Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Scholar Source Context
Document identity
localId
16620322
label
Lamont, Thomas W.
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
16620322
sourceUrl
contentType
document
title
Lamont, Thomas W.
citationUrl
collections
President's Secretary's File (Franklin D. Roosevelt Administration)
Subject Files
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
16620322
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
b76476f541137e7a
ocrText
X
PSF. Lamont
Box
PSF
Subject File
15%
stip
Sub. PSF File
Lamont
(2)
59 EAST SEVENTY-NINTH STREET
NEW YORK
RECEIVED OCT THE WHITE 1934 HOURS
October 10, 1934.
PERSONAL
My dear Mr. President:
As I told you last week, I happened to
see Tom Lamont and told him I had heard that at 8.
small dinner in New York, given to Harry Hopkins,
at which he and a few bankers and business men were
present, they had endeavored to dictate terms upon
which they would cooperate with the Government and
upon which the Government should cooperate with them.
Tom Lamont then sent me a memorandum giving his ac-
count of what happened. I forgot to give this to
you and as I am off for Europe today I enclose it
herewith. I think you will find it of interest.
Faithfully yours,
The Honorable
Franklin D. Roosevelt,
Washington, D. C.
23 Wall Street
NewYork
October 1, 1934
Personal
Memorandum for N. H. D.:
On Tuesday evening a fortnight ago Jim Perkins gave a small
private dinner to a few of his friends uptown, to discuss the business
situation. He had as his guests Clarence Woolley of the American Radiator,
Gerard Swope of General Electric, Alfred Sloan of General Motors, Floyd
Carlisle and Alfred Schoellkopf of Niagara Hudson, Lew Brown of Johns-
Manville, and myself. Jim said that he was concerned about the situation,
and from his talks with the President he felt that the latter naturally was
anxious to have, as always, the co-operation of leading business men.
After Jim's presentation he called on each man to present his views, and
the discussion became general. The whole atmosphere was, as it seemed to
me, one of friendliness to the Administration and earnest desire to co-
operate. Naturally each man had his own particular point in mind as to
what the Administration might be able to do, either in acts of commission
or omission, that would help to serve the situation. But nobody attempted
to lay down the law or to take any attitude other than a very keen one of
realizing the President's difficulties and wanting to co-operate in every
way he could. There was considerable talk about the advantage that might
accrue to the business situation if in the near future the President were
able to give a talk over the radio, rather clarifying the Administration's
ideas on certain points, because a good part of the business community was
reported as being confused and uncertain. Even here, however, it was re-
cognized that the President had a political situation on his hands and that
he was the only one who could decide how far he could prudently go in saying
certain things.
Last Thursday Floyd Carlisle invited exactly the same group
of men to meet Harry Hopkins at dinner, and they all turned up except
Gerard Swope who apparently was detained at the last moment. Harry
Hopkins, first of all, gave a very clear presentation of the situation
that comes under his particular notice. He talked very modestly and
sensibly as to the relief problem. Of course, everyone in the room was
of one accord that the needs for relief just had to be met and took prece-
dence over everything else.
Hopkins also mentioned plans as to a house-building progamme.
I am not so keen about this as a measure of recovery so much as I am as a
measure of reform and social betterment. I believe that if the community
can unlock the investment market we shall have lots of building anyway.
Following his presentation there was, as before, a general
discussion, and again the spirit of great friendliness and desire to co-
operate was very clear. I didn't hear a single man in the room criticize
Street
- 2 -
the President. Of course, as at the first dinner, various suggestions
were made, the adoption of which might prove of advantage, and some of
the present situations were described as being a handicap to business.
But nobody for a moment proffered his suggestions as if they were in the
nature of conditions upon which his co-operation was based. Absolutely
the contrary. The suggestions were all put forward as helpful adjuncts
to a situation which everybody assumed as a matter of course that the
President was doing his level best to improve, and that everybody present
was co-operating to the same end.
One of those present (I forget who) mentioned in passing
a rumor that had come to his ears recently that the President in his
forthcoming radio talk planned to chide American business men for their
lack of confidence. This particular diner, however, didn't seem to take
any stock in the rumor, and Hopkins pooh-poohed it by adding that he
didn't think the President had even started to write his speech yet. No-
body attached the slightest importance to this rumor.
There was some talk about the N.R.A. The points of weak-
ness which were stressed were the very ones that President Roosevelt
mentioned in his radio address last night.
There was quite a lot of talking about the jittery feeling
in the business community. I mentioned that some people in Washington
seemed to think that New York bankers were the leading jitterers, whereas
my experience was that we spent a good deal of time reassuring business
people from all over the country. I said I wished the Administration
could have dictaphones in our offices so as to hear the gospel of general
"buckupness" which we were handing out. When people complain to me of
the amount of money that the Government has been borrowing, I always answer
it by saying: "Well, if the country was willing to spend thirty billion
dollars in a year's time to try to lick the Germans, I don't see why people
should complain about its spending five or six billion dollars to keep
people from starving."
That is about all that happened at the dinner. But, as I
say, if the President, himself, had been there I don't think that he could
have asked for anything better in the way of spirit and co-operation. There
was no carping criticism of any kind. One fellow might have the idea that
business was a little worse than the other fellow might think, but everybody
was keen to co-operate whether the Administration adopted his particular
gadget, or not.
As to the general attitude of the banking community here:
I can only testify from what comes under my own observation, but I believe
that the attitude is generally the same as it is in this office, namely,
one of backing up the Administration to the limit. Look at the U. S.
Government bond situation. The chief selling of U. S. Governments has
been from the country at large, interior banks and other institutions, and
individual holders . at least that is what is reported to me. The New York
banks haven't been sellers. On the contrary, I think that as a group
their holdings are heavier than ever before. Take our own situation:
- 3 -
the last four months our holding of U. S. Government obligations
increased by $25,000,000. They may rise and fall with our demands
cash, but it is simply typical of the New York banking community as
whole.
And referring to the President's allusion last night to
co-operation of British bankers, as contrasted - one would infer -
that of American bankers, I don't think that big English banks have
ything like the same proportion of government bond holdings that the
ading American banks have. The British banks, of course, assisted
the refunding bond operation, but so did the American banks, so far
I can see, just as well as they know how, in the pending U. S. con-
And that co-operation extends all along the line: The U. S.
Corporation had need for some more cash and, therefore, quite
turally had decided to turn in their maturing 4 1/4s. But they tell
that when word came that it might be more helpful to do otherwise,
did the otherwise.
Of course, the New York banks are away over in their re-
of cash and are crazy to make good loans, but good loans are not
fering. Until the capital market can be opened, the banks will con-
to be overloaded with funds which they would like to see devoted to
development of industry. Every now and then some members of the Ad-
nistration complain that the banks of the country, including the New
banks, are holding back in making loans. The actual fact is just
opposite. I hope the President will talk on this point with some
the members of the New York banks.
I forgot to say that at the end of the dinner the other
when there was some talk of the make-up of the new Congress I said
if it was very radical I thought business must look upon F.D.R. as
only hope and as a bulwark for sane policies. I may be a Republican,
you can bear witness from my association with President Wilson that I
want to be loyal to any Democratic President with whom I happen to be
rking, especially one who is a friend of many years' standing as F.D.R.
T. W. L.
PSFiLament
Hm Ji,
says her +
readth Angilhone +
he is returning
h
PSF: Tamont
THE WHITE HOUSE
WASHINGTON
file Rusa nal
CONFIDENTIAL
March 10, 1938.
Subject File
MEMORANDUM FOR
THE SECRETARY OF THE TREASURY
Please read and talk
with me about it. I would not
show it to anyone but Magill.
F. D. R.
(Forthe Pres. to take to
Warm Springs)
Memo. from T. W. L.
the ausehea is wat the
product any office
"Economist. I wrote it
all myself, and hobady
has Ever accused me of
being all Economist!
s have mumbered These
Tm copies 8 the memo. and
The one other cepies are now
in my office file.
2.w.L.
20025/38
23 Wall Street
NewYork
February 25, 1938
Dear Mr. President:
Here is the memorandum which I suggested I might send to you.
I threw it into proof form as being easier for you to read. I have refrained from touching
on too many subjects, because I wanted to emphasize the three key ones that I brought up
in our talk at the White House February 14th, - credit policies, capital markets, public
utilities. I know how heavily other situations press upon you, particularly perhaps, as
you said to me over the telephone from Hyde Park, the matter of the railways. The railway
problem is, however, one that, even with a practical plan laid out, cannot be worked out
for many months, while the three key situations which I touch upon are subject to early
remedy. In fact, in two of them (credit policies and public utilities) your judgment
would be guiding.
As to credit policies, about which you seemed to have some concern, I
had quite a visit with Marriner Eccles after my talk with you, but I didn't get even to
first base. He was just as nice to me as he could be, but I just don't understand his
language. He has a lot of interesting personal theories about America being a creditor
instead of a debtor country, but I couldn't get out of him anything tangible to propose
in the way of action. Nor could I see that we were much in accord as to the manner in
which the great movements of industry and commerce are carried on in this country. He
talked just as blue to me as he does to you about the immediate outlook and he speaks
about the probable necessity of spending billions for relief, and yet seems quite philo-
sophic about keeping the Reserve brakes jammed down tight as they now are. I suppose
I ought not to say all this, but my contacts with you date back twenty-five years; so
I allow myself some latitude. I know how devoted a public servant Mr. Eccles is, but
I also know that if the country is to be saved, it is you and not Mr. Eccles who will
have to do the saving. I see according to the bulletins that early next week, there is
to be a meeting at Washington with the Federal Reserve Bank heads. Perhaps prior to that
time there might be a chance for you to have a word with Mr. Eccles in the hope that he
might take a new lead.
There is one point in the general situation which has an international
bearing. I mention it because I believe that you have had much more to do of late with
the preservation of the European peace than the public generally realizes. Any serious
or long-continued depression here is bound to have similar effects abroad. America's
output of production, its consumption, its spending power, are so enormous that serious
curtailment along these lines affects conditions on the other side almost immediately.
If over there they get into another economic tailspin with bread riots, etc. early war
will then be a cinch. Secretary Hull's excellent programme is & peace-building programme.
But continued bad times in Europe will scrap it.
This only means an added reason, if one were needed, for early arrest
of the depression here. So I come back to my main point that in this country prosperity
depends upon the prompt and coincident handling of the three situations which I describe.
No scheme for the railways, housing or any other industry, will work unless these three
basic situations are put right.
Thank you again for your great sympathy as expressed to me in the
death of Parker Gilbert. It is a. very heavy loss for everybody. Thank you, too, for your
good wishes covering my little trip abroad.
The President,
Washington, D. C.
Sincerely yours W.Lawant
Copy No.
1
Memorandum for
The President.
Three Steps to Curb the Depression
Can the business depression be overcome and turned
into early revival? The answer is yes.
How can such a change be accomplished? The answer
is contained in three steps, three constructive measures
which are all interdependent.
What are they? The answer is-first, reverse present
deflationary policies of the Federal Reserve; second, en-
courage now dormant capital to expand our heavy indus-
tries; third, bring peace between Government and public
utilities.
Are these the only measures to be taken? Certainly
not. But these are the keystone of the arch. Of course
solutions must in due course be found for other grave
situations-agriculture, the railroads, housing problems.
And others besides, many of which have recently been pub-
licly discussed. But the solution of these other problems
is largely dependent upon all three of these first steps.
DEFLATIONARY CREDIT POLICIES
The first step, then, to halt the depression lies in the
Federal Reserve policies of public credit. Let me point
out what has happened: Late in 1936 the Federal Re-
serve and Treasury authorities announced the adoption of
certain measures to curb what they then feared would
amount to a dangerous inflationary market in commodi-
ties and securities. Assuming the validity of such view,
they adopted orthodox methods to curb the impending
inflation. They took two vastly important steps. One
was to require all banks in the Federal Reserve System
within a certain period to increase their reserves by 100
per cent. Certainly a strongly deflationary measure.
