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
28276710
label
Volume 408, June 13 – June 14, 1941
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
28276710
sourceUrl
contentType
document
title
Volume 408, June 13 – June 14, 1941
citationUrl
collections
Henry Morgenthau, Jr. Papers
Diaries of Henry Morgenthau, Jr.
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
28276710
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
d549e25d58769f81
ocrText
DIARY
Book 408
June 13 and 14, 1941
- A -
Book Page
Agriculture
See Revenue Revision
American Viscose Corporation
See War Conditions: Purchasing Mission
Amherst College
See Speeches by HMJr
- C -
Civilian Conservation Corps
For refunding of issues maturing on August 1, 1941,
see Financing, Government
- D -
Defense Savings Bonds
See Financing, Government
- E -
Eire (Ireland)
See War Conditions: Shipping
- 1 -
Federal Housing Administration
For reduction in loans from present level of 90% to
former level of B0% of cost of home, 500
Financing, Government
Financing, Government
Federal Housing Administration loans: HMJr, Jones,
Bell, Foley, and White discuss proposal to reduce
from present level of 90% to former level of 80%
of cost of home - 6/13/41
408
5
Reconstruction Finance Corporation and Civilian
Conservation Corps: Four tables prepared by Hass
to be used in connection with refunding of issues
maturing on July 20, 1941, and August 1, 1941,
respectively - 6/13/41
6
Defense Savings Bonds:
Lucky Strike program featuring Berlin (Irving)
song and talk by HMJr: Callahan memorandum -
6/13/41
72
Josten (Werner) to compose march with Sandburg
(Carl) to compose lyrics - - 6/13/41
74
Field Organization News Letter, No. 4 - 6/14/41
239
France
For sale of French paintings in United States, ...
War Conditions: Foreign Funds Control
See also War Conditions: Purchasing Mission
Regraded Uclassified
- G -
Book Page
General Counsel, Office of
Report on projects during May 1941
408
97
- H - -
Housing
Federal Housing Administration loans: For reduction
from present level of 90% to former level of 80%
of cost of home, see Financing, Government
- I -
Ireland (Eire)
See War Conditions: Shipping (Eire)
- J -
Josten, Werner
See Financing, Government: Defense Savings Bonds
- M -
Masterpieces
See War Conditions: Foreign Funds Control
Morgenthau, Robert
At graduation from Amherst on June 14, 1941, HMJr
delivers speech at alumni luncheon
212
- P -
Paintings
See War Conditions: Foreign Funds Control
Pictures
See War Conditions: Foreign Funds Control
Price Control
See War Conditions
R$ . I
Reconstruction Finance Corporation
For refunding of issues maturing on July 20, 1941,
see Financing, Government
Revenue Revision
Farmers filing income tax returns: Helvering reports
on - 6/13/41
69
Regraded Uclassified
- 8 -
Book Page
Sandburg, Carl
See Financing, Government: Defense Savings Bonds
Shipping
See War Conditions
Speeches by HMJr
At Amherst College alumni luncheon - 6/14/41
408
212
(See also Book 406)
a) FDR congratulates HMJr - 6/16/41:
Book 409, page 67
b) Mail report (Forbush) - 6/18/41:
Book 410, page 40
Stabilisation Fund
HMJr's testimony before Senate Banking and Currency
Committee - 6/13/41
12
Statements by HMJr
Stabilisation Fund: Testimony before Senate Banking
and Currency Committee - 6/13/41
12
- U -
U.S.S.R.
See War Conditions
United Kingdom
See War Conditions
- W -
War Conditions
Exchange market resume' - 6/13-14/41
115,268
Export Control:
Export of petroleum products, scrap iron, and scrap
steal from United States to Japan, Russia, Spain,
and Great Britain, week ending June 14, 1941
267
Foreign Funds Control:
Program for immediate action with respect to foreign
funds control: Copy of memorandum approved by
Hull sent to HMJr by Acheson - 6/13/41
77
a) Discussion of Treasury-Federal Bureau of
Investigation jurisdiction - 6/15/41:
See Book 409, page 4
b) Executive Order and regulations, as amended,
relating to transactions in foreign exchange
and foreign-owned property, the reporting
of all foreign-owned property, and related
matters - 6/14/41
132,136
c) Discussion by Treasury and State Department
groups and Stopford - 6/16/41: Book 409, page 21
1) HMJr-Biddle conversation: Book 409, page 46
2) Proposed instructions for Federal Reserve
Banks as drawn up by Foley: Book 409, page 44
3) Comptroller of Currency reports 59 men
engaged in carrying out freezing order in
New York City: also reports on Chicago:
Book 409, pages 50, 51, 52, 53, and 55
d) FDR signs over-all Order June 14, 1941
1) See Foley discussion in Book 411, page 212
Continental European assets in United States as of
6/14/41
148
Regraded Uclassified
- Y - (Continued)
Book Page
War Conditions (Continued)
Foreign Funds Control (Continued):
Paintings (French): Sale of in United States
discussed in Cochran memorandum - 6/14/41
408
130
Military Planning:
Reports from London transmitted by Halifax -
6/13/41
116,119
War Department bulletin:
German artillery and armored vehicles -
British notes on - 6/13/41
121
Price Control:
Minutes of June 11 meeting
253
a) Discussion of
1) 011
2) Requisitioning bill
3) Automobile price situation
4) Hide schedule
5) Copper
6) Rabbit fur
7) Coffee
8) Tariffs - suspension of
9) Jute and cenaburg containers
10) Steel - allocation of
Cork - civilian allocation program
258
Iron and steel products - civilian allocation of
261,262
Railroad frieght care - civilian allocation
program for material
264
Purchasing Mission:
American Viscose Corporation:
McCain (Dillon Read and Company) thanks HMJr for
"courtesy and consideration during
negotiations" - 6/13/41
11
Courtald directors' statement issued to
shareholders - 6/14/41
236
"$1,000,000 refund for British sought; offering
such a success it warrants cut in underwriting
profit" - New York Times article - 6/20/41:
See Book 411, page 24
a) Stanley-HMJr conversation concerning
article: Book 411, page 74
Federal Reserve Bank of New York statement showing
dollar disbursements, week ending June 4, 1941 -
6/13/41
87
Lend-Lease purchases, week ending June 13, 1941
92
French assets and contracts after collapse
discussed in Phillips memorandum - 6/14/41
233
Shipping:
Eire (Ireland):
Purchase of two American ships discussed in
Cochran memorandum - 6/14/41
149
U.S.S.R.:
Amtorg disbursements, January 1, 1941-April 30, 1941
75
Regraded Uclassified
1
TREASURY DEPARTMENT
Washington
FOR RELEASE, MORNING NEWSPAPERS,
Friday, June 13, 1941.
6/12/41
The Secretary of the Treasury, by this public notice, invites tenders
for $200,000,000, or thereabouts, of 91-day Treasury bills, to be issued on A
discount basis under competitive bidding. The bills of this series will be
dated June 18, 1941, and will maturo September 17, 1941, when the face amount
will be payable without interest. They will be issued in bearer form only,
and in denominations of $1,000, $5,000, $10,000, $100,000, $500,000, and
$1,000,000 (maturity value).
Tenders will be received at Federal Reserve Banks and Branches up to
the closing hour, two o'clock P. m., Eastern Standard time, Monday, June 16, 1941.
Tenders will not be received at the Treasury Department, Washington. Each tender
must be for an even multiple of $1,000, and the price offered must be expressed
on the basis of 100, with not more than three decimals, 6. 6., 99.925. Fractions
may not be used. It in urged that tendors be made on the printed forms and for-
warded in the special envelopes which will be supplied by Federal Reserve Banks
or Branches on application therefor.
Tonders will be received without deposit from incorporated banks and
trust companies and from responsible and recognized dealors in invostment securi-
ties. Tondors from others must be accompanied by payment of 10 percent of the
face amount of Treasury bills Appliod for, unless the tenders are uccompanied by
an express guaranty of payment by an incorporated bank or trust company.
25-79
Regraded Uclassified
2
- 2 -
Immodiately after the closing hour, tenders will be opened at the
Federal Reserve Banks and Branchos, following which public announcement will
be mado by the Secretary of tho Treasury of the amount and price range of
accepted bids. Those submitting tendors will be advised of the acceptance or
rejection thereof. The Secrotary of the Treasury expressly reserves the right
to accept or reject any or all tondors, in whole or in part, and his action in
any such respect shall be final. Payment of accepted tonders at the prices
offered must bo mndo or completed st the Federal Reserve Bank in each or other
immodiately available funds on Juno 18, 1941.
Tho incomo dorived from Treasury bills, whether interest or gain from
the sale or other disposition of the bills, shall not have any exemption, BS
such, and loss from the salo or other disposition of Troasury bills shall not
have any special treatment, as such, under Federal tax Acts now or hereafter
onacted. The bills shall be subject to estate, inheritance, gift, or other
excise taxos, whether Foderal or State, but shall be exempt from all taxation
now or horonftor imposed on the principal or interest theroof by any State, or
any of the possessions of the United Statos, or by any local taxing authority.
For purposes of taxation the amount of discount nt which Tronsury bills are
originally sold by the United States shall be considered to be interest.
Trensury Department Circular No. 418, as amonded, and this notice,
proscribo the torms of the Treasury bills and govern the conditions of thoir
issuo. Copies of the circular may be obtained from any Federal Reserve Bank
or Brunch.
- o0o -
Regraded Uclassified
3
June 13, 1941
9:02 a.m.
HMJr:
Hello.
Operator:
Mr. Graves.
HMJr:
Hello.
Harold
Graves:
Hello, sir.
HMJr:
Harold?
G:
Yes sir.
HMJr:
I'm sending in to you Tom Stokes'
article last night on Florida
procurement.
G:
Yes.
HMJr:
Just for the matter of safety I
don't know who - whether we
have one man who does our buying
down there for Florida or whether
he covers several states.
G:
Just one.
HMJr:
Well, just give it the once over,
will you?
G:
Yes sir.
HMJr:
Right away?
G:
Yes sir.
HMJr:
And look into all the contracts
that they have been letting -
you know I'd just give it a check,
make sure we don't get caught.
G:
Sure, I'll take care of it. He's
had some trouble that I happen to
know about down there.
Regraded Uclassified
4
- 2 -
HMJr:
Well, I got that one report
about that one thing and we
were all right on that.
G:
Yeah, we were.
HMJr:
But I don't know whether there are
other things- and I don't know
whether the man who does our
buying was put in there by Pepper
or not.
G:
I don't either, but I'm inclined
to think not. I think he's a -
he WRS there before Pepper became
Senator, but I'll
HMJr:
Anyway, I think I'd have the office
give it the once over.
G:
I'll do it.
HMJr:
I'd do it right away.
G:
Yes sir. Would you like me to
be in there at 9:30?
HMJr:
9:30?
G:
Colonel Donovan 1s coming in as
I understand.
HMJr:
I tell you - he wants to tell me
something about the President first.
G:
Surely, well I'll stand by.
HMJr:
You stand by.
G:
Fine. Goodbye.
Regraded Uclassified
5
June 13, 1941.
ME'MORAN DUM FOR THE SECRETARY'S RECORD
Meeting in Secretary Morgenthau's Office
Tuesday, June 10, 1941
Present: Secretary Morgenthau, Secretary Jones,
Mr. Bell, Mr. Foley, Mr. White
After discussion re handling of liquidation of British asseta
in this country (described in report by Mr. Cochran) Mr. Morgenthau
asked Mr. Jones what Mr. Jones would think of a proposal to reduce
FHA loans from the present level of 90 percent to the former level
of 80 percent of the cost of the home. Mr. Morgenthau stated that
the change would have the advantages of (a) causing many prospective
home builders to save more before building homes and thereby curtail
the demand for other products, (b) reducing the demand for housing
products, and (c) make possible a return to the 90 percent at some
time in the future when it would be desirable to stimulate increased
home building.
Mr. Jones said he thought it was a good idea and that he could
do it by regulation instead of by statute. He said he would talk
it over with his boys and see what could be done about it.
H. D. White
Regraded Uclassified
6
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
DATE June 13, 1941
TO
Secretary Morgenthau
FROM
Mr. Haas
I am attaching hereto four tables that may
be helpful in connection with the refunding of
the RFC and CCC issues maturing on July 20 and
August 1, respectively. These tables have been
prepared from the data received in the Treasury
survey of bank and insurance company holdings of
securities issued or guaranteed by the United
States. From the first two tables you will note
that ownership data are available for 89 percent
and 86 percent, respectively, of the total amount
of these issues outstanding. The names of the
twenty-five largest holders of each of these issues
and the amount of their holdings on May 31 appear
in Tables 3 and 4.
Attachments
Regraded Uclassified
7
Table 1
RFC 7/8 Percent Notes Maturing on July 20, 1941
Ownership of the $211.5 Millions Outstanding by
the Various Classes of Investore, April 30, 1941
(Dollar figures are millions)
: Amount : Percent of
Class of investor
: owned
:
total
1. Banks
a. 6 large N.Y.C. commercial banks
$ 91.0
43.0
b. 789 other commercial banks
88.0
41.7
C. 25 mutual savings banks
5.8
2.7
Total 820 banks
$184.8
87.4
2. Insurance companies
3.0
1.4
3. Government agencies and trust funds
.5
.2
Total for which ownership data
are available
$188.3
89.0
4. All other investors
23.2
11.0
Total amount outstanding
$211.5
100.0
Office of the Secretary of the Treasury,
Division of Research and Statistics.
June 12, 1941.
Regraded Uclassified
8
Table 2
000 5/8 Percent Notes Maturing on August 1, 1941
Ownership of the $202.6 Millions Outstanding by
the Various Classes of Investors, April 30, 1941
(Dollar figures are millions)
Class of investor
: Amount : Percent of
: owned : total
1. Banks
a. 7 large N.Y.C. commercial banks
$ 39.4
19.4
b. 1,044 other commercial banks
101.7
50.2
C. 29 mutual savings banks
4.8
2.4
Total 1,080 banks
$145.9
72.0
2. Insurance companies
28.4
14.0
Total for which ownership data
are available 1/.
$174.3
86.0
3. All other investors
28.3
14.0
Total amount outstanding
$202.6
100.0
Office of the Secretary of the Treasury,
Division of Research and Statistics.
June 12, 1941.
1/
Government agencies and trust funds do not own
any of this issue.
STRICTLY CONFIDENTIAL
Table 3
9
RFC 7/8 Percent Notes Maturing on July 20, 1941
Amount Owned on May 31, 1941 by the Twenty-Five
Largest Holders Reporting to the Treasury
(In millions of dollars)
Guaranty Trust Oo., New York
75.4
National Bank of Detroit, Michigan
6.4
Bank of Manhattan Co., New York
6.0
Irving Trust Co., New York.
5.0
Bankers Trust Co., New York
3.5
City National Bank & Trust, Chicago
3.1
Brown Brothers Harrimen & Co., New York,
3.1
Union Trust Co. of Pittsburgh
3.1
Colorado National Bank, Denver
2.8
First National Bank, Boston, Mass
2.7
Riggs National Bank, Washington, D. C
2.5
Cleveland Trust Co., Cleveland, Ohio
2.5
First National Bank, Shreveport, La
2.1
Camden Trust Co., Camden, N.J.
2.0
State Bank of Albany, New York
2.0
Union County Trust Co. Elizabeth, N.J.
1.6
State Planters Bank & Trust, Richmond, Vε
1.6
Fidelity Union Trust Co., Newark, N.J.
1.5
Peonles Savings Bank in Providence, R.I
1.5
Marine Midland Trust Co., New York
1.4
Bank of North Dakote, Bismarck, N.D.
1,2
First National Bank of Chicago, Chicago, Ill
1,1
First National Bank, Kansas City, Mo
1.0
Huntington National Bank, Columbus, Ohio
1.0
American Trust Co., San Francisco
1,0
Total amount owned by 25 largest holders
135.3
Total amount outstanding
221.5
Percent of total owned by 25 largest holders
64.0%
Office of the Secretary of the Treasury,
Division of Research and Statistics.
June 12, 1941
Regraded Uclassified
STRICTLY CONFIDENTIAL
Table 4
10
000 5/8 Percent Notes Maturing on August 1, 1941
Amount Owned on May 31, 1941 by the Twenty-Five
Largest Holders Reporting to the Treasury
(In millions of dollars)
Metropolitan Life Insurance Co., New York
16.0
First National Bank, New York, N.Y.
14.4
Commerce Trust Co., Kansas City, Mo
8.5
Bank of Manhattan Co., New York,
8.5
French American Banking Corp., New York, N.Y
8.1
J.P. Morgan & Co., Inc. New York
6.3
National Bank of Detroit, Detroit, Mich
6.1
Bankers Trust Co., New York
6.0
Lumbermen's Mutual Casualty Co., Chicago, Ill
4.2
Brown Brothers Harriman & Co., New York
3.2
Bank of North Dakota, Bismarck, N.D
3.1
City National Bank & Trust, Chicago
2.7
Manufecturers' Trust Co., New York
2.7
First National Bank, Boston, Mase
2.3
First National Bank of Chicago, Chicago, Ill
2.2
American Trust Co., San Francisco
2.0
First National Bank, Shreveport, La
2.0
The Detroit Bank, Detroit, Mich,
1.9
New York Life Ins. Co., Madison Square, New York
1.8
Anglo-Celifornia National Bank, San Francisco
1.8
Bank of America N.T. & S.A., San Francisco
1.6
United States National Bank, Portland, Ore
1.3
First Huntington National Bank, Huntington, W.Va
1.3
Central Missouri Trust Co., Jefferson City, Mo
1.1
Providence Institution for Savings, Providence, R.I.
1.1
Total amount owned by 25 largest holders
110.2
Total amount outstanding
202.6
Percent of total owned by 25 largest holders
54.4%
Office of the Secretary of the Treasury,
Division of Research and Statistics.
June 12, 1941
Regraded Uclassified
11
COPY
28 Nassau Street
New York
June 13, 1941
The Honorable Henry Morgenthau,
Secretary of Treasury,
Washington, D.C.
My dear Mr. Secretary:
On behalf of Dillon Read & Co. and myself, I want
to express our appreciation for the courtesy and considera-
tion which you 50 unfailingly showed us during the negotia-
tions in connection with the American Viscose business.
You were most considerate of the many problems involved,
and our only regret is that we were not able to get all
of our associates to comply with your last suggestion.
We were deeply embarrassed that this was not done.
With highest personal regards, and again expressing
our appreciation, I beg to remain
Yours sincerely,
Charles S. McCain (signed)
Regraded Uclassified
12
SECRETARY'S READING COPY OF TESTIMONY
ON EXTENSION OF STABILIZATION FUND
BANKING AND CURRENCY COMMITTEE OF THE SENATE
June 13, 1941
13
On April 28, 1941, the President wrote to
the President of the Senate and to the Speaker
of the House recommending extension to June 30,
1943, of the powers relating to the
Stabilization Fund and of the power to alter
the gold content of the dollar, which powers,
under the present law, will expire on June 30,
1941. A Bill (H.R. 4646) was introduced in
the House of Representatives to accomplish
this purpose. The House passed the Bill on
May 27, 1941. I am appearing before you in
support of this B1ll.
Regraded Uclassified
14
- 2 -
When I appeared before your Committee on
March 2, 1939, to recommend extension of these
same powers, I said:
"The emergency in the international
economic and monetary field still exists,
and, unfortunately, there are no
grounds for believing that such emergency
will end on June 30, 1939. On the
contrary, the recurrence of international
crises 1s as probable now as when the
Stabilization Fund was created in 1934."
These forebodings turned out to be only too
true. During the last two years the international
exchange markets have been more disrupted than
they have been in the past twenty years. I am
afraid that the period ahead of us will be
even more critical.
15
- 3 -
In reviewing the work of the Stabilization
Fund during the last two years, I want to
mention in some detail two of the operations
which have been undertaken by the Stabilization
Fund.
The first arrangement 1s with China.
You will recall that on December 2, 1940,
I appeared before a joint session of the Senate
Committee on Banking and Currency and the
House Committee on Coinage, Weights and Measures,
to make a statement about the proposed
stabilization arrangement with China.
Regraded Uclassified
16
4 -
I had previously stated to this Committee
that I would not consent to the use of the
Stabilization Fund to assist any foreign
country in prosecuting a war without first
consulting with the congressional committees.
The transaction we contemplated and entered
into with China was for currency stabilization
purposes. So long as there was any difference
of opinion as to whether this type of
transaction was of the character that I had
promised to discuss with your Committee,
I decided to lay all of the facts of the proposed
transaction before the joint session of the
committees.
Regraded Uclassified
17
- 5 -
I was greatly appreciative of the vote of
confidence given to Secretary Hull and myself
on that occasion.
Following months of negotiation and study
of the Chinese foreign exchange and monetary
position, an Agreement was signed on April 25,
1941, making available $50,000,000 to China
for the purpose of stabilizing the dollar-yuan
rate of exchange. The Agreement also provided
for the establishment by China of a United
States. dollar - Chinese yuan stabilization fund.
Included in the Fund's resources will be the
dollars acquired from the United States through
our purchase of Chinese yuan and a further sum
of at least 20,000,000 United States dollars
contributed by Chinese governmental banks.
Regraded Uclassified
18
- 6 -
The Chinese Government is placing this Fund
under the control of a five-man Board, one member
of which will be an American appointed by China
on the recommendation of the Secretary of the
Treasury. This Board will also have charge of
the Chinese yuan - British sterling stabilization
funds, which include a 5,000,000 sterling credit
recently extended to China by the British
Government.
These stabilization arrangements with
China should be of great aid to China in her
monetary problems and also in the struggle with
the puppet currencies. In fact, the mere
knowledge in the Far East of the contemplated
arrangement has been of some assistance to the
Chinese monetary position.
19
- 7 -
Under the earlier stabilization arrangement
of July 14, 1937, with China, we had at one
time in the Stabilization Fund $48,000,000
of yuan. This amount has been reduced to
$19,000,000, fully collateralized by gold.
The second arrangement of importance to
be entered into by the Stabilization Fund 18 the
one signed December 27, 1940, with the
Argentine Government and the Central Bank of
Argentina. Under that arrangement we have
agreed to buy $50,000,000 of Argentine pesos
and Argentina will use the dollars to stabilize
the dollar-peso rate of exchange.
Regraded Uclassified
20
- 8 -
The arrangement also provides for the exchange
of information and of views bearing on the
proper functioning of such a program. The
monetary authorities of the two countries
expect to hold further discussions in the
future, which discussions it 1s hoped will
enable both countries to reap the greatest
possible benefit from the workings of the
stabilization arrangement. The machinery of
the Fund was most opportunely at hand to
enable us to implement the Good Neighbor
policy at a time when Argentina, in common
with other Latin American countries, was
disturbed about a prospective drain of its
foreign exchange resources.
21
- 9 -
Before the Treasury actually pays any dollars
to Argentina under this arrangement, it will
be necessary for Argentina to take certain
action to confirm the authority of the Argentine
Government to guarantee performance of all
obligations undertaken by it and by the
Argentine Central Bank.
There has been activity recently in
connection with the stabilization arrangement
which we entered into in 1937 with Brazil.
On October 18, 1940, we bought $10,000,000
of milreis from Brazil under this agreement.
Regraded Uclassified
22
- 10 -
As Brazil's foreign exchange position improved,
Brazil repurchased from us $5,000,000 of
these milreis on December 13, 1940, and the
remainder on February 13, 1941. Under
another part of the same agreement with Brazil
we have sold $24,000,000 of gold to Brazil
for dollars.
In the period which I am now describing,
the functioning of the Tripartite accord, the
development of which had appeared to hold so
much promise, was interrupted by the war.
Since the outbreak of the war, the machinery
set up by the Tripartite accord has been inactive.
23
- 11 -
We have not acquired any currency of a
belligerent nation since September, 1939, and
at the present time we are holding less than
$4,000 worth of British pounds sterling,
Belgian belgas, and French francs, acquired
before the outbreak of the war. I venture
to predict that the experience in international
monetary cooperation gained through the
Tripartite accord will prove of permanent
value. I believe that that machinery, which
functioned in a spirit of cooperation and
equality, promises more for future international
economic organization than any of the aggressive
monetary devices which now hold sway.
Regraded Uclassified
24
- 12 -
During the period from July 1, 1939, to
April 30, 1941, the Stabilization Fund purchased
approximately $3,920,000,000 of gold. This
gold was bought from twenty-three different
countries. In the same period there were
sales of approximately $380,000,000 of gold
to foreign countries. Eighteen countries
sought and obtained gold from our Stabilization
Fund in exchange for dollars. To give an
1dea of the far-flung extent of these operations,
I will just mention Afghanistan, Java and
Uruguay as among the countries with which
the Stabilization Fund has cooperated in
building up their reserves.
Regraded Uclassified
25
- 13 -
The total number of gold transactions
of the Stabilization Fund during this period
was large. The circumstances of the purchases
and sales were varied. In these transactions
the Stabilization Fund has proved an
effective piece of machinery. Incidentally,
the existence of the Stabilization Fund made
it possible to carry out, with the essential
speed and secrecy, three large acquisitions
of gold from hard-pressed friendly countries.
Regraded Uclassified
26
- 14 -
As I have previously promised, we have
during this period published quarterly reports
of the position of the Stabilization Fund.
This 18 in addition to the yearly record of
the activities of the Stabilization Fund which
the statute requires that the Treasury send
to the President and to the Congress. These
annual reports, the most recent one of which
sent to the Congress was dated March 12, 1941,
give summaries of transactions in all of the
accounts of the Exchange Stabilization Fund for
the period April 26, 1934, to June 30, 1935, and
for each fiscal year thereafter up to June 30, 1940.
Regraded Uclassified
27
- 15 -
I have with me for inspection by the Committee
the balance sheet of the Stabilization Fund as
of March 31, 1941, which ordinarily 18 not made
public until three months after its date.
The Stabilization Fund has proved its value
during years of unparalleled crises in
international trade and finance. Long ago we
made the dollar the strongest currency in the
world. Foreign nations and foreign individuals
have preferred the dollar to all other currencies.
The flow of billions of European capital and
the accompanying flow of gold to this country
in recent years have made this point clear
even to the most unfriendly critics of our
monetary policies.
Regraded Uclassified
28
- 16 -
Now we are going forward into times of
even greater peril. We are in the midst of
many systems of currency and exchange controls.
Some are operated with no friendly intent
toward the United States. Our Stabilization
Fund is a potent weapon of defense in our
international economic relations. This is
hardly the time to abandon the machinery of
control which we have built up to protect the
dollar and the American economy.
Economic warfare, as well as military
warfare, is now being waged on all sides of us.
There 1s no certainty that even with peace
these aggressive economic instruments
will be abandoned by other countries.
Regraded Uclassified
29
- 17 -
Nobody can say what kind of international economy
will emerge from this war. But it would surely
be unwise if we chose this time to let private
speculators and foreign governments determine
the exchange value of the dollar.
In these circumstances, I have no
hesitation in making the strongest possible
recommendation that Congress extend the
Stabilization Fund powers.
The reasons favoring the renewing of the
President's power to alter the gold content
of the dollar to not less than 50% of 1ts former
weight are comparable to those I have just given
for extending the Stabilization Fund powers.
Regraded Uclassified
30
- 18 -
When I was before this Committee on March 2, 1939,
I said:
"The dollar now has indentically
the same gold value it had five years
ago when the President proclaimed on
January 31, 1934, that the gold
content of the dollar shall be 15-5/21
grains of gold nine-tenths fine. The
fact that we have kept the gold value
of the dollar stable through the
international monetary disturbances
and alarms of the past five years
should be adequate assurance that
there is neither desire nor intent on
the part of this Administration to
alter the gold value of the dollar
except under circumstances which clearly
demand such action. "
Regraded Uclassified
31
- 19 -
Just as there were critics some years back
who said that an irresponsible administration
would squander the Stabilization Fund in a
foolish manner, so there have been persistent
critics who said that the President's power
to devalue the gold content of the dollar
would be used to bring about inflation.
There is no basis for believing that we are
going to have inflation in this country
because the President possesses this emergency
power. I am sure that the President will be
as zealous as Congress in taking the steps to
prevent inflation.
Regraded Uclassified
32
- 20 -
Obviously the Administration has no present
intent whatsoever to devalue the gold content
of the dollar. But certainly this 18 not the
time to remove flexible powers from the
Executive when the Executives of all other
nations possess virtually complete powers over
the domestic and external monetary affairs of
their countries. In 1939, I said to Congress
"This power is a weapon in reserve needed for
protection of American interests. In the
monetary field, 1t is as important as a powerful
Navy in the field of defense against armed
attack." That statement 1s as true now as in
1939.
33
- 21 -
What steps will be necessary in the next
two years in the international monetary field
depends to a considerable extent upon the wars
which are being fought all around the globe.
We are not seers and we cannot describe what
the future holds in store. I feel very strongly
that for Congress to remove this power at the
present time because there is no immediate
use for it would be an unwise step in the face
of an uncertain future.
-000-
Regraded Uclassified
June 13,1941
THE SECRETARY OF THE TREASURY
34
WASHINGTON
my dear Mr. President: Knowing
in M. M. Ft. and other related
of your Eleanor's interest
agen cies Idave discussed
included in this memo-
many of, the problem
randum with her.
9 have therefore sent her
a complete copy.
Sincerely,
Henry
35
June 17, 1941
Dear Eleanor:
I an inclosing herewith another
complete set of everything that I sent
to the President in regard to the sub-
ject matter covered at lunch last Wed-
sent Decy's
nesday.
subton c opy.
I am also inclosing three
copies of my Amherst speech.
Affectionately yours,
Mrs. Franklin D. Roosevelt,
The White House.
Regraded Uclassified
36
June 13, 1941
Dear Eleanor:
I an inclosing herewith & com-
plete set of everything that I sent
to the President in regard to the
subject matter covered at lunch
Wednesday.
I an also inclosing three copies
of Ky Amherst speech.
Affectionately yours,
Mrs. Franklin D. Roosevelt,
Poughkeepsie, New York.
Regraded Uclassified
DE 37
TELEGRAM
Washington, D.C.
June 13, 1941
Mrs. Franklin D. Roosevelt
Poughkeepsie, New York
Mailed you this afternoon important document addressed to
Poughkeepsie.
Henry Morgenthau, Jr.
HMJr/EHFJr/fm
Sent at 6:50 p.m. from the Treasury.
Regraded Uclassified
38
Copy to Mr. Oscar Cox on 6/23 for Mr. Harry nopkins.
Regraded Uclassified
39
June 24, 1941
Dear
kubinew of your interest and
assistance in preparing this material,
I as sending you a copy herewith, in
strictest confidence.
Yours sincerely,
Dr. Isador Lubin,
The White House.
Regraded Uclassified
40
June 24, 1941
Dear Lauch:
In view of your interest and
assistance in preparing this material,
I am sending you a copy herewith, in
strictest confidence.
Yours sincerely,
Dr. Lauchlin Currie,
The White House.
Regraded Uclassified
41
THE WHITE HOUSE
WASHINGTON
June 25, 1941.
Dear Mr. Secretary:
Thank you so much for the material
which I assure you I shall hold in the
strictest confidence.
I should like, if I may, to express
my genuine admiration for the breadth of
vision you displayed in making these
recommendations.
Yours sincerely,
Land Chine
Honorable Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D.C.
42
July 1, 1941
Dear Harold:
I promised to send you a copy
of the results of Harry White's trip.
I tried to reach you, but I understood
you were out of town for two weeks.
I take pleasure in sending you
herewith, for your confidential infor-
mation, a copy of the material which I
sent to the President. I would be glad
to have your comments after you have read
it.
Yours sincerely,
(Age , 7
Honorable harold D. Smith,
Director of the Budget,
Bureau of the Budget,
Washington, D. C.
Regraded Uclassified
43
August 12, 1941
My dear Mr. Coy:
I am inclosing herewith, for
your confidential information, a
copy of the material which I sent
to the President on June 18, 1941,
relative to the creation of a De-
partment of Supply.
I would be glad to have your
comments after you have read it.
Yours sincerely,
(Signed) 1. Sorgesthou, 37.
Mr. Wayne Coy,
Liaison Officer,
Office for Emergency Management,
State Department,
Washington, D.C.
By Messenger 4:45
Regraded Uclassified
44
August 12, 1941
My dear Sams
I an inclosing herewith, for
your confidential information, a
copy of the material which I sent
to the President on June 18, 1941,
relative to creation of 6 Department
of Supply.
I would be glad to have your
comments after you have read it.
Yours sincerely,
(Signed) Henry
Judge Samuel Rosenman,
The White House,
Washington, D.C.
By Measenger 10:45
Regraded Uclassified
45
THE WHITE HOUSE
WASHINGTON
August 13, 1941.
Dear Henry:
I just finished reading the
memorandum on the Ministry of Supply and
I think it is excellent. Of course, it is
a much bigger reorganization than I have
been working on and will be invaluable
when that kind of reorganization comes to
the fore, if it ever does.
Your point three on page five
is, I think, something brand new, which is
a wonderful idea for taking care of people
who may be thrown out of work by the shortage
of materials for certain industries.
Hope you have a fine time in
Canada. Kindest regards to you all.
Sincerely,
fam
Honorable H. M. Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D. C.
46
LETTER
47
By dear Mr. President:
I as enclosing a preperal which 10 designed greatly
to increase our defense production by placing in defense
work or in training for such work every person now
available. These proposals have evolved out of the
investigation which you authorized as to make of the
expenditures of the non-defense agencies. In the
course of that investigation I as deoply impressed by
the large-seale waste of our labor resources and by the
need for a unified training program. From the point of
view of both national morale and defense these two
deficiencies seem to no to give cause for alarm.
Should the international situation take a turn for
the woree, a good deal of confusion and defention might
well ensue and the dangers to our democracy would be
seriously increased both from within and without.
