of myth, the inferior or more depreciated
tends to drive the other out of circulation. And this
is particularly true in a period when propaganda has
been elevated into something of a science. For
propaganda is a form of counterfeiting.
I make this somewhat philosophical approach because
I want to say something about myths this evening - in
particular about one myth which seems to me one of the
most remarkable propaganda efforts of our time.
Let me state the myth for you as it was expounded
earlier this year by the Republican Presidential
Candidate in his acceptance address:
2,111
Regraded 2000 Unclassified
119
- 3 -
The present Administration - I quote his own words -
"has been consistently hostile to and abusive of
American business and American industry, although
it is in business and industry that most of us make
our living."
Now I do not mean for a moment to suggest that
the th - - in this particular instance - was invented
by the candidate. On the contrary, it is one of the
most hackneyed, time-worn and over-worked myths of
the present day. It has been in circulation, I should
guess, for pretty nearly a full decade.
Ins
91
1909
Regraded Unclassified
120
- 4 -
It was tried out with great gusto by campaign orators
in 1936, was dusted off and trotted forth as a brand
new discovery in 1940; and today - such is the
originality of its sponsors - it is being tried again.
It is about time, I think, to take a good close
look at this myth. Let us leave the war years altogether
out of account for the moment and go back instead to
the 7-year period before 1940 when the Administration
halted the precipitous deflation of the early '30's
and built up steam in a cold boiler to start industry
once more on the upgrade. It is this period which the
Republican candidate is pleased to call "The Roosevelt
depression".
1909
Regraded Unclassified 124
121
- 5 -
I am glad to think that time has dimmed the memory
of the dark days before Franklin D. Roosevelt revived
our faith in ourselves by telling us that the only
thing we had to fear was fear itself.
In 1932, the year before he took office, corporations
reporting to the Bureau of Internal Revenue showed an
aggregate loss of more than 4 billion dollars. By 1934,
the present Administration had abused business and
industry to such an extent that they began to report
profits instead of losses to the Bureau of Internal
Revenue. The profits of corporations that year -
after payment of taxes - amounted to $2,374,000,000. 1/4
1785
117
Regraded Unclassified
122
- 6 -
Net profits rose steadily each year after that, except
during the recession of 1938, until by 1939 they
stood at about six billions.
Pause
All right, now let's take a look at the record
of retail trade during this period. Total retail
sales in 1933 amounted to 24-1/2 billion dollars.
In 1939, they were better than 42 billions, an increase
of 71 per cent. If this was abuse, I have an idea
that most retailers would like to be abused constantly.
The steel industry affords a pretty good clue to
our general economic health. In 1932, it was operating
at 20 per cent of its capacity. In 1939, before the
war orders began to come in, at 65 per cent.
1668
Regraded Unclassified
123
- 7 -
The United States Steel Corporation had a net
income in 1932 of minus 71 million dollars - that 1s,
it suffered a net loss of that amount. That was when
it was functioning under an Administration that
professed great friendship for business. In 1939,
U.S. Steel was ruthlessly forced to relinquish the
pleasure of taking such a loss; the New Deal abused
it into accepting a net profit of 41 million dollars.
There wasn't anything special about the experience
of the United States Steel Corporation. Manufacturing
concerns in general reported themselves in the red
for 1932 to the tune of $1,600,000,000. In 1939, they
were three billion dollars in the black.
1533
125
Regraded Unclassified
124
- 8 -
Well, here is the record, open for examination
to any one who wants to read it. If it is a record of
hostility and abuse, then words, I think, have altogether
lost their meaning. Businessmen are generally known
to be pretty practical fellows not easily terrified by
phoney labels. Your presence "here tonight testifies
to this. You have found the proof of your pudding in
the eating their of. of.
Of course, there is no enmity on the part of the
Roosevelt Administration toward business and industry.
There is simply a firm determination to avoid the kind
of quicksand crust of fake prosperity on which this
Nation danced such a frenzied Jig during the twenties.
1408
112
Regraded Unclassified
125
- 9 -
Pause
This Administration has sought, instead, to
develop a balanced and expanding economy, based on a
high volume of purchasing power. It has recognized
that enduring prosperity must have a solid foundation
and
that it must be built from the ground up. It has
operated on the premise that what advances the
general welfare of the people of the United States also
advances the welfare of the business and industry in
which they engage.
1396
72
Regraded Unclassified
126
- 10 -
And this is the very simple explanation for the growth
in corporate profits which I have noted - for the
increase in dividend payments, for the mounting volume
of trade, for the expansion of production. Under this
Administration, the American people as a whole have
been earning the money with which to buy the goods and
services which business and industry have for sale.
The Roosevelt Administration has had so much faith -
and such genuine faith - in the free enterprise system
that it has sought to keep it free. I think that no
young man who wants to start in business for himself
will feel abused by an Administration which protects
him from the shackling influence of monopoly. 1/2
1324
117
Regraded Unclassified
127
- 11 -
I think that no banker or broker who wants the public
to invest in an honest enterprise will feel abused by
an Administration which protects him from the competition
of irresponsible market manipulators and gold brick
salesmen. I think that no honest employer will feel
abused by an Administration which protects him from the
competition of sweatshops.
These and other measures instituted under the
New Deal have given American enterprise real freedom.
To speak of them as abusive is as absurd as to speak
of a surgeon as abusive because he cuts out an inflamed
appendix or a cancerous growth. Business and industry
in America are healthier today and have greater
opportunities for the future because this Administration
has been a true friend to them.
1107
Regraded Unclassified
128
- 12 -
Pause
Oh, yes, I know that the opposition now endorses
the Roosevelt reforms and any evening on the air you
can hear the Johnnies-come-lately hollering "me, too If
But you can also hear them hollering that the present
Administration "has been consistently hostile to and
abusive of American business and industry." And I
think that you can get from this a fair measure of
Pause their sincerity.
There are, I think, real enemies of business -
important and powerful enemies - some of them within the
ranks of business itself.
982
22
Regraded Unclassified
129
- 13 -
They are the "business as usual" boys who opposed
the conversion of industry from peace to war. They
are the men who fought price control and renegotiation -
who would have risked the danger of inflation for extra
profits for themselves. They are the men who fought
collective bargaining, minimum wages, social security
and the other social gains of this Administration.
They are the monopolists who favor restricted industrial
output and restricted credit at high interest rates
and restricted markets at home and abroad.
Yes, business has its enemies. But they are not,
I am certain, representative of American businessmen.
And they are not in the Roosevelt Administration.
885
109
Regraded Unclassified
130
- 14 -
Pause
Now, I want to turn for a moment to the war years.
The achievement of the American industrial machine
during this war has brought heart and hope and wonder
to our friends, consternation and despair to our enemies.
We have kept our pledge to serve as the arsenal of
democracy. We have built and equipped a mammoth army
of our own and the greatest navy in the world. And
at the same time we have met all the essential needs
of our civilian economy. Business itself deserves
immense credit for this accomplishment. But does any
one seriously think these things could have been done
without a well balanced economy developed before the
war began?
778
114
Regraded Unclassified
131
- 15 -
Business itself has fared pretty well in the
performance of its magnificent production job. The
total of corporate profits for the year 1943, after
payment of taxes and after renegotiation, was the
highest in the history of this Nation - higher even
than in the frenzied boom of 1929.
This war prosperity has been well balanced. I
am glad to say that it has created few war millionaires,
for the rise in profits has been distributed throughout
the business community.
664
83
Regraded Unclassified
132
- 16 -
The prosperity of the smaller concerns 18 less
easily observed than that of the large corporations
but, according to a survey made jointly by the Federal
Reserve System and Robert Morris Associates, there
has been an even greater relative increase in the
profits of the smaller businesses. 3/4
What is much more important to business in the
long run than its profits during the war itself is the
fact that, despite the conversion of our resources to
war production, the domestic economy has been kept
sound and stable.
581
82
Regraded Unclassified 494
133
- 17 -
There has been no out-of-hand inflation in the course
of this conflict. The purchasing power of the American
dollar has been kept firm. You must certainly credit
this in large measure, I believe, to the stabilization
program and the methods of war finance undertaken by
your Government. The economic policies pursued in
the war years have safeguarded business and industry
not only against inflation but also against the
disastrous sort of deflation which struck this country
in 1920 and 1921.
We in the Treasury have conducted our fiscal
operations in such a way as to minimize the post-war
burden of the debt and to promote mass buying power
and balance in the post-war economy.
494
121
Regraded Unclassified
134
- 18 -
Business will have these assets in meeting the problems
of reconversion:
(1) More than 85 million individual investors
have purchased bonds of their Government, and the
aggregate value of bonds held by individuals is now
48 billion dollars. These bonds give their holders
generally a sense of security which will enable them
to spend their current incomes for consumer goods
when these become available.
(2) Interest rates have been kept low, averaging
about 1-3/4 per cent in comparison with 4-1/4 per cent
in the first World War; the reduction will not only
save about four billion dollars annually in the post-war
Federal budget but will also give business much more
favorable borrowing opportunities than it had at the
end of World War I.
373
188
Regraded Unclassified 245
135
- 19 -
(3) Securities sold to banks and corporations,
most of them of short maturity, have provided an
unparalleled liquidity which should assist greatly in
the financing of post-war reconversion and expansion.
(4) Provision has been made for the refunding
of excess profits taxes to cushion corporations against
losses in the years immediately following the war.
Pause
Can any reasonable man find in such measures an
indication of hostility to American business and
American industry? No, I think the Republican candidate
has been engaged - and not for the first time - in
the prosecution of a myth.
245
94
151
Regraded Unclassified
136
- 20 -
Business and industry have a role of vital
responsibility to play in the development of the future.
They must be, in the future as they have been in the
past, the initiators of economic progress. Theirs
must be the ingenuity, the know-how, the enterprise
needed to find new products, build new plants, develop
new techniques. It 1s to them that Americans look
for the expansion of production and the creation of
new jobs and the lifting of our living standards.
151
81
Regraded Uncla ssified
137
- 21 -
Business can and will fulfill these hopes. But
it can fulfill them only in partnership with an
Administration which will support it, not with fair
words and special benefits, but with a dynamic program
of economic development for all the people. It is
this kind of friendship for business,
-
for
agriculture and labor, which the Roosevelt Administration
has practiced and will continue to practice. while
It 10 in ce.
70
Regraded Unclassified
T
138
OPR
NY 1-2139
OK
NY 1-2139-G MOK
SECRET SVCE NY AMMER FFF - law - October 27, 1944 - 1855 PM ENT
SECRET SERVICE WA WILSON
THE FOLLOWING TELEGRAM IS QUOTED FOR DELIVERTY BY AGENT GAYDICA TO THE
COLONEL ON HIS ARRIVAL
"NEW YORK NY OCT 27 1214P
SECY HENRY MORGENTHAU JR TREASURY DEPT
ATTN HERBERT E GASTON ASST SECY WASH DC
I HAVE BEEN ASKED BY THE EXECUTIVE COUNCIL TO ASSURE YOU THAT THE
ENTIRE PROCEEDS OF TONIGHTS DINNER WILL BE USED TO DEFRAY PARTIALLY
THE EXPENSES OF TONIGHTS BROADCASE FROM PHILADELPHIA AND FOR NO OTHER
PURPOSE
PHILIP E WILCOX PRES BUSINESS MEN FOR ROOSEVELT INC
502 PARK AVE
1225P"
MOM PLS
CORRECTION
WORD SHOULD BE BROADCAST NOT BROADCASE
XXXXXX TOP OF TELEGRAM ALSO HAS "WU 15 40 4 EXTRA
WILSON GA
OK HAMMER END
WILSON ENDM
Regraded Unclassified
WU 15 40 4 EXTRA
139
NEWYORK NY OCT 27 1214P
1944 OCT 27 PM 12 27
SECY HENRY MORGANTHAU JR TREASURY EPT
o
ATTN HERBERT E GASTON ASST SECY WASHIC
I HAVE BEEN ASKED BY THE EXECUTIVE COUNCIL TO ASSURE
YOU THAT THE ENTIRE PROCEEDS OF TONIGHTS DINNER WILL BE
USED TO DEFRAY PARTIALLY THE EXPENSES OF TONIGHTS
BROADCAST FROM PHILADELPHIA AND FOR NO OTHER PURPOSE
PHILIP E WILCOX PRES BUSINESS MEN FOR ROOSEVELT
INC 502 PARK AVE
1225P
STANDARD FORM
Office Memorandu,SECRET STATES GOVERNMENT
140
n
DATE: October 27
TO
:
Secretary Morgenthau
FROM :
Frank Coe, Secretary
CCLL
SUBJECT:
Minutes of October 25 meeting in
Secretary Morgenthau's Office.
Attachment 1
No.
1. 141
TOP SECRET
U.S. Committee on Mutual Lend-Lease Aid Between
the United States and the United Kingdom
Minutes of Meeting in Secretary Morgenthau's
Office on October 25, at 10:45 a. n.
Present
Secretary Morgenthau, Chairman
Messrs. Acheson
White
Patterson
Currie
Taft
Casaday
Gates
Cox
Collado
Angell
Davidson
Coe, Secretary
Army Air
Agreement has been reached on most of the major items in the British program
of Army Air types. Assistant Secretary Lovett informed Secretary Morgenthau
in a letter (U.S. No. 5) which was distributed at this meeting. The letter
further stated that it was expected to sign a formal agreement on October 25.
Ground Army Requirements
A memorandum from this subcommittee (Patterson, Somervell, Clay-Venning,
Weeks, Macready) was distributed (U.S. No. 6). It stated that agreement had
been reached on the treatment of all items in the British program, and that
subject to the agreed conditions, all these items are to be accepted for
production concurrently with the requirements of the U.S. Army. The request
for locomotives and wagons for India is remitted to FEA. A detailed
schedule was attached.
Reciprocal Aid-Military
According to the above memorandum, U.K. undertakes to supply reciprocal aid
within the limits prevailing at the beginning of the period in question.
However, the U.S. representatives also recommended that as a condition of a
U.S. acceptance of the U.K. ground army program, the U.K. should be responsible
for reciprocal aid throughout the Empire and Commonwealth.
Regraded Unclassified
142
-2-
CCLL-U.S. Com.Minutes,Oct.25
Shipping
Mr.White reported on a letter from Admiral Land, who said that he had not
received British estimates from FEA and so was delayed.
Navy and Navy Air
Secretary Morgenthau said that Secretary Forrestal would furnish a memorandum
on a British request for reconditioning the Navy. This appeared not to be in
the program before this group.
Later in the meeting, Assistant Secretary Gates explained that agreement on
the Navy program was held up pending more information and that negotiations
on the Naval Air requirements had not begun because the British representative
had not arrived.
Non-Military
Under Secretary Patterson called attention to his letter (U.S.No.11) expressing
the Army's interest in four short items (tires, tire fabrics, paper and paper
board and nylon) which the British are requesting of FEA.
Exports
There was discussion of a memorandum (U.S. No. 12 distributed) by Asst.Secretary
Acheson, which set forth the American understanding of certain points in the
British document (2), relating to exports and the White Paper. It was agreed
to ask the British whether the American interpretation on these points was
correct. (See Minutes of Combined meeting of October 25.)
Press Release
Mr. Cox pointed out that rumors and press inquiries had begun. Mr. Coe
was asked to review the release, and, after clearance, to take the question
up with Mr. Early.
The meeting adjourned at 11:35 for discussion with the British.
Regraded Unclassified
143
TOP SECRET
USS:402
Copy No. 2
U.S. Subcommittee on Mutual Lend-Lease Aid
CCLL
Between the U.S. and the U.K.
Minutes of meeting held in Mr. White's
office on October 27 at 10:30 a.m.
Present
Mr. White, Chairman
Lauren Casaday
Dean Acheson
Charles Taft
Mr. Fetter
L. Currie
J. Angell
A. Davidson
Frank Coe, Secretary
Exports and Stocks
Mr. Davidson circulated a draft "Joint Statement of Principles" (U.S. No. 17)
which had been prepared by himself and Mr. Angell on the basis of preceding
documents and discussions. After discussion, the American group agreed
tentatively to work on the basis of these principles with one modification.
In the draft it was provided that where goods were exchanged between the two
countries in substantial amounts, neither country was barred from exporting
the goods in commerce. This was changed 80 that the exception would be
allowed only where the goods were exchanged between the two countries in
substantially equal amounts.
As modified the principles are as follows, with the date on which they
are to go into operation agreed upon tentatively by the U.S. group as
December 31, 1944:
1. Lend-Lease, mutual aid and identical articles would not be exported
in commerce, except where the article was exchanged between the two
countries in substantially equal quantities.
2. In the case of goods no longer obtainable as lend-lease, stocks
would be reserved for military purposes, without a time limit.
3. In the case of goods which would continue on lend-lease, the quantity
used for military and civilian war purposes would have to exceed lend-
lease deliveries plus withdrawals from lend-lease stocks.
4. Consent would be required to transfer goods from military to civilian
end uses,
Regraded Unclassified
144
&
It was agreed by the American group that in the case of any announcement
on this matter, we would prefer that such a statement was written in terms
of the large changes which were due to take place in lend-lease and the
corresponding need for new and modified principles, written in terms of
a withdrawal of export restrictions on lend-lease goods and the scrapping
of the White Paper. The U.S. group further decided that after today's
discussion of this question-to which it was expected that general agree-
ment would be reached-the subject might be laid over for some time until
other matters had been finished.
The following matters were discussed and it was agreed that they would
be brought up at the next meeting with the British:
a. Non-munitions program - Mr. Currie wished to raise & number of
points of procedure.
b. 011 exports - Question of whether Britain intended to export
any oil for cash.
c. Sterling Pool - Mr. Acheson wished a full dress discussion of
this matter.
d. Military reciprocal aid - Mr. Goe pointed out that the U.S.
Army Subcommittee on the ground program had recommended that
that program be contingent upon the underwriting of military
reciprosal aid from the Empire. This would have to be discussed
with the Dominions and in the top group.
Regraded Unclassified
145
TOP SECRET
COPY NO. 40
C.S.L.L.(44) 2nd Meeting
Combined Sub-Committee on Mutual Lend-Lease Aid
Between the U.S. and U.K.
Minutes of Meeting held in U.S.
Treasury on 27th October, 1944 at
11:30 a.m.
Present
Mr. White
(In the Chair)
U.S. Representatives
U.K.Representatives
Mr. Acheson
Mr. Ben Smith
Mr. Taft
Lord Cherwell
Mr. Fetter
Lord Keynes
Mr. Brand
Mr. Casaday
Sir Robert Sinclair
Sir Henry Self
Mr. Currie
Sir Charles Hambro
Mr. Davidson
Mr. Opie
Mr. Angell
Mr. Helmore
Mr. Coe
Mr. Lee 3
Joint Secretaries
1. EXPORT FREEDOM AND STOCKS
At the Chairman's invitation Mr. Acheson communicated
to the meeting the tentative proposals which the U.S. group
would be prepared to recommend on this subject.
These proposals can be summarised as follows:-
(a) At the present stage the two groups would concentrate
on securing agreement on principles, leaving detailed drafting
for a later period.
(b) The date for the initiation of the new principles
would be the 1st January, 1945, since on that date the U.K.
would start paying cash for the raw materials and manufactured
goods which were to be taken off lend-lease.
(c) Lend Lease or mutual aid goods delivered to the
United Kingdom or the United States, or goods identical
thereto, would not be exported in commerce. Where the two
countries exchanged roughly the same amounts of a substitutable
commodity (e.g. rubber, oil products raw and refined) this
restriction would not apply.
(d) Remaining Lend-Lease stocks at the 1st January 1945
of materials and goods no longer furnished under Lend-Lease would
be set aside for "military" end-use. There would be no obligation
on the U.K. to consume such stocks within a given period.
(e) As regards raw materials remaining on Lend Lease,
the question of payment would not arise unless the quantity
received on Lend Lease exceeded the amounts required for con-
sumption for military and essential war purposes in the United
Kingdom.
Regraded Unclassified
146
(f) Articles requisitioned for military end-use would
not be transferred to civilian end-use without the prior
concurrence of the U.S. Administration,
MR. WHITE said the Americans were accepting almost
entirely the British proposals on these points.
LORD KEYNES said that the U.K. group welcomed the
proposals or the U.S. group and were glad to recognise that they
were almost wholly in accord with the proposals which had been
put forward on behalf of the U.K. His main comments would be
on points of detailed interpretation rather than of principle.
(1) He asked whether it was essential that the
restriction on the export of articles identical to those obtained
on Lend-Lease need apply in the case of articles identical to
stores requisitioned on Lend Lease for military end-use. He
pointed out that if it could be ruled that the obligation was not
to apply in respect of goods in this field, the difficulties of
administration and of interpretation would be very greatly
simplified, For instance, there would be no need to have trouble
with the difficult complications which would arise in connection
with components and spare parts. MR. CURRIE agreed that the
possibility of making an exception on the lines suggested by
Lord Keynes should be further considered by the U.S. group.
MR. ANGELL asked whether the U.K. case would be met if it could
be ruled that the obligations should not relate to components and
spare parts. LORD KEYNES replied that while he would prefer a
more comprehensive arrangement, a ruling applying to components
and spare parts only would meet part of the difficulties which
he apprehended, provided that it was recognised that the U.K.
would be requisitioning on lend lease components and spare parts
as such as well as those incorporated in or supplied with other
goods.
(11) LORD KEYNES circulated two notes for the information
of the U.S. group:
(a) A note (No. 17) giving more comprehensive
figures of stocks in the United Kingdom of raw materials of lend
lease origin. (He explained that exact figures for steel stocks
of lend lease origin were not at present available).
(b) A note (No. 16) (attached as an Annex to these
minutes) indicating the arrangements proposed for effecting the
clean-cut removal as at the 1st January 1945 of the raw materials
and manufactured articles to be taken off Lond Lease. (Lord
Keynes emphasised that it would be dosirable for the arrangement
suggested in the above noto to be discussed between the U.K.
Missions concerned and their opposite numbers, particularly as
it would be important that there should be no interruption in
the flow of goods because of the financial changes proposed,
and that the maximum quantity of lend lease goods should be
shipped before the 1st of January, 1945).
There was some discussion on the quostion of what public
statement would be required when the change was announced. The
U.S. group expressed the hope that the statement would not
emphasise a unilateral withdrawal of the White Paper but should
rather indicate that the White Paper had become inapplicable in
present circumstances, particularly in view of the impending
substantial changes in the Lend Lease programme -- especially
the withdrawal of steel and most manufactured civilian supplies
from the U.K. Lend Lease requirements
It was agreed that while further discussion of the
principles involved should be deferred for the present, progress
might be made with the drafting of a suitable public statement
for consideration at a later meeting. It was recognised (1)
that it would be essential during the negotiations absolute
secrecy should be maintained (11) that an announcement on December
1, or even sooner, might be suitable.
- 2 -
Regraded Unclassified
147
2,
DOMINIONS AND INDIAN PROGRAMMES
LORD KEYNES expressed the hope that the requirements
which had been put forward on behalf of Australia, New Zealand
and India would be examined in a generous spirit, since the war
situation in Stage II would mean that those countries would not
be able to proceed to the same degree of demobilisation as would
be the case in the United States and the United Kingdom. In his
view therefore there would be a strong prima facie case for giving
them the full measure of Lond Lease for which they had asked,
particularly as they would presumably still be asked to furnish
a considerable amount of Reciprocal Aid.
It was agreed that there should be a formal meeting
between the U.S. group and representatives of the Dominions
Governments concerned and of India on Tuesday the 31st October
at a time to be arranged. It was contemplated that such a
meeting would be a prelude to more detailed discussions of the
Dominion and Indian programmes,
3.
LOCOMOTIVES AND WAGONS FOR INDIA
LORD KEYNES referred at some length to the desirability
of having these requirements met on Lend Lease. He said that
there was admittedly a difference of opinion between the U.S.
and U.K. military advisers as to the degree of military
essentiality for both the locomotives and the wagons. Nevertheless
on the U.K. side it was certain that the necessity for obtaining
the wagons in 1945 would be pressed, although it might be that
if lend lease terms were refused, provision of the locomotives
would have to be deferred until 1946. He understood that the
difficulty on the U.S. side was not so much one of supply as of
the export criteria. He pointed out, however, that at no previous
stage had the provision of given articles on Lend Lease torms to
parts of the British Commonwealth outside the United Kingdom,
been taken into account in connection with exports from the United
Kingdom. Thus in the view of the U.K. group the criterion
proposed by the U.S. group was irrelevant, In any case the only
identical locomotivos which the U.K. would export in 1945 were
the remainder of the same requirement for India. There would be
no cash advantage to the U.K., since the receipts would merely
diminish outstanding storling balances.
LORD CHERWELL, MR. BEN SMITH and SIR 'ROBERT SINCLAIR
supported LORD KEYNES'S arguments and urged that a distinction
between military and civil requirements in this field was unreal
since the non-fulfilment of a civilian necessity might well
radically affect the military situation.
MR. CURRIE said that the U.S. group would have to
consider this matter further. One of their main difficulties was
that if the locomotives and wagons were supplied on Lend Lease
they would still have a long life after the period of military or
quasi-militory user was ended. LORD KEYNES said that in the
view of the U.K. group the U.S. position in this respect would
be safeguarded by their ability to recapture the equipment in
question.
4, FOOD
MR, CURRIE said that the F.E.A. had reviewed the
U.K. programme and was now prepared for dotailed discussions
to take place with W.F.A. and the operating levels of F.E.A. The
general view of F.E.A. was that the over-all size of the programme
was reasonable, while they recognised that in the light of the
Quebec Agreement it was right that the programme should make
some allowance for an increase and an improvement in the diet of
the U.K. population. The most important points which F.E.A. would
wish to explore further related to (1) the extent to which the
U.S. would be called upon to meet the needs of other countries
especially for relief requirements (11) the extent to which the
U.K. proposed to meet any increased demand for food by running
- 3 -
Regraded Unclassified
148
down its stocks, (11) the amount of imports which the U.K.
proposed to draw from sources other than the United States in
1945. It was pointed out that (1) would be taken care of by
the ordinary allocation machinery of the C.F.B.: what the forth-
coming discussions should establish was a programme which would
be acceptable from a Lend Lease standpoint subject to allocations
being agreed by the C.F.B. in the light of the over-all demands
on world food supplies, including those of the United States.
It was agreed that discussions should now proceed at
the operating level on the lines indicated by Mr. Currie. The
U.K. group noted that their representativos would be called upon
to provide detailed information on points (11) and (111) above.
5.
OIL
MR. CURRIE said that here again the U.S. were now
prepared for discussions at the operating level. The point of
difficulty was likely to be that of the sizo of the stocks of
oil to be maintained in the U.K., a point which had already been
raised with the Resident Ministor.