Next the Treasury borrowed in the market $1,250,000,000,
bought gold with the proceeds and sterilized it-another
distinctly deflationary step. The fact that the merits of
this latter measure can be argued on other grounds does
not change its deflationary character.
So far, so good. Then what happened? Within a few
months, as I view it, the effects of the deflationary medi-
cine began to show. While current output was for the
time being maintained, the backlog of orders in the heavy
industries began to diminish; the stock market, represent-
ing scattered views from all over the country, anticipated
a slowing down of business and began a long and at times
violent decline; commodity prices began to slip.
Manifestly there was no longer fear of inflation in any
visible direction. According, then, to all orthodox theo-
ries the authorities should have ceased administering defla-
tion, and in fact might well have begun gradually to
reverse the policies, to encourage expansion rather than
contraction. That was of course the logic of the situation
even as early as late spring or early summer.
ALL THE EARMARKS OF DEFLATION
Yet there has been no reversal, no cessation even, of the
deflationary policy. Meanwhile the figures published by
the Federal Reserve tell the story. The decrease in loans
all over the country continues. Commodity and raw ma-
terial prices are weakening. The bond market is dead. We
have with us most of the earmarks of a deflationary epoch,
and yet the Federal Reserve holds sternly to continued
deflation.
I have friends in New York and Washington who dis-
agree with this theory. They hold, curiously enough, it
seems to me, that simply because loans are down and
banks cannot for the moment utilize their reserves, there-
fore the deflationary policy should be continued. They,
and even the heads of many large banks, seem to forget
that by their respective actions in 1936 and early 1937 (a,
increased bank reserves, b, gold sterilization), the Federal
Reserve and the Treasury gave urgent notice to the coun-
try that they were initiating a policy of deflation. They
told industry that it was going ahead too fast, and they
warned it to let up. Now they seem surprised that the
country took them at their word and did slow up. They
2
thought-and they were right-that increased bank reserve
requirements would tend against inflation. Some of the
commercial banks doubtless felt that increased reserve re-
quirements would raise interest rates. But what happened
was that prospective borrowers received so clear a warn-
ing that brakes were being applied that they refused prac-
tically to borrow at all. Loans fell off and of course rates
did not rise.
The influence of the Federal Reserve Banks through
their open market operations has been negligible, and
while in March and November, 1937, they increased their
portfolio of Governments modestly, they have done so
fearfully, because everything they buy is frozen into their
structure, like the approximately $2,500,000,000 of Gov-
ernments they now hold.
It has been pointed out that you cannot start your motor
car simply by taking off the brakes. That is true enough.
On the other hand you cannot start your car at all with
the brakes still on. It is utterly futile to adopt various
devices to "prime" your engine and still leave the car with
its brakes locked. I can hardly do better on this point
than to quote from the very report made by the Presi-
dent's Government experts and quoted by him on Feb-
ruary 18th last "During the past six months, on the other
hand, the general price level and industrial activity has
been declining. Government policy must be directed to
reversing this deflationary trend."
CAPITAL EXPANSION ESSENTIAL
Second, as to making capital available for prompt in-
dustrial expansion:
America is a country of business. Our material prog-
ress has for decades been dependent upon industrial ex-
pansion, technological advancement, able management.
Look, for example, upon the record of capital expansion
for the eleven years 1920-30-expansion which kept labor
employed at a high level and which furnished heavy tax
revenues to the Government. The story is extraordinary.
In those years private enterprise carried the great brunt
of the nation's financing. Of the total net amount of new
3
financing (excluding refunding issues), 88.2% went into
corporate, while only 11.8% consisted of net Government,
state, municipal, etc., issues. The annual average of such
net corporate financing was roughly $3,817,000,000; of
net Government financing, Federal, state, etc., only
$508,000,000.
Contrast this with the startling change in the seven-
year period, 1931-37. While new corporate financing was
on a considerable scale in 1936-37, yet for the whole
period it provided only 15.2% of the total, whereas Gov-
ernmental financing almost monopolized the field with
84.8%; the annual averages being only $710,000,000 for
new corporate financing against $3,974,000,000 net for
Government's.
These figures, which I have never before seen presented
in just this comparative form, show the complete reversal
of the capital market situation. The Government since
1933 has clearly preempted and dominated the capital mar-
kets. It is true that such intervention after the collapse
of 1932-33 was essential and the country welcomed it. But
what has happened is that, while Government large-scale
spending on public works, etc. furnished a strong tem-
porary stimulus to industry, yet on the whole the pro-
ductive plant of industry has suffered and improvements
and betterments have lagged. Spending by the Govern-
ment for relief and public works does not "create produc-
tive capital, whereas expansion of private industry creates
both employment and the productive capacity of the
country.
SERIOUS GAP IN THE CAPITAL MARKET
This reduction in the investment of private capital in
industry was more or less ignored during the years of
active Government spending. But now that such spend-
ing is prudently curtailed, the gap has become only too
evident. Employment on public works has fallen off and
industry, without fresh capital, has been unable to take
up the slack. Hence our increasing unemployment. It
now becomes only too clear that the improvement of
1935-37 has had a high degree of artificiality about it,
4
because so much of it was based on Government spending
which has recently been wisely curtailed.
Any suggestion that the remedy should be the resump-
tion of Government spending, "pump-priming" once more,
seems almost incredible to me. First, from the Govern-
ment's point of view. With 21 billions of dollars of fresh
Federal debt incurred under one necessity or another since
1930, the Government's credit is not unlimited and would,
under heavy fresh borrowings, soon suffer. Inflation
always brings down the buying power of the currency and
imposes an even more cruel burden upon those least able
to bear it, namely the wage-earner, the farmer and the
small investor.
Obviously the remedy is, as I said at the beginning, to
attract private funds to the capital markets, to resume the
methods by which not alone large capital but small in-
vestors all over the country are led to furnish the funds
which, in the generations heretofore, have built up our
whole splendid structure of industry and business.
And it is striking to note that, in the long run, accord-
ing to Carl Snyder, until recently statistician of the Fed-
eral Reserve Bank of New York, the increase in national
income closely parallels the increase in the capital equip-
ment of the country's industries (American Economic
Review, June '36).
ILL EFFECTS OF UNDISTRIBUTED PROFITS TAX
Why, then, are the capital markets today practically
closed to private investment? Because, specifically, our
industrial corporations are being ground between the
upper and nether millstones. The upper millstone con-
sists primarily of the undistributed profits tax. That
tax lays heavy penalty upon prudence. That tax declares
to business, both little and big, that it may no longer lay
by the reserves required for a rainy day, or for the im-
mensely productive efforts of businesses in the fields of
scientific research and new invention. That tax gives
clear warning to investors that their investments are to
be rendered less secure. That tax is a blow to labor, warn-
ing them that their employers are to be milked of the
5
surplus earnings which in difficult periods have so largely
been utilized for the benefit of labor. That tax weakens
the corporations' credit standing, frequently compelling
them to resort to short-term bank borrowing on a large
and unprecedented scale. The tax even penalizes a cor-
poration in many instances if it applies part of its earnings
to the paying off of its debts! Can anything be imagined
more fantastic than this? Why this attempt to siphon
all the profits out of industry, to make strong businesses
weak, and to turn little businesses into feeble ones?
As for the Government Treasury, the tax yields only
temporary and fictitious penalty revenues, far more than
overbalanced by the lag in real revenue that would flow
from normal industrial activity. The tax was based on a
mistaken thesis. It has already worked havoc with indus-
try. It makes investors dubious as to the whole invest-
ment outlook and drives them further into the field of
tax-exempt securities, non-productive from the point of
view of either Government or private enterprise. The tax
should be repealed.
ANOTHER MILLSTONE GRINDING INDUSTRY
The other upper millstone grinding down on industry
through its effect upon private investors is the capital
gains tax. Private investors hesitate to supply what has
been aptly called "venture capital" when the profits from
successful investment are added to other sources of income
for determing income taxes, whereas losses are not
similarly deductible. Consequently the supply of the
type of capital which has served as the base for our
industrial development has tended to dry up, forcing those
companies which have need for funds to rely upon borrow-
ings either from the public or from the banks. The prin-
ciple of this tax, although in no sense is it properly an
income tax, could perhaps be preserved in part without
too much damage. But it is unscientific in theory and
destructive in effect. It exaggerates booms and prolongs
depressions. It is a simple enough matter to distinguish
in the statute between those individuals whose primary
source of income arises from dealings in securities and
6
the remaining great mass of people with whom investment
is an incidental rather than a primary source of income.
In Great Britain, where income taxation has reached a
fine art in yielding Government revenue, the idea of a
capital gains tax as to individuals has always been dis-
carded.
Those are the upper millstones. What is the lower mill-
stone that is grinding industry from the bottom? It is
the heavily increased costs of labor and of other essentials
going into large scale production. I have said more than
once that, as a whole, American industry had been some-
what of a laggard in its labor policies. But now as to
wages and hours the pendulum has swung so far the other
way that, despite technological improvement, profits have
been greatly cut down and some of our principal heavy
industries are operating at a serious loss. In the railroad
field, for example, the increased wages, fuel, materials,
social security taxes, etc., combined with reduced rates, as
testified before the I. C. C. recently, will cost the roads
more than $300,000,000 annually. Is it any wonder that
American investors who see security diminished through
penalty taxes (the upper millstone), and profits reduced
through increased labor costs (the lower millstone), fear
to enter the capital market and provide the financing that
industry so constantly needs for progress?
It is satisfactory to know that even now Committees of
the Congress have under advisement the question of these
two drastically deflationary taxes.
PEACE IN THE PUBLIC UTILITY FIELD
The third point in any constructive programme to
reverse the depression is, as I said, to have peace between
Government and the public utilities. And this is a case
where the President almost single-handed can bring about
composition and prevent further sweeping destruction of
values.
I have neither the opportunity nor the knowledge to
enter into a technical review of the situation. We all know
the sins of omission and commission of a few, a very few,
of the holding companies in the public utility field. But to
7
visit condign punishment on a few and at the same time
wreck the many is folly. In this country today American
investors, including our life insurance companies, savings
banks, etc., have at stake in public utilities something like
$18,000,000,000. This whole investment is threatened by
the war over the TVA.
Many persons erroneously believe that this is a purely
local contest, with its effects limited to the region in ques-
tion. Nothing could be further from the fact. If TVA
proceeds, through unfair competition or through methods
that destroy the value of outstanding securities, to ruin
the private utility companies in the Tennessee Valley, that
is plain notice to public utility investors all over the
country that their turn may come next. Some of our
Washington friends say that investors in Michigan or
Missouri should not be alarmed just because of the destruc-
tion to existing utility values in the Tennessee Valley; that
they should ignore what is going on in TVA and should
furnish all the funds required for development of existing
local utilities. But utility investors are alarmed-not as a
result of "propaganda", as some claim, but of what they
see going on and of what they fear, in the way of Govern-
ment competition, threatens the country at large. Make
peace in this industry tomorrow, and the effect would be
far-reaching, not in utilities alone, but on all industry. As
we are all aware, the utilities would be keen to spend a
billion dollars at once in needed improvements, in labor
and in materials.
BASIC PRINCIPLES FOR GENUINE TVA PROGRESS
I do not call for the TVA to fold up or turn back the
hands of the clock. I ask that, if it is determined Govern-
ment shall make the social experiment of going into the
production, transmission and sale of electric power, it
should forthwith declare its purpose of restricting its
experiment to a certain area, and should prescribe a rea-
sonable number of years during which the experiment
would be given a fair trial in the area thus prescribed.
The experiment might succeed. Let it be, however, a
carefully controlled experiment. The bookkeeping of the
8
TVA should be made to observe all the highest standards
of frank disclosure, and should be made comparable to
the figures of the private utilities; so that the advantages
of free grants of funds, of low rates on borrowed funds
obtained through Government credit, of tax exemption,
etc., will be clearly seen. All the ideals of the Securities
Exchange Act should be exemplified in the Government's
business.
