Volume 574, October 1 – October 2, 1942

>DIARY Book 574 October 1 and 2, 1942 Regraded Unclassified - - - Book Page American Agriculturist Farmers' Standard Carbide Company of Pittsburg, New York (Samuel Null, President): Article in publication January 26, 1924, discussed in Mrs. 1. Goold-Mrs. FDR-- Treasury correspondence - 10/1/42 574 122 - B Bell, James Washington See Financing, Oovernment Brasil See Latin America - C- Cagney, James See Financing, Government: War Savings Bonda Canada See Lend-Lease Eastern Provinces Administration, Limited: Colonel Doriot's connection with reported in Paul memorandum - 10/1/42. 146 a) Strauss (Commander, Navy) endorsement of Doriot per 10/13/42: See Book 578, page 139 Chiefs of Staff, Joint See Joint Chiefe of Staff China Joint Distribution Committee: Paul memorandum giving resume' to date - 10/1/42. 132,134 Cooper, Jere (Congressman, Tennessee) See Sho af, William A. Correspondence Mrs. Forbush's mail report - 10/2/42 271 Curley, John Discussed by HMJr and McCormack (Congressman, Massachusetts) - 10/2/42 173 - D - Doriot, Colonel Georges F. (Quartermaster Corpa) See Canada Draeger Shipping Company See Foreign Funds Control - - - Eastern Provinces Administration, Limited See Canada Emergency Price Control Act of 1942 See Inflation "Everybody Every Payday' See Financing, Government: War Savings Bonds Exports To Russia, Free China, and selected blocked countries during 10-day period ending September 20, 1942 - 10/2/42.. 309 Regraded Unclassified - 7 - Book Page Farmera' Standard Carbide Company of Pittsburg, New York See American Agriculturist Financing, Government $4 billion borrowing - as much as possible outside commercial banke - discussed by HMJr, Bell, Harrison, Burgess, Brown, Spencer, and Edwards - 10/1/42 574 26,53 a) Agenda. 63 b) Bankers' group recommendations 65 Conference of Treasury group and Executive Committee of Open Market Committee - 10/2/42 177 Bell (James Washington) in New York Herald-Tribune questions assumption that year's borrowing should be limited to $35 billion - 10/2/42. 227 Tax Savings Notes: Report on sales in September - 10/2/42. 253 Government securities - recent changes in prices and yields: Haas memorandum - 10/2/42. 255 War Savings Bonds: State Administrators - meeting of: Agenda - 10/1/42. 20 "Everybody Every Payday": Odegard memorandum on planned conference with Petrillo - 10/1/42 67 a) Petrillo gives permission for record: See Book 575, page 107 Cagney, etc., thanked for assistance in September campaign - 10/1/42. 68 Payroll Savings Plan: Analysis as of September 26, 1942 - 10/2/42. 265 Foreign Funds Control Draeger Shipping Company Report to FDR on handling - 10/2/42, 294 - G- Goold, Mrs. E. See American Agriculturist Green, Theodore Francis (Senator, Rhode Island) See Silver - H Hawaii Industrial shop workers of Pearl Harbor Navy Yard transmit $70,000 toward air or sea craft named Pearl Harbor - 10/2/42 259 Regraded Unclassified -I- Book Page Inflation Emergency Price Control Act of 942 - amendment to - 10/2/42. 574 232 Vage Increases: Inforcement of edere under Price Stabilization Act by Treasury Department discussed by Paul and Davis (War Labor bard) - 10/1/42 109 - J- Joint Chiefs of Staff "The Security Control": HMJr tels Admiral Leahy that he will welcome representativi of - 10/2/42 268 Joint Distribution Committee See China Julian, William A. Editorials in connection with caddy altercation - 10/2/42. 241 - K- Kentucky See Revenue Revision - L- Latin America Brasil: Vargas thanks HMJr for poffered financial assistance - 10/1/42 153 Mexico: Beteta (Ramon)--Ambassaor Najera difference of opinion over relations witl United States reported to HMJr - 10/1/42 154 Lend-Lease Stettinius-EMJr correspondence oncerning valuation of reciprocal aid and procedue for - 10/2/42. 296 (See also Book 575, page 35 - 10/5/42) Canada: Navy purchase of PBY boats an dollar position involved discussed by HMJr ed Forrestal's aide - 10/1/42 22 Navy purchase of PBY boate an dollar position involved discussed by HMJr, Towere, Strauss, and White - 10/1/42. 