LORD KEYNES soid ttat there had been a modification
of the British requirements as a result of which the net Lend
Lease domends were now expected to amount to $413 million as
against a previous figure of $475 million. Ho mentioned, as a
matter of interest, that the U.K. would be providing a greater
quantity of oil on Reciprocal Aid than the amount for which it
was asking on Lend Lease, but owing to the fact that the
Reciprocal Aid oil was largely made up of low priced fuel oil,
the value would be less than the value of Lond Lease oil. He
confirmed that the revised figure of $413 million did not include
anything in repect of certain oil products (1,e, identifiable
lubricating oils) which were now being excluded from the Lend-
Lease programme because of export considerations.
It was agreed that detailed discussions on oil should
now proceed with Mr. Ernst of F.E.A.
6.
SHIPPING
It was agrood that the detailed discussions would
now begin between the British Morchant Shipping Missions, Mr.
Martin of F.E.A. and Mr. Cornwall of W.S.A.
7.
RAW MATERIALS AND MISCELLANEOUS MANUFACTURED GOODS
MR. CURRIE said that he thought that the way was now
clear for detailed discussion of these programmes with Messrs.
Griffin and Lebensburger of F.E.A. He thought that there was
perhaps some misconcoption about the U.K. demand for open cast
mining machinery since his information was that all the U.K.
demands had either already been supplied or were in course of
procurement. It was agreed that this point could be cloared up
at the detailed discussions.
8.
FUTURE ARRANGEMENTS
LORD KEYNES said that he proposed to communicate to
the U.S. group on the 30th October a paper which, he hopod, would
contain (a) certain revisions in the detailed figures of the U.K.
requirements together with the revised oil programme to which
he had referred, (b) a more detailed breakdown of Dominion and
Indian requirements which the Governments concerned were now pre-
paring, (c) a more comprehensive version of Chapter 3 setting
out ways in which, in the U.K. view, the gold and dollar reserve
position of the U.K. could be strengthened.
4
Regraded Unclassified
149
It was agreed -
(1) that there should be a formal meeting in
Mr. Morgenthau's room, with Dominion and Indian
representatives on the 31st October at a time
to be agreed,
(11) that the next meeting of the Combined Group should
be on 1st November, at 11:30 a.m.
(111) that on the 30th October Lord Keynes should give a
talk on the working of the Sterling Area dollar
pool. It was agreed that this talk would probably
be of interest to a wider audience of both U.S.
and U.K. officials than those comprising the
Combined Committee, and it was tentatively arranged
that it should take place in Mr. Acheson's office
at the State Department.
(Signed)
Mr. Lee
Mr. Coe
Washington, D.C.
- 5 --
Regraded Unclassified
150
ANNEX
STATEMENT BY LORD KEYNES
I confirm what I said at the discussion on the 24th
October - namely that in order to assist agreement on the date
of 1st December, 1944, for the removal of White Paper restrictions
on U.K. exports, we had proposed that all raw materials and
manufactured goods not included in either the Munitions Programme
in Chapter 1 or the Non-Munitions programme in Chapter 2 of our
document should be taken off Lend-Lease with effect from the
1st January, 1945, whether Stage II actually begins on that date
or not.
You will remember that I reserved the question of
whether the proposed terminal date of 1st January, 1945, should
apply to materials requisitioned after that date, or to
materials shipped after that date, or to materials made available
for shipment after that date. I am now able to let you have
our considered views. I am, of course, dealing solely with the
"financial" point and nothing in our suggestions to meet this
point should have any effect on the flow of goods.
We suggest that the most convenient arrangement will
be to proceed on the following lines:-
1. Goods which we do not require oither on Lend-Lease
or on cash terms during 1945.
(a) Goods covered by Lond-Lease requisitions which are
placed on board ship before the 1st January, 1945,-
defined as goods which are included on a Bill of
Lading sighed by the Master of the ship concerned
before the 1st January, 1945 - will be on Lond-Lease
terms.
(b) Goods covered by Lend-Lease requisitions which
have not been placed on board ship before the 1st
January, 1945, in the sense of the foregoing
paragraph, but which have been made available for
shipment by that date - defines as having been
invoiced from the works for transport to a ship's
side - will continue to move forward and be shipped,
but will be paid for on a cash reimbursable basis
unless other arrangements for their disposal are made
by mutual agreement.
(c) Goods covered by Lend-Lease requisitions which by
1st January, 1945, have not reached the point of
having been issued from the works for transport
to the ship's side, will fall outside the scope of
(a) and (b) above. We hope that the amounts involved
would be very small as we shall, of course, do our
best to give porticulars of goods we shall not require
at the earliest possible date, so that cancellation
action can be taken where appropriate. We assume,
however, that in accordance with the usual practice
there would be no commitment on the U.K. to take
such goods or to pay cancellation charges.
Regraded Unclassified
151
2. Goods which we have proposed to take off Lend-Lease
but of which we shall still continue to need supplies
in 1945.
Goods not placed on board ship (in the sense of
(a) above) before the 1st January, 1945, will be
purchased for cash. The question of whether such
goods would need to remain on a cash reimbursable
basis and the time at which they would be
transferred to U.K. Government procurement or
private trade channels, would require to be
considered case by case, and settled by mutual
agreement.
We hope that the above proposals will be found to
constitute a practical means of effecting a "clean cut at given
date" solution which we believe to be in the mutual interests of
both Governments.
(Signed) Keynes
I
27th October, 1944
- 2 -
Regraded Unclassified
152
UNITED KINGDOM TREASURY DELEGATION
Box 680
Benjamin Franklin Station
Washington, D. C.
October 31, 1944
Reference:
39 - TOP SECRET
Mr. Frank Coe
Foreign Economic Admin.
Rm. 1405 - Tempo T.
Washington, D. C.
My dear Frank:
You will remember that at the Sub-Committee meeting on the
27th October, Lord Keynes circulated a paper showing the Lend-Lease
stocks in the United Kingdom of certain commodities.
I am sorry to say that we have now discovered that the sulphur
stock figures contained in that table were not wholly accurate. Would
you please be good enough to amend the figures to read as follows:
No. of Months
Consumption
Stock of
%-age of Total
Represented by
Date
Unit
L/L Origin
U.K. Stocks
Total Stocks
1944
Sulphur Acid
L.T.
85,000
97
6
Oct. 1
"
Regular
"
24,000
91
5
#
I am assuming that you will circulate any necessary copies of
this letter to the others concerned on the U.S. side. In other words,
I am not proposing to circulate a note amending the figures given in the
statement handed to you on the 27th October, although I will do so if you
wish.
Yours sincerely,
/a/ F. G. Lee
Regraded Unclassified
153
TOP
October 27, 1944
SECRET
My dear Mr. Krug:
In accordance with the request con-
tained in your letter of October 24th, I
am sending you herewith a Top Secret
document on "British Requirements for the
First Year of Phase II".
Sincerely yours,
(Signed) H. Morgenthau, Jr.
Mr. J. A. Krug, Chairman,
War Production Board,
Washington, D.C.
TOP
SECRET
Regraded Unclassified
154
Mr. Krug would like to have a copy
of British Proposal for Phase II.
bay-
155
WAR PRODUCTION BOARD
WASHINGTON, D. C.
October 24, 1944
IN REPLY REFER TO:
The Honorable
The Secretary of the Treasury
My dear Mr. Secretary:
Since the combined production problems
of the interval between the end of the German
war and the end of the war with Japan are so
closely tied in with the extent and nature of
future lend-lease aid to Great Britain, I
would very much appreciate your sending me a
copy of the British proposal for Phase II,
copies of which I understand have been delivered
to you by the British Delegation.
I recognize that this document must be
0
kept in strictest confidence at this time, and
I can assure you that it will be treated ac-
cordingly.
Sincerely yours,
Jaking A. Krug
Chairman
FORVICTORY
BUY
UNITED
STATES
WAR
BONDS
AND
STAMPS
Unclassifie
156
WAR PRODUCTION BOARD
WASHINGTON, D. C.
October 27, 1944
IN REPLY REFER TO:
SECRET
Dear Mr. Secretary:
I have received your letter and the
document, "British Requirements for the First
Year of Phase II". Please be assured that
this material will be handled with utmost
secrecy.
Sincerely,
Jhkney J.A. Krug Krug
Chairman
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
FORVICTORY
SECRET
BUY
UNITED
STATES
WAR
BONDS
AND
STAMPS
157
October 27, 1944
11:50 a.m.
QUEBEC CONFERENCE NEWS LEAK
Present: Dr. White
Mr. Glasser
Mrs. Klotz
H.M.JR: I take it that you have told Mr. White of
our conversation.
DR. WHITE: Yes, he did.
H.M.JR: Subsequent to that I asked Mr. Stettinius
to ask Pete Collado, as you suggested, whether you had
discussed the German plan with him, and he said that
during the middle of the night in the room you had dis-
cussed it with him at great length in full detail; but
as far as he knew he didn't hear you discuss it with
anybody else. But during the night, in greatest detail,
you discussed the thing with him.
MR. GLASSER: I got a message this morning. Pete
left last night and his secretary gave me the message.
He said he wanted me to know that he told Stettinius that
I did not discuss any Treasury matters with him except
the discussed documents which both of us had. I believe
that is the way he put it.
H.M.JR: I can only repeat--
DR. WHITE: Well, are those two incompatible state-
ments?
MR. GLASSER: He didn't mention Germany in the
message to me. He did the talking about the German doc-
ument which we discussed. I did not indicate the content
or discuss the content with him.
H.M.JR: I am only repeating what Mr. Stettinius
said and you're not getting it, that during the middle
of the night in confidence in your room you discussed in
Unclassified
158
- 2 -
great detail the plan we had here for Germany with Pete
Collado.
But then I finished by saying, "But now let's get
this thing straight, Stettinius. In view of what Collado
said, you still say that Glasser is responsible for
spreading stories in Montreal about this?" He said, "No,
I feel he is not."
DR. WHITE: Personally, I am not satisfied, if that
is the end. It is not a clear picture to me yet,
Mr. Secretary.
H.M.JR: It isn't entirely clear to me, either.
Either Collado or Glasser, one or the other, is not
telling the truth.
MR. GLASSER: Let's assume that I did talk to
Collado--
DR. WHITE: But, Harold, you were there; you don't
need to make an assumption.
MR. GLASSER: Who told Stettinius that? Collado tells
Stettinius that I was talking about Germany?
H.M.JR: He told me who told that and I couldn't
repeat it. It was another State Department man. He said
he wanted to protect this man.
But you see what he did yesterday. He went all over
checking up on these leaks, you see, and one of the men
in the State Department said to Stettinius that you were
responsible for spreading this thing all over Montreal
and that the telephone wires and the newspaper wires
buzzed when they got this story and that you boasted
about what the Treasury had done and threw your weight
around. And as a result of that the story was picked up
in Montreal and wired here.
MR. GLASSER: Was that person who told Stettinius
that in Montreal?
Regraded Unclassified
159
- 3 -
H.M.JR: I don't think so, no.
DR. WHITE: Do you know the person?
H.M.JR: Yes, I have the name and he is & person
very high up.
Let me read this to you here:
(Secretary reads aloud transcript of telephone
conversation with Mr. Stettinius on October 27, 1944
at 3:25 p.m.)
DR. WHITE: As I say, it still is quite unsatis-
factory. First, Harold, you were there. Did you or did
you not talk exhaustively to him?
MR. GLASSER: I did not even talk exhaustively or
sketchily. I listened to Pete talk. In fact, I do
nothing but listen to Pete talk. You know him. He talks
all the time. Even when he is hanging up his trousers
and he has his trousers in his mouth he keeps on talking!
But I did not mention one detail of the Treasury
program to him, even though I knew he had the document.
And he said he had the document.
H.M.JR: He said he had the document?
MR. GLASSER: He saw the document.
DR. WHITE: Secondly, even setting that episode
aside, somebody informed Stettinius that the root of the
rumors was that Glasser was talking all over town. The
man who did that either got it from someone else or made
it up, himself. Now, I personally think it is terribly
important to trace this thing down to its roots, because
we don't often get a chance to know where the origin of
these rumors is. The man who gave it to Stettinius, if he
originated it, certainly had no good purpose in mind for
the Treasury or the men in the Treasury. If he got it
from somebody else, then that person didn't.
If it is at all possible or feasible, we ought to--
Regraded Unclassified
160
- 4 -
H.M.JR: Well, Harry, I am leaving in a few minutes.
I'll be back here tomorrow. I can't do it today and I
can't do it on the run. I'll be glad to talk with you
and Glasser tomorrow, but--
DR. WHITE: Don't you think that--
H.M.JR: You'll never get anywhere on the thing. As
I told Stettinius, they are trying to throw this thing
on the Treasury, and then I said, "Where?" Well, this is
the only thing that they had.
DR. WHITE: What do you want to do about Collado?
MR. GLASSER: I'd like to put this question to
Acheson. Now, I went up to Montreal--
H.M.JR: Let's go into this thing tomorrow. I want
to give you a full day in court and, as I say, either
you or Collado, one or the other, are not telling the
truth.
MR. GLASSER: I have no question about which one it is!
H.M.JR: I am not certain which one it is or isn't,
but I agree with White--I'll take ample time tomorrow
which I haven't got now.
Regraded Unclassified
161
October 27, 1944.
Dear Mr. Grafton:
I was much interested in your column published
in the Post on Wednesday the 25th.
I myself have been a great deal puzzled lately
by reading pieces whose general effect is that we
ought to be careful not to make the Germans angry at
us.
Won't you drop in to see me the next time you
are in Washington?
Sincerely,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury.
Mr. Samuel Grafton
New York Post
New York, New York
HEG/mah
Regraded Unclassified
New York Post
OCT 25 1944
I'd Rather Be Right
By Samuel Grafton
If I seem to be mumbling to myself today, pay no attention, I
am trying to figure something out.
In his speech to the Herald Tribune Forum, on October 18, Mr.
Dewey said:
"On the basis of our Treasury's ill-conceived proposals the Ger-
man people were told that a program of destruction was in order
for them if they surrendered. Almost overnight, the morale of the
German people seemed wholly changed. Now they are fighting with
the frenzy of despair. We are paying in blood for our failure to
have ready an intelligent program for dealing with invaded Ger-
many."
Get the picture. Mr. Dewey is blaming the deaths of American
soldiers on Secretary Morgenthau, on the ground that Mr. Morgen-
thau and some of his experts went to work recently and drew up
a plan for stripping Germany of her heavy industry. Secretary
Morgenthau's plan is admittedly "tough." Yet it seems strangerhe
should be singled out as the one cause for intensified German are-
sistance. Why pick on Morgenthau? Why not pick on Eisenhower,
who said last week to the Germans: "We come as conquerors!"
Why Morgenthau?
Tough as the Morgenthau plan is, it is not any tougher than
the general policy of unconditional surrender.
But Mr. Dewey, like a shrewd courtroom prosecutor, picks his
spots. He does not attack Eisenhower, who is plenty tough. He
does not attack unconditional surrender, to which Eisenhower sub-
scribes. He attacks Morgenthau, and he does not hesitate to sug-
gest that this one American, and not Hitler, is the cause of Amer-
ican deaths.
All right, let it lie there for a minute. Here is what has me
mumbling. On October 2, 1944, Colonel McCormick's Chicago
"Tribune" printed an editorial, from which I quote:
"Senator Johnson of Colorado believes it is a mistake to offer
Germany no terms other than unconditional surrender.
Mr.
Johnson thinks that since the Germans learned of the Morgenthau
plan to deprive Germany of all her industries, Hitler has acquired
a new hold on his people. His soldiers, instead of surrendering in
droves, are fighting furiously. In consequence thousands of Amer-
ica been killed and maimed and other thousands are going
to suffer the same fate."
Regraded Unclassified
New York Post
OCT 25 1944
A Parallel
The "Tribune" editorial then expands on this theme approvingly,
and in great detail.
The parallel between this editorial, in a violently isolationist
newspaper, and the speech of the Republican candidate, sixteen
days later, is truly startling. The "points" are the same: Morgen-
thau is the villain; Americans are dying because of Morgenthau;
there is something wrong in our attitude to Germany. We have
heard it sald that Colonel McCormick's support for Mr. Dewey is
embarrassing to the candidate. But here we have an indication
that it is not only Colonel McCormick who follows after Mr. Dewey;
here we have Mr. Dewey following after Colonel McCormick.
Smooth and Outrageous
And there is a kind of pregnant, unstated something in both
the editorial and the speech which seems to me a little frightening.
Just what sort of terms do Colonel McCormick and Mr. Dewey
(since they are teammates in raising this issue) want for Germany?
Softer terms? Perish the thought! They both deny it vigorously.
But is their position intelligible unless they are thinking, somehow,
of something softer than has been offered? They would deny it.
They want only a more "intelligent" peace plan. But the Germans
will not surrender because our Nan is merely "Intelligent"; the Nazis
don't care whether our plan is intelligent or not; they have been
trying to blackmail us, via radio, into a softer plan.
And It is precisely this kind of vigorous hinting in which Mr.
Dewey continually engages, It is precisely this extremely deft, clever
ability to work both sides of the street, to say nothing clearly, but
to suggest everything, that has made Mr. Dewey's campaign the
silkily smooth and yet strangely outrageous one it has been. There
ID just something shocking about so much cleverness; it makes the
cain to drop; it even makes the New York Times come out for
Rposevelt.
Regraded Unclassified
BERNARD M. BARUCH
597 MADISON AVENUE
NEW YORK 22. N.Y.
October 27, 1944.
Hon. Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D. C.
My dear Henry:
Previous to my discussion with you I had
been disturbed by the turn that many of our inter-
national relationships in the economic field were taking.
German reparations will affect the living standards of
everybody, particularly America.
The story from the English as I hear it
repeated is the same I heard twenty-five years ago.
You will hear the same thing from all the other countries.
I have heard no discussion of the Balkans. Norway,
Denmark, Belgium, Holland and France will be coming
along, and of course China and Russia.
As what I know is only fragmentary, my
feelings may be baseless. What I do know, I think
is very threatening to the peace of the world.
American production and standards have
held the world up for many years and finally won the
war. I am sure those standards can win the peace.
Like your father, I have been a great advocate of what
America should do in association with other nations.
But we ought not to do all of it. If we attempt it,
none of it will be done. Nothing can hold up many
of these countries unless they modernize their business
structure. For instance, does anyone know what
England or France or any other country will permit an
American to do in those countries? We know they
have the greatest freedom of action and ownership within
our laws, like anybody else.
I understand that Cherwell is too busy
to see anybody before he leaves. What a different
attitude to what it was at the commencement of the war
when you first took hold, and the Englishman was glad to
see even a civilian like myself!
Regraded Unclassifie
165
2.
But it is a repetition of a time which I
hope will not be repeated in the last stages of what we
have to go through.
I cannot give you a definite answer upon the
other matter concerning which you asked my attention
because it might be one of several.
With a little
time it will be developed.
In the meantime, I thought I must write you
this warning note, although I am doing so without having
facts but rather the feel from little things people have
told me.
Sincerely yours,
Borne
P.S.
I go back to a memorandum I sent you some time
ago on these international relationships. Money,
credit, goods, relief, aviation, shipping, disposal of
surplus - these are matters which are very closely
related and a body should be set up that should pass
upon these things and then present a decision to the
President.
On that body should be a representative
from the State, the Treasury, War and Navy, and
Commerce Departments, and the Conversion and Demobiliza-
tion Director. AB Hopkins is the principal adviser to
the President, doubtless he would want him on it.
There are too many different cross-currents
and policies and they should be brought into one current,
one policy.
I have always felt that you have never taken
as firm a position on price control as the Treasury
position demands. Unless we work for America with
our present standards of living, there will be no
permanent peace.
166
Oct. 27, 1944
Mr. Gaston
Secretary Morgenthau
For the time being, my answer is no to the
invitation to address the A. F. of L. Convention in
New Orleans, because I will have to devote my time
to the War Bond program. However, if I find one week
before the Convention that I will be able to address
them, I would like very much to do so, and I will
contact them.
See Group 10/30/14-
Regraded Unclassified
167
October 26, 1944.
MEMORANDUM
TO: Secretary Morgenthau
FROM: Mr. Gaston
Laurence Houghteling has asked me to inquire
whether you would be receptive toward an invitation
to address the A.F. of L. convention which will be
held in New Orleans from November 17 to 24. An
invitation has not been extended but Mr. Houghteling
is sure that it would be if you should indicate that
you could accept. He thought that in view of the
fact that you had to cancel last year's engagement at
Boston, which created some dissatisfaction before
they learned just why you had to cancel it, that you
might like to take on the engagement for this year.
If you should be willing to speak, they would probably
offer any of the three days, Monday, November 20,
Tuesday, November 21, or Wednesday, November 22.
No- -
VI,
or
I
(vrs
n b S 702
P 5 00
/
Regraded Unclassified
168
October 27, 1944.
Memorandum
TO: Secretary Morgenthau
FROM: Mr. Gaston
You asked me to follow up on two letters included
in last week's review:
(1) From Lewis S. Vermillion, Wilkinsburg, Pennsyl-
vania, who complained that the Collector at Pittsburgh
was not permitting him time to meet liability on his 1943
income tax return. Mr. Self has written a letter to the
taxpayer telling him that his 1943 taxes should have been
paid in full last March but asking him to get in touch
with the Collector to arrange a schedule of payments which
he will be able to meet, and Mr. Sullivan has also written
to the Collector enclosing a copy of letter to the taxpayer.
Both are attached.
(2) Charles J. Katz, of Katz, Gallagher & Margolis,
attorneys of Los Angeles, wrote to complain that the
Salary Stabilization Unit was refusing to go along with
the decision of the War Labor Board and the arbiter in a
motion picture wage case. I am attaching a letter to
Katz, which has been signed by Mr. Sullivan, telling him
that Mr. Burford, head of the Salary Stabilization Unit,
will look into the matter on his visit to Los Angeles the
6th or 7th of November.
Action in both cases by the Bureau has been prompt
and satisfactory.
7539
Regraded Unclassified
169
C
O
P
Y
October 19, 1944
A&C:Col: O
PERSONAL
Hon. Stanley Granger,
Collector of Internal Revenue,
P. O. Box 2008,
Pittsburgh 30, Pennsylvania
My dear Mr. Granger:
There is transmitted herewith a copy of a letter
dated October 9, 1944, addressed to the President by
Lewis S. Vermillion, i669 Laketon Road, Wilkinsburg,
Pennsylvania, relative to his income tax liability for
the year 1943.
The Bureau has made reply to Mr. Vermillion's
communication, and there is enclosed herewith, for your
information, a copy thereof.
Very truly yours,
(Signed) Victor H. Self
Acting Deputy Commissioner
ALB
Enclosures.
Regraded Unclassified
170
P
y
A&C:Col:0
October 19, 1944.
Mr. Lewis S. Vermillion,
1669 Laketon Road,
Wilkinsburg, Pennsylvania
Dear Mr. Vermillion:
Your letters dated October 9, 1944, addressed to the Presi-
dent and to the Secretary of the Treasury, relative to your income
tax liability for the year 1943, have been referred to this office
for attention and reply. You indicate that you are unable to pay
the tax in question in a lump sum and request that permission be
granted for payment on the installment basis.
The collection of Federal internal revenue taxes is a duty
vested by law in the Collectors of Internal Revenue. Under the
terms of the Current Tax Payment Act of 1943, individual income
tax for a given year must be settled in full by March 15th of the
following year. The law makes no provision for installment pay-
ments as heretofore. The tax as computed on your return for 1943
should have been paid in full on or before March 15, 1944.
In the collection of taxes, it is not the intention or desire
of the; Internal Revenue Service to work an undue hardship on any
taxpayer. However, when a taxpayer fails to cooperate with the
Collector and make payment of his liabilities voluntarily, it is
the duty of the Collector to take such action as is necessary to
effect collection of the amount due.
The Collector of Internal Revenue, Pittsburgh, Pennsylvania,
is responsible for the collection of your account, and any delay
in enforcing collection would, of course, be in the nature of for-
bearance on the part of that Collector.
A copy of your letter to the President, together with a copy
of this reply, is being forwarded to the Collector at Pittsburgh,
and it is suggested that the matter be taken up with the Collector
with a view to making some arrangement for payment.
Very truly yours,
(Signed) Victor H. Self
Acting Deputy Commissioner.
ALB
Regraded Unclassified
171
P
y
October 27, 1944
Dear Mr. Katz:
I wish to acknowledge receipt of your
letter of October 12, 1944, addressed to Secretary
Morgenthau re Screen Cartoonists Guild and Walt
Disney Productions, Inc.
I am advised by the Salary Stabilization
Unit of the Internal Revenue Bureau that no action
has been taken in this case pending the visit to
Los Angeles of A. D. Burford, Deputy Commissioner
of the Salary Stabilization Unit.
Mr. Burford tells me he will be in Los
Angeles about the 6th or 7th of November and will
contact you for the purpose of discussing this
case with you.
Very truly yours,
Charles J. Katz, Esq.,
Katz, Gallagher & Margolis,
111 West Seventh Street,
Los Angeles 14, California.
JLS:vls
Regraded Unclassified
miskey
see Page#2 #5
172
#7
CA
MEMORANDUM FOR THE SECRETARY.
October 27, 1944.
Mail Report
During the past week the Sixth War Bond Drive
again dominated the mail. There was a great volume
of replies to our letters and telegrams, and with
these responses were many unsolicited suggestions,
both types expressing approval of the Drive and
confidence in its success. Thus far, there has
been much less objection to the cost of the telegrams
than we have had during previous Drives, and also
fewer protests on the size of the individual quota
for employees of business firms.
We struck a new low in bonds submitted for re-
demption -- 18 were addressed to the Secretary for
this purpose. However, critical letters on the over-
the-counter plan for cashing bonds increased, and
all spoke of very high turnover in particular local-
ities. Other bond mail followed the usual pattern,
with complaints on delays very few. Tax mail also
was unimpressive, with only 9 requests for overdue
refunds.
There was a slight shift noticeable in the mail,
in connection with surplus property sales. Already
there are protests as to the method of handling
announcements, releases, etc. These are still negli-
gible, but there is the indication that this may
become an important section of our mail receipts.
There were 2 requests for dogs this week, prompted
by news that the K-9 Corps is being demobilized.
The political campaign has been reflected hardly
at all in our mail. There are occasional allusions
to political issues, but the approach of election day
Regraded Unclassified
173
- 2 -
Memorandum for the Secretary.
October 27, 1944.
has failed to arouse partisans of either one side
or the other, so far as the Treasury is concerned.
The so-called Morgenthau plan for de-industrializ-
ing Germany drew 20 communications, and for the fourth
week the favorable outnumbered the unfavorable 3 to 1.
Regraded Unclassified
174
Favorable Comments on Postwar Plan
for Germany
David M. Van Buuren, The Plaza, New York, New York.
I am sending you herewith a study which I have written,
entitled, "Isolate the 'Master Race', which gives a
condensed version of a method of dealing with Germany
after the war which apparently has not been considered
so far. I hope this will be of interest to you, and
place myself at your disposal. I am a Belgian, a
former banker of Brussels, and Professor of the
Deontology of Finance at the Universite Libre de
Bruxelles.