It will then appear whether the contention is correct
that the country must pay extra taxes to enable the Fed-
eral Government to operate a great public utility at higher
costs, but to furnish the users, domestic and industrial,
power at somewhat lower prices. Certain industries are
already moving to establish plants in the Tennessee Valley.
Naturally they seek lower-cost power, even though the
country as a whole has to pay the cost of it.
BONA FIDE EQUITIES TO BE PRESERVED
But if such experiment is to be tried through the acqui-
sition by purchase of certain existing private utility prop-
erties, then at least the prices to be paid should be on an
equitable basis of appraisal. Such procedure is as impor-
tant for the Government as for the security holders.
For, if through any short-sighted decision, TVA should
first ruin the values of the existing private companies and
then attempt to buy them on the auction block, so to
speak, that indeed would aim a blow at the utilities and
at industry generally, all over the country, that would be
nothing less than disastrous. The Government would at
one stroke have given a shock to country-wide security
values from which they would not recover for years. The
cause of economical power and cheaper industrial produc-
tion would have been set back a generation.
If the TVA will, then, observe such fair principles of
carrying out a socialized experiment on a widened scale,
certainly the public utility managers, from what they have
already declared, seem prepared to adjust matters on such
a basis. How, then, can TVA turn its back upon such
a peace-through the negotiation of which they will pre-
vent a wholesale destruction of existing values and will
9
put the public utility industry on a plane to command
capital for immense expansion? (Attached to this memo-
randum is a separate one bearing upon the relations of
the TVA and of the Commonwealth & Southern and the
manner in which these cases may conceivably be handled.)
NECESSITY OF DEALING WITH FUNDAMENTALS
There seems to be a distinct disposition in some quarters
to turn to temporary expedients rather than to grapple
with the essentials of the problem; to deal with conse-
quences instead of causes. It should be realized that this
depression cannot be cured unless we tackle the funda-
mental causes of it. There is no use in dealing merely
with symptoms. We cannot, for example, project a suc-
cessful housing programme unless we see to it that basic
conditions are right to build upon. Men who are losing
their jobs will not commit themselves to buy a new house
or even rent one. Again, it might be pointed out that the
disparity of prices to which the Committee, as just quoted,
called attention in its statement last week is in the main
a result of the depression-not a cause of it. Cure the basic
defects and you will relieve the body, industrial and
economic, so that nature can steadily effect the cure.
What we need is a free market, not a controlled one.
As for plans to provide capital for small industrial
units, I understand that a careful study of this situa-
tion is properly being undertaken upon the Presi-
dent's initiative. But if we could once more approxi-
mate the conditions of the middle '20s, before the expan-
sion of industry became too violent, the rising of the gen-
eral tide of business would provide natural and simple
methods for financing all classes of industry, little and
big. In 1926 there was no complaint by small business
that it could not secure capital.
CAPITAL NORMALLY EAGER FOR EMPLOYMENT
Much has been said at times about the sluggishness and
stubbornness of capital. Surely no one can rightly call
capital a sluggard. Capital is eager to be as industrious as
the ant. It abhors idleness as much as nature abhors a
10
vacuum. It is a ready and willing worker. But if it
can find no work to do safely and at a reasonable return,
it disappears from the active marts of capital and seeks
refuge in tax-exempt securities. Labor, too, is, I believe,
beginning to realize that industry to which it looks for its
livelihood is in turn dependent on capital. The two are
interdependent. And labor should do its part in seeing
to it that capital as well as labor receive a living wage.
The British Prime Minister, Mr. Neville Chamberlain,
speaking recently of government's attitude towards capital
and industry in his own country, made this far-seeing ob-
servation: "A policy which discourages and damps down
enterprise, which destroys the confidence of industry, is
likely to destroy revenue too and make all social reform
impossible."
NECESSARY FOR CONTINUING PROSPERITY
I return at the end to the three vital steps that I
advocate: (a) Revise our Federal Reserve credit policies
from wearing down to building up; (b) Repeal and revise
the undistributed profits tax and the capital gains tax, and
thus remove heavy burden from the capital market; (c)
Bring peace to the public utility field. Adoption of no
one of these steps by itself will cure the depression, but
the adoption of all three as promptly as possible will
radically improve our picture. In the place of depression
and discouragement we shall have revival, renewed energy,
increased production, steady wages, growing tax revenues
for our Government.
T.W.L.
February 25, 1938.
11
Addendum
TVA and Commonwealth & Southern
Outline for Practicable Method of Settlement
Initially the question arises as to whether it is not pos-
sible to canvass once more the idea of a "Power Pool"
which was under discussion at the White House confer-
ence on public utilities in late September, 1936. At that
conference which I was asked to attend, I was impressed
with the views which the President expressed, and I had
hoped that further progress along the line of a Power
Pool would be possible.
As a workable alternative, however, I suggested to the
President at the White House on February 14th that
effort be made to bring about composition on the basis of
the three principles outlined on pages 8-9 of the forego-
ing memorandum to which this is an addendum, namely:
that (a) a definite area be agreed upon for Government
operation, that (b) a limit of time be set during which,
as to the balance of the country, the Government would
confine its operations to the circumscribed area, (c) that
any acquisitions of private utility properties within the
area should be made at fair appraisal prices, all circum-
stances being taken into consideration.
The President responded by expressing the opinion
that such procedure could hardly be fruitful, by reason of
the fact that Mr. Wendell Willkie had already declined
to enter into negotiations with the City of Chattanooga
concerning properties and connections in the area imme-
diately circumscribing Chattanooga, and that such refusal
was evidence of Mr. Willkie's non-cooperative intentions.
My comment was that, although I was not familiar with
the technique of these situations, I wondered whether it
might not be true that to turn over to Chattanooga the
immediately outlying region would break up the whole
system serving outlying districts as well, and thus serve to
damage irreparably the system as a whole.
Upon my return to New York I immediately asked
Mr. Willkie whether he would be willing to show to me
12
any of the documents bearing upon this particular phase.
Whereupon Mr. Willkie sent me the correspondence.
From this it appears:
(a) That the law creating the Power Board of the City
of Chattanooga empowers it to expend not over the sum
of eight million dollars for the building or acquisition of
a distribution system;
(b) That The Tennessee Electric Power Company, in
addition to its investment in the distribution system in the
City of Chattanooga, has an investment of twenty-five
million dollars in generating plants and transmission lines
which primarily serve the region of which Chattanooga is
the center; and
(c) That The Tennessee Electric Power Company was
built (under the regulation of State authority), as a sys-
tem, serving not alone the Chattanooga area but most of
middle Tennessee and that to discuss any plan that would
mean a piece-meal disposition of The Tennessee Electric
Power Company system would mean simply disintegration
and destruction of values.
It must be clear that, if only a part of a system is
acquired, or even if an entire system is acquired and
no limitations are placed simultaneously on the future
extension of the operations of the Tennessee Valley
Authority, the country-wide reluctance of capital to under-
take investment in public utilities will remain undiminished.
My object in making inquiry on the point that the
President brought up was not merely to gain light on the
Chattanooga situation, but to sound out Mr. Willkie, and
ascertain whether a formula of procedure could not be
accepted by him, in behalf of his corporation, that would
at once simplify the situation and at the same time render
a solution on the part of the TVA fairly easy, financially
and otherwise; in any such solution the three principles
that I have already outlined to be observed.
From the studies which we then made it became
apparent that there are four systems within the Common-
wealth & Southern group that may be affected by the TVA.
These are the Georgia Power Co., Tennessee Electric
Power, already mentioned, the Alabama Power Company,
the Mississippi Power Company. As to the regions served
13
by the three latter systems, most directly affected, and
within the potential purview of the TVA, I should advo-
cate that a definite boundary be agreed upon which will
roughly embrace all the territory that TVA under full
development can adequately serve. All the plant and
facilities of the three companies within this boundary to
be conveyed to TVA upon a scale of prices and under
terms which even now are subject to ready determination.
Some such plan as this, I am confident, Mr. Willkie
would be willing to consider promptly with the President.
I have attempted merely to give a bare outline form of
negotiation. But I am hopeful that it would provide an
immediate means of solving this whole vexed question,
the solution of which, as I have said, will be one of the
most important factors having prompt and favorable effect
upon the depressed economy of our entire country.
14
Personal and confidential.
conse
PSF.
23 Wall Street
Girl
Lamont
NewYork
June 30, 1938
Dear Mr. President:
Many thanks for your letter of June 25th which Joe Kennedy
handed me. I did not see the U. S. Steel Corporation's statement until it
came out Sunday morning, but if I had, I should have approved it, not because
of what you said in your "Fireside Chat", but because of that special story on
the front page of The Times which pictured Ed Stettinius as having given a
private pledge contrary to the fact and which, as he put it to me Monday, put
him and the Corporation on the spot. I am sure that the Steel Corporation people
were most meticulous not to wrap up their statement with any such provocative
suggestion as you quote from the ticker in your letter to me. In fact, you must
be aware how, particularly since March 4, 1933, the whole spirit at 71 Broadway has
been to render every possible cooperation to the Administration. That spirit goes
from top to bottom.
Like you, nobody wants to reduce wages a penny if it can be
helped. So far as the Steel Corporation is concerned, any question of wage scale
revision must depend primarily on what Mr. Fairless, Mr. Stettinius, and those who
are in charge of the Corporation's operations report and recommend. There seems
to be a mistaken impression that directors attempt to initiate policies along this
line. This is absolutely contrary to the fact. As to the recent price cut, for
example, Mr. Fairless and Mr. Stettinius reported the conclusions that they had come
to as to reductions from the published price scale, and these seemed to fall in with
the views of everybody.
Though I don't want to have you take my views more seriously than
they should be taken, or imagine for a minute that I do any more than consider the
policies and recommendations of the managing officers as all the directors do, never-
theless, you have honored me with an expression of your view, and I am going to give
you the very best picture I can of what I understand to be the nature of the problem and
of the considerations which are now before the management of the Steel Corporation.
Fairless reported last Friday that he had had one entirely agree-
able preliminary talk with John Lewis to explain to him the situation of the Corporation
and expected to have another that day. Some figures were then given as to the opera-
tions of the Corporation under the price cut prior to any wage revision. These showed
losses (at 30% of production - production is actually less than 28%) of $4,200,000. per
month, or a little over $50,000,000. per year. (Last year's figures include the fol-
lowing: $85,000,000. approximately for taxes; $443,000,000. for payrolls; and after
the preferred dividend payments, a total of $8,705,000. for the common stockholders -
the only dividend, by the way, since early 1932.) Now, I think you can see that when
the operating men are up against deep red figures of $4,200,000. a month, it is only
natural that they should feel that in helping to stimulate new business, they should
get some relief from labor. But how much it ought to be and the timing of it must
rest primarily with the Corporation's operating people, the same way that the question
of price reductions had to rest with them.
I am glad that you speak in the last paragraph of your good letter
Wall Street
- 2 -
to me of that confidence which you and I are both in favor of. To my mind, a great
factor to such an end is prosperous business, increasing production, full employment
and a full pay envelope. It is not so much the published scale of wages as the
number of laborers employed and what each laborer has in his pay envelope at the end
of the week. It is the number and contents of the pay envelopes that are going to
increase purchasing power and spread confidence throughout the community: it is not
a theoretical wage scale under which labor receives a meagre envelope.
You will never, in my judgment, have any quarrel with the U. S. Steel
Corporation on the principle of making the greatest price reductions possible to
stimulate business and the least wage reductions possible. In difficult times management
of industrial corporations are driven to disregard for the time being the question of
actual profit or return upon capital to the stockholders; but they cannot disregard a
loss that may run into disastrous figures and imperil a corporation's solvency. Reducing
rates and increasing wages have brought the railroads to a sorry pass. It would not help
confidence in my opinion if a similar course were to bring the great steel industry
or even some of its weaker members into financial peril.