Continued unemployment furnishes the most fortile ground
for anti-democratic propaganda. Nowever, we de not have
to envisage a worsening of the situation in order to be
concerned. Considerations of our own national sufety
require, I believe that " should very speedily go into
an all-out production program and put every available man
and vome at useful work or in training for useful work.
Regraded Uclassified
48
- 2 -
A program of that kind would out such of the ground away
from these who are opposing the Administration's policy.
Though the appended prepesal Le devised to stand by
itself, I would like to indicate how it might fit in
with my propesal of May 9. 1941, for the creation of a
Department of Supply with a head having Cabinet rank.
I think the Department of Supply could be a three-
fold job. At the center would be a man in charge of
purchase and production; on his right hand, there would
be a man in charge of labor training and supply: on
his left hand, there would be a BAR in charge of defense
public works projects. This triumvirate would be charged
by you with the responsibility for organizing production
and labor supply so that every requirement of the armed
forees for material and equipment will be anticipated
and met.
There 10 appended a chart giving a rough picture
of the possible working set-up of such a department.
I as also enclosing the draft of a bill which would
set up a Department of Supply along these lines. The
******* of the provisions herein recommended Le contained
in Section 7, on pages 4 and 5 of the drafted bill.
Regraded Uclassified
49
- 3 -
I have also shown a copy of the recommendations
to two members of your staff .. Mr. Lubin and Mr. Currie.
I shall be glad to discuss the proposals with you
at your convenience.
Faithfully yours,
Secretary of the Treasury.
The President,
The White House.
Enclosures
EDW:VFC:10m
6/13/41
Regraded Uclassified
50
RECOMMENDATIONS
Regraded Uclassified
i
51
Regraded Uclassified
s Program for Total Defence Production and
Labor Training
Lecking at ear defense offort, ⑉ all-important fact
stands out and is the gravest oriticies of our program of
defense production: the United States is wasting the me-
pover of approximately 12 million persons.
If " vere to employ the came proportion of our adult
population (ages 15 - 65) as we did is 1918, there would
nov be 61 million persons at work or in the Arey or Havy.
But instead, only 49 million are 00 engaged. We are wasting
the labor of 12 million persons. More than half of these
12 million are elassified as unemployed; the remainder are
persons who would work If there were enough jobs available.
Our failure to attain maximus defense production has
important effects on the merale of the country. People are
bound to feel that semething is wrong when they are told
that there is an emergency but when at the same time mil-
liens of them cannot find work. They will be convinced
that a national emergency exists when unemployment disap-
years and every citizen feels that his labor, his time,
and his services have meaning and significance in the
national effort.
Unemployment - always a recal point of discontent and
danger within a seciety -- is now a serious obstacle to
popular support of the Administration and its offorts to
52
- 2 -
unify the public against the grave danger confronting our
democracy both from within and without.
It is perfectly proper, while applauding the rapid
increases in production which have taken place, to find
fault with the imadequacies of planning and administration
which are preventing those increased from being even larger.
It is abundantly clear that the managers of defense pro-
duetion have not set themselves the problem of producing
the mxima volume of defense articles. Had they done so,
they would necessarily have had to plan to use all the
labor resources of the country.
To expand production and to strengthen morale we
should immediately plan a defense program comprehensive
enough no that every able-bodied person will either be at
useful work or in training for work.
The idea of Universal Service which has been put for-
ward as a program for the young persons of this country
should be extended no as to embrace the whole potential
working population. with an adequate program of defence
production, such a system of Universal Service can be volum-
tary.
Recommendations
1. Creation of a pool of trained workers. A large-
soale progres of labor training is plainly necessary if "
are to make as all-out production offort. Iven now with
Regraded Uclassified
53
- 3 -
millions of an being unused there are almost 100 skills
im which scute shortages exist.
The present labor training program is handicapped by
the inadequacy of the production plane and by division of
authority. Centralized control of expenditures furnishes
a ready way of eliminating such divided authority.
It is, therefore, recommended that all the agencies
conserned with the training of workers -- the N.Y.A.,
c.c.o., Office of Education, W.P.A., U.B.E.S., and the
Labor Training Division of the O.P.M., Apprenticeship
Division of the Department of Labor -- be unified under
a single head. This head should be given the authority,
the funds and the responsibility for providing trained
workers of such skill and in such quantity and at such
places as to break existing bottlenecks of skilled labor
and prevent future bottlenecks.
If this country really swings into an all-out produe-
tion program, it would be necessary to keep constantly in
training -- whether elementary, intensive or up-grading
-- between 1 and 3 million persons. Unemployed workers in
training should receive compensation at rates approximating
those now being paid by W.P.A. and N.Y.A. Inclusion of the
unions in the planning and administration will insure their
support.
Regraded Uclassified
54
- 4 -
2. Expansion of Defense Production. The present de-
fease production falls far short of an all-out effort. Not
only are " now leaving unused approximately 12 million
workers, but the managers of defense production are not
planning, even within another twelve months, to sop up
this pool of unused labor. O.P.M. estimates that/2 months
from now, there will be employed in defense industries and
in secondary industries 3 million more workers than at pros-
ent. This is an "optimistic" estimate in the somse that
11 makes no allowance for hundreds of thousands of workers
who will be "disemployed" by the application of priorities.
But even if this goal is achieved, " will, in 1942,
fall short of our 1918 performance in the utilization of
labor by over 8 million persons. This mans that to secure
full employment in the near future " must have a substan-
tial increase in the production of both consumer goods
and defense material. This, in turn, requires an expansion
in the productive capacity of basis industries rather than
a more diversion of their capacity from non-military to
military production. In the provent eircumstances pre-
possle to met all the needs of the expanded military pro-
duction by ourtailing civilian demand are in effect
proposals to perpetuate unemployment.
Regraded Uclassified
55
5
Additional plants and mohinery must be built nov is
anticipation of demand -- in anticipation of shortages.
Unless this is done, we doom ourselves to imadequate pro-
duction and unused labor resources for a long time to come.
It does not make sense to complain of shortages of plants,
machines and raw muterials and, at the same time, to be
worrying about the lack of employment for millions of persons.
3. A large-seals program of "building for defense." A
Federal Agency -- logically the Federal Works Agency --
should be given funds and authori ty sufficient to employ
several million persons on necessary defense projects.
The need for these defense projects is urgent. Plans
exist in abundance. What is lacking is funds, organization,
and will to carry out these projects. We need defense
plants, defense highways, bridges, airports, community
facilities for defense boom towns, power resources, defense
housing, and reconditioning of railroads for defense pur-
poses. within six months a program of this sort should be
capable of employing directly and indirectly several million
persons and within 4 year the number might be doubled.
These should not be W.P.A. jobs. The rate of pay should
be standard. The equipment should be the best available,
taking account of other more vital defense requirements. The
Regraded Uclassified
56
- 6 -
method of construction -- public or private -- should be
such as the experience of the Federal Works Agency distates.
This defense building program should be planned and
exccuted with too types of clasticity:
(a) skilled workson on this program should be availa-
ble for instant shifting to other areas of defense produe-
tion when the Office of Labor Supply and Training believes
this and,
(b) existing bottlemeeks of eapacity and paw materials
make it necessary that this program should be flexible enough
to circumvent these obstacles. Both raw materials and cape-
city can be increased by intelligent use of our labor and
engineering abilities.
The above recommendations may be modified in sany ways,
but the escential point remains. To get maximus defense
production, " have to plan to use all our resources. On
the side of labor supply, this means that every able-bodied
person should either be at work, or in training for work.
HDW:VFC:mag
6/13/41
Regraded Uclassified
DRAFT BILL
58
& BILL
To ostablish a Department of Supply in
erder more effectively to coordinate and
expedite the national defease pregram of
the United States, and for other purposes.
11
Recreamistives
Redied States of America in General assembled, That this Act may be
cited as the "Department of Supply Act of 1941.
see. 2. Where used is this set, unless the context clearly 10d1-
cares otherwise-
(a) The Term "agenty" includes say excentive department, independent
establishment, semission, office, board, burees, service, administration,
authority, Federally owned or controlled corporation, agency, division,
or activity of the United States, whether in the District of Columbia
or in the field service, of any pairt thereof.
(b) The term "funations" includes any rights, privilages, passes,
inventise, daties, authority, of functions, or my part thereof,
(a) The term "proparty" includes may articles, goods, materials,
things, facilities, structures, improvements, assistry, equipment,
stores, supplies, w any other property of rights is property, real
or personal, tangible or intengible, including (without any limits-
ties of the foregoing) any defense article or defense information as
defined is section 2 of the Act of March 11, 1941 (Fublie No. 11,
77th Congress).
Regraded Uclassified
59
- 2 -
me. " There shall be as the mark of government an medive
department to be known as the Department of Supply and & involvery
of Supply (hereinafter referred to as the Secretary), who shall be
the head thereof, and shall be appointed by the President, by and with
the advice and - of the Senate, and have a tomore of office and
salary like those of the heads of the other emeditive departments.
Section 150 of the Revised Statutes, " assended (U.D.C., title 5,
100. 1), is sussded to include smoke Department, and the provisions
of Title IV of the Reviced Statutes, including all acts assulatory
and supplementary thereto, shall be applicable to neb Department if
not inconsistent with this set.
SEC. 4(a) There shall be is the Department of Supply three Under
Secretaries of Supply, a General Counsel, and ne suber of Assistant
Secretaries of Supply at the President shell does necessary, who shall
be appointed by the President, by and with the advise and - of
the Senate, all of whom shall exercise such functions as say be pre-
scribed by the Secretary # required by law. The Secretary 10 authorized
to exercise any function now or hereafter conferred of imposed upon his
through say of the foregeing efficers, or any other officer of his De-
partent when he say designate. The Under Secretaries of Supply, the
General Commel, and the Assistant Secretaries of Supply shall each
receive a ealary of $10,000 per same.
(b) In the absense or disability of the Secretary, or is the event
of & Wesney is that office, - of the Under Secretaries of Supply
Regraded Uclassified
60
- , -
shall set as Secretary, in wish order as may be determined by the Prosi-
dent. In the absence or disability of the Secretary and all the Under
Secretaries of Supply, or in the steet of meansies in all such offices,
coo of the Assistant Secretaries of Supply or the General Comment shall
not AS Secretary, in with order as say be determined w the President.
The Secretary say designate any officer of die Department to not ne as
Under Secretary, as Assistant Secretary, the General Counsel, a. Director
of Division, of 4a Assistent Director of Division, in the absemes of
disability of the officer involved, or in the event of a to the
office involved. Any officer filling emother office is an scring eag-
seity under this subsestion say exercise any function which sight be
exercised by the regular insumbert of that office.
sec. 5. There shall be in the Department of Supply three major
Bureeus (with 43 Under Secretary of Supply at the need of each), and
mish major Divisions thereof as the Secretary shall by regulations
preseribe, which regulations shall be approved by the President. In
addition, there shall be to the Department of Supply much leaser nb-
divisions, sections, and offices, M the Secretary shall by regulations
prescribe. All regulations under this sestion shall be published is the
Federal Register.
110. 6. There shall be at the head of each major Division of the
Department of Supply . Director, the shell be appointed by the form-
tary without regard to the sivil service laws and shall receive & salary
of $10,000 per annum, and cas or sare Assistant Directors (as the Secretary
Regraded Uclassified
61
- 4 -
may find necessary), who shall be appointed by the Secretary without
regard to the civil service laws and shall ench receive a salary of
$9,000 por ann.
smc. 7. The President is authorized to transfer by Insentive
Order to the Department of Supply any agency or function relating to
any one of aere of the following activities or functions;
(a)(1) The manufasture OF production of any property by of under
the supervision of any agency)
(2) The management, coordination, and stimulation of expansion,
of the manufacture or production of any property by private industry,
private persons, public bodies, of other persons of entities)
(3) The procurement, varchousing, transportation, and dis-
tribution of any property for national defense OF other governmental
purposes
(4) The sstablishment and revision of priorities with respect too
(1) deliveries of property under any contrasts, out-
contracts, ordere or suberders;
(11) the carriage of any property, or classes of
property, by any sease of transportation)
(111) the carriage of any message, OF class of -
by any SARIMP of consumioation facility;
(5) The allesation of property for defense, for private account,
02 for export, in the public interest of to promote the national defenses
(6) The requisitioning, of the taking by eminent domain or
otherwise, of any property; and
Regraded Uclassified
62
- 5 -
(7) the control of prises and the protection of memore,
(b) Voestional training end education, registration, placement,
employment, sobility, donand, and priorities is connection with workers
and potential workers on projects (governmental and non-gevernmental)
and in industries related to the national defense program.
(e) Public works and housing projects (governsental and non-
governmental) related to the netional defense program.
(4) Such other activities of functions 40 the President may does
so elessly related to cue OF more of the foregoing that they should be
administered in the Department of Supply.
SEC. 8(a) The President is authorised to transfer by Executive
Order any agency or function of the Department of Supply to any other
agency in the - manner and subject to the same previsions of this
Act of other laws as in the case of a transfer of an egency w function
to the Department of Supply under section 7 of this Act.
(b) Each Expective Order under section 7 of this Ast shall be
printed in the Federal Register, and shall also be printed in the
Statutes at Large in the - values " the public laws.
smc. 9(a) Any supervisory or other functions exercised by my
officer of my agency with respect to any agency of function transferred
to the Department of Supply under this set are transferred to the Seare-
tary.
(b) The Secretary shall administer the love relating to say agency
or function transferred to the Department of Supply under this Act or
Regraded Uclassified
63
- 6 -
brought within the jurisdiction and central of noth Department w or
purcuas to any other provision of law.
SM. 10(a) the Secretary shall crass 4 seal of office to he made
for the Department of Supply, of - design as the President shall
approve, and judicial notice shall be takes of such seal.
(b) The Secretary shall assually, at the class of each fissel
year, make-s report in writing to the Dengross, giving as account of
all usery received and expended by the Department of Supply and de-
scribing the wark dose by that Department. Be shall also from time to
time sake such special investigations and reporte as be may deem neces-
MARY or 46 he may be required to make by the President or requested to
make by either Rouse of Congress.
520. 11(a) The Secretary is authorised, subject to the civil
service laws, to appoint such officers and employees as he doors 24000-
eary to mable his to envoice the functions now or hereafter conforred
or imposed upon his or his Department by or pursuant to Lov, and the
compensation of all mah officers and employees shall be fined in 4-
cordence with the Classification set of 1923, as assended.
(b) Setwithstending the provisions of subsection (a). the Boare-
tary is authorised to employ such compensated or uncompanted persons
as he in his discretion my dose for part-tine w epecial
work, and up each person may be appointed without regard to the civil
service Laws, at, is compensated, my reseive compensation without
regard to the Classification Act of 1923, as
Regraded Uclassified
64
- , -
sec. 12. the Decretary my enter into contracts (vidate he 10
otherwise authorized to enter into w or persuant to 1000 without who
verticing w competitive bidding. So contract which would otherwise be
subject to the previsions of the Act of June 30, 1936 w stat, 2036g
U.S.O., Supp. v, title 41, .... 35-49), shall be - from the No.
visions of such Act solely because of being entered into without advertis-
ing or competitive bidding purcuast to this section. The
percentage-of-sest system of contracting shall not be used under this
section, but this shall not be construed to prohibit the use of the
cost-plus-a-finad-foe form of contract when such use is deened necessary
by the Secretary. The Secretary shall report every three months to the
Congress the contracts entered into by his Department without advertising
or competitive bidding pursuant to this sestion. This section shall be
supplementary to, and not in lieu of, all other provisions of law -
therising officers of the United States to enter into contracts without
advertising or competitive bidding. the authority conferred w this
section shall terminate June 30, 1943.
mo. 13(a) Each Recentive Order under this Act transferring
agencies or functions shall contain appropriate provisions for the
transfer or other disposition of records, property (including office
equipment), personnel, and unexpended balances of appropriations w
other funds, affected by cush treasfer.
(b) The Secretary my appropriately change the - of any agency
or the title of any officer treasferred to the Department of Supply.
Regraded Uclassified
65
Regraded Uclassif
- 6 -
(a) In the 6100 of any connicatened officer or cullsted - of
the Assy, Nevy, of Count Guard trensfored by any with Executive Order
to the Department of Supply, such treasfer shall be regarded as & w
tail, revocable at any time by the President. Is addition, the President,
or the head of my egency at the request of the Secretary, say at any
time detail say officer or employee of his agency (including counts-
stemed officers of enlisted - of the Assy, Havy, or Coast Guard) to
the Department of Supply, mah detail to be reseable is the -
manner is which 18 was made.
sec. 14(a) All orders, rules, regulations, permits, OP other
privileges, mde, Lossed, OF granted my or is respect of any agreedy
or function treasferred under this Act, and in effect at the time of
the transfer, shall continue in effect to the 0420 estent as if mich
transfer had not coorred, will actified, experseded, or repoaled.
(b) No suit, action, of other preseeding lawfully commenced by or
against the head of my agency of other officer of employee of the United
States, in his official especity of is relation to the discharge of his
official duties, shall state by reason of any transfer of functions free
one officers, employee, or agency of the United States to enother under
this 408, but the court, oa notion of supplemental potition filed at any
time within toolve months after - treasfer takes effect, showing a
necessity for . servivel of mith ouit, action, of start presseding to
obtain & settlement of the questions involved, say allow the - to
be waintained by of against the hand of the agency to which the was
for is más.
66
- 9 -
(a) All laws relating to - agency or function treasferred under
this Act shall, in n for as and laws are not impplicable, remain in
full force and effect.
no. 15. No treasfer under this 4st shall here the effect-
(a) of continuing wy agency or function beyond the date
when 18 would have terminated if such transfer had not bemandes
(b) of continuing any fusction beyond the time when the
agency in which it was vested before its transfer to the De-
partnent of Supply would have terminated if such transfer had
not been mades or
(e) of authorising the Department of Supply, the Secretary,
or any other agescy or officer, to emergise any function which
is not authorised w # pursuant to law.
me. 16. There is hereby authorized to to appropriated oweh -
as may be necessary to earry out the provisions of this Act.
Regraded Uclassified
67
CHART
the
Bearstary of maly
Under Secretary
of Supply
Assistant tearstary of
labor Emply and
Assistant Coaretary of
Assistant Secretary of
fraisier
Supply
Defense
Marks
Director
Director
Director
Director
is charge of construction
la charge of inventory of
is sharge of general
of defense familities
labor resources and
protection planning
in sharge of priorities
reads, airports, sirraid
projection of Labor requirements
shelters, aso.) other
Man yards and areenale
Birestor
Director
Director
Director
is charge of laber
is charge of fecilities
is charge of
training - years and adult,
expensive and familities
to charge of price evated:
of public
is and out of industry
contracts
buildings
Director
Director
Director
Director
is charge of labor
is sharge of purchasing
La sharge of lisises
la charge of plant construction,
labor mobility,
- emply matrate
vita Area. Novy, etc.
defense houstag, community
and labor priorities
facilities
Birector
Director
its durge of vague, hours, working
is charge of requisitively -
emitions, collective
additivition of requisitioned
hergisting, merale
familities
Regraded Uclassified
de President
hurstary of happly
Union Decretary
of Anyly
Assistant Decretary of
labor Supply and
Assistant Sectetary of
Assistant Secretary of
Training
Supply
Defense
verks
Director
Director
Director
Director
in charge of construction
is charge of inventory of
in sharge of general
of defance fedilities
labor remwees and
production planning
La charge of priorities
(reads, airports, airraid
projection of Labor requirements
shelters, etc.) other
than yards and areocals
Birector
Director
Director
Director
La charge of labor
in charge of facilities
is charge of construction
training - youth and adult,
expensive and familities
la charge of price ocatre)
of public
is and out of industry
buildings
Director
Director
Director
Director
is charge of labor
is charge of purchasing
la charge of limison
in charge of plant sunstruction,
exchanges, labor mobility.
and supply matracts
with Any, Mary, atc.
defense boaring, community
and labor priorities
facilities
Director
its charge of vague, hours, vorking
is charge of Poquisitioning and
moditions, sollective
administration of requisitioned
merals
familities
Regraded Uclassified
69
TREASURY DEPARTMENT
WASHINGTON
OFFICE DF
IMMISSIONER OF INTERNAL REVENUE
NAMES ALPLY to
June 13, 1941.
- OF INTERNAL REVENUE
AND REFER TO
Memorandum for the Secretary:
Reference is made to your inquiry of June 11, 1941, concern-
ing the number of farmers filing income tax returns.
A tabulation of the 1936 individual income tax returns by
the Division of Tax Research at the Philadelphia office shows
6. total of 79,064 individual returns filed reporting income,
or loss, from "Agriculture and related industries".
of the 79,064 returns filed, 57,668 included schedules
itemizing income and expenses, the total receipts of which
aggregated $708,252,276; the receipts of the remaining 21,456
which were not accompanied by schedules are estimated at
$180,500,000 making a grand total of farm receipts for 1936
of $888,752,000.
The total number of farms in the United States as of
January 1, 1935, was 6,812,350 (Statistical Abstract - 1940;
P. 634). The actual number of farm owners would be something
less than this, probably about 6,000,000. The 1930 Census
showed farmers (owners and tenants) numbering 6,012,012.
This means that for 1936 one farmer out of each 76 filed
an income tax return. For 1940, the number of returns report-
ing income (or loss) from business activities about doubled
over previous years, owing to the gross income basis for filing
and the lowered exemptions. On the assumption that those re-
porting farm incomes (or loss) followed the pattern for all
businesses, the number of farmers filing for 1940 would be
also about double, resulting in one farm return out of each
thirty-eight farmers.
for the nation as 6. whole, being based on 15,000,000 individual
This compares with one out of every four income recipients
income tax returns out of 60,000,000 income recipients in the
United States.
The total cash income of all farmers for 1936 was
$8,499,293,000. This represents value of crops, livestock,
and livestock products actually sold off ferms. (Statistical
Regraded Uclassified
70
-2-
Abstract, 1940; P. 668) $725,000,000 of this amount was re-
ceived by corporations. This means that for 1936 the farmers
filing individual income tax returns accounted for 11.5 per
cent of the total cash farm income received by individual
farm operators leaving 88.5 per cent or $6,885,541,000 to be
accounted for by the remaining 5,920,936 farmers, or an
average of $1,161. This is in terms of cash income, or
receipts. In terms of cash profits from farm operations,
the average is about $248. This average is based on the ratio
of profits to receipts existing in the individual income tax
returns for 1936 showing farm schedules which were tabulated
in Philadelphia.
Commissioner.
Regraded Uclassified
71
June 13, 1941
MEMORANDUM FROM VINCENT F. CALLAHAN:
Barry Wood will sing "Arms for America" on the
Lucky Strike Program Saturday night, June 14th, at
approximately 9:40 PM EDST (New York time) - 8:40 PM EST
(Washington time).
The song will be the final song on the Hit
Parade and to make sure of hearing it we suggest that the
Secretary tune in at approximately 9:36 or 8:36 depending
upon where he is at the time. We are putting in both day-
light and standard time so that there will be no mix-up.
72
June 13, 1941
MEMORANDUM FROM VINCENT F. CALLAHAN
Program for opening show of Treasury Hour OR
Columbia Broadcasting System network Wednesday night,
July 2nd, 9:00 to 10:00 PM EDST, 8:00 to 9:00 PM EST
(Washington Time).
Opening song "Any Bonds Today" by Irving Berlin --
sung by Barry Wood, singing star of the Lucky Strike Hit
Parade, accompanied by twelve piece choir and twenty-five
piece orchestra.
Address - 3 minutes - by Secretary of the Treasury
Morgenthau.
Fred Allen, master of ceremonies.
Grace Moore, singing 8. song of the South. Miss
Moore will inaugurate the series of folk songs to be
featured in every program. Being an American, she will sing
B. typical American folk song. There will be special
continuity to introduce this song, special effects, etc.
On the programs of the following twelve weeks folk
songs of various nations, together with special continuity,
will be featured. In cases where the artist is foreign born,
artists will be asked to speak 8. few words about their native
countries.
Charles Laughton recites the Gettysburg address.
"Information Please" - Clifton Fadiman, master of
ceremonies. Participants - Secretary of the Treasury
Morgenthau, John Kieran, Oscar Levant, and F. P. Adams.
Judy Garland
Mickey Rooney
All Goodman and his band
Twelve voice choir.
Closing - "Any Bonds Today", sung by Barry Nood.
Regraded Uclassified
73
June 13, 1941
MEMORANDUM FROM VINCENT F. CALLAHAN:
Second Treasury Show, Wednesday, July 9th
(Tentative*)
Major Edward Bowes, master of ceremonies
Bob Hope
Bing Crosby
Dorothy Lamour
Charles Kullman, tenor
Dorothy Maynor, colored soprano
Speaker
Closing song "Any Bonds Today"
*All of these persons have been contacted. We are awaiting
a definite OK from each of them. We should have final word
within ten days about each of these artists.
Regraded Uclassified
74
June 13, 1941
MEMORANDUM FROM VINCENT F. CALLAHAN
Narmer
Wesses Josten has been contacted by Mr. Paul
C. Munroe. Mr. Munroe reports: "Have talked to Mr.
Josten and explained the whole program, its purposes and
expectancies. Mr. Josten has agreed to compose B. march
and has indicated he would like to have Carl Sandburg
compose the lyrics."
Mr. Munroe reports this morning that he has
talked with Mr. Sandburg's manager who told him he is
confident that Mr. Sandburg will be glad to write the
lyrics. Mr. Sandburg is somewhere in Michigan and Mr.
Munroe hopes to contact him directly before the day is
over.
To follow through on both Mr. Josten and Mr.
Sandburg, Mr. Munroe and I personally will call on both
of these gentlemen early next week,
In the event Mr. Sandburg is not available, we
will contact (1) Stephen Benet and (2) John Latouche.
Regraded Uclassified
75
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
STRICTLY CONFIDENTIAL
DATE June 13, 1941
TO
Secretary Morgenthau
FROM
Mr. Wiley
FBI reports:
June 12. Between January 1 and April 30, 1941, Amtorg disbursed approxi-
mately $13,000,000 in this country of which
$1,984,000 was for shipping
1,093,000
=
-
tools, machinery, and equipment
1,483,000
#
=
petroleum and petroleum products
1,376,000
=
E
grain, foods, and spices
1,340,000
=
=
leather, hides, and tanning materials
1,314,000 - e rags
1,093,000
"
" iron, steel, other metals, and carbon.
The
76
OFFICE OF
THE SECRETARY OF THE TREASURY
PHOTOSTAT TO:
BELL
WHITE
COCHRAN
FOLEX
77
ASSISTANT SECRETARY OF STATE
WASHINGTON
June 13, 1941.
Dear Henry:
I am enclosing a copy of the memorandum
approved by Secretary Hull which I showed you
this morning, and which outlines the steps that
we have proposed for continental European
freezing.
Sincerely yours,
Arm Gahrson
The Honorable
Henry Morgenthau,
Secretary of the Treasury,
Washington, D. c.
DEPARTMENT OF STATE
ASSISTANT SECRETARY
A - A
June 10, 1941.
Mr. Secretary:
The attached memorandum has been
worked out as a result of conferences
between Messrs. Berle, Dunn, Feis,
Atherton, and myself. I have gone over
it with Mr. Welles.
Do you approve of the suggestion?
If so, do you wish me to make an attempt
to take up with the Treasury the matter
of putting the recommendations into
effect?
I'm Gahron
Dean Acheson.
A-A:DA:BE
Regraded Uclassified
79
PROPOSED PROGRAM FOR IMMEDIATE ACTION
WITH RESPECT TO FOREIGN FUNDS CONTROL
I. Registration of foreign-owned property and
reporting of transactions therein.
The issuance of an executive order by virtue of the
authority vested in the President by section 5(b) of the
Act of October 6, 1917, as amended, providing for the
filing of reports under oath on such forms, at such times,
and by such persons as may be required by regulations with
respect to all property of any nature whatsoever of which
any foreign state or national thereof 16 the owner or in
which any such state or national has or had any interest
of any nature whatsoever, direct or indirect, and with
respect to any acquisition, transfer, disposition or any
other dealing in such property. The same order should
authorize regulations requiring the furnishing under oath
of additional and supplemental information including the
production of any books of account, contracts, letters,
or any other papers, with respect to the matters concern-
ing which reports are required to be filed.
Under authority of this order, an immediate census
of all property in the United States in which any foreign
state or national thereof has an interest could be re-
quired.
II. Freezing
Regraded Uclassified
80
available with respect to any transactions in which they
suspect that Germany, Italy or the invaded countries or
the nationals thereof have an indirect interest.
V. Interdepartmental liaison.
There would be created an informal committee con-
sisting of representatives of the Secretary of State, the
Secretary of the Treasury and the Attorney General to
determine policies for the administration of the order.
To provide for effective liaison and the prompt determina-
tion of policies with respect to foreign funds control,
several officers from the State Department and the Depart-
ment of Justice should be permitted to have offices in
and to work closely with appropriate officers of the
Treasury Department and to attend meetings of foreign
funds control committees passing upon important applica-
tions.
81
-2-
II. Freezing of all continental European countries.
The issuance of an executive order extending Execu-
tive Order No. 8389, as amended, so as to include the
remaining states of continental Europe and nationals
thereof not previously designated in Executive Order
No. 8389, as amended; namely, Germany, Italy, San Marino,
Finland, Sweden, Spain, Andorra, Portugal, Liechtenstein,
Switzerland and the U.S.S.R. and nationals thereof and
also the remaining invaded or occupied countries, namely
Austria, Czechoslovakia, Poland, Danzig and Albania, and
nationals thereof.
III. General licenses for European neutral countries.
Simultaneously with the issuance of the Executive
order to be issued under II, above, it would be announced
that general licenses would be issued with respect to
Finland, Sweden, Portugal, Spain, Switzerland and the
U.S.S.R., and nationals of such countries, authorizing all
transactions involving property in which such countries or
nationals thereof have an interest, except transfers
directly or indirectly to, on behalf of, or for the account
of Germany or Italy or any national thereof or of any
European invaded or occupied country or any national there-
of. Periodic reports of all transactions effected under
such
82
-3-
such general licenses should be submitted, including all
transfers of property to generally licensed countries
and nationals thereof from any source. With respect to
the excepted transactions, applications for specific
licenses would be required before such transactions could
be consummated.
It is contemplated that as B condition to the granting
of general licenses the governments of such countries
would be required to give assurances that neither such
governments nor their nationals would undertake trans-
actions involving property of such countries or their
nationals in the United States when such transactions would
result in transfers of such property directly or indirectly
to, for the account of, or on behalf of Italy, Germany,
invaded or occupied European countries, or any of their
nationals. The general licenses to be issued would be
terminable without notice and it would be indicated to
generally-licensed countries that failure to comply with
the assurances would result in such termination.
IV. Cooperation of leading foreign exchange banks.
The leading foreign exchange banks of this country
would be informally approached and the suggestion made
that for their own protection, as well as for the protection
of this country, they should refuse to make their facilities
available
Regraded Uclassified
83
EH
GRAY
Berlin
Dated June 13, 1941
Rec'd 10:30 p.m.
Secretary of State,
Washington.
2351, June 13, 4 Pams
This morning's press reports a speech made by
Reich Economics Minister Funk in Vienna on Thursday.
HE stated that American steamships' total foreign trade
in terms of value was almost 88 great as in 1939. Im-
ports from southeastern Europe had increased from
900,000,000 to 1.3 billion marks, imports from the
Soviet Union were over ten times as great as in 1939
and trade with Italy was twice as great as in 1939.
(Imports from the Soviet Union during the first half
of 1939 amounted to only 11.2 million marks and during
the second half of the year for which no figures are
available they probably did not EXCEED this amount in
view of disturbed conditions during several months of
this period. HENCE imports from the Soviet Union probably
amounted to from 200 to 250,000,000 marks in 1940).
The remainder of Funk's speech was chiefly a repe-
tition of statements that have already been made in other
speeches.
Regraded Uclassified
84
EH -2- 2351, June 13, 4 p.m. from Berlin.
speeches. HE alleged that Germany did not desire
complete autarchy, that the European "regional Economy"
would bE willing to carry on trade with the other
regional Eclipses. But in no Event would world trade
after the war bE again carried on by the methods which
led to its downfall, Germany's Economic methods he
maintained do not make impossible Economic cooperation
with regions employing other methods. The international
gold standard will not bE employed because it would rob
Germany of its freedom but gold will still have its
place as a commodity. Funk remarked that after the war
Germany would in any EVENT have sufficient gold to
carry on national trade.
England is factd with the armaments potential of all
Europe whose last reserves are not as yet employed. The
war of production Funk alleged has already been won by
the Axis powers.
In conclusion Funk again warned businessmen against
stock market speculation and repeated that dividends abov
6% would bE subject to severe and in the higher CASE,
prohibitive taxation. Inform Treasury and Commerce.
MORRIS
WWC
85
MP
GRAY
Berlin
Dated June 13, 1941
Rec'd. 1:13 P. m.
Secretary of State,
Washington
2345, June 13, noon. (SECTION ONE).
In his speech at Vienna yesterday to the Southcast
Europe Society Funk declared that the European regional
economy is well on the road to organic functioning and
that, although based on the cleering system end central
planning, it is not to involve EXCESSIVE entrols, EX-
aggerated autarchy or B degree of regional specialization
in production which would impoverish the partners. Like-
wise, hE stated that in its relations with othertrade areas
this Economic unit will not insist on rigid methods of
trade and psyments but will freely USE gold of which he
said Germeny would have adequate quantities efter the war.
HE implied that such trede relations between the Germen
controlled Europe end any other orgenized regional economy
may bE carried out in E form similer to prewer trade
between Germeny and Great Britgin under the so-celled payme
greement or one wey clearing. HE also insisted that the
postwer import needs of Europe will EXCEED Fll expectation.
MOnth IS
KLP
Regraded Uclassified
86
PARAPHRASE OF X SECTION TWO OF TELEGRAM NO. 2345,
JUNE 13, 1942, NOON, FROM THE AMERICAN exrassy, BERLIN.