Dr. jur. F. A. Milch, Detroit, Michigan. I enclose a
copy of an article about the question of how to prevent
Germany to prepare a third world war. Last year I sent
it to the New York Times, but I think it was not pub-
lished, perhaps because at that time the idea of soft
peace terms was prevalent in this country. Meanwhile,
people have learned about the terrible change of the
German's character by Hitler and the Nazi ideas.
The Nazis have transferred big sums to neutral countries
in the last ten years. They have deposits in the banks
and own estates, mines, houses, factories, and so on.
This will be, no doubt, all under cover. It is nec-
essary to prevent Germany to use these properties for
rearmament. Therefore, they have to be transferred to
the Allies by the Armistice. A model may be the
law of the Nazis compelling the Jews to declare their
possessions and threatening incorrect declaration with
draconic punishment. To inform you about myself
I have been executive president of German mortgage banks
for about 25 years, until 1933.
Desmond Brown, New York, New York. (A World War I
Veteran.) I wish to congratulate you on the statement
you issued in reference to Germany in making it an
Regraded Unclassified
175
- 2 -
agricultural country after the War is over. I hope
and trust that you are able to win your point of view
with the leaders of the Allied Nations, and those of
our country.
Anonymous -- Postmarked, Mountain View, California.
I am taking the liberty of sending you my remarks to
the security problem with some references to your de-
industrializing plan. Some of the enclosed papers were
published as letters to the editor in different news-
papers. I should be happy if some of my remarks could
help you in your project. You may utilize my remarks
in any way you will find suitable. The fact that my
family is still under German occupation makes it im-
possible to sign this letter. However, I hope that
the moment of their liberation is not far ahead and
then I shall disclose my name to you.
to
Lieutenant Edward A. Norman, U.S.N.R., Fleet Post Office, :
New York, New York. I am writing this after reading
the enclosed article in the Stars and Stripes", as
like to
one member of the Forces who wants to congratulate you
see this
on the stand you are taking, and to say that it will
be most heartening to many of us if your point of view
article
prevails. I know that a number of us feel a most dis-
from
couraging fear that once again our victory will be in
vain because of "soft" thinking at home. Anything less
Ships Istare t
than you suggest is sure to result in the rise of a new
industrial class in Germany, which not only will compete
with us in the none-too-abundant markets of the world,
but which is bound to try to annihilate us in a third
world war. May you succeed with your highly intelligent
policy.
Ena Seely, "Lindum", Park Lane East, Reigate, Surrey,
England. As a British woman, I write to congratulate
you on your reported stand against Germany ever again
becoming a great industrial power. The world could
manage very happily without Germany. # # If big
Regraded Unclassified
176
- 3 -
business or party politics ever allow Germany to
become strong again, then woe will betide the rest
of the world. # # No one who has not lived in this
part of England can realise the horror of the flying
bombs. They would be as toys compared with what the
devilishly clever Germans would have ready next time.
*** Thoughtful, middle-aged people who have lived
through two terrible wars due to Germans, heartily
agree that Germans should only be agriculturists.
With all their cleverness, they would make a good
living from the land. I wonder if the Americans
realise that German business methods all over the world,
and South America in particular, were largely instru-
mental in causing the great depression in the world
trade, from which millions of innocent people suffered!
With best wishes for your good health and prosperity.
Lawrence Anathan Loeb, Member of New Haven Real Estate
Board, New Haven, Connecticut. Enclosed please note
a copy of a letter sent to The Kiplinger Washington
Agency which is self-explanatory. I have not enter-
tained, nor do I now, the impression that you were any
more militantly revengeful nor felt any differently
than millions of others whose relations are now fight-
ing in this war. (The following is quoted from letter
addressed to the Kiplinger Agency by Mr. Loeb.) "We
are subscribers to your publication and note in a
previous issue, and again in today's issue, reference
to what appeared to be unrelenting and humanly un-
reasonable terms of surrender adapted by the Secretary
of the Treasury at the expense of our fighting forces,
who as a result are consequently meeting kill-or-be-
killed tactics. I note that you again single out
Morgenthau as the 'chief offender'. # I have not
seen any publicity elsewhere of such expressions on
his part and consequently am curious to learn what was
the basis for your publication in this matter."
Regraded Unclassified
177
- 4 -
Unfavorable Comments on Postwar Plan for
Germany
J. P. Kemper, Hammond, Louisiana. *** Germany is
essentially an industrial country and cannot sustain
herself agriculturally. To force her to attempt to
do so will not only completely demoralize eighty million
people, but will spread chaos throughout Europe with
the economy of which Germany is unalterably inter-
twined. If the Mosaic law is applied, there can be
no peace. The idea that Americans can be induced to
be cruel like Germans, or Frenchmen, or Spaniards, or
Italians, is fantastic. We will not be a party to any
proposal the purpose of which is to permanently rele-
gate the Germans to a condition that will prevent their
exercising their skill. But we will lend our strength
to directing that skill to purposes beneficial to all
the world, as well as Germany.
American Mother -- Postmarked New York City. How can
you rest or sleep? Instead of speeding peace, you're
looking for world destruction. You must be heartless.
All people deserve a square deal, including the
Germans. No, I'm not a Fascist or Nazi. I'm an
American mother with two sons serving their country,
but you -- cold-blooded and heartless -- have no con-
cern. Not even your better-half, Mr. Roosevelt.
Unconditional surrender! Playing checkers with our
boys' blood.
Regraded Unclassified
178
- 5 -
General Comments
K. H. Schweitzer, Folding Carrier Company, Oklahoma
City, Oklahoma. On my return from a sojourn of several
weeks in Mexico, I feel prompted to address you in
order to call to your kind attention a most deplorable
incident which I have witnessed on several occasions,
particularly in the town of Acapulco, in the State of
Guerrero. In accordance with Treasury regulations,
travelers visiting Mexico are properly cautioned not
to take into the country U. S. currency other than
$2.00 bills or American Express Travelers' Checks,
either one of which are readily exchanged at the pre-
vailing rate of 4.80 to 4.85 pesos per U. S. dollar.
In the port of Acapulco there were several U. S. war-
ships and merchant ships, and the soldiers, marines,
and sailors from these ships who came ashore did not
have any knowledge of the regulations existing in re-
gard to the carrying of U. S. currency other than $2.00
bills. Consequently, these boys came ashore with bills
in denominations of $5.00, $10.00, and $20.00, and had
them exchanged there by scalpers and black market
operators, who paid 3.25 to 3.50 pesos per U. S. dollar,
causing our boys to lose on the exchange, roughly, 25%.
I asked several of the boys whether they could not have
exchanged their currency aboard ship, to obtain either
$2.00 bills or American Express Checks. In all cases
the boys professed complete ignorance and seriously
doubted that the purser aboard ship could or would have
made such exchange for them. A group of my American
friends in Acapulco have elected me to address this
communication to you to point out this shortcoming, and
add our recommendation that aboard all ships landing in
Mexico, due notice be posted for the convenience of the
soldiers, marines, and sailors, and at the same time
that provision be made for the exchange of money into
what is considered legal tender in Mexico. While I am
not familiar with similar restrictions applicable to
other countries, I believe the same general principle
should be applicable. # #
Hany white Llnes this come
under you ? If so Phoned
do something g about Hn, it shites
Regraded Unclassified THE
179
- 6 -
James G. Patton, President, Farmers Educational and
Cooperative Union of America, Washington, D. C.
In the past week, Mr. E. L. Olrich, one of your
Assistants, has made two speeches that are deeply
disturbing to those of us who hope to see this
country make a smooth transition from wartime to
peacetime economy. Specifically, members of the
National Farmers Union are deeply concerned over
Mr. Olrich's position, and fear that it represents
the position of the Treasury Department. This I am
unwilling to believe. # * * The two principal points
of concern are (1) his assertion that the Treasury,
in effect, is going to do just about what business
interests tell it to do in the disposal of surplus
property; (2) his attacks on the preferences required
by the law for farmers, veterans, small business,
cooperatives, agencies of local government and edu-
cational and charitable institutions. I do not
believe that you agree with Mr. Olrich in his in-
temperate criticisms of the Surplus Property Act and
his obvious refusal to accept any other than the
generally discredited big business view of what is in
the public interest, and should appreciate your in-
forming me as to the considered position of the
Treasury in this matter.
Regraded Unclassified
180
- 7 -
Favorable Comments on Bonds
Should
Damble
10/31-
Grover C. Helm, President, The National Bank of
Bloomington, Bloomington, Illinois. Knowing how
I want
vitally interested you are in the n ew program of
allowing banks to cash Series E Bonds over-the-counter,
I thought that you would be pleased to view the record
of one country bank, such as our own. *** On the
to and
first day 189 of the 279 bonds redeemed had been issued
by Credit Unions and factories. We have talked to
thingelf. plase
several bankers, and the majority of them informed the
writer that the notice having gone out that October 2nd
would be the first day, naturally many people who would
have sent their bonds in during the last two or three
Jumber
weeks waited until the opening day, which, of course,
made a lot of activity in their banks, but most of them
June
thought it would gradually dry up. The reaction of the
ag for
public is wonderful. They appreciate the fact that
they do not have to pay either 25¢ or 50¢ and we have
been told in some instances they have had to pay $1.00
for certification of their bonds. You are to be con-
Tylm
gratulated for the inauguration of this new policy.
Frank Silver, New York, New York. I recently, in fact
today, had to cash some War Bonds. This I didn't like
to do. However, I appreciate the fact that the Govern-
ment pays interest for the use of my money. I like the
profit system but this money I have no taste for, so
I would appreciate your accepting this gift of your
own interest. (Check for $2.73) I would like it to
go to the benefit of our service men, so please make
this available to the proper agency. I will still buy
more War Bonds.
Regraded Unclassified
181
- 8 -
Unfavorable Comments on Bonds
Robert A. Beeland, Jr., Greenville, Alabama. Just a
line from one of your old 1933 FCA employees. I was
in Montgomery yesterday and went by the First National
Bank. A line of people, several hundred deep, was
moving toward the windows to cash War Bonds. It looked
like a 1932 run on a failing bank. Here in my small
town of Greenville, the local bank has cashed in over
500 War Bonds since October 2nd. The presidents of
both banks stated they estimated more bonds would be
cashed in October than during the prior two years. In
discussing the matter, I found a number of people thought
"they were due to turn in their bonds". Some figured
the war was over and the Treasury no longer needed the
money. Others were cashing in just because they saw it
being done, and the Treasury had made it easy. Some
thought the bonds would go down in value as they did
after World War I. An investigation shows that
most of these bonds are being turned in by small owners,
wives and families of service men, industrial workers
and small salaried people. *
*
C. B. Moore, General Chairman, Brotherhood of Railway
and Steamship Clerks, Chesapeake & Ohio System Board
of Adjustment, Richmond, Virginia. In keeping with the
policy of our organization in investing our funds, our
Board has consistently invested every dollar that it
could possibly spare in Series G War Savings Bonds. We
were told that if we needed the money they could be
cashed on one month's notice in writing on the first
day of any month. Believing this to be true, we in-
vested money in bonds which we knew we would have to
have at some later date to take care of some unusual
expenses which we do have periodically. * We are now
going through one of those periods where we are having
unusual expense and need some money. # # Anticipating
our needs, we wrote the Federal Reserve Bank at Cleveland
on August 22, 1944, serving notice of our desire to cash
Regraded Unclassified
182
- 9 -
three of our $1,000 bonds, the money to be delivered
to us on October 1. Under date of August 24, Mr. 0. 0.
Sparrow of the Cleveland Bank wrote us advising that
our notice had been accepted for redemption of the
bonds we desired to cash, and sent us certain papers
to be executed in order that check to cover the bonds
might be delivered to the First Huntington National,
Bank at Huntington, West Virginia, where we keep our
account. # # The papers were executed in accordance
with the Cleveland Bank's instructions, and within
the time limits prescribed. Our bank contacted October
7, and we learned that the check had not been delivered.
We wrote Mr. Sparrow on October 10, and requested advice
with respect to failure to deliver the check. We are
today in receipt of reply dated October 18, reading:
"The bonds were submitted to the Treasury Department
for redemption and we have asked the Treasury to
expedite the redemption". Here it is October 20,
twenty days beyond the date we were told we could get
our money. Believing that our money would be delivered
in accordance with the advice furnished us, we incurred
expenses which we do not now have funds to cover. This
is a most embarrassing situation and, if this is the
procedure our Government is going to follow with respect
to the handling of our money, it is going to be nec-
essary for us to cash all of our bonds and put our
money where we can get to it when it is actually needed.
# #
Mrs. Loyce Pinchaski, New Orleans, Louisiana. About
three months or more ago I turned over two War Savings
Bonds of $100 each to the Federal Reserve Bank to be
cashed. The bonds were purchased by my late husband
and payable to me at death. My husband was chief
engineer on a ship that was torpedoed. *** Upon
presenting these bonds for payment, I was informed
that I had to furnish an affidavit of death of my hus-
band, also have papers signed by the Postmaster, even
though the bonds had already been certified by my bank.
I complied with the orders. After waiting about two
weeks or more I called upon the bank. I was instructed
Regraded Unclassified
183
- 10 -
that I had to have a death certificate from the War
Department, and again papers to be signed by the Post-
master. My husband was working under the rules of
the Maritime Commission. I had to secure a death
certificate from them. I had a death certificate
which I offered to furnish a photostatic copy of --
this would not do. So I secured a new one, had the
Postmaster sign some more papers, again complying
with the orders of the bank. Again I waited for some
news from the bank. Not receiving any, I called and
was notified that the entire matter was being taken
up with Washington. At a later date I received copy
of enclosed letter. Note the date. (September 1,
letter of inquiry by bank to Treasury.) 4b * # About
two or more weeks later I again marched around to the
bank and wanted to know why the delay this time.
I was told that I would hear from the attorney, and
that I would be required to sign papers, that in the
event my husband showed up alive, I would return the
money. This was about three weeks ago. Today the
bonds are still in the hands of the bank and I am
waiting for the money. I am the owner of hundreds
of dollars worth of War Bonds, payable to my daughter.
I was thinking about all the trouble I am having of
getting $200 worth cashed, what trouble she would have
cashing about $2,000 worth. Maybe it would not be a
bad idea if I were to cash all my bonds and place the
money in the bank where there would be no delay or
trouble getting it out now, or even at death.
R. 0. Arnold, Treasurer & Manager, Covington Mills,
Covington, Georgia. The Treasury Department has done
something to convey the impression that you want all
the little "E" Bonds cashed in. The Bank of Covington
has cashed more than 1,700 bonds since October 1st.
It will be hard to sell bonds to our employees as fast
as you can cash them in, under present arrangements.
Regraded Unclassified
184
- 11 -
Congressman Thomas E. Martin (Iowa). Because of the
importance of a letter I have received from one of my
outstanding constituents with reference to the Sixth
War Loan Drive, I am quoting it as follows: "I re-
ceived today a long telegram from Washington urging
me to put the heat on our employees for an average
quota of $75.00 cash deduction for investment in bonds
during the Sixth War Loan Drive. A copy of this tele-
gram follows and it must have been sent to all business-
men with employees. This seems one of the silliest
things that ever happened to us because the Government
does not need to send us a $5.00 telegram to get our
support. It is all the more discouraging when a small
printed notice sent to us without postage would accom-
plish the same thing and convince us at the same time
that the money being squeezed out of wages is being
handled with some sort of reasonable stewardship. We
doubt very much whether the bonds purchased by our em-
ployees would pay for this vast number of telegrams
sent forward so needlessly. I am now expected to re-
quest our employees to divert their wages and deny
themselves with this as an example of the manner in
which their money is being handled. This is a small
thing, but somebody should raise hell about it some
place. # # #
Nan Manuel, Norfolk, Virginia. (Telegram) Think it
awful you jeopardize lives of fighting men by allowing
bonds to be cashed in so easily. To ninety percent
people cashing it is not an emergency. With new bond
drive coming up it seems a vicious circle as patriotic
citizens suggest bond easy payments be stopped
immediately.
Erle P. Dudley, ex-Capt., Engineers, AEF No. 1, Kellogg,
Idaho. If the Browder-Hillman combination win the
forthcoming election will it be 8. wise plan to continue
to put my money into War Bonds? If that bunch gets in,
I am very skeptical about the future of our country.
The good and able Senator Byrd, who is trying to inject
Regraded Unclassified
185
- 12 -
some economy into the present Administration, has
stated several times that 55% of those now employed
by the Government have no connection with the war
effort. Personally, I have put approximately 25%
of my earnings into War Bonds, the intelligence people
have shown much appreciation of what they considered
valuable data I have furnished them, have helped on
all Drives, and did all I possibly could to get back
into the service again. # # * I wonder if the Army
will be given orders to carry the Wop Petrillo out of
his office for apparently the same crime that the
Montgomery Ward man was carried out.
Regraded Unclassified
186
- 13 -
Unfavorable Comments on Taxation
Lt. (jg) S. D. Lorton, Springfield, Illinois. Please
find enclosed herewith copy of 8. letter received by
my office from one of my income tax clients. It is
apparent that the Deputy Collector has violated
Treasury Department Rules and Regulations and should
be discharged because of such violations. Due to the
fact that the same situation has occurred frequently,
it is evident that such Deputies have been instructed
to carry on such malicious gossip using gestapo tactics.
The Springfield, Illinois, office has not allowed
a single tax hearing as yet. Before such hearing is
allowed to proceed, they decide there is no liability
and thus avoid the contest. In other cases they force
the taxpayer into a settlement, but at all times dis-
crediting myself. The illegal methods carried on by
the Springfield, Illinois, Collector's Office is un-
bearable. (The following is quoted from a letter
written to Lt. Lorton by Mr. and Mrs. Robert Matson,
Beecher City, Illinois.) "Just a line to tell you we
have just finished a three-day session with Mr. Johnson,
of Effingham, and had our income reports for 1942 and
'43 checked. He thought he had done a thorough job,
and we agreed with him. The first couple of days, he
took considerable time out to tell us what a crooked
man you were. I finally pointed out we were there to
check the reports, not to establish your reputation,
and we proceeded a little faster after that. He was
very nice to us and only asked for a check for Fourteen
Hundred and Sixty-three Dollars ($1,463), which we
didn't pay. There may be some mistakes, but we don't
think that large. Will you now give this matter your
attention and tell us how to proceed? If
Regraded Unclassified
187
TREASURY DEPARTMENT
M
INTER OFFICE COMMUNICATION
DATE October 27, 1944
TO
Mr. White
FROM
S. Gold H.S.
Subject: U. S. Industry Advertises for Russian Market.
1. The active interest of American business in the Russian market
is revealed by the fact that American industry has just contracted for a
quarter of a million dollars for industrial advertisements in Russian
publications. Most of this expenditure will be incurred in acquiring
space in a buyer's guide prepared by Amtorg, the Soviet trade organiza-
tion in the U. S.
2. U. S. manufacturers are reported to have flooded Amtorg with
requests for space in the buyer's guide, necessitating strict alloca-
tion of space and careful editing of advertisement content by Amtorg
in order to assure maximum descriptive information and representation
of products of interest to Soviet industry.
3. The American businessmen who bid so eagerly for space in the
Amtorg guide are now awaiting invitations to participate in the forth-
coming Moscow Industrial Fair, where samples of American products are
to be exhibited by the Soviet Chamber of Commerce.
(Source: Wall Street Journal, October 16, 1944)
Regraded Unclassified
Original to Mr. D. W. Bell; photostat to
188
Dr. White.
CONFIDENTIAL
Bell&
SAVE
HEADQUARTERS ARMY SERVICE FORCES
White
OFFICE OF THE FISCAL DIRECTOR
WASHINGTON 25, D, C.
OCT 2 7 1944
SPFER - P-9308
The Honorable,
The Secretary of the Treasury.
Dear Mr. Secretary:
Receipt is acknowledged of your letter of October 20, 1944,
requesting that arrangements be made to ship $20,000,000 of gold
to Assam, India, either by air or by water in shipments spaced
over an appropriate period of time.
Insofar as transport by water is concerned, I can assure
you that the War Department is prepared to make arrangements for
immediate shipment by Army transport of whatever monthly quotas
are desired.
With respect to gold shipments by air, the urgent military
demands on air transport facilities to the China, Burma, and
India Theater make it necessary to obtain air priority from the
theater. The Chinese Government recently requested that the
War Department arrange for air shipment of Chinese banknotes of
ninety (90) tons a month for the next three or four months.
General Stilwell was advised of the request and air priority
was assigned for only seventy (70) tons during the month of
October and the balance of the currency will of necessity have
to be made by water shipment.
Under the circumstances, therefore, if gold is to be shipped
to India for delivery to the interior of China, it would appear
that it will be necessary to depend on water shipment. The War
Department is prepared to arrange for shipment of the gold by the
fastest available vessel allocated to the Army for shipment to
Calcutta without charge to the Chinese Government for transpor-
tation but without assumption of risk by the War Department.
Sincerely Art yours,
A. H. CARTER,
Major General, O.S.C.,
is document contains information affecting
Fiscal Director.
the
tional defense of the United into within
the massing of the Esploniso Lot,
31
and 32, assisted. Its transation
revela-
tion d'its contents in
must prizel person is
CONFIDENTIAL
Regraded Unclassified
190
CABLE TO AMEMBASSY, QUITO, ECUADOR
Information contained in your 1015 of October 20 is appreciated.
Amlegation Bern reports that a communication dated August 30
conveying Ecuadoran request that bearers of Ecuadoran papers in Hungary
be protected by Switzerland has been received by Swiss government from
Ecuadoran consulate, but that Swiss reply stated that since Ecuadoran
interests are not represented in Hungary by Switzerland, they could not
consider this request.
As you note ffom foregoing, it is essential that, in addition
to the specific request to protect persons with Ecuadoran passports,
Ecuador requests Switzerland generally to assume the representation of
Ecuadoran interests in Hungary. Please cable Department and Board as
soon as such request will have been cabled from Quito to Switzerland.
11:05 a.m.
October 27, 1944
Regraded Unclassified
191
CABLE TO AMBASSADOR WINANT, LONDON, FOR MANN FROM PEHIE
I have been advised that proposed warning from General Eisenhower
to Germans concerning atrocities against persons in concentration and
labor camps is still awaiting clearance from the British. The proposed
warning was cleared with all interested agencies here and has been
approved by the President. I urge that yardo everything possible to
expedite clearance in London where matter has been referred by British
military authorities.
THIS IS WRB LONDON CABLE NO. 18.
11:05 a.m.
October 27, 1944
Regraded Unclassified
192
CORRECTION
1FD-265
Distribution of
October 27, 1944
true reading only by
special arrangement.
(SECRET w)
In cable number 3272, October 26, 10 p.m., from
Lisbon, code block should be "(SECRET W)" instead of
"(SECRET F)".
DIVISION OF COMMUNICATIONS AND RECORDS
JMB
=
Regraded Unclassified
193
Lisbon
Dated October 27, 1944
Rec'd 2:09 p.m., 28th
Secretary of State,
Washington.
3279, Twentyseventh, 7 p.m.
FOR LEAVITT FROM PILPEL JDC 103 WRB 237
Guine left Tangier afternoon October 26 carrying
total 434 refugees. Melvin Goldstein received North
African validation. Awaiting necessary French visa.
Is Joseph Schwartz well.
NORWEB
CSB
Regraded Unclassified
194
CABLE TO AMEMBASSY, MADRID, SPAIN
Reference is made to Department's 2519 of September 11.
In view of difficulty of transportation of 155 sephardics in Belsen-
bergen to Spain, it is requested that the Spanish government exercise
its good offices to obtain their release from Germany and temporary
admission into Switzerland. It would be appreciated by this Govern-
ment if requests to that effect were made by Spanish missions in
Berlin and in Bern. American Minister in Bern has been instructed
to support request to that end from his Spanish colleague.
11:05 a.m.
October 27, 1944
Regraded Unclassified
195
CABLE TO MINISTER HARRISON AND MCCLELLAND, BERN, SWITZERLAND
(1) Reference is made to your 6469 of September 29 and 6964 of
October 20.
The following is the substance of a cable received from Amembassy
Quito under date of October 20 in regard to matter discussed in your 6469:
QUOTE The Foreign Office of Ecuador states that it has received
no specific request for the clarification of telegram under reference and
is at a loss to understand the cause of difficulty in interpreting the
Ecuadoran consulate's note of May 12, since cable instruction of May 8
seems perfectly clear. The only communication received by the Foreign
Office from the Consulate at Geneva concerning the protection of individuals
in Germany claiming Ecuadoran nationality was a letter of May 25 requesting
INNER QUOTE some opinions and advice END OF INNER QUOTE. On September 7,
The Foreign Office replied by airmail letter which presumably has not
reached Geneva as yet.
Yesterday the Foreign Office wired the Ecuadoran consulate in Geneva
substantially as follows: INNER QUOTE Repeating instructions issued to you
previously to arrange for government of Switzerland to ask that German
officials respect rights of persons protected by papers and documents of
Ecuador. Take steps to obtain action by Swiss Government at once, In ad-
dition, in this connection, you are asked to contact the American diplomatic
representative END OF INNER QUOTE. UNQUOTE
Department and Board appreciate difficulty pointed out in paragraph 2
of your 6964 and attempts are being made to have Ecuador make a formal request
to be represented by Switzerland in Hungary. It is assumed that Swiss QUOTE
reluctance UNQUOTE reported by you continues notwithstanding your suggestion
that they approach problem in spirit indicated in Department's 2490 of July 21,
item 6. Reference is made in this connection to Department's 3996 of October
13 item three.
(2) 155 sephardic Jews now in Belsenbergen in possession of Spanish
passports are unable to proceed to Spain in view of military situation. It
is suggested that you informally request Swiss officials to grant them temporary
admission in Switzerland. Attempts will be made to get Spanish government to
present identical request formally.
THIS IS WRB BERN CABLE NO. 243,
11:05 a.m.
October 27, 1944
Regraded Unclassified
196
CABLE TO MINISTER HARRISON AND MCCIELLAND, BERN, SWITZERLAND
The following is the substance of a cable received from Amembassy
San Salvador under date of October 23:
QUOTE Ina note backdated to October 17 but received
only today, former Foreign Minister Dravila declares that
his Government authorizes the United States Government to
compile lists of persons claiming Salvadoran citizenship
and without prior preference to the Salvadoran Government
to send them to the Swiss Government in accordance with
the Department's Circular Airgram of September 18. UNQUOTE
Foregoing is communicated to you with reference to Department's
3180 of September 14, item one, paragraphs 5 and 6, 3255 of September 21,
item 4, and 3290 of September 23.
THIS IS WRB BERN CABLE NO. 244.
2:00 p.m.
October 27, 1944
Regraded Unclassified
197
CABLE TO AMBASSADOR STEINHARDT, ANKARA, FOR KATZKI FROM WAR REFUGEE BOARD
Reference your No. 1988 of October 18 (Ankara's 166 to War Refugee
Board). Interested groups here have requested Board to obtain reasons
for need to evacuate Transnistrian repatriates from Rumania. Please
report to Board any information you are able to obtain concerning this
matter.