As you are aware, Fairless and John Lewis have had a couple of good
general talks already, and I don't see why they shouldn't be able, when they get
together next time, to work something out. John Lewis knows perfectly well that when
the 621/2 cents per hour basic wage was running a year ago, production was running at
85% or above, and he knows now that production is running at less than 30% and has been
for a long time. The Corporation has been sweating blood for six months or whatever,
and John Lewis could make the greatest ten strike in his life if he were practically to
volunteer a reasonable wage revision. That would mean the quickest route to heavier
pay envelopes. That would indeed prove to the country that labor and capital, so to
speak, had succeeded in working out their own difficulties. It would be a great thing
for any Administration to father such a solution! And such a course would be far better
all around than to have the spectacle of "the independents" jumping in and slashing wages
roughshod.
Thanking you once more for your letter, I am
Sincerely and respectfully yours,
The President,
Hyde Park,
New York.
P.S. I hordly have to say that these figures about being in the red are very confidential.
T.W.L.
2 (am) Ambassad singland
is one The my besi ythe Butroh respect
and like interpoken Americanion
PSF
Lamont
7P
THE WHITE HOUSE
WASHINGTON
1-8-40
MEMORANDUM FOR THE PRESIDENT:
T. W. Lamont's secretary 'phoned the
following messages, which Mr. Lamont wished
conveyed to the President:
1.
"I want to send my heartiest
thanks to the President for saying he
will see Eichelberger.
2.
"His second speech was superb, just
like the first, and I am convinced
the feeling of the Republicans through-
out the country is far more sympathetic
and eager than indicated by the
Republicans in Congress.
3.
"I hope very much he succeeded in
straightening out Roy Howard. Howard
is away and I have not attempted to
communicate with him. 11
anm
I
PSF
Lamont
February 6, 1940.
My dear Mr. Lamont:
Herewith is the information
for which you asked.
Very sincerely,
Mr. Thomas W. Lamont
23 Wall Street
New York, New York.
Rush D. Holt
Peter C. Genry
Alve B. Advan
C. Tolaton
The following Canagers believed 3 be favor blo
unless Anthor information should indicate 1.11 exception here or there:
The following Senators are either doubtful or
probably doubtful:
Tom Connally
Robert M. LaFollette
(5)
Josh Lee
David I. Walsh
H.H.Swartz
The following Senators are reported to be opposed,
but might be disposed to consider the matter further:
Henry F. Ashurst
(4)
Dennis Chavez
Burton K. Wheeler
Vic Donahey
The following Senators are understood to be definitely
opposed:
Sheridan Downey
Key Pittman
(8)
Pat McCarran
Joseph C. O'Mahoney
Rush D. Holt
Peter G. Gerry
Alva B. Adams
Edwin C. Johnson
The following Senators are believed to be favorable
unless further information should indicate an exception here or there:
Chas. 0. Andrews
John H. Bankhead
(47)
Alben Barkley
Theodore G. Bilbo
Prentiss M. Brown
Harry F. Byrd
James F. Byrnes
Hattie W. Caraway
Bennett C. Clark
Allen J. Ellender
Walter F. George
Guy M. Gillette
Theodore F. Green
Joseph F. Guffey
Pat Harrison
Carl A. Hatch
Carl Hayden
Clyde L. Herring
Lister Hill
James H. Hughes
William H. King
Scott W. Lucas
James M. Mead
John F. Miller
Sherman Minton
James E. Murray
Kenneth McKellar
Matthew M. Neely
George W. Norris
John H. Overton
Claude Pepper
George I. Radcliffe
Richard B. Russell
Robert R. Reynolds
Elmer Thomas
Elbert D. Thomas
Lewis B. Schwellenbach
Morris Sheppard
William H. Smathers
Kllison D. Smith
Harry S. Truman
Millard Tydings
Frederick Van Nuys
Robert F. Magner
A. B. Chandler
James N. Slattery
Tom Stewart
-2-
THE WHITE HOUSE
WASHINGTON
February 6, 1940.
MEMORANDUM FOR
GENERAL WATSON
The President said to have
this list copied on a plain piece
of paper and send it in a plain
envelope to Tom Lamont and say
this is the information he had
asked for.
G. G. T.
Budgetary issues- -
The following Senators are either doubtful or
probably doubtful:
5-
Tom Connally
Robert M. LaFollette
Josh Lee
David I. Walsh
It H swartz
The following Senators are reported to be opposed,
but might be disposed to consider the matter further:
4
Henry F. Ashurst
Dennis Chavez
Burton K. Wheeler
Vic Donshey
(Dims)
The following Senators are understood to be
definitely opposed:
8 -
Sheridan Downey
Key Pittman
Pat McCarran
Joseph C. O'Mahoney
Rush D. Holt
Peter G. Gerry
Alva B. Adams
Edwin C. Johnson
The following Senators are believed to be favorable
unless further information should indicate an exception
here or there:
47-
Chas. 0. Andrews
John H. Bankhead
Alben Barkley
Theodore G. Bilbo
Prentiss M. Brown
Harry F. Byrd
James F. Byrnes
Hattie W. Caraway
Bennett C. Clark
Allen J. Ellender
Walter F. George
Guy M. Gillette
Theodore F. Green
Joseph F. Guffey
Pat Harrison
Carl A. Hatch
Carl Hayden
Clyde L. Herring
Lister Hill
James H. Hughes
William H. King
Scott W. Lucas
James M. Mead
John F. Miller
Sherman Minton
James E. Murray
Kenneth McKellar
Matthew M. Neely
George W . Norris
John H. Overton
Claude Pepper
George I. Radcliffe
Richard B. Russell
Robert R. Reynolds
Elmer Thomas
Elbert D. Thomas
He H. Schwarts
2
Lewis B. Schwellenbach
Morris Sheppard
William H. Smathers
Ellison D. Smith
Harry S. Truman
Millard Tydings
Frederick Van Nuys
Robert F. Wagner
A. B. Chandler
James M. Slattery
Tom Stewart
PSF: Lamont
February 8, 1940.
Dear Tomt-
That note from Mr. Saperston is a joy.
You and I are, I believe, at what is known as
the "dangerous age", and it is just as well that
we do not conduct classes for young ladies in
the Bronx!
which reminds me that we are having the
American Youth Congress here this week -- a
group which really does represent a big section
of young people. The faot is that they are, as
a whole, definitely set on "going places" --
they want jobs and opportunity -- and they are
extremely vocal. I think it is our business
not to kick them in the fact but to point out
that they cannot get Utopia in a day - not
even jobs of their own choosing for all. But
we must do it by saking friends with them and
earning at least a share of their confidence.
They and many similar organizations could become
dangerous to our future if they were scorned
or if the Government merely told them to go
and eat cake.
That is why Eleanor and I, thinking
in terms of our grandchildren and yours, are
treating them rightly like the American oitizens
who will have a lot to say about the running
of the Government ten or twenty years from now.
You, I know, have that point of view but I wish
to goodness some of your Harvard classmates and
mine could catch the idea!
As ever yours,
Memo. from T. W.L.
7/8/8 7
1940
RECEIVED 58 AM HOUSE '40
Dear Mr. President:
I thought the attached
copy of a letter a member of my staff
received recently might amuse you. It seems
that this Sidney Saperston is a fellow whom
Martin Egan (perhaps you remember him of old)
picked up when he was on his uppers without
a job and got one for him. Saperston has now
become a teacher. He tells Wasson - believe
it or not - that the students are writing very
pleasantly about J. P. Morgan & Co. But
what might please your nice wife is contained
in the last paragraph, namely, that all 22 of
the school girls want you to be permanent
President!
mann Sincerely W.kmart yours,
The President,
The White House,
Washington, D. C.
FENRUARY 1st-1940
Dear Mr Wasson: This letter vil interest you,
In the conmerciel-English courses I give nt Herman Ridder High
School in the evenings up in the Bronx, in addition to correspon-
/o
dence, I nsk for original compàsitions extempraneously composed
from pupils to judge their styple of phraseology, etc. Last night
I naked my class of 22 (all girls renging in ages from minimum of
17 to maximum of 22) - to write out on n piece of naper in form of
composition whatever they know of JP Morgon A Co. Most of them
had heard of to e firm but mew nothing about 1:- o ICW, nowever,
nee some decided views and vrote out their observations.
I enclose them herewith. Read them and you'll get a kiok of it.
Note these brief coments are written by adolescent girls, all
of potty hourgeoise and proleterist homes, living in poorersection
of the Monx, very few have any business experience, if nt all,
no contact with banks, finence, etc., their opinions obviously being
what they hear their fathers sey, from redio, newspapers, etc
Ithink these opinions ere more to be noted than those of
current day politicians and confrosmen as former are coming genera-
tion.
On another occa-ion I nsked for composit ons on their hoice for
the IT sidency and it was 100% unfenimously for Roosevelt. All the
that they'd vote for him if qualified.
writers, many below legal voting age, gove it ns Information t opinion
Cordinlly yours,
SIDNEY SAPERSTON-
R GORDON WASSON, Esq-
230 WEST 97th street
From
Thoras N. Lamont
YORK
NEW
FEB 6
N
CHURCH ST
T-PM
ANNEX
3
CENTS
1340
The President
The White House
Washington
D. C.
23 Wall Street
NewYork
Lammt, T.W.
Memo.
from T.W.L.
PSF
Dear
This from the hored Igm
staday was Just handed
Doining the light to
me. as a missimary
Royth I an atlent
100% failure I am
looky Rowern, that
he gaor This resty
stuff Mail Thanken,
n
Memo. from T.W.L.
mit careohan come
from nowhere Else.
However, There is no
use mg string love
about thing like
This - theyeome
antin the wash.
my attention mas
also called some
days ago to attugh=
Johnson prece and
ar Estimal in The
3/ tame issue for
Memo. from T.W. L.
world: 2 Zm Im can
ready note the
concidered The
This prices
Willkie's Stand
cd
By Hugh S. Johnson
and
a
of
The Bill of Rights in our Constitution doesn't
Nothing has happened since to impair the ap-
SIN
tise these words but what part of it means is, that
parent soundnéss of that doctrine. If anything.
od
it is every American's sacred privilege to say what
what has happened since has strengthened it. But to
he pleases, think what he pleases
it would have been impossible for Mr. Willkle to
sta
and change his mind as often as
have gone further than he has now gone to repudi-
will
he desires. That goes for Wen-
ate it and those ardent followers of is and him.
loi
dell Willkie.
He has made them appear to be the most gul-
111
But with such privileges go
ble-of suckers and himself to be what shrewder
B4
obligations, moral if not legal.
DED suspected all along, to put it as charitably
ht
Mr. Willkie, after a considerable
a possible, an opportunist and a man who has not
period of hesitation as to just
earned the first lesson of leadership, which is that
what it was all about, during
0 chieftain can expect loyalty from his people
be
which his stock slumped from
Inless be gives an even greater measure of loyalty
kl
the remarkable high of the
them. This la the man who promised to lead
q
Philadelphia convention to 1a
"loyal but watchful opposition.
very low point in August: finally
began to attract followers again.
On-the surface this administration seems in-
He announced that he wasrieading & crusade to
different. to Mr. Willkie's servitle antics. But tn
return America to the Americans. He stood against
fact, without According any aspect of official status,
any further delegation and concentration of power
it is doing all that can: be done to facilitate the
in the President:
propagandist journey to Europe of Mr. Willide, and
Ha was for aiding Britain within our own and
his party,
law." but be felt that If Mr. Roose-
The House of Morgan at Teast as represented by
velt were. re elected it would be construed! MI .
Mr. Thomas W. Lamont-and other great interna-
mandate for an immediate headlong rusht toward.
