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Volume 632, May 6 – May 10, 1943
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Volume 632, May 6 – May 10, 1943
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Henry Morgenthau, Jr. Papers
Diaries of Henry Morgenthau, Jr.
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DIARY
Book 632
May 6 - 10, 1943
Regraded Unclassified
- A -
Book Page
Advertising (Newspapers)
See Financing, Government: War Savings Bonds
Agriculture
For 1943 crop production goal plans see Economic
Stabilization Authority
- B -
Bankhead, John H. (Senator, Alabama)
See Financing. Government: War Savings Bonds
Bartelt, Edward F.
See War Department
Business Conditions
Haas memorandum on situation, week ending May 8, 1943
632
256
Byrnes, James
See Economic Stabilization Authority
- C -
Cabinet Meeting
Report by Bell - 5/7/43
124
Chiang Kai-shek
See China
Chicago, Illinois
See War Department
China
Chiang Kai-shek thanked for birthday gift - 5/6/43
119
Stabilization Board: Foreign exchange conversion by
diplomatic and consular establishments in China at the
official rate plus 50% (Book 628, page 99)
a) Treasury asks certain questions concerning -
5/6/43
122
b) Adler reply - 5/12/43: See Book 633, page 106
(See also Book 635, pages 223 and 225 - 5/22/43,
and Book 637, page 88 - 5/26/43)
1) Treasury advises verbal agreement only:
Book 637, page 208
2) Treasury suggestions (further) to Adler for
discussion with Kung and Board - 5/29/43:
Book 638, page 105
Correspondence
Mrs. Forbush's mail report - 5/7/43
146
Credit, Regulation of
See Economic Stabilization Authority
- D -
Darlan, Admiral
Son suffering from infantile paralysis on his way to
Warm Springs, Georgia - 5/8/43
214
Davis, Chester C. (Administrator, War Food Administration)
See Economic Stabilization Authority
Deferments, Military
Discussion at Cabinet meeting - 5/7/43
128
Regraded Unclassified
- E -
Book Page
Economic Stabilization Authority
Federal Reserve Board: Widening of powers over extension
of credit under Section 5(b) of Trading-with-the-Enemy
Act suggested by Byrnes
632
98
a) Treasury reaction - 5/6/43
96
b) Executive Order draft
99
c) Byrnes sends revised draft - 5/15/43: See Book 634
page 59
Davis, Chester C. (Administrator, War Food Administration):
Reports on mobilisation of agricultural resources to
meet 1943 crop production goals - 5/6/43
103
- F -
Federal Reserve Board
For widening of powers under national stabilization
program see Economic Stabilization Authority
Financing, Government
April financing - Bell memorandum - 5/7/43
134,227
Federal Reserve operations in Government securities -
5/8/43
20?
War Savings Bonds:
See also War Department
2nd War Loan Drive:
Workers to be thanked by HMJr: See Speeches by HMJr
Labor (Organized): Houghteling to prepare a report
by States of reaction to drive - 5/6/43
1
a) Houghteling report - 5/12/43: See Book 633,
pages 84 and 180
FDR given statement to be used at press conference -
5/6/43
75
a) Schwarz memorandum on conference - 5/7/43
132
Analysis of subscriptions by classes of investors
and by issues - 5/10/43
228
Summary of work as planned for immediate future in
view of results of 2nd drive - Graves report -
5/6/43
3
Advertising Space in Newspapers: Bill to require
Secretary of Treasury to spend $25-30 million yearly
introduced by Bankhead (Senator, Alabama)
82
a) Paul memorandum - 6/5/43
80
Weekly report - 6/8/43
175
Business connections of chairman and co-chairman of the
County War Finance Committees
a) Illinois - 5/10/43
234
b) Indiana -
#
243
c) New York -
.
250
d) Washington - II
230
France
Martinique: Situation there discussed by Hull at Cabinet
meeting - 5/7/43
126
Freund, Paul
Declines Treasury offer because of pressing duties in
Office of Solicitor General - 5/5/43
92
a) Frankfurter-HMJr correspondence - 5/6/43
91
Regraded Unclassified
- G -
Book Page
Greece
Financial assistance:
Treasury letter to State Department concerning report
submitted by Greek Government
632
115
State Department letter to Greek Ambassador reporting
114
on program
State Department letter to FDR reporting proposed
Lend-Lease assistance.