THIS IS WRB ANKARA CABLE NO. 122.
3:00 p.m.
October 27, 1944
Regraded Unclassified
DEPARTMENT
198
INCOMING
DIVISION OF
OF
COMMUNICATIONS
STATE
DEPARTMENT TELEGRAM
AND RECORDS
DIVISION OF
MB-984 1944 OCT 30 PM 3 52
Chungking
This telegram must be
paraphrased before hoirs
Dated October 27, 1944
other than a arnment
communicated AED ANIMOS
Rec'd 11:27 p.m., 28th
agency, (SECRET of
Secretary of State,
Washington.
1745, October 27, 6 p.m.
FOR TREASURY FROM FRIEDMAN
One. Treasury notification to National City Bank
be close 0 guarded.
text of this measage must
For security reasons the
and United Clearing Board does not meet army preference
CONFIDENTIAL
that regulations be issued for United States civilian
government personnel similar to those issued for army
personnel. (Reference 1350, October 19) Army prohibition
covers sale and purchase of all United States dollar
instruments while at present some civilian government
personnel buying United States dollar instruments
except for UCB drafts.
Two. Doparting personnel can at present convert
CN dollar proceeds of sale of personal and household
effects in Black Market without appreciable loss except
for individuals here for considerable time before
allowed to use Black Market. If administratively
feasible recommend exception be made for those departing
civilian
Regraded Unclassified
199
-2- 1745, October 27, 6 p.m., from Chungking
civilian government personnel here during more than
6 months of 1943; if not administratively fonsible, no
exception should be made. The Ambassador concurs in
this proposal.
Three. Army and Navy personnel would not be
affected by proposed exception for civilian personnel
since they do nothave for sale on departure personal or
household effects purchased at official rates. Army
and Navy here consulted and both feel that any
exception made for civilian government personnel need
not apply to them.
Four. It is assumed that civilian government
personnel would have difficulty bringing United States
dollars into the United States or treasury checks
issued by Army finance Officer in exchange for
currency or PO money orders.
GAUSS
WMB
Regraded Unclassifie
200
NOT TO BE RE-TRANSMITTED
COPY NO.
11
SECRET
OPTEL No. 349
Information received up to 10 a.m., 27th October,
1944.
1. NAVAL
MEDITERRANEAN. Makaraka Island (Adriatic) has
been captured by Partisans. Skopelos (Aegean) has been
evacuated by enemy. On 23rd aircraft from one of H.M. Ships
successfully attacked M.T. in area S.W. Salonika.
2. MILITARY
WESTERN EUROPE. Hertogenbosch now completely
occupied by Allied troops. Excellent progress made in
area Hertogenbosch-Tilburg with armoured column operating
N.E. of Tilburg. As result of amphibious landing on South
Beveland a firm lodgment has been secured and casualties
are reported light.
ITALY. Operations on Eighth Army Front
hampered by very heavy rain but our leading troops are
established on River Roncha southwards from point about two
miles north of Highway 9. Elsewhere progress greatly re-
duced by swollen rivers and bad roads.
3. AIR OPERATIONS
WESTERN FRONT. 26th. 1,230 heavies without
loss dropped through cloud 514 tons Leverkusen Chemical
Works, 776 tons Hanover A.F.V. Works, 538 tons Munster Air-
craft Repair Works and Railway Centre, 162 tons Bottrop
Synthetic 011 Plant, 760 tons Mittelland Canal Aqueduct,
492 tons Bielefeld Ordnance Depot. Bombers supported by
723 fighters who destroyed two enemy aircraft for loss of
two missing. 493 fighters (4 missing) attacked communica-
tions in Metz and Coblenz Areas destroying 15 locomotives
and cutting railway tracks in 41 places. Mosquitoes of
Coastal Command set fire to 2,000 ten cargo vessel off
Kristiansand.
MEDITERRANEAN. 25th. 307 fighters and
fighter bombers successfully attacked communication tar-
gets in battle area and PO Valley.
Regraded Unclassified
201
October 28, 1944
9:51 a.m.
HMJr:
Hello.
Robert
Patterson: Henry.
HMJr:
Talking.
P:
I'm coming over to see you.
HMJr:
Right.
P:
Is -- that's a date?
HMJr:
That's a date.
P:
Right. I haven't got anyone with me. Is that
okay?
HMJr:
I'll have nobody with me.
P:
I mean you didn't expect me to bring along ....
HMJr:
No.
P:
Right.
HMJr:
No.
P:
All right.
202
October 28, 1944
11:00 a.m.
QUEBEC CONFERENCE NEWS LEAK
Present: Mr. White
Mr. Glasser
H.M.JR: Did you get my note?
MR. WHITE: Yes, I did. I read them.
H.M.JR: I have all the time you gentlemen want,
now.
MR. WHITE: Well, I believe that unless for some
reason or other you don't feel you can do it, that you
ought to find out from the man who informed Stettinius
where he got his information and why he made that state-
ment.
H.M.JR: Could I see those things? (Refers to
clippings as follows: Krock, New York Times, September
22; Hightower, New York Times, September 24; and Flynn,
Wall Street Journal, September 23.)
MR. WHITE: These are pretty accurate. There are
three of them. The Wall Street Journal is the best.
(Hands the Secretary the above clippings)
H.M.JR: Can I take a minute or two to study these?
You say the Flynn story is fairly accurate?
MR. WHITE: Fairly accurate. Apparently he did not
have the document before him, but he received that infor-
mation from some one who knew the document fairly well,
though there are some points in each one of them which
are not quite accurate. But they are, on the whole,
minor points, so the three together make a fairly accurate
story.
Regraded Unclassified
203
- 2 -
H.M.JR: I think it would be a good point to ask
Stettinius if his people also went with Flynn to help
him out. He admits he went over the thing with Hightower.
MR. WHITE: Oh, he did?
H.M.JR: Yes, they admit that Hightower went to the
European Division of the State Department and told them
what he had and they corrected it, and 80 forth.
MR. WHITE: That is the first we heard of that.
H.M.JR: I am thinking out loud. I think the thing
for me to do is call up Stettinius and ask if he won't
see you two gentlemen, that we are very much disturbed
here about this thing that has been said about Montreal,
and that Collado says that you talked at midnight with
him, you say you didn't, and that I think he ought to
have Collado in.
MR. WHITE: Yes, I would like to be there and have
them both in, with Stettinius.
Wasn't it more or less by accident that you heard
that the source of the stories was Montreal?
H.M.JR: No, you see, Stettinius called me up the
other day on another matter and I made the crack on the
French Lend-Lease that I hoped that this wouldn't get
in the paper. He got kind of angry and I don't blame
him for it - in the fact that I was sitting on the French.
I said, "Let's talk about it."
Before he came over he evidently got everybody to-
gether in the State Department and had a regular session
on it, at which McDermott interviewed a lot of people
including Hightower, and this man in the State Department
made the flat statement this thing. came out of Albany.
That was in preparation to coming over for lunch. Now,
there is no accident. He read from a memorandum of
McDermott's on this thing.
Regraded Unclassified
204
- 3 -
MR. WHITE: So it may simmer down to the fact that the
man who told that to Stettinius might say that that is
what the reporters told him, and that would be stumped.
H.M.JR: Well, I don't think that this man was at -
well, Stettinius isn't in the office. He is going to call
in and when he does I will ask him to make an appointment.
MR. WHITE: All right.
H.M.JR: A little later on I want to see you.
MR. WHITE: I wonder whether you would consider
calling a meeting - this is something else with regard
to the British arrangements - for Monday, if possible, to
get the Dominions in to get them started in the same way
that the British have. We agreed on that at the last
meeting. They will bring some representative from each
Dominion and at that you will just give a preliminary
talk, asking them to present their materials and enter
into the discussions in the same way that the British
have. That will presumably be their first introduction
to the subject. The British say they haven't mentioned or
discussed it with the Dominions.
H.M.JR: Do you want the Americans again first?
MR. WHITE: Not for this. This is to just sort of
give it a start-off so they can begin to prepare the
material.
H.M.JR: When would you like it?
MR. WHITE: The sooner the better. Monday, if you
can.
H.M.JR: In the morning?
MR. WHITE: Oh, we have a meeting scheduled with the
British at eleven-thirty, so that is the only considera-
tion.
Regraded Unclassified
205
- 4 -
H.M.JR: When do you want this?
MR. WHITE: There is a meeting at eleven-thirty.
Now, if you could have it at eleven, then they could
stay over and go in the other room and take that eleven-
thirty meeting. It wouldn't be more than a half hour.
H.M.JR: You fix it up with Mrs. Mannen.
Stettinius says he would like to be invited from now
on, as well as Acheson. So you invite him, and tell him
what it is about, and if he wants to come, all right.
Regraded Unclassified
206
October 28, 1944
11:07 a.m.
Operator:
Mr. Stettinius is not in the office today but
they're expecting him to call in most any minute
and they can have him call you.
HMJr:
Will you do that?
Operator:
Right.
HMJr:
Are you making any progress on the other?
Operator:
Not 80 far. She's left Saks.
HMJr:
Oh.
Operator:
She's been there and gone. I'm going to try
Mr. Klotz now.
HMJr:
Well, just hold on a minute. Do nothing for a
minute.
Operator:
All right.
11:54 a.m.
HMJr:
I didn't want to bother you all the way up in
New York -- hello?
Edward R.
Stettinius:
Yes, sir.
HMJr:
When you get back Monday, I wish you would take
the time to see White -- Harry White.
S:
Right.
HMJr:
And Glasser.
S:
Right.
HMJr:
On this Montreal story.
S:
Right.
HMJr:
Because after all when the man that came and
told you that -- he ought to have some facts
before he makes a statement like that. I'm
talking about -- not the man who slept in the
room with Glasser
Regraded Unclassified
207
- 2 -
S:
I understand.
HMJr:
....
but the other fellow.
S:
I understand.
HMJr:
See?
S:
I understand.
HMJr:
And to spread a story like that -- where the
hell did he get it from?
S:
Right.
HMJr:
And White and Glasser are very much disturbed.
S:
Right.
HMJr:
So when you get back Monday, when you have a
chance, I really wish you would do that.
S:
I will, friend.
HMJr:
And between us maybe We can run some of this
down.
S:
I will.
HMJr:
Now, one other thing while I have you on the
phone, you were kind enough and frank enough
to say that on the Hightower story they came
into European Section and cleared it in the
sense that they had it corrected. See?
S:
Yeah.
HMJr:
Well, now before the Hightower story was run,
there was a story in the Wall Street Journal
the day before.
S:
Right.
HMJr:
And I'd like you to ask your people did they
also advise the Wall Street Journal how to run
that story.
S:
I will.
HMJr:
See?
Regraded Unclassified
208
- 3 -
S:
I will.
HMJr:
And I'd like to keep pecking at this thing
because there's something rotten somewhere.
S:
All right, I'll -- you know that I'll do
everything that I can.
HMJr:
Yeah. And because for future things -- I mean
both of our departments -- we've got to keep it
on a basis that we can conduct negotiations
without reading about it in some newspaper.
S:
Now, Henry,
....
HMJr:
Yeah.
S:
before I have this private talk with
Harry
HMJr:
Yes.
S:
....
can I be assured that his attitude toward
me, personally, is friendly now?
HMJr:
Oh, yes.
S:
Well, it has -- it hasn't been in the past.
HMJr:
Oh, really?
S:
And I don't want to sit down with a man and
have a private confidential talk unless I am
sure that his heart 18 in the right place.
HMJr:
Well, I'll tell you this: if it isn't, I won't
let him come over.
S:
But I want a statement from him to you ....
HMJr:
Yes.
S:
that he has the proper feeling between --
that two men should have between them.
HMJr:
Well, if
....
S:
He's been -- he's been very difficult as far
as I, personally, am concerned in the past.
Regraded Unclassified
- 4 -
209
HMJr:
Oh, I didn't know that.
S:
And he's not been complimentary and I've never
felt there was a spirit of confidence between us.
HMJr:
Well, I'm glad you say -- now, those kind of
statements made to me -- we -- I can clean up
the thing.
S:
Well, that's the only relationship, Henry, that
you and I can have.
HMJr:
Yeah.
S:
I mean, life is too short, you know.
HMJr:
Yeah.
S:
You and I have always had a clear understanding
between each other.
HMJr:
That's right. Yeah.
S:
And I hope we always will.
HMJr:
Right. Well, now in this event -- well, they
will as far as I'm concerned and -- hello?
S:
Yeah.
HMJr:
And as far as I'm concerned I don't care where
the chips fall on this thing just as long as
we get to the bottom of it.
S:
That's right. But I'd like to be assured that
Harry -- that Harry White's attitude toward
Ed Stettinius 18 a decent, constructive one.
HMJr:
Well, I -- I'll see that -- I'll see that it is.
S:
Right.
HMJr:
And if it hasn't been, it will from today on.
S:
Well, it's been -- it's been pretty bad, Henry.
HMJr:
Well, I'm sorry to hear that.
Regraded Unclassified
210
- 5 -
S:
And now, Henry, on these meetings on Monday
HMJr:
Yeah.
S:
do you need me there for this Lend-Lease
stuff and at lunch on Monday?
HMJr:
No.
S:
Well, I got -- Harry -- Harry White phoned my
office and said that
HMJr:
No, but
....
S:
I had to be there at eleven-thirty
....
HMJr:
No, I -- I just asked you as a result of your
saying the next time there was one you wanted
to be asked.
S:
No, but I want to be -- I want to be at any
meeting that you say that you want me at.
HMJr:
Well, when there's one that -- I'll tell you
what we'll do -- we'll keep informing you of
every meeting. When there's one that I think
you ought to be, I'll call you myself.
S:
Well, I don't want you -- to bother you.
HMJr:
No, I will.
S:
But if the boys could just understand that
Acheson is carrying the thing
HMJr:
Right.
S:
until you say -- until you say that you
want Stettinius.
HMJr:
Oh, well, then you don't want to be notified
every time?
S:
I don't want to be -- I want Acheson notified.
HMJr:
Right.
S:
Until the time arrives that -- when you want me --
whenever you want me, I will be there.
Regraded Unclassified
- 6 -
211
HMJr:
We'll do that.
S:
All right, old boy.
HMJr:
Thank you.
S:
Thank you, Henry.
HMJr:
Bye.
Regraded Unclassified
212
OFFICE OF
TREASURY DEPARTMENT
WASHINGTON
THE SECRETARY
October 28, 1944
Dear Mr. Secretary:
I am sending you a copy of our report to
General Cobbs outlining 8 plan for a War Bond drive
in the ETO. I am also sending a letter to General Cobbs
which I should appreciate very much having you sign. I
have also drafted a proposed letter from you to
General Eisenhower and the Officers and Men in the ETO
for use in the Silver Lining War Bond Drive, and also a
similar letter for the President's signature. I should
like to have copies of these communications for trans-
mittel to General Cobbs through Major General A. H. Carter,
Fiscal Director, Army Service Forces, War Department,
Washington, D. C. Ted knows all about this in case I
am not in Washington at the time they come to your at-
tention.
May I say again how much I appreciate our evening
in New York, and may I say that I really did like your
soeech very much.
Cordially,
Peter
Peter H. Odegard
FORDEFENSE
BUY
UNITED
STATES
SAVINGS
BONDS
AND STAMPS
Regraded Unclassified
213
A PLAN FOR A WAR BOND DRIVE
IN THE E. T. 0.
Submitted by a Committee of
the United States Treasury.
Frank N. Isbey
H. B. Thomas
C. L. Whittier
Peter H. Odegard,
Chairman.
Regraded Unclassified
214
- 1 -
A FOREWORD TO GENERAL COBBS -
FISCAL DIRECTOR OF THE ETO
At your suggestion and request, we have come to the ETO
to study "soldiers' savings" and to propose a plan for increasing
them. It has been our privilege to inspect a number of installa-
tions in the U.K. and in France - to examine payrolls - to talk
to many officers concerned with this matter - and to talk to
some enlisted men. We are deeply appreciative of the friendly
and helpful attitude of everyone.
There appears to be almost universal opinion that, while
soldiers should save by any of the means made available to them
by the Army, War Bonds are definitely the best form of saving.
It further appears that in the main there is adequate and
competent personnel in the forces in the ETO successfully to plan
and administer an expanded and intensified War Bond campaign.
We believe that an increase in War Bond sales in the ETO will
be highly beneficial to the soldiers themselves, both now and
when they return to civilian life. It will help to stabilize
conditions in the United States after the war by reducing
inflationary pressure and also by giving greater independence
to the discharged soldiers and through a reduction of inflationary
spending it will help to improve our relations with those countries
in which large numbers of our soldiers are on duty. We are happy
to have been asked to help with such a worthwhile undertaking.
Regraded Unclassified
215
- 2 -
You, General Cobbs, have been most gracious. You and
the members of your staff have facilitated our work at every
turn and we are most appreciative. It is a pleasure to present
to you this report and to make some recommendations which we
hope may prove helpful.
Regraded Unclassified
216
- 3 -
Basic Objectives of a War Bond Drive in the ETO
A. To reduce the net retained pay in the theater and
thereby help to check inflation in areas occupied or visited by
American soldiers.
By accomplishing this purpose we can contribute not
only to the welfare of our own soldiers but also help to foster
more friendly relations wit h our allies both now and in the years
to come.
B. To increase the total volume of soldiers' savings in
order to give to as many men as possible a financial cushion
during the period of transition from military to civilian life.
C. To support and strengthen the esprit de corps and
general morale of the officers and men of the ETO to further
promote pride in their respective commands to give officers
and men a sense of participation and ownership in their govern-
ment as citizens.
In the U.S. the promotion of war bond sales through
extensive and intensive education and publicity has made an
inestimable contribution to national unity, efficiency and morale.
The experience of BAD #2 and the Eighth Air Force with War Bond
Drives has demonstrated that these collateral values are as
great and as real in the Army as in civilian life.
D. To maintain a voluntary savings program.
It is important that the savings program for the ETO
Regraded Unclassified
217
- 4 -
be based on the principle of voluntary action. A soldier is
subject to innumerable restraints and compulsions. In deciding
what to do with his money he wants to do "as he damn well
pleases". We should also like to emphasize that in our judgment
a War Bond Drive in the ETO should be voluntary in the best
sense of that word.
Regraded Unclassified
218
- 5 -
II. The Market for War Bonds in the ETO
A.
The General Financial Picture
The total monthly payroll in the ETO is in the neighbor-
hood of $172,000,000 (This was the payroll for August).
Approximately 11.5 per cent of this, or about
$19,000,000, is "disbursed" to officers.
Approximately 34.5 per cent of this total is "disbursed"
to enlisted men, or about $59,000,000.
That is to say, some 46 per cent of the total payroll
of $172,000,000, or over $78,000,000 is "disbursed" to officers
and men.
The other 54 per cent is absorbed by various forms of
savings through payroll deductions:
1. Total allotments (other than class "B") 45.40% or $78,289,000
2. Total class "B" allotments
5.51% or 9,496,000
3. Total voucher collections and misc. pay
deductions
3.76% or 6,489,000
$94,276,000
Of the $78,000,000 or thereabouts "disbursed" to officers
and men, approximately 70 per cent is absorbed by cash collections
of various kinds including PTA, money orders, cash purchase of
war bonds. (The largest of these items is money orders and stamps
sold which in August amounted to $21,700,811. Cash purchases of
War Bonds were $3,065,596.)
Thus the net retained pay in the ETO is about 15 per cent
of the total payroll and in the neighborhood of twenty-five million
dollars. Both the percentage figure, however, and the retained
Regraded Unclassified
- 6 -
219
Pay figure are distorted by a peculiar condition on the continent
under which substantial funds have been converted into money orders
made payable to the soldier himself and retained by him. Note
that retained pay for August in the U.K. was 24 per cent but on
the continent only .77 per cent.
B. Why War Bonds?
The savings program of the ETO including life insurance,
"E" allotments, PTA, soldier's deposits and war bonds, is well
adapted to meet every need of officers and men. Moreover, it is
flexible enough to allow for readjustment within the system.
For many reasons we believe that war bonds represent
the ideal form of soldiers' savings.
1. They are guaranteed obligations of the
American Government and therefore as sound as a dollar.
2. War bonds are registered in the name of the
owner and co-owner or beneficiary. If they are lost, destroyed
or stolen the investor is fully protected against loss. The
Treasury will, upon receiving notice, cancel the lost, destroyed
or stolen bond and issue a new bond in its place.
3. Not being negotiable they are protected against
market fluctuations. No investor can lose on them because of
a "slump" in the bond market as was the case with Liberty bonds.
4. They are nevertheless a liquid form of invest-
ment and are redeemable for cash on demand and without notice
sixty days after the date of issue. War bonds are now redeemable
Regraded Unclassified
220
- 7 -
for cash across the counter on presentation to any member bank
of the Federal Reserve System- i.e. a majority of all banks - in
much the same manner as checks are cashed or deposits withdrawn.
5. War bonds have a good rate of interest, 2.9
per cent when the bonds are held to maturity. Moreover the bonds
earn interest from the first day of the month in which they are
purchased.
6. Since interest is paid through an increase in
the value of the bonds rather than in cash at stated intervals
there is a strong incentive for the investor to hold his bonds
to maturity. There is therefore less likelihood that money
invested in War Bonds will be spent for frivolous or transient
reasons. Moreover, by holding War Bonds to maturity the
soldier may acquire the habit of saving.
7. War Bonds are issued in denominations as low
as $7.50 ($10 maturity value) for enlisted men in the Armed
Services. This G-I Bond not only makes it easier for the soldier
to buy bonds, but it gives him greater flexibility in meeting
his needs when and if it becomes necessary to redeem his bond or
bonds for cash; that is, he will not have to redeem a bond of
larger denomination than his immediate need require.
8. War Bonds may be issued in the name of the
owner alone, or the owner and a co-owner or the owner and a
beneficiary. If issued in the name of an owner and a co-owner
they represent savings as accessible to either as a joint
bank account. If issued in the name of the owner and a
Regraded Unclassified
221
- 8 -
0
beneficiary, War Bonds are inaccessible to anyone except the
owner during his lifetime and to the Beneficiary after the
owner's death. War Bonds therefore offer a choice of savings
as flexible as a joint bank account or as restricted as an
insurance policy. War Bonds are available to the co-owner or
beneficiary without probate or other legal process. The inves-
tor who puts his money in War bonds can always be sure that it
will go only to him or to those designated by him and no one
else.
9. No other form of soldiers savings lends
itself so readily to a Theater-wide promotional and educational
campaign. Such a drive helps to foster and sustain general
morale. The promotion and sale of war bonds can be a vehicle
for the development of that wholesome competitive spirit which
contributes so much to esprit de corps and to pride of officers
and men in their respective commands. We realize that this is
a collateral consideration, but an important one nevertheless.
10. A drive to increase soldiers savings through
the purchase of War Bonds seems to us an ideal method of
accomplishing the basic objectives set forth above.
Regraded Unclassified
- 9 -
222
C. A Theater-Wide War Bond Drive
We propose therefore a theater-wide war bond campaign to
sell 100 million dollars (cash price) of War Bonds through cash
sales and allotments extending over a period not to exceed six
months. Setting a quota to cover a period of six months will
help to sustain war bond subscriptions beyond the period of the
drive. The campaign itself should not extend over a period longer
than three or four weeks.
Subscriptions during the drive might be on the basis of
(a) payroll allotment on Form 29-6 for an indefinite term; (b) pay-
roll allotment for a limited term of six months (sign-up sheet);
(c) cash purchases.
Subscriptions on an allotment basis are, we believe,
preferable to cash purchases but both should be included in the
drive.
We believe 100 million dollars over a six month period to
be a reasonable objective because:
1. At the present time total monthly war bond
sales throughout the ETO through "B" allotments - are approximate-
ly nine and a half million dollars. We are ignoring the cash
sales because the Eighth Air Force drive may make these figures
temporary.
2. At the present rate, war bond sales during a
six month period will total in the neighborhood of 57 million
dollars.
3. The proposed campaign will involve therefore
approximately $43,000,000 of new sales and allotments through
Regraded Unclassified
223
- 10 -
a period of six months - or an increase of some $7,167,000 per
month over current sales.
4. Assuming total personnel in the ETO of
approximately 2,000,000 - this will involve additional war bond
subscriptions of about $3.10 per man per month.
5. In summary: A quota of 100 million dollars
to be raised during a period of six months will require total
war bond subscriptions for cash and by allotment of approximately
$50 per man or at the rate of $8.50 per man per month. It must
be borne in mind that nearly 64 per cent of this amount is
currently being subscribed.
6. A war bond quota of 100 million dollars over
a six month period would require the investment in war bonds of
slightly less than 10 per cent of the total gross payroll.
7. This quota would be exceeded if each enlisted
man would purchase but one $7.50 G-I bond per month, and if each
officer would purchase one $18.75 bond per month.
This is not in addition to, but includes, current purchases.
Regraded Unclassified
224
NEW SALES REQUIRED
On Basis of August Payroll
In the August payroll, bond sales by Allotment "B"
and for cash, are approximately
$ 9,500,000 Mo.
X
6
If present rate is maintained, sales for
6 months would
= 57,000,000
Total new sales needed in 6 months
43,000,000
To make the total quota
$100,000,000
Total new sales needed each month
43,000,000
=
7,167,000
6
11
-
-
4.16% of total
payroll
per month
On the Basis of the August Payroll
Monthly quote new sales
Monthly quota new sales
for U.K.
for continent
$ 4,167,000
$ 3,000,000
Funds available
38,030,000
24,898,000
Quota % of Funds
11%
12%
Quota % of Payroll
4.17%
4.15%
The quota for the theatre is 4.16% of payroll per month in
new business.
Regraded Unclassified
- 11 -
225
D. Sources of Funds
There are ample funds in the ETO to attain this goal.
Sources from which increased sales can come are:
(1) From a reduction in net retained pay
It is desirable that a substantial portion of
increased savings come from this source. If net retained pay
were somewhat reduced, officers and men in the ETO would still
have substantial funds to spend. By reducing the amount
available to be spent in the ETO we should help to accomplish
one of our most important basic objectives, namely, to reduce
the inflationary effect of soldiers' spending on the economy
of liberated areas.
(2) From a reduction in PTA
PTA has proved to be a great boon to the
soldier. Experience in the Eighth Air Force Bond Drive, however,
points to the probability that increased war bond purchases will
be made, to some extent, with money that would otherwise be sent
to the U.S. through PTA. We believe this to be salutary. By
investing the money in war bonds the investor has greater assur-
ance that his money will be saved. There is less likelihood
that war bonds will be redeemed and the proceeds spent than
there is that cash sent home will be spent. If those to whom
PTA transmittals are normally made appear on the bonds as
co-owners, they can redeem the bonds almost as readily as they
draw cash from a bank if they are in need of the money. By
putting some of the present PTA funds into war bonds we help
to make sure that in reducing inflationary pressures in the
226
- 12 -
ETO we do not increase the threat of inflation at home.