44 U.S.S.R.: Rubber tire manufactuing equipment program being given "the run-around" Paul memorandum - 10/1/42. 112 a) Cox-HMJr conversation - 0/2/42 169 b) I.F. Stone calls on HMJF Fior to Akron visit in connection with secon-hand rubber making machine - 10/2/42. 203 United Kingdom: Federal ReserveBank of New York statement showing dollar disbrsements, veek ending September 23, 1942 - 10/1/42. 149 Regraded Unclassified - M - Book Page Manpower Sanders (Colonel Lewis) recommended to Hopkins as being well-informed on subject - 10/1/42 674 1 Mexico See Latin America Military Reports British operations - 10/1/42, 10/2/42. 156,157,330 "Voice of the Chief" broadcast - Hoflich summary - 10/1/42. 161 Japanese and United States Pacific Naval Losses - Hoflich memorandum - 10/1/42. 164 "The Var This Week, September 24 - October 1, 1942" - Office of Strategic Services report - 10/1/42 168 New Guinea: Map of roads and trails - 10/2/42 331 Office of War Information report - 10/2/42. 334 a) Young and Rubicam report on adjustments to decreased purchasing pover - N - Nelson, Donald Apologises for testimony of Wilbur Nelson before Senate Finance Committee on War Production Board's point of view regarding effect of taxation on production of strategic and critical metals - 10/2/42 234 Nelson, Wilbur Donald Nelson apologizes for testimony before Senate Finance Committee on War Production Board'e point of view regarding effect of taxation on production of strategic and critical metals - 10/2/42 234 New Guinea See Military Reporte New York See Revenue Revision Null, Samuel (President, Farmers' Standard Carbide Company of Pittsburg, New York) See American Agriculturist -P- Petrillo, Janes See Financing, Government: Var Savings Bonda - R - Revenue Revision FDR' communications with the Congress or its committees for consideration of tax bill transmitted to White House and then withdrawn - 10/1/42. 75 Ruml Plan: Senator George, at luncheon of National Retail Dry Goode Association, predicte full and aympathetic consideration - 10/1/42. 107 Regraded Unclassified - R - (Continued) Book Page Revenue Revision (Continued) Spendings Tax: Senators Lee and O'Mahoney and Congressman Gore express interest in - 10/1/42. 574 108 Joint Committee on Taxation: Direct access to Bureau of Internal Revenue proposed by HMJr - 10/2/42. 200 a) Paul memorandum - 10/2/42. 216 Donald Nelson apologises for testimony before Senate Finance Committee on War Production Board's point of view regarding effect of taxation on production of strategic and critical metals - 10/2/42. 234 Federal tax returns in Kentucky in 1864 and New York in 1867 diacussed in Treasury correspondence - 10/2/42 244 Rubber See Lend-Lease: U.S.S.R. Rubicam and Young For comments on adjustments to decreased purchasing power, see Military Reports: Office of War Information report Ruml Plan See Revenue Revision - S - Sanders, Colonel Lewis See Manpower Shoaf, William A. Recommended by Congressman Jere Cooper; vants $5000 a year job; Paul disapproves - 10/2/42 233 Silver Green, Theodore Francis (Senator, Rhode Island): Treasury comment on proposed bill authorising use of silver for var purposes - 10/1/42 115,116 Stone, I. F. See Lend-Lease: U.S.S.R. -- - - T - 4 Taxation See Revenue Revision - U - U.S.S.R. See Lend-Lease Security Control, Joint See Joint Chiefs of Staff Regraded Unclassified -V- Book Page "Voice of the Chief" See Military Reporte - W - Wage Increases See Inflation Walsh, David E. (Senator, Massachusetts) Treasury' opposition to proposal to preclude renegotiating agencies ***** from reducing contractor' profit below 5% of his sales after income and excess profits taxes: Paul letter - 10/2/42 574 219 War Savings Bonds See Financing, Government - Y - Young and Rubicam For comments on adjustments to decreased purchasing pover, see Military Reports: Office of Yar Information report Regraded Unclassified 1 October 1, 1942 9:20 a.m. HMJr: Hello. Operator: Mr. Secretary, the White House operator is trying to locate Mr. Hopkins. She said she'11 call you back. HMJr: Thank you. Operator: You're welcome. 