112
a) Copy with covering letter sent to HMJr
111
1) White memorandum for HMJr protesting
Hull's implication of consultation with
Treasury Department
109
a) Treasury letter to State Department
expressing disapproval since Treasury
does not recognize Greek need at this
time - 5/6/43
108
- I -
Intergovernmental Fiscal Relations, Committee on
See Revenue Revision
- L -
Labor
See Financing, Government: War Savings Bonds
Lend-Lease
United Kingdom:
Dollar position of British Empire countries - Stettinius
requests re-examination of
117
a) Treasury reply - 5/6/43
116
Federal Reserve Bank of New York statement showing
dollar disbursements, week ending April 28, 1943 -
5/7/43
157
Aircraft flight delivery as at May 4, 1943 - British
Air Commission report - 5/10/43
302
Aircraft despatched, week ending May 4, 1943 - British
Air Commission report - 5/10/43
304
- M -
Martinique
See France
- N -
Newspaper Advertising
See Financing, Government: War Savings Bonds
North Africa
See Occupied Territories
Regraded Unclassified
- 0 -
Book Page
Occupied Territories
Records - preservation of: Recommendation of Librarian
of Congress discussed at Cabinet meeting - 5/7/43
632
126
North Africa:
Resume of situation from financial point of view -
White memorandum - 5/10/43
270,280
Report of purchases, May 3-9, 1943 - 5/10/43
298
- P -
Post-War Planning
International Stabilization Fund (British): Chancellor
of Exchequer asks advice of HMJr in connection with
proposed appearance in House of Commons and House of
Lords - 5/6/43
24
a) HMJr-Phillips-White conference
b) Chancellor's message
29
- R - -
Revenue Revision
Intergovernmental Fiscal Relations, Committee on:
FDR thanks HMJr for report - 5/6/43
95
FDR asked to contact Hill; otherwise Ruml plan may be
voted out - 5/7/43
124
a) FDR contacts Connally: can do no more - 5/12/43:
See Book 633, page 22
b) Byrnes reports Doughton's phone call for guidance -
5/17/43: Book 634, page 88
1) Doughton-HMJr conversation: Book 634, page 96
- S - -
Smith, Fred
Facetious press release coverning - 5/6/44
90-A
Speeches by HMJr
2nd War Loan Drive workers - HMJr's speech to thank
Publicity plans as outlined by Bell - 5/6/43
32
Draft 1
34
#
2
46
Reading copy
59
HMJr-Marshall conversation as quoted
74
Nami broadcasters voices: HMJr thanks those who
"took off" - 5/14/43: See Book 633, pages 275 and 279
- T -
Trading-with-the-Enemy Act
See Economic Stabilization Authority
Regraded Unclassified
- U -
Book Page
United Kingdom
See Lend-Lease
- W -
War Department
Chicago Army War Bond Office: Report on situation sent by
Regional Coordinator to Bartelt - 5/8/43
632
87
a) Protection of building discussed in War Department
letter - 5/21/43: See Book 635, page 147
War Food Administration
See Economic Stabilization Authority
War Savings Bonds
See Financing, Government
Regraded Unclassified
1
May 6, 1943
9:10 a.m.
WAR BONDS
Present: Mr. Graves
Mr. Houghteling
H.M.JR: What I wanted to do, I would like to have
Lawrence Houghteling have for me next Wednesday, a report
by States of what organized labor thinks and feels as to
how they were treated during this last drive.
I want to know where they thought the people treated
them well, and where they thought they treated them badly.
If they want to mention names, that is all right. But I
want it by States, and I want it by next Wednesday morning.
MR. HOUGHTELING: All right, that is fine. I will
have it.
H.M. JR: You say you will have it, or you love it?
(Laughter)
MR. HOUGHTELING: I will have it. I don't know whether
I will love it or not.
H.MJR: I want it by States. What I want to know is
where they feel organized labor was taken into camp and was
used, and where they were given the brush-off, by States,
and if they want to mention names, let them mention names.
And do you think that during the day you could dictate
to me what War Savings Bonds are planning for this month -
what they are doing?
MR. GRAVES: Yes.
H.M.JR: As far as I know, they are not doing anything.