(3) From a reduction in Soldiers' Deposits
Experience indicates also that increased war
bond sales arising from the Eighth Air Force Victory Squadron
War Bond Drive came in part at least from money that otherwise
would have gone into soldiers' deposits.
Soldiers' Deposits offer an attractive form
of saving to enlisted personnel. They pay 4 per cent interest
and are in the form of cash reserves.
On the other hand, unless previously with-
drawn with consent of his C.O., soldiers' deposits plus interest
are returned to the soldier on discharge in one lump sum. There
will be a strong temptation at that time to spend these funds
rather than to re-ihvest them. Some such spending undoubtedly
will be necessary and salutary. Much of it however will be un-
necessary and will not only dissipate needed reserves but will
contribute to a post-war price inflation in the United States.
It is well to remember that the most serious period of inflation
arising from World War I came during the period of demobilization
and after the war itself was won.
We believe, therefore, that a part of the in-
creased war bond sales necessary to attain the proposed six months
goal of 100 million dollars may properly come, as they undoubtedly
will come, from money that would otherwise go into soldiers'
deposits.
(4) From a reduction in "E" allotments
"E" allotments are used for a variety of
Regraded Unclassified
- 13 -
227
R
purposes - the most important being family remittances by
officers and men. In addition, these funds, like PTA, are
undoubtedly used at home to make necessary payments on insurance
policies, mortgages, and other fixed obligations of both officers
and enlisted men. Undoubtedly too, as in the case of PTA, some
of the money sent to the U.S. under "E" allotments goes into
war bonds, bank deposits and other forms of savings. How far
these "E" allotments should be diverted into War Bond purchases
in the ETO must be left to each individual to decide. It is
clear, however, that some of the money now going home under
"E" allotments might well be invested in War Bonds in the ETO.
(5) From money now being sent home through
Postal Money Orders
As in the case of PTA funds a considerable
part of this money can and should be invested in War Bonds in the
ETO.
(6) From accumulated bank deposits and cash
in the ETO
Many officers and some enlisted men have bank
deposits in English banks - others have substantial amounts in
cash. A large proportion of demand deposits and practically
all of these excess cash funds should be invested in War Bonds.
Regraded Unclassified
- 14 -
228
E. Variations as to sources of funds
The disposal of soldiers' pay varies from unit to unit
in the ETO, and no uniform pattern as to sources of funds for
increased war bond sales can be expected.
We have examined many payrolls of many different organi-
zations inthe U.K. and in France, and one thing seems clear:
there are few, if any, units in the ETO where funds are in-
sufficient for a substantial increase in war bond subscriptions.
The ability to buy bonds is not to be measured solely
by the amount or percentage of net retained pay. For example,
in FD Section 52 at Normandy Base only 11 per cent of the total
payroll was retained after all allotments and cash collections.
In FD Section 136 net retained pay, after all allotments and
cash collections, was 34 per cent of total payroll.
Notwithstanding this great disparity in the percentage
of net retained pay, the market for war bonds is substantially
the same in both cases.
In both cases war bond purchases by allotment and for
cash represented slightly more than 6 per cent of the total
payroll.
The difference in net retained pay is accounted for
mainly by the fact that in FD Section 52 PTA and postal transmit-
tals amounted to 24 per cent of the total payroll, whereas in FD
Section 136 these transmittals amounted to only 12 per cent of
the total payroll.
Regraded Unclassified
229
- 15 -
Obviously in the first case there is ample room for
increased bond purchases from funds now being sent home through
PTA and the Post Office. In the second case increased bond
purchases could be made largely from the net retained pay.
This is merely one of many illustrations that might
be given to show the necessity for analyzing the war bond
market on a local or unit basis.
We deceive ourselves if we measure the bond-buying
potentialities of any unit simply by the percentage of net pay
retained for expenditure in the ETO.
Regraded Unclassified
- 16 -
230
III. Objections of Officers and Men to War Bonds
A. Among the objections often raised by officers and
men to the purchase of war bonds are the following:
1. "I can't afford it".
In final analysis, of course, each individual
must be the judge of his ability to save through the purchase
of war bonds.
We should, however, be doing the soldier a
disservice if we failed to point out to him the importance, for
himself and his future, of saving now, and more particularly the
advantages of war bonds over other forms of saving.
2. "War bonds are all right but I'm sick and
tired of trying to keep up with all the changes
in the procedure of buying them, and with the
red tape involved. They've changed the system
twice before and now they're changing it again."
To meet this objection it should be emphasized
that war bonds are guaranteed securities, registered in the
name of the owner alone, the owner and co-owner, or the owner
and beneficiary. All these features are designed solely for
the protection of the bond buyer. But they involve a good deal
more book keeping and "red tape" than would be necessary if
these safeguards were eliminated.
It is true the procedure of buying and issuing
bonds has been changed two or three times. It is unfortunate that
Regraded Unclassified
231
- 17 -
these changes have been necessary. But the Army, like other
human institutions, must "live and learn". We are sure that
the present plan will prove to be more efficient than previous
ones. We wish it had been installed from the beginning. As a
matter of fact, the new plan involves no additional burden
and no change in procedure for the enlisted man. His B
allotments will be continued as in the past, and cash purchases
may be made in substantially the same manner as before. For
officers the new procedure merely requires that he sign his
name on pay day once a month to continue his B allotments.
Certainly this is not sufficiently burdensome to justify
discontinuance of his allotment or failure to renew it at an
increased amount.
After all, war bonds are the best investment in
the world. Failure to put every cent you can into them because
of irritation with procedure is to "cut off your nose to spite
your face".
3. "It takes too long to get war bonds now and
under the new plan it will take even longer.
When I buy something, I don't want to wait a
month of Sundays to get it".
Because war bonds are guaranteed and registered,
it takes longer to issue them than it does to handle cash.
But the very fact that the Government takes time and care in
making sure that the bonds are properly registered should be
a source of comfort rather than a cause for irritation.
Remember that your bond begins to draw interest
from the first day of the month in which an allotment is made from
Regraded Unclassified
232
- 18 -
your pay or in which you pay cash for a bond. This is true
no matter how long it may take your wife or whomever else you
designate, to receive it. If you pay for a bond either by
allotment or with cash as late as the 30th or 31st day of the
month that bond is yours and begins to draw interest from the
first day of that month even if it is not actually delivered for
a month or more to the person you designate to reeive it.
We know how anxious most people are to get
delivery of their bonds as soon as possible. Every effort will
be made in the future to see that this is done.
4. "I prefer other forms of saving to war bonds,
that is PTA, Soldiers' Deposits, etc."
If this is given as a reason rather than as
an excuse for not buying war bonds it would be well to review
with the individual making this objection the advantages of
war bonds over other forms of saving as set forth above.
Point out, for example, that when money is invested in war
bonds you know it is being saved. You are not always sure
when you send it home.
Point out that in the case of Soldiers' Deposits,
the higher interest rate is offset by the inconvenience of having
to re-invest this money after the war and the uncertainty of
finding a suitable investment.
Point out also that in case of your death, war
bonds, unlike Soldiers' Deposits, cannot be tied up in probate
or other legal process.
Regraded Unclassified
233
- 19 -
5. "How do I know the Government will ever
'pay off' on these bonds?"
First, the Government of the United States has
never defaulted on any obligation and never will as long as
there is a United States.
Second, if the Government should fail to "pay off"
on its war bonds, no other form of savings, whether in cash,
insurance, or securities, would be worth anything. It would
do you no good to bury your money because when you dug it up
"it wouldn't be worth a lead nickel" if Uncle Sam went back on
his bond.
Third, the fact that 81 million individual
Americans, every insurance company, bank, and trust company,
and nearly every corporation in the United States have invested
over 200 billion dollars in Government bonds and securities -
is pretty good evidence of their soundness.
Fourth, if you have enough faith in your Govern-
ment to fight and if need be to die for it - surely you have
enough faith in it to invest your money with Uncle Sam.
So
Save your dough
And watch it grow
In War Bonds
IV. The Organization
A.
Initial endorsement and activation by Commanding
Officers.
The success of any undertaking is dependent in major
degree on the enthusiasm of the men responsible for it and
starts with the leaders at the top. To make this drive
Regraded Unclassified
234
- 20 -
dynamic, the enthusiastic support of Commanding Officers is
essential. The importance of such support has been amply
demonstrated in the United States and in the Eighth Air Force
bond campaign.
It is therefore proposed that General Eisenhower
write informally and personally to the Commanding Officers
of the several Armies -- of Com Z -- and of USSTAF endorsing
the drive and urging support of it.
It is further proposed that the several Commanding
Officers likewise write to the C. 0.'s of the Divisions, the
Bases and other commands under them endorsing the drive and
urging support.
It is finally proposed that these communications be
continued down through the channel of command to the "units".
Although the communications would come from Commanding Officers,
and go down through official channels, they should not be
"directives" or "orders". To be fully successful, this drive
must be "put over" by information, persuasion, and personal
selling. In short, it must be voluntary. These communications
from Commanding Officers will give the drive official approval
and initial activation.
B. Planning, Administration, and Execution.
1. At the top or Theater level.
Each of the following services would have a
direct interest in and part responsibility for the success of
the drive.
Regraded Unclassified
235
- 21 -
Finance
War Bonds
Personnel
Special Service
Public Relations
Chaplain
It is recommended that a representative of each
of these services from the top or Theater level be delegated to
serve on a planning and administrative board. Because these
services are so directly involved, the men representing them
would not have to be detached since they would be working, in
the main, in the area of their regular duties.
However, no group of men, no matter how able and
cooperative they may be, when serving as a group, can actually
run such an undertaking. This is a cardinal principle of
Army organization as well as sound business organization.
Therefore, it is desirable to select a particularly suitable
officer to be Chairman of this board. He would, in a sense,
be the C. O. of the drive serving under the Fiscal Director.
The board members would serve with him as assistants and advisers,
but he would have the final responsibility and authority. He
could serve in this capacity for a period of sixty days and
then carry on with his regular duties. The duties of the
Chairman and the board would be planning, determination of
policy, and overall administration.
One of the most important obligations of the
Theater Chairman and the board would be the allocation of the
quota, down to and including the divisions. This can be done by
Regraded Unclassified
236
- 22 -
apportioning the total quota on the basis of the relation which the
payroll of the command or the division bears to the total payroll of
the ETO. The quota should always be set in dollars and not in per-
centages of payroll.
2.
Finance Officers on Temporary Duty
Eight officers have been sent to the ETO on temporary
duty to assist the War Bond and Insurance Division. They have been
assigned to various commands to promote the sale of war bonds and
insurance. They have no other duties. These men could serve as
field representatives for the drive. Their duties might be:
a. To help in making plans for the education
and indoctrination of the officers of the
several services responsible for execution
of the drive from Army level down to Unit level.
b. To interpret policy and explain proce-
dure so that all activities including the
measurement of results will conform to the
basic policies determined at the Theater
level for the conduct of the drive.
C. To serve in a liaison capacity between
Theater headquarters and lower level operations.
3.
At the Army, USSTAF and Com 2 level
It is not desirable to try to build too large and too
complicated an organization. Therefore no specific plan for ad-
ministration at this level is recommended. If it proves desirable
to use the talents and abilities of the officers at this level,
Regraded Unclassified
- 23 -
237
plans for doing so can be made by the Theater Chairman and his
board.
4.
Officer Personnel at the Division or Comparable
Level
At this level we move from planning and administration to
actual execution. The Commanding Officer of the Division should
bring together the officers of the several services (Finance, Per-
sonnel, Special Service, War Bonds, Chaplain, Public Relations) and
appoint one of them, or some other specially suitable officer, as
drive chairman for the Division. The other officers should serve
as his assistants and advisers.
The duties of the Division Chairman and his assistants
might be:
a. To understand the overall plan and arrange
for its execution in each unit in the Division. This
will be necessary, for conditions will differ between
Divisions and among the units in & Division. In this
way, a war bond drive in practically every unit in
the ETO can be assured.
b. To introduce the "local color", the in-
dividual initiative, and the competitive element so
important in this kind of a drive. Each Division
will want to outdo all other Divisions in sales and
in clever and original methods of promotion.
C. To arrange for the best use of the skills
and talents of the officers in the several services
at levels below the Division.
d. The finance or disbursing officer of the
Regraded Unclassified
238
- 24 -
Division should assign the quota for the drive to
each unit. This can be done by calculating the
percentage which each unit payroll represents of
the total payroll of the Division and then applying
that percentage against the quota for the Division.
For example:
Suppose the Division payroll is $1,000,000
Suppose also that the Unit payroll is $15,000 or 1.5%
of the Division payroll.
Assume the Division quota to be $100,000
The Unit quota would then be 1.5% of $100,000 or $1,500.
Calculating unit quotas in this way gives full allowance
to differences between units in average rates of pay and in
strength. Unit quotas should always be in dollars.
5. Officers and Enlisted Personnel at the Unit
Level. (Company, squadron, detachment, etc.)
At this level the accent is on execution. Here the
C. 0. should take an active personal interest even though the
work be done by the following:
(a. War Bond Officer
(b. Personnel Officer
(c. Class-A Agent
(d. Company Sergeant
(e. Company Clerk
a. The War Pond Officer, or other officer
designated by the unit commander, should have the
responsibility for the drive within the unit.
His duties might be as follows:
Regraded Unclassified
239
- 25 -
1. Establish and maintain contact with drive
Chairman for the Division.
2. Correlate activities within the unit with
Division plans and activities.
3. Handle such promotion for the unit as may
be indicated or requested.
4. See that all officers and enlisted men
doing actual personal selling be as well
informed as possible regarding war bonds --
what they are -- why they should be bought
and kept -- how they can be bought, etc.
5. Personally solicit B allotment and cash
purchases from each officer in the unit.
6. If possible, hold a meeting of all personnel
in the unit with the Commanding Officer present.
Describe the drive as an overall theater
operation. Announce the quota for the
unit. Tell how the drive will be conducted
in the unit, with details on personal sel-
ling. Give a sales talk on war bonds.
Play on the fact that this is the "best
damn unit in the outfit" and urge going
over the quota in a big way.
7. Put up a "quota thermomener" or some other
device that will show graphically how the
Regraded Unclassified
240
- 26 -
unit is doing. This quota device should
be in a prominent place where every member
of the unit can see it.
b. The Personnel Officer should be prepared to
handle additional B allotments and cash purchases records
expeditiously. He should give every aid in preparing
and expediting periodic reports of the unit's progress
in the drive.
C. The Class-A Agent, when paying men, will
automatically note those who are receiving comparatively
large amounts and at that time urge purchase of war
bonds and urge help in putting the unit over the quota.
d. The Company Sergeant should select the G. I.
salesmen (see next section) and check with them from
time to time to get "action". Through his supervision
of these G. I. salesmen the company sergeant can make
a most important contribution to the success of the drive.
e. The Company Clerk can and should play a very
important part in the war bond drive. He will be of
great help to the war bond officer and the personnel
officer in handling expeditiously records and reports.
He has frequent contact with the personnel of the unit
and can be a potent one-man sales force.
6.
Auxilliary help from other officers.
a. The Chaplain can be of great help in making
this drive successful. He will naturally approve the
general purposes of the drive, and will be particularly
Regraded Unclassified
241
- 27 -
interested in the advantages to the individual enlisted
man. He can openly endorse the drive. Wherever and
whenever he has personal contact with individuals he
can urge partici ation.
b. Public Relations Officers should find in the
drive much material with which to promote desirable
publicity and thus stimulate all groups to greater
enthusiasm. Through this means, ride in organization
can be increased.
7.
The G. I. Salesmen.
These salesmen should be selected from the enlisted
personnel of the unit, not because of rating, but because of:
8. Willingness to work at the job;
b. Personality end standing with their
fellow soldiers;
C. Previous experience 18 salesmen.
"ach of the G. I. salesmen should have 8 list of names
of ten or fifteen men in his unit. He is the salesman and the
ten to fifteen are his rospects. He should personally talk to
each rospect to induce him to sign up for new or additional
class-B allotments. He will know, or can easily ascertain,
which of the men are struggling to care for dependents back home,
end who therefore have little money left to spend or save. He
will also know which of the men are saving little and spending &
lot; he will naturally "go easy" with the former and "bear down"
on the latter. Each of these G. I. salesmen should be told how
much he should average per pros ect. This average will be the
- 28 -
242
unit quote divided by the number of men in the unit. He
should strive to better this average sale in order to make
sure that his unit goes over its quota. If one man can't sign
up for a new or additional allotment, another man will have
to sign up for more than the average. Once the prospect says
"I'll sign up" the G.I. Salesman should take him to the per-
sonnel officer or other place of purchase and see that the
proper forms are executed for the new or additional B allotment.
In addition to the B allotment "sign-up" plan, each G.I.
salesman should sell for cash. Fe knows who has "hit the jack-
pot" or won the poker game and has 8 pocket full of money. He
should induce these men to go with him to the finance officer
or other appropriate place and persuade them to buy for cash
as many bonds as possible.
When the G. I. salesman has seen and talked to each of the
prospects assigned to him, he should report the results to his
unit war bond officer.
By having the G. I. salesmen do the personal selling to
their fellow enlisted men, the drive will be voluntary and by
persuasion rather than forced or by "command."
If each G. I. salesman does his job well, his unit will
"go over" its quota -- so will the Divisions and the larger
commands. The whole drive in the ETO will "go over." The
success of the entire drive may depend in a major degree on the
work of the G. I. salesman.
Regraded Unclassified
243
- 29 -
C. Outlets for the Sale of Bonds.
An important factor in this war bond drive will be the
ready availability of the product to the purchaser. The soldier
should be able to buy war bonds with ease and facility. The
regular "outlets" or places where soldiers can sign up for
B allotments or make cash purchases may be supplemented by
the setting up of additional outlets from time to time during the
drive.
D. Periodic reports of results.
The Theater Chairman should provide forms and set
intervals for regular reports of results. These reports should
be signed by the commanding officers at each level of command from
the unit on up. They can, of course, be summarized or consolidated
at such levels as may be indicated. The overall report in as
much detail 88 may be practicable should be given to the com-
manding general of the ETO. Those officers concerned directly
with the drive will know where exceptionally good work is being
done, and just where the drive is lagging. The commanding of-
ficers at different levels will also have this information for
their own commands and for those under them.
These reports should probably be compiled by finence
officers and handled through finance channels.
E. The Problem of Circular No. 290.
The reception of Circular No. 290 has been unfavorable.
Most officers with whom we have talked resent it. The resentment
Regraded Unclassified
244
- 30 -
seems to divide between the fact that this is still another
change in war bond procedure, and the fact that it entails more
work.
It should be impressed upon all personnel and finance
officers that Circular No. 290 is the best scheme that has been
worked out from the standpoint of the men. It will eliminate
mistakes and the ill feeling that accompanies mistakes. It
will also eliminate the work of tracing down and correcting
mistskes. From the point of view of the buyer, Circular No. 290
represents a better way to buy war bonds. This point should be
impressed upon all personnel and finance officers.
We have heard the thought expressed that the effect of
Circular No. 290 will be to reduce war bond sales in the Theater
by as much as 50 per cent. We cannot agree with this. The
circular does not affect enlisted men. If Circular No. 290
will tend to reduce war bond sales to officers, then a special
selling effort to officers is indicated.
V. Promotion.
The purpose of promotion in connection with a Theater-
wide war bond drive is to inform all military personnel that the
drive is taking place, to emphasize the importance of the
drive, to sustain interest in the drive as it progresses, to
present war bonds in such a way that soldiers will want to own
more of them, and to create an atmosphere in which the sales
organization can function more effectively.
It is important to emphasize that, while promotion can
Regraded Unclassified
- 31 -
245
make people want to own war bonds, few people are likely to
buy them until someone actually asks them to do SO. Thus,
promotion is nota complete and separate selling effort by itself.
But it is a necessary supplementary aid to the sales organization.
A. Channels of information and persuasion.
1. Special Service.
Under the jurisdiction of the Special Service
Division are Stars & Stripes, Yank, the American Forces Network,
Motion Pictures, Army Talks, and 8 new publication soon to
appear. We have been assured of the willingness of this
division to support 8 war bond drive with 8. vigorous campaign
in all of these media.
2. The Red Cross
While the Red Cross will undertake no aggressive
selling of war bonds, we have been told that they will put up
war bond posters in all Red Cross club rooms, and will devote
at least one informational discussion period to war bonds.
3. U. S. 0.
We believe it will be possible to have the theme
song of the drive sung at all U. S. 0. performances given in
this theater. Additional cooperation by individual stars
should be possible.
4. Mess halls.
These offer a dual opportunity of talking to groups
of men and of placing posters in conspicuous positions.
Regraded Unclassified
- 32 -
246
5.
Orderly Rooms.
Here is an opportunity to do some personal
selling on individuals. They are good places in which to put
up posters, and pass out informational leaflets.
6. Finance offices.
Personal selling to both officers and enlisted
men can be done in finance offices. Posters can be put up
there. Leaflets can be distributed there.
7. Wherever men are paid.
Whether it be in an office, mess hall, or tent,
there is an opportunity to get in a word about "making the
quota" as the men are paid.
8. PX's and Q.M. Stores.
These two types of outlets offer excellent
opportunities to place posters where heavy traffic will see them.
9. RTO And ATC
These are good outlets for posters, and perhaps
for directions as to the nearest place where war bonds may be
purchased.
10. Mobile equipment
If it were possible, some mobile equipment might
carry a war bond message in the way American Express Trucks at
home carry commercial messages.
11. Latrine posters.
12.
Miscellaneous channels.
The ingenuity of the local war bond officer will
Regraded Unclassified
247
- 33 -
suggest additional outlets for information. For example,
the front of the building in which the finance office is
located in Paris now carries three Liberation Posters. This is
a good location for war bond posters. The local war bond officer
might arrange to use the windows of vacant stores for poster
showings; 8. window in the Champs Elysee for instance, would be
seen by thousands of American soldiers.
B. Selling Devices.
1. The Quota.
The value of the cuota as an impelling and
successful sales device has been demonstrated, not only with
civilians during five war bond drives in the United States,
but with soldiers in the ETO during the drives held by Base Air
Depot No. 2 end by the Eighth Air Force. The competitive spirit
it engenders is en important factor; the lift it gives to the
morale of each participating unit is a valuable concomitant.
A quota should be set for each Army, for each Air Force, for
each Base, for each Division, and for each Unit.
2. Prizes.
Prizes are & stimulating part of any drive. We
recommend that prizes be worked up for different levels of
command.
As a grand prize, we suggest a week's leave in
Paris for one man -- to be selected by lot -- from each Division
making its quota.
3. Personal Salesmanship (see Section IV)
Regraded Unclassified
248
- 34 -
4. Posters
We realize, of course, that paper is a problem but
every effort should be made to get a priority. We are recom-
mending that four posters be used:
a. A message from General Eisenhower
together with his picture.
b. A poster showing a G-I salesman selling a
bond to his commanding officer.
C. The family scene shown with this report.
d. The Uncle Sam poster shown with this report.
5.
News Stories, Editorials, Articles, etc.
6. Radio Announcements, Talks, etc.
7. Motion Picture Trailers, Shorts, End Clips.
8.
Group Talks
9.
Sign-up Sheets
10. Sales Kits for War Bond Officers at the Unit Level.
C.
The Central Sales Idea
1. The requirements of the sales idea.
Based upon our findings in the UK and in France,
we believe that the best appeal to sell war bonds to soldiers in
this Theater is one that combines emotion with sound common sense.
We should recognize that foremost in most soldiers'
minds are dreams for the future. What each hopes to do when he
returns to civilian life is constantly in his thoughts.
Regraded Unclassified
249
- 35 -
We think he can be made to see in war bonds an ideal means of
realizing these dreams.
We understand that many soldiers feel that they
are doing enough for their country by serving in the Army. We
think the soldier should be influenced to view war bonds as
something he should buy, not to finance the war, but as an
example of sound business judgment, and for his own personal good.
We do not believe that a sales idea which was
entirely emotional would accomplish its purpose. Nor would one
that was wholly practical be of maximum effectiveness. There-
fore we have sought a motivation that would combine emotion and
practicality into & single sales idea.
We are proposing that the theme of the theater-
wide war bond drive be
"YOUR SILVER LINING -- WAR BONDS".
This idea we believe to be catchy without being tricky. It is
dignified without being stuffy. It holds a promise of hope for
the soldier, and it is aimed directly at his interests and his
concern. There is a lofty quality to it that gives it grandeur,
yet it is written in a language common to all men. And perhaps
most importent of all, it has immediate significance, immediate
meaning to all who see it.
While we would suggest that the slogan crystalizing
the idea be used exactly as written above for all major publicity,
there are many interesting variations which can be used to meet
Regraded Unclassified
250
- 36 -
local conditions and situations. Many ideas for varying the
slogan will occur. A few examples of how it may be varied are
given below:
"PUT A SILVER LINING ON YOUR FUTURE"
"CLIMB ON THE BOND-WAGON AND GET A SILVER
LINING"
" A SILVER LINING MAKES DREAMS COME TRUE"
"JOIN THE WISE G. I.'s --
GET YOURSELF A SILVER LINING"
(For sign-up sheets)
"HAVE YOU GOT A SILVER LINING?"
(For a sign at war bond offices)
"GET YOUR SILVER LINING HERE!"
The idea offers many interesting poster possibil-
ities. An example is shown in the accompanying sketch. We use
the family scene because returning to the wife and children, or
getting married and raising children is the paramount thought in
the minds of the majority of men we have talked with, both
enlisted and commissioned. This poster shows the soldier in
the role in which the vast majority want soon to be.
In adapting this idea to various media and uses,
many original ideas will occur to officers and men. A few
suggestions are given below:
THEME SONG
A good theme song is a stimulating addition to
any drive. There is a natural for this one in
Regraded Unclassified
251
- 37 -
the old familiar favorite by Jerome Kern.
"Look for the Silver Lining". It could be
sung at every USO performance, and at
periodic intervals over the radio.
EDITORIALS
An editorial could be written under the title
of "Your Silver Lining" that would point out to
soldiers the advisability of having a nest egg
that can either be quickly converted into cash
or left to keep on growing larger.
NEWS STORIES
"Eisenhower Opens Silver Lining Drive" would make
a good news story. Other obvious ones could be
written about cables from the President, Secretary
Stimson and Secretary Morgenthau expressing
interest in the drive.
PHOTOGRAPHS
It would be possible to run a picture of a G. I.
salesman selling a bond to a Commanding Officer,
with the caption under the picture saying "General
Blank buys himself a piece of Silver Lining."
Photos could also be run of interesting stunts
that various war bond officers had worked up to
promote the drive.
CARTOONS
Many ideas suggest themselves for humorous
Regraded Unclassified
252
- 38 -
treatment of the idea. One might be to have a
Breger cartoon with the little character in a
crap game. A very large pile of money is in
front of him. In the foreground one G. I. is
whispering to another saying "He says he's
getting himself a silver inter-lining."