The statement of Funk constitutes a renewed effort
with promises that are more specific than heretofore to
hold out to the outside world and particularly to the
U.S. the prospect of favorable trade relations with a
victorious Germany and its satellite countries. Punk,
in referring to gold and semi-liberal methods of payment,
seeks to give the impression that Germany is taking a
direction away from the policy and the theory of using
bilateral barter agreements instead of gold. Funk's
whole statement is a new element in the German propaganda
program which has the object of allaying the belief which
is prevalent abroad that a vistorious Germany would
mobilize Europe's resources to underwine the Western
Hemisphere's sconomic structure.
You are requested to inform the Departments of
Commerce and Treasury,
(END OF MESSAGE)
MORRIS
EA:MSG
10 THE
TECHNICVE 11
OFFICE Ot THE
BII nnn It ЫМ I 00
BECEINED
Regraded Uclassified
For Miss Chaunosy
87
June 13, 1941.
CONFIDENTIAL
Dear Mr. Incks:
Permit as to acknowledge, ea behalf of the
Secretary, the receipt of your letter of June 12, 1941,
enclosing your compilation for the wook ended June 20
showing dollar disbursements out of the British Expire
and French accounts at the Federal Reserve Bank of New
York and the means by which these expenditures were
financed.
Faithfully yours,
B. Morle Cochran,
Technical Assistant to the Secretary.
L. V. Knoke, Bequire,
Vice President,
Federal Reserve Bank of New York,
New York, New York.
HMC:dm:6.13.41
Regraded Uclassified
88
c
I
FEDERAL RESERVE BANK or KEY YORK
June 12, 1941.
CONFIDENTIAL
Dear Mr. Secretary:
Attention: Mr. 1. Morle Coobran
I as enclosing our compilation for the week ended
June 4, 1941, showing dollar disbursements out of the
British Empire and French accounts at this bank and the
means by which these expenditures were financed.
Faithfully yours,
121 L. V. Knoks
L.V. Knoke,
Vice President.
Nonorable Henry Morgenthen, Jr.,
Secretary of the Treasury,
Washington, D. c.
Enclesure
Copy:alm 6-13-41
Regraded Uclassified
ANALYSIS OF BRITISH AND EXENCH ACCOUNTS
(In Millions of Dollars)
Yeek Ended June 4, 1941.
Strictly
Confidential
BANK OF ENGLAND {BRITISH government)
BANK
or
FRANCE
DEBITS
CRE DITS
DEBITS
OREDITS
Cor't
Proceeds of
Net Incr.
Net Incr,
Sales of
(+) or
Givit
Proceeds
Total
Expendi-
Other
Total
Securities
Other
Total
(+) or
PERIOD
Dear. (-)
Expendi-
Other
Total
of Gold
Debita
tures(s)
Other
Debits
Credito
Gold
Decr. (-)
Dfficial)(b)
Craits(e)
In Balance
Debits
tures (d)
Debita
Credita
Sales
First year of var
Credits
in Balance
(8/29/39-8/26/40)
1,793.2
605.8
1,187,51,828.2
1,356.1
52.0
420.1
+ 35.0
866,3(e)
416,6 (e)
1940
449.7
1,095%)
900.2
195,1(e)
-229.0
Aug. 29 - Oct. 2
$16.8
244.5
72.5
508.9
271.0
6.0
31,4
- 7.9
8.6
4,4
Oct. 3 - 30
4.8
1.3
I
196.7
167.8
23.9
1.3
- 7.3
198.5
160.5
6.0
32.0
4 1.8
0.5
0.3
0.2
0.5
-
0,5
-
Oct. 31 - Nov. 27
241,0
201.1
39.9
259.5
210,0
18,0
31.5
- 18,5
0.8
0.1
0,7
0,7
-
0,7
NOT, 28 - Dec, 31
- 0,1
234.6
206,8
27.8 198,0
111,4
26,0
60.6
- 36.6
2.1
-
2.1
0,5
-
0.6
- 1.5
Var period through Dec.
2,782.3
1,425.5
1,356,72,793.1
2,109.5
108,0
575.6
* 10.8
878.3
4£1.4
456.9
1,098.4
900.2
198.2
+220.1
1941
Jan. 2 29
197.4
162.7
34.7
259.9
176.2
52.0
31.7
+ 62,5
1.7
-
1.7
0.5
-
0.5
- 1.2
Jan. 30 - Feb. 26
164.6
137.8
S6.B
101.4
26.6
25.0
48.6
- 63.2
0.2
-
0.2
0.2
-
0.2
-
Feb. 27 - Apr. 2
229.7
157.6
32.1
237.9
103.7
72.0
62.2
+ 8,2
0.7
-
0.7
1,6
-
1.6
- 0,9
Apr. 3 - Apr. 30
126.0
101.9
24.1
215.9
125.6
15.0
75.3
+92.9
MAY 1- May 28
0.9
-
0.9
0.9
.
0.9
-
122.6
90.6
32.0
91.0
6.3
32.0
52.7
-31.6
0.4
-
0.4
0.8
.
May 29 - July 2
0,8
+ 0.4
July 3 - July 30
July 31 - Aug. 27
Second year of war
(8/29/40-8/27/41)
Aug. 28 - Det. 1
Oct. :- Dot, 29
Oct. 30 - Dec. 3
Doo. 1 - 31
WEEK ENDED:
May 14
26.7
20,2
6.5
27.8
6.3
16.0
5.5
+ 1.1
0.1
-
0.1
0.1
-
0.1
-
23
29.3
21.6
7.7
11.5
-
6.0
5.5
-17.8
0,1
-
0.1
0.2
-
0.2
+0.1
28
27.0
19.6
T.4
34.6
-
4,0
30.6
+ 1,6
-
-
-
0.3
-
0,3
+0.3
June 4
35.3
30.0
5.3
33.9
-
4.0
25.9(i)
- 1.4
0.2
-
0.2
0.2
-
0.2
-
Average Weekly Axpenditures Since Outbreak of War
Transfers from British Purchesing Commission to
France (through June 19)
$19.6 million
Bank of Canada for French Account
(See footnotes on reverse side)
England (through June 19)
27.6 million
Teek ended June 4, 1941
-
million
England (since June 19)
50.0 million
Qualistion from July 5
162.7
million
For monthly breakdown see tabulations prior to April 23, 1941.
Regraded Uclassified
(a)
Includes
MAIN reduct w VIICA Fundrates Commission, Mr Minterey, Britten Supply Board, Ministry or
Supply Timber Control, Mid. Holstry of Shipping,
(b) Estimated figures bused on transfere from the New York Agency of the Bank of Montreal, which apparently répresent the
proceeds or official Brit ish sales of American securities, including those effected through direct negitiation. In addition
to the official selling, substantial liquidation of securities for private British account occurred, particularly during the
early months of the mor, although the receipt of the proceeds at this Bank cannot be ident ified with any accuracy. According
to data supplied by the British Treasury and released by Secretary Morgenthau, total official and private british liquidation
of our securities through December, 1940 amounted to $334 million.
(0) Includes about $85 million received during October, 1939 from the accounts of British authorized banks with Now York banks,
presumably reflecting the requisitioning of private dollar belames, Other large transfers from such accounts since October,
1939 receipts. apparently represent the acquisition of proseeds of exports from the sterling area and other currently ascruing dollar
(d) Includes payments for account of French Air Commission and French Purchasing Commission.
(e) Adjusted to eliminate the effect of $20 million paid out on June 25, 1940 and returned the following day.
(r) Includes $25 million transferred from British American Tobacco Company's account at e N. Y. bank; it vill be recalled that this company
previously received this emount from the Brown & Williamson Tobacco CO., its American aubsidiary, in connection with the R.F.C. loan.
Regraded Uclassi
AMALYSIS OF CANADIAN AND AUSTRILLIAN ACCOUNTS
(In Millione of Dollars)
Week Ended Jane ", 1941.
Strietly
Confidential
OF
CANADA
DEBITS
CREDITS
COMMONWEALTH BANK OF AUSTRALIA
DIDITS
CREDITS
Transfere
Transfers from Official
Transfere
to
Proceeds
Total
British A/C
Net Inor.
Other
to
Prossede
Net Inor.
Official
Total
of
Other
(+) or
Total
Debite
Official
Other
Total
of
Other
British
Debita
Credits
For Own
For French
(+) or
Gold
Credits
Dear. (-)
Debits
British
Debits
Credits
Gold
PERIOD
A/C
Credits
Sales
A/C
A/C
Datr. (-)
in Balance
A/C
Gales
in Balance
First year of war
(6/29/39-8/56/40)*
323.0
16.6
306.4
504.7
412.7
20.9
38.7
32.4
+181.7
31.2
3.9
27.3
36.1
30,0
6.1
- 4,9
1940
AUG. 29 - Oct. 2.
44.3
-
44.3
43.9
16.4
-
27.3
0.2
- 0.4
8.7
2.5
6.2
8.0
5.7
1.3
- 0.7
Oot. 3 - 30
25.7
-
26.7
28.6
14.0
-
14.3
0,3
+ 1.9
10.1
7.5
8,6
7.9
6.5
1.4
- 2.2
Oct. 31 - Nov, 27
35.2
-
35.2
69.6
49.2
-
16.7
3.7
+ 34.4
7.1
0.6
2,8
3.6
2.1
1.5
- 0.5
Nov. 26 - Dec. 31
48.0
-
46.0
60.6
42.5
-
13.7
4.4
+ 18.6
4.8
1
4.8
6.8
4.8
2.0
- 2.0
Mar period through Den.
477.2
16.6
460.6
707,4
534.8
20.9
110.7
41.0
-230.2
57.9
14,5
43.4
62.4
50.1
12.3
+ 4,5
1941
Jan. 2- 39
33.7
-
33.7
33.9
16.9
-
15.0
2.0
- 0.2
4.8
-
4.8
6.8
5.1
1.7
+ 2.0
Jen. 30 - Fob. 26
31.1
-
31.1
14.3
14,3
-
6.8
3.2
- 6.8
5.0
1.7
3.3
3.2
0,6
2,6
Feb. 37 - Apr. 2
- 1.8
60.9
-
60,9
46,0
23.1
-
19.1
3.8
- 14,9
5.8
0.8
5.0
13.7
12.5
1.2
Apr. 3 - Apr. 30
- 7.9
34.9
-
34.9
35.9
12.5
-
10.5
12.9
+ 1.0
2.8
-
2,8
May 1 - May 28
5.9
4.6
1.3
+ 3+1
39.2
-
39.2
25.6
15.8
-
0.5
9-3
- 13.7
5.4
-
5.4
4.9
4.1
0.8
May 29 - July 2
- 0.5
July 3 - July 30
July 31 - Aug. 27
Smoond year of war
(8/29/40-8/27/41)
Aug. 26 - Oct. 1
Oct. 2- Oct, 29
OOT, 30 Doo, 3
Doo. 4 -- 31
WEEK ENDED:
May 14
8,3
-
8,3
4.4
3.7
-
-
0,7
- 3.9
0.2
-
0.2
0.1
-
0.1
- 0.1
21
9.4
-
9x4
4.6
4.5
-
-
0.1
- 4.9
1,7
-
1.7
4.3
3.9
0.4
+ 2.6
28
12.5
-
12.5
4.4
4.1
-
-
0.3
- 8.1
1.8
-
1,8
0.4
0.2
0.2
- 1.4
June 4
11.3
-
11.3
9.9
3.6
-
-
6.3(a)
- 1.4
2,1
.
2.1
0.2
a
0.2
- 1.9
Weekly Average of Total Debits Since Outbreak of Wor
Through June 4
7.5
million
(a) Includes $6 million transferred from a Canadian bank's account in the market.
+ For monthly breakdown 000 tabulations prior to April 23, 1941.
Rearaded Uclassifi
92
TREASURY DEPARTMENT
PROCUREMENT DIVISION
OFFICE OF THE DIRECTOR
WASHINGTON
June 13, 1941
MEMORANDUM TO THE SECRETARY:
Weekly Report - Lease-Lend Purchases
(6/6 - 6/13/41)
Purchases to 6/6/41
$ 7,007,011.06
Purchases 6/6 to 6/13/41
7,060,317.25
Total to 6/13/41
$ 14,067,328.31
Requisitions Pending
Estimated Cost
Cleared by O.P.M.
$ 180,345,794.05
Awaiting clearance by O.P.M.
33,678,717.00
Total Pending Requisitions
$ 214,024,511.05
Decisions by the Office of Production Management to allocate
monthly steel, scrap, pig iron, copper and zinc orders instead of
blanket contracts extending over three or four months will result
in numerous contracts to the value of approximately $82,000,000.
Our weekly reports will therefore reflect only actual contracts
drawn monthly after allocations by the Office of Production
Management.
Clifton E. And Mack
Director of Procurement
Attachments-4
H)
Regraded Uclassified
JUNE
CONTRACT
REQUISI-
NUMBER
CONTRACTOR'S NAME
TIONER
commodity
QUANTITY
TOTAL VALUE
DA-TPS-185 Reynolds Metal Co.
China
Aluminum Strips
10,000 lbs
Aluminum Rods
20,000 lbs
66,150.00
DA-TPS-43
Gardner-Denver Co.
U. K.
Air Compressors and
spare parts
6
30,810.00
DA-TPS-76
International Harvester
Export Co.
U. K.
Harvester Threshers
24
27,459.80
DA-TPS-77
International Harvester
Export Co.
U. K.
Agricultural Implements
and spare parts
56,459.05
DA-TPS-128 J. I. Case Company
U. K.
Spare parts for J.I. Case
Co. Farm Equipment
11,097.05
DA-TPS-141 American Smelting & Refin-
ing Co.
U.K.
Zinc
1,044,000 lbs
77,047.20
DA-TPS-151 U. S. Steel Export Co.
U.K.
Zinc
526,000 lbs
40,186.40
DA-TPS-148 American Zinc Co. of Illinois U.K.
Zinc
1,134,000 lbs
82,838.70
DA-TPS-149 International Minerals and
Metals Corp.
U.K.
Zinc
1,822,000 lbs
134,468.60
DA-TPS-152 United Zinc Smelting Corp.
U. K.
Zinc
362,000 lbs
26,896.60
DA-TPS-154 Republic Steel Corp.
U.K.
Wire
200 G.T.
16,598.40
DA-TPS-153 Wickwire Spencer Steel Co. U. K.
Wire
100 G.T.
12,051.20
93
DA-TPS-156 U. S. Steel Export Co.
U. K.
Wire
600 G.T.
47,824.00
Regraded Uclass
CONTRACT
REQ 101-
NUMBER
CONTRACTOR'S NAME
TIONER
COMMODITY
QUANTITY
TOTAL VALUE
DA-TPS-155 Jones & Laughlin Steel Corp.
U. K. Wire
500 G.T.
40,320.00
DA-TPS-139 Schiavone-Bonomo Corp.
U. K. Scrap
17,000
G.T.
312,885.00
DA-TPS-132 Charles Dreefus Company
U. K. Scrap
17,000
G.T.
312,885.00
DA-TPS-134
Commercial Steel & Chemical Corp
U.
K.
Scrap
17,000
G.T.
312,885.00
DA-TPS-133 Harcon Corp.
U. K. Scrap
18,020
G.T.
333,720.00
DA-TPS-136 Dreefus Iron & Steel Corp.
U. K. Scrap
7,500
G.T.
137,687.50
DA-TPS-106 Caterpillar Tractor Co.
U. K. Tractors
30
247,638.00
DA-TPS-74 Caterpillar Tractor Co.
U. K. Graders
12
28,790.40
DA-TPS-158 R. G. Le Tourneau, Inc.
U. K. Rooters
10
14,257.50
DA-TPS-100
Deere & Company
U. K. Spare Parts
1,995.99
DA-TPS-69
Simplicity Mfg. Co.
U. K. Tractors, etc.
79,629.70
DA-TPS-91
Stauffer Chemical Co.
U. K. Sulphur
1000 L.T.
32,256.00
DA-TPS-169 The Linde Air Products Co.
U. K. Cylinders
300
1,875.00
DA-TPS-150 American Metal Co. Ltd.
U. K. Zinc
766,000 lbs
58,522.40
DA-TPS-186 Youngstown Sheet & Tube Co.
U. K. Wire
100 G.T.
6,944.00
DA-TPS-145 Raytheon Production Corp.
U. K. Radio Tubes
6,240.00
DA-TPS-144 National Union Radio Corp.
U. K. Radio Tubes
10,695.00
Regraded 94 Ucla
CONTRACT
REQ ISI-
NUMBER
CONTRACTOR'S NAME
TIONER
COMMODITY
QUANTITY
TOTAL VALUE
DA-TPS-177 Chemical Construction Corp.
U. K. Vanadium Contact
Mass
3920 Litres
6,860.00
DA-TPS-70 Briggs & Stratton Corp.
U. K. Rope Starter Motors 200
10,288.00
DA-TPS-79
R. Herschel Mfg. Co.
U. K. Smooth Guard Plates
1,223.23
DA-TPS-131 Gravely Motor Plow & Cultivator Co U. K. Tractors & attachments
19,375.87
DA-TPS-94
Henry R. Jahn & Son
U. K. Tractors & attachments
8,865.98
DA-TPS-89 Allis-Chalmers Mfg. Co.
U. K. Harvesters
3
1,038.75
DA-TPS-165 Merger Engineering Wks. Inc.
U. K. Cranes
250
1,423,775.40
DA-TPS-184 La Plant-Choate Mfg. Co. Inc.
U. K. Trailbuilder
1,974.00
DA-TPS-194 Climax Molybdenum Co.
U. K. Molybdenum
2,195,200 lbs 1,481,760.00
DA-TPS-164 Williamette Hyster Co.
U. K. Cranemobiles
250
1,093,750.00
DA-TPS-140 Roumanian Government
U. K. Galvanized Barbed
Wire
6,008,687 lbs
213,308.39
DA-TPS-174 The Cleveland Tractor Co.
U. K. Tractors
15
28,460.70
DA-TPS-178 Taylor Wharton Iron & Steel Co.
U.
K.
Cylinders
720
10,800.00
DA-TPS-173 La Plant-Choate Mfg. Co. Inc.
U. K. Angledozers
20
19,303.80
DA-TPS-171 Taylor Wharton Iron & Steel Co.
U.
K.
Cylinders
8,000
106,400.00
DA-TPS-161 R. G. Le Tourneau, Inc.
U. K. Carryall Scrapers
8
31,920.00 95
Regraded Ucl
CONTRACT
REQUISI-
NUMBER
CONTRACTOR'S NAME
TIONER
COMMODITY
QUANTITY
TOTAL VALUE
DA-TPS-162
Caterpillar Tractor Co.
U.K.
Tractors
4
32,104.6.
Total Purchases 6/6 to 6/13/41
$ 7,060,317.25
96
Regraded Uclass
97
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE I JUN 13 1941
TO Secretary Morgenthau
FROM Mr. Foley
In accordance with the request contained in Mr.
Thompson's memorandum of December 26, 1939, there is attached
a summary report of studies or projects carried on in the Office
of the General Counsel for the month of May, 1941.
9.10.7h
à
on
2
Regraded Uclassified
98
SUMMARY REPORT ON STUDIES OR PROJECTS IN
THE OFFICE OF THE GENERAL COUNSEL -
MAY 1941
The following matters received attention in the Office
of the Chief Counsel for the Bureau of Internal Revenue:
1. Increase in tax on certain income under Tax Conven-
tion with Canada. The Tax Convention between Canada
and the United States limiting the rate of tax on cer-
tain income to 5% contained 8. provision that either
country could increase such rate but, if it did so, the
other country was released from the terms of the conven-
tion. Canada has now notified the United States that it
has increased its applicable rate of tax to 15%. A
Treasury decision was therefore drafted and has been is-
sued notifying withholding agents that the rate of tax
applicable to Canadians is now the same as the rate ap-
plicable to aliens generally.
2. Exclusion from decedent's gross estate of rents, etc.,
accruing vithin year of decedent's death. A Treasury de-
cision was prepared and has been issued outlining the
effect of Maass V. Higgins, Abendroth V. Commissioner,
and Estate of Blacque V. Commissioner, Supreme Court
March 3, 1941, excluding from the gross estate of a de-
cedent rents, dividends and interest accruing within the
Regraded Uclassified
99
- 2 -
year following the decedent's death where the estate
is valued under the option authorized by section 811
(j) of the Internal Revenue Code. The purpose of this
section of the law is to allow the estate tax to be based
on the value of property as at one year after date of
death where such value is less than the value as at the
date of death.
3. Veto of two relief bills. Under date of May 19,
1941, the President, following the suggestion of the
Treasury Department, vetoed two relief bills. Had the
bills been approved, their effect would have been the
waiving of the statutory period of limitations for fil-
ing claims for refund of taxes (S. 514 - For the relief
of R. Stern, and S. 788 - For the relief of Noland Blass).
The above matters were handled under the supervision
of G. E. Adams, Head, Legislation and Regulations Division.
The following work was done under the supervision of
Assistant General Counsel Cairns:
4. Irregularities of alien's entry as affecting subse-
quent naturalization. The opinion on this question,
drafted by Mr. DuBois of the Opinions Unit, and dated
Regraded Uclassified
100
- 3 -
May 5, 1941, concludes that irregularities in entry do
not render void an alien's naturalization. Fraudulent
statements in connection with entry could be the ground
for cancelation of the certificate of naturalization, if
disclosure of the truth would have been & bar to legal
entry.
5. Procedure for settling contractor's reclaim for
liquidated damages on account of delay. This opinion,
written by Messrs. Meeker, Gilmore, and Feidler, bears
date of May 12, 1941, and concludes that, where comple-
tion of a project by a Government contractor is delayed
beyond the time set for performance in the contract, the
administrative officers concerned should make e final dis-
position of the reclaim, by payment or refusal, if they
believe the case raises no doubtful questions of law.
If they believe that it does, they should transmit the
contractor's claim to the General Accounting Office for
direct settlement, or refer it to the Court of Claims.
In any case where disbursing officers or the head of the
department concerned wish to be reassured that no doubt-
ful question of law is at issue, they may certify an in-
quiry to the Comptroller General.
Regraded Uclassified
101
- 4 -
6. Jurisdiction of Coast Guard to patrol harbors in
United States ports. The opinion on this question,
addressed to Rear Admiral Waesche, was prepared by
Messrs. Mullin, Meeker, and Feidler, and was given
under date of May 20, 1941. The opinion examines the
statutory and other authority of Coast Guard personnel
to search for acts of sabotage, and to take appropriate
measures upon discovery or suspicion of sabotage on
ships and docks in inland waters of the United States.
It concludes in favor of the existence of authority for
such law enforcement, either directly or by virtue of
collateral powers.
7. Availability by settlement warrants of funds appro-
priated to the Tennessee Valley Authority. The opinion
in this case, dated May 5, 1941, was prepared by Mr.
Zarky of Tietjens' shop and reviewed in the Opinions
Unit. The conclusion is expressed that in the case of
funds appropriated by Congress to the Tennessee Valley
Authority, the procedure of issuance of settlement war-
rants signed by the Secretary may be used to withdraw
moneys from the Treasury, since the accounts of the Au-
thority are not audited in the General Accounting Office.
Regraded Uclassified
102
-
- 5 -
8. Overtime compensation. The bill to authorize
regular tours of duty for customs officers and employ-
ees at nights and on Sundays and holidays without
extra compensation, and generally to clarify the provi-
sions of the customs overtime laws, referred to in the
March, 1941 report, has been introduced in the House
and referred to the Committee on Ways and Means (H.R.
4768).
Mr. Fred Ivey of the Customs legal staff and
another representative of Customs have participated in
conferences with Mr. Staley of the Department of Jus-
tice, and Mr. Drysdale, attorney for the plaintiffs in
the case of Howard C. Myers V. United States, and com-
panion cases, with reference to proposed stipulations
as to the amounts of recovery so that judgments may be
entered and B. petition to the Supreme Court for a writ
of certiorari may be filed. Tentative drafts of such
stipulations were prepared at the conferences and have
been approved by this Department.
The following work was handled under the supervi-
sion of Assistant General Counsel Bernard:
Regraded Uclassified
103
- 6 -
CONTINUATION OF PROJECTS
9. Bill to relieve the hospitals from double taxation
under Harrison Narcotic Act (for description see origi-
nal report, Item 9). This bill and letters' of trans-
mittal therefor were transmitted to Congress on May 1,
1941, and referred to the Senate Finance Committee, and
to the House Ways and Means Committee.
10. Fidelity bond bill (formerly identified as "Bond
Survey") (for description see original report, Item 10).
In accordance with recommendations which have been made
by other departments and agencies, this bill which was
prepared by Mr. Spingarn, has been redrafted. This pro-
posed legislation as revised has finally cleared with
the Bureau of the Budget and will be submitted to Con-
gress within the next week or SO. A very hot congres-
sional battle on this bill is anticipated because of the
great amount of business the surety companies would
stand to lose by enactment of the legislation. The ten-
year (1930 to 1939, inclusive) country-wide experience
record of the surety companies writing Federal fidelity
bonds shows they receive premiums of nearly $10,000,000
and incur net losses of less than $2,000,000.
Regraded Uclassified
103
- 6 -
CONTINUATION OF PROJECTS
9. Bill to relieve the hospitals from double taxation
under Harrison Narcotic Act (for description see origi-
nal report, Item 9). This bill and letters' of trans-
mittal therefor were transmitted to Congress on May 1,
1941, and referred to the Senate Finance Committee, and
to the House Ways and Means Committee.
10. Fidelity bond bill (formerly identified as "Bond
Survey") (for description see original report, Item 10).
In accordance with recommendations which have been made
by other departments and agencies, this bill which was
prepared by Mr. Spingarn, has been redrafted. This pro-
posed legislation as revised has finally cleared with
the Bureau of the Budget and will be submitted to Con-
gress within the next week or SO. A very hot congres-
sional battle on this bill is anticipated because of the
great amount of business the surety companies would
stand to lose by enactment of the legislation. The ten-
year (1930 to 1939, inclusive) country-wide experience
record of the surety companies writing Federal fidelity
bonds shows they receive premiums of nearly $10,000,000
and incur net losses of less than $2,000,000.
Regraded Uclassified
104
- 7 -
10. Federal Depositary System (for description see
original report, Item 6). Several minor changes were
made in this bill to comply with the suggestions of
Under Secretary Bell, and it has been forwarded for
initialing. The Legislative Section cooperated with
Mr. O'Connell's office in perfecting these changes.
11. Law Committee of Defense Communications Board
(for description see November report, Item 23). Mr.
Spingarn is continuing his work as the Treasury Rep-
resentative on the Law Committee of the Defense Com-
munications Board. A memorandum to the Coordinating
Committee of the Board on the legality of establishing
traffic priorities in radio-telegraph, telegraph, and
cable communications for Governmental and other national
defense traffic (1) in time of war or (2) in time of
national emergency short of war, which was prepared by
Lt. Commander Willenbucher and Mr. Spingarn, was dis-
cussed and adopted by the Committee, subject to certain
changes to be made by Messrs. Willenbucher and Spingarn.
12. Survey of tax-exempt Federal securities, other than
obligations (for description, see February report,
Regraded Uclassified
105
- 8 -
Item 7). We have almost completed our work on this sub-
ject.
13. Administrative Procedure bills (for description see
April report, Item 8). Mr. Koken is continuing his work
on the preparation of the Department's detailed report on
the three pending Administrative Procedure Bills, S. 675,
S. 674, and S. 918, which report will be transmitted to
the Senate Judiciary Subcommittee handling the bills within
& few days.
14. Proposed legislation to regulate production of opium
poppies (for description see May report, Item 9). In con-
junction with the Narcotic Division, Mr. Morton is contin-
uing his work on the preparation of legislation to author-
ize and regulate the production and distribution of opium
poppies in this country.
The following matters were worked on under the direc-
tion of Assistant General Counsel Bernstein:
15. Foreign funds control. For several months we have
been studying the need for issuing a series of definitions
and rules of interpretation for use in all rulings, licenses,
instructions, etc., in connection with the administration
Regraded Uclassified
106
- 9 -
of freezing control. The past year's experience in the
field had disclosed the need for official definitions of
such concepts as "blocked account", "blocked country",
"domestic bank", and the like. On May 24 we issued an
amendment to General Ruling No. 4 which prescribed eighteen
such definitions and rules of interpretation. This ruling
will permit the streamlining of the thousands of licenses
issued weekly, simplifying their interpretation and, at
the same time, contributing to 8. greater degree of legal
accuracy. The operating division of the Foreign Funds Con-
trol is now studying standard texts of licenses in order
to revise them in the light of the new ruling. Mr. Bern-
stein and Mr. Luxford worked on these matters.
As & further step along the lines indicated in the
preceding paragraph, we are in the process of revising 8.
number of the outstanding general licenses in order to in-
corporate a body of interpretations into the express terms
of the licenses and to adjust the licenses to the needs
and problems of today. The process of revision requires
constant consultation wi th the operations division both
here and in New York, as well as with B. committee of bank
Regraded Uclassified
107
- 10 -
representatives in New York. Mr. Bernstein and Mr. Luxford
worked on this matter.
The question of issuing a general license to facili-
tate the purchase with blocked dollars of Defense Savings
Bonds by refugees, was studied and some of the technical
aspects were discussed with Public Debt. The problem was
raised with Mr. D. W. Bell, who suggested that pending fur-
ther developments, we continue to deal with the matter on a
specific license basis. Mr. Bernstein and Mr. Luxford
worked on this matter.
In connection with B. report that a certain New York
bank of foreign ownership was planning to remove its assets
to South America, this office, in addition to assisting in
the study of the matter, drafted the documents necessary
for freezing the bank on an ad hoc basis. Further study was
also given to the drafting of a general ad hoc section
which might be integrated into any Order for 8. general ex-
tension of freezing control. The scope of the term "na-
tional" for use in a new Order was also reexamined in the
light of the present conditions. Messrs. Bernstein, Lux-
ford, and DuBois worked on this matter.
Regraded Uclassified
108
- 11 -
The problem of attachment cases involving blocked
accounts is requiring special study. At the present
time there are about thirty of such cases pending, and
action thereon is being delayed until & comprehensive
course of action is decided upon. The problem has 8.
series of implications, including those of default judg-
ments against nationals having no notice of the litiga-
tion; protection of American creditors; the possibility
of collusion to free accounts from our control, etc.
Messrs. Bernstein, Luxford, and Anderson worked on this
matter.
This office assisted in the drafting of & "clearing
agreement" arrangement between the Philippine Islands and
French Indo-China through the use of blocked Philippine
peso accounts. Discussions are still under way with re-
spect to permitting French Indo-China to conduct its
foreign trade with countries other than the United States
through dollar clearing balances. Messrs. Bernstein and
Luxford worked on this matter.
This office participated in the formulation of 8. pro-
cedure and drafting of a license to permit the payment of
Regraded Uclassified
109
- 12 -
& French Government bond dollar issue maturing June 1,
1941. The matter is requiring particular attention
because the amounts involved are considerable; the mar-
ket regards our action as indicative of what to expect
in future cases, and the possibility of payments bene-
fiting the invader must be minimized. Messrs. Bernstein
and Luxford worked on this matter.
16. Economic Defense Committee. After many conferences
with Dean Acheson and Francis Shea, we prepared an Exe-
cutive Order and a memorandum to the President signed by
Secretary Hull, Secretary Morgenthau, and Attorney Gen-
eral Jackson providing for the setting up of an economic
defense committee. The matter was submitted to the Pres-
ident but no action has as yet been taken thereon.
Messrs. Bernstein, Luxford, and DuBois worked on this mat-
ter.
17. Pioneer Import Case. This case has been discussed
with the Assistant United States Attorney and with the
Customs investigators with a view to presenting the case
to a grand jury. Mr. Bernstein also spoke to officials
of the Belgian Embassy and the Dutch Legation with a view
Regraded Uclassified
110
- 13 -
to enlisting their cooperation on this matter. We are
also asking the State Department for certain informa-
tion from their officials in the invaded areas. Messrs.
Bernstein and DuBois worked on this matter.
18. Daniel de Gorter, et al., Assignees of Banque Na-
tionale de Belgique V. Banque de France. This case in-
volves a suit by the Belgian National Bank V. The Bank
of France for $260,000,000 of Belgian gold which the
French are in the process of turning over to the Germans.
John Foster Dulles came in to discuss the various phases
of this case with Mr. Bernstein. Messrs. Bernstein and
Anderson worked on this matter.
19. Harold Anderson V. N.V. Transandine Handelmaatschappij,
et al. Allen W. Dulles and Mr. Molekamp of the Dutch Le-
gation discussed with Mr. Bernstein the brief which they
were filing in this case which involved the validity of
the Dutch Decree of May 24. The decision of Justice
Shientag in this case is very helpful from our point of
view and is along the lines which we have been arguing dur-
ing the past year. Messrs. Bernstein, Friedman, and Ander-
son worked on this matter.
Regraded Uclassified
111
- 14 -
20. Werfel V. Zivnostenska Banka. This Department has
reviewed B. memorandum prepared by the Department of Jus-
tice for the United States, as amicus curiae, for pre-
sentation on the appeal of Werfel V. Zivnostenska Banka.
The case involves a claim based on the deposit of money
in a Czechoslovakian bank prior to the German occupation
of Czechoslovakia and the failure of the bank to repay.
The lower court held for the defendant and the plaintiff
has appealed. Mr. Bernstein has also discussed the memo-
randum with representatives of the Department of Justice
on several occasions. Messrs. Bernstein, Friedman, and
Anderson worked on this matter.
21. Luxembourg Decree. We made public through the chan-
nels of the Federal Reserve Banks a note received from the
State Department, including a decree of the Luxembourg
Government which is comparable to a decree issued by the
Belgian Government and also related to the management of
Luxembourg corporations and the right to dispose of their
funds outside of Luxembourg. Mr. Bernstein worked on this
matter.