HOMET bankers are as lictive in guiding and pro-
war. Hea Willkle, stood fhr caution and discretion
belling our steps toward involvement in this war
and the building of an impregnable American de-
as they were in 1917. And suddenly Mr. Roose-
fense.
velt himself seems to be cuddling Just as close to
The impression that he tried to leave was that
them as is Mr. Willide in the latter's swift and
he stood against the war-minded and those who
startling change of front
had been careless of American defense as the
It is no time to assail motives. All these men
apostie of all-out hemisphere defense and the
are patriotic and sincere. Actions only are Im-
traditional American policy of a minimum of med-
portant: It is wisdom, not motive that is in ques-
dling with the interminable European conflict.
tion It is becoming clearer every day that Mr.
E
Willkie's charm and appearance of candor were
On this basis millions of people left their party
not enough to counterbalance his lack of experi-
moorings. some of them at great sacrifice of per-
ence, education and poise in positions of public
sonal friendship and prestige, to follow him. Some
responsibility. The glare and glamour of his sky-
gave him more help than the leading members of
rocket excursion into national favor dazzled him.
his own new-found party. It was not & question
He is still dazzled and innocently grasping through
with them of partisanship, it was a question of
this grand new gesture for some remnant of a
patriotism.
fading glory.
Policy on War
By Hugh S. Johnson
Mr. Walter Lippmann asks angrily why the
"short of war" and promised never to send troops
abroad. The phrase "short of war" was dropped
sage should be debated. He says that is has been
"policy" laid down in the President's annual mes-
out in the message and we are now said to be
passed upon by the peóple not
committed to full support." Who consulted us?
merely in the elections but in
Not the Congress. Not the people. Not the elec-
the nominations and that if
tion. Furthermore, any professional soldier knows
either Mr. Willkle or Mr. Roose-
that the policies advocated in the message never
velt had not indorsed it neither
can be achieved without war and an expeditionary
would have been nominated.
force.
be
when the voters went to
If Mr. Roosevelt had made during the campaign
any such warlike utterance as his annual message.
of
the polls they knew that the
winner of the election would de-
he would have lost millions of votes-If not the
pi
clare the policy the President
election.
PI
has now declared."
No issue was presented. Both
The truth Is, that If they are not debated now
candidates agreed on aid by
It proves that democracy has been whipped through
to
"methods short of war," but
hysterical fear into totalitarian silence and acquies-
Hi
since this was not defined no "policy" was con-
ence or beguiled into believing such absurdities as
he
sidered. Mr. Willkle. to the astonishment and
Mr. Lippmann's assertion of an issue debated and
pa
ria
distray of many of his supporters, didn't explore
closed with a mandate.
There has also been too little clarifying debate
gla
the subject or give the people a chance to hear
te
debate on any part of the greatest of American
the sloganeering assertion that Britain is
questions. Since there was no issue on any policy
on Wighting our war." Says & New York Times dis-
there is no popular mandate.
dately from London, paraphrasing the British re-
of
Mr. Lippmann cannot fairly contend that Mr.
ation to the message: "The United States say over
to
Roosevels mentioned in the campaign any new
and over again that Britain must be aided in every
to
American crusade to insure. not merely to us but
dossible way because Britain is essential to
Sp
the whole world. freedom of the press and re-
The United States is
PI
to ligion, social security and perpetual peace. It is
hiring United us States to fight defense. its battles as we once hired the
of Nations stuff which this country once
Ressians. But we are not getting our pay"-
overwhemingly League rejected in & "great and solemn
meaning thereby that the United States isn't in-
referendum.",
juring delivery of munitions by putting its havy
nto the armed Atlantic convoy service.
Mr. Roosevelt campaigned in the presence of
That argument is Ananswerable if we are "al-
mention of any change or any evasion of any of
the Neutrality and Johnson. acts. He made no
rays remembering
the British opinion cannily,
these such as is contained in the "lease-lend"
I
not chuckingly,
ntinues, "that the United
plan. nor did he indicate as he did Monday will any
States 13 at all has is said becau the are fighting for the United
ge only reason it is helping
"accept." Unless America is at war she can't
policy about what kind of peace America
Itates," By muc sloganeering and too little
lebate we are faumbling. fumbling and stumbling
either accept or reject peace terms.
Candidate Roosevelt advocated methods only
into war.
22
New York Md-Telegram
A SCRIPPS-HOWARD NEWSPAPER.
NOT W. HOWARD, President and Büler,
LES B. WOOD, Esecutive Inditor,
X a. MACNEUSH, Business Manager.
Owned and published daily (REMPS Bunday) by New York
World-Telegram Corporation. Main office, 133 Bartisy BL
Phone BArclay 7-3211.
Member of United Press, Associated Press, Beripos-Howart
Newspaper Alliance, NEA Berries, Inc.: Newapaper Information
Service, which organizations retain exclusive richts to all new
and Instrum credited to them.
@ubscription rais by mail for New York World-Telegram in
the United Blains (oulaida of New York Cityl, coe year, 6.3.00
"Gier Light and the People Mill Find Their Our Way."
WEDNESDAY, JANUARY a. INL
Editorial
British Logic.
A London dispatch on British reaction to President
Roosevelt's message to Congress, published in the New
York Times, contains some interesting quotations.
It reports that Britons are pleased with the Presi-
dent's "striking and inspiring phrases." But they want
brave words translated into deeds. They want ships,
planes and guns delivered-at once.
And here, is the nub of their argument, as the dis-
patch sets it forth:
"The United States says over and over again that 'we
cannot afford to allow Britain to fall.' It says over and
over again that Britain must be aided in every possible
way, not because Britain should be saved but because
Britains essential to United States defense. If that is
what the United States thinks, then, virtually speaking,
the United States is hiring us to fight its battles as we
once fired Hessians in an effort to subdue the Thirteen
Colonies.
"But we are not getting our pay. The United States
has come long and far, but not far enough. If we are
fighting for the United States and if it is willing to give
us money or credit on that basis we have the right to ask
it to 2D further. Since we cannot bring material oversea:
ours yes, we have the right to ask the United States to
do always remembering that the United States has said
that the only reason it is helping us at all is because we
are ghting for the United States."
The argument appears sound. Once the premise is
accepted that the British Ire fighting our war, then all
the best follows as clear and irrefutable logic.
The big issue bei Congress and the American
people is whether to give pproval to this basic assump-
tion. If we grant that the British are fighting our battles,
then Re must admit:
That they have every right to insist that we outfit
them with everything they need, not through sales or
leases either, but at our own expense;
That we should deliver the supplies in our own mer-
chant vessels;
That we should send our warships to any point of
the compass where they will be most useful in Britain's
fight for us;
Indeed, that we should forthwith declare war, and
get in with everything we've got, including sending our
own young men to risk their lives alongside the youth of
Britain. Granted that it is our fight, there is only one
road to travel-and our speed down it should be deterred
only by the expedient consideration of "what will we
fight with?"
Will Congress and the American people accept the
premise from which these logical and fateful steps natur-
ally flow? Or shall we return to the conviction expressed
so often when this war started-that the British are
fighting their own war-and thereby reserve the right to
decide step by step just how far we shall go in aid to
Britain.
So far as this newspaper is concerned, we still cling
to that once popular phrase "short of war."
W. LAMOUT
SECURITY EDUCATION
consonarge HEALTH
not
JANIS
CHURCH STREET
Z8-PM
ANNE
FOR DETINSE
794%
The President
The White House
STE
Washington
D. C.
and
1/17/21
15
23 Wall Street
New York
PSF: Lamont
file ml
23 Wall Street
NewYork
December 24, 1940
Dear Mr. President:
Thank you very much for letting me come to see you. You
gave me a lot to think about, and more to do than I probably can
do. But whatever differences there may have been about domestic
affairs, I and my colleagues are heart and soul with you for
unlimited material aid to Britain and for national defense. What
little we can do to make our little influence felt, we shall do.
I pledge you that. I don't need to say to you, because you are not
a believer in myths but a realist, that we do not have and never did
have institutional, financial or political power. Such influence as
we do have is wholly personal to the individuals who make up our
board. We are scratching about to see what we can do to help in
the specific directions to which you called my attention.
Meanwhile I am perfectly delighted to see that you are
going on the air to the American people this week-end. As I said
to you, nobody can lead us but you. If you say it your own way with
your own personal magical touch, writing, as George suggested, your
own duplicate of the '33 fireside talk, you can make it so plain and
simple that we shall all follow, and the heretofore doubting Thomases
of whom you spoke will be swept away in the current of an overwhelming
public opinion.
What we need to be told is I think:
That you will not go to war, but you cannot promise that
Hitler will not make war upon us. That is for him to say. All that
2.
you can say is that no policy of cringing fear or cowardice on
our part will keep Hitler from making war upon us if it suits his
purposes, as the bitter experience of some of the excessively
neutral countries which he has overrun has demonstrated.
That the way to stay out of war is to help England stop
the war conflagration over on the other side of the Atlantic:
That the first step in national defense is to give unlimited
material aid to England. When you say "give," you mean give or
lend goods, guns, ships, planes, munitions and whatnot.
That you were talking in terms of real things when you
said you wanted to lend England things, not dollars. That you are
not interested in giving England a bank account, but in giving her
the things she needs. This is pure realism, and not merely a
technical formula. A bank account might only mean that she could
go into competition with our own procurement policies -- a com-
petition in which she must necessarily fail. That you have on the
contrary to decide what things she must have and then get them for
her. And then let the return of the things, or other things in re-
placement, await the conclusion of the war.
That although you are determined not to go to war across
either ocean, you are equally determined not to deviate one hair's
breadth from the policy of unlimited material aid to Britain which
was demanded of you by all the voters in the last election whether
they voted for you or for the opposition.
That in particular you won't deviate from that course under
threats, veiled or explicit, from the dictators across the Atlantic
3.
or from the military oligarchy across the Pacific.
That you conceive yourself to be President of the whole
people, and that as such you recognize no differences of race,
creed, color or party; no difference between capital, labor and
management; no difference between your friends and your oppponents.
That you are the leader of the whole people, and that you dedicate
yourself anew to the cause of democracy against autocracy, of
freedom against despotism, of the peaceful and law-abiding against
the aggressors.
That only by united effort of the whole American people --
an immediate, prompt and urgent effort -- in aid of England and our
own national defense, can the American way of life and freedom of
the seas be defended.
I hope you won't condemn anybody in the United States,
however much you may now disagree or disapprove of him, but offer
amnesty to all your opponents and beg their aid and support of your
great policies of aid to England and national defense in this hour
of peril of our nation and of our liberties. With my whole heart
I desire the triumph of your administration and your personal
triumph in this great cause. You are the man of the hour. The
power is yours. You have the great gift of leadership. Do not
let yourself be bogged down in administrative detail. You can
hire others to do that. Nobody can give the whole people leadership
but you. You dragged us out of economic slough in '33. You alone
can pull us as a whole people out of the defeatism and disillusion-
ment which followed as a perhaps natural reaction the excitements
4.
of the pre-election campaign or the excitements of domestic politics.
Forgive me 1f, in the excess of my zeal and enthusiasm for
the cause of which you are the leader, I have talked and written
too outspokenly.
I am, my dear Mr. President, with great respect,
Faithfully Releasions yours
The President
The White House
Washington, D. C. Tom has Read this and
Auggests adding a word of aid
to China, a may bobular cause,
'&`
Lamonk To PSF, the Secretariat: For Memo. the JAN from RECEIVED President's P.W.LITE 112, AM'41 HOUSE Hersmal we L
immediate
attention,
s.v.p.
E.T.Sanders
Secretary.
Jan 2 1941
Memo. from T.W.
Back President
I andead
sme that you
are The one
person who
can show Roy Jt-
The situation
in a way to
N/A
z
Memo. from T.W.L.
consince him That
all air thyland,
Constinted
administration,
crisis to To
at This are time 2
sentine. - He is
Memo. from T.W.L. 3
sympritetic Cont
is anxions yo
was realistic-
tacks asks why
a "negonation"
peace now
is accy wore
that mas a
of
4
Memo. from T.W.L.
distain beace
in 1919 Etc.
you anogn alone
can they teen him
one all $ his
powerful fress 20
with hein. I
Think
reach auxims
Memo. from T.W.L. 3 3
anow the
ansm.