Regraded Unclassified
2
- 2 -
MR. GRAVES: I would say we are doing everything;
that is, we are going right on with everything.
H.M.JR: Well, I haven't the foggiest idea of what
you are doing.
MR. GRAVES: We sent out following our discussion
yesterday we sent word to all of our State people to go
right ahead.
H.M.JR: Would you mind once more telling me about it?
MR. GRAVES: I wouldn't at all. I would love to.
Regraded Unclassified
3
TREASURY DEPARTMENT
WASHINGTON
May 6, 1943.
MEMORANDUM FOR THE SECRETARY:
In accordance with your request this morning, I give
you below 8. summary of the work which will be carried on
by the War Savings Staff in the immediate future.
As I said to you this morning, the War Savings Staff
in all States concentrated its energies on the April drive,
which concluded last Saturday. While quotas for May were
released to the field a week earlier, I had not thought
it wise to give any specific word to State Administrators
at the conclusion of the drive regarding the resumption of
their continuing program, until you had indicated what your
wishes were with respect to a possible reorganization.
Following the meeting in your office yesterday, however,
Mr. Coyne, at my instruction, sent the following telegram
to all State offices:
"The Secretary expects all hands in
War Savings organization at State and community
le vels to go on as usual with our normal oper-
ations now that April drive has been successfully
ORDEFENSE
concluded. I urge you and your associates to do
everything possible to sustain and strengthen the
BUY
UNITED
STATES
SAVINGS
BONDS
Regraded Unclassified
4
-2-
public interest in the War Savings program, and
to increase monthly sales of War Bonds among all
classes of people to highest possible levels.'
While there naturally has been a feeling of uncertainty
in some areas regarding the future of the War Savings or-
ganization, which might have some effect upon the work, my
hope and expectation is that this message will help greatly
to dispel any such feeling and stimulate workers everywhere
to renewed activity.
Following is a brief account of our principal activities:
NATIONAL ADVERTISING
Newspapers
Five full-page ads and five small-size ads for the month
of May have already been distributed. Additional ads are being
prepared by the Advertising Council. These ads will feature
payroll savings; we also are anticipating the withholding tax
and how to meet its effect on Bond sales. Our regular news-
paper campaign now numbers some 6,000 daily and weekly news-
papers which carry War Bond advertising regularly, with an
aggregate circulation of about 90,000,000.
General magazines
A portfolio of new ads has just gone out to leading
general magazines. Our last such ads were scheduled by 61
magazines, with an approximate circulation of 70,000,000.
Regraded Unclassified
5
-3-
Farm magazines
A May ad has been distributed and a June ad is in pro-
duction. This is a new series prepared by Erwin-Wasey after 8.
farm research survey. It will appear in approximately 36
leading farm publications, with a circulation of approximately
14,000,000.
Business publications
A May ad has been distributed, and a June ad is in pro-
duction. This series, on payroll savings, will appear in
roughly 550 trade papers, with a circulation of 5,000,000.
Outdoor advertising
A May 24-sheet poster is up now. One on payroll savings
is being prepared. Outdoor showings are now running approxi-
mately 12,000 a month.
Posters
Our May poster has been distributed. A photographic
poster "Deliver Us From Evil" is in production for June,
and 8. Flag poster for July. (Quantities on each - 1,300,000).
Hitch-hikes
Support from national advertisers is continuing at a very
satisfactory rate. In the six leading weekly magazines, for
example, we now get between 90 and 135 mentions each week,
and between 7 and 12 complete ads on War Bonds. Mailings and
personal contact encouraging this support will continue on
a consistent basis.
Regraded Unclassified
6
-4-
Special
A payroll envelope stuffer is being prepared in anticipa-
tion of the possible adoption of the withholding tax.
PRESS
Newspaper clip sheet
We have currently in production a payroll savings clip
sheet which will be mailed to about 1,750 dailies, and to
over eight thousand weeklies.
News pictures
A series of picture releases is in production, the
pictures being designed to tie in War Bonds with special
days. Releases will be made on Mother's Day, First Aid Week,
Memorial Day, Flag Day, and Father's Day.
"What You Buy With War Bonds"
A new series of the feature "What You Buy With War
Bonds" with emphasis upon payroll savings, is being prepared
for release to dailies and weeklies with a total circulation
of approximately 55 million.