22. Rueckwanderer marks. As a result of the Treasury in-
quiry, the Department of Justice is taking active steps in
Regraded Uclassified
112
- 15 -
this case with 8. view to presenting it to 8. grand jury.
Mr. Klaus has been working directly with McNulty of
Justice on the case. Messrs. Bernstein and Friedman
worked on this matter.
23. Lend-lease problems. We participated in discussions
in the Treasury relating to the problem of taking out the
British on $300 to $400 million of their outstanding com-
mitments and on the problem presented in the Keynes pro-
posal for taking out the British on $650,000,000 of their
outstanding contracts. Mr. Bernstein worked on this mat-
ter.
24. Stabilization and dollar devaluation powers. We
prepared 8. statement for the Secretary for use at the
hearings in the House Coinage Committee re the extension
of powers, went over the testimony given at the hearings,
worked on speech and other material used by Congressman
Cochran in the debate on the House floor and attended the
debates on the bill. Mr. Bernstein worked on this matter.
25. Chinese Stabilization Agreement. Mr. Bernstein pre-
pared 8. memorandum which was furnished to Mr. Fox cover-
ing the further steps to be taken in connection with
Regraded Uclassified
113
- 16 -
carrying out the Stabilization Agreement, including the
setting up of the various accounts with the Federal Re-
serve Bank of New York. The problems listed in the
memorandum were discussed with and approved by the Trea-
sury group working on the Chinese Stabilization arrange-
ment. Mr. Friedman also worked on this matter.
26. Transactions under section 25(b) of Federal Reserve
Act. The following transactions were authorized pursuant
to the provisions of the Act of April 7, 1941, amending
section 25(b) of the Federal Reserve Act, as amended: (a)
Transfer of approximately $15,000,000 from accounts at
various banks in the names of the Central Banks of Latvia,
Lithuania, and Estonia to accounts at the Federal Reserve
Bank of New York in the names of the governments of such
countries, and transfer of $175,000 to accounts in the
names of the Legations of such countries for expenses of
the diplomatic missions and consular offices in the Western
Hemisphere; (b) payments, transfers and withdrawals from
the account in the name of the Central Bank of Norway.
In addition to preparing the appropriate licenses
required to effect these transactions, we also prepared,
Regraded Uclassified
114
- 17 -
in each case, drafts of the documents required to be
executed by the State Department and the accredited
representatives of the countries involved. Messrs.
Bernstein and DuBois worked on these matters.
27. Inter-American Bank hearings. Mr. Bernstein at-
tended hearings before the Subcommittee of the Senate
Foreign Relations Committee relating to the convention
of the Inter-American Bank.
115
TREASURY DEPARTMENT
por - Chauncey
INTER-OFFICE COMMUNICATION
DATE June 13, 1941
TO
Secretary Morgenthau
FROM Mr. Cochram
CONFIDENTIAL
Registered sterling transactions of the reporting banks were as follows:
Sold to commercial concerns
£54,000
Purchased from commercial concerns £27,000
Open market sterling held steady at 4.03-1/2. The only reported transaction
consisted of the purchase of £1,000 from a commercial concern.
Continuing its recovery, the Cuban peso moved to 1-1/16% today, as compared
with 1-1/2% yesterday.
In New York, closing quotations for the foreign currencies listed below
vere as follows:
Canadian dollar
12% discount
Swies franc
.2321-1/2
Swedish krona
.2385
Reichemark
.4005
Lira
.0526-1/4
Argentine peso (free)
.2370
Brazilian milreis (free)
.0505
Mexican peso
.2070
In Shanghai, the yuan held steady at the rate of 5-3/8# which has prevailed
since June 10. Sterling was also unchanged at 3.92.
There were no gold transactions consumented by us today.
The State Department forwarded a cable to us which stated that Sharps &
Vilkins, London, shipped $350,000 in gold from England to the Bankers Trust Co.,
Sev York, for sale to the New York Assay Office.
A price of 23-3/8d was again fixed in London for both spot and forward
silver, equivalent to 42.44#.
Handy and Harman's Treasury's settlement purchase price for foreign silver was also unchanged at 34-3/44.
The price for foreign silver was unchanged at 35#.
Purchase Act. This consisted of new production from Argentina, and was bought
We made one purchase of silver amounting to 175,000 ounces under the Silver
for forward delivery.
R.M.S.
Regraded Uclassified
116
BRITISH EMBASSY,
PERSONAL AND
WASHINGTON, D.C.
SECRET.
June 13th, 1941
Dear Mr. Secretary,
I enclose herein for your
personal and secret information a copy of
the latest report received from London
on the military situation.
Believe me,
Dear Mr. Secretary,
Very sincerely yours,
Halfex
The Honourable
Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D.C.
117
Copy of tolegram from London dated June 11th, 1941.
Night of 10th/11th. 93 bombers attacked
ensuy shipe at Breat. Smoke screen over warships
effective; identification difficult. 122 tone
high explosives including 19 A.P's of 2,000 pounds
and 12 of 1,000 pounds dropped, All airoraft
returned safely. Large fires seen in docks. 8
aircraft Coastal Command bombed U-boat Penns, st.
Nassire. "Pintail", escorting eact coast convey
was mined and sunk off Humber Dom./10, 22 survivors,
on 10th, attack on shipping off Stavanger by Blenheims,
resulted possible hit on 1,000 ton merchant ship.
2.
syria.
Up to morning of June 10th our
troops had taken 450 prisoners comprising French
Tunisians and a few Italians. Free French on right
encountered some opposition just south of Kiawe but
morning of June 10th were able to push on, No
progress at Nordjayoun. On left, bridge over River
Litani repaired and our column resumed advance by
coast road June 10th being five miles north of river
by 0900 hours. Reference engagement 9th, French
destroyers had previously bombarded our advancing
troops north of Tyre. On 9th Royal Mr Force fighters
covering naval units deatroyed 4 French aircraft,
3 Hurricanes missing. Cladintors drove off 4 French
bombers attacking our troops South Damascus. Night
of 9th/10th 20 aircraft probably from Dodecenase bombed
Haifa. Tanker set on fire, power station and oil
works damaged not seriously. Two certain one possible
aircraft shot down by anti-aircraft.
3.
Servi. Libya. Labour situation at
Alexandria which was bad after dr raid now improving.
Night of 8th/9th Royal Air Force berthed Benghasi and
other targets in Libya with 10 aircraft, attacked Rhodes
harbour and aerodromes where explomions and persistent
fires occurred among dispersed aircraft. on same
night Swordfish attacked Tripoli harbour starting fires
near quay and in merchant ship. June 9th enemy air-
craft bombed hospital at Tobruk. Our own and enemy
patrols have been active both there and South of Halfays.
One enemy armoured car captured in area Bidi Suleiman,
Exercy aircraft bombed Rabia damaging one aircraft on
ground and attacked Matruh where no damage or casualties
were caused.
4. column advancing on Girma was delayed by road blook at
Abyssinia, To 0700 June 9th. Northern
Socorro, This will take 36 hours to clear. On line
of advance of southern column work proceeding on pentoon
bridge over River One and on clearance of road blook
12 miles west of crossing. Heavy rain impeding work.
5. Irea./
Regraded Uclassified
118
5.
June 9th, Our flying column
passed through Hediths (at pipe line junction)
and head was reported to be in touch with some
rebels two miles southeast Abu Kemal. Mobile
column sent to Kirkuk has arrived. More troops
have reached Mosul by air without incident.
6.
Ensmy activity United Kingdom, remains
slight but night of 10th/11th brief attack on
Pembroke area. No important damage reported.
Regraded Uclassified
119
BRITISH EMBASSY,
WASHINGTON, D.C.
Personal and Secret
June 13th, 1941.
Dear Mr. Secretary,
I enclose herein for your
personal and secret information a copy
of the latest report received from
London on the military situation.
Believe me,
Dear Mr. Secretary,
Very sincerely yours,
Halifax
The Honourable
Henry Morgenthau, Jr.,
United States Treasury,
Washington, D. C.
120
Telegram from London dated June 12th, 1941.
1.
At 11.20/11th capture of Anomb had been
successfully completed. Operation proceeded according
to plan, surprise complete. Landing made by Indian
troops. Indian naval aloop Clive Indus and H.M.Ship
Chekdina prisoners. took part. Two generals one navel captain
2.
11th three aircraft attacked awrohant vessel
at Recorugge. your hite on molo observed. Five
aircreft claimed destroyed 5,000 ton tanker between
Dunkin und Ostand last soon on fire decks aware.
3.
Last night three Swordfish attacked docks Dun-
kirk. All bombs target apon. Trusty WAP ships Brest
atill in sera position.
4.
Night of 10th/11th two Blenheims claimed one
hit 1,900 ton merchant veasel none Hougeaund.
5.
Night or 11/12th, 245 bombers despatched for
Dusseldorf, Duisburg, Boulogno docks, Rottordan docks,
Cologne and shipping off Dutah and French cousts. B
aircraft adming. 103 tono of high explosive bonbs
including the 4,000 pound and 42 1,000 pound and 4,380
incondiaries dropped over Number of fires
started including oil fire weet of the town. Duisberg
48 tons of high explosives 7,180 incondiaries dropped.
lisity fires started in infund port, one very large
he ne hit, set on fire, Boulogne dooke 36 tona of high
explosive bombe 1,780 incondiaries. Lorgo fire were-
howe south of dock.
6.
jucccosful borbing attack mode Benghasi herbour
nicht of 9th/10th.
7.
avria. Morring of 11th. Troe Pronch assisted
by Colonal Collete envolry were developing sttock on
Time. No further advance on werdjaymin, Porce on
const road approaching Nehr So Zahrani, 7 miles mouth
of 11don.
E,
Irea, our trope on vary Anxra to Anghdad have
peasod
9.
Libya. Dem.loth. Henvy shelling took place
enlient area Tobruk. ment APV's active south of Malfyn.
Right of 9th/10th enemy aircraft bashed petrol dump Metruh
one exploded GO mines in our mine field cast of the town.
10. clearing road One to Abelti but dolny caused by torrential
Abyocinia, To 7 here June 10th. To are
rain. Itelian communder non anked us to analnt General
Pralerms and remunts of 2/2 Italian divisions from stinds
by petriots. Patriot foroce have occupied Lakebohi,
important town 170 miles rest of Addie habe.
11.
Night of 11th/12th about 100 enery aircraft
operated. Bombe dropped addlends, and thern, eastern
counties. me serious incident Dov Perschute mines
caused much darage to houses in Bristol, comunities
probably heavy.
Regraded Uclassified
121
CONFIDENTIAL
MILITARY INTELLIGENCE DIVISION
TENTATIVE LESSONS BULLETIN
WAR DEPARTMENT
No. 119
Weshington, June 13, 1941
G-2/2657-235
NOTICE
The information contained in this series of bulletins
will be restricted to items from official sources which are
reasonably confirmed. The lessons necessarily are tenta-
tive and in no sense nature studies.
This document is being given an approved distribution,
and no additional copies are available in the Military In-
telligence Division. For provisions governing its reproduc-
tion see Letter TAG 350.05 (9-19-40) N-B-L.
BRITISH NOTES ON GENEAN ARTILLERY AND ARMORED VERICLES
SOURCE
This bulletin is based upon information released by a high
British official source on March 23, 1941.
CONTENTS
1, 75-mm. ANTITANK GUN
2. 105-mm, ASSAULT GUN
3. 25-mm. LODINE ANTITANT DQUIPMENT
4. 15-m. ANTIAIECRAFT-ANTITAUI HEAVY MACHINE GUN
5. HE. TYPIS OF TANKS
E. T-SHAPID RATTS
CONFIDENTIAL
-1-
Regraded Uclassified
122
CONFIDENTIAL
BRITISH NOTES ON GERMAN ARTILLERY AND ARMORED VEHICLES
1-
75-mm, ANTITANK GUN
It is reported that a 75-com. antitank gun with mussle velocity
of 2620 feet per second is in production at the Skoda and C.K.D. works,
The penetration claimed is 80 m. of armor at 2000 yards, and although
the angle of impact is not stated, it is presumed to be 90 degrees.
It is considered that this performance is possible and that at about
600 yards range and a 30 degree angle of impact, the penetration might
be as much as 100 m.
Particulars received early in 1940 gave muzzle velocities
varying between 3300 and 5000 feet per second, but these figures
apparently referred to trials for maximum service performance. The
muzzle velocity now quoted is what could be expected of a normal ser-
vice weapon.
The equipment may weigh as much as 1$ to 2 tons if the car-
riage is of the normal field gun type. If all-round traverse is
provided, the weight is at least 2 tons, and probably more. A proper
antitank gun of this caliber will have distinct advantages in maneuver-
ability, concealment, and general handiness as compared with an anti-
aircraft gun, but the success of the latter against tanks in the
Battle of France probably influenced the production of the new cun.
It is not yet known when the 75-m. [un will be ready for issue to units.
2. 105-mm. ASSAULT GUN
The existence of 105-mm. assault guns is reported from a usually
reliable source, and we must certainly expect these guns to appear in
certain formations, especially the heavy armored division.
No details are known. The gun itself may well be an adaptation
of the 105-mm. light field gun-howitzer, 1918, with a considerably
greater range than either the 75-mm. or the 150-mm. infantry gun, It
may be suitable for firing either armor piercing or high explosive
ammunition. The mounting may be the 18-ton tank chassis, Type III, with
armor protection on at least three sides for the gun crew.
3. 25-m. MOBILE ANTITANT EQUIPLENT
Recent reports suggest that large numbers of 9-ton tanks, Type
III, recently made available by reorganization, are being used to pro-
vide light mobile antitank equipment.
CONFIDENTIAL
-2-
123
CONFIDENTIAL
The armor protection is said to be 25 m., which would give
immunity at fighting ranges against anything less than an antitank gun.
The gun, mounted in 8. half-turret, is believed to be the French 25-mm.
Hotchiciss antitank gun.
The characteristics of this gun are as follows:
liuzzle velocity: 3000 feet per second
Weight of armor-piercing shot: 11.3 ounces
Penetration: 50 m. at normal at 400 yards
32 nn. at 22 degrees at 400 yards
It is probable that the Germans have secured more than 3000 of
these guns from the French army.
The Type-II tank weighs nine tons. Dimensions and performance
are as follows:
Length: 14'8"
width: 6'0"
Height: 5'6"
Maximum road speed: 28 MPH
Cross country speed: 18 EPH
Trench crossed: 4'11"
Water forded: 2'6"
At least 2000 of these tanks should be in existence, but it does
not follow that they have all been converted to this particular purpose.
4. 15-mm. ANTIAIECRAPT-ANTITAUX HEAVY MACHINE GUN
It is now known that the German Army is employing the Czech
15-mm. dual purpose heavy machine gun, whose design is similar to that
of the British Besa.
Antitank performance figures are as follows:
Muzzle Velocity:
2950 feet per second
Weight of armor-piercing bullet:
1142 grains
Rate of fire:
480 revolutions per minute
Effective rate of fire:
180-220 revolutions per minute
Feed by belt in 40-round strips
Penetration: 30 m. at 100 yards at normal
21 m. at 100 yards at 40 degrees
15 mm. at 100 yards at 40 degrees
27 mm. at 200 yards at normal
19.7 mn. at 200 yards at 20 degrees
13.8 m. at 200 yards at 40 degrees
25 m. at 400 yards at normal
16.5 mm. at 400 yards at 20 degrees
CONFIDENTIAL
-3-
124
CONFIDENTIAL
5. NEW TYPES OF TANKS
A recent report from a good source suggesta that two new marks
of tank are in oxistence, namely:
R. A 21-ton tank armed with a 47-mm. gun. This may be a de-
velopment of the 18-ton, Type-III tank, with a Czech 47-m. gun replac-
ing the 37-cm. gun with which it was formerly armed. Penetration
claimed for the 47-mm. 11.38 antitank gun is 60 mn. face-hardened plate
at 800 yards at normal. Alternatively, but less likely, it may be an
improved French Somua tank, which weighed 18 tons and carried a 47-m.
gun in its original form.
b. A Type-IVa tank whose details are not known. This may be
a Type-IV tank converted to an armored command vehicle. A large number
of these are now in fornations. They are built along lines similar to
those of the earlier Type-I and Type-II commanders' tanks, although
they are more roomy and better protected.
6. T-SHAPED RAFTS
A number of reports have been received indicating that flat-
bottom boats or rafts of a special design are being constructed for
use during an invasion. Sketches of these rafts are shown on the follow-
ing page.
At first Raft A was believed to be a tank landing craft, the
head of the T being a tank float and the tail of the T a landing cang-
way. The shape of the section, however, seemed to rule out this pos-
sibility and gave rise to the opinion that perhaps this was a covered
way over the longer axis of the raft to give some protection in the
event of the reft's being used as a ship-to-shore floating gangway.
Raft B seens to be a larger edition of Raft A, but without the
covered way.
It will be seen from estimated dimensions that Raft C is very
large. They are reportedly for use in landing operations after estab-
lishment of a bridgeheed. The base of the I is to run ashore, and the
head of the I is to be anchored in deep water for the purpose of enabl-
ing troops and material, including field artillery and light tanks, to
disembark. These rafts are said to be unable to stand the North Sea.
It is doubtful - except in the case of Types A and B, which might be
carried by ship - whether a passage could be made except in a very caln
sea either by towing or by powerful outboard motors. Type C would
presumably be brought over in sections and assembled on arrival.
CONFIDENTIAL
-4-
Regraded Uclassified
L
125
CONFIDENTIAL
49'
197'
I
y20'K
60'
6'0"
X
X
Section on XX
Not to Scale
SKETCH A
49'
657'
82'
131'
-
X17"
SKETCH B
SCALE
1 inch = 80 feet
y
CONFIDENTIAL
SKETCH C
-5-
CONFIDENTIAL
No details are available as to the under-water shape of these
rafts, but on the assumption that the main body of the raft is of uni-
form draft while the under side of the tail slopes uniformly upwards
to water level to facilitate grounding on a sloping beach, it is clear
that considerable buoyance will be available for load carrying purposes
even if the maximum draft is small. This might be of the order of
50 tons for a draft of three feet in the case of the 60-foot raft.
CONFIDENTIAL
⑉6⑉
126
RESTRICTED
G-2/2657-220; No. 416
M.I.D., I.D.
12:00 M., June 13, 1941.
SITUATION REPORT
I. Western Theater.
Air: German. Very limited activity last night over
Eastern England.
British. A strong offensive effort involving an
estimated 200-300 planes was made last night. Primary effort was
made over the Ruhr-Rhine industrial area. Raids were also made
along the Dutch-Belgian-French coast, including an attack on
Brest.
II. Mediterranean and African Theaters.
Ground: Libya. Artillery action at Tobruk.
Ethiopia. No important developments.
Air: Axis. Raids on Tobruk, Malta and Gibraltar.
R.A.F. Raids on Benghazi, Rhodes and over the
Western Desert.
III. Syria.
Ground: No noticeable progress by the invaders.
Air: German. Haifa was again attacked.
R.A.F. Raids on Beirut.
RESTRICTED
127
CONFIDENTIAL
Paraphrase of Code Cablegram
Reserved at the Var Department
at 11:25, June 13, 1941.
Lendon, filed 16:30, June 13, 1941.
1. Aritish Mr Activity over the Continent.
& Eicht of June 12-13. On this night the following
disposition of benbers of the Royal Air Force vas made:
Attacking Schverte, 84; Seest, 91; Desabruck, 611
Radon, 11 Xam, 82; Retterdam, 21 Bals, 19,
1. Day of June 12. Reyal Air Tyree benbers with fighter
escorts operated against shipping at drevelines. One ship vas
destroyed. An unnentioned number of Desufert (reconnaissance-
beabers) attacked the airport at Horderney. The decks at Denkirk
were hambed by a Overdfish (toryeda-recommaissance).
2. Fight of June 11-13. 8700 incendiaries and 69 seas
of high explesive bembe were dropped on Doisberg. 4.800 incontiazion
and 100 teas of high explesive bombs were dropped on Descolderf.
2. Garman Air Activity STOP Britain.
4. Richt of June 12-11.
berner planes operated on a small scale, principal
targets being in the visinity of Lands Mad, Cope Wrath, the Orkneys,
Lincelnshire and Torkshire.
1. Elchi of Jane 11-12.
It is now reported that the Germans employed 75
CONFIDENTIA
INFORMATION COPY
-1-
Regraded Uclassified
CONFIDENTIAL
128
leng-range beabers, 20 fighters and 10 mine-laying planes during
their operations on this night.
& Par of June 11. Employed in operations a this day
were 20 resonnaissence planes, 20 lang-range bombers and 10 fighters.
3. Aircraft Jesses - British Thenker.
&
During the extensive sperations on the night of June
12-13, two of the British planes crashed in England and six are w
reported.
2
During the British attack on Grovelines, - Nesserschnitt
Me-109 was destroyed. During the German activity to on the night of
June 12-15, cas Messerschwitt Me-110 was shot down.
4. British Mr Activity - Other Theaters.
& Arvotion Theater. During the day of June 12, planes
of the Reyal Air Force successfully carried out their bember
reconnaissance activity throughout the Middle last,
LES
Distribution:
Secretary of War
State Department
Secretary of Treasury
Chief of Staff
Assistant Chief of Staff, 6-2
War Plans Division
Office of Naval Intelligence
Assistant Chier or credity
Air Carps
CONFIDENTIAL
REFORMATION COPY
+
Regraded Uclassified
129
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
DATE June 14, 1941
Secretary Morgenthau
TO
FROM Mr. Cochran
Mr. Jay Crane telephoned no from New York yesterday afternoon. He referred
to our conversation of June 10, and told me that the Standard Oil Company had now
received word that the German representative who contemplated coming to Cuba for
negotiations with the Standard in regard to the sale of its properties in Hungary,
is still in Brasil. It appears that some difficulty has been experienced in
effecting the necessary arrangements to travel from Brazil to Cubs. It is hoped,
however, that the representative may reach Cuba toward the end of June. In the
event this is impossible, Mr. Crane feared that the question might arise as to
whether one of the Standard officials should go to Brazil. I made no mention to
Xr. Crane of the action which we have taken since my last conversation with him.
B.M.P.
Regraded Uclassified
130
im 14, 1941
Files
Mr. Cookram
At the meeting of Foreign Funds Centrol hold at 20 p.a. on Im 3. there
- brought w several points which lb. Mayford of the British Roberty - dis-
asseed with as from time be time, the simtes of the meeting give the official
record.
Is 6000762200 with the decision takes is the meeting. I discussed with
Mr. Livery of the Department of State the policy of the British deverment in
setsing at Berwade dollar bonds and standatill claims which had boen parchased
from Americans for shipment to Gerenay. Mr. Livesey brenght mp at this time the
signature of has 6 from his office to the treasury, enclosing a marrantes vith
respect to the activities of V. V. Cibera 4 Do. is repairiation of German securities.
b. Livesey vas of the opinion that we should not request the British to make any
change is their policy on the point above montioned. 90 had not indicated to enyure
that the transactions under reference were contrary to American law. Various indivi-
dale engaged is this type of treasmetion have been in touch with the Department of
State and other breaches of the deverament wooking specific approvel of their
operations, but have not obtained 18.
After the above converention with Mr. Livesty. I discussed at -
M had considered is explaine. I referred first to the entry of pictures, particularly
leagth with Mr. Stopford, visa to called as - at 3:30 p.m., June 9. the items which
of French origin, which are being shipped to Valted States via Portugal, Outsoriand
and othervise. I told his that w thought the French picture problem count to be
is hand. Ye are not have any definite authority at that sime to apply restrictions
414 decire, however, that the British give us mah information as they night receive
to terms and other pictures similar to these Imposed upon French pictures. We
with respect to all importations of pictures sening from Europe. the people
vould leek into such shipments metionlensly and thereaghly if there was car ground
whatever for explain.
with respont to the centrol of the toport and export of incrican bank
notes, I told Mr. Stepford that n had observed that this trade had drindled of - to
small the is part to the encosseful interseption eir
free South by rented through a British esstrel station.
shipments proportions, the British probably at the various control pointe. It expoured that Ve mail
agreed thought of importantly that the America blooked. nain there channels vas vot We still MV were of being & trensmission not change dieposed for current. leakage via to recement through I teld and at Pastic Stepford Boath this Amorica time Cosst that the ports, I were licensing mad, received best -
to the brought offect se that the travelers attention and COADER on ships centas from restagal
ever, all exports at imports of American of my colleagues the reports which be had and spots
Regraded Uclassified
131
- 8 -
so the United States are being used to eneggle currentes date this country. We
wald - stops to ... that w Customs people look out for the basiness at -
fully " possible.
is the question of credits w United States taste fovering Anio trade,
1 told Stopford that this question had ast yet been cettied. there - a interchange
of correspendence ml these between the Departmento of State ont with sight
result is - masroto setten to the use fature. $ told Ma that the had
ml - 110 w take the initiative is telling American basis skall types of backasse
they should not indulgo in, values ná operations - definitely corerol w #
existing regulations. Consequently, no had selicited State Department advice is the
promisso.
with respect to the question of patent regulties, I told Mr. Stepford
that this - a matter es which legislation use - being statics, and that souething
definite sight to have is the - fature. $ recommental that to tesp in touch
with Mr. Pekio or Mr. Bernetein ml an this yoint.
:6.16.16.41
Regraded Uclassified
102
CODE OF FEDERAL REGULATIONS
Title 31 - Money and Finance: Treasury
Chapter I - Monetary Offices, Department of the Treasury
Part 130
TREASURY DEPARTMENT,
Office of the Secretary,
June 14, 1941.
REGULATIONS® UNDER EXECUTIVE ORDER NO. 3389, AS AIRDED.
Relating to Transactions in Foreign Exchange
and Foreign-Owned Property, the Reporting
of all Foreign-Owned Property and Related
Matters. (*)
The Regulations of April 10, 1940, as amended (Sections 130.1 to
130.6), are amended to read as follows:
Section 130.1. Authority for regulations. These regulations
are prescribed and issued under authority of Section 5(b) of the
Act of October 6, 1917 (40 Stat. 415), as amended, and Executive
Order No. 9389 of April 10, 1940, as amended by Executive Order
No.
of June 14, 1941.(*)
Section 130.2. Definitions.
(a) The term "Order" shall refer to Executive Order No. 8389
of April 10, 1940, as amended.
(b) The term "regulations" shall refer to these regulations.
(c) The terms "property" and "property interest" or "property
interests" shall include, but not by way of limitation, money, checks,
drafts, bullion, bank deposits, savings accounts, any debts, indebted-
ness or obligations, financial securities commonly dealt in by
benkers, brokers, and investment houses, notes, debentures, stocks,
bonds, coupons, bankers' acceptances, mortgages, pledges, liens or
other right in the nature of security, warchouse receipts, bills
of lading, trust receipts, bills of sale, any other evidences of
title, ownership or indebtedness, goods, wares, merchandise, chattels,
stocks on hand, ships, goods on ships, real estate mortgages, vendors'
sales agreements, land contracts, real estate and any interest therein,
leaseholds, ground rents, options, negotimble instruments, trade
acceptances, royalties, book accounts, accounts paymble, judgments,
patents, trademarks, copyrights, contracts or licenses affecting or
involving patents, trudemarks or copyrights, insurance policies,
safe deposit boxes and their contents, anmuities, pooling agreements,
contracts of any nature whatsoever, et cetera.
(d) Safe deposit boxes shall be deemed to be in the "custody"
not only of all persons having access thereto but also of the lessors
of such boxes whether or not such lessors have access to such boxes.
The foregoing shall not in any way be regarded as 5 limitation upon the
meaning of the term "custody".
Sections 130.1 to 130.7: - Sec. 5(b), 40 Stat. 415 and 966; Sec. 2,
48 Stat. 1; 54 Stat. 179; Ex. Order 8389, April 10, 1940, as amended
by Ex. Order
June 14, 1941.
Regraded Uclassified
- 2
133
(o) For the meaning of other terms reference should be mide to
the definitions contained in the Order. In interpreting rulings,
licenses, instructions, etc., issued pursuant to the Order and reguln-
tions, particular attention is directed to the provisions of General
Ruling No. 4, as from time to time hereafter amended. (*)
Section 130.3. Licenses. Applications for licenses to engage
in any transaction referred to in sections 1 or 2 of the Order shall
be filed in triplicate with the Federal Reserve Bank of the district
or the Governor or High Commissioner of the territory or possession
of the United States in which the applicant resides or has his princi-
pal place of business or principal office or agency, or if the uppli-
cant h:s no legal residence or principal place of business or princi-
pal office or agency in a Federal Reserve district or n. territory or
possession of the United States then with the Federal Reserve Bank
of Me: York or the Federal Reserve Bank of S:n Francisco. Application
forms my be obtained from any Federal Reserve Bank, the Governor or
High Commissioner of e territory or possession of the United States,
or the Secretory of the Treasury, Washington, D.C. The original of
etch application shill be executed under oath before en officer
authorized to administer ocths, or if executed outside of the United
States, before a diplomatic or consuler officer of the United States,
The applicant shall furnish such further information as shall be re-
quested of him by the Secretary of the Treasury or the Federal Reserve
Bank or other agency at which the application in filed. Licenses will
be issued by the Secretary of the Treasury, ecting directly or through
my officers or agencies that he my deodgate, not by the Feder
Reserve Banks, acting in accordance -ith such regulations, cultage,
and instructions as the Secretary of the Tre sury may from time to
time prescribe, in such cases or classe: of is the Sccret.ry of
the Trelsury may determine. The Feder 1 Reserve Bank or other egency
at which un application in filed will alviso the applicant of the
decision respecting the application. Licenses for exports, withtranals
or inports, ufter Inving been concelled Dr the collector of customs
or :>> postanctor through whom the exportation, withirewal or Importa-
tion WAS made, my be returned by such collector 0^ customs or poct-
from to the licensee. Appropet be Sorns "or Meason
mill 20 prescribed by the Secret of the Treasury. ry be
to uired to file reports upon the consummention of M. closs,
= fortaton of the Secretary of the Tre sury with respect to a
for license shall be final. (*)
Section 130.4. Reports of Propert Interests of All Foreir
Comiries and Nation: 13 Thereof.
(=) On or before July 14, 1941, reports sh=11 Do filed on
Para TFB-300, duly executed under oath, Lite the information
for in such Form, with respect to "11 property subject to the
pervision of the United States on the opening of business on June 1,
the United States on the opening of business on June 14, 1941, in which had
1960, ul with respect to all property subject to the jurisdiction of
or. the respective datas any foreign country or any national thereof
any interest of nature whatsoever, direct or indirect, regardless
of whether report any on Form TFR-100 with respect to any such property
mill arve a previously been filed. Such reports shall be filed by:
holding, or having title to, or custody, control or possession
(1) Every person in the United States, directly or Indirectly of
Regraded Uclassified
134
such property on either or both of the aforementioned respective
dates.
(2) Every agent or representative in the United States for
any foreign country or any national thereof having any inform-
tion with respect to such property.
Provided, That no report on Form TFR-300 need be filed where the total
value of all property interests of any foreign country or national to
be reported 1a less than $1,000.
Without any limitation whatsoever of the foregoing, reports on
Form TFR-300, filed as required above, shall be filed by every partner-
ship, trustee, association, corporation, or other organization organized
under the laws of the United States or any state, territory, or district
of the United States or having its principal place of business in the
United States, with respect to any shares of its stock or any of its
debentures, notes, bonds, coupons or other obligations or securities
or any equity therein, in which any foreign country or any national
thereof had on either or both of the aforementioned respective dates,
any interest of any nature whatsoever, direct or indirect.
(b) Reports shall be executed end filed in quadruplicate with the
Federal Reserve Bank of the district or the Governor or High Commissioner
of the territory or possession of the United States in which the party
filing the report resides or has his principal place of business or prin-
cipal office or agency, or if such party has no legal residence or principal
place of business or principal office or agency in a Federal Recerve district
or e territory or possession of the United States, then with the Federal
Reserve Bank of Now York or the Federal Reserve Bank of San Francisco. A
report shall be deemed to have been filed when it 16 received by the proper
Federal Reserve Bank or other agency or when it is properly addressed and
mailed and bears a postmark dated prior to midnight of the date upon which
the report is due. Each Federal Reserve Bank or other agency shall promptly
forward three copies of every report filed with it to the Secretary of the
Treasury.
Reports found not to be in proper form, or lacking in essential
(c) (1) All spaces in the report must be properly filled in.
details, shall not be deemed to have been filed in compliance with
the Order.
(2) Where space in the report form does not permit full
answers to questions, the information required my be set forth
and submitted therewith. Supplementary documents and papers must
in supplementary papers incorporated by reference in the report
be referred to in the principal statement in chronological or
other appropriate order and be described in such menner that they
can be identified.
cuired to file B. report except that persons holding property jointly may
(d) A separate report under oath must be filed by cach person re-
file a joint report.
such extensions of time or exemptions as be deess advisable for
(e) The Secretary of the Treasury my, in his discretion, the grant
miking of any or all of the reports required by these regulations.
Regraded Uclassified
tub
(f) Report Form TFN-300 my be obtained from any Federal Reserve
Bank, the Governor or High Commissioner of a territory or possession of
the United States, or the Secretary of the Treasury, Washington, D. c. (*)
1917, 0.0 amended, provides in parts
Section 130.5. Penalties. Section 5(b) of the Act of October 6,
H # * Whoever willfully violates any of the provisions
of this subdivision or of any license, order, rule or regula-
tion issued thersunder, shall, upon conviction, be fined not
more than $10,000, or, if a natural person, my be imprisoned
for not more than tea years, or both; and any officer, director,
or agent of any corporation who knowingly participates in such
violation my be punished by a like fine, imprisonment, or
both.*(*)
Section 130.6. These regulations and any rulings, licenses, or
instructions issued horeunder shall not be deemed to authorise any
transaction prohibited by reason of any other law, proclamation, order
or regulation. (*)
Section 130.7. Amendment, Modification, or Revocation. These
regulations and any rulings, licenses, instructions, or forms Lasued
terounder my be amended, modified, or revoled at any time.(*)
Secretary of the Treasury.