RADIO
In addition to broadcasting the theme song,
radio can report periodically on the progress
of the Silver Lining Drive. It can have short
talks about the drive, gags about it, and per-
haps even a dramatic or comedy sketch about it.
MOTION PICTURES
Trailers suggest themselves in which various
Commanding Generals would endorse the drive.
A short picture might be worked up about the
drive -- a newsreel type of picture. All feature
entertainment pictures shown throughout the
ETO should carry end clips giving a message
about the drive. These are but a few suggestions.
We know that the ingenuity of all the officers
concerned with the drive will produce many more.
Thus far, we have discussed separately the
channels of information, promotion devices, the central idea,
and varying ways of treating the idea. A plan should be worked
out for integrating them.
Regraded Unclassifie
253
- 39 -
For each of the three major media - publications,
radio, and motion pictures - a schedule of promotion should be
prepared. Dates should be set on which releases would be made
in publications, time given on the air, and motion pictures
shown. The dates should be staggered so that there would not
be promotion by all media on certain days with gaps when no
promotion was reaching the audience.
The actual material to be used in these media, such
as news stories, editorials, radio spots, etc., should be out-
lined in advance. Thus, by having a picture of the complete
program, it is possible to make sure that constantly fresh
approaches will be used to maintain interest for the duration
of the drive.
Sales kits, leaflets and posters should be prepared
together with a plan for distributing them. Dates should be
set for the simultaneous appearance of all posters.
The USO should be contacted in advance of the drive.
Arrangements should be made to have the theme song sung by all
units at all performances, and to have it introduced with a
reference to the drive. The star of each unit should sing
the song.
Many more ideas for organizing the promotion of the
drive will occur to the Theater Chairman and the board. Too
much emphasis cannot be put upon the importance of having a
carefully worked out, well integrated program prior to the
opening of the drive.
Regraded Unclassified
254
- 40 -
VI. In Conclusion
In this report we have tried to analyze the market and
demonstrate that a war bond quota of 100 million dollars for
this Theater is a modest one.
We have tried to outline methods by which this quota
might be achieved.
But we wish to emphasize that no plan based on thirty
days' experience in the Theater can be a rigid blueprint.
Rather it is a guide, and a very flexible one, to point a
general direction and to serve as inspiration to those who
will carry out the drive.
Like any mass selling operation, this drive will be
successful in proportion to the enthusiasm put into it.
Of one thing we are certain, given enthusiasm, the quota will
be exceeded.
Regraded Unclassified
255
COMPARISON OF ALLOTMENTS AND TOTAL PAY DRAWN BY
OFFICERS AND ENLISTED MEN FOR JUNE AND AUGUST
100%
100%
Total Allotments
41.5%
(other than Class "B")
45.4%
Total Class "8" Allotments
Total Voucher Collections
and Misc. Pay Deductions
Total Pay Drawn in Cash
By Officers and Enlisted Men
June
August
Z-398
Regraded Unclassified
256
COMPARISON OF CASH RETURNED AND CASH RETAINED
FOR JUNE AND AUGUST
50.23%
Soldiers' Deposits
45.33%
P.T.A.
7.99%
Cash Sale War Bonds
:48%
P.X. Sales
7.95%
Sales by Officers Mess
Q.M.C. Sales
LOFS
Red Cross
.85%
Money Orders Issued
B2%
and Stamps Sold
11.59%
Treasury Checks Issued
.08%
12.58%
45%
Cable Transfers and Drafts
41%
Cash Retained
11.18%
1031%
June
August
*Sale Wor Bonds by foreign banks 01% in each instance
+ Misc. Cash Collections, June 11%. August .09%
Z-396
Regraded Unclassified
257
COMPARISON OF ALLOTMENTS AND TOTAL PAY DRAWN
BY OFFICERS AND ENLISTED MEN IN THE U.K.
AND ON THE CONTINENT, FOR AUGUST
100%
100%
Total Allotments
(other than class "B7
42.32%
49,66%
Total Class "B" Allotments
Total Voucher Col. and
Misc. Pay Deductions
the
5.05%
Total Pay Drawn (cash)
by Officers and Enlisted Men
U.K.
Continent
Z-397
258
COMPARISON OF CASH RETURNED AND CASH RETAINED
IN THE U.K AND ON THE CONTINENT, FOR AUGUST
50.27%
Soldiers' Deposits
sirt
P.T.T.
Sole Wor Bonds for Cash
2.76%
#
P.X.
A.iga
38.48%
Soles by Officers Mess
141
Q.M.
MFS
7.39%
Money Orders Issued
HIZES
and Stamps Sold
Red Cross
IRE
Treasury Checks Issued
MIS
**
42%
Cable Transfers and Drafts
ERA
+
46%
19.76%
Cash Retained
91%
77%
U.K.
Continent
# Sales wor bonds by foreign banks, U.K. .02%; Continent none
Miscellaneous cash collections, U.K. .15%; Continent none
- *No P.X sales on continent
Z-395
Regraded Unclassified
259
Status of Negotiations on British Lend-Lease
Requirements for Stage II as at
October 28, 1944
Mt
I. Munitions
1. Ground Army.
Mr. Patterson transmitted to Secretary Morgenthau on
October 23 a memorandum stating that representatives of the War
Department and of the British Army had "been able to agree on
the treatment of all items" in the schedule of British require-
ments for ground and other than air Army equipment for the first
year of Stage II.
The request for locomotives and freight cars for India is
transmitted to FEA.
In a letter to the Secretary of October 24, Mr. Patterson
asked that the War Department be consulted before a decision is
reached by FEA on tires and tire fabric, paper and paper board,
nylon and polymer as there is a direct military interest in these
items.
2. Air.
"
According to a preliminary report submitted to the Secretary
by Mr. Lovett in a letter dated October 23 "tentative agreements
have been reached with British representatives covering aircraft,
aircraft engines, gliders, components and equipment of Army Air
Force types". All major requests on the Army Air Forces except
certain radio and radar items had been settled as of the above
date and further information to enable settlement of these items
was expected momentarily and a formal agreement was expected to
be signed October 25.
Mr. Lovett's office informed Treasury late on October 28 that
the agreement is now in final stages of drafting and should be
ready for signing by Monday, October 30.
3. Navy and Navy Air.
Mr. Gates informed the meeting in the Secretary's office on
October 25 that the Navy program was held up pending more informa-
tion and that negotiations on Naval Air requirements had not be-
gun because the British representative had not arrived.
Regraded Unclassified
260
Division of Monetary
Research
- 2 -
On October 28 Admiral McCormick's office reported that the
British had replied on October 27 to the series of questions put
by the Navy Department and that the reply is being considered by
the Navy Department on October 27 and October 28. Joint negotia-
tions with the British have not yet begun but are expected to
early next week.
On the question of the request for naval reconditioning men-
tioned by Secretary Morgenthau at the meeting of October 25,
Admiral McCormick's office said that the item as received from
the British is considered exhorbitant and not suitable to serve
as the basis for negotiations with the British. Admiral Horne
plans to report fully on both these points to Secretary Morgenthau
on Monday or Tuesday.
On October 28 Mr. Gate's office stated that Captain Abel Smith
arrived from England October 27 in the forenoon and that joint
discussions on the Fleet Air Arm requirements began at once and
are continuing today with good progress being reported.
II. Non-Munitions
1. Food.
The British indicated at the meeting of the Joint Subcommittee
on October 27 that they felt these negotiations were not progressing
very rapidly. FEA representatives stated that although the over-
all claims seem reasonable the principal problem to be considered
is that of existing stocks and the extent to which it is appro-
priate to ask the British to draw on these in bringing about the
easement for British civilians contemplated at Quebec. FEA feels
that stocks in some commodities are excessive in view of probable
Stage II contingencies. More information is needed on the size
of these stocks and on anticipated imports from other sources. It
was agreed that British food experts would meet with FEA as soon
as possible to work this out.
2. Shipping.
FEA reported October 27 that discussions on these require-
ments are now going on with other U.S. agencies and the British
will be brought in early next week.
Regraded Unclassified
261
Division of Monetary
Research
- 3 -
3. Oil.
Lord Keynes stated on October 27 that the problem of stocks
is most troublesome here and he believed the British would pro-
pose stopping Lend-Lease of oil in excess of consumption and pay
cash for all oil exported. This would cut stated requirements
from $475 million to about $423 million. It was decided to hold
a separate meeting on this although Lord Keynes thought the
British could make a proposal that would not be difficult.
4. Miscellaneous Supplies.
The appropriate British experts are to contact FEA on such
items as wood, pulp, tires and tire fabric, nylon, etc. The
War Department in accordance with its request will be consulted
on the items in which it has expressed an interest.
III. Dominions.
It was decided at the meeting of the Joint Subcommittee
October 27 that
1. The British and Dominions will submit by October 30 a
more detailed statement of the munitions and non-munitions re-
quirements of the Dominions than is contained in Chapter 4.
2. There will be an initial meeting of the U.S., British
and Dominions reprosentatives in the Secretary's office Monday,
October 30 at 11:30 a.m. Later meetings of technicians will
follow as soon as can be conveniently arranged. Most of these
discussions will be between the Dominions (separately) and the
U.S. but U.K. financial interests will be involved in some pro-
blems such as the decision concerning locomotives and cars for
India, the question of Reverse Lend-Lease from Australia, etc.
Discussions with the Dominions can go on simultaneously with the
U.S.-U.K. discussions insofar as times can be arranged.
3. FEA representatives indicated on October 27 that active
consideration was being given to the request for locomotives and
freight cars but that other Dominions questions can be better con-
sidered after the detailed requests are available.
Regraded Unclassified
262
Division of Monetary
Research
- 4 -
IV. General
1. Export White Paper.
In a meeting of the Joint Subcommittee on October 27 the
British representatives accepted in principle the points presented
orally on this subject by the American side. Also tentatively
agreed upon was a memorandum by Lord Keynes defining the proposed
"cut-off date" in relation to Lend-Lease goods in flow although
FEA wants to examine this in relation to specific categories of
goods. It was agreed that the principal remaining problem now is
to work out a method of announcement acceptable to both sides.
Each group will prepare tentative drafts on this point and an
effort will be made to integrate them at a meeting to be held in
the near future.
2. Sterling Area Dollar Pool Arrangements.
Lord Keynes stated in the meeting October 27 that he would
be glad to discourse on this subject and a meeting of those
interested has been arranged for 11:00 A.M. Tuesday, October 31.
3. Extra Dollar Relief Asked for in Chapter 3.
The British are going to present a full statement of these
claims and the reasons therefore by Monday, October 30. Some FEA
representatives have felt that this subject cannot be profitably
discussed until all the Lend-Lease claims have been settled but
it was agreed October 27 to hold a joint meeting on it Wednesday,
November 1 at 12:00 with the U.S. side meeting one hour earlier
to consider the British revised statement. At these meetings
the question of whether to continue the discussions at present
or defer them until toward the end of the negotiations can be
determined.
L. W. Casaday
Regraded Unclassified
263
Feb263
S
U
R
Y
T
E
WU31 10
E
1944 OCT 28 PM I 30
G
NBN NEWYORK NY OCT 28 1944 1245P
R
A
HON HENRY MORTENTHAU JR
P
SECRETARY OF THE TREASURY
H
T
0
R
I HAVE AN ENGAGEMENT WITH LORD CHECWELL FOR TOMORROW SUNDAY
E
A
BARUCH.
S
129P,
U
R
Y
T
E
L
E
G
R
A
Regraded Unclassified
264
OCT 28 1944
Through the Bureau of the Budget
Attorney General
Division of Federal
Register
My dear Mr. President:
There are submitted herewith for your
consideration, with the recommendation that
they be approved, a proposed Executive Order
authorizing the Department of Commerce to
inspect income, excess-profits, declared value
excess-profits, and capital stock tax returns
made under the Internal Revenue Code for the
year 1941 and subsequent years, and a proposed
Treasury decision regulating such inspection.
The Executive Order and Treasury decision are
submitted in accordance with the request of the
Acting Secretary of Commerce for permission to
inspect the returns in order to obtain informa-
tion for use in connection with the research of
Regraded Unclassified
265
- 2 -
the Bureau of Foreign and Domestic Commerce
of the Department of Commerce, regarding the
balance of international payments and inter-
national investment position of the United
States. Names and addresses of taxpayers
are not to be disclosed by the Department of
Commerce.
Faithfully yours,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury.
The white House.
Regraded Unclassified
266
(T. D.
>
TITLE 26 - INTERNAL revenue
CHAPTER I - BUREAU OF INTERNAL REVENUE
Subshanter & - Administrative Provisions Cossac
to Various Taxes
PART 458 - INSPECTION OF RETURNS
Regulations coverning the inspection of
*omoony
excess-profits. and min
returns by the Department of Conseres.
TREASURY DEPARTMENT,
Washington 25, D. C.
TO COLLECTORS OF INTERNAL REVENUE
AND OTHERS CONCERNED:
Pursuant to the provisions of sections
55 (a), 508, 603, 729 (a). and 1204 of the Inter-
nal Revenue Code, income, excess profits, de-
elared value excess profits, and capital stock tax
returns made under the Internal Revenue Code, as
amended, for the year 1941 and subsequent years,
shall be open to inspection by the Department of
Connerce. The inspection of such returns herein
authorised may be unde by any officer or employee
of the Department of Connerce duly authorized by
the Secretary of Commerce to make such inspection.
Upon written notice by the Secretary of Connerce
to the Secretary of the Treasury stating the classes
Regraded Unclassified
267
of returns which it is desired to inspect, the
Secretary of the Treasury and any officer or
employee of the Treasury Department, with the apo
proval of the Secretary of the Treasury, may
furnish the Department of Commerce with any data
an such returns or sake the returns, or any of them,
available in the Office of the Commissioner of
Internal Revenue for inspection, and taking of such
data as the Secretary of Commerce may designate.
The information so obtained may be published or dis-
closed in stutistical form, provided such publice-
tion does not disclose, directly or indirectly, the
name or address of any taxpayer.
(so 0.
.
,
# and ⑉
tions 55 (a), 508, 603. 1204, and 729 (a), 53
Stat. 1, 29, 111, 171; 54 Stat. 974, 989; 26
U. s. C. 1940 ed., 55 (a), 508, 603, 1204, and
729 (a).)
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury.
Approved:
The White lieuse.
PAY/MEN 9-22-44
Regraded Unclassified
268
EXECUTIVE ORDER
INSPECTION OF INCOME, EXCESS-PROFITS,
DECLARED VALUE EXCESS-PROFITS, AND
CAPITAL STOCK TAX RETURNS BY THE
DEPARTMENT OF COMMERCE.
By virtue of the authority vested in me by
sections 55 (a), 508, 603, 1204, and 729 (a) of
the Internal Revenue Code (53 Stat. 1, 29, 111,
171; 54 Stat. 974, 989), it is hereby ordered that
income, excess-profits, declared value excess-
profits, and capital stock tax returns made under
the Internal Revenue Code for the year 1941 and
subsequent years, shall be open to inspection by
the Department of Commerce, subject to the condi-
tions stated in the Treasury decision relating to
the inspection of such returns by such Department
approved by no this date.
This Order shall be published in the Federal
Register.
The White House
(Cotober s 1944.)
Regraded Unclassified
269
COSLAR:PAV
4-304300
S. SECRETARY:
Pursuant to request of the Acting Secretary of Commiss, there
is transmitted herewith for your consideration, with the recommends-
tion that 10 be approved, a preposed Excentive Order for the
signature of the President permitting inspection w the Department
of Commerce of income, 6X0862 prefits, declared value @@@@@@ prefits,
and capital stock tex returns for the year 1941 and subsequent years.
There is also transmitted a proposed Treasury decision regulating
such inspection.
The language of the request of the Acting Secretary of Commerce
includes "varieus withholding returns filed to report tax withhold
from income paid to neures&dent aliens and foreign corporations; and
reserds designed to be supplemental to such returns." The proposed
Executive Order and Treasury decision is not specifically - -
specified documents. Income, such documents ⑉ specified in the no-
quest of the Conserer Department are either returns w parts of
returns and are therefore within the language of the proposed Known-
tive Order and Treasury decision covering inspection of "income,
cusses-profits, declared value exemes profits, and expital stock ten
returns."
The inspection contemplated is for statistical purposes is -
mesties with the research of the Bureau of Foreign and Demestic
Connerso of the Department of Comeros regarding the balance of
international payments and international Investment position of the
United States. Names and addresses of tempsyees are not to be
published.
(Signed) Joseph D. Nunan, Is
now 9-21-44
Regraded Unclassified
270
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE October 28, 1944
TO
Secretary Morgenthau
FROM Mr. White HOW
1. Stabilization Fund's Gold Transactions
During the three months ending September 30, 1944, the
Stabilization Fund sold approximately $340.7 million of gold to
foreign countries principally to be earmarked for their accounts
with the Federal Reserve Bank of New York. Sales by countries
were as follows:
Gold Sales to Foreign Countries
Country
Millions of dollars
Argentina
38.404
Chile
19.950
Cuba
20.000
Ecuador
1.390
Netherlands East Indies
.240
Norway
19.950
Peru
1.994
Switzerland
18.273
Turkey
9.972
Uruguay
10.011
United Kingdom
200.001
Vatican City
.499
Total
340,684
During the same period, the Stabilization Fund sold $10.7
million of gold to acquire local currencies in India and Iran
for the purpose of financing United States war expenditures in
Regraded Unclassified
271
- 2 -
those currencies. Sales by countries were as follows:
Gold Sales for Acquisition of Local Currencies
Country
Millions of dollars
India
9.624
Iran
1.098
Total
10.722
The Fund purchased approximately $1.8 million of gold from
the earmarked account of the National Bank of Denmark and $4.0
million from the Central Bank of Peru.
In order to maintain its gold balance, the Fund also pur-
chased approximately $349.1 million of gold from the Treasury
General Fund.
As a result of the above transactions, there was a net
increase of approximately $3.5 million in the Stabilization
Fund's gold holdings by September 30, as shown in the following
summary:
Summary of the Fund's Gold Transactions
Sales
Millions of dollars
To foreign countries
340.684
For acquisition of local
currencies
10.722
Total
351.406
Purchases
Millions of dollars
From foreign countries
5.770
From the General Fund
349.121
Total
354.891
Net increase in the Fund's gold holdings
3.485
Regraded Unclassified
272
- 3 -
2. Treasury Gold Stock
During this quarter, the Treasury's gold stock decreased
$348.0 million from $21,173.1 million to $20,825.1 million as
of September 30. Known and estimated amounts of sales and
acquisitions were as follows:
Sales
Millions of dollars
Sold to the Stabilization Fund
349.121
Sold to industry
8.680
Miscellaneous
1.599
Total
359.400
Acquisitions
Newly-mined domestic
3.010
Imports bought directly by
mints and assay offices
7.520
Miscellaneous (coin and scrap)
.870
Total
11.400
Net decrease in the Treasury gold stock
348.000
3. Total Gold Holdings of the United States
June 30, 1944
Sept. 30, 1944
Treasury gold stock
$21,173,065,544
$20,825,066,027
Stabilization Fund gold
21,139,972
24,625,097
Total
$21,194,205,516
$20,849,691,124
The decrease in the gold holdings of the Treasury and the
Stabilization Fund during this quarter was $344.5 million.
Regraded Unclassified
Treasury
Division of Monetary Research
Date October 28...19 44
To:
Secretary Morgenthau
I think you will be interested
in reading the bottom of page 3
and page 4 of Mr. Friedman's letter.
H.D.W.
MR. WHITE
Branch 2058 - Room 214-1/2
MA
274
COPY
SECRET
October 7, 1944
My dear Mr. White:
[I I must begin by apologizing in advance for my typing as this is my first
effort. It has taken me quite some time to get up enough courage to try to
learn how to type. I have always bragged about how quickly I could learn if
I tried and therefore have been most unwilling to try.
I presume that by the time this reaches you you will have had a chance
to consider the Chinese suggestion that the Treasury might be requested to
take steps to help enforce a Chinese decree ordering all Chinese to surrender
their foreign exchange holdings. The ostensible reason for considering such
a move is that the People's Political Council suggested it as a means of
financing increased allotments to soldiers. Actually the criticism in the
PPC of allowing private holdings of foreign exchange is more likely a reflection
of resentment against the war profiteers who are given opportunities to convert
their ill-gotten gains into U.S. dollars at very favorable rates, since even the
rate on missionary drafts is very low as compared with increase in profits and
prices in recent years. It was probably also a manoeuvre on the part of some
to embarras those Government officials who are thought to have large holdings
of foreign exchange. Moreover, it may be further complicated by the possibility
that O. K. Yui, the acting Minister of Finance, wishes to demonstrate that he
stands in well with the U. S. Treasury. It is being rumored here that Yui is
being seriously considered by the Generalissimo as the successor to Kung and
Yui does have very good political connections. He also has the advantage of
having made a good impression on the PPC. In recent talks with me he has taken
Regraded Unclassified
275
- 2 -
the line that he wishes to tell all to the Secretary of the Treasury as
compared with his earlier attitude of being reluctant to say or tell anything
of real significance. He may, of course, be acting under instructions from
Kung, but I have no way of knowing.
I presume that we would be reluctant at this critical stage in China's
political history to give the present Government, without any quid pro quo,
the additional strength and prestige which might result from our active
support to their commandeering the foreign exchange resources of private
Chinese.
The atmosphere in Chungking these days is full of rumors of coalition
Government, of which the rumors about Yui are merely a part. One rumor has
it that Hsu Kan, the present Minister of Food who cooly informed the PPC
that no good people entered his Ministry, is also being considered as a
possible successor to Kung. It is also rumored that the Minister of
Education, Chen Li-fu, and the Minister of War, General Ho, are slated to
be replaced, the latter by General Chen Cheng, who is now in command of the
war area centering in Sian. General Chen is one of the most highly regarded
of the Central Government generals, if not the most highly regarded of them
all. He is said to be a bitter enemy of General Ho.
At the same time, there are stories to the effect that the Generalissimo
in an address to party members last Monday denounced all talk of coalition
government on the grounds that a coalition with the Communists was impossible.
It is reported that Sun Fo has been urging the Generalissimo to accede to
Communist inclusion in the government on the grounds that the Kuomintang
now would have the superior position, but that this relative position was
undergoing change as the Communists continued to gain prestige and the
Kuomintang to lose it.
Regraded Unclassified
Fair
276
- 3 -
In connection with this highly complicated political situation, the
activities of Congressman Judd were particularly interesting. He has been
going around being more of an apologist for the Government than the Government
spokesmen themselves dare to be these days. Last Thursday a dinner was given
for him by the Chinese-American Cultural Institute, to which I was invited.
Among the Chinese present were Chen Li-fu, General Ho, Sun Fo, P. H. Chang,
P.S.
official Government spokesman, and General A Wang, Jap expert to the Ceneralissimo.
It started dull, but by the time Judd had finished speaking, there was an air
of astonishment and delight. There were only four foreigners, including myself,
present. After the dinner, Macy Fisher and Myself (Fisher is head of OWI out
here) decided it would be a good idea to make notes on what Judd said. We
only put down what we both agreed was said and therefore it represents a
minimum. I an enclosing copy of the notes as we made them without any editing.
In reading them, it is of interest that Judd had just returned from an inter-
view with the Generalissimo and that he had previously told Fisher that he
had seen a lengthy memo telling how the wave of criticism of the Chinese
Government had originated with the U.S. Army in China. If the Generalissimo
already has decided that all major political decisions here must await the
outcome of the elections in November, this sort of speech would have convinced
him and his advisors of the wisdom of such move. No one was present from the
Embassy (the Ambassador was invited, but had a previous engagement) so I
reported it to the Ambassador who seemed quite disturbed. I believe he
passed it on to State.
At this dinner I sat next to General P. S. Wong, one of the Generalissimo's
principal advisors on Jap affairs who has a mixed reputation for accuracy and
sagacity. He told me the following interesting story, asking that it be kept
1. 16e s a member of a Fascest plique and favers a peace for Japan. S.A.
Regraded Unclassified
277
- 4 -
secret and saying that he had transmitted it to the U.S. Army headquarters
the previous evening. The Japanese have decided to risk their fleet in
defense of the Philippines. Admiral Nomura, a submarine expert, has gone
to Formosa to get ready for the attack in which the Japanese hope their
subs will play a large part. This attack may only be a matter of a few
days off. If the Japanese lose this naval battle, they will realize that
the war is lost and it will result in a new political crisis in Japan even
if the war against Germany is going on. The Japanese army will not be able
to continue resistance on the Pacific Islands or in China after this naval
defeat and they fully realize this. The United States should do all possible
to apply direct pressure on the Japanese Homeland; all other areas are of
comparatively minor importance in achieving quick victory. Japah may be
defeated in this way before Germany. I don't know to what extent or degree
this story can be believed in view of the uncertain reliability of the
source, but it is interesting that this is not the regular government line
on Japan. The Government's position seems to be that China is vital to
the defeat of Japan and that more and more of the American effort should be
directed to alleviating the situation here. On October 6, the Ta Kung Pao
formally called for the opening of a "second front" in China by U. S. and
Great Britain. I presume this is the opening gun in a full scale campaign.
[I am enclosing a letter for Sol which contains some things you may
find of interest. Please give my best regards to the Division.
Yours sincerely
Irving (signed)
P.S. Do you think this typing would qualify me for the post of Mrs. Shanahan's
third assistant. I'm afraid I know the answer.
Regraded Unclassified
278
Notes on Speech by Walter H. Judd
at
Chinese-American Institute of Cultural Relations
October 5, 1944
First, autobiographical note on his experiences and background in China
and then in America where he tried to awaken the American people to what was
happening in the Pacific before Pearl Harbor. Then dwelt on over-optimistic
view of everything Chinese which prevailed in the U.S. after Pearl Harbor
and was further heightened by Madame Chiang's appearance (tear-jerking) in
Congress. Mentioned George Fitch as another who tried to awaken American
people.
Then beginning about last March, all over the country, simultaneously,
as if at the click of an electric switch there began to appear criticism
attacks and criticisms of the Central Government. (Clear implication if not
direct statement was that Communists in America clicked switch.) One Sunday
morning Earl Browder purchased full-page paid advertisement in newspapers
all over the country (mentioned N. Y. Times, a Washington paper, a San
Francisco paper). The point in the ads was that the U. S. must compel the
To
Central Government come to terms with the Chinese Communists.
Judd then elaborated briefly on the points of criticisms - aid to
China goes to warlords to be retained for the civil war which is to be the
real war for China, not the war against Japan; lack of democracy in China,
lack of unity.