9:41 a.m. HMJr: Hello. Hello. Operator: Go ahead. HMJr: Hello. Harry Hopkins: Hello, Henry. HMJr: Good morning. H: Good morning, Henry. HMJr: The man that I saw yesterday was Colonel Lewis Sanders - 8-a-n-d-e-r-8. H: 8-a-n-d-e-r-s - Colonel Lewie? HMJr: Yeah, and he's in the office of General Hershey. H: Yeah. HMJr: And he's got the answers to most of the questione that you were asking me yesterday about thie Man Power. H: And he knows what he's talking about? HMJr: He knows what he's talking about, and he's done more original thinking on it than anybody I've met in this town. Regraded Unclassified 2 -2 - H: And he - he'e got ideas of what ought to be done? HMJr: And he has ideas what ought to be done. H: I'm going to see him today. HMJr: He'e - he's worth - well, I gave him an hour and three-quarters. H: Well, I'11 give him plenty of time. HMJr: He's worth seeing, Harry. H: I won't do it unless I've got plenty of time. HMJr: No, and. H: Yeah. HMJr: Harry? H: Yeah. HMJr: I wondered if you knew that o. W. I. used your name on this Russian refinery business? H: No. HMJr: And called us up and said we shouldn't get out any more statements unless they were first okay'd by you? H: Never heard of it. Never even heard of it. HMJr: Well, I didn't think H: I don't know anything about it. Elmer Davis was trying to get me yesterday, but when I called him he was busy. HMJr: Well, I was.... H: I don't know a damn thing about it, and they got no business saying things like that. HMJr: Will you tell that Regraded Unclassified 3 - 3 - H: Oh, yes, I'll tell Davis. I'11 call - who - who did - who called who, do you know? I suppose some of their fellows called some of your fellows. HMJr: Some - wait a minute, I'11 ask Schwarz. Abe Feller. H: Abe Feller? HMJr: Yes. H: He'e in O.W.I. HMJr: Yeah. H: Called up who? HMJr: Called up Schwarz. H: In your office? HMJr: In my office. H: Sure, I'll tell them to mind their own damn business. HMJr: What? H: I'll tell them to mind their own damn business. HMJr: Okay. H: Yeah, all right. HMJr: Thank you. H: Goodbye. Regraded Unclassified 4 October 1, 1942 9:30 a.m. GROUP Present: Mr. Sullivan Mr. Graves Mr. Buffington Mr. Gamble Mr. Cairns Mr. Gaston Mr. Schwarz Mr. Thompson Mr. Kuhn Mr. White Mr. Blough Mr. Odegard Mrs. Klotz H.M.JR: Herbert, on that complaint that we had from General Strong on Tampa, I never heard from it - about having it investigated. MR. GASTON: We wrote many letters. First we wrote a letter after receiving it, asking to have it investigated, and another after we had investigated it telling him that the examinations - the searches were made on the specific, direct request of Military Intelligence. We sent him a copy of the report, showing that it was only done by Customs after Military Intelligence had made a definite request that it be done. H.M.JR: You never heard from it? MR. GASTON: No. H.M.JR: Here is one from Sumner Welles. (Letter from Mr. Summer Welles dated September 26, 1942, handed to Mr. Gaston.) Regraded Unclassified 5 - 2 - MR. GASTON: That will be another of the same kind - a request of the investigative agencies, I- don't have any doubt. H.M.JR: You certainly did some job on him. MR. GASTON: I will look into that. I had a letter this morning from the head of the Special Defense Unit in Justice, asking if we will agree to make searches on request of any one of the three investigative agencies - make body searches for any one of the three investigative agencies. H.M.JR: You know how I feel. I would play safe and keep the bodies here, if there is any doubt. Do we do it the way they used to do in the World War, scrub their bodies to see if there is invisible ink on their bodies? MR. GASTON: I don't think we have gone that far. H.M.JR: They can write it right on your body. MR. GASTON: We probably would if the Intelligence Unit had a genuine curiosity. H.M.JR: Ask them. You could write this on your body with invisible ink; and unless you scrub it, it stays there. MR. GASTON: We had a case two weeks ago of a Portuguese ship in Baltimore where