APPROVED: June 14, 1941.
tranklin Museuver
CERTIFIED COPY
CERTIFIED TO at A TRUE COPY OF THE ORIGINAL
REAL
CHIEF CLERR TREASURY DEPARTMENT
Regraded Uclassified
136
EXECUTIVE ORDER
REGULATING TRANSACTIONS IN FOREIGN EXCHANGE
AND FOREIGN-OWNED PROPERTY, PROVIDING FOR
THE REPORTING OF ALL FOREIGN-OWNED PROPERTY,
AND RELATED MATTERS.
By virtue of and pursuant to the authority vested in
me by Section 5(b) of the Act of October 6, 1917 (40 Stat.
415), as amended, by virtue of all other authority vested
in me, and by virtue of the existence of a period of un-
limited national emergency, and finding that this Order is
in the public interest and is necessary in the interest of
national defense and security, I, FRANKLIN D. ROOSEVELT,
PRESIDENT of the UNITED STATES OF AMERICA, do prescribe
the following:
Executive Order No. 8389 of April 10, 1940, as amended,
is amended to read as follows:
Section 1. All of the following transactions are
prohibited, except as specifically authorised by the
Secretary of the Treasury by means of regulations, rul-
ings, instructions, licenses, or otherwise, if (1) such
transactions are by, or on behalf of, or pursuant to the
direction of any foreign country designated in this Order,
or any national thereof, or (11) such transactions involve
property in which any foreign country designated in this
Regraded Uclassified
-2-
137
Order, or any national thereof, has at any time on or
since the effective date of this Order had any interest
of any nature statsoever, direct or indirects
A. All transfers of credit between any
banking institutions within the United States;
and all transfers of credit between any banking
institution within the United States and any
banking institution outside the United States
(including any principal, agent, home office,
branch, or correspondent outside the United
States, of a banking institution within the
United States);
B. All payments by or to any banking in-
stitution within the United States;
C. All transactions in foreign exchange by
any person within the United States;
D. The export or withdrawal from the United
States, or the earmarking of gold or silver coin
or bullion or currency by any person within the
United States;
E. All transfers, withdrawals or exporta-
tions of, or dealings in, any evidences of
indebtedness or evidences of ownership of property
by any person within the United States; and
F. Any transaction for the purpose or which
has the effect of evading or avoiding the fore-
going prohibitions.
Regraded Uclassified
130
138
- 3 -
Section 2.
1. All of the following transactions are
prohibited, except as specifically authorised by
the Secretary of the Treasury by means of regula-
tions, rulings, instructions, licenses, or other-
vise:
(1) The acquisition, disposition or
transfer of, or other dealing in, or with
respect to, any security or evidence thereof
OEL which there is stamped or imprinted, or to
which there is affixed or otherwise attached,
a. tax stamp or other stamp of a foreign country
designated in this Order or a noterial or
similar seal which by its contents indicates
that it was stamped, imprinted, affixed or
attached within such foreign country, or where
the attendant circumstances disclose or indicate
that such stamp or seal may, at any time, have
been stamped, imprinted, affixed or attached
thereto; and
(2) The acquisition by, or transfer to,
any person within the United States of any in-
terest in any security or evidence thereof if
the attendant circumstances disclose or indicate
that the security or evidence thereof is not
physically situated within the United States.
Regraded Uclassified
139
- 4 -
B. The Secretary of the Treasury may investi-
gate, regulate, or prohibit under such regulations,
rulings, or instructions as be may prescribe, by
means of licenses or otherwise, the sending, mail-
ing, importing or otherwise bringing, directly or
indirectly, into the United States, from any foreign
country, of any securities or evidences thereof or
the receiving or holding in the United States of any
securities or evidences thereof BO brought into the
United States.
Section 3. The term "foreign country designated in
this Order" means a foreign country included in the fol-
lowing schedule, and the term "effective date of this
Order" means with respect to any such foreign country,
or any national thereof, the date specified in the fol-
lowing schedule:
(a) April 8, 1940-
Norway and
Denmark;
(b) May 10, 1940-
The Netherlands,
Belgium and
Luxembourg;
(c) June 17, 1940-
France (including Monaco);
(d) July 10, 1940-
Latvia, Estonia and
Lithuania;
(e) October 9, 1940-
Rumania;
Regraded Uclassified
- 5 -
140
(f) March 4, 1941-
Bulgaria;
(g) March 13, 1941-
Hungary;
(h) March 24, 1941-
Fugoslavia;
(1) April 28, 1941-
Greece; and
(j) June 14, 1941-
Albania,
Andorra,
Austria,
Czechoslovakia,
Denzig,
Finland,
Germany,
Italy,
Liechtenstein,
Poland,
Portugal,
San Marino,
Spein,
Sweden,
Switzerland, and
Union of Soviet Socialist Republics.
The "effective date of this Order" with respect
to any foreign country not designated in this Order
shall be deemed to be June 14, 1941.
Section 4.
A. The Secretary of the Treasury and/or the
Attorney General may require, by means of regula-
tions, rulings, instructions, or otherwise, any
person to keep a full record of, and to furnish
under oath, in the form of reports or otherwise,
from time to time and at any time or times, complete
information relative to, any transaction referred
to in section 5(b) of the Act of October 6, 1917
(40 Stat. 415), as amended, or relative to any
Regraded Uclassified
141
- 6 -
property in which any foreign country or any
national thereof has any interest of any nature
whatsoever, direct or indirect, including the
production of any books of account, contracts,
letters, or other papers, in connection therewith,
in the custody or control of such person, either
before or after such transaction is completed; and
the Secretary of the Treasury and/or the Attorney
General may, through any agency, investigate any
such transaction or act, or any violation of the
provisions of this Order.
B. Every person engaging in any of the
transactions referred to in sections 1 and 2 of
this Order shall keep & full record of each such
transaction engaged in by him, regardless of
whether such transaction 1a effected pursuant to
license or otherwise, and such record shall be
available for examination for at least one year
after the date of such transaction.
Section 5.
4. As used in the first paragraph of section
1 of this Order "transactions [which] involve
property in which any foreign country designated
in this Order, or any national thereof, has +++
any interest of any nature whatsoever, direct or
indirect," shall include, but not by way of
limitation (1) any payment or transfer to any such
Regraded Uclassified
142
foreign country or national thereof, (11) any
export or withdrawal from the United States to
such foreign country, and (111) any transfer of
credit, or payment of an obligation, expressed in
terms of the currency of such foreign country.
B. The term "United States" means the
United States and any place subject to the juris-
diction thereof; the term "continental United
States" means the states of the United States,
the District of Columbia, and the Territory of
Alaska.
C. The term "person" means an individual,
partnership, association, corporation, or other
organisation.
D. The term "foreign country" shall include,
but not by way of limitation,
(1) The state and the government thereof
on the effective date of this Order as well as
any political subdivision, agency, or instru-
mentality thereof or any territory, dependency,
colony, protectorate, mandate, dominion, possess-
ion or place subject to the jurisdiction thereof,
(11) Any other government (including any
political subdivision, agency, or instrumentality
thereof) to the extent and only to the extent
that such government exercises or claims to
exercise de jure or de facto sovereignty over the
area which on such effective date constituted
Regraded Uclassified
143
- 8 -
such foreign country, and
(111) Any person to the extent that such
person is, or has been, or to the extent that
there 1a reasonable cause to believe that such
person is, or has been, since such effective date,
acting or purporting to act directly or indirectly
for the benefit or on behalf of any of the fore-
going.
E. The term "national" shall include,
(1) Any person who has been domiciled in,
or a subject, citizen or resident of a foreign
country at any time on or since the effective
date of this Order,
(11) Any partnership, association, corpora-
tion or other organization, organized under the
laws of, or which on or since the effective
date of this Order had or has had its principal
place of business in such foreign country, or
which on or since such effective date was or
has been controlled by, or 8 substantial part
of the stock, shares, bonds, debentures, notes,
drafts, or other securities or obligations of
which, was or hae been owned or controlled by,
directly or indirectly, such foreign country
and/or one or more nationals thereof as herein
defined,
Regraded Uclassified
-9- - -
144
(111) Any person to the extent that such
person is, or has been, since such effective
date, acting or purporting to act directly or
indirectly for the benefit or on behalf of any
national of such foreign country, and
(iv) Any other person who there is
reasonable cause to believe is & "national" as
herein defined.
In any case in which by virtus of the foregoing defini-
tion a person is a national of more than one foreign
country, such person shall be docued to be a national
of each such foreign country. In any case in which
the combined interests of two or more foreign coun-
tries designated in this Order and/or nationals thereof
are sufficient in the aggregate to constitute, within
the meaning of the foregoing, control or 25 per centum
or more of the stock, shares, bonds, debentures, notes,
drafts, or other securities or obligations of & part-
nership, association, corporation or other organi-
sation, but such control or a substantial part of
such stock, shares, bonds, debentures, notes, drafts,
or other securities or obligations is not held by any
one such foreign country and/or national thereof,
such partnership, association, corporation or other
organisation shall be deemed to be a national of
each of such foreign countries. The Secretary of the
Treasury shall have full power to determine that
any person is or shall be deemed to be a "national"
Regraded Uclassified
145-
- 10 -
within the meaning of this definition, and the
foreign country of which such person is or shall
be deemed to be a national. Without limitation of
the foregoing, the term "national" shall also in-
clude any other person who is determined by the
Secretary of the Treasury to be, or to have been,
since such effective date, acting or purporting to
act directly or indirectly for the benefit or under
the direction of a foreign country designated in this
Order or national thereof, as herein defined.
F. The term "banking institution" as used in
this Order shall include any person engaged primarily
or incidentally in the business of banking, of grant-
ing or transferring credits, or of purchasing or sell-
ing foreign exchange or procuring purchasers and
sellers thereof, as principal or agent, or any
person holding credits for others as a direct or
incidental part of his business, or brokers; and,
each principal, agent, home office, branch or
correspondent of any person so engaged shall be
regarded as 8. separate "banking institution".
G. The term "this Order", as used herein,
shall mean Executive Order No. 8389 of April 10,
1940, as amended.
Section 6. Executive Order No. 8389 of April 10,
1940, as amended, shall no longer be doemed to be an
amendment to or a part of Executive Order No. 6560 of
Regraded Uclassified
146
-11-
Regraded Uclas
January 15, 1934. Executive Order No. 6560 of January
15, 1934, and the Regulations of November 12, 1934, are
hereby modified in no far as they are inconsistent with
the provisions of this Order, and except as so modified,
continue in full force and affect. Nothing herein shall
be deemed to revoke any license, ruling, or instruction
now in effect and issued pursuant to Executive Order
No. 6560 of January 15, 1934, as amended, or pursuant to
this Order; provided, however, that all such licenses,
rulings, or instructions shall be subject to the pro-
visions hereof. Any amendment, modification or revocation
by or pursuant to the provisions of this Order of any
orders, regulations, rulings, instructions or licenses
shall not affect any act done, or any suit or proceeding
had or commenced in any civil or criminal case prior to
such amendment, modification or revocation, and all
penalties, forfeitures and liabilities under any such
orders, regulations, rulings, instructions or licenses
shall continue and my be enforced as if such amendment,
modification or revocation had not been made.
Section 7. Without limitation as, to any other
powers or authority of the Secretary of the Treasury or
the Attorney General under any other provision of this
Order, the Secretary of the Treasury is authorised and
empowered to prescribe from time to time regulations,
rulings, and instructions to carry out the purposes of
this Order and to provide therein or otherwise the
- 12 -
147
conditions under which licenses my be granted by or
through such officers or agencies as the Secretary of
the Treasury my designate, and the decision of the
Secretary with respect to the granting, denial or other
disposition of an application or license shall be final.
Section 8. Section 5(b) of the Act of October 6,
1917, as amended, provides in part:
** * * Whoever willfully violates any of
the provisions of this subdivision or of any
license, order, rule or regulation issued there-
under, shall, upon conviction, be fined not more
than $10,000, or, if a natural person, may be is
prisoned for not more than ten years, or both; and
any officer, director, or agent of any corporation
who knowingly participates in such violation may
be punished by a like fine, imprisonment, or both."
Section 9. This Order and any regulations, rulings,
licenses or instructions issued hereunder may be amended,
modified or revoked at any time.
Franklin
THE WHITE HOUSE,
June 14, 1941.
Regraded Uclassified
CONTRAINAL ASSISS AN THE UNITED STATES
(milliens of dellars)
a
#
#
.
Total
a
.
Twell
I
Direct
, Pertfolio
I
Inc.
I
.
thert
- .
. 1
I
Total
1
$
I
I
Term
,
E
Term.
4. Constries Weekst - to
2361
I
$
I
32
as
that
hips
258
17
E
-
1
-
,
1
16
Tegaloria
3
of
2. Onstries Members as June 14,
709mld 4587
150
I
Italy
Assista
Caroholovakia
June
Feland
Alberta
G. Constries ampled by 1 Homes
Inim
, - - 12 - - & - . 30 2
1
595 22 15 17 18 6 2 - 1 - 1 1 -
2) 34 22 - - - 3 1 1 1 3 3 -
735 - 22 - - 52 RK 1 2
2 , 5
1,00 195 23 01 130 794 RY 15 39 M " . 28 30 57 , - 5 - - - 6 1 2 8
THE 7,406 4,599 - my 122 p M 70 M 73 9 . 30 22 , - , , 6 2
196
Regraded Uclassified
Partngal
- 1
148
Pinkal
Total
2,670
4,565
transury Departments, Bivisis of injury -
In 11,130
149
Im 14, 1941
Piles
Mr. Dealurem
Mr. Livesey of the Department of State talked with be by telephone $5 2:30 p.m.
posterday. No stated that be had received a from Mr. Atherten -
LNC asgetiations through which the Irish Pree State haped to pay the
Karitine Commission for too American ships which 11 is agreed should be made seail-
able to the Irish. the - involved is appreximately $600,000. the Irish Gevern-
nest states that 11 has se dellare. The Maritime Commission 10 not villing to
accept payment is sterling. Consequently, Mr. Livesey was seking whether there
was enything the Treasury Department could 40 to facilitate the transaction, or
whether 11 could ascertain if the Irich have any funds on deposit in New Tesk. 1
teld Mr. Livesey that the Stabilisation Punk would not be interested is purchasing
$600,000 worth of storling, holding 11. and making dollars available to the
Karitime Commission. 1 told his that I would, bewever, get in touch with the
Federal Reserve Bank at New York and ⑉ what Irish funds are is that market. 2
telephoned the Federal at case and spoke with Mr. Liday is Mr. Commerce effice.
B. Cameren telephoned me back around 5:15 yesterday ovening to the offect that be
had found that the Tank of Dublia had sene mobey in New Terk, and that he would
give NO a sere detailed report this norning. I relayed this accesse to Mr. Livesey
at 5:20 resterday evening.
AS 11 s'aleck this norsing Mr. Cameron telephened M. No referred to all
article which appeared in the New York Verld Telegram of last night, purporting to
- from Mr. Milton Preaser, Washington Staff correspondent of the I.B.A. Service.
sa this question of the President selling or chartering two steamships to the Irish
Pres State Deverument to carry feedstuffe to Bire. 1 had set seen the article is
question. Rr. said that 11 included a story from Mr. Denie Dovlin.
Secretary of the Irish Legation is Washington. as the Irish feed and shipping situs-
ties. The point vas made that Iroland and provided Maglam is the past and 10 still
providing England with becom, butter. etc., and that Important balances of fundo
have been built up is England as a result of this trade.
Kr. Cameron told BE that as a result of his inquiries. 11 had been determined
that two Irish banks have $5,000,000 on deposit with the National City. The latter
prose for this information for the Irich deposite with the Chase Bank de- 1
was reluctant to indicate the names of these depositors. and I teld Cameron not be
Prodic will the and these trust. There are M funds hold is Nov York, with the It Federal to
to $191,000. with the Cuaranty Trust to $68,000. There are M wash
Baserve Irving is the same of the Irish Type State Deverment. Teak
believed Bank that or met elsewhere. of the funds are deposited by the Just of Ireland and the
of Dublis.
Regraded Uclassified
150
- 2 -
is server to 4 question as to whether the Federal night possibly dispeco of
the equivalent of $600,000 of sterling which the Irich sight pay for the chips.
- thought that soch as orrangement could only be resped call with the full
approval of the British Centrol, and that this would accossarily involve the latter
civing " dollars. Mr. Concrez and I ware not evero as to whether the lyish would
decive to approach the British Central n this subject.
M 11:15 I telephoned the above information to Mr. livessy in the Department
of State.
earl
EMC:lap-6/14/41
Regraded Uclassified
(Amherst)
file 6/14/45 151
date of speech
MEMORANDUM
Secretary Morgenthau is expected to speak at the
Amherst Commencement-luncheon on Saturday, June 14. This
is to be an informal speech but, as the luncheon is the
leading event of the Commencement, it needs to be written
with care.
President King of Amherst wrote on March 4 that the
Secretary was free to speak on any subject he wished, al-
though the audience would be looking for something on
"some aspect of the national or international situation."
The speech will require 1,000 or 1,200 words.
3/18/41
152
UNITED STATES ATLANTIC FLEET
U.S.S. AUGUSTA, Flagship
June 10, 1941 fib June 14
MEMORANDUM
The Honorable
Henry Morgenthau, junior,
Secretary of the Treasury,
Washington, D. C.
My dear Mr. Secretary:
I have read the attached draft of your
speech with much interest.
In the part relating to "calculated risk",
I have entered suggested modifications in pencil,
as you requested.
I wish to "make my compliments" on the
tenor of the speech - its suitability to "the
time, the place and" - the men.
With all good wishes -
Sincerely Eghing yours,
153
Draft of Secretary Morgenthau's Speech
at Amherst College Commencement Luncheon
June 14, 1941
I know that many distinguished alumni of Amherst are
here in this room, but to me the most important members of
this audience are the seniors who are about to graduate. With
your permission, President King, I should like just to greet
the alumni, and tell them how glad I am to be among them;
but I want to address my words to the seniors. They, after
all, are the men we honor today.
It is the habit on these occasions to offer condolences
to the students who are about to be launched into the world
of action. If I do not condole with you seniors today, it
is not because I do not understand your problems. No man in
public life can call himself mature if he lets himself be
impatient with college men at this time. No one with the
slightest human understanding can be unaware of the load of
6/9/41
Regraded Uclassified
154
- 2 -
doubt and discouragement which all young men and women, in
America and in all other countries, have carried for the past
few years.
The world of today is not a pretty sight; the prospect
of the years ahead is not 8. pleasant one. If you feel that
your elders have betrayed you, I, for one, do not blame you
for being bitter. If you feel that the youth of 1941 has had
a raw deal, I can understand why. The world tragedy of today
has its roots, to some extent, in the mistakes and the failings
of an older generation, mistakes in which you had no voice and
no share.
The present Foreign Minister of China, Dr. Quo Tai-chi,
looked out of his window on the day the present war in Europe
began. "The sky," he said, "is black with the wings of chickens
coming home to roost." It is your fate and mine to live under
D-A
Regraded Uclassified
155
- 3 -
that dark sky for a time, and I do not blame you for wanting
a place in the sun instead.
I do not even blame the editorial writer who poured his
heart out in my favorite college newspaper the other day. As
you may have guessed, he was writing in the Amherst Student;
some of you may remember what he said:
"Corruption in high places does not disturb us, but
honesty astonishes us when it appears. Nothing wells up
in our throat when 'God Save the King' is played, and we
do not find it easy to associate Winston Churchill with
Prince Arthur. Nobility in anything is suspect among us.
This is not an intellectual skepticism, but an attitude
with which we have become infused."
I am glad that he called this an "attitude." If it
were anything more than an "attitude" I should really be
disturbed. Perhaps we have read so much about disillusionment
that some of us have become disillusioned ourselves. We have
read so much about the weaknesses of France and other countries
Regraded Uclassified
156
- 4. -
that have gone down, that some of us have become weak and
irresolute ourselves. We have seen 80 much selfishness and
greed in high places that we are too apt to take them for
granted. We have seen truth and honor and fair-play degraded
50 widely that some young Americans, like your editorial
writer, no longer feel these standards are worh preserving.
Something important is missing from the reasoning of
those who, perhaps rightly, call themselves "the lost genera-
tion." I think I discovered what was missing on an inspection
cruise the other day with the United States Atlantic Fleet--
8 cruise, by the way, which was one of the most thrilling and
heartening experiences of my life. I learned that the Fleet
always acts upon what the Admiral King, the Commander-in-Chief,
calls "A the calculated risk." That is to say, the officers who
command A fighting shipsat sea always weigh the alternatives
but
of any course they take, and take for granted that there is
Regraded Uclassified
157
- 5 -
granted that there is risk in every decision. It is "realism"
nov simple terms and in practical form.
It seems to me that college men, like all Americans in
this year of great decisions, must weigh two great alternatives.
Each of them involves HH risk. If we act now to stamp out this
terror and this tyranny that is on the march abroad, we run the
risk of losing our comfort, our safety, perhaps our lives
before the job is done. We may be bombed, we may be killed in
the process, and we shall certainly be poorer. This is one
side of the risk.
But, at that, it is better to die on our feet than to live
on our knees. If we do not act, we run another and far greater
risk: of losing our precious freedoms, of surrendering the
intellectual and spiritual heritage from which Amherst College
and all of our American way of life have grown. We must choose.
We cannot have it both ways. One thing we cannot do at this
moment in the fate of the Western world is to preserve our
158
- 6 -
freedom without being ready to fight in its defense. Other
countries tried to do just that. They waited, one by one,
until they had lost their security and their liberty too.
I am not especially fond of the phrase "calculated risk,"
but I have used it because it is one of those "realistic"
expressions which the college senior of 1941 may prefer,
since he pretends to discount idealism. Actually, I know
that in his heart he has ideals to which he is devoted; but
"realism"--whatever it may mean--has become fashionable. The
writer of the editorial which I quoted a few moments ago
would, no doubt, calls himself a "realist." He was being
"realistic," I suppose, when he wrote:
"We are going into this war with no strong feeling that
there are any ideals involved; we see no visions of
Christian knighthood in the clouds This war, to us,
has neither an idealist right nor an idealist wrong, it
Regraded Uclassified
159
- 7 -
is simply more confusion We are & flock of moral
amoebas, 8. race of young animals to whom pessimism has
become 8. natural and constant condition of mind."
Whoever wrote that cry of despair--and I wish that I
could write with his eloquence and his power--was not a
realist at all. He was writing in terms of sheer romanticism.
For it is romantic in the last degree to throw up your hands
in surrender just because this world is not what it ought to
be. It is romantic to imagine that the twenty years since the
last war were long enough to build a better world-society.
Why, we in the United States never tried to build it. We
fought for eighteen months to win 8. victory by arms, but
then we promptly washed our hands of all the responsibilities
that we, as a leader among democratic nations, should have
assumed.
We forgot then, and we are apt to forget now, that the
D-A
Regraded Uclassified
160
- 8 -
great forward movements of mankind are never successful in
one year or one generation. The great struggles that gave
us our law, our freedom, our democratic institutions, our
Amherst Colleges, were successful only after many generations
of striving. They were the work of one generation of youth
after another. If the young men of past centuries had thrown
up their hands in despair, we should not be here today. If
they had run away to some ivory tower or if they had been
content to be "moral amoebas," you and I would not be free
to speak our minds, free to worship in our own way, free from
want and free from fear.
The world we contemplate today is no more terrible,
comparatively, than the physical and political wilderness
that faced a little group of young men in the century before
Amherst was founded. Let me tell you, for example, about
Regraded Uclassified
161
- 9 -
Alexander Hamilton, who comes first to my mind because he
was the first Secretary of the Treasury, and because for
eight years I have lived with his portrait on the wall of
my office in Washington. Alexander Hamilton was only eighteen,
a boy in King's College, New York, when he wrote undying
pamphlets that helped to win American liberty. At twenty
he was a lieutenant-colonel in Washington's army; and before
he was thirty he had become 8. mighty force in the creation
of our Federal Union. Madison was only five years out of
Princeton when he served in the Continental Congress.
Jefferson was only thirty-three when he drafted the Decla-
ration of Independence, and Monroe was only twenty-nine when
he helped draw up the Federal Constitution.
If any men had excuses for despair, it was that
generation of young men 150 years ago. First they had to
Regraded Uclassified
162
- 10 -
win their freedom; but when that was won they had virtually
nothing but their freedom and their faith on which to build.
Their new country was weak and poor and exposed to attack;
its economics were in chaos, its thirteen states were on the
verge of going to war with one another. Yet they did not
lose faith. They did not shrink from the job, or say, "That's
the use?", or blame their elders for bringing them to such a
pass.
I sometimes wonder what those young men of faith and
genius might have accomplished if our great country of today
had been theirs to lead. I wonder what heights they might
have reached if their America had had our farms and factories,
our mines and shipyards and natural resources, if their America
had had E. national income of B. hundred billion dollars a year,
if they had had 130,000,000 fellow-Americans, already united
Regraded Uclassified
163
- 11 -
under free institutions which had been tested for 150 years.
Would they have said "this world is too unfair to youth,
too terrible for us"? Would they have complained of their
inheritance? Would they have seen the rise of a pagan tyranny
shrond and called it "the wave of the future"?
If any man in this room turns pale as he seez the forces
of evil in this world, let him remember always the greatness
of America. If any man thinks that the preservation of human
freedom is too big a job for free men, let him remember what
America has accomplished already, and let him remember also
the riches and power and splendor of this country and its
people. Te Americans can ão any job that we set our hearts,
our minds and muscles to do.
The men we remember in our American past are not the
Suchannes and the Marren Hardings, the wear or frightened
Regraded Uclassified
164
- 12 -
leaders who would not lead. We remember the men who had
faith, the men who were not discouraged. The non we shall
remember as we look back on the present are not the men who
surrendered to evil, the Quislings or the Lavals abroad, or
the men in this country who would sign a compact with the
devil himself if they thought they could do business with
him. We shall remember the men who dared greatly, like the
young flyers of the Royal Air Force, of whom it was said,
"Never in the field of human endeavor has 80 much been owed
by so many to so few."
Nations, like human beings, need periodic revivals of
faith and courage if they are to survive. They may pass
through their valleys of disillusion, but they also climb
to the heights of action and achievement. We in America are
climbing now. We are winning once more the faith without
Regraded Uclassified
165
- 13 -
which the human race would slip back into the jungle. We
are coming to see the truth of what Archibald MacLeish wrote
the other day, that
"In the wars of the spirit there is no defense but
to attack. For in the wars of democracy, of the human
spirit, it is faith which will decide the issue."
The terrible events of the past year have opened our
eyes again to the basic realities. They have made us see
once more the great truths of human freedom toward which
man has groped his way throughout the ages.
Because I feel that we are on that high and splendid
road, I should like to congratulate the senior class of
Amherst on its good fortune. Great challenges in human
history have produced great responses, even before the
earliest days of ancient Greece and Rome. We now are con-
fronted with the greatest challenge that has come to free
D-A
Regraded Uclassified
166
- 14 -
men and women in our time. It has already produced an
immortal response from the ordinary men and women, and
especially the young men and women, of England.
The task is far greater than winning a war or destroying
evil. It means building 8. new world when the war is over,
a world in which the Four Freedoms can grow and spread
gradually over the earth. It will be America's task, your
task, to clear the ruins, to feed the starving, and to assume
the duties as well as the privileges of leadership. If the
generation of 1941 rises to that task, the common man of the
future will have something better to live for, to work for,
and to hand on to his children.
D-A
Regraded Uclassified
Retdly 6-12-41
Draft of Secretary Morgenthau's Speech
167
at Amherst College Commoncement Luncheon
June 14, 1941
There are
I know that n many distinguished alumni of Amherst - gathered
here, in this room, but to me the most important members of
this audience are the seniors who are about to graduate. with
your permission, President King, I should like just to greet
the alumni, and tell them how glad I an to be among them;
but I want to address my words to the seniors. They, after
all, are the men we honor today.
It is the habit on these occasions to offer condolences
to the students who are about to be launched into the world
o
1
of action. If I do not condole with you seniors today, it
atay's
is not because I do not understand your problems. No man in
public life can call himself mature if he lets himself be
impatient with college men at this time. No one with the
slightest human understanding can be unaware of the load of
Regraded Uclassified
168
- 2 -
doubt and discouragement which all young non and women, in
America and in all other countries, have carried for the past
few years.
The world of today is not a pretty sight; the prospect
of the years ahead is not a pleasant one. If you feel that
your elders have betrayed you, I, for one, do not blame you
for being bitter. If you feel that the youth of 1941 has had
a raw deal, I can understand why. The world tragedy of today
has its roots, to some extent, in the mistakes and the failings
of an older generation, mistakes in which you had no voice, and
no share.
The present Foreign Minister of China, Dr. Quo Tai-chi,
looked out of his window on the day the present war in Europe
began. "The sky." he said, "is black with the wings of chickens
very
quel!
coming home to roost." It is your fate and mine to live under
D-A
Regraded Uclassified
169
- S -
that dark sky for & time, and I do not blams you for wanting
a place in the sun instead.
I do not even blame the editorial writer who poured his
heart out in my favorite college newspaper the other day. As
you may have guessed, he WRS writing in the Amborst Student;
some of you may remember what he said:
"Corruption in high places does not disturb us, but
honesty astonishes us when it appears. Nothing wells up
In our throat when 'God Save the King' is played, and we
do not find it easy to associate Winston Churchill with
Prince Arthur. Nobility in anything is suspect among us.
This is not an intellectual skepticism, but an attitude
with which we have become infused."
my
Think be was right in
But
nggosta
I ase glad that he called this an "attitude." A If it
jhily
rmer
were anything more than an "attitude" I should really be
Perhaps
should
intervisturbod. Perhaps we have read so much about disillusioment
1.
it
flunation
that some of us have become disillusioned ourselves. We have
abt.
read BO much about the weaknesses of France and other countries
Regraded Uclassified
170
- 4
that have gone down, that some of us have become weak and
irresolute ourselves. We have seen so much selfishness and
greed in high places that we are too apt to take them for
granted. We have seen truth and honor and fair-play degraded
50 widely that young Americans, like your editorial writer,
no longer feel these standards are worth preserving.
Something important is missing from the reasoning of those
is 1)
fulcrum
which who, perhaps rightly, call themselves "the lost generation."
cutire
kn "
think I discovered what was missing on an inspection cruise
lanced: at - belwee by follows that and
west
sure
the other day with the United States Atlantic Fleet--a cruise,
aluhes
the way, which was one of the most thrilling and heartening
fully.
experiences of my life. I learned that the Navy always acts
a
perfect figure
upon what the Admirals call "a calculated risk.' " That is to
say, the officers who command a fighting ship at sea always
weigh the altornatives of any course they take, and take for
D-A
Regraded Uclassified
171
- 5 -
granted that there is risk in every decision.
It seems to the that college men, like all Americans in
this year of great decisions, must weigh two great alternatives.
Each of them involves a risk. If - act now to stamp out this
terror and this tyranny that is on the march abroad, we run the
risk of losing our comfort, our safety, perhaps our lives
before the job is done. We may be bombed, we may be killed in
the process, and we shall certainly be poorer. This is one
side of the risk. Expound a little further, outline briefly reasons
or The other alternative: what ave the couses of doubt 5
mistrust. clear The show of all you mugings so that you fan hit the next paragram and your messe
choosing that are aware of Them as They are Then your "B real
But, decks at that, it is better to die on our feet than to live all with
weight
on our knees. If we do not act, we run another and far greater
risk: of losing our precious freedoms, of surrendering the
intellectual and spiritual heritage from which Amherst College
and all of our American way of life have grown. We must choose.
We cannot have it both ways. One thing we cannot do at this
moment in the fate of the Western world is to preserve our
Regraded Uclassified
172
- 6 -
freedom without being ready to fight in its defense. Other
countries tried to do just that. They waited, one by one,
until they had lost their security and their liberty too.
I
am - especially fond of the phrase "calculated risk," and I
but I have used it because it is one of those "realistic"
may also be to The liking of
expressions which the college senior of 1941 my profer, who
since he pretends to discount idealism. Actually, I know
that in his heart he has ideals to which he is devoted; but
"realism"-=whatever it may mean--has become fashionable. The
will wight
writer of the editorial which I quoted n. few moments ago
tot
stastit,
at
would, no doubt, call himself a "realist." lle was being
"realistic," I suppose, when he wrote:
"We are going into this war with no stron feeling that
there are any ideals involved; we see no visions of
Pristian knighthood in the clouds This war, to us,
has neither an idealist right nor an Idealist wrong, it
Regraded Uclassified
173
7 -
is simply more confusion... We are a flook of moral
amoebas, & race of young animals to whom pessimism has
become a natural and constant condition of mind."
Whoever wrote that cry of despair and I wish that I
could write with his eloquence and his power-was not a
realist at all. He was writing in terms of sheer romanticism.
For it is romantic in the last degree. to throw up your hands
in surrender just because this world is not what mechanism) it ought to
13 characteristic of romant IC of escape 1/4 The extreme
bar It is romantic to imagine that the twenty years since the
last war were long enough to build a better world-society.
Why, we in the United States never tried to build it. No
fought for eighteen months to win a victory by arms, but
then we promptly washed our hands of all the responsibilities
that we, as a leader among democratic nations, should have
\ Mink the above purcessuph 13 vary weak in This particular
partion. Pensonally, it brings to mind too many
assumed
misgluings That we shall do exartly The same
ming again, given the apportunity.