Regular Features
Also in production are the regular continuing features,
including "Stars in Service" and "American Heroes" serviced
to all dailies and weeklies, Spot Picture Page, ordered by
over 600 papers, Underbars used by 250 dailies and "Small
Regraded Unclassified
7
-5-
Change", the latter half-page being carried regularly by 130
dailies.
House organs
The June Press Book for company publications will
shortly be released. Circulation of these publications totals
approximately 30 million. This will include editorial material,
cartoons, suggestions to editors for incorporating War Bond
promotion in their publications, and a photograph especially
designed for use on magazine covers. On an average, these
cover pictures are picked up by a thousand publications.
Special War Savings Staff News
A special newspaper edition of the War Savings Staff
News, outlining and illustrating what the press did to
support the Second War Loan, will go out shortly to news-
paper publishers, editors, and others in 8. position to assist
in the continuing promotion of theWar Bond program.
Flag covers on magazines
Virtually every major magazine in the country is planning
to use a flag cover for July, these covers to include War Bond
tie-ins.
Picture stories
A series of illustrated stories is in production for use
during June. These stories will draw a comparison pictorially
Regraded Unclassified
8
-6-
between the Bond buyer and the soldier at the front.
Special
In preparation for the possibility of an invasion of
Europe, a special "What You Buy With War Bonds" series is
being developed with an invasion angle. In addition a
picture page is being prepared to be released in the event
of invasion, showing the aircraft and surface vessels and
other equipment which must play a major part in such an
operation.
RADIO
Network programs
During May, approximately 36 of the outstanding network
programs each week will use special War Bond payroll savings
materials. In addition, during May and June, the following
programs will be donated to the Treasury War Bond program in
their entirety:
Little Jack Little, Monday - Friday, 11:45 to 12:00,
Blue Network
Guy Lombardo, Wednesdays 11:30 to 12:00, Mutual Broadcast-
ing Co.
Tonmy Dorsey, Fridays 12:30 to 1:00 AM, Blue Network
Horace Heidt, Saturdays, 5:00 to 5:45 PM, Blue Network
The Saturday Night Bondwagon will continue to be broad-
cast each Saturday night over 161 stations of the Mutual
Broadcasting System from 10:15 to 10:45 PM.
Local station announcements
During May each of the Nation's radio stations will
Regraded Unclassified
9
-7-
carry at least three special War Bond payroll savings announce-
ments per day--or a total of more than 19,000 announcements
per week.
Treasury Star Parade
The Treasury Star Parade is now being used 2,571 times a
week by 857 radio stations. We plan to continue to release
the Treasury Star Parade programs to these stations on &
three-a-week basis.
Treasury Song Parade
The Treasury Song Parade is now being used 7,150 times
& week by 650 stations (average eleven times per week per
station). Eight three-minute Song Parade programs will
continue to be released to these stations each week.
Foreign language Treasury Song Parade
We are now and will continue making special Treasury Song
Parade programs in various foreign languages for distribution
to foreign-language radio stations. During May the Song Parade
will be recorded in Polish, German, and Scandinavian by popular
vocalists of these nationalities.
Foreign language scripts
In cooperation with the Foreign Origin Section of the War
Savings Staff, the Radio Section is releasing to foreign-
language radio stations appropriate War Bond radio scripts
in English for translation and presentation by them in
Regraded Unclassified
10
-8-
various languages.
Special radio news
The Radio Section is now gathering from all radio
"stations in the country complete details on their local War
Bond programs. As soon as this material is compiled, we
plan to issue & special edition of the War Savings Staff
Radio News for distribution to all radio stations containing
a synopsis of the best program ideas received.
Advance copy
We are now preparing special War Bond pay-as-you-go
radio announcement material to be used in the event of legis-
lation putting into effect & withholding tax.
NATIONAL ORGANIZATIONS
Labor
A number of new appointments are pending in the Labor
Section. When consummated, these will enable the Labor Section
to take an accelerated part in Payroll Savings developments,
particularly in C.I.O. shops and in the railroad field.