the FBI men wanted the Customs to make a body search of every member of the crew before permitting them to go ashore. The Customs people told the FBI men they would do that if they would put it in writing. They refused to put it in writing, and they did not do it. H.M.JR: Have you got anything, Herbert? MR. GASTON: No, I haven't anything except here are a couple of memoranda on those Seattle investigations. Regraded Unclassified 6 - 3 - There is just about a final clean-up on that. I thought you might be interested. H.M.JR: You stay behind a minute. MR. GASTON: Yes. H.M.JR: Sullivan? MR. SULLIVAN: There is a consulting management engineering company in New York that has written to several companies suggesting that now that the tax rates are up this is the time to have the new things in their business that they need, and let the Government pay the freight. One of these people who got such a letter sent it to you and wrote back to this company saying that they thought it was most unpatriotic. We are going after that engineering company. I have here for your signature a letter to Nelson pointing out the situation and enclosing the correspond- ence and saying that he might want to look after the priorities that were granted to this engineering company. MR. GASTON: They just didn't know how to phrase their letter, John. MR. SULLIVAN: It is a beaut. (Letter addressed to Mr. Nelson signed by the Secretary.) We had the first meeting of the sub-committee on compensation for concentrated industries, and there is to be another meeting Friday. I rather suspect that almost everybody in WPB has gone all out for this. The talks were in the preliminary stages, but it looks to me a.s though what they expect to do is to set Regraded Unclassified 7 up a national pool out of which all industries that are closed are to be compensated from the profits of those industries in whom the orders are concentrated. There were quite some implications. I will keep you posted as it goes along. H.M.JR: Please. Anything else? MR. SULLIVAN: That is all, sir. H.M.JR: Roy? MR. BLOUGH: May I have, say, five minutes some time this morning to take up with you the letter we are asking the President - drafting for the President on the Vandenberg amendment? H.M.JR: What letter is that? I am all tied up. MR. BLOUGH: The letter which McNutt and Madam Perkins - Secretary Perkins-- H.M.JR: On what? MR. BLOUGH: The Vandenberg amendment. We are trying to get the President to take some action on that, you know, Social Security freezing. H.M.JR: You come in at quarter of three. That is the only time I have. Regraded Unclassified 8 - 5 - MR. BUFFINGTON: I have nothing. MR. GAMBLE: Mr. Secretary, at the close of the day, if we have gone over our quota for September we would like to have you talk to Mr. James Cagney, the president of the Soreen Actors Guild, on the phone for about two or three minutes. H.M.JR: I won't do it. Listen, Ted - look, you fellows, there is something else in the world. Now, look, that is what was put on my desk this morning for you fellows. (Indicating letters to be signed.) I just can't raise - I have got to try to study how to raise four billion dollars. I mean, there is a limit and I can t do it. I am willing to write - look at that. MR. GAMBLE: I understand, sir. H.M.JR: I can't do it, I am sorry. I mean, I am so tied up now that - there is two days' mail waiting to be signed there. MR. GAMBLE: Our interest is that we are trying to sell the program for January. He is the president of all these actors and actresses. H.M.JR: I thought Arnold was. MR. GAMBLE: Cagney is the new president, and they are having a big meeting out in Hollywood tonight, following his trip. Unfortunately, we had an incident, too, that did not set so well with Mr. Cagney. He is highly temperamental, perhaps the most temperamental man on the tour, and we thought just a "hello" from you and an expression of thanks to him for all these people-- H.M.JR: You will have to get along. I am going to try to sign all these (indicating letters). I mean, there must be