We forgot then, and we are apt to forget now, that the
B
Regraded Uclassified
174
- 8 -
great forward movements of mankind are never successful in
one year or one generation. The great struggles that gave
us our law, our freedom, our democratic institutions, our
Amherst Colleges, were successful only after many generations
of striving. They were the work of one generation of youth
after another. If the young men of past centuries had thrown
up their hands in despair, we should not be here today. If
they had run away to some ivory tower or if they had been
content to be "moral amoebas," you and I would not be free
Thank 47
to speak our minds, free to wamekip in our own way, free from
college students are not much
want and free from fear.
interested in freadam of worship,
so Mat The term would appear hackueye
The world we contemplate today 1s no more terrible,
comparatively, than the physical and political wilderness
that faced a little group of young men in the century before
Amberst was founded. Let me tell you, for example, about
D-A
Regraded Uclassified
175
- 9 -
Alexander Hamilton, who comes first to my mind because he
cumal
was the first Secretary of the Treasury, and because for
say
eight years I have lived with his portrait on the wall of
my office in Washington. Alexander Hamilton was only eighteen,
still in existancembut under The name of Columbia university,
-
a boy in King's College, New York, when he wrote undying
pamphlets that helped to win American liberty. At twenty
he was a licutenant-colonel in Washington's army; and before
he was thirty he had become a mighty force in the creation
of our Federal Union. Madison was only five years out of
Princeton when he served in the Continental Congress.
Jefferson was only thirty-three when he drafted the Docla-
ration of Independence, and Monroe was only twenty-nine when
le helped draw up the Federal Constitution.
If any men had excuses for despair, it was that
generation of young mon 150 years ago. First they had to
D-A
Regraded Uclassified
176
- 10 -
win their freedom; but when that was won they had virtually
nothing but their freedom and their faith on which to build.
Their new country was weak and poor and exposed to attack;
its economics were in chaos, its thirteen states were on the
verge of going to war with one another. Yot they did not
lose faith. They did not shrink from the job, or say, "What's
the use?", or blame their elders for bringing them to such a
pass. From The stand point of delivery, you
end your puraqraph more strongly with a simple phrase like The above,
I sometimes wonder what those young men of faith and
genius might have accomplished if our great country of today
had been theire to lead. I wonder what heights they might
have reached if their America had had our farms and factories,
our mines and shipyards and natural resources, if their America
had had a national income of a hundred billion dollars e year,
if they had had 130,000,000 1 fellow-Americans, already united
Regraded Uclassified
177
- 11 -
under free institutions which had been tested for 150 years.
Would they have said "this world is too unfair to youth,
too torrible for us"? Would they have complained of their
inheritance? Would they have seen the rise of & pagan tyranny
abroad and called it "the wave of the future"?
If any man in this room turns pale as he sees the forces
of evil in this world, let him remember always the greatness
of America. If any man thinks that the preservation of human
freedom is too big a job for free men, let him remember what
America has accomplished already, and let him remember also
the ti riches and power and splendor of this country and its
people. We Americans can do any job that we set our hearts,
our minds and muscles to do.
The men we remember in our American past are not the
Buchanans and the Warren Hardings, the weak or frightened
D-A
Regraded Uclassified
178
- 12 -
leaders who would not lead. We remember the men who had
faith, the men who were not discouraged. The men we shall
remember as we look back on the present are not the men who
surrendered to evil, the Quislings or the Lavals abroad, or
the men in this country who would sign A compact with the
devil himself if they thought they could do business with
him. We shall remember the men who dared greatly, like the
young flyers of the Royal Air Force, of whom it was said,
"Never in the field of human endeavor has 80 much been owed
by so many to so few."
Nations, like human beings, need periodic revivals of
faith and courage if they are to survive. They may pass
through their valleys of disillusion, but they also climb
to the heights of action and achievement. The in America are
however large same immediate set backs may 100m etc. etc,
climbing now, The are winning once more the faith without
halting
179
- 13 -
which the human race would slip back into the jungle. / The
are coming to ⑉ the truth of what Archibald MacLeish wrote
the other day, that
"In the wars of the spirit there is no defense but
to attack. For in the wars of democracy, of the human
spirit, it is faith which will decide the issue."
11.
This quote would muke That a strong Ruish for the speech if you
could worn it in way.
The terrible events of the past year have opened our
eyes again to the basic realities. They have made us see
once more the great truths of human freedom toward which
man has groped his way throughout the ages.
Because I feel that we are on that high and splendid
road, I should like to congratulate the senior class of
Amherst on its good fortune. Great challenges in human
history have produced great responses, even before the
earliest days of ancient Greese and Remo. We now are con-
fronted with the greatest challenge that has come to free
D-A
Regraded Uclassified
180
- 14 -
men and women in our time. It has already produced an
immortal response from the ordinary men and women, and
especially the young men and women, of England.
The task is far greater than winning a war or destroying
evil. It means building a new world when the war is over,
a world in which the Four Freedoms can grow and spread
gradually over the earth. It will be America's task, your
task, to clear the ruins, to feed the starving, and to assume
the duties as well as the privileges of leadership. If the
generation of 1941 rises to that task, the common man of the
future will have something better to live for, to work for,
and to hand on to his children.
This speech 13 bound to be a tremendous
success. None of Those & whom at whom it 13
lirected - the students - will be left unscathed, and
the effect will undonbtedly bc serious.
love
D-A
Honny III III
181
Draft of Secretary Morgenthau's Speech
at Amherst College Commencement Luncheon
June 14, 1941
I know that many distinguished alumni of Amherst are gathered
here in this room, but to me the most important members of
this audience are the seniors who are about to graduate. With
your permission, President King, I should like just to greet
the alumni, and tell them how glad I am to be among them; but
I want to address my words to the seniors. They, after all,
are the men we honor today.
It is the habit on these occasions to offer condolences
to the students who are about to be launched into the world of
action. If I do not condole with you seniors today, it is not
because I do not appreciate your problems. No man in public
life can call himself mature if he lets himself be impatient
with college men at this time. No one with the slightest human
70
Regraded Uclassified
182
- 2 -
understanding can be unaware of the load of doubt and dis-
couragement which all young men and women, in America and in
all other countries, have carried for the past few years.
The world of today is not & pretty sight; the prospect
of the years ahead is not a pleasant one. If you feel that
your elders have betrayed you, I, for one, do not blame you
for being bitter. If you feel that the youth of 1941 has had
a raw deal, I can understand why. The world tragedy of today
has its roots, to some extent, in the mistakes and the failings
of an .older generation, mistakes in which you had no voice and
no share.
The present Foreign Minister of China, Dr. Quo Tai-chi,
looked out of his window on the day the present war in Europe
began. "The sky," he said, "is black with the wings of chickens
Regraded Uclassified
183
- 3 -
coming home to roost." It is your fate and mine to live under
advice 7
,
that dark sky for a time, and I do not blame you for wanting a
?
place in the sun instead.
We of an older generation might understand youth's interests
and problems better if we read college newspapers more regularly.
And so, before coming up here, I did some research by reading a
good many papers published at many different colleges and uni-
versities. As I went through them I was struck by the note of
disillusionment and cynicism that seemed to pervade them all. I
think, therefore, that I can understand the editorial writer who
poured his heart out in my favorite college newspaper the other
day. As you may have guessed, he was writing in the Amherst
Student; some of you may remember what he said:
"Corruption in high places does not disturb us, but
honesty astonishes us when it appears. Nothing wells up in
our throat when 'God Save the King' is played, and we do
-B
Regraded Uclassified
184
- 4 -
not find it easy to associate Winston Churchill with
Prince Arthur. Nobility in anything is suspect among
us. This is not an intellectual skepticism, but an
attitude with which we have become infused."
I am glad that he called this an "attitude." If it were
anything more than an "attitude" I should really be disturbed.
Perhaps we have read so much about disillusionment that some of
us have become disillusioned ourselves. We have read so much
about the weaknesses of France and other countries that have
gone down, that some of us have become weak and irresolute
ourselves. We have seen 80 much selfishness and greed in high
places that we are too apt to take them for granted. We have
seen truth and honor and fair play degraded 80 widely that some
young Americans, like your editorial writer, seem almost to
have lost their own faith that these standards can be preserved.
Yet, something important is missing from the reasoning
-B
Regraded Uclassified
185
- 5 -
of those who, perhaps rightly, call themselves "the lost genera-
tion." I think I discovered what was missing on an inspection
cruise the other day with the United States Atlantic Fleet -- a
cruise, by the way, which was one of the most thrilling and
heartening experiences of my life. I learned that the Fleet
always acts upon what Admiral King, the Commander-in-Chief, calls
"a calculated risk." That is to say, the officer# who command of
Captain isin
carefully
8 fighting ship at sea always weighsthe alternatives of any
he may
course they take, and takesfor granted that there is risk in
every decision.
It seems to me that college students, like all Americans
in this year of great decisions, must weigh two great alterna-
tives. Each of them involves a risk. If we act now to stamp
out this terror and this tyranny that is on the march abroad,
we run the risk of losing our comfort, our safety, perhaps our
es
lives before the job is done. We may be bombed, we may be killed
Regraded Uclassified
186
- 6 -
in the process, and we shall certainly be poorer. That is
one side of the risk.
But if we do not act, we run another and far greater
risk: of losing our precious freedoms, of surrendering the
intellectual and spiritual heritage from which Amherst College
and all of our American way of life have grown. We must choose.
We cannot have it both ways. One thing we cannot do at this
moment in the history of the Western world is to preserve our
freedom without being ready to fight in its defense. Other
countries tried to do just that. They waited, one by one, until
they had lost their security and their liberty too.
It is for us to decide, and to decide now, whether we
would rather die on our feet than live on our knees.
I am not especially fond of the phrase "calculated risk,"
but I have used it because it is one of those "realistic"
Regraded Uclassified
187
- 7 -
expressions which the college senior of 1941 may prefer, since
he pretends to discount idealism. Actually, I know that in his
heart he has ideals to which he is devoted; but "realism" --
whatever it may mean -- has become fashionable. The writer of
the editorial which I quoted B. few moments ago would, no doubt,
call himself a "realist." It was in this spirit, and in all
sincerity, I am sure, that he wrote:
"We are going into this war with no strong feeling that
there are any ideals involved; we see no visions of Christian
knighthood in the clouds
This war, to us, has neither
an idealist right nor an idealist wrong, it is simply more
confusion
We are a flook of moral amoebas, a race of
young animals to whom pessimism has become a natural and
constant condition of mind."
Whoever wrote that cry of despair -- and I wish that I
could write with his eloquence and his power -- was not a realist
at all. He was writing in terms of sheer romanticism. For it
Regraded Uclassified
188
- 8 -
is romantic in the last degree to throw up your hands in surrender
just because this world is not what it ought to be. It is romantic
to imagine that the twenty years since the last war were long
enough to build a better world society. Why, we in the United
States never tried to build it. We fought for eighteen months to
win a victory by arms, but then we promptly washed our hands of
all the responsibilities that we, as a leader among democratic
nations, should have assumed. And this evasion of our responsi-
bilities was all the more tragic because we, having no selfish
ends to serve, could have brought to the council-table 8. truly
disinterested point of view.
We forgot then, and we are apt to forget now, that the great
forward movements of mankind are never successful in one year or
one generation. The great struggles that gave us our law, our
freedom, our democratic institutions, our Amherst Colleges, were
Regraded Uclassified
189
- 9 -
successful only after many generations of striving. They were
the work of one generation of youth after another. If the young
men of past centuries had thrown up their hands in despair, We
should not be here today. If they had run away to some ivory
tower or if they had been content to be "moral amoebas," you and
I would not be free to speak our minds, free to worship in our
own way, free from want and free from fear.
The world we contemplate today is no more terrible, compara-
tively, than the physical and political wilderness that faced 8.
little group of young men in the century before Amherst was
founded. Let me tell you, for example, about Alexander Hamilton,
who comes first to my mind because he was the first Secretary of
the Treasury, and because for e ight years I have lived with his
portrait on the wall of my office in Washington. Alexander
Hamilton was only eighteen, a boy in King's College, New York,
Regraded Uclassified
190
- 10 -
when he wrote undying pamphlets that helped to win American
liberty. At twenty he was a lieutenant-colonel in Washington's
army; and before he was thirty he had become a mighty force in
the creation of our Federal Union. Madison was only five years
out of Princeton when he served in the Continental Congress.
Jefferson was only thirty-three when he drafted the Declaration
of Independence, and Monroe was only twenty-nine when he helped
draw up the Federal Constitution.
If any men had excuses for despair, it was that generation
of young men 150 years ago. First they had to win their freedom;
but when that was won, they had virtually nothing but their
freedom and their faith on which to build. Their new country was
weak and poor and exposed to attack; its economics were in chaos,
its thirteen states were on the verge of going to war with one
another. Yet they did not lose faith. They did not shrink from
the job. They did not say, "What's the use?", or blame their
Regraded Uclassified
191
- 11 -
elders for bringing them to such a pass.
I sometimes wonder what those young men of faith and genius
might have accomplished if our great country of today had been
theirs to lead. I wonder what heights they might have reached if
their America had had our farms and factories, our mines and ship-
yards and natural resources. if their America had had & national
income of a hundred billion dollars a year, if they had had
130,000,000 fellow-Americans, already united under free institu-
tions which had been tested for 150 years.
Would they have said "this world is too unfair to youth,
too terrible for us"? Would they have complained of their in-
heritance? Would they have seen the rise of a pagan tyranny
abroad and called it "the wave of the future"?
If any man in this room turns pale as he sees the forces of
evil in this world, let him remember always the greatness of
America. If any man thinks that the preservation of human freedom
B
Regraded Uclassified
192
-12 -
is too big B. job for free men, let him remember what America has
accomplished already, and let him remember also the riches and
power and splendor of this country and its people. We Americans
can do any job that we set our hearts, our minds and muscles to do.
The men we remember in our American past are not the Buchanans
and the Warren Hardings, the weak or frightened leaders who would
not lead. We remember the men who had faith, the men who were not
discouraged. The men we shall remember as we look back on the
present are not the men who surrendered to evil, the Quislings or
the Lavals abroad, or the men in this country who would sign &
compact with the devil himself if they thought they could do busi-
ness with him. We shall remember the men who dared greatly, like
the young flyers of the Royal Air Force, of whom it was said,
"Never in the field of human endeavor has so much been owed by so
many to so few."
Regraded Uclassified
193
- 13 -
Nations, like human beings, need periodic revivals of
faith and courage if they are to survive. They may pass through
their valleys of disillusion, but they also climb to the heights
of action and achievement. We in America are climbing now. We
are winning once more the faith without which the human race would
slip back into the jungle. We are coming to see the truth of
what Archibald MacLeish wrote the other day, that
"In the wars of the spirit there is no defense but
to attack. For in the wars of democracy, of the human
spirit, it is faith which will decide the issue."
The terrible events of the past year have opened our eyes
again to the basic realities. They have made us see once more
the great truths of human freedom toward which man has groped
his way throughout the ages.
Because I feel that we are on that high and splendid road,
I should like to congratulate the senior class of Amherst on its
B
Regraded Uclassified
194
- 14 -
good fortune. Great challenges in human history have produced
great responses, even before the earliest days of ancient Greece
and Home. We now are confronted with the greatest challenge that
has come to free men and women in our time. It has already pro-
duced an immortal response from the ordinary men and women, and
especially the young men and women of England.
I said before that I wondered what those young Americans
of 150 years ago might have accomplished if our great country
of today had been theirs to lead. I think I know the answer. I
know that the courage and determination which is the spirit of
America has not run out with the generation of Jefferson,
Madison, and Hamilton. That spirit is right here in this room --
as it is in every graduating assembly in every American college,
and it is everywhere in America today where young men and young
women are ready to face the responsibilities of citizenship.
Regraded Uclassified
195
- 15 -
The task is far greater than winning 8. war or destroying
evil. It means building a new world when the war is over, a
world in which the Four Freedoms can grow and spread gradually
over the earth. It will be America's task, your task, to clear
the ruins, to feed the starving, and to assume the duties as
well as the privileges of leadership. If the generation of
1941 rises to that task, as I know it will, the common man of
the future will have something better to live for, to work for,
and to hand on to his children.
I-D
Regraded Uclassified
196
Draft of Secretary Morgenthau's Speech
at Amherst College Commencement Luncheon
June 14, 1941
I know that many distinguished alumni of Amherst are
gathered here, but to me, and I am sure to you also, the most
important members of this audience are the seniors who are
about to graduate. With your permission, President King, I
should like just to greet the alumni, and tell them how glad
I am to be among them; but I want to address my words to the
seniors. They, after all, are the men whom you, as alumni,
would wish to honor today.
It is the habit on these occasions to offer condolences
to the students who are about to be launched into the world of
action. If I do not condole with you seniors, it is not because
I do not appreciate your problems. No man in public life can
call himself mature if he lets himself be impatient with college
men at this time. No one with the slightest human understanding
Regraded Uclassified
197
- 2 -
can be unaware of the load of doubt and discouragement which
all young men and women, in America and in all other countries,
have carried for the past few years.
The world of today is not a pretty sight; the prospect
of the years ahead is not a pleasant one. If you feel that
your elders have betrayed you, I, for one, do not blame you
for being bitter. If you feel that the youth of 1941 has had
a raw deal, I can understand why. The world tragedy of today
has its roots, to some extent, in the mistakes and the failings
of an older generation, mistakes in which you had no voice and
no share.
The present Foreign Minister of China, Dr. Quo Tai-chi,
looked out of his window on the day the present war in Europe
began. "The sky," he said, "is black with the wings of chickens
coming home to roost." It is your fate and mine to live under
that dark sky for a time.
D-C
Regraded Uclassified
198
- 3 -
We of an older generation might understand youth's interests
and problems better if we read college newspapers more regularly.
And so, before coming up here, I did some research by reading a
good many papers published at many different colleges and uni-
versities. As I went through them I was struck by the note of
disillusionment and cynicism that seemed to pervade so many of
them. I think, therefore, that I can understand the editorial
writer who poured his heart out in my favorite college newspaper
the other day. As you may have guessed, he was writing in the
Amherst Student. How representative he is of college opinion I
cannot tell; but at least his article impressed me as the best
centain
expression of a widespread point of view. Some of you may re-
member what it said:
"Corruption in high places does not disturb us, but
honesty astonishes us when it appears. Nothing wells up
in our throat when 'God Save the King' is played, and we
do not find it easy to associate Winston Churchill with
Regraded Uclassified
199
- 4 .
Prince Arthur. Nobility in anything is suspect among
us. This is not an intellectual skepticism, but an
attitude with which we have become infused."
I am glad that he called this an "attitude." If it were
anything more than an "attitude" I should really be disturbed.
Perhaps we have read 80 much about disillusionment that some of
us have become disillusioned ourselves. We have read 80 much
about the weaknesses of France and other countries that have
gone down, that some of us have become weak and irresolute our-
selves. We have seen 80 much selfishness and greed in high
places that we are too apt to take them for granted. We have
seen truth and honor and fair play degraded so widely that some
young Americans, like your editorial writer, seem almost to have
lost their own faith that these standards can be preserved.
Yet, something important is missing from the reasoning
of those who, perhaps rightly, call themselves "the lost genera-
tion." I think I discovered what was missing on an inspection
Regraded Uclassified
200
- 5 -
cruise the other day with the United States Atlantic Fleet -- a
cruise, by the way, which was one of the most thrilling and
heartening experiences of my life. I learned that the Fleet
always acts upon what Admiral King, the Commander-in-Chief, calls
etc
"& calculated risk." That is to say, the captain who commands a
fighting ship at sea always weighs carefully the alternatives of
but
any course he may take, and 1 takes for granted that there is risk
in every decision.
It seems to me that college students, like all Americans
in this year of great decisions, must weigh two great alternatives.
Each of them involves 8. risk. If we act now to stamp out this
terror and this tyranny that is on the march abroad, we run the
risk of losing our comfort, our safety, perhaps our lives before
the job is done. We may be bombed, we may be killed in the
process, and we shall certainly be poorer. That is one side of
the risk.
Regraded Uclassified
201
- 6 -
But if we do not aot, We run another and far greater
risk: of losing our precious freedoms, of surrendering the
intellectual and spiritual heritage from which Amherst College
and all of our American way of life have grown. We must choose.
We cannot have it both ways. One thing we cannot do at this
moment in the history of the Western world is to preserve our
freedom without being ready to fight in its defense. Other
countries tried to do just that. They waited, one by one,
until they had lost their security and their liberty too.
It is for us to decide, and to decide now, whether we
would rather die on our feet than live on our knees.
I am not especially fond of the phrase "calculated risk,"
but I have used it because it is one of those "realistic"
expressions which the college seniors of 1941, along with
many others, may prefer, since they seem to discount idealism.
Regraded Uclassified
202
7 -
Actually, I know that in his heart the college senior has ideals
to which he is devoted; but "realism" -- whatever it may mean --
has become fashionable. The writer of the editorial which I
quoted & few moments ago would, no doubt, call himself a "realist."
It was in this spirit, and in all sincerity, I am sure, that he
wrote:
"We are going into this war with no strong feeling
that there are any ideals involved; we see no visions of
Christian knighthood in the clouds
...
This war, to us,
has neither an idealist right nor an idealist wrong, it is
simply more confusion We are a flock of moral amoebas,
a race of young animals to whom pessimism has become 8.
natural and constant condition of mind."
Whoever wrote that cry of despair -- and I wish that I
could write with his eloquence and his power -- was not a realist
at all. He was writing in terms of sheer romanticism. For it
is romantic in the last degree to throw up your hands in surrender
Regraded Uclassified
203
- 8 M.
just because this world is not what it ought to be. It is
romantic to imagine that the twenty years since the last war were
long enough to build a better world society. Why, we in the United
States never tried to build it. We fought for eighteen months to
win a victory by arms, but then we promptly washed our hands of
all the responsibilities that we, as 8. leader among democratic
nations, should have assumed. And this evasion of our responsi-
bilities was all the more tragic because we, having no selfish ends
to serve, could have brought to the council-table a truly disinter-
ested point of view.
We forgot then, and we are apt to forget now, that the great
forward movements of mankind are never successful in one year or
one generation. The great struggles that gave us our law, our
freedom, our democratic institutions, our Amherst Colleges, were
successful only after many generations of striving. They were the
Regraded Uclassified
204
- 9 -
work of one generation of youth after another. If the young men
of past centuries had thrown up their hands in despair, if they
had run away to some ivory tower or if they had been content to
be "moral amoebas," you and I would not be here today as free
sitizens of a free Republic.
The world we contemplate today is no more terrible,
comparatively, than the physical and political wilderness that
faced a little group of young men in the century before Amherst
was founded. Lot me tell you, for example, about Alexander
Hamilton, who comes first to my mind because he was the first
Secretary of the Treasury, and because for eight years I have
lived with his portrait on the wall of my office in Washington.
Alexander Hamilton was only eighteen, a boy in King's College,
New York, when he wrote undying pamphlets that helped to win
American liberty. At twenty he was a lieutenant-colonel in
Regraded Uclassified
205
- 10 -
Washington's army; and before he was thirty he had become a
mighty force in the creation of our Federal Union. Madison was
only five years out of Princeton when he served in the Continental
Congress. Jefferson was only thirty-three when he drafted the
Declaration of Independence, and Monroe was only twenty-nine when
he helped draw up the Federal Constitution.
If any men had excuses for despair, it was that generation
of young men 150 years ago. First they had to win their freedom;
but when that was won, they had virtually nothing but their
freedom and their faith on which to build. Their new country was
weak and poor and exposed to attack; its economics were in chaos,
its thirteen states were on the verge of going to war with one
another. Yet they did not lose faith. They did not say, "What's
the use?", or blame their elders for bringing them to such a pass.
They did not shrink from the job.
Regraded Uclassified
206
- 11 -
I sometimes wonder what those young men of faith and genius
might have accomplished if our great country of today had been
theirs to lead. I wonder what heights they might have reached
if their America had had our farms and factories, our mines and
shipyards and natural resources, if their America had had B.
national income of a hundred billion dollars a year, if they had
had 130,000,000 fellow-Americans, already united under free insti-
tutions which had been tested for 150 years.
Would they have said "this world is too unfair to youth,
too terrible for us"? Would they have complained of their in-
heritance? Would they have seen the rise of a pagan tyranny
abroad and called it "the wave of the future"?
If any man in this room turns pale as he sees the forces of
evil in this world, let him remember always the greatness of
America. If any man thinks that the preservation of human freedom
Regraded Uclassified
207
- 12 -
is too big a job for free men, let him remember what America has
accomplished already, and let him remember also the vast resources
and power and splendor of this country and its people. We Americans
can do any job that WO set our hearts, our minds and muscles to do.
The men we remember in our American past are not the
Buchanans and the Warren Hardings, the weak or frightened leaders
who would not lead. We remember the men who had faith, the men who
were not discouraged. The men we shall remember as we look back
on the present are not the men who surrendered to evil, the
Quislings or the Lavals abroad, or the men in this country who
would sign a compact with the devil himself if they thought they
could do business with him. We shall remember the men who dared
greatly, like the young flyers of the Royal Air Force, of whom it
was said, "Never in the field of human endeavor has so much been
owed by so many to 80 few."
Regraded Uclassified
208
- 13 -
Nations, like human beings, need periodic revivals of
faith and courage if they are to survive. They may pass through
their valleys of disillusion, but they also climb to the heights
of action and achievement. We in America are climbing now. We
are on that high and splendid road again. We are winning once
more the faith without which the human race would slip back into
the jungle. We are coming to see the truth of what Archibald
MacLeish wrote the other day, that
"In the wars of the spirit there is no defense but
to attack. For in the wars of democracy, of the human
spirit, it is faith which will decide the issue."
The terrible events of the past year have opened our eyes
again to the basic realities. They have made us see once more
the great truths of human freedom toward which man has groped his
way throughout the ages.
Regraded Uclassified
209
- 14 -
Great challenges in human history have produced great
responses, even before the earliest days of ancient Greece and
Rome. We now are confronted with the greatest challenge that
has come to free men and women in our time. It has already pro-
duoed an immortal response from the ordinary men and women, and
especially the young men and women of England.
I said before that I wondered what those young Americans
of 150 years ago might have accomplished if our great country of
today had been theirs to lead. I think I know the answer. I know
that the courage and determination which is the spirit of America
has not run out with the generation of Jefferson, Madison, and
Hamilton. That spirit is right here in this place -- as it is in
every graduating assembly in every American college, and it is
everywhere in America today where young men and young women are
ready to face the responsibilities of citizenship.
Regraded Uclassified
210
- 15 -
The task is far greater than winning a war or destroying
evil. It means building a new world when the war is over, a
world in which the Four Freedoms -- freedom of speech, freedom of
worship, freedom from want and freedom from fear -- can grow until
they encompass the earth.
In that new world we shall have to give more than lip-
service to the great principles in which We believe. We shall
have to translate those principles into a fuller and richer life
for the millions of decent, hard-working men and women in all
countries who have been the victims of poverty, inequality, in-
security, or war.
If the generation of 1941 rises to that task, as I know it
will, the common man of the future will have something better to
live for, work for, and to hand on to his children. It will be
Regraded Uclassified
211
- 16 -
America's task, your task and mine, to clear the ruins, to feed
the starving, and at last to assume the duties as well as the
privileges of leadership.
212
SECRETARY MORGENTHAU 'S READING COPY
OF HIS SPEECH DELIVERED AT
ALUMNI LUNCHEON, AMHERST COLLEGE,
JUNE 14, 1941, WHEN BOB
GRADUATED
Regraded Uclassified
213
I know that many distinguished alumni of Amherst
are gathered here, but to me, and I am sure to you also,
the most important members of this audience are the
seniors who are about to graduate. With your permission,
President King, I should like just to greet the alumni,
and tell them how glad I am to be among them; but I
want to address my words to the seniors. They, after
all, are the men whom you, as alumni, would wish to
honor today.
It 1s the habit on these occasions to offer
condolences to the students who are about to be launched
into the world of action. If I do not condole with
you seniors, it is not because I do not appreciate
your problems.
2520
127
2393
214
- 2 -
No man in public life can call himself mature if he
lets himself be impatient with college men at this
time. No one with the slightest human understanding
can be unaware of the load of doubt and discouragement
which all young men and women- in America and in all
other countries, have carried for the past few years.
The world of today is not a pretty sight; the
prospect of the years ahead is not a pleasant one.
If you feel that your elders have betrayed you, I, for
one, do not blame you for being bitter. If you feel that
the youth of 1941 has had a raw deal, I can understand
why. The world tragedy of today has its roots, to
some extent, in the mistakes and the failings of an
older generation, mistakes in which you had no voice
and no share.
147
2246
Regraded Uclassified
215
- 3 -
The present Foreign Minister of China, Dr.
Jr chee
Quo Tai-chi, looked out of his window on the day the
present war in Europe began. "The sky," he said, "1s
black with the wings of chickens coming home to roost."
It is your fate and mine to live under that dark sky for
a time.
We of an older generation might understand youth's
interests and problems better if we read college
newspapers more regularly. And so, before coming up
here, I did some research by reading a good many papers
published at many different colleges and universities.
As I went through them I was struck by the note of
disillusionment and cynicism that seemed to pervade
80 many of them. I think, therefore, that I can understand
the editorial writer who poured his heart out in my
favorite college newspaper the other day.
142
2104
Regraded Uclassified
216
- 4 -
AS you may have guessed, he was writing in the Amherst
Student. How representative he is of college opinion
I cannot tell; but at least his article impressed me
as the best expression of a widespread point of view.
Some of you may remember what it said:
"Corruption in high places does not disturb us,
but honesty astonishes us when it appears. Nothing
wells up in our throat when 'God Save the King' is
played, and we do not find it easy to associate
Winston Churchill with King Arthur. Nobility in
anything 18 suspect among us. This is not an
intellectual skepticism, but an attitude with which
we have become infused."
I am glad that he called this an "attitude." If
it were anything more than an "attitude" I should really
be disturbed.
133
1971
Regraded Uclassified
217
- 5 -
Perhaps we have read 80 much about disillusionment
that some of us have become disillusioned ourselves.
We have read 80 much about the weaknesses of France
and other countries that have gone down, that some
of us have become weak and irresolute ourselves. We
have seen so much selfishness and greed in high
places that we are too apt to take them for granted.
We have seen truth and honor and fair play degraded
80 widely that some young Americans, like your
editorial writer, seem almost to have lost their own
faith that these standards can be preserved.
Yet, something important 18 missing from the
reasoning of those who, perhaps rightly, call themselves
"the lost generation."
116
1855
218
- 6 -
I think I discovered what was missing on an inspection
cruise the other day with the United States Atlantic
Fleet -- a cruise, by the way, which was one of the
most thrilling and heartening experiences of my life.
I learned that the Fleet always acts upon what Admiral
King, the Commander-in-Chief, calls "the calculated
risk." That is to say, the officers who command
fighting ships at sea always weigh carefully the
alternatives of any course they may take, but take for
granted that there 18 risk in every decision.
It seems to me that college students, like all
Americans in this year of great decisions, must weigh
two great alternatives. Each of them involves risk.
"7
Regraded Uclassified
219
- 7 -
If we act now to stamp out this terror and this
tyranny that is on the march abroad, we run the risk
of losing our comfort, our safety, perhaps our lives
before the job is done. We may be bombed, we may be
killed in the process, and we shall certainly be poorer.
That is one side of the risk.
3 thru
But if we do not act, we run another and far
greater risk: of losing our precious freedoms, of
surrendering the intellectual and spiritual heritage
from which Amherst College and all of our American way
of life have grown. We must choose. We cannot have
it both ways. One thing we cannot do at this moment
in the history of the Western world 18 to preserve our
freedom without being ready to fight in its defense.
136
1602
Regraded Uclassified
220
- 8 -
Other countries tried to do just that. They waited,
one by one, until they had lost their security and
their liberty too.
It is for us to decide, and to decide now, whether
we would rather die on our feet than live on our knees.
I am not especially fond of the phrase "calculated
risk," although it is "realism" in simple terms and in
practical form. I have used it because it is one of
those "realistic" expressions which the college seniors
of 1941, along with many others, may prefer, since they
seem to discount idealism.
Actually, I know that in his heart the college
senior has ideals to which he is devoted; but "realism" --
whatever it may mean - has become fashionable.
124
1478
Regraded Uclassified
221
- 9 -
The writer of the editorial which I quoted a few moments
ago would, no doubt, call himself a "real'st." It was
in this spirit, and in all sincerity, I am sure, that
he wrote:
"We are going into this war with no strong
feeling that there are any ideals involved;
we see no visions of Christian knighthood in the
clouds
...
This war, to us, has neither an
idealist right nor an idealist wrong, it is
simply more confusion
...
We are a flock of
moral amoebas, a race of young animals to whom
pessimism has become a natural and constant condition
of mind."
102
1376
Regraded Uclassified
222
- 10 -
Whoever wrote that cry of despair - and I wish
that I could write with h1s eloquence and h1s power --
was not a realist at all. He was writing in terms of
sheer romanticism. For it is romantic in the last
degree to throw up your hands in surrender just because
this world is not what it ought to be. It 1s romantic
to imagine that the twenty years since the last war
were long enough to build a better world society.
Why, we in the United States never tried to build it.
We fought for eighteen months to win a victory by arms,
but then we promptly washed our hands of all the
responsibilities that we, as a leader among democratic
nations, should have assumed. And this evasion of our
responsibilities was all the more tragic because we,
having no selfish ends to serve, could have brought to
the council-table a truly disinterested point of view.
157
1219
Regraded Uclassified
223
- 11 -
We forgot then, and we are apt to forget now, that
the great forward movements of mankind are never
successful in one year or one generation. The great
struggles that gave us our law, our freedom, our
democratic institutions, our Amherst Colleges, were
successful only after many generations of striving.
They were the work of one generation of youth after
another. If the young men of past centuries had thrown
up their hands in despair, 1f they had run away to
some 1vory tower or if they had been content to be
"moral amoebas," you and I would not be here today as
free citizens of a free Republic.