The labor situation has been complicated by the wage negotia-
tions of the coal miners and railway workers. The firm stand
of the Government in the coal strike matter has done much to
clear the air. The labor people throughout the country appre-
ciate the many evidences of the importance which the Treasury
Regraded Unclassified
11
-9-
attaches to their participation in the War-Bond program, and
as various problems confusing them are straightened out, they
are all ready for "full steam ahead". The new Payroll
Savings program is well liked by Organized Labor, and the Labor
Section will concentrate its efforts on this program.
Inter-racial activities
Plans are being developed for increased contacts with
Negro leaders in five fields: Churches, schools, fraternal
associations, business organizations, and labor unions. A
new approach will be made to these leaders, with the hope
that through them it will be possible to reach the colored
people in the lower-income brackets more effectively.
Foreign-language groups
The continuing drive among foreign-origin groups will
concentrate upon a campaign for Liberty ships among nationally
organized foreign-language church groups--many thus far
untouched--such as Swedish, Danish, Norwegian, Finnish
Lutherans. This campaign has already been taken up by the
French Canadians in & drive continuing through May and to
June 28--St. Jean-Baptiste Day--for $10,000,000 in War Bonds.
Hungarian, Greek, and Slovak prelates are also deeply interested
in the plan.
Flag Day, June 14, is to be made United Nations Day, and
will be the next center of promotion: f or foreign-origin groups
Regraded Unclassified
12
-10-
following on the heels of "I Am An American" Day, May 16,
in which nationality groups all over the Nation are partici-
pating.
Rallies and pageants are being held by practically every
foreign-origin group in the Country, with War Bonds stressed.
Definite objectives are popular in War Bond drives among
people of recent foreign extraction, and our promotion will
attempt to present various opportunities to these groups,
such as Liberty Ship and Bomber campaigns.
Fraternal orders
The Knights of Columbus Founders' Month Drive officially
ended April 28. While its goal was $25,000,000, War Bond
sales actually reached a total of $37,500,000. Similar
drives are in prospect by other orders, including the
following:
Royal Neighbors of America
Benevolent and Protective Order of Elks of the World
Fraternal Order of Eagles
Improved Order of Red Men
Independent Order of Odd Fellows
Knights of Pythias
Loyal Order of Moose
Modern Woodmen of America
Woodmen of the World
B'Nai B'Rith
Regraded Unclassified
13
-12-
Business and trade associations
It is planned to develop a program for enlisting the
support of trade associations in the new Payroll Savings
program. In this connection, we shall first get in order
our lists of members of the more important associations, 80
that Payroll Savings statistics by associated groups may
be made available to the associations. We shall urge the
associations to publish regularly in their bulletin up-to-
date Payroll Savings information pertaining to their
respective industries as a means of encouraging the laggard
firms to better their positions.
FIELD DIVISION
Payroll savings
An intensive program is planned to increase payroll-
savings participation. This program involves (a) the
setting of dollar quotas for employing companies; (b) the
assignment of War Savings Staff representatives in the plants;
(c) speeding up bond deliveries; (d) a plan for cash sales in
connection with special drives.
Suitable advertising and promotion material is in
process to support this special program, including material
for newspapers, magazines, and house organs, pamphlets for
employees and workers, bill-board displays, radio announce-
ments, slide films, etc.
Regraded Unclassified
14
-13-
It is planned to introduce this program to the field
at a. series of meetings to be held at the principal cities
during the week of May 17. These meetings will be attended
by representatives of the Washington Staff and of all State
organizations, including especially the payroll-savings,
labor, and women's groups.
Schools
The school year is drawing to 8. close and the summer
vacation is approaching. In the meantime, the Schools At
War program designed by the Education Section of the War
Savings Staff continues, being implemented from time to
time by Field Bulletins and Memoranda, and by advertisements
and articles furnished the educational press and magazines.
Considerable attention is being given to organizing
summer schools and playgrounds for the sale of War Savings
Stamps, and children's organizations, such as Boy Scouts,
Girl Scouts, Camp Fire Girls, Boys Clubs, etc., are being
encouraged to carry on summer War Savings programs in their
local units.
A conference of about 20 State War Savings Staff members
and educators will be held in New York City, May 21-22. This
conference will review the Schools At War program as it has
functioned to date, and work out basic plans for the school
year 1943-44.
Regraded Unclassified
15
-14-
Agricultural Section
This section is continuing its work directed at increas-
ing the farmers' participation in the War Bond program.