+ with
9amm
UNITED
STATES
T.W.Lamont.
POSTAGE
YORK
CHURCH STREE
NEW
I/M 2
800PM
ANNEX
3 3 CENTS 3
7941
The President
The White House
Washing ton
L.C.
23 Wall Street
NewYork
PSF Lamont because
THE
Jan 10
23 Wall Street
NewYork
at
fellowed
RECEIVED Mil 741-
8 55 WHITE HOUSE
January 9, 1941
Dear Mr. President:
Thank you for your kind note received yesterday. I
thought your message on the state of the Union was superb too.
Referring to our talk when I had the honor to call
upon you with Morris Ernst: I do not know General Wood, and none
of us knows him or is in the way of seeing him. I cannot think of
anything that I or any of my colleagues could do that would do
anything but make bad matters worse.
Tom Iamont has had repeated and extended talks with
Roy Howard, and has urged upon him the importance of supporting
your policies with regard to England and national defense and
pressed upon him that he should take an early opportunity to call
upon you and learn from you at first-hand about them. I see from
the papers that Mr. Howard has indeed been to see you, and I hope
the effect has been favorable. Tom said he felt that Howard was
for aid for England and strong for our own defense and of coúrse
bitter against Hitler, but that his lack of belief in Britain's
ability ultimately to lick the Germans effected his point of view.
Tom called his attention to that hopeful expression in your December
29th speech and thought that you could talk more convincingly on
that than anybody else could.
Tom has talked with Mrs. Morrow. She has been whole-
heartedly for your program In foreign affairs but since Mr. Thite's
2.
recent unfortunate speech about his "smart trick" in setting her
up against her son-in-law, she has been, very humanly, unwilling
to appear again in a public clash with Lindbergh. I understand
that she has telegraphed you her support of your program.
George Whitney has talked with the General Motors
people more than once, and the chief people are just as much con-
cerned and they just as much deplore the Mooney articles as you do.
Mooney is an important and able man, and an opinionated one, and
the heads of the Company hate to be in the position of attempting
to censor his utterances. He seems to like to make speeches and
write articles and tell things as he sees them realistically. I
understand that he is not the slightest bit pro-German, but indeed
strongly pro-British, and was just telling what he thinks he knows
about the situation as he sees it. I understand that all the
General Motors people are enthusiastically pro-BritisH and anti-
Kazi, and much as they deplore the Mooney articles they do not
know how to deal with a very strong and able and opinionated man
who thinks he should call a spade a spade even in the hands of
Hitler. George has not dropped this subject, and is whole-heartedly
with you in regard to aid to England and national defense.
Not knowing where else to inquire about those German
films, etc., I asked John Hanes. His account of the facts was just
about as they had been told to you with this great difference,
that the films had only been shown once or twice to half a dozen
people, in each case with the very clear statement that they were
dreadful propaganda, wholly unreliable and distorted, that the
papers had not been allowed to get legitimate photographs, and had
3.
been furnished this stuff instead, and so suppressed it. The films
are not being shown around the country to groups, but were shown %
to perhaps half a dozen people here on two occasions, as of some
interest, with the full explanation that they were obviously wicked
propaganda and utterly dreadful.
I am told that there is nothing in the rumor of á
Hearst-Kennedy alliance. I don't know either man.
I wish you could send for Hanes and talk things
over. Perhaps he, who is pro-British and anti-Nazi as any one, and
who has something to do with Hearst's finances, but nothing to do
with editorial policy, could be of help to you. But this is solely
my own idea, and you will know whether it is any good.
These are just incidents. I can promise you that we
will all of us so far as we have a voice to raise be using it in
aid of your program of aid to Britain and rearmament for national
defense. We have been doing just that, both before and after
election, wherever any of us thought a word of ours would be helpful,
and we will keep it up you may be sure. Any one of us would be
glad of an opportunity, when if ever you are less pressed, to
come down and report to you, or to have from you any suggestion
of any way in which you think we can help. Te all wish you every
success in your great effort for aid to England and national defense.
I am, my dear Mr. President, with great respect
Faithfully Relevations yours
The President
The White House
R.C. Leffiguell
Washington, D. C.
PSF
file
LamonX
23 Wall Street
NewYork
January 13, 1941
Dear Mr. President:
Supplementing my letter of January 9th, I am told
that those films were brought in with the aid of the British
Embassy to be shown to our own War and Navy Departments.
Obviously these films are pure Nazi propaganda; nevertheless
they do have information of real value to our national
defense program. They have been shown from time to time to
our Army and Navy experts, and they have taken from them
such information as was considered useful. Otherwise they
have been shown only to a few intimate friends, with a
warning that they were taken by the German government and
therefore place the German position in the most favorable
light.
I am, my dear Mr. President with great respect,
Faithfully Retions yours
Effing
The President
The White House
Washington, D. C.
Drawer
BF Lamont
January 16, 1941
Dear Tom:
I am sorry indeed to hear of the loss
of your sister. I do not think I ever had a
chance to meet her but I knew John Gavit in
the early years.
In regard to Roy Howard, I had a
completely inconelusive talk but Steve Early
saw his later for a long time and I think
made Roy realize some of the rather serious
things he had said and done both in this
country and in other countries. I hope some-
thing will come of it.
As over yours,
Thomas W. Lamont, Esq.,
107 East 70th street,
New York, New York.
fdr/t
Laury 9th/941
JANII RECEIVED 42 WHITE HOUSE
107, East 70th Street
Dear mr. President
mg sister today -ruey -
anhappily I lost my
the wife 8 Joan Falmer
Eaint who mos an action
fournalist in the years
goneby. the Relped
mother me
a live my @ shall
miss her sorely.
When Ireturn from Ilmisa
where She funeral is to
he held Ithall Bentare
21 seall you Shighan ,
pr after works smok
INCT
straggestion will Any
Honsed see the light?
57
PSF Gen Corres
Lamont Drawn 3
copy
February 12, 1941.
Dear Tom:
Thank you for that interesting
memorandum. I am following it up.
I ean glad you and I occupy the
same "dog-house" in respect to Roy Howard --
the little pipsqueak -- and Hugh Johnson,
who is very properly called "that disgust-
ing old man" by my boy Elliott! However,
I cannot hate either of them, but I am
awfully sorry for them.
As ever yours,
Thomas W. Lamont, Esq.,
23 Wall Street,
Ne York, N.Y.
Bamont PSF SKY FARM Saturday An
NORTH HAVEN, MAINE
Dear in President
I accuratime A say
that of Dn cauld Tree the
American people about
mat hunday service on
The Anice of males that
in the same moving
terms Im fred me,
is mould haur a
strong Effect in keeping
The Isocationists
quiet. To me t that
powerpe gicture.
very impression, a my
I ana bit concerned
when Ketsome beal paper
mintioned that that Shapped
ant Asee 2m last soming It
goss with as Saging that I had
ad contackat king hime
with any new spaph. But
suppose that fonebry in to
scarsq care dashing our
here may harr been me.
no partienlar harm, I
suppose, but I womed at
have Im think I about
your about hapitaliz -by Leabbing
& nod luch congrapheations
again montinful
Strategy Injury Faithful
Thmas Waucont Thmas Laucont
Min Canco
3-41
In
secy 4th Prisider
U.S.S. Phomac
Form T.W.(amont)
PSF Lamont fillerenting
THE WHITE HOUSE
WASHINGTON
February 12, 1941.
MEMORANDUM FOR
THE SECRETARY OF STATE
For your eyes only.
Please read and return.
F. D. R.
thanks understing.
CH
2/ Therefor when the attached
Jeby 8. 441
confidential memo. reached
YEAMANS HALL
CHARLESTON
SOUTH CAROLINA
methis morning, Jat
Hear In. Amixent
a you
Kunark S me, norman
Im may not
THE Ff811 WHITE HOUS. WHITE 8 855AM21 HOUS. 5> "4"
who is here accorring
that in the cause of
apeed
the taek an The which
with me Dhet I should
Honse, Endg November,
forward mememo. to
(when came 0032
fun pr June information
outhe Hooor food
and that f secy Hull.
the memo. came an
me Shat Spain mes
cambaign) you Fold
by chipper the other day.
The most deshtale
It is from Harry wathins,
of all the poor countries.
one the pretners
secy Hull and Nowan
mazha St bil sparis,
Dan's likense agreed.
3/ and the "a" whois men- 41 math
timed is alourua, Hulls-
figures quin seem made
fee's 2
up with care and anthons.
in the madrid 200't al.
in madia
burna, it seems, has long
was naturals talking to
been kunn Am people
good,
mathing hardheadedited a
in Paris, having formers
been are meine you Baule
with the madrid foor hight
f spain They regard him
result in Kincing the
as a capable and Fmst-
figures somewhet.
memend is addressed
writing man.
another member
the memo. contains, in all
/ mayon the now in this
probability m nothing new topm
whe rpt, but if is int.
cauntry. none us has
matters, and fince
my interest in Lpanish Paris
plant bath from one insiness
cresting in that it is a
mys received the Paris
have has inatically
Later
formerly
alburna mas in charge
YEAMANS HALL
CHARLESTON
SOUTH CAROLINA
8 stains
grign business, in- -
VI ceased doing business.
chinaj control of €-
Thope 0 return hornan
change are people
in a tew days in acter
chanld # nat be
shape Than when he came
ginerally quoted ast
down. = I am Thill in The
This talk, of course.
Roy Howard dog house,
2wr
and Hugh Johnson the
Iama mee freem, The
all ml on she Lease- -
Lend Bill
Smarery
manor W.Lamank
9707
Gen Casses
stamont Jon
Feby 8, 1941.
COPY
Yeamans Hall
Charleston
South Carolina
Dear Mr. President -
You may not recall that in the course of the talk
at the White House, end, of November, (when I came over
on the Hoover food campaign) you told me that Spain was
the most destitute of all the poor countries. Secy Hull
and Norman Davis likewise agreed. Therefore when the
attached confidential memo reached me this morning, I
at once recalled your remark to me. Norman, who is here
recovering from the flu, agreed with me that I should
forward the memo to you for your information and that of
Secy Hull.
The memo came over by clipper the other day. It is
from Harry Watkins, one of the partners of Morgan et Cie.
of Paris, and the "A" who is mentioned is Alburna, Under
Secy of Commerce and Industry in the Madrid Gov't. Alburna,
it seems, has long been known to our people in Paris, hav-
ing formerly been an official of the Bank of Spain. They
regard him as a capable and trustworthy man.
The memo contains, in all probability, nothing new to
to
you or/the Dep't, but it is interesting in that it is a
plain
-2-
plain talk from one business man to another, and the
figures given seem made up with care and authority.
Our Ambassador in Madrid wasnaturally talking to Watkins
guardedly. A good, hardheaded trade with the Madrid
Gov't might result in reducing the figures somewhat.
The memo is addressed to N. D. Jay, another member
of Morgan et Cie., now in this country. None of us has
any interest in Spanish matters, and since Paris was oc-
cupied, the Paris house has practically ceased doing busi-
ness.
I hope to return Norman in a few days in better shape
than when he came down. I am still in Roy Howard's dog-
house, and Hugh Johnson says I am a nice fellow, but all
wet on the Lease-Lend Bill.
Sincerely and respectfully yrs,
THOMAS W. LAMONT
Later
Alburna was in charge of the Bank of Spain's foreign
business, including control of exchange - our people
should not be generally quoted as to this talk, of course.
T.W.L.
Memorandum for N. D. Jay:
Re: Madrid
I telephoned Mr. A. when I got to Madrid on January
23rd and he asked me to come right around and see him at The
Ministry of Commerce and Industry. When I arrived he told me
he wanted to discuss the trade position with America. He said
they did not think the Ambassador or the Commercial Attache
understood their pressing needs and that the latter was not
qualified to deal with the problem.