The world we contemplate today 18 no more terrible,
comparatively, than the physical and political
wilderness that faced a little group of young men in
the century before Amherst was founded.
Regraded Uclassified
224
- 12 -
For example, let me talk for a moment about Alexander
Hamilton, who comes first to my mind because he was
the first Secretary of the Treasury, and because for
eight years I have lived with his portrait on the wall
of my office in Washington. Alexander Hamilton was
only eighteen, a boy in King's College, New York,
when he wrote undying pamphlets that helped to win
American liberty. At twenty he was a lieutenant-colonel
in Washington's army; and before he was thirty he had
become a mighty force in the creation of our Federal
Union. Madison was only five years out of Princeton
when he served in the Continental Congress. Jefferson
was only thirty-three when he drafted the Declaration
of Independence, and Monroe was only twenty-nine when
he helped draw up the Federal Constitution.
137
942
Regraded Uclassified
225
- 13 -
If any men had excuses for despair, it was that
generation of young men 150 years ago. First they had
to win their freedom; but when that was won, they had
virtually nothing but their freedom and their faith
on which to build. Their new country was weak and
poor and exposed to attack; its economy was in chaos,
its thirteen states were on the verge of going to war
with one another. Yet they did not lose faith. They
did not say, "what's the use?", or blame their elders
for bringing them to such a pass. They did not shrink
2
from the job.
3 three
I sometimes wonder what those young men of faith
and genius might have accomplished if our great country
of today had been theirs to lead.
131
811
Regraded Uclassified
226
- 14 -
I wonder what heights they might have reached if their
America had had our farms and factories, our mines and
shipyards and natural resources, if their America had
had a national income of a hundred billion dollars a
year, if they had had 130,000,000 fellow-Americans,
already united under free institutions which had been
tested for 150 years.
Would they have said "this world is too unfair
to youth, too terrible for us"? Would they have
complained of their inheritance? Would they have seen
the rise of a pagan tyranny abroad and called it "the
wave of the future"?
104
707
Regraded Uclassified
227
- 15 -
If any man in this room turns pale as he sees the
forces of evil in this world, let him remember always
the greatness of America. If any man thinks that the
preservation of human freedom is too big a job for free
men, let him remember what America has accomplished
already, and let him remember also the vast resources
and power and splendor of this country and its people.
We Americans can do any job that we set our hearts,
our minds and muscles to do.
The men we remember in our American past are not
the Buchanans and the Warren Hardings, the weak or
frightened leaders who would not lead. We remember
the men who had faith, the men who were not discouraged.
125
512
228
- 16 -
The men we shall remember as we look back on the
present are not the men who surrendered to evil, the
Quislings or the Lavals abroad, or the men in this
country who would sign a compact with the devil himself
if they thought they could do business with him. We
shall remember the men who dared greatly, like the
young flyers of the Royal Air Force, of whom it was
said, "Never in the field of human endeavor has so
much been owed by so many to so few."
Nations, like human beings, need periodic
revivals of faith and courage if they are to survive.
They may pass through their valleys of disillusion,
but they also climb to the heights of action and
achievement.
125
457
229
- 17 -
We in America are climbing now. We are on that high
and splendid road again. We are winning once more
the faith without which the human race would slip back
into the jungle. We are coming to see the truth of
what Archibald MacLeish wrote the other day, that
"In the wars of the spirit there is no defense
but to attack. For in the wars of democracy,
of the human spirit, it is faith which will
decide the issue.
The terrible events of the past year have opened
our eyes again to the basic realities. They have made
us see once more the great truths of human freedom toward
which man has groped his way throughout the ages.
119
338
230
- 18 -
Great challenges in human history have produced
great responses, even before the earliest days of
ancient Greece and Rome. We now are confronted with
the greatest challenge that has come to free men and
women in our time. It has already produced an
immortal response from the ordinary men and women,
and especially the young men and women, of England.
I said before that I wondered what those young
Americans of 150 years ago might have accomplished if
our great country of today had been theirs to lead.
I think I know the answer. I know that the courage
and determination which is the spirit of America
has not run out with the generation of Jefferson,
Madison, and Hamilton.
121
Regraded Uclassified
231
- 19 -
That spirit is right here in this place -- as it 18
in every graduating assembly in every American college,
and it is everywhere in America today where young men
and young women are ready to face the responsibilities
of citizenship.
The task 18 far greater than winning a war or
destroying evil. It means building a new world when
the war is over, a world in which the Four Freedoms --
freedom of speech, freedom of worship, freedom from
want and freedom from fear -- can grow until they encompass
the earth.
In that new world we shall have to give more than
lip-service to the great principles in which we believe.
e 6
232
- 20 -
We shall have to translate those principles into a
fuller and richer life for the millions of decent,
hard-working men and women in all countries who have
been the victims of poverty, inequality, insecurity,
or war.
If the generation of 1941 rises to that task,
as I know it will, the common man of the future will
have something better to live for, work for, and to
hand on to his children. It will be America's task,
your task and mine, to clear the ruins, to feed the
starving, and at last to assume the duties as well
as the privileges of leadership.
106
0
233
C
0
P
Y
THE BRITISH SUPPLY COUNCIL IN NORTH AMERICA
Box 680
Benjamin Franklin Station
Washington, D.C.
14th June 1941.
Dear Mr. Bell,
Enclosed you will find a letter addressed
to the Secretary on the subject of the further payments
due to the French. You will recollect that I mentioned
this to you on Thursday.
Will you please treat the letter at the
moment as unofficial. We should be most grateful if you
would begin considering the matter now on the basis that
ve shall probably be approaching you early next week (with
our usual plea for urgency) early next week.
Yours very sincerely,
(Signed F. Phillips)
Mr. Daniel Bell,
U. S. Treasury,
Washington, D. C.
COPY - dm - 6/16/41
Regraded Uclassified
234
Willard Hotel,
Washington, D, o
14th June 1941.
Dear Mr. Secretary,
As you are aware, after the collapse of
France, the French Government assigned to us their con-
tracts in this country. In an agreement parallel to but
separate from the actual assignment, ve undertook to repay
to the French the advances which they had made to their
contractors, as and when ve obtained delivery of the corre-
sponding material. These was are paid in U.S. dollars to
the credit of the State of France in an account with the
Bank of Canada. The amount remaining to be paid is $78.9
millions.
The British Government considere that in
present political circumstances it is insppropriate to
continue making these payments out of our small resources.
We therefore propose to stop making payments under this
agreement, but before doing 80 would like to know your
Government's views on the subject.
We are advised that the assignment is in no
way dependent on our continuing to make these payments,
and that if the French tried to contest our action or to
prevent our receiving deliveries in the United States
courts, their chances of success would be very slight. The
only risk worth considering is that by means of interis
injunctions against the suppliers which they could doubtless
obtain, they might perhaps delay some supplies. It would
be extremely useful to ne to know whether, if in the last
resort any important supplies were delayed, the United States
Government would be prepared to use their present powers to
place priority orders for us and to lend-lease us the material,
in order to avoid the delay which might occur if ve had to
wait till the action was tried.
I would be grateful if you could let no knov
views on this subject as soon as possible. Ve have weeks held
your back payments due to the French during the past few
while considered the question, and they are getting time. very
restive. we Action by the French may be expected at any
Regraded Uclassified
235
- 2 -
I should perhaps add that all the assets of
the Bank of Canada in the United States, including the suns
of about $150 millions already credited to the State of
France, have been transferred to the Canadian Government
and any action by the French to collect the amount due from
the Bank of Canada could presumably not be brought in the
United States.
I have sent a copy of this letter to Mr.
Hopkins and I understand that the Embassy vill inform the
State Department of the facts.
Believe me,
Dear Mr. Secretary,
Very sincerely yours,
(Signed) F. Phillips
The Honourable
Henry Morgenthau, Jr.,
United States Treasury,
WASHINGTON, D. C.
236
JT
PLAIN
London
Dated June 14, 1941
Rec'd 9:15 a.m.
Secretary of State,
Washington.
2449, fourteenth.
FOR TREASURY.
Embassy's 1052, March 18, and 1225, March 28.
The Directore of Courtaulds, Limited, have issued to
their shareholders a statement about the sale of its
American Viscose Corporation holding. The full statement
which will be sent by despatch, appare designed to show
that the price paid was inadequate to compensate for the
loss sustained by Courtaulds, the directors setimating
the net written down value of these assets as $128,000,000
EXCLUSIVE of goodwill. In the concluding paragraphs the
report states: "Courtaulds, Limited, apart from the
loss of the American Viscose Corporation, with the goodwill
attached to that business in its own country, will lose
a large part of the additional goodwill which has been
acquired by the English business from its prestige as
being in virtual control of the largest group of rayon
interests in the world. Furthermore it must not be
forgotten
Regraded Uclassified
237
-2- 2449, June 14, from London
forgotten that Courtaulds have owed much of their
financial strength in the past to the fact that a large
part of their interests was in another continent."
The TIMES, City Notes Column, June 13, comments on
this transaction: "The figures which the directors of
Courtaulds now give of the 'break-up' value of the
American Viscose Corporation show that report had by
no means exaggerated the discrepancy between the price
to DE received by the British Treasury from the recent
public offer of the stocks in the United States and the
estimated value of the assets. That price of course
has nothing to do directly with the price to be paid by
the British Treasury to Courtaulds for the shareholding
which is to be agreed upon mutually with recourse to
arbitration if necessary. Incidentally the directore do
not yet know what sum they will receive for the business.
From the terms of the public offer it would appear that
the British Treasury will receive something less than
$56,000,000 net, or say L14,000,000 by the sale of the
shareholding in the United States. "
The Financial Editor of the DAILY TELEGRAPH refers
to "the surprisingly emall total realized by the Viscose
issue in the United States" and adds that "the widespread
disappointment with the dollar side of the deal gains
point from the valuation placed by the directore on their
former subsidiary".
The
Regraded Uclassified
238
-3- 2449, June 14, from London
The City Editor of the NEWS CHRONICLE concludes
his comment as follows: "One infere that the Courtauld
Board is far from satisfied with the transaction, for
though the starling sum it is to receive from the
government is subject to arbitration and not necessarily
dependent on the American resale, the government will no
doubt be very reluctant to pay out more than it has
received.
JOHNSON
HPL
Regraded Uclassified
FIELD ORGANIZATION 239
NEWS LETTER
DEFENSE SAVINGS STAFF
-
U.S. TREASURY DEPARTMENT
WASHINGTON, D. C.
JUNE 14, 1941
NO. 4
TO THE FIELD STAFF:
Motivation is one of the most important of all marketing features.
The general public reacts favorably to fine educational programs if the
product so advertised is a necessity of life. Methods of personal
motivation are important for products in other classifications.
For this reason the magnificent program of publicity for Defense
Savings, is supplemented by our State and local organizations, the
members of which will carry the message by the Spoken Word to every man,
woman, and child in every community.
Many things will motivate individual Americans to purchase Defense
Bonds and Stamps. Safety of investment, reserves for the future and
patriotic assistance to our Government's National Defense Program are
outstanding.
These must be supplemented by convenient methods of purchase.
Our task is to create these ways and means to supplement our vast
educational effort.
Thus far the most successful methods adopted are:
1. Payroll Allotment: Many prominent firms have
announced plans. The voluntary reaction of workers has
been excellent. Many labor organizations are cooperat-
ing. These plana should produce many regular, systematic
purchasers.
2. Depositors Draft Plan: Many financial institutions
have announced plans whereby depositors may authorize deduc-
tions from their accounts monthly for the purchase of a Bond.
The Bond is purchased for and mailed to the depositor. This
method is becoming increasingly popular because of its great
convenience.
3. Stamp Banks: Many stores, shops, factories, announced schools,
picture the establishment of Stamp Banks. These provide
shows, banks, utilitics, and others, have facilities
for convenient and regular purchase of Stamps. In addition, value.
they are constant reminders and have great advertising
fiscal agencies for the Bonds or Stamps are made most
a in primary addition objective, to the seeking of qualifications of any outlet
important, the above. Our local committees should
Naturally, because through them many direct purchases are have as
that can act as & fiscal agency.
Sincerely yours,
GALE F. JOHNSTON
Field Director, Defense Savings Staff
Regraded Uclassified
240
GOVERNORS TO SERVE AS HONORARY CHAIRMEN
The following governors have been invited by Secretary Morgenthau
and have agreed to serve as Honorary Chairmen of Defense Savings Committees
in their states:
ARKANSAS
MAINE
The Honorable Homer M. Adkins
The Honorable Summer Sewall
Governor of Arkansas
Governor of Vaine
FLORIDA
MINNESOTA
The Honorable Spessard L. Holland
The Honorable Harold E. Stassen
Covernor of Florida
Governor of Vinnesota
OKLAHOMA
The Honorable Leon C. Phillips
Governor of Oklahoma
Previous issues of the NEWS LETTER have announced that Governor
Hurley of Connecticut, Governor Saltonstall of Massechusetts, Governor
Van Wagoner of Michigan, Governor Johnson of Mississippi, Governor
Donnell of Missouri, Governor Ford of Montana, Covernor Broughten of
North Carolina, Governor Maybank of South Carolina, Governor O'Daniel of
Texas, and Governor Langlie of Washington are already serving on Defense
Savings Committees in their states in this capacity.
SOUTH CAROLINA COMITTEE FORMED
Governor Burney R. Maybank heads the Defense Savings Committee for
South Carolina as Honorary Chairman.
Chairman is James H. Harmond, Attorney, Columbia; and other members State
W. Rhott Harloy, State Commissioner of Labor; James H. Hope, Rock
are: of Education; Walter T. Jenkins, General Manager,
Hill Superintendont and Finishing Company; J. Roy Jones, State Commissioner A. Foster of
Agriculture; McKessick, Greenvillo; A. B. Taylor, Spartanburg; and A. L. M.
Printing Harold F. McGinnis, American Tobacco Company; Mrs. Wiggins,
Prosident of the Bank of Hartsville.
is the State Administrator of the Defense Savinga Moit.
Program W. P. in Bowers South Carolina. Deputy Administrator is Joseph D.
LOCAL COMMITTEES FORMED IN NORTH CAROLINA
State Administrator, has ennounced 26 cities the appoint- of
ment Charles of H. Robertson, committees for the 100 counties Carolina. and the
10,000 or seven-man more population in the state of North
HELP OF MINNESOTA SCHOOL CHILDREN ENLISTED
With permission States Savings Bonds" Wes children in
of school authorities, the distributed pemphlet "For to
more Defense than Buy 150,000 United public and parochial school
Minneapolis and St. Paul.
Regraded Uclassified
241
MISSISSIPPI
Solid Groundwork Being Lic
STATE COMMITTEE FORMED. The first meeting of the Defonse Savings
Committee for Mississippi was held in Jackson May 29,
The Honorary Chairman of this Committee is Governor Paul B. Johnson.
The Chairman is Alfred H. Stone, Chairman of the Mississippi State
Tax Commission; and the other mumbors are: Rex I. Brown, President, Missis-
sippi Fower and Light, Company; Si Corley, State Commissioner of Agriculture;
Vrs. D. C. Lea, Executive Secretary to Governor Johnson; G. M. McWilliams,
Executive Vice President, Citizons Bank, Hattiesburg; Judge W. W. Ramsey,
Vicksburg; J. S. Vandiver, State Superintendent of Education, J. C. Bullock,
Wattiesburg; Dr. Folix J. Underwood, Secretary, Vississippi State Board of
Health, Jackson; Mrs. Hardy S. Wilson, Mazlchurst; and Tom Lylo Mitchell,
Proxident, Mississippi Junior Chamber of Commerce, Meridian.
Sugena Fly, Collector of Internal Revenue in Jackson, is the State
Administrator of the Defense Savings Program in Mississippi. Doputy Adminis-
trater is Orrin it. Swayze, Vico President of the Capitol National Bank of
Jackson.
COUNTY COTITTEES are being set up in all of the state's 82 counties.
Many of the state's leading citizens have agreed to eeryu on their County
Committoes and within a few works It is expected that Iocal committees will
IC functioning in every county.
IN HINDS COUNTY, largest in the statu and the one in which Jackson,
the candtal, is located, a committee has buch set up which, according to
State Administrator Fly, will serve "as a model and proving ground for the
statewide organization."
Mayor Waltor A. Scott of Jeckson is Honorary Choirman of
the Hinds County Committee,
Russ E. Johnson, Assistent Vice President of the Deposit
Guaranty Trust Company, is the Executive Chairmen. Other Dell-
hers are: George Godwin, Vice Chairman in charge of publicity;
Mrs. Joe F. Robinson, women's groups; J. hi Konnington, retail
group; W. H. McCarty, wholesale and manufacturing group; Kirby
Walker, city educational group; T. H, Naylor, town and rural
group; A. C. Griffin, postal employees group; W. C. Wells, III,
professional group; Creek L. Rice, public employees group;
Leon F. Handrick, speakers group; and 7. G. Byars, labor group.
INSTALLATION CF PAYROLL ALLOTMENT PL.NS in nil business time in Jackson
Hinds County is A major objective of the Hinds County Committee, accord-
Ing tn Chrinean Johnson's réport to the State Committice.
BANKS IN JACKSON paid for the printing of 500,000 copies
of = slip carrying n. sketch of the Vinute Man and the message
Buy n Share in America. Your Government nska You
to Invost Regularly A Part of Your Ternings in
United States Defenso Sevings Bonds Dr Defense
Savings Stamps.
ALL BUSINESS HOUSTS in Rinds County will anolyse these alips
with their statements work with and many employers will Include
them In DRY envelopes,
Regraded Uclassified
SPOT NEWS FROM TEXAS
242
State Employees Pledge Support, Heads or representatives of every
department of the Texes State Government have net with Bascon Giles,
Chairman, and other members of the Capitol Committee for Defense Savings,
and have given unanimous soproval to B. monthly purchase plan for Defense
Sevings Bonds and Stamps.
The Texas State Federation of Lebor, through its secretary, Harry W -
Acremen, endorsed the Defense Savings Program as follows:
"The Texas State Federation of Labor joins heartily in
the campaign to encourage people of all walks of life to
purchase these Defense Sevings Bonds. Every effort is being
put forth to 206 that the individual members of ell affili-
atéd organizations have culled to their attention this
opportunity for further service to Our Country, se well BE
a sensible, systematic sevings plan for thrmselves.
"Notional Defense is putting money in pey nvelopes.
Thoughtful people seve a port of their cornings. Defenso
Sevings Bonds afford you that opportunity."
The Harrison County Committee, Doyle A. Webb, Chairman, makes the
following suggestions to its members:
"1, Keep in touch with local newspopers so that Defense Sivings
Bond publicity will always be in your papers. Solicit
editorials from the aditor.
"2. Be prepared to distribute postera and literature on Defense
Sovings Bonds when it reaches you.
"3, Contact employers with regrd to exploining the bonds to
their employees.
"4. Sex that spenkere 30 provided for local school assemblies
end other meetings.
"5. County school supprintendents cen arrange educational pro-
STUDE through county schools that will reach the rural
people."
Wedo, business establishments, banks, and schools have set
up "depote" which will sell Defense Savings Stanps.
A very dignified 1ndy stepped into B. bank in North
Mississippi a few days ngo and told - clerk that she wented in to
purchase D Defense Savings Bond. He told her they case
several denominations end asked nor which denomination she
desired. She replied: "['11 take Biother,"
Regraded Uclassified
WINNER OF NATIONAL OPEN BUYS BOND
243
FOR DEFENSE
BUY
UNITED
STATES
SAVINGS
Crate Wood, winner of the National Open Golf Tourndment, purchased after A $100
Millise Savings Bond at the 18th hole of the Colonial Club golf course
Pareiving the loving cup symbolic of the Open Title und his championship check
:
11,000.
Amon Carter, member of the Texas Defense Savings Committee, is shown handing
The bond to Wood. Mr. Carter said:
"They can take that cup away from you, ont not (De bond.*
The brought cheers from the big crowd which watched the transaction. Bonds
Fide newspaper purchase publicity given the event will aid the SALE of Defense Savings
MI
all parts of the country.
New York, N.Y.--Hal Schumacher, bitcher for the New York State Giants,
*** presented with a $1,000 Defense Sevings Bond by New York
#dmirers before the first game of & deuble-beader on Sunday, June 8.
Regraded Uclassified
TEXAS
294
Fort Worth Committee Pushes Payroll Savings Plan
J. Lewell Lafferty, Chairman of the Terrant County Committee and Vice
President of Fort Worth National Bank, reports that the following card is
being distributed by the bank to industrial end business firms throughout
the county:
Firm Name
Address
Phone
Person in Charge
The above listed firm does hereby agree to cooperate with the
UNITED STATES GOVERNMENT
In the Sale of
DEFENSE BONDS
To the employees of this firm in the following manner:
1. Distribution of Informative Literature, Posters, Etc.
2. Personnel Meetings with Inspirational and Informative Speakers.
3. Arranging salary deduction plans to assist employees in making
Defense Bond purchases.
Signed
Date
Title
Approx. No. Employees
When these cards are signed and returned to the bank, the firm receives
8 supply of pemphlets, easels, and "employee cards". One of these employee
cards 1a reproduced below.
Employee
To
Date
Firm Name
Address
I hereby subscribe for
, $
maturity value,
Number
Amount
F
United States Defense Bonds Series
R
This will be your authority to deduct from my salary, or make collec- until
0
tion from ne of $
on each
N
Pay Period or Pay Day
T
sufficient funds are Amount accumulated to purchase the above subscribed
bond(s); said bond(s) to be registered as follows:
Please Print
Name
Street
City and State
Signed
B
A
Name Date : Amount :Balance :: Date : Amount : Balance : : Disposition
C
:
:
::
:
:
K
:
:
::
:
:
The Bank furnishes these cards to employers without cost.
245
AUTO WORKERS ENDORSE PROGRAM
A MESSAGE TO YOU
DEFENSE SAVINGS BONDS AND STAMPS give us all a way
to take a direct part in building the defenses of
our country-an American way to find the billions
The text of an
needed for National Defense.
attractive red,
white and blue
The United States is today, as it has always been,
bulletin board
the best investment in the world. This is an op-
announcement
portunity for each citizen to buy a share in
distributed by
America.
the large and
influential
We orint this message in the cause of Defense.
United Automobile
Workers Union.
Geo. F, Addes
R. J. Thomas
Secretary-Treasurer
President
INTERNATIONAL UNION
UNITED AUTOMOBILE WORKERS OF AMERICA
Affiliated with The CIO
MOTES FROM MICHIGAN
425 citles, towns and villages of the 467 in the state have established
local Defense Savings Committees.
Lunging Merchants Association Board of Directors has voted unanimously
to secure the cooveration of all Lansing retailers in the sale of Defense
Savines Stamps.
Detroit Bar Association is making plans to recruit socakers from the
legal profession to further the Defense Savings Program.
Gobel Brewing Company in Detroit is advertising the fact that All of its
employees have invested in Defunso Savings Bonds or Stamps.
Muskegon Piston Rink Company has reported the ourchase of $50,000 worth
of Defense Savings Bonds.
SYSTEMATIC SAVING FOR JUNE BRIDES
Michigan newsoapers, through thoir women's nagus, are suggusting
that June brides start their married lives with aystematic savings
plans and are advocating the regular purchase of Defense Savings Bonds
and Stamps.
NATIONAL INCOME RISING
"Salarive and wages amounted to $4,432,000,000 in Anril, a 17 DWT
cent rise over the comparable figure of $3,784,000.000 for April of last
year. The scasonally adjusted index of salaries and wages rose slightly,
from 100.0 in March to 100.3 in April. With defunse and other cayrolls
continuing the ramid expansion that characterized the closing months of
1940, the adjusted indox for May is expected to exceed the record figure
of 101.8 established in August of 1929."
If, S. Department of Commerce Name Release, June 5. 1941.
7
Regraded Uclassified
MICHIGAN -- Campaign in Full Swing!
246
w N. :SSEY, CHAIRMAN, MICHIGAN DEFENSE SAVINGS COMMITTEE, MAKES HIS FIRST MONTHLY REPORT. From left to Fight:
Gloson, Chairman, Michigan Commission of LADOR and Industry: Mrs. Seymour Beach Conger, Executive Secretary,
of Michigan Alumnae Council; Giles Kavanaugh, Collector of Internal Revenue, Detroit, and State admin-
Defonse Savings Staff: Frank N. Isbey: Edward W, McFarland, Wayne university: Earl W. Delano, Vice Presi-
Micrican Sinvery Association: and Herbert A. Dison, Director, Micnigan Municipal League,
EXECUTIVES OF JOINT COUNCIL NO. 43. TEAMSTERS UNION,
A. F. OF LA confer with Chairman 15bey after a
meeting at which some 80 business agents, represent-
ing 30,000 men, signified their approval of Defense
Savings Program and piedged their Full support.
From left to right: R, J, Bennett, secretary. Joint
Council: Chairman (sbey) George wilson, Recording
Secretary. Joint Council: Sam Murst, President. and
Bert Brennan, President.
SOCIETY INVESTS IN DEFENSE SAV-
BAS, Unficers of the Societa' Monte San
structed by the members to invest the
Surplus funds in Defense Savings
Tutina the purchase of $6,000 worth of
to Kenneth Burns, Cashier, Bank
Chairman Isbev: Silvestro G. slivestri,
Societa' Monte San Gluliano: Vincent
infistant V. 5. District Attorney: and
ins, President, Societa' Monte San
LOCAL 174, UNITED AUTOMOSILE WORKERS. C. 1. 0.,
yes
of the targest unions in Detrolt with members 1-
sixty clanis, purchases $50,000 worth of Defense
savings Bonds.
From left to rights Jack Fuller, Financial secre-
tary, and Michael J. Manning, president. of the
Local: Giles Kavanaugh, collector of Internal
Revenue, Detroit, and State Administratory Defense
savings staff: and Roscce Muston, Detroit Post-
master.
Regraded Uclassified
247
MOVIES
TRAILERS advertising Dufense Savings Bonds and Stamps will be attached
to the following feature pictures to be released during June:
Man Hunt
One Night in Lisbon
Penny Screnade
Sunny
Shining Victory
They Met in Bombay
In the Nevy
The trailers to these seven features will be secn in most of the theatres
of the country during the next three months. The importance of this contribu-
tion of the motion picture industry to the Defenso Savings Program is apparent
when one realizes that the average weekly attendance at motion picture theatres
of the country in approximately 80,000,000.
DEFENSE SAVINGS BONDS HELP HOME PURCHASERS
Series E Defense Savings Bonds are well adapted to the needs of home nur-
chasers, points out one who is purchasing a home on the FHA plan.
"My monthly payments are about $50," he writos. "My earnings are
considerably more than they have been in the past and I am going to
purchase (for $37.50) a $50 Defense Savings Bond each month. Ten
years from now, as these bonds mature, they will take care of the
last half of my 20-year FHA contract. In this way, instead of having
paid $6,000 in cash, I will have paid only $4,500, Uncle 5am having
made un the difference in interest,
"Of courso, I could make double payments now on my contract, but I
feel that it is better for me to put my extra money in Dufense Savings
Bonds, as in case of illness or other emergency I could cash a few
quickly if I had to.
"Furthormore, I believe that onu of the best ways for the to assist
In the defense of my home is to buy Defense Savings Bonds."
MASSACHUSETTS COLLECTOR'S OFFICE USES CLUB PURCHASE PLAN
Defense Savings Bond Clubs have been organized in the office of Thomas B.
Hassett, Collector of Internal Revenue, Boston. Those clubs are composed of
nine members, each of whom contributes $2 & wook. The purchasing member adde
75 cents to bring the total to $18.75, the purchase orice of the $25 Defense
Savings Bond, A different member malses the actual bond purchase each week.
HI
Newmarket, N. H.-100 oer cent of the employees of the Sam Smith Shoe
Corporation have accepted EX plan whereby they will systematically purchase
Defense Savings Stamps (very week. This is reported to be the first factory
in New England, of any kind, to SQ act.
MORE FIRMS AND ORGANIZATIONS "THICH HAVE INSTALLED SALARY SAVINGS PLANS
248
Boy Scouts of America
Federal Intermediate Credit Bank, Springfield, Mass.
(Reports 100% participation)
General American Life Insurance Compan - St. Louis, Mo.
National Bank and Trust Company of Norwich, Norwich, N. Y.
National Bank of Detroit, Detroit, Mich.
South Carolina Insurance Company, Columbia, S. C.
Installation of various types of payroll savings plans to make the
purchase of Defense Savings Bonds and Stamps as simple and convenient as
possible is proceeding at a rapid pace in all parts of the country. It
will not be possible to publish in this NEYS LETTER anything like a com-
plete list of concerns which have in this way made it possible for their
employees to participate in the Defense Savings Program. However, future
issues of the NETS LETTER will continue to list the namos of some concerns
which have adopted salary allotment plans.
It will be appreciated if State Administrators will report to
Gale F. Johnston, Field Director, Defense Savings Staff, the names
of companies in their states which have made it possible for their
employees to purchase Defense Savings Bonds by the payroll allot-
ment method,
NEW PUBLICATIONS
of the
DEFENSE SAVINGS STAFF
THE FIRST MONTH
Radío address of Secretary Morgenthau, delivered over a
nationwide network on June 5, reporting on the sales of
Defense Savings Bonda and Stamps during May.
BUY A SHARE IN AMERICA
Radio address by Ignace Jan Paderewski from New York on
May 16, on behalf of the Defense Savings Program.
THE VOICE OF THE PRESS
Excerpts from editorials from newspapers in all sections
of the country, showing wide support of the Defense Savings
Program.
MANUAL FOR STATE AND LOCAL committees
Explains the purpose of the Defense Savings Program, and
contains detailed suggestions for State Committees, Local
Committees, social end vocational organizations, public
employees, business and employers' organizations, women's
clubs, labor organizations, teacher's organizations, and
farm organizations.
These publications will be sent upon request to any member of a
state or local Defense Savings Committee.
Regraded Uclassified
249
LOCAL GOVERNMENTS COOPERATE
City end county finance officers throughout the country have been advised
by their Municipal Finance Officers' Association that Defense Savings Bondo
(Series F and G) are appropriate investments for public funds and that separate
funds (sinking funds, special assessment funds, pension funds, trust funds,
etc.) can each purchase the maximum amount (350,000), provided such funds can-
not be considered part of the general operating funds of the governmental unit,
The Municipal Finance Officers' Association also suggests that cition:
1) Help their employees purchase Series E bonds by sotting
up voluntary payroll allotment plans;
2) Distribute official folders describing Defense Savings
Bonde with tax and utility bills;
3) Display official posters in public buildings.
BUILDING AND LOAN AND SAVINGS AND LOAN ASSOCIATIONS SUPPORT PROGRAM
The Board of Directors of the United States Savings and Loan Lengue scopt=
ed a plank in its suggested policies for 1941 urging member Associations "to
visist the government by encouraging and assisting individuals to own govern- and
sint honds
advertising vigorously the advantages of saving
purchising government bonds for their own investment accounts."
Commenting upon the role of savings and loan casociations, Paul Endicott,
President of the United States Savings and Loan League, writes in the Savings
and Loan Journal:
"In this emergency we have an opportunity to do something more
then give lip service and endorsement to the plans of the
Treasury. It is in our interest 68 well 1.8 that of the national
defense not only to qualify (as issuing agents for Defense SAV=
Ings Bonds) but also to adá our influence to that of the Tressury's
in persuading the public to buy thase bonds."
STA'PS WELCOME BABIES
For many years it has boon the policy of the Mississippi Power and Light
Company to send 85 to every new beby in the home of E. Power end Light Comp by
employee. However, Rex I. Brown, President and General Menager of the company
and member of the Defense Savings Committee for Mississippi, is now sending
etch E. now baby ft Defense Savings Stamp album containing 35 worth of Defense Sev-
ings Stamps, accompanied by e letter which reads in part LS follows:
edly I cum enclosing & stepping storic toward e. United States but Savings a
the finest country in the world, especially in these troublous
"Since you are to be a citizen of the United States, undoubt-
timos, Bond so you will not only be 3. citizen of the United Status
part amer."
"SAVE HALF YOUR OVERTIVE"
#: Connecticut This is bank. Commenting upon this ad adltoris.ly, the Bridgeport
the advice to working min contained in recent advertisement of
Times-Ster says:
"SAYO half your overtime 18 good advice
If you have n.s.
much as $18.75 R nesk, or e month, over actual living expenses,
put this money into of Defense Savings Bond."
- 11 -
Regraded Uclassified
BANKING ASSOCIATIONS ENDORSE PROGRAM
250
OHIO:
"Our nation is engaged in a mammoth program for national defense.
"All citizens are being called upon to make sacrifices and to co-
operate in every way to the end that America will be invincible in the
protection of its freedom and the liberties of its people.
"The banks of Ohio, like those throughout the land, are in a posi-
tion to be extremely helpful in the financing of the defense program.
"We strongly urge that overy bank in Ohio qualify as an issuing
agent for such bonds as are to bedistributed for the defense program
and do all they can to advance the sale of Defense Savings Stamps and
Defonse Savings Bonds."
-From a resolution adopted shanimously
Ohio Bankers Association
51st Annual Convention, Cincinnati.
WASHINGTON, D. C.:
The 23rd annual convention of the District of Columbia Bankers'
Association at Hot Springs, Virginia, adopted a resolution plodging
"all out" support to the National Defense Program and commonding the
efforts of banks in the distribution of Defense Savings Bonds.
TEXAS:
The Texas Group, Investment Rankers Association of America, endorsed
the Defense Savings Program with the following resolution:
"Be it known that the Texas Group, Invostment Bankers Asso-
ciation of America, is fully in accord with the National
Defense Program to sell Dofense Savings Bonds and Stamps."