twenty-five letters here, and I signed five for you yesterday. You stopped me in the middle of the day to sign five so you could get them out. I did that. I don't charge you for Veronica Lake. If you want me to call up Veronica Lake, I have the time. (Laughter) Regraded Unclassified 9 -6 - MR. KUHN: I have nothing. H.M.JR: Cairns? MR. CAIRNS: I have nothing. H.M.JR: Where is Randolph? MR. CAIRNS: He went to a meeting at the Labor Department. (The Secretary held a télephone conversation with Mr. Hopkins.) H.M.JR: He says he doesn't know anything about it and we should tell them to mind their own damned business. MR. SCHWARZ: That is interesting. H.M.JR I debated all night whether I should go to Davis. I said, "Why go to Davis? I will go right to Hopkins. I feel pretty good, now. You know this town; it is awfully hard to breathe in it. (Laughter) What did they tell you? MR. SCHWARZ: That nothing further should be said on the Russian gasoline situation without first clearing with Harry Hopkins. H.M.JR: He said he never heard anything about it, that it was perfectly ridi culous, and we should tell them it was none of their damned business. MR. SCHWARZ: We will be all right with our story in this afternoon's Post. H.M.JR: My own thinking is to follow the usual Treasury policy of cooperating and go ahead and do as we think best. (Laughter) What do you think, Herbert? MR. GASTON: I think that is good policy. Regraded Unclassified 10 - 7 - H.M.. JR: I don't think, Herbert, that I should call up - should I call up Elmer Davis and give him hell? I think the thing for us to do is go ahead and pay no attention. If he calls up and gives us hell,I will say,"! spoke to Harry Hopkins and he told us to tell you to mind your own business." MR. SCHWARZ: "We have checked on your request." MR. CAIRNS: We have a clearance from him. H.M.JR: Sure, but I mean there is no use in calling back Elmer Davis. MR. CAIRNS: No, they said to check with Harry Hopkins. MRS. KLOTZ: Cairns said you have a clearance with Harry Hopkins to do it. MR. GASTON: Consider that you have a blanket clearance. H.M.JR: Would anybody have me call back Pavis? MR. WHITE: I think he is having a pretty hard time as it is. You will only make it more difficult. (Laughter) = H.M.JR: Don't feel sorry for him. Have you met him? MR. WHITE: Yes, I met him. H.M.JR: The best way I can describe him, in the words of Peter Odegard, he has a Jehovah complex, having addressed so many million people over the air for so long. Was it you, Huntingtm, that said we got a clearance? MR. CAIRNS: Yes, you followed their instructions, you checked with Hopkins and he has given you a blanket clearance. Regraded Unclassified 11 - 8 - H.M.JR: I get quite a kick out of this. I am not a baby, but I get quite a kick out of it. All right, where were we when that happened? MR. CAIRNS: Paul is at the Labor Department. I have nothing to report. H.M.JR: Incidentally, I want to say that Cairns did a perfectly swell job for us on this Russian oil refinery thing. He did a swell job. MR. CAIRNS: It was under your guidance, Mr.Secretary. H.M.JR: It is all under my guidance, but that does not mean I always get results. MR. ODEGARD: You asked the other day about having two of these numbers that were on the Lucky Strike Star Parade put on platters. H.M.JR: Platters? (Laughter) MR. ODEGARD: Have records made of them. I didn't know whether you wanted to know what we had done about that or not. H.M.JR: Yes, sir. MR. ODEGARD: We find that we cannot get those made by Victor because Petrillo refuses to allow the musicians to make the records for commercial distribution. We are completely stymied. H.M.JR: How did we - we did the Irving Berlin record. MR. ODEGARD: We can do this by having a radio recording made; put this on a record with the infantry song on one side, and "Ev'rybody Every Payday" on the other, and distribute it. We cannot do it commercially; it would cost us about twenty-five hundred dollars to do that. Regraded Unclassified 12 - 9 - Now, this song, Ev'rybody Every Pay Day" actually has gone out. We