Regraded Unclassified
279
- 2 -
Speaker then proceeded to defend China against these criticisms. Said
that England would have been lost by now if she hadn't had much more aid
than China -- also Russia. (Hearl Hear!) Told the story of what a tough
time China had had, how much she'd suffered, how much progress she'd made
nevertheless. Touching on democracy, said that while Britain was regarded
as one of the oldest and most experienced democracies, she had not had an
election in nine years. That America, which had had an election every four
years for 168 years, was having difficulties now and that many Americans
said they wished we did not have to hold one at this time. When we compare
these two countries with China, what right has America, who has not had
even a city bombed - not been touched by the war and England, who has
not been invaded - what right had they to insist that China hold an election
now in the midst of all she is going through. "It is absurd to expect
that China could or should institute democracy now, in this situation."
(Here the only applause during the speech, led off by enthusiastic
Minister Chen Li-fu.)
Touching on unity in China, he said that the degree of unity was all
that could be expected. That it was more than England and Russia would
have had if they had not received more aid than China. And if America
had undergone what China has, he would be surprised and grateful if she
had maintained as much unity as China.
Emphasized that the Executive Branch of the Government cannot make
binding commitments without the support of Congress, therefore he came out
here to get information and help get American foreign policy off a partisan
basis and onto a non-partisan basis. Deplored alternating democratic
and Republican foreign policies which contradict each other,
Regraded Unclassified
280
- 3 -
(When he mentioned that the original source of the criticism in
America had been with the Communists, there was considerable note-taking;
one man translated this immediately and handed to Ho Ying-chin who nodded
and smiled like a cat full of canaries. Considerable nodding of heads
and rapt attention when drift of whole speech became clear. Following
the break-up of the meeting Ho Ying-Chin and Chen Li-fu invited him
into a separate room, apparently to continue conversation. (B oth these Knomintang
leaders tain civil waris.A
Repeatedly stated that the United States had helped Japan in her
war against China.
Clearly stated that Chinese self-criticism made a good impression
in the United States but that he completely sympathized with Chinese
objection to criticism by foreigners.
Regraded
Unclassified
281
ATRORAM
FROM
RIO DE JANEIRO
REC'D: October 28, 5 p.m.
DATED: October 24, 1944
RESTRICTED
To the Secretary of State,
Washington, D. c.
A-2008, October 24, 12 noon.
For Har Refugee Board
Preliminary and informal information made
available to the Bubassy by the Lithuanian Charge
here indicates that number of Lithuanian refugees
in Brasil (see Department's telegram no. 3139 of
October 14, 9 p.m.) probably does not number
more than 20 - 30, and that none at the moment
appear in need of support. More definite advice
will be transmitted as information becomes avail-
able.
DONNELLY
VC:mp
Regraded Unclassified
282
CABLE TO AMERICAN CONSULATE, JERUSALEM, FROM WAR REFUGEE BOARD.
Please deliver the following message to Judah Magnes from
Joseph Schwarts of the American Jewish Joint Distribution Committee:
QUOTE YOUR OCTOBER 5 HAVE ALREADY CABLED PASSMAN ASKING HIM
PROCEED RUMANIA AS SOON AS POSSIBLE AND WE HERE HAVE UNDERTAKEN
ALL POSSIBLE STEPS WITH DEPARTMENT TO AUTHORIZE HIS ENTRY.
FULLY AGREE YOUR VIEW THAT RELIEF NEEDS BALKAN COUNTRIES so
GREAT THAT NO PRIVATE AGENCY CAN ALONE UNDERTAKE FULL
RESPONSIBILITY AND WOULD CERTAINLY EXPECT PASSMAN UNDERTAKE
ALL NECESSARY STEPS RUMANIAN OTHER GOVERNMENT AUTHORITIES TO
OBTAIN FULLEST AMOUNT GOVERNMENT PARTICIPATION RELIEF PROGRAM
WITH JDC SUPPLEMENTING WHEREVER NECESSARY AND TO THE EXTENT
OUR BUDGET PERMITS. MUST POINT OUT THAT WE HAVE NOT AUTHORIZED
NOR DO WE INTEND JEWISH AGENCY ACT OUR BEHALF THEREFORE WILL
CERTAINLY NOT PAY FOR PROGRAMS WHICH THEY INITIATE. WE LOOK
TO PASSMAN AND OUR OWN REPRESENTATIVES TO INITIATE NECESSARY
PROGRAMS IN CONSULTATION WITH LOCAL COMMITTEES AND WITH US.
FOR YOUR INFORMATION SALY MAYER IS IN DIRECT TOUCH FILDERMAN
AND HE HAS AUTHORIZED INITIAL CREDIT TWO MILLION SWISS FRANCS
AGAINST WHICH FILDERMAN HAS ALREADY DRAWN 650 MILLION LEI STILL
LEAVING AN OPEN CREDIT OF ABOUT 1,100,000 SWISS FRANCS. FOR
TIME BEING DIRECT TRANSMISSIONS FROM HERE IMPOSSIBLE THEREFORE
HAVE TO RELY ON SALY MAYER FOR REMITTANCES BASED LARGELY ON
LOCAL BORROWING. WOULD URGE PASSMAN TO GIVE AT LEAST ADDITIONAL
SIX MONTHS FOR WORK IN BALKANS WHICH WE TAKING UP WITH HIS BOARD
MEMBERS HERE. SHOULD HE REQUIRE ADDITIONAL PERSONNEL WOULD AUTHORIZE
IMMEDIATELY ENGAGING USSOSKIN AND ANY OTHER SUITABLE ASSISTANTS AVAIL*
ABLE PALESTINE PROVIDED TRAVEL ARRANGEMENTS BALKANS COULD BE MADE.
KESSLER DESIBOUS RETURNING HERE IN JANUARY AGAINST WHICH WE HAVE
NO OBJECTION PROVIDED USOSKIN OR SOMEBODY KLSE AVAILABLE REPLACE
HIM THAT TIME. MEANWHILE WE INTERVIEWING AMERICAN PERSONNEL AND
WILL KEEP YOU ADVISED OF RESULTS. UNQUOTE
4:00 p.m.
October 28, 1944
283
E0C-962
PLAIN
Lisbon
Dated October 28, 1944
Rec'd 10:18 p.m.
Secretary of State,
Washington.
3284 twenty-eighth, 1 p.m.
FOR LEAVITT FROM PILPEL JDC 104 WRD 238.
Beckelman advises 495 people from Fedhala including
about 180 Palestine certificate holders now en route
eastward British supplied transportation.
Office of Commanding General Mediterranean theatre
authorizes Reuben Resnik enter that theatre for purpose
of assuming his duties connected with welfare work there.
NORWEB
MRM
Regraded Unclassified
284
JP
Distribution of true
October 28, 1944
reading only by special
arrangement. (SECRET w)
1 p.m.
AMEMBASSY
MADRID
2904
Reference is made to Department's 2519 of September 11.
In view of difficulty of transportation of 155 Sephardics in
Bergenbelsen to Spain, it is requested that the Spanish
government exercise its good offices to obtain their release
from Germany and temporary admission into Switzerland. It
would be appreciated by this Government if requests to that
effect were nade by Spanish missions in Burlin and in Bern.
American Minister in Bern has been instructed to support
request to that end from his Spanish colleague.
STETTINIUS
ACTING
(GIN)
WRB:MMV: NO
10/27/44
It'ss
Regraded Unclassified
285
CABLE TO MINISTER JOHNSON, STOCKHOLM, FOR OLSEN, FROM WAR REFUGEE BOARD
Please deliver the following message to Chief Rabbi Ehrenpreis,
Stockholm, from the Union of Orthodox Rabbis and the Vaad Hahatzala
Emergency Committee:
QUOTE LATEST REPORT RECEIVED THAT NAZIS EVACUATING KAUNAS
TOOK WITH THEM NO LESS THAN 16,000 JEWS, AMONG THEM THE
RENOWNED RABBIS ELCHANON WASSERMAN, ABRAHAM GRODZINSKI,
SHABSAI WENIKOWSKI, ZALMAN PERMUT, MOSHE SKARUTO, DAVID
PERLAM, SAMUEL ABA SNIEG, SHIMON DUBIANSKY, MORDCHE
SHLIAPOBERSKI, BENJAMIN AZINSKY. INFLUENCE KING OF SWEDEN
AND GOVERNMENT TO INTERCEDE AND REQUEST INFORMATION OF
THEIR WHEREABOUTS. SWEDEN IS THE CLOSEST NEUTRAL COUNTRY
FOR SWIFT ACTION. CITIZENSHIP SHOULD E GRANTED TO AS
MANY AS POSSIBLE AND ASYLUM OR PROTECTION AFFORDED WHEREVER
POSSIBLE. REQUEST THEY BE RECOGNIZED AS CIVILIAN INTERNEES
UNDER JURISDICTION INTERNATIONAL RED CROSS. PLEASE COOPERATE
WITH OUR COMMITTEE AND REPLY. UNQUOTE
THIS IS WRB STOCKHOLM CABLE NO. 225.
9:15 a.m.
October 28, 1944
Regraded Unclassified
286
CABLE TO MINISTER JOHNSON, STOCKHOLM, FOR OLSEN, FROM WAR REFUGEE BOARD
Please deliver the following message to Rabbi Wilhelm Wolbe, 11
Olefsgotten, Stockholm, from the Vaad Hahatzala Emergency Committee:
QUOTE LATEST REPORT RECEIVED THAT NAZIS EVACUATING KAUMAS
TOOK WITH THEM NO LESS THAN 16,000 JEWS, AMONG THEM RABBIS
ELCHANON WASSERMAN, ABRAHAM GRODZINSKI, SHABSAI WENIKOWSKI,
ZALMAN PERMUT, MOSHE SKARUTO, DAVID PERLAM, SAMUEL ABA SNIRG,
SHIMON DUBINESKY, MORDCHE SHLIAPOBERSKI, BENJAMIN AZINSKY.
CONTACT EHRENPREIS TO INFLUENCE SWEDISH KING AND GOVERNMENT
TO INTERCEDE AND REQUEST INFORMATION OF THEIR WHEREABOUTS.
SINCE SWEDEN IS THE CLOSEST NEUTRAL COUNTRY PLEASE REQUEST
SWIFT ACTION, GRANTING CITIZENSHIP, PROTECTION AND ASYLUM TO
AS MANY AS POSSIBLE. REQUEST ALSO THEY BE RECOGNIZED AS
CIVILIAN INTERNEES UNDER PROTECTION INTERNATIONAL RED CROSS.
TAKE ALL NECESSARY STEPS. CONTACT OLSEN. UNQUOTE
Following for Olsen from War Refugee Board:
Please give all possible assistance to foregoing request.
THIS IS WRB STOCKHOLM CABLE NO. 226.
9:15 a.m.
October 28, 1944
Regraded Unclassified
PARAPHRASE OF TELEGRAM RECEIVED
287
FROM:
American Legation, Stockhelm
TO:
Secretary of State, Washington
DATED:
October 28, 1944
NUMBER: 4395
CONFIDENTIAL
Following is for Ancress Nicholson from Ameress
Whisler.
It is suggested by us, having in mind implications
of press attack commented on in Legation's cable of October 23,
No. 42, to Moscow, repeated as our 4314 to the Department, that
the Department may want to have Amcress withheld action on
prepesed $10,000 transfer for Latvian refugees which was non-
tiened in Legation's cable of the 26th, No. 4365, and Depart-
ment's message of the 25th, No. 2144, pending infermation which
we are looking for new and we will cable the Department with
respect to persons when the transfer would benefit.
JOHNSON
Regraded Unclassified
288
CABLE TO MINISTER HARRISON, BERN, FOR MC CLEILAND, FROM WAR REFUGEE BOARD
Please deliver the following message to Issac Sternbuch, St. Gall,
for the Vaad Hahatsala Emergency Committee:
QUOTE LATEST REPORT RECEIVED THAT NAZIS EVACUATING KAUNAS
TOOK WITH THEM NO LESS THAN 16,000 JEWS AMONG THEM RABBIS
ELSHANON WASSERMAN, ABRAHAM GRODZINSKI, SHABSAI WENIKOWSKI,
ZALMAN PERMUT, MOSHE SKARUTO, DAVID PERLAM, SHMUEL ABA SNIEG,
SHIMON DUBIANSKY, MORDCHE SHLIAPOBERSKI, BENJAMIN ASINSKY.
CONTACT MAYER AND MC CLELLAND AND INTERNATIONAL RED CROSS
FOR ALL HELP TO SAVE AS MANY AS POSSIBLE BY EVERY AVAILABLE
METHOD. SEEK INFORMATION REGARDING WHEREABOUTS. REPLY YOUR
PLANS. UNQUOTE
Following for McClelland from War Refugee Board:
Please give all possible assistance to foregoing request.
245
THIS IS WRB BERN CABLE NO. 245,
9:15 a.n.
October 28, 1944
Regraded Unclassified
289
CABLE TO MINISTER HARRISON, BERN, FOR MC CLELLAND, FROM WAR REFUGEE BOARD.
Please deliver the following message to the International Red Cross,
Geneva, from the Union of Orthodox Rabbis of the United States and Canada
and the Vaad Hahatzala Emergency Committee:
QUOTE LATEST REPORT RECEIVED THAT NAZIS EVACUATING KAUNAS,
LITHUANIA, TOOK WITH THEM 16,000 JEWS, LAST REMNANTS OF LITHUANIAN
JEWRY. EARNESTLY REQUEST YOUR INVESTIGATION TO DETERMINE PRESENT
WHEREABOUTS AND TO HAVE THEM RECOGNIZED AS CIVILIAN INTERNEES.
PLEASE EURNISH ALL POSSIBLE FOOD AND RELIEF AND INFORM IF FUNDS
NECESSARY. UNQUOTE
THIS IS WRB BERN CABLE NO. 246.
9:15 a.m.
October 28, 1944
Regraded Unclassified
290
CABLE TO MINISTER HARRISON, BERN, FOR MACLELLAND, FROM WAR REFUGEE BOARD.
Please deliver the following message to Adolph Freudenberg, 41 Avenue
de Champel, Geneva, from Leland Robinson of the American Christian Committee
for Refugees, Inc.
QUOTE WE ARE WORKING THROUGH NEWLY ESTABLISHED CENTRAL LOCATION
INDEX SEARCHING EUROPE LOST RELATIVES REFUGEES UNITED STATES AND
COOPERATING INTERNATIONAL RED CROSS ALSO OTHER MEANS AVAILABLE.
CAN WE CONTACT YOU INDIVIDUAL CASES FOR SEARCHING SERVICE.
NAME COUNTRIES YOU CAN OPERATE. PARTICULARLY INTERESTED FRANCE.
UNQUOTE
THIS IS WRB BERN CABLE NO. 247.
2:00 p.m.
October 28, 1944
Regraded Unclassified
291
CABLE TO MINISTER HARRISON, BERN, FOR MC CLELLAND, FROM WAR REFUGEE BOARD.
Please deliver the following message to Saly Mayer from M. A. Leavitt
of the American Jewish Joint Distribution Committee:
QUOTE MAGNES REPORTS JOSEPH LEVI TIMES CORRESPONDENT INFORMS
HIM OVER 40,000 BULGARIAN JEWS POSSESS NO MEANS LITERALLY NAKED
NO SHELTER AND REQUIRE URGENTLY CLOTHING BED COVERS MATTRESSES.
THIS INFORMATION CONTRARY TO REPORT FROM PILPEL THAT BULGARIAN
JEWS DO NOT REQUIRE AID. CAN YOU LOOK INTO SITUATION AGAIN AND
BRING SUCH HELP AS POSSIBLE. UNQUOTE
THIS IS WRB BERN CABLE NO. 248
4:00 p.m.
October 28, 1944
Regraded Unclassified
292
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
American Legation, Bern
DATED:
October 28, 1944
NUMBER: 3686
SECRET
For Harrison and McClelland.
The following is the substance of & cable received from Amembassy
San Salvador under date of October 23:
QUOTE. In a note backdated to October 17 but
received only today, former Foreign Minister Dravila
declares that his Government authorizes the United
States Government to compile lists of persons
claiming Salvadoran citizenship and without prior
preference to the Salvadoran Government to send them
to the Swiss Government in accordance with the
Department's Circular Airgram of September 18. UNQUOTE
Foregoing 1a communicated to you with reference to Department's
3180 of September 14, item one, paragraphs 5 and 6, 3255 of September 21,
item 4 and 3290 of September 23.
THIS IS WRB BERN CABLE NO. 244.
STETTINIUS
(Acting)
Regraded Unclassified
293
Bern
Dated October 28, 1944
Rec'd 11:45 Pellop 29th
Secretary of State,
Washington.
7162, October 28, 11 a.m.
FOR WRB FROM MCCLELLAND FOR LELAND REX ROBINSON
AMERICAN COMMITTEE FOR CHRISTIAN REFUGEES FROM FREUDENBERG
Important sums are urgently needed for refugee
service France and Jewish relief Hungary. We were able
supply Hungarian Church Committee with means continue
their relief before events of mid-October. Have additional
commitments but our funds exhausted. Received from you
since September 3000 plus $6,500 presumably Methodist gift for
Hungary. Please do your utmost (#) egular remittances
for September and October.
MARRISON
RR
(#) Apparent omission.
likes Chauncey (for the Sec'y) Abrahamson, Akain, Cohn, Drury,
DuBois, Friedman, Gaston, Hodel, Lesser, Marks, Mannon, McCormack,
Pehle, Files.
Regraded Unclassified
c
0
PARAPHRASE OF TELEGRAM RECEIVED
294
P
Y
FROM:
American Legation, Bern
TO:
Secretary of State, Washington
DATED:
October 28, 1944
NUMBER:
7163
CONFIDENTIAL
Reference is made herewith to Department's telegram of October 23,
1944, No. 3605 (WRB 226).
The following information taken from areport from Swiss Consul
General Grassli at Bratislava, dated October 10, was made available to
Legation Secretary on October 26 on strictly informal basis by Swies
Division of Foreign Interests in view of non recognition by United States
of so-called Slovak Government and consequent inability of Swiss
officially to represent American interests in Slovakia:
There were recently arrested and concentrated in camps several
thousand Jews remaining in Slovakia. The most of these Jews are at
Sered Camp which is overcrowded several times the normal capacity of
the camp. The Gestapo, which became a great power in Slovakia follow-
ing recent uprising there took this action and not the Slovak authorities.
The Jews are assembled, guarded in camps and their fate decided by
German officials.
There are a substantial number of persons claiming United States
nationality among these Jews. The Slovak Foreign Office was approached
and it in agreement with interested Slovak authorities attempted to
have the American Jews transferred to a special damp under control of the
Slovaks situated near Bratislava at Marianka, Regardless of whether their
right to claim nationality of American Republics was established or in
doubt, the fate of these Jews was acceptable to the extent that they were
detained at Marianka and they only asked to be able to continue to live
in such conditions until hostilities cease. Food and lodging were paid
for by them. However, on the pretext that the Jewish identity papers of
persons detained at Marianka were all of doubtful nature, the Gestapo
completely evacuated the camp on October 11.
It/observed is by Grassli that the above statement is certainly
incorrect as concerns considerable number of bonafide American citizens
among these persons. Internees at Marianka must be transferred to
Ausechwits, according to information avialable to him, and it is felt by
the Swiss representative that in order to save them expeditious action
would be necessary.
Persons holding American or Latin American documentation were also
at camps under control by the Germans. The Slovake attempted without
appreciable suñcess to have them transferred to Marianka prior to the
dissolution of that camp.
Regraded Unclassified
- 2 -
295
In order to avoid impression by Slovak Government that its sov-
ereignity is not respected by Switzerland, Grassli feels that it would
be posible to request the Germans to deliver to the Slovak Gov ernment
the Jews concerned. Possibly it might be of help to observe that
American Jews interned in camps in Slovakia under German control are
given less favorable treatment than American Jews in similar German
camps. As an example, because of this there is no Intercross delegate
in Shovakia, although he was expected long ago and he is anxiously
awaited by Slovek Red Cross for the purpose of visiting camps where Jews
are held.
This problem was discussed by Grassli with Mr. Acna, Chief of Political
Division of the Slovak Foreign Office and his collaborators, in order to
avoid the impressions that representations were being made without Slovak
Government's knowledge. Since Acna feels it important that Slovakia be
able to entruet the control of Jews of United States nationailty to its
own officials and thereby prevent retaliatory steps against numerous
Slovake living in the United States, the procedure suggested by Grassli
is approved by Mr. Acna. This is the end of the summary report.
Instructions concerning nature of such approach to Germans as Depart-
ment may consider possible are requested in view of the area involved and
steps which the Holy See has taken.
HARRISON
DCR:IDB:MLM 10-31-44
296
Bern
Dated October 28, 1944
Rec'd 6858 p.m.
Secretary of State,
Washington.
7165, October 28, 2 p.m.
FOR WRB FROM MCCLELLAND
American Friend Service Committee Philadelphia
from Marjorie McClelland.
Your 89. Danish Charge d'Affaires in Bern reports
Germane refused authorization any further export relief
goods by Danish Red Cross directly to France. Possi-
bility forwarding such supplies including Toulouses can-
load bacon via Switzerland consigned to Intercrose being
studied. If and when this question settled will take up
mode of payment. Danish Charge d'?Affaires inclined
believe Denish Red Cross would like Swiss francs. WR12
keep you informed.
HARRISON
RR
Miss Chauncey (for the Sec'y) Abrahmson, Aksin, Cohn, Drury,
DuBois, Friedman, Gaston, Hodel, Lesser, Marks, Mannon, McCormack,
Pehle, Files.
Regraded Unclassified
297
Barn
Dated October 28, 1944
Rec'd 10:50 p.m.
Secretary of State,
Washington.
7170, October 28, 3 p.m.
FOR WRB FROM MCCLELLAND
FOR UNION ORTHODOX RABBIS FROM STERMWYCH
Backed by Italian Minister at Bern, Angelo Donati
has approached Papal Nuncio and other Winisters of
neutral countries in interest of promoting a
collective intercession with German Government in
behalf of deportees. We have serious reasons to be-
lieve that Vatican and neutral states following
agreement among themselves will ask Germany's One, to
liberate or allow to be interned in neutral countries
deported elderly non and - and children;
Two, apply to other deportees treatment similar to
that accorded priceners of was. Please communicate
this - to your Government asking that steps be
taken by its representatives at Vatican and with
neutral governments to encourage and support this
initiative.
Polish Minister at Bern has already requested
support bis Government in London.
Please nake text this cable known to all other
Jenish organisations.
WMB
HARRISON
Miss Channesy (for the Sec'y) Abrahamson, Aksin, Cohn, Drury, DuBode,
Frieduan, Gaston, Hodel, Leaser, Marks, Mannon, McCormack, Pehle, Filse.
Regraded Unclassified
298
HM
Distribution of true
October 28, 1944
reading only by special
arrangement. (SECRET 11)
1 p.m.
AMEMBASSY
ANKARA
956
The following for Katski is WRB 122.
Reference your No. 1988 of October 18 (Ankara's 166 to
Mar Refuges Board). Interested groups here have requested
Hoard to obtain reasons for need to evacuate Transmistrian
repatriates from Rumania. Please report to Board any
information you are able to obtain concerning this matter.
STETTIHIUS
(ACTING)
FIN
WHB:10fV:XG
MB
SE
10/28/44
Regraded Unclassified
299
C
O
P
Y
PLAIN
MF-987
Ankara
Dated October 28, 1944
Rec'd 11:31 p.m.
Secretary of State
Washington
2069, Twenty-eight
Embassy 2041, Twenty-fifth Palestine.
YENISABAH editorial, twenty-seventh: Desire to give Jews independent
homeland has lately grown stronger. Problem of Jewish state has since
1918 exercised considerable bearing on Arab-Jewish and Arab-British
relations. In present life and death struggle British Government wishes
sell all Arab lands attached more strongly than before to Great Britain's
family of nations but Arab leaders and sovereigns don't seem inclined
make slightest sacrifice on Palestinian question which in their eyes is
exceedingly vital and delicate matter. Since Jews don't constitute
majority in Palestine majoity which cah be created only artifically by
immigration, certain Arab leaders have suggested idea of giving Jews
land in America where there are vast uninhabited spaces.
Palestinian and Jewish problems have again been raised in connection
with American Presidential election. President Roosevelt has declared
himself as favoring idea of founding Jewish homeland in Palestine.
Powerful Jewish groups in America and England are exerting great efforts
in this direction and certain newspapers are strongly defending Jewish
cause. However, when House of Representatives recently invited American
Government to take frank and definite stand in this matter, statement
was issued to effect that would be inadvisable discuss question at
present time for military reasons. Thus it appears that American
Government, no matter what its leanings and sentiments in this regard
may be, was hesitating to accept as its program viewpoint of one side
only in this most difficult problem. In this connection, it should
be remembered that Americans too are becoming increasingly interested
in all Arab lands, especially in oil matters and construction of pipe-
lines, and consider it advisable act cautiously in order not offend
Arab and Moslem elements.
Repeated by mail to Jerusalem and Beirut.
STEINHARDT
MJF
Regraded Unclassified
300
C
o
P
Y
FBM-971
Ankara
This telegram must be
paraphrased before being
Dated October 28, 1944
communicated to anyone
other than B. Government
Rec'd 10:45 p.m.
Agency. (RESTRICTED)
Secretary of State,
Washington.
2070, October 28, noon.
FROM KATZKI TO PEHLE WAR REFUGEE BOARD.
ANKARA'S NO. 171.
The Jewish Agency has revised the information
previously supplied us (See my 2,043, October 25)
as follows:
0
1. The children's group from Rumania comprises
110 children instead of 156 previously reported to
us.
2. The few Transnistrian children originally
included in the group were removed at the Rumanian -
Bulgarian border. We are informed that the emigration
of Transnistrian children from Rumania is not permitted
as the Russian authorities, claiming that such children
are Russian nationals, desire to repatriate them to
Russian territory.
The children together with some 40 adults
from Russia departed from Istanbul October 27,
proceeding to Palestine.
The foregoing is for your information.
STEINHARDT
EEC
Regraded Unclassified
301
NCB-970
This telegram must be
Ankara
paraphrased before being
communicated to anyone
Dated October 28, 1944.
other than a Government
Agency. (RESTRICTED)
Rec'd 10:45 p.m.
Secretary of State,
Washington.
2075, October 28, 5 p.m.
FOR THE DEPARTMENT AND WRB FROM THE AMBASSADOR.
Ankara No. 172.
I heartily approve of the appointment of Herbert
Katski as Special Representative of the War Refugee
Brand in Turkey with the designation by the Department
as Special Attache to the Embasay on War Refugee matters.
I do not regard it as necessary to approach the Turkish
Government with respect to his proposed designation as
I an reasonably satisfied that there will be no objection.
I have informed Katski of the substance of the Department's
telegram under reference.
STEINHARDT
RB
Regraded Unclassified
302
SECRET
Copy No 11
NOT TO BE RE-TRANSMITTED
OPTEL No 350
Information received up to 10 A.M. 28th Octoger 1944.