Emphasis is being placed upon the job of strengthening our
field organization in the important agricultural States in
line with the plans given us by Dr. Myers. These plans in-
volve not merely the improvement of our organization, but
steps in the direction of providing additional educational
material for farm people, training our volunteer workers,
the establishment of better yardsticks for individual par-
ticipation, farm-to-farm canvasses and follow-ups, etc.
The Agricultural Section is collaborating with our
promotion people in the preparation of stories, pictures,
and advertisements concerning War Bonds, for publication
in the farm press and magazines, and in the preparation of
suitable material for radio broadcast in the farm sections
and on farm programs.
Retail Stores Section
Plans for May, June, and July include a Nation-wide
canvass to determine the stores now selling War Bonds and
Stamps, and to find out how they use the War Bond posters and
display material furnished by the Treasury. The intention
is to give an identifying "decalcomania" to each active outlet.
Special promotions are planned for the week of Flag
Regraded Unclassified
-15-
16
Day (June 7-14) and for Father's Day (June 13). To
stimulate the sale of War Savings Stamps, now averaging
about $50,000,000 a month, it is planned to supplement
our regular activities during July by a special promotion
by retailers calculated to bring about a large and, it is
hoped, a permanent increase in the volume of Stamp sales.
A training program is now being developed, intended for
introduction in the larger stores everywhere as a means of
interesting and instructing salespeople in the most effective
methods of selling Bonds and Stamps. Experimental meetings
to develop this program are now being held.
Outstanding War Bond advertisements used by retailers
in different cities are being given a special "star award",
and reprinted and distributed for the information and benefit
of all War Bond advertisers.
Articles are to be distributed to 250 retail trade
journals with 8. view to educating retailers generally in
the economic importance of savings bonds.
Women's activities
During the spring and summer, the Women's Section will
focus on women workers in industry and farm women. It will
work closely with the Payroll Savings and the Farm Sections
to develop appropriate methods of reaching these groups.
State and local Women's War Savings Committees, National
Regraded Unclassified
17
-16-
Women's Organizations, and women's publications will be
enlisted to help install Payroll Savings and the commodity-
check deduction plan in firms and farms hitherto not
reached, and to increase War Savings investments by women
through these plans.
The Women's Section is in the process of taking over
the War Stamp Corsage program, formerly handled by National
War Stamp Corsage Committee in Chicago. In connection with
this, other War Stamp promotions, such as the "Stamp A Day
for the Boy Who's Away" program, and the Retail Stores
July stamp campaign, will be given special attention.
The Women's Section in all of its activities will stress
the importance of "doing without" other things, in order to
buy bonds. Tentative plans call for a national "Do Without
Week" scheduled for fall.
Special events
"Buy A Bomber" and "Sponsor A Fighting Ship" campaigns,
and other similar promotions are to be continued and em-
phasized in as many communities as possible.
Major tours planned for thenext few weeks in the interest
of the War Bond program include the Jap Submarine, "Truth or
Consequences", "The Four Freedoms," sponsored by the Saturday
Evening Post, three circuses, and a number of other interest-
ing and popular attractions. Bond rallies, mass meetings,
Regraded Unclassified
18
-17-
or similar events, are to be held in Washington, D. C.,
Chicago, Columbus, Cincinnati, Indianapolis, Pittsburgh,
and Cleveland, among other cities during May.
Musical events
Arrangements have been made for Mr. Zanzig to conduct
singing at War Bond rallies in 12 cities; others are pend-
ing. About 350 music leaders have recently been enrolled
for voluntary services in collaboration with local War
Savings committees, to be aided through correspondence and
bulletins. Brief leader-training courses and demonstrations
for War Savings service are to be arranged by request at
several Universities for their summer sessions.
Special summer concerts, with War Savings promotion,
are being planned for orchestras, opera companies, school
and community bands, etc., while a number of top ranking
soloists have agreed to give War Bond concerts similar to
those already given by Toscanini, Horowitz, Milstein,
Piatigorsky, Heifetz, etc.
GRAVES
Regraded Unclassified
May 6, 1943
11:20 A. M.
HMJr:
Hello.
Operator:
Mr. Stauffer.
HMJr:
Hello.
Donald
Stauffer: Hello.