CONNECTICUT:
Mombers of the Connecticut Investment Bankers Association have agreed
to bring Defenso Savings Bonds to the attention of their clients daily
during the month of June,
ADVICE FROM BANKER BROWN OF PENNSYLVANIA
"Do not deposit your funds with us but buy Defense Savings Bonds,"
was the advice of V. Elbridge Brown, President of the Pennsylvania
Bankers Association, at its 47th annual convention. "It is no longer
proper to spond just EL little more than you carn," he said, "It is now
proper to save, and with those savings you should buy Defense Savings
Bonds."
Defense Bowery Staff pamphlet "Defense Savings for American Workers"
The Savings Bank of New York has distributed copies of the
urges 45,000 regular purchase of Dofense Sevings Bonds and Stamps and
to Savings depositors. In an accompanying letter the Vice President, offers
the facilities of the Bowery Savings Bank for this purpose.
251
WIDELY READ MAGAZINES COMMENT ON PROGRAM
Collier's
"Better Buy Some Bonds" says & Collier's editorial. "We hope Ameri-
cana will buy the current and forthcoming Defense Savings Bonds as copiously
and then some, as they bought Liberty and Victory bonda in World War times,
"Regular and aggressive investment in government bonds is one of the
best known ways of building up an annuity for yourself and dependents. For
another thing, by putting what money you can into government bonds at this
time, you take out what insurance you can against runaway price inflation.
"From the larger point of view, it is high patriotism to loan what
money you can to the government for the greatest arms program it ever has
undertaken, and for aid to Britain."
Liberty
"The whole truth of the defense-bond issue is that it Le not so much
money-raising scheme us it is a lid on prices and - cushion under us all
against the day that the war boom collapses," Walter Korig writes in the
June 7 issue of Liberty Magazine.
"Every bond, in the hopes of the government experts, is an insurance
policy against inflation now and deflation later. They believe that
National Defense Bond' is a name with A three-way meaning-dafense against
an external aggressor, defense against extortionate prices for necessition,
defense ugainst postwar depression."
Pathfinder
"DL is up to us," The Pathfinder said editorially in its May 24th
Issue. "There are two ways in which WE are called on to contribute to
our nation's defense. One is to obey direct orders to serve and pay
exxes; the other is to volunteer further aid by londing our money to the
Government, by letting up on our personal demands, and by making sucrifices
generally for the common cause.
"The second way is the acid test of our patriotism, our true devotion
to the nation. At bottom the responsibility for economizing in this
democracy is up to esch citizen. Let every man ask himself personally the If
he is willing to forego expected extra benefits at the expense of
Government; whather he is willing or unwilling to make some sacrifices of
his present privileges for the gruster strength of the nation."
Wallace's Farmer
points out in present its May 17th Issue, "farmors who have their places paid for
"As the war boom builde up form income,' Willace's Farmer
will be looking for ways to invost their extra funds.
"The arfost investment will undoubtedly be the new Defanse Savings
Bonds,"
Young America
monthly magazinu which is read by more than 340,000 of
mchool Young children, America, describes Dafonae Savings Bonds on the back cover
Ite May 23rd immio.
13
Regraded Uclassified
5053
252
MEMORANDUM
June 14, 1941
To:
PRICE ADMINISTRATION COMMITTEE
From:
R. K. Thompson, Secretary
Attached hereto are the following:
1. Corrected page 5 for minutes of June 3.
2. Minutes of the meeting of June 11.
3. Civilian allocation program for cork and
products and materials of which cork is
E. component.
4. Civilian allocation program for Dig iron,
ferro-alloys, steel ingots and castings, and
all carbon and alloy steel products.
5. Civilian allocation program for material
and equipment entering into reilroad,
mine, and industrial freight car construc-
tion and repairs.
5053
- 5 -
which are affected by shipping shortages. Mr. Henderson replied that a
ceiling would be fixed in such cases, Secretary Wickard raised the problem
of regulating shipping rates and Messrs. Henderson and Hame reported that
OPACS is participating in rate discussions and in the discussion concerning
the creation of an Office of Defense Transportation within the OSM which
would coordinate all forms of transportation where price, priority and
supply are concerned.
11. Coordination of defense priorities
Mr. Ezekiel raised the problem of a small manufacturer of brass
who was unable to secure copper from the big copper companies except by
paying 8 higher price than these same companies have fixed for their own
processors and subsidiaries for both defense and other needs. Be questioned
the possibility of tying price control to priorities so that the incentive
to bootlegging would be avoided and monopoly control would not be increased,
Mr. Weiner pointed out that the civilian allocation order on copper, issued
May 31, was worked out on a basis which would give the integrated company
and the independent company pro rata shares according to the amount of
defense and civilian production each has, but that proportionately the
integrated company usually has a greater amount of defense business.
12. Presidential power to suspend tariffs
Mr. Stevens reported that he had looked into the President's
authority to suspend tariffs and found that in case of an emergency or
var he may suspend any duty on food, clothing, and medical, surgical and
other supplies. Be pointed out that under the present unlimited emergency
there are many cases in which the President could act under that authority.
5259
253
CONFLUENTIAL
SUMMARY OF STENOGRAPHIC TRANSCRIPT OF MEETING 02
PRICE ADMINISTRATION COMMITTEE
June 11, 1941
11:30 s.n.
Chairman: Mr. Benderson
Present: Miss Elliott, Mesers. Stevens, Clayton, Nelson, Pike,
O'Connell, Esckiel, Meeker, Barnes, Hoover, Galbraith,
Ginsburg, Whitcomb, Plummer, Thompson
1. 011
Mr. Oalbraith reported on the meeting with California oil
producers held in San Francisco on June 7 to discuss the recent in-
creases in oil and gasoline prices. The initial request made of the
oil producers vas that they restore May 22 prices on June 10 but
after further consideration it was decided to defer the request until
July 1 with the possibility of working out in the meantime some formuls
by means of which the position of the small operators could be relieved
and their production obtained without ballooning the general price
structure.
Mr. Henderson emphasized the difficulties of the problem
since it is not clear whether the prices prevailing prior to the three
recent advances were sufficient to cover the costs of production borne
by marginal operators. The problem therefore remains of deciding
whether to insist arbitrarily on maintaining the status quo BO far as
prices are concerned or whether to work out differential prices recog-
nising differences in cost as between the small and large producers.
Mr. Pike suggested the possibility of working out B. formula
for prices within the schedule of gravity 80 that stripper-well
operators, who usually produce heavier oils which have been low in
price, could be given relief without affecting the price of gasoline,
which is refined from the lighter gravity oils and the price of which
has been at & rather high level.
2. The United States-Oanada Materials Committee
Mr. Henderson reported that be has arranged with OPM to oit
In as an observer with this committee at its weekly meetings and would
from time to time make reports to the Price Administration Committee
concerning transactions of the Materials Committee.
3. The requisitioning bill
Mr. Henderson reported that OPACS has been in contact with
the War Department concerning the requisitioning bill and that his
Office, as indicated at the last meeting of the committe, would support
the bill. Mr. Ginsburg added that the bill has been BO amended that
nothing is left save an authorization to the President to take over
Regraded Uclassified
254
5259
- 2 -
a plant which has been what down by reason of a striks but that an
amendment would probably be introduced In the Senate to enlarge the
bill's coverage to something nearer its original scope,
4. Automobile price situation
Mr. Benderson reported that on June 3 he called Pyice
Johnson, secretary of the Automobile Manufacturers Association, (of
which most leading producers are members) and requested him to tell
the executive session of the association on June 5 that OPACS would
like them not to increase their prices without consultation with OPACS
and to point out that fevored treatment of the automobile industry
could not be permitted when rigid price ceilings had been set for
other industries in which the earning rate had not been BO great.
However, simultaneously with the industry meeting on June
5, Mr. Henderson reported, EL story appeared in the Wall Street
Journal detailing the previous discussion that had been had in the
Price Administration Committee concerning the automobile price situa-
tion, That evening OPACS sent telegrams to all automobile producers
repeating the request which had previously been transmitted to them
via Pyke Johnson, Despite this, Chrysler, Studebaker, Hudson and
Willys announced price increases without prior consultation with
OPACS. General Motore Corporation was the only company to contact
OPACS to discuss prices and Mr. Henderson met with their represents-
tive for such 6. discussion on June 9.
Mr. Henderson added that a canvas of the situation indicated
that there is no other alternative except to ask automobile manufactur-
ors to withdraw their price increases in order to etop inflationary
tendencies. Furthermore, it is highly uncertain what prices should
be set for new models since that problem is complicated by the
questions of how many automobiles they may produce, what Idnds of
materials may be used, and the schedule according to which they will
be produced,
Miss Elliott raised a question concerning the allocation
of available care and trucks and Mr. Henderson replied that, until &
priority problem is raised, individual companies will have the right
to decide to what sections or regions available cars and trucks will
go. Mr. Ezekiel raised the question whether truck production would
be paintained or increased with all reductions taken on passenger care
when allocation is made, Mr. Henderson indicated that the present
allocation to the various companies is an attempt to maintain 88
much as possible of the truck supply and promised to present B. digest
of the present allocation at the next committee meeting.
5259
255
5. Publicity
do & result of the story which appeared in the Vall Street
Journal regarding the discussion of automobiles at previous meetings
of this committee, it vos understood that, unless otherwise requested
by the Administrator, members of the committee would not discuss with
menbers of the press the considerations had at meetings of the Price
Administration Committee and that the only publicity to be given such
matters would come from the office of the Administrator,
6. Side schedule
Mr. Galbraith announced that the price schedule on hidos
would be issued either this afternoon or tomorrow, Be spoke of the
difficulties in framing this schedule because of the problem of
differentials, of which there could be anywhere from none to some
three hundred, and because the advice and assistance given had not
been entirely disinterested, The schedule to be issued represents
the simplest possible form with ceilings set only on hides, calf
skine end kip, without any differentials.
7. Policy of price administration
Mr. Henderson set forth the general policy that whenever
it becomes apparent in the administration of price schedules that 8.
change is necessary to expedite the flow of any material, there is
no hesitancy on the part of OPACS in making that change, since there
is no concept of fixing rigid price schedules to be maintained with-
out differentials or without change. He spoke of the salutary effect
of various price schedules in maintaining practically A. given level
of prices in the commodities concerned,
8. Copper
Mr. Galbraith reported that a problem has arisen in con-
nection with a group of high-cost copper mines in northern Michigan
which are unable to produce within the framework of the 12-12} cent
price which is being held, The Tariff Commission has made a study
as to what price would keep those mines in operation and OPACS is in
the final stages of reviewing that study and arriving at a. price which
will keep that supply of copper available without upsetting the general
price structure for copper. Mr. Galbwaith also spoke of the necessity
of negotiating with the Metals Reserve Company concerning the
possibility of stock piling copper,
9. Rabbit fur
Mr. Nelson reported that the situation with respect to
rabbit fur (for making hate) is apparently getting very serious and
that the price rise on hats will be terrific if the speculators keep
control. Ee suggested that OPACS look into the situation and Mr.
Galbraith assured his that would be done immediately,
256
5259
10. Coffee
Mr, Galbraith reported that a meeting with the coffee tende
would be held this afternoon and that OPACS would try to negotiate
with then on 8. quid pro quo that DO ceiling will be set if they supply
the Army with coffee at a price which is not abnormally high, Mr.
Nelson reported that his division had been successful in getting
coffee to the Army from General Foods and Standard Brands, who
voluntarily offered it,
11. Suspension of tariffe
Mr. Stavens reported that he believed that action to suspend
tariffs on necessary supplies could be taken more readily under Section
318 of the Tariff Lew than under the amendment he cited in the mooting
of June 3. Kr. Henderson called attention to the bill recently intro-
duced which would authorise the President to bring in duty-free any
imports in the interest of national defense and security. Mr. O'Connell
reported that the Treasury is recanvassing its interpretation of the
President's authority to suspend tariffe on food, clothing, and medical,
surgical and other supplies in time of emergency looking toward the
inclusion of an energency such as the present one, as well as the
relief background in time of flood or other disaster.
Mr. Ezekiel suggested that it night be better to suspend
the duty on a clear-cut industrial product rather than on an agricultural
product when use 18 first made under the present or the proposed
statute of authority to suspend tariffs,
12. Jute and osnaburg containers
Mr. Erekiel reported that farmers are facing a rather acute
shortage of containers of all sorts but particularly of bags since the
supply of jute from India is almost wholly cut off and the price of
censburg is out of reach. Be stated that the Department of Agricul-
ture will make a study of the whole container situation as affecting
all farm products, He reported that a hasty survey of the bagging end
of the textilo industry indicated that the production of osnaburg und
sheetings is up about 36 percent over B year ago but that prices are
up 91 and 111 percent, respectively.
13. Allocation of steel
Mr. Weiner reported that an informal arrangement has been
made with Mr. Vniteside of the OPM Priorities Division to assure #
supply of steel for the manufacturers of agricultural implements for
a period of approximately four months. In the meantime, the final
goneral allocation will be worked out,
The committee adjourned at 12:30 p.m. to meet on Wednesday,
June 18 at 11 E,
257
OFFICE FOR EMERGENCY MANAGEMENT
OFFICE OF PRICE ADMINISTRATION AND CIVILIAN SUPPLY
For Immediate Release
PM 512
June 5, 1941
Following is text of the "Civilian Allocation Program For Cork
and Products and Materials of Which Cork is a Component," issued by
the Civilian Supply Allocation Division, Office of Price Administra-
tion and Civilian Supply, in connection with the General Preference
Order on cork announced by the Director of Priorities, Office of
Production Management, on June 2, 1941. The OPACS program and the
General Preference Order were both summarized in a joint press re-
lease issued on that date.
Regraded Uclassified
PM 512
TITLE 32 - NATIONAL DEFENSE
258
CHAPTER XI - OFFICE OF PRICE ADMINISTRATION AND CIVILIAN SUPPLY
Part 1310 - Cork and Products and Materials
of Which Cork 1a a Component
Civilian Allocation Program for Cork and Products and Materials
of Which Cork is 8. Component
The rapid depletion of stocks of raw cork in the United
States and the uncertainty of future shipmente from abroad, serious-
ly threaten a shortage of cork, and of products and materials of which
cork is a component, for defense and civilian demands. To insure the
obtaining of priority for deliveries of cork, and of products and mater-
ials of which cork is a. component, under present and future Naval and
Army contracts and orders and related sub-contracts and sub-orders, the
Priorities Division, Office of Production Management, has, simultaneous-
ly herewith, Issued General Preference Order No. M-B to direct the use
and distribution of cork, and of products and materials of which cork
is a component, in the hands of suppliers. Such Order will curtail the
supply of cork, and of products and materials of which cork is 8. com-
ponent, for civilian purposes. It is necessary, therefore, after mill-
tary defense needs are satisfied, to provide for the equitable allocation
of the residual supply of cork, end of products and materials of which
cork is a component, in the hands of suppliers, among competing civilian
demands.
Accordingly. pursuant to and under the authority vested in me
by Executive Order No. 8734, particularly Section 2(a) thereof, and pend-
ing the formulation of a more detailed program in this regard, the follow-
ing program for the equitable allocation of such cork, and products and
materials of which cork is a component. among competing civilian demanda,
ia announced for the interin period.
Regraded Uclassified
259
PM 512
- 2 -
I 1310.1 Insofar as the Director of Priorities, pursuant to
General Preference Order No. M-8, particularly Section 933.1(c) and (b)
thereof, will make allocations of such cork, and products and materials
of which cork is a component, among competing civilian demands, the
Director will be guided by general and specific policies and programs
formulated by the Administrator. In allocating such cork, and products
and materials of which cork is a component, among competing civilian de-
mands, the following factors, among other relevant factors, are to be
taken into consideration:
1. The need to provide adequately for civilian uses of cork,
and of products and materials of which cork is a component, essential
to the public welfare.
2. The degree of hardship upon labor or business resulting
from the restrictions contained in General Preference Order No. M-8.
3. The past requirements of users of cork and of products
and materials of which cork 1s a component.
4. The objective of achieving an equitable relation with
regard to supplies of cork and of products and materials of which cork
is a component among all users of these materials.
5. The availability of substitutes for the particular uses
for which cork, or products and materials of which cork is & component,
is sought.
6. The policy of the Administrator to refuse to allocate
cork, or the products and materials of which cork is a component, to
any person who, in the conduct of his business, discriminates against
defense orders.*
Regraded Uclassified
PM 512260
- 3 -
I 1310.1 to I 1310.2, inclusive, issued pursuant to the
authority contained in Executive Order No. 8734.
5 1310.2 The terms used herein shall be defined as they
are defined in General Preference Order No. M-8.*
Issued this 31st day of May, 1941.
LEON HENDERSON
ADMINISTRATOR
CERTIFIED TO BE A TRUE COPY OF THE ORIGINAL
JOHN R. HAMM
DEPUTY ADMINISTRATOR
Regraded Uclassified
261
OFFICE FOR EMERGENCY MANAGEMENT
OFFICE 03 PRICE ADMINISTRATION AND CIVILIAN SUPPLY
For Release PM Papers
PM 513
Friday, June 6, 1941
Factors to be taken into consideration by the Office of Price Administration
in formulating policies and programs for allocation of iron and steel products
among competing civilian demande were announced today in a "Civilian Allocation
Program for P1g Iron, Ferro-Alloye, Steel Ingots and Castings, and All Carbon and
Alley Steel Products" issued by Leon Henderson, Administrator.
The program carries out action agreed upon by the Director of Priorities,
OPM, and the Administrator, OPACS, as announced last week,
Current demand for such products under defense orders and for civilian
purposes is greater than the ability of producers to deliver in the required
amounts upon scheduled delivery dates, the program states.
Therefore, it becomes necessary, after military defense requirements are
satisfied, to provide for equitable allocation of remaining iron and steel pro-
ducts among competing civilian demands, In doing this the Administrator of
OPACS will take the following factors into consideration:
a-The need to provide adequately for civilian uses essential to the public
welfare,
b-The degree of hardship upon labor or business resulting from the failure
to obtain deliveries when scheduled or from the rejection of orders,
c-The past rates of consumption of the products by users thereof,
d--The objective of achieving an equitable division of supplies of the pro-
ducts among all users.
-The availability of substitutes for the particular uses for which the
products are sought.
f-The policy of the Administrator to refuse allocation to any person who,
in the conduct of his business, discriminates against defense orders.
Regraded Uclassified
262
PM 513
TITLE 32 - NATIONAL DEFENSE
CHAPTER XI - OFFICE OF PRICE ADMINISTRATION AND CIVILIAN SUPPLY
Part 1306 - Iron And Steel
Civilian Allocrtion Program for Pig Iron, Ferro-Alloys,
Steel Ingote and Castings, and All Carbon and Alloy Steel Products,
The current demand for deliveries of pig iron, ferro-alloys, steel ingote
and cestings, and all carbon and alloy steel products, (herein referred to AB the
products), under Defense Orders and for civilian purposes, is greater than the a-
bility of producers to deliver the same in the required Amounts upon delivery
dates scheduled. For this reason deliveries of the products are being delayed
and orders therefore rejected. To assure deliveries under Defense Orders and
other orders for necessary non-defense purposes when scheduled and to assure that
such orders are not rejected, the Priorities Division, Office of Production Man-
agement, has issued General Steel Preference Delivery Order. In view thereof, it
is necessary, after military defense requirements are setisfied, to provide for
the equitable allocation of the products among competing civilian demands.
Accordingly, pursuant to and under the authority vested in me by Executive
Order No. 8734, particularly Section 2(A) thereof, And pending the formulation of
a. more detailed program in this regard, the following program for the equitable
allocation of the products among competing civilian demands is announced for the
interim period.
§ 1306.26 Insofar as the Director of Priorities, pursuant to the General
Steel Preference Order, particularly Section 936.1(c) and (d) thereof, will make
allocations among competing civilian demands, the Director will be guided by gen-
eral or specific policies and programs formulated by the Administrator. The fol-
lowing factors, among other relevant factors, are to be taken into consideration
in making such allocations:
-2-
PM 513
263
a. The need to provide adequately for civilian uses essential to the public
welfare.
b. The degree of hardship upon labor or business resulting from the failure
to obtain deliveries when scheduled or from the rejection of orders.
C. The past rates of consumption of the products by users thereof.
d. The objective of achieving an equitable division of supplies of the
products among All users.
e. The availability of substitutes for the particular uses for which the
products are sought.
f. The policy of the Administrator to refuse allocation to any person who,
in the conduct of his business, discriminates against defense orders.
§ 1306.27 The terms used in this Order, except as otherwise indicated, shall
be defined no they are defined in the General Steel Preference Order.
Issued this 4th day of June, 1941.
LEON HENDERSON
ADMINISTRATOR
CERTIFIED TO BE A TRUE COPY OF THE ORIGINAL
JOHN R. HAMM
DEPUTY AIMINISTRATOR
264
OFFICE FOR EMERGENCY MANAGEMENT
OFFICE OF PRICE ADMINISTRATION AND CIVILIAN SUPPLY
For Release AM Papers
PM 530
June 10, 1941
Moving to meet the impending shortage in railroad freight
cars, Leon Henderson, Administrator, Office of Price Administration
and Civilian Supply yesterday promulgated a Civilian Allocation
Program covering material and equipment necessary for construction
or repair of railroads, mine, and industrial freight cars.
The program provides that all deliveries of equipment and
material necessary for the construction and repair of freight
cars shall be given preference over all material and equipment
going into any other civilian use, subject only to a prior preference
on deliveries for all such material and equipment as may be required
under contracts with the United States or any Department or Agency
thereof.
Effect of this progress will be to assure freight car
builders of first call on steel and other required materials
and equipment after military and other government needs are taken
care of. Action was taken under the authority of OPACS to allocate
residual supplies of scarce materials among competing civilian
demands after needs of the armament program are satisfied.
Administrator Henderson pointed out in announcing the program
that the railroads are faced during the peak loading period this
fall with the heaviest volume of freight traffic in recent years
as result of the combined impetus of armament and civilian activity.
265
PM 530
- 2 -
Because of this fact the railroads are now undertaking to expand their
supply of rolling stock. They had approximately 73,000 cars on order May 1
which should be built this year. In order to accomplish this and to avoid a
serious rail transportation bottleneck it is essential that construction of
these freight care and repair of bad order cars be speeded by every means
possible.
The civilian allocation program for freight care will affect particular-
ly the distribution of available supplies of steel and its products since they
constitute a major part of the materials required in freight car construction.
It is estimated that an average of 20 tons of steel are required for each
freight car built. Completion this year of all the freight cars on order May 1
would require around 1,400,000 tons of steel.
The need for additional rolling stock is coming at a time when the
armament program is placing heavy demands on the steel industry. Even though
the industry is operating at capacity there is not enough steel being produced
to satisfy both military and all civilian needs. The giving of preference to
freight car construction, therefore, will necessarily mean some curtailment
for other civilian uses.
Attached is text of program.
TITLE 32 - NATIONAL DEFENSE
PM 530
CHAPTER XI - OFFICE OF PRICE ADMINISTRATION AND CIVILIAN SUPPLY 266
Part 1313 - Civilian Allocation Program
for Material and Equipment Entering into
Railroad, Mine, and Industrial Freight
Car Construction and Repairs.
There is a critical shortage in the nation's freight cars. The total
demand for material and equipment entering, directly or indirectly, into freight
car construction and repairs is presently in excess of the available supply.
It is necessary, therefore, to direct the distribution of such material and
equipment in order to insure an uninterrupted and unretarded supply for freight
car construction and repairs.
Accordingly, pursuant to and under the authority vested in me by Execu-
tive Order No. 8734, and particularly Section 2(a) thereof, the following pro-
gram for allocation of freight car material and equipment among competing civil-
1an demands is announced:
8 1313.1 Preference rating on deliveries. All deliveries of equipment
and material necessary for the construction and repair of freight care shall be
given preference over all material and equipment going into any other civilian
use, subject, however, to a prior preference to deliveries for all such material
and equipment as may be required under contracts with the United States or any
Department or Agency thereof.*
§§ 1313.1 and 1313.2 issued pursuant to
the authority contained in Executive Order
No. 8734.
§ 1313.2 Effective Date: Expiration. This program shall take effect
on the 9th day of June, 1941, and shall continue until terminated by the
Administrator."
Issued this 9th day of June, 1941.
Leon Henderson,
Administrator
CERTIFIED TO BE À THUE COPY OF THE ORIGINAL
John E. hamm, Deputy Administrator
267
EXPORTS OF PETROLEUM PRODUCTS, SCRAP IRON AND SCRAP STEEL
FROM THE UNITED STATES TO JAPAN, RUSSIA, SPAIN, AND GREAT BRITAIN
AS SHOWN BY DEPARTURE PERMITS GRANTED
Week ended June 14, 1941
:
:
:
JAPAN
:
:
RUSSIA
SPAIN
GREAT BRITAIN
PETROLEUM PRODUCTS
Fuel and Gas 011 (including
Diesel 011)
19,415 Bbls.
I
75,000 Bbie. 462,759 Bbls.
Crude -
Blended or California
High Octane Crude*
75,000 Bble.
-
1
-
All Other Crude
73,800 Bbls.
-
I
-
Gasoline -
Gasoline A**
I
-
-
:
Gasoline B*
88,000 Bble.
-
-
289,143 Bble.
All Other Gasoline
-
I
-
--
Lubricating 011 -
Aviation Lubricating 011*** 158,000 Bble.
-
-
75,179 Bbls.
All Other Lubricating Oil
18,928 Bbls.
-
5,000 Bble
25,011 Bble
Tetraethyl Lead***
-
-
:
I
"Boosters", such as Iso-
Octane, Iso-Hexane, or
Iso-Pentane
-
I
-
I
5CRAP IRON AND SCRAP STEEL
Number 1 Heavy Melting Scrap
-
:
-
1,020 Tons
--
All Other Scrap
-
:
2,585 Tons
Office of the Secretary of the Treasury. Division of Research and Statistics.
June 16, 1941.
Source: Office of Merchant Ship Control, Treasury Department.
-
Any material from which by commercial distillation there can be separated
more than 3 percent of aviation motor fuel, hydrocarbon or hydrocarbon
mixture - President's regulations of July 26, 1940.
Aviation Gasoline.
As defined in the President's regulations of July 26, 1940.
miss bhauncy
TREASURY DEPARTMENT
268
INTER-OFFICE COMMUNICATION
DATE June 14, 1941
TO
Secretary Morgenthau
FROM Mr. Cochran
CONFIDENTIAL
Registered sterling transactions of the reporting banks were as follows:
Sold to Commercial concerns
24,000
Purchased from commercial concerns -0-
The Federal Reserve Bank of New York purchased 13,500 in registered
sterling from Thomas Cook & Sons, New York.
Open market sterling was unchanged at 4.03-1/2. Transactions of the
reporting banks were as follows:
Sold to commercial concerns
14,000
Purchased from commercial concerns
-0-
In New York, the closing quotations for the foreign currencies listed
below were as follows:
Canadian dollar
11-3/4% discount
Swies frane
.2321-1/2
Swedish krona
.2385
Reichsmark
.4005
Lira
.0526-1/4
Argentine peso (free)
.2370
Brasilian milrois (free)
.0505
Mexican peso
.2070
Cuban peso
1-1/16% discount
In Shanghai, the yuan was again unchanged at 5-3/80. Sterling was the
equivalent of 3.89-1/2.
There were no gold transactions consumated by us today.
No new gold engagements were reported.
N.M.S.
269
RESTRICTED
G-2/2657-220; No. 417 M.I.D., W.D. 12:00 his, June 14, 1941.
SITUATION REPORT
I. Western Theater.
Air: German. lioderate activity over southern England
on the night of the 13th-14th.
British. The large scale attack on the Ruhr was
renewed. Invasion ports and Brest were also bombed. It is claim-
ed that a pocket battleship was torpedoed.
II. Mediterranean and African Theaters.
Ground: Libya. At Tobruk the British claim to have re-
captured a portion of the defense position penetrated by Axis
forces.
Ethiopia. The British claim a continuing advance toward
Jimma (Gimma), but have made no further progress north and east of
Lake Tana, A Belgian force is moving toward Gambela in the west.
Native forces have occupied the Magi, Shoa, and Gimira areas.
Air: Axis. Attacks on Cyprus, Tobruk and Gibraltar.
III. Syria.
Ground: No change in the situation.
Air: The R.A.F. again bombed Beirut.
RESTRICTED
Regraded Uclassified
CONFIDENTIAL
270
Paraphrase of Gode Cablegram
Received at the Yes Department
at 20:40, Im 14, 1941.
Lendon, filed 18:15, Im 14, 1941.
the Mr Ministry of the Ver Office reports that they have
as information to cenfire runr of a depleted copply of banks for
the - Air Yer se. Nevertholess, as regards beath funes, indications
are that these are being sent to bombing equadrons direct from the
fastery, this indicating a lask of recerve of this item.
1. British Mr Activity Over the Continent.
a. of June 18-14. The following is the dispesition
of Reyal Air Force benters sparating during this nights Against
Irest, 110; Schwerte, 42, Boulegns, 51 Paris and Vichy, 12 planes
dropping propagania notices and fear mine-laying aircraft.
b. main. Fighter patrols and reconnaissance
flights directed - shipping activities vere again in operation.
a. Reyal Air Force bombers dropped
as team of banks an Home, 57 team - Schworte, and 42 tons es Beist.
While at 008 the German pecket battleship, LUTION. vas bonbed w
13 Before and nine Blexheims. the terpodees struck the vessel which
is heading for land - a speed between five and eight wiles.
2.
& German operations were en a
mall scale over an extensive srea.
b. the following number of Germen
planse vis invelved in operations en this nights 44 long reage benbers,
CONFIDENTIAL
INFORMATION
-1-
Regraded Uclassified
CONFIDENTIAL
271
20 fighters, and 20 mine-laying aireraft.
Regraded Uclassifie
c. the muler of planee involved in
operations on Shie day val 20 recommalsemente planes, 10 leag reap
beabers and five fighters,
3. Aircraft leave. Brittich Theater.
4. is a result of the operations on the night of I'm
12-13, five bookers of the Reyal Mr Force are unreperted.
D.
During the night of June 13-14, British night fighters
shot dom four enemy planes and damaged another. During the day of
June 13 British fighters in the Dever area destroyed two
No-109-7's and damaged one Junicers Ju-88.
4. British Air Activity. Other Theaters.
a. Amition. There were the regular reconnaissance, fighter,
beneer operations throughout all areas in the Middle East. In the
visinity of Malta, planes of the Royal Air Force sank a 5,000 tan ship.
5. Aircraft leases. Other Theaters.
a. In the vicinity of Malta during the operations on June 18
planes of the Reyal Air Ferce shot down 14 German planes and possibly
mother.
b. In the vicimity of Malta on June 12 the Germans shot
dewn four British planes and destroyed an additional four.
LES
Distribution:
Secretary of Var
State Department
Secretary of Treasury
Chief of Staff
Assistant Chief of Staff, 0-3
Ver Plans Division
Office of Naval Intelligence
Air Carge
Assistant Chief of staff, G-3.
CONFIDENTIAL
272
Paraphrase of Code Cablegrum
SECRET
Received at the Var Department
at 10:40, im 14, 1941.
By authority A. C. of s,, G-2
Date JUN 16 1941 ( Ro
)
Total
London, filed 15:15, Jane 14, 1941.
1. It has been examenced that a total of 16,700 ma, including
2,000 vounded, have been evacuated from Crote to Alerandria. Two hundred
more have just disemberked from fishing craft at B1d1 Barrani.
2. There 18 much optimistic talk but very little serious expects-
tion among the high reaking officers here that relations between Germany
and Imesia my develop into conflict.
3. In the week beginning June 1st, 812,000 tons of supplies
were disemberked in Great Britain from convoys.
4. Syria. With the Viohy French forces having retired from
Kissone and taken up position across the Damasons road, the British Central
Imparial forees are nov at Marjayous and have captured Babatiye. There
are unconfirmed reports that along the coast Bidon has been captured.
5/ There was havy boabardment of Tobrak by German planes but
without result. One Corner Amount car vas deptured and smother detachment
of vehicles was driven off in the visimity of Sollum and the Libyan border.
6. The 24th Italian Division has laid dom its ares.
At Eritive the British have exptured all the airdromes near Assab and are
making use of the sirport facilities.
7. Iraq. The only fast worthy of note was a small skirmish with
local guarilla troops who were all casualties.
LEE
Distribution:
Secretary of Var
State Department
Secretary of Treasury
Assistant Chief of Staff, 0-2
Var Plans Division
SECRET
INFORMATION COPT
Office of Enval Intelligence
0-3
Regraded Uclassified
CONFIDENTIAL
273
of Code Gablegram
Breadred at the Vor Department
at 12:30, - 15, 1943.
Lealus, filed 16:19, las 15, 1941.
1. Ba
a
Colegue we attached w w Britten
I
a. 14 please bented the German airficide
along the channel. the constal command attempted to sink a freighter off
Bittern Island, not mother TOOO team stoumble and its coursy vere attented
etf Curtery.
1. the - battlechtys Beharaberok end
Customers wire subjected to booking in which T1 tame of bonks were dropped.
The Prins begin - the terget for 34 tase of bashe. 50 team were drogged
as Cubserte.
2.
a I I I r inte a 1 à
stom proportions and limited to the Bristel, - and - -
₺ IS Leng-mage besters with 15
recommademento planse performed nicolene. 100 Lang-range beabers, 50
size leging - end 15 parents planse performed alssions -
3.
Purent plans above (mm - - 109's
à
with two others damged. for NII 1007 - destruyed and -
-
i
4. Pert of Bengast - bealsed w welve
CONFIDENTIAL
INFORMATION COPY
Regraded Uclassified
CONFIDENTIAL
274
British planse ont both the Britten and - corrict an
and benking operations in all the areas of the modle Instem thester
I I I
-
Distribution:
a I r
State Department
Secretary of Treasury
Valor Secretary of Ver
thief of Staff
Assistent thief of staff, 6-2
Yes Plane Division
Office of Noval Intelligance
=
ASP Garge
CONFIDENTIAL
Regraded Uclassified