Spain, he said, at the present time has to have food
from either the U.S.A. or Germany. They are in an extremely
delicate position vis a vis the Germans, with troops on their
northern border, and they are doing what they can to stave them
off. The Germans wish to buy more than their normal past pur-
chases particularly of olive oil and mercury against wheat, but
the Spaniards have so far refused. Every day they inquire for
some product or other. The Spaniards however would like to make
a trade agreement involving a credit with the U.S.A. if only in
order to keep their independence, as they expect the Germans
will ask a good deal more than trade for anything that may done.
Later A. told me the Germans are afraid that America will do
something for Spain, and after my visit he had had a call from
the German Embassy to inquire whether we were going to offer
them a bank credit. Of course, he said a bank credit was out
of the question. Incidentally A. stated that when the news
-2-
came out of the small shipment of wheat from America, the
Germans countered through their propaganda bureau with the
announcement that they would buy no foodstuffs in Spain.
A. stated that all they wanted was current materials
and foodstuffs and that there was no question of stocking and
no opportunity to do 80, The English would agree to give
Navicerts for anything purchased, and in fact, would endorse
anything we would do for them. He emphasized that the need
was very pressing which our embassy did not seem to under-
stand--the matter could not even wait a month before some-
thing had to be done one way or the other.
He also said the Germans wanted to control or in-
fluence Spain on account of the indirect control it would
give them in South America.
We were to lunch the next day at which time he would
give me figures, and meanwhile, I told him I was going to
call on our Ambassador.
The Ambassador received me cordially, and talked
about a variety of subjects.
He told me he thought we would eventually do some-
thing to help Spain whose need he admitted was pressing, but
I did not think he had anything quick in mind. In fact, I
had definitely the impression that he was cautious in view of
attacks at home which he said would arise in view of American
sympathy for the Red cause in the Civil War and the fact that
Spain was a dictatorship. He emphasized the indirect attacks
on him by Bromfield and Hemingway.
-3-
The following day I had lunch with A. and another
official of the Ministry.
At the present time the wheat situation is as
follows:
Normal production
4,000,000 tons
Monthly consumption
300,000 tons
Stocks
-
The new crop will be available only in the month
of July; meanwhile, all the Spanish merchant fleet of 70
ships is in the Argentine where they are loading corn flour
which they can mix with wheat. They are to c arry:
December
25,000 tons
(These figures may be
January
40,000 tons
for Argentine wheat
February
50,000 tons
in addition.)
They need immediately 500,000 tons of wheat from us (or the
Germans) which at $3 a ton makes $15,000,000. They need
in addition in 1941:
Petrol
$10,000,000
Trucks
5,000,000
Tractors
2,000,000
Cotton
)
Purchases from Eng.
)
18,000,000
Misc. including
)
freights
)
Total
$50,000,000
He said these products were absolutely for pressing
current needs. The wheat for instance in total, over period
of shipment is less than two months normal consumption. The
trucks and tractors the Germans would not want or need. They
also need fertilizer, its lack last year being the cause of
the crop failure. I think he said they needed 360,000 tons
-4-
of sulphate of amonia of which they have now no stocks and
a substantial quantity of Chilean nitrate--120,000 tons of
which they now have 44,000 tons. In any eventneither pro-
duct could come from America.
To pay for their purchases, they could give, fairly
rapidly in 1941, mercury which the Germans inquire for
regularly for
$ 5,000,000
They could also give olive oil in 1941 for
nearly
20,000,000
To do so, however, they would have to import a
similar amount of peanut oil at 1/3 the price.
Potash, zinc (and balance after 1941)
25,000,000
$50,000,000
These figures are all approximate as he said. There
was no reason to come to fine, points until or unless principle
was established. Meanwhile it is becoming more difficult each
day to hold off the Germans. He repeated the story Bunny told
us of 15,000 tons of wheat for neutrality as an example of how
little we Americans understood what they were up against, and
said he hoped something could be done right away, with which
the English would be wholly in accord. He said Spain's in-
terest logically could only be to remain neutral, and indepen-
dent of the Germans. A trade agreement with us would enable
them to say that this or that was reserved under their agree-
ment with us and refuse sale. He also said that the announce-
ment of food from America was excellent propaganda to counter-
act the strong German propaganda in the country.
H. A. W.
PSF:1 1 Happy
Drae m. Prese dent
file al fullsonal
arriving here for a few
days. Tmotord orm to
hantra with myron
Iaylor Heio
years improved is
confident That throat
pthe Franble-persistent
Gall stones- - has been
remond. Hehad lost
a lat might sile but he
lookla prelly Hehas
Dr carefre in his diet,
audin planty of KRT.
hardly 30ck off the place
as get
The Jupiter Island Club
Hobe Sound, Florida
2/ Myronx Itatted chant the
concerence that Fairless and
Rhil murray had ar Pits-
burg on Thursday. myron
also, as junknow, believes
as do that some can-
cession can be made - pro-
sided it is put on the
basis of apremium, as he
calls & Day to be can-
Imued if production
is maintained @ 85% or
mne. Inving Geds Rold
me on the phone that
m shurstay Inurray ruled
ont. Out 2 hope
also sent you a memo.
covering the discussion,
of me I regard it as im- -
penkant- especials in vew
of these Current strikes that
people like usskee, whome
otrong for callectin bargin-
me linions,
Im continued connsel and
should hnor The benefit 7
suggestions.
note The Ingreations in
The mashing ton Spotches sithall
This morning of na midiation
Representation of capital and
f lebual
leter as remmans the
confidence of all concerned,
and Leb up so asd or
able to deliberati and mor
+ this shikes
me as agrad idea,
naksme whether the prest
mechanism under Existing
law is glared ract
promptly. Place dourt bother
shis. dong
etarted and rogir In the
good repork abant Myron,
pr DoliRitons. skam that mare
but muel respect
Sincerely Jano
Inmas W.Lamant
Bike country is heing steadily unified
Bres cortonals from all com, can -
mendry metand of A topport for the
administration in Sience this.
fillal 16th Daby BH
Gen Carres
Lamout
PSF
107, East 70th Street
Lamont
= Referring to
one telephone Salle of lawnight
2 am glad whan you say
you will hee alose Fairless
this mrle. the Earlier the
better ! you connsels will
greate aid a difficult situa-
tion June is important, be-
Cause Phil Murray's demand
Im n wag increed now Intes
back Mr some Fine, although
he hundelf days that tuel
au increase w not marranted
4 in The can
of living, aud hat he real-
ises the grave factors in-
volves in the cauntry's Seasmic
stability. you dief cause quite right
when you say tome that the
country will not pen permit
authody to start the fatal
higher prices clc, as this
spiral of higher mague, then
critical time. at perhaps
m che steel heale
myberg pat maynot BE
twise. Because if is the
that, while the basic wase
31 since R29 has risen 50%-
from 4# He etc 1062"2 ats per
hay, andreals if, yet the
worker's be-
cause & the lean years, has
bhan no such increase.
m other wonds, if fun incepermit
The Luggration 2 wond ask
acor 0 Fairless (both growth
you will find Exceedingly liberd-
minded) to tell you first in
detail just wrat Phil Monays
attitude is. And than, leand,
I world ask possible Kew His: Can
you make alleys suggestion
y
that might help share
Phils face somewhat with his
locals, and ak the same Time
wonld hot raise the deoil
with the Referse programme- -
because, as
moned be dected in like
all classes the industry
measure.
If yme visitors coned Ruggest
alley such formula that did not
strike Im actoo dangerous in
opening the door, shen I ca-
ceir the matter might be
settled Thankly I womed G
bad avreace serins.
S later dispute in a Kasic in-
restogat this 107, East 70ᵗʰ critical Street time.
Im understand that any the Arees as to people formula
aan not made then Suggestion
D ne. This is my own shought-
astomyron, hehasbeen
marorllms in all this field,
but the matter waits
a him. The surgeons have
found and that whas
had from major operations time
Each
in 211/2 pais and has zone
back & work too quickly.
her he must be allowed
aget back his strught
In this situation, Fairless is
6/ are respriend B Inurray's
qui them the elements of
comportion and Fairless and
Murry stand a better chance
purshane ant the situation man
any one use.
Sincerely mus
Rd that long have, matty that I ong-
q sted there to lots of time. But
2 should like tosel it work mr
sother,
without
keeping the country
onty Has, you had yet months
peace M the cauntry and fr
the world!
PSF: Lamont Mexicones
filmed file
meh 16 3-41
YEAMANS HALL 141
CHARLESTON
SOUTH CAROLINA
arai III. President
Last night I listened
DER the radio with
year extisfaction
Jone Firm ad-
drss. I am cotain
that its moniyterms
will appeal Dall
Jnu countrymen, and
that the dictates will
wards Don't of
a bit and take notice.
I am interestro to
2/ note, for the preso,
the development
your ideas astocator
mediation This is
allothe Eard. Shy-
seef than yno im.
players -although I
suppose there must be
some - who will fail
so recopnize the just
demands flabor f and
them. Loon makes a
doringthing Imeet
bit f Inistater Some-
mon Shan it Lepech
fined in demanding
loget. Buthat is
of
In cannection with this
or rey Ther matter, the
ym, m. Priduct, that
I hardly here to ablue
ym can commanding
action coopuration
auf services may in any
with best wishes
have Ins
Thousas
Highest southm ANY End
This mrk.
PSFiLamont "X" Gen.corres
Memo. from T.W.L.
3-41
April 8, 1941
file." confidental
Dear Mr. President:
Here is a letter I
wrote today to Eichelberger of the
Committee to Defend America by Aiding
the Allies following up a talk I had
with him. I am very glad that Senator
Gibson is going to see you soon. That
other approach to the question which you
touched upon over the telephone Sunday
night appeals strongly to me.
With great respect,
comoon
Sincerely yours,
The President,
The White House,
Washington, D. C.
Enclosure
PSFiagmont
April 8, 1941
Dear Mr. Bichelberger:
In general you know how highly I consider the work of the
Committee To Defend America by Aiding the Allies. During the entire inception
and progress of the Lend-Lease Bill that Committee did yearsan service for its
country; well supplementing the effort which its predecessor committee under
William Allen White did in the autumn of 1939 when the Administration was
endeavoring to lift the embargo against Allied purchases here. Because of my
high esteem for the value of the Committee's work and for its personnel, you
will forgive no if I emphasise the point that I made as to the importance (in
my mind) of not waving too much the provocative slogan of immediate "Convoys".
The question of convoys is & highly technical one. It sounds
simple as A, B, C, but it is anything but that. I want just as much as anybody
does to see the Administration take steps that will result in one way or another
in delivery to England of the all-important supplies for Britain. But I still
think that it is for the Administration, and not for us private individuals, to
declare how those purposes shall be carried out. They have the know how and WO haven't.
Now, you take the President himself: He must be particularly interested
in this whole question. And he is in a position, as no one of us is, to know what
"convoy" means and whether that red flag is the one to wave at the country at this
particular minute. I take note very carefully that no expression about convoys per
se has fallen publicly from his lips or from those of Secretary Hull.
The President since his college days, as I see it, has taken a
prodigious interest in nautical and naval matters. They have been his specialty.
He was virtually Secretary of the Navy for eight years, 1913-1921, and has never
lost interest in the technique as well as in general policies. Why not let him
decide the convoy question?
Senators Wheeler and Nye are rearing around the country under the
banner' of the America First Committee making a campaign which, whether effective
or not, is rendered much more virulent on their part by being able to wave this
convoy advocacy made by your Comittee. I don't think the country west of the
Alleghenies is ready at this moment to swallow whole the convoy system. I think,
on the other hand, that they will follow the President in whatever measures he may
devise carefully and prudently to attain the enda that we all want. You say that
Senator ibson 1s going to see the President soon. I an sure the Senator will get
first-class counsel from him.
Sincerely yours,
(Signed) Thomas W. Lamont
Clark M. Bichelberger, Esq.,
Committee To Defend America
by Aiding the Allios,
8 West 40th Street,
New York City.