HMJr:
Morgenthau speaking.
S:
Oh, hello, Mr. Morgenthau.
HMJr:
How busy are you right now?
S:
Well, as a matter of fact, I'm never too busy
to be of help to you if I can.
HMJr:
Well, we're working on a speech for tonight.
S:
Yeah.
HMJr:
and we need some real good technical help.
You couldn't drop over right now, could you?
S:
I'd be delighted to do it.
HMJr:
Won - wonderful.
S:
I have one thing I must get out. It's these wires
to all these stations asking for announcements
ahead of time
HMJr:
Yeah.
S:
and it will probably take me about, oh,
twenty minutes or BO - if I can get over there
in about twenty minutes?
HMJr:
Right. I - let me give you the idea - I don't
know whether you - I don't think you need to
bring anybody with you. But Fred Smith got this
idea instead of the usual talk - I think - you
know - your people - you or somebody sent word
over they'd like me to use these German short-
wave broadcasts, you see.
S:
Well, now I - I haven't been in on that - I've
been out of town and just got back this morning.
Regraded Unclassified
- 2 -
20
HMJr:
Well - well, I guess it was somebody else's.
Now, the thought is, We want a voice to come
in on my talk, you see....
8:
Yeah.
HMJr:
cut in on me, using these direct quotes,
which O.W.I. has furnished us with
S:
Uh huh.
HMJr:
....and We need technical help.
S:
Uh huh.
HMJr:
See?
S:
Well, I will be glad to come over and be of any
help that I can to you.
HMJr:
Wonderful.
S:
I'll be over in about twenty minutes.
HMJr:
Wonderful.
S:
Right. Goodbye.
Regraded Unclassified
21
May 6, 1943
12:12 P. M.
HMJr:
Hello.
Vincent
Callahan:
Good morning, sir.
HMJr:
Vincent, good morning. Who went to George
Washington Hill and asked him for time in my
name Saturday night?
C:
The Office of War Information. As to which one
over there, I don't know, Mr. Secretary.
HMJr:
But somebody from here must have asked him.
C:
Well, Mr. Robbins communicated with us to get the
time and we went to O.W.I.
HMJr:
Well, why did you say - he was under the impression
that I was going on the air.
C:
Well, he wanted to get the time for you, Mr. Secre-
tary, for Saturday night.
HMJr:
Well, I didn't want to go on Saturday night.
C:
Well, I didn't - I didn't know that.
HMJr:
Who, Robbins?
C:
Robbins. It was his idea.
HMJr:
Well.
C:
And he asked us - he didn't specify Lucky Strike
or Mr. Hill. What we did, we went over the
schedules of Saturday night and
HMJr:
But it was from Robbins?
C:
It was from Robbins. But we made - there were no
commitments made, unless there was a misunderstand-
ing.
HMJr:
I see.
C:
The way we put it up Was if they would give the
time, We would find out from you whether you would
want to use it or not.
Regraded Unclassified
- 2 -
22
HMJr:
I see.
C:
But now Mr. Stauffer and most of his radio
people were out of town, and when they got
back they were a little bit annoyed about the
whole thing.
HMJr:
Yeah. Okay.
C:
Okay, sir. Goodbye.
Regraded Unclassified
23
May 6, 1943
2:30 P. M.
HMJr:
In this business of keeping me informed
what's going on, will you also make a
special effort to keep Mr. Bell informed?
Harold
Graves:
I'll be glad to.
HMJr:
Right.
G:
Yes, sir. I'll send him a copy of this
memorandum that you asked me for this morning.
HMJr:
Thank you.
G:
You're welcome.
Regraded Unclassified
24
Conference in Secretary Morgenthau's Office
May 6, 1943 - 3:00 P. M.
Present: Secretary Morgenthau
Sir Frederick Phillips
H. D. White
Sir Frederick Phillips handed Secretary Morgenthau a message from
the Chancellor of the Exchequer to Secretary Morgenthau. A copy of the
message is appended. Sir Frederick Phillips wanted to know what he
might answer the Chancellor.
The Secretary asked whether Phillips would mind joining Mr. White
in his office and discussing the procedure and submitting to him an
answer which might be made that would be agreeable to the British and
ourselves.