have done that. We have a radio recording of it with Dinah Shore singing it on one side and Milton Douglas singing it on the other side of the record - the same song. We don't have the infantry song. H.M.JR: But that record has gone? MR. ODEGARD: Yes, we have that record. H.M.JR: Is it in the hands of every radio station? MR. ODEGARD: Well, I would have to check to see whether it is in every radio station, but we have done that. H.M.JR: That is all I was trying to get. MR. ODEGARD: You were not so concerned about the commercial distribution of it? H.M.JR: Well, what the Victor did for me, they made a black record of Berlin's two songs - the ordnance song and the "High Hat" bond song. Wouldn't they do that? MR. ODEGARD: No. H.M.JR: Why not? MR. CDEGARD: The Union refuses to allow it. H.M.JR: Why? MR. ODEGARD: They refuse because it would be a commercial operation. H.M.JR: I mean, supposing Victor wants to do it and sell it. MR. ODEGARD: They can't do it. Regraded Unclassified 13 - 10 - H.M.JR: But they make other records. MR. ODEGARD: There is difficulty there, too, about Victor getting permission to make the records. H.M.JR: Do you mean Victor has stopped making all records? MR. ODEGARD: No, they have not stopped making all records, but Vince told me he talked to the Victor people and they preferred not to go ahead. I will read you the memorandum. He says, "I have been unable to carry out the Secretary's request because of a dispute now existing between the American Federation of Musicians and Victor and other recording companies. The Musicians Union will not give permission to make such a record for commercial purposes. Consequently, it is impossible for Victor to make the record.' H.M.JR: Read that again; I don't understand it. MR. ODEGARD: It says there is "a dispute now exist- ing between the American Federation of Musicians and Victor and other recording companies. The Musicians Union will not give permission to make such a record for commercial purposes. Conseguently, it is impossible for Victor to make the record. H.M.JR: Well, that man sitting on your left is the expert on this. Will you turn it over to him? MR. ODEGARD: Huntington? H.M.JR Yes. Huntington, will you take this up with Victor for me? I wanted what they call the black records, which sell for fifty cents, and they did this for me - I mean for them to sell. You see, not for the radio stations because that is a different kind, but to sell on the market. I want the regular black record with "Every Payday, Ten Percent" on one side, and the infantry song on the other. Regraded Unclassified 14 - 11 - MR. KUHN: That dispute arose since we had the Berlin record made. That is why there is a difficulty. H.M.JR: I know. Let Huntington get in on this. After all, he got us our stuff on the radio. I mean, you steered us all through that thing with ASCAP, didn't you? MR. CAIRNS: Yes, I did. H.M.JR: You did a good job; see what you can do on this. I mean, it just doesn't make sense. MR. GASTON: If Huntington can settle the row be- tween Petrillo and the recording companies he would be doing something, because Elmer Davis and Fly and every- body else has been trying to. H.M.JR: He did it for us on the whole thing on ASCAP. We were, as far as I know, the only agency permitted to go ahead and use all copyrighted songs. MR. KUHN: We are permitted to do all our work with recordings. Petrillo says his dispute does not affect Government recordings, but this that we are proposing to do is a commercial proposition, and that is why it comes under his ban. He has been very good about the Government's program. H.M.JR: Well, it is like I put this thing up to Hopkins; Hopkins says, "I never heard of it. Petrillo may say, for course, if Mr. Morgenthau says he wants a record made to sell his bonds, and an infantry song on the other side, he can have it." MR. ODEGARD: Mr. Callahan has been in direct touch with Petrillo on this. H.M.JR: Well,let's turn it over to Huntington. You pick up the pieces, will you, Huntington? MR. CAIRNS: I will do my best. Regraded Unclassified