1. NAVAL
On 23rd, 24th Coastal forces damaged enemy convoy GULF OF
GENOA, On 24th. two abandoned explosive boats sunk off NICE and
a U.S. destroyer shelled positions in this area. German Hospital
ships FREIBURG and TUEBINGEN intercepted and brought into BRINDISI
and ALEXANDRIA for inspection. A British Cruiser and two
destroyers bombarded MILO on 25th and 26th. Strong enemy reaction
and only one gun in the coast defence battery L.PIKA 80 far silented
is British submarine claims to have sunk an enemy submarine off
SABANG on 24th:
2. MILITARY
Western Eurpe Good progress all along the front from HERTOG-
ENBOSCH to the SCHELDT estuary. U.K. armour
has swept north of TILBURG, captureing UDENHOURT and LOON-OP-ZAND
and cutting North/South road to the MAAS from TILBURG. TILBURG,
itself entered and mobile patrols operating as far as half way
along TILBURG BREDA road. Canadians, following up Germans, have
entered BERGEN-OP-ZOOM and are now one mile from ROOSENDAAL.
BEVEL ND bridgehead strengthened.
Italy Very bad weather hampering operations: rivers flooded
bridges washed away and roads impassable in places, Small advances
made and ROCCA SAN CASCIANO entered.
Russia In SLOVENIA, Russians have captured UNGU.R, they have
advanced further into HUNG. RY west of SATUL M.RE and
repulsed Germen infentry and tank attacks near NYIREGHAZA. They
have also captured NOVI S..D on the DANUBE.
3. AIR OPERATIONS
Western Front 27th. Operations severley restricted by bad
weather. 27th/28th. bomber Command sent out
hidden by thick cloud.
81 aircraft including 60 to BERLIN. All returned safely. BERLIN
Mediterrunean weather. 26th. Operations severely restricted by bad
SECRETARY OF TREA SURY TREASURY
AM 32
OFFICE
1944 OCT
TREASURY DEPARTMENT
Regraded Unclassified
STRICTLY CONFIDENTIAL
303
October 29, 1944
CONFIDENTIAL MEMORANDUM
I called up Ed Stettinius at a quarter of eight Sunday night and
told him that Cherwell, to my surprise, had told me that Stettinius
had raised the question of the Argentinian meat with him and that I
thought that that was something that Stettinius wanted me to raise at
the proper time. So Stettinius said, well, that Cherwell had paid a
courtesy call on him and during the course of the conversation -- I
think I'm reporting right -- Stettinius said he blew off on the Argen-
tinian meat thing and that he was simply talking but not officially.
And I said I didn't think you could ever talk unofficially to those
fellows. So I know that Cherwell did not pay just 8. courtesy call
because he told me so himself. So I said I felt that with Cherwell
returning Wednesday I'd like to see Stettinius to be posted on it and
then raise it with Cherwell and Stettinius be present, before Cherwell
returns. Stettinius didn't seem to like that. He said that he'd ask
8. man by the name of Llewellyn, I think, to come over here especially
to talk about this. So I said that Cherwell and I were on such a frank
basis that I didn't want him to return to England and while he was gone
then raise this matter of the Argentinian meat before we settled on
lend-lease. I thought we should raise it and furthermore that Cherwell
had a lot of influence with Churchill and that Cherwell said that he
thought that the English had been very stupid in this matter so that
interested Stettinius. Then he said that -- 80 I said, "Well, think
it over." And he said that he'd have to bring himself up to date and
that he would call me Monday morning. Then I got on to Harry White and
Regraded Unclassified
304
said I'd talk to Harry and Harry was very emphatic and said he had
nothing against Stettinius and didn't know what Stettinius was talking
about. So Stettinius said, "Had Harry said that he trusted Stettinius?"
And I said, "Yes." So he said that during the Lend-Lease days that
Harry was very critical and made some very "snotty" remarks about
Stettinius. So I said that I didn't know anything about that, but
Harry said certainly during the last twelve months he had never
criticized Stettinius and that he would like to see him not only in
regard to himself but also in regard to Glasser. So Stettinius said
that people had told him that White went around making nasty remarks.
So I said there are too many people trying to make trouble between
State and Treasury, and that we just had to stop it.
October 20, 1944
STRICTLY CONFIDENTIAL
Regraded Unclassified
305
October 29, 1944
CONFIDENTIAL MEMORANDUM
Sunday night at eight o'clock I talked to B. M. Baruch
and he said he had had a three-hour talk with Lord Cherwell
that was very satisfactory and that he caught him on the
right track and explained things to him the right way. Just
what he meant by that, I don't know, but he said Cherwell
would tell me all about it and he thinks we ought to keep
it between Cherwell and Baruch and myself and the President.
He said some of the opposition is coming from Leo Crowley
who is not in favor of making this "loan", as he put it, to
the British. I asked him if he'd seen Stimson and he said
that he hadn't and he would. And I asked him whether he
couldn't do something with Dorothy Thompson, so he said,
"Oh, let her talk herself out." But he said he was going
to work with me and now he is beginning to think that the
whole idea was his, and while I told him confidentially
the other night it was my idea to deliver that plan for
Germany at Quebec, he's got it in his head now that it is
his baby and he's going to -- his part, and he's going to
carry it, which I think is all right. He seems to take the
matter very seriously. I hope that my bringing him into it
will work out all right.
NEW YORK TIMES - OCTOBER 29, 1944
306
Text of
President Roosevelt's Chicago Speech
The following is the text of
Today everything we do is de-
They have said that they were
President Roosevelt's address lost
voted to the most important job
dreams of starry-eyed New Deal-
night in Chicago as recorded and
before us-winning the war and
cre-that It la ally to talk of them
transcribed by THE NEW Your
bringing our men and women
because we cannot attain these
TIMES:
home as quickly as possible.
ideals tomorrow or the next day.
We have astonished the whole
Mr. Mayor, Senator Lucas and
world and confounded our ene-
Halls Falth of the People
I think I am not too previous in
mies with our stupendous war
But I think the American peo-
saying Governor Courtney, my
production, with the overwhelm-
pie have greater faith than that.
friends of Illinois and Indiana and
Ing courage and skill of our fight-
I know that they agree with these
Wisconsin:
Ing men-with the bridge of ships
objectives that they demand
The American people are now
carrying our munitions and men
them-that they are determined
engaged in the greatest war of all
through the seven dess-with our
to get them-and that they are
history-and we are also engaged
gigantic fleet which has pounded
going to get them.
in a political campaign.
the enemy all over the Pacific and
The American people have a
We are fighting this war and
has just driven through for an-
good habit, the habit of going
we are holding this election-both
other touchdown,
right ahead and accomplishing
for the same essential reason:
Yes, the American people are
the impossible.
because we have faith in democ-
prepared to meet the problems of
We know that and other people
racy,
peace In the same bold way that
know R. For example, today
And there la no force and there
they have met the problems of
there are those that know It best
la no combination of forces
war.
of all-the Nazia and the Japs.
powerful enough to shake that
For the American people are
Now this economic bill of rights
faith.
resolved that when our men and
is the recognition of the simple
As you know, I have had some
women return home from this
fact that, in America, the future
experience, in war-and I have
war they shall come back to the
also had & certain amount of pre-
best possible place on the face of
of the worker, the future of the
vious experience in political cam-
the earth, they shall come back
farmer lles In the well-being of
to & place where all persons, re-
private enterprise; that the fu-
paigning.
gardless of race and color or
ture of private enterprise lies in
But-I must confess to you that
creed or place of birth, where
the well-being of the worker and
this is the strangest campaign I
have ever meen.
they can live in peace and honor
the farmer, It goes both ways.
I have listened to various Re-
and human dignity-free to
And the well-being of the na-
tion as a whole is synonymous
publican orators who are urging
speak, free to pray as they wish-
the people to throw the present
free from want and free from
with the well-being of each and
Administration out and put them
fear.
every one of its citizens.
Now I have the possibly old
In. And what do they say?
Economic Bill of Rights
fashioned theory that when you
Well, they say, in effect, just
Last January, in my message to
have problems ot solve, when you
this:
the Congress on the state of the
have objectives to achieve, you
They say "those Incompetent
Union, I outlined an economic
cannot get very far by just talk-
blunderers and hunglers in Wash-
bill of rights on which a "new
ing about them
ington have passed a lot of ex-
basis of security and prosperity
We've got to go out, welle got
cellent laws about social security
and labor and farm relief and
can be established for all." And
to go out and do something,
I repeat It now:
To assure the full realization
soil conservation-and many oth-
ers-and we promise that If elect-
The right of a useful and re-
of the right to a useful and re-
munerative job in industries, in
munerative employment, an ade-
ed we will not change any of
them."
shops, on the farms, or the mines
quate program must, and If I.
And they go on to say:
-of the nation;
have anything to do about ft, will,
"Those same quarrelsome, thred
The right to earn enough to pro-
provide America with close to
vide adequate food and clothing
sixty million productive jobs.
old men, they have built the
and recreation:
I foresee an expansion of our
greatest military machine the
The fight of every farmer to
peace-time productive capacity
world has over known, which in
fighting its way to victory," and
raise and sell his products for a
that will require new facilities,
they say, "If you elect us we
return which will give him and
new plants, new equipment-capa-
promise not to change any of
his family a decent living:
ble of hiring millions of men.
that, either.
The right of every business,
Would Aid Private Enterprise
"Therefore," say these Repub-
man, large and small, to trade in
an atmosphere of freedom from
I propose that the Government
Hean orators, "It le time for a
unfair competition, from domina-
do its part in helping private
change."
Non by monopolies at home or
enterprise to finance expansion
They also say in effect:
abroad:
of our private industrial plants
"Those Inefficient and Worn-out
The right of every family to &
through normal Investment chan-
erackpota have really begun to
decent home:
nels.
lay the foundations of a lasting
The right to adeuqate medical
For example, business, large
world passe; If you elect us, we
care and the opportunity to
and small, must be encouraged by
will not change any of that
achieve and enjoy good health:
the Government to expand its
either."
The right to adequate proteç-
plants, to replace their obsolete
tion from the economic fears of
and worn-out equipment with
Offers New Soope for "Me Too"
old age, of accident, of unemploy-
new equipment and, just AS an
"But," they whisper, "we'll do
ment:
saide but pretty important, the
it In such a. way that we won't
And last of all the right to &
rate of depreciation on these new
lose the support of even Gorald
good aducation.
plants and facilities for tax pur-
Nye or Gerald Smith-and-and
New, what will those rights
poses should be accelerated.
this in very Important-we won't
meant They spell security. And
That means more jobs, Jobs for
loss the support of any Isolation-
often this war is won we must
the worker, Increased profits for
lat campaign contributor. Why,
be propered to move forward, in
the business man and & lower
we will be able to eatisfy even
cost to the consumer.
The Chicago Tribune."
the implementation of these
In 19933, when my administra-
Tonight, tonight I want to talk
rights, to new goals of human
tion took office, vast numbers of
simply to you about the futural or
happiness and well being.
our Industrial workers were un-
Amarica-about this land of ours,
Botos people I need not name
employed, our plants and our bus-
this land of unlimited opportu-
them, some people have ancored
inesses were fdle, our monetary
nity. I shall give the Republican
el these Ideals as well as at the
and banking system was in ruin,
idals at the Atlantic Charter, the
campaign orators some more op-
as we know, our economic The
portunities to say-"Me too."
ideals of the Four Freedoms.
sources were running to waste.
Unc
307
But by 1940 bafore Pearl Har-
Proposes New Rights for All
Let us look back, let us look
We had our em-
back for a moment to 1932, & year
ployment by 16.000,000 workers.
And with all that our economic
We had converted a corporate
MII of rights, like the sacred
of unhappy memory. All of us
remember the spreading tide of
loss of $5,500,000,000 in 1932 to a
Bill of Rights of our Constitution
farm foreclosures; we remember
corporate profit (after taxes) of
itself, must be applied to all our
four-cent hogs, and twenty cent
nearly $5,000,000,000 in the black
citiens, Irrespective of race, or
wheat, and five cent cotton.
in 1940,
creed or color.
Three years ago, back in 1941,
I'm going to give you very sim-
Obviously, to increase jobs after
this war we shall have demand,
I appointed a Fair Employment
ply same figures of recovery-
Practice Committee to prevent
quite a while ago, and I am sure
We'll have to take care of an In-
creased demand, for our Indus-
discrimination In war industry
you will pardon me if I quote
and Government employment.
them correctly,
trial and agricultural production
For, as I remarked In Fort
not only here at home but abroad
The work of that committee and
the results obtained more than
Wayne this afternoon, It was my
also,
habit to quote figures correctly
And I am sure that every man
justify Its creation.
even when I was Governor of the
and woman in this vast gather-
I believ ethat the Congress of
State of New York many years
ing here tonight will agree with
the United States should by law
me in my conviction that never
make the committee permanent.
ago!
again must we In the United
Yes, America must remain the
In those days, 1932, the Ameri-
can farmer's net Income was only
States attempt to isolate ourselves
land of high wages and efficient
two and a quarter billion dollars.
from the rest of humanity.
production. Every full-time job
in America must provide enough
In 1940-a year before We were
Yes, I am convinced that, with
attacked-farm income in the
Congressional the for-
for a decent living. And that
United States was more than
eign trade of the United States
goes for jobs In mines, offices, or
doubled-It was up to five and a
can be trebled after the war-
factories, stores, canneries-ev-
half billion dollars.
providing millions of more jobs.
erywhere where men and women
Figure on 1944 Farm Income
are mployed.
Intent on Lasting Peace
And this year-in 1944-It will
During the war we have been
be approximately thirteen and
Such cooperative measures pro-
compelled to limit wage and sal-
one-half billion dollars.
vide the soundest economic foun-
ary increases for one great objec-
I take It that the American
dation for a lasting peace, and
tiye-to prevent runaway infla-
farmer does not want to go back
that's what we want, And, after
tion. You all know how success-
to a Government owned by the
this war, we do not intend to set-
fully we've held the line by the
moguls of 1929-and let us bear
tie for anything less than a. last-
way your cost of living has been
it constanti yin mind that those
ing peace.
kept down for the necessities of
same moguls still control the
When we think of the America
life. Sometimes, as even I know,
destinies of the Republican party,
of tomorrow, we think of many
that doesn't apply to the juxuries
Yes, we must continue this ad-
things.
of life.
ministration's policy of conserv-
One of them la the American
However, at the end of the war
ing the enormous gifts with
home-in our cities, in our vil-
there will be more goods avail-
which an abundant Providence
lages, on our farms. Millions of
able and it's only common sense
has blessed our country, our soll,
our people have never had homes
to see to It that the working man
our forests and our water.
worthy of American standards-
in paid enough and that the farm-
For example, the work of the
well buit homes with electricity
are earn" enough to buy these
Tennessee Valley Authority that
and plumbing, air and sunlight.
goods and keep our factorias
we've read about in closely related
The demand for homes and our
running.
to our national farm policy, our
capacity to build them call for a
And It's a simple fact, likewise,
farm program, and we look for-
program of well over a million
that n. greatly increased produc-
ward toward similar develop-
homes a year for at legat ten
tion of food and fiber on the
ments that I recommended in
years.
farms can be consumed by the
Private industry, private Indus-
other places-the valley of the
people who work in industry only
try can build and finance the
Missouri, the valley of the Arkan-
If those people who work in In-
BILE and the Columbia River Basin
vast majority of these homes,
dustry have enough money to buy
out on the far coast.
Government can and will assist
food and clothing.
and encourage private industry to
And, incidentally, and as an
do this, as It has for many years.
Links Wages and Prices
adde, I cannot resist the tempta-
For those very low income
For, if Industrial wages go down,
tion to point to the gigantic con-
tribution to our war effort made
groups that cannot possibly
I can assure you that farm prices
afford decent homes at this time,
by the power generated at TVA
will go down too,
the Federal Government should
and Bonneville and Grand Coulee.
After the war we shall, of
and will continue to assist local
course, remove the control of
But do you remember when the
housing authorities in meeting
wages and leave their determina-
building of theen great public
that need.
tion to free collective bargaining
works was ridiculed as New Deal
In the future America we are
between trade unions and em-
"boondoggling"? And we are
talking about, we think of new
ployers.
planning, almost ready to put into
highways, new parkways. We
And we In the cities in this war
effect, developments at Grand
think of thousands of new air-
must remember that the Ameri-
Coulee which will provide Irriga-
ports to service the new commer-
can farmer has been called upon
tion for many thousands, tens
cial and private air travel which
to do for and away the biggest
of thousands, of acres-providing
to bound to come after the war.
production job, food production
fertile land for settlement-set-
We think of new planes, large
job, in all its history.
tlement I hope-by many of our
and small, new cheap automo-
The American farmer has met
returning soldiers and sailors.
biles with low maintenance and
that challenge triumphantly.
More "boondoggling!!"
operating cost
Despite all manner of wartime
And this Administration has put
We think of a new merchant
difficulties-abortnge of farm la-
into the law of the land the
marine for our extended world
bor, new farm machinery-the
farmer's long dream of parity
trade.
American farmer has achieved a
prices,
My friends, think of these vast
total of food production which IN
We propose, too, that the gov-
opportunities. these vast possi-
one of the great wonders of the
ernment will cooperate when
bilities for Industrial expansion-
world.
ewather will not-by & genuine
and you will foresee opportuni-
The American farmer 10 & great
crop Insurance program.
ties for more millions of jobs.
producer and he must have the
This Administration has adopt-
means also to be a great consum-
ed-and will continue-the policy
er. For more farm Income means
of giving to as many farmers as
more jobs everywhere in the na-
possible the chance of owning
tion.
their own farms.
And that means something to
cution as a "persecution." You
those veterans who left their
know It depends & good deal on
farms to fight for their country.
whose baby has the measles.
And after this war is ended
then will come the time when the
Must Keep "Winning Team"
returning service men can grow
This war has demonstrated that
their own apples on their own
when the American business men
farms instead of having to sell
and the American worker and the
apples on the street corners.
American farmer work together
Expression of Beliefs
they form an unbeatable team.
We know that, you and I-our
I believe in free enterprise-
Allies know that-and so do our
and always have.
enemies,
I believe in the profit system-
That winning team must keep
and always have
together after the war and it will
I believe that private enterprise
win many more historie victories
can give full employment to our
of peace, peace for our country,
people,
a victory for the cause of secu-
If anyone feels that my faith
rity, for decent standards of Itv-
in our ability to provide sixty
Ing here and throughout the
million peace-time jobs is fantas-
world.
tie, let him remember that some
We owe It to our fighting men,
people said the same thing about
we owe it to their families, we
my demand in 1940 for fifty thou-
owe It to all of our people who
sand airplanes.
have given so much in this war-
I believe in exceptional rewards
we owe it to our children to keep
for innovation, skill and risk-tak-
that winning team together.
ing by business.
And, as I remarked, the future
We shall life production and
of America, like its past, must be
price control as soon as they are
made by deeds not words.
no longer needed, encouraging
America has always been a land
private business to produce more
of action-a land of adventurous
of the things to which we're ac-
ploneering-a land of growing and
customed and also thousands of
building.
new things, in ever-increasing
And America must always be
volume, undue conditions of free
such a land.
and open competition.
The creed, the creed of our
This administration has been
democracy in that liberty is ac-
mindful from Its earliest days,
quired, liberty is kept by men
and will continue to be mindful,
and women who are strong and
of the problems of small business
self-reliant and possess-such wis-
as well as large.
dom as God gives to mankind-
Why, small business played B.
men and women who are just,
magnificent part in producing
men and women who are under-
thousands of Items needed for our
standing and generous to others-
armed force. When the war broke
men and women who are capable
out it was mobilized into new pro-
of disciplining themselves.
duction. Money was loaned for
For they are the rulers and they
machinery. Over one million con-
must rule themselves.
tracts and subcontracts have been
I believe in our democratic
distributed among sixty thousand
faith. I believe in the future of
of the smaller plants of our na-
our country which has given
tion.
eternal strength and vitality to
We shall make sure small busi-
that faith.
ness. is given every facility to
Here in Chicago you know a lot
buy government-owned plants,
about *bat vitality.
equipment, inventories. The spe-
And as I say good night to you,
cial credit and capital require-
Isay it in a spirit of faith-a
ments of small business are go-
spirit of hope, a 'spirit of con-
Ing to be met.
fidence.
And small business will con-
We are not going to turn the
tigue to be protected from selfish,
clock back.
selfish cold-blooded monopolies
We are going forward, my
and cartels. Beware, beware of
friends, forward with the fight-
that profound enemy of the free
Ing millions of our fellow coun-
enterprise system who pays. lip
trymen. We are going forward.
service to free competition but
And that tonight is my message
also labels every anti-trust prose-
to you-let us go forward to-
gether.
309
Rome
Dated October 29, 1944
Rec'd 12:04 p.m., 30th.
Secretary of State,
Washington.
619, October 29, 9 a.m.
FROM ARTHUR GREENBRICH FOR MOSES LEAVITT,
AMERICAN JOINT DISTRIBUTION COMMITTEE NEW YORK:
Military clearance entry here approved for
Resnik and Jacobs. Completion my clearance expected
next few days. Please cable when Schwarts expected France
and where. Also when Jacobs departing. Perlman now
headquartered with me. Please advise his family.
Regards.
KIRK
BB
Miss Channesy (for the Sec'y) Abrahamson, Akain, Cohn, Drury, DuBois,
Friedman, Gaston, Hodel, Lesser, Marks, Mannon, McCormack, Pehle, Files.
Regraded Unclassified
310
KEM-92
This telegran must be
Bern
paraphrased before being
communicated to anyone
Dated October 29, 1944
other than a Government
agency. (SECRET 0)
Rec'd 5:25 p.m.
Secretary of State,
Washington.
7193, October 29, noon.
WRB FROM MCCLELLAND FOR NUHUM GOLDMANN AND LEON
KIBOWITZKI WORLD JEWISH CONGRESS FROM RIBONER
with reference information concerning tragio
situation Jane Budapest contained McClelland's cable
October 25 to WRB, I can inform you confidentially
that Intercross protested energetically to Hungarian
Government against new deportations, on basis promise
received July 18 from Bungarian authorities concerning
ceseation deportations and threatened to publish breach
of official promise if action carried out. 25.00.
HARRISON
EEC
Regraded Unclassified
-C
311
o
EXCERPT OF
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Delegation, Vatican City
TO:
Secretary of State, Washington
DATED:
October 29, 1944
NUMBER:
359
SECRET
Following is for the Secretary and the President.
This morning at an audience I reviewed with the Pope the
general war situation with particular reference to Germany.
Like similar audiences in the recent past, I have been conscious
of a growing sind developed realization on the part of the Pope
of the cruel and inhuman practices which are now reaching a cli-
max in various areas toward which the Pope feels that he has ex-
erted continuing attempts to allay but which he feels are com-
pletely disregarded at this moment. This applies to both recent
cables you have directly or indirectly sent to me at the
instance of the War Refugee Board (you 55 and 56 of October 25 and 26
respectively). However, the Pope will continue his efforts
in which he displays a very real desire to help.
As is our weekly custom, we discussed at some length the
question of relief supplies and activities and relationship be-
tween supply of clothing and food to the political future of
the state, It has always been indicated in my previous cables
that the first step towards stability here was to supply clothing
and food, In any event the failure to supply them will hasten,
if not quate of itself consequences of political importance.
The Pope takes obvious satisfaction in the National Committee for
distribution of relief, our first attempts at cooperative dis-
tribution with regard to atebrin (see note) having been most
successful and with the receipt of the first shipments of donated
relief from American Relief from American to put % to a second
and more general test. We are forwarding today, on the basis
of these experiences, & sumary that ve are making of the facil-
ities of the three combined agencies for distribution that we
hope of supporting our judgment that the activities of UNRRA
should be administered through the same channels which allow of
adquate supervision by its limited staff of UNRRA representa-
tives along with those of our other supervisory and contributing
groups.
Note: An acute malarial condition which last week was die-
covered to prevail to the extent of ninety percent of the popu-
lation in the Cassino area. They had not distributed an ado-
quate supply of atebrin and the death toll was great. We dis-
covered and obtained one million and & quarter atobrin tablets
and the situation 1s being dealt with by a medical group of
312
- 2 -
national committee representative of the Government, the Vati-
can and the Italian Red Cross who are already in the area.
TAYLOR
0
313
NOT TO BE RE-TRANSMITTED
COPY NO.
SECRET
CPTEL No. 351
Information received up to 10 a.m., 29th October, 1944.
1. NAVAL
On 21st/22nd one of H.M. Submarines attacked convy
of 3 ships between 3,000 and 6,000 tons off S.W. NORWAY. One
ship sunk, another set on fire.
On 26th troops were landed on Piskopi Island, Dodecan-
ese from one of H.M. Cruisers.
2. MILITARY
WESTERN EUROPE. On 2nd Army front a German attack
by infantry and tanks gained 3 miles, but has now been held 2
miles northwest of Meijel. Heavy fighting just south of Loon-
Op-Zand where little progress made. Tilburg has been occupied,
very good progress by 1st Canadian Army. Eastern outskirts
Breda reached and Rijsbergen captured. Further west Wouw taken
and our positions at Bergen-Op-Zoom improved in spite of enemy
counter attacks. Canadian infantry have crossed the Canal at
the west end of the Zuid Beveland Isthmus and advanced 4,000
yards to within 3 miles of the bridgehead established across
West Scheldt opposite Terneusen. This bridgehead has been ex-
tended westwards by one mile. South of Scheldt German resist-
ance has stiffened and only very slight progress made.
RUSSIA. Further Russian progress reported in Czecho-
slovakia north and south of Uzhored ad in Hungary west of Staul
Mare and northwest of Belgrade where Apatin and Ruma have been
taken.
3. AIR OPERATIONS
WESTERN EUROPE. 28th. Bomber Command. Gun posi-
tions Walcheren Island 277 aircraft despatched, 1125 tons
dropped, Visibility mainly good, marking and bombing accurate.
Cologne 734 aircraft despatched, 2,948 tons
dropped, including 592 incendiary. Visibility excellent,
marking accurate and bombing concentrated. Knapsack power
station identified and heavily bombed, Reconnaissance about
+ hours layer flerce fires in compact area and others
scattered throughout town. 362 U.S. heavy bumbers bombed rail-
way centres Harom 406 tons, and Munster - 444 tons. Results
unobserved. Eight R.A.F. and 4 U.S. heavy bembers and 8 fighters
missing (5 fighter crews believed landed Belgium).
193 aircraft successfully attacked railway bridges
(those at Venlo and Roermond severely damaged) and other ob-
jectives Holland and Germany. 1,939 fighters attacked targets
in battle area destroying and damaging 69 lecemotives and 475
railway carriages, cutting track in 10A places and blocking two
tunnels. German casualties 73, 2, 1, Ours - 10 fighters
missing.
28th/29th, Airporaft despatched:
Bergen U-boat Dens
225
Cologne
30 Masquitoes
Seamining
15
Bomber Support. etc.
82
7 Lancasters, 1 Mosquite missing.
4. HOME SECURITY
12 flying bombe plotted during the might.
Regraded Unclassified