Sir Frederick agreed and added that they had not met for some time
on discussions of stabilization plans. The last conference he had on
the subject was in Mr. Berle's office at the State Department some
months ago. He said he had some further comments he would like to
make on the proposal and would like to submit them in writing. He
asked whether the Secretary preferred that he come to the Treasury or
to Mr. Berle's office. The Secretary replied that these matters were
to be discussed in the Treasury; he regarded the stabilization fund
discussions as Treasury problems and that he wished Sir Frederick to
take up such matters with the Treasury directly. The Secretary went
on to say that Secretary Hull knew that the Treasury was handling the
matter.
Sir Frederick and Mr. White adjourned to the latter's office.
Two statements were prepared there. One by Mr. White, setting forth
the procedure which the U. S. Treasury proposes to follow with respect
to discussions in Washington on currency stabilization plans. Sir
Frederick had some suggestions which were incorporated in the outline,
Sir Frederick then drafted the statement which he suggested the
Chancellor could make on the floor of the House of Commons during the
debate. Mr. White suggested some slight change. Both statements were
later brought to the Secretary by Mr. White and the Secretary approved
them with the understanding that the outlined procedure drafted by
Mr. White was not to be part of any statement by the British. The in-
tent of the statement on procedure was merely to inform the British of
the procedure being pursued here with respect to the discussions.
Mr. White subsequently informed Sir Frederick of the Secretary's
approval with the condition indicated. Sir Frederick quite agreed with
the condition.
H. D. White
the
Regraded Unclassified
MESSAGE TO THE SECRETARY OF THE TREASURY
FROM THE CHANCELLOR OF THE EXCHEQUER
I thought I should like to let you know that there is to be
a debate on International monetary mechanism after the war, pro-
bably on the 12th May, in the House of Commons, and a subsequent
debate in the House of Lords in the following week. I shall be
making a statement in the Commons.
I do not know what your experience has been, but the impres-
sion I have of the position here is that informed public opinion
has not yet had sufficient opportunity to judge the implications
of the papers which your experts and ours have produced for
consideration. I propose therefore in my statement to describe
the problem as we see it and to give an outline of the principles
of the Clearing Union paper, making it plain that the British
Government is not committed to the scheme but has authorised its
publication as a contribution to the general study of the matter,
along with the American paper and any other papers that may be
produced.
I shall emphasize that at this stage the matter is in my
opinion one for further examination by experts before any conclu-
sions however provisional can be arrived at, and shall express
a welcome to the attention that has been given to the subject
both in the United States and among the representatives of the
United Nations.
I think that I shall be expected to say something about the
Stabilization Fund. I do not propose to comment in detail on it.
I shall underline the recognition which your Treasury paper gives
to the vital importance of the matter, and to the need for orderly
arrangements to be made. It is a paper with similar objectives to
ours, and I shall indicate that there are inevitably at this stage
certain differences of approach which clearly deserve further
examination in all interested quarters.
I expect to be pressed by the House to tell them what next
step is now intended. Am I right in thinking that after prelimi-
nary soundings which are now going on your intention is to summon
a general conference of experts to consider these and any other
schemes that may be produced, and to prepare proposals for
governments on the expert level but without commitment by any
government at this stage? In my view it would not be advisable
to summon a meeting of Ministers until after the results of the
expert conference are available and have been carefully considered.
If I could say anything definite on probable future procedure it
would certainly help me.
Washington, D. G.,
Yay 6, 1943.
Regraded Unclassified
26
I have been asked what is the next step now intended. Of
course, the final step would necessarily be a conference of
Finance Ministers. But it is much too early to make any definite
statement on that: clearly a considerable measure of agreement
must be evidenced before the calling of such a conference would
be wise. The purpose of the publication of our plan was to
obtain the reactions of economists and others for which some time
must be allowed considering the complexity of the subject. The
matter is still at the expert level, and the forms which expert
consideration will take will be settled largely by convenience.
I shall keep in touch with the Secretary of the United States
Treasury as matters develop.
Regraded Unclassified
27
Procedure Being Followed with Respect to the
Currency Stabilisation Plans now Being
Discussed in Washington by the
Experts of the United and
Associated Nations
1. Exploratory discussions with the experts of the various
countries are going on and will continue during the next month or
so.
2. During that period there probably will be a