\
THE WHITE HOUSE
WASHINGTON
October 27, 1941.
MEMORANDUM FOR THE PRESIDENT:
Thomas W. Lamont 'phoned
from New York and dictated the
attached memorandum to
Eum I ,E.M.W.
PSF
3-41
THE WHITE HOUSE
Lamont
WASHINGTON
October 27, 1941.
MEMORANDUM FOR THE PRESIDENT:
I am wondering how much this clamor for British in-
vasion of the Continent is bothering the British Government.
You would of course know. From the outside evidence it
would seem to be especially overstaged by the Labor people
and some of their Communist hangers-on.
I can't help wondering whether Mr. Churchill might not
welcome a letter from you which he could make public, to the
general effect that American industry was rushing ahead in
the Defense Program and was turning out in large quantities
munitions, tanks, airplanes, etc., especially allocated for
British\defense purposes all over the world; that American
laborers who had a clear recognition of the issues of the
War were doing their best to see to it that this vast quan-
tity of equipment is reaching Britain (and Russia and
China) in time to avail.
Meanwhile, however, it would be most unfortunate for
the American working men to get the idea that large quanti-
ties of equipment upon which they were working might be
destroyed and wasted in the event that the British high com-
mand were in any way to yield its best judgment to public
clamor on the part of patriotic but uninformed groups; that
this was a delicate matter and perhaps it would have been
more prudent for you to refrain from acquainting Mr. Churchill
with the impression recently created here by the public meet-
ings in England: Nevertheless, you thought he should have
this information from America for what it is worth.
I guess there is nothing in this and more likely your
advices from Mr. Churchill are to the effect that they are
not really bothered as much as they seem, and are merely
letting these people shoot off their heads a la the usual
Hyde Park style. But I send this line along just in case.
Respectfully,
T. W.
MEMO FOR DOROTHY JONES:
STE saw and said to return to you.
Alice Winegar
October 5, 1942.
file
STE
Will you read a
return for my confidential
files ? 20R
COPY
New York
Memo
Sept. 16, 1942
PSF La Lamiont gen 3-42 Cores-"L"
Dear Mr. President:
The last time that I was at the White House I showed you some
figures of newspaper advertising that had some interest for you.
Attached are similar tables through July. In the country at large
the Chicago Tribune and the New York News continue to show the
heavicat losses, the the Milwoukee Journal is a close third.
Here also is a table as to New York City advertising. World
Telegram and Sun show the biggest losses. Times and Herald Tribune
keep up, partly because they are wise enough to run immenso amount
of so-called "Classified Advertisements" -- that is to say "want" ads,
real estate for sale, apartments wanted, help wanted, etc. Lest
Sunday the Times had 26 full pages - a whole section of "Classified
Advertisements".
I hada chat with Joe Grew at the Harvard Club on Monday: He
said you were in expert form and I rejoiced to hear it. Forgive
this hasty scrawl. Do not feel that you must acknowledge it.
Respectfully yours,
/s/ THOMAS TV. LAMONT
COPY
New York
Memo
Sept. 16, 1942
Dear Mr. President:
The last time that I was at the White House I showed you some
figures of newspaper advertising that had some interest for you.
Attached are similar tables through July. In the country at large
the Chlcago Tribune and the New York News continue to show the
heaviest losses, tho' the Milwaukee Journal is a close third.
Here also is & table as to New York City advertising. World
Telegram and Sun show the biggest losses. Times and Herald Tribune
keep up, partly because they are wise enough to run immense amount
of so-called "Classified Advertisements" - that is to say "want" ads,
real estate for sale, apartments wanted, help wanted, etc. Last
Sunday the Times had 26 full pages a whole section of "Classified
Advertisements".
I had achat with Joe Grew at the Harvard Club on Monday. He
said you were in expert form and I rejoiced to hear it. Forgive
this hasty scrawl. Do not feel that you must acknowledge it.
Respectfully yours,
/s/ THOMAS W. LAMONT
memo-
dept nevance DEIVED 16th 2
the last time that
was ax the while House
showed you some figures
8 newspaper advertising
That had some interest
In you attached are
smila Tables through
& mshe country as
large she Chiago Inclune
and me new york news
continue The Leavest
losses, The The
me is a close thing
Here also ^ is a table ast
newyork as and mode-
show
the ajgror losses. Junes
# Негаеб Frienne Keepo up,
parts because They are
msd Smargh to run an
internal amount (PTO) of
So. called "classified adountise
mints- That va (o say, "mant"
adr, recessible pr tate,
againments wanted, help
mand IC. Sast hure
The 2imes had 26 Ince
pages whol sestion &
designed Arvertisements_
shad a chat with for
Rew at the Harvard case m
montay Hesaid you are
in supert formand
rejoiced sharit. surgier
This Lasty Derawe Donal
first matyou must
accurated it.
have ruspectine) go
Mames Co Lawart
THE FOLLOWING ARE THE TEN LEADING NEWSPAPERS IN TOTAL ADVERTISING
SEVEN MONTHS JANUARY lat CO JULY 31st, 1942 .. 2941
POS, POS.
MONTHS
1942 1941
1942
1941
GAIN OR LOSS
N
WASHINGTON STAR
1
1
12,846,253
13,602,043
755,790 L
5.56
DETROIT NEWS
2
3
11,713,849
11,952,367
238,518 L
2.00
SALTIMORE SUN
3
4
11,544,932
11,793,612
248.880 L
2.11
THE 150 YORK TIMES
+
6
11,246,418
11,598,618
352,200 L
3.04
MILNAUKEE JOURNAL
a
a
10,588,478
11,707,494
1,119,016 L
9-56
CHICAGO TRIBUNE
6
4
10,400,685
12,105,054
1,704,169 L
14.08
PHILADELPHIA INQUIRER
1
11
9,931,743
9 492,391
439,352
463
AKHON FRAGUE-JOURNAL
8
J.O
9,518,816
9 883,404
364,528 L
5.69
PITISBURCH PRESS
y
B
9,502,964
10,265,864
62,900 L
7.43
LEW YORK TENS
10
7
9,432,204
10,467,8%8
1,035,6% L.
9.89
Memorandum for Mr -nurracy T. W. Lamont
September 11, 1942
The latest advertising linage figures showed a
continuation of earlier trends, with Times and Herald Tribune
improving their relative positions slightly.
World Telegram, Sun, and News continue their bad
showing.
The amount of classified advertising has increased
sharply since last year, this being the only field that shows
startling improvement. It is a curious fact that the World
Telegram seems to have thrown this bread and butter business
out of the window. But the Sun has not picked up what its
competitor has lost. Instead, Times, Herald Tribune, and
Journal American show the gains.
R. G. W.
ADVERTISING LINAGE COMPARISON - ALL NEW YORK NEWSPAPERS
(8 Months)
JANUARY TO AUGUST 1942 - 1941
TOTAL ADVERTISING
X of Field
GAIN OR LOSS
1942
1941
1942
1941
1940
OVER 1941
X
TIMES
22.40
21.27
12,927,808
13,080,824
13,037,169
153,016 L.
1.17
H.TRIBUNE
15.94
15.61
9,201,914
9,598,888
9,448,839
396,974 L.
4.14
NEYS
18.53
19.08
10,693,292
11,732,360
11,873,355
039,068 L.
8.80
MIRROR
6.76
6.24
3,903,489
3,838,795
3,577,844
54,694 o.
1.69
J.AMERICAN
11.53
11.05
6,655,655
6,795,071
6,696,093
139,416 L.
2.05
POST
5.66
5.71
3,264,046
3,514,738
3,224,867
250,692 L.
7.13
SUN
10.04
10.66
5,791,607
6,556,486
6,615,288
764,879 L.
11.67
WORLD-TELE.
9.14
10.38
5,276,161
6,387,203
6,482,356
,111,042 L.
17.39
RETAIL ADVERTISING
TIMES
17.46
17.11
6,217,231
6,393,424
6,453,515
176,193 L.
2.76
H.TRIBUNE
13,45
13.35
4,789,822
4,986,919
4,902,908
197,097 L.
3.95
NEWS
24.28
25.23
8,647,318
9,427,051
9,446,140
779,733 L.
8.27
MIRROR
7.29
6.64
2,595,926
2,480,189
2,266,259
115,737 G.
4.67
J.AMERICAN
8.04
7.75
2,863,680
2,894,213
2,960,634
30,533 L.
1.05
POST
6.69
6.40
2,383,846
2,391,817
1,905,675
7,971 L.
.33
SUN
12.25
12.50
4,361,143
4,669,659
4,605,924
308,516 L.
6.61
WORLD-TELE.
10.54
11.02
3,753,699
4,117,296
4,069,977
363,597 L.
8.83
GENERAL
ADVERTISING
TIMES
22.05
21.68
2,368,065
2,544,202
2,793,208
175,137 L.
6.92
H.TRIBUNE
19.36
19.02
2,079,698
2,232,254
2,416,180
152,556 L.
6.83
NEWS
14.84
13.97
1,593,519
1,639,002
1,714,283
45,483 L.
2.78
MIRROR
7.50
6.61
805,140
775,487
757,943
29,653 G.
3.62
J.AMERICAN
13.41
12.78
1,439,939
1,499,663
1,562,140
59,724 L.
3.98
POST
3.21
3.92
344,251
460,132
501,728
115,881 L.
25,18
SUN
9.66
11.43
1,037,846
1,340,844
1,400,691
302,998 L.
22.60
WORLD-TELE.
9.98
10.59
1,071,489
1,242,058
1,323,722
170,569 L.
13.73
AUTOMOTIVE
ADVERTISING
TIMES
18,94
20.21
127,841
387,388
388,702
259,547 L.
67.00
H.TRIBUNE
17.66
18.72
119,252
358,797
350,006
239,545 L.
66.76
NEWS
27.68
19.95
186,859
382,279
412,719
195,420 L.
51.12
MIRROR
3.08
3.79
20,755
72,719
66,545
51,964 L.
71.46
J .AMERICAN
12.73
11.88
85,944
227,701
221,009
141,757 L.
62.26
POST
2.06
4.32
13,894
82,749
67,306
68,855 L.
83.21
SUN
8.79
10.20
59,359
195,382
198,887
136,023 L.
69.62
WORLD-TELE.
9.07
10.93
61,208
209,404
192,849
148,196 L.
70.77
FINANCIAL ADVERTISING
TIMES
24.21
27.72
427,133
519,526
495,328
92,393 L.
17.78
H.TRIBUNE
17.55
17.75
309,568
332,709
361,364
23,141 L.
6.96
NEWS
13.65
13.39
240,876
251,029
263,180
10,153 L.
4.04
MIRROR
8.72
7.45
153,924
139,580
142,068
14,344 G.
10.28
J .AMERICAN
8.28
9,16
146,115
171,628
165,823
25,513 L.
14.87
POST
5.69
4.57
100,309
85,577
100,996
14,732 G.
17.21
SUN
12.02
10.86
212,095
203,617
246,164
8,478 G.
4.16
WORLD-TELE.
9.88
9.11
174,338
170,830
198,849
3,508 G.
2.05
CLASSIFIED
ADVERTISING
TIMES
42.65
37.65
3,767,461
3,209,017
2,864,930
558,444 G.
17.40
H.TRIBUNE
21.37
19.67
1,887,972
1,676,217
1,397,241
211,755 G.
12.63
NEWS
.27
.38
24,216
32,330
35,730
8,114 L.
25.10
MIRROR
3.68
4.34
324,635
369,775
342,222
45,140
L.
12.21
J ...MERICAN
23.98
23.48
2,118,281
2,000,723
1,782,801
117,558 G,
5.88
POST
4.29
5.23
379,152
445,388
574,939
66,236 L.
14.87
SUN
1.34
1.70
118,600
144,996
160,206
26,396 L, 18.20
WORLD-TELE.
2.41
7.55
212,486
643,764
702,014
431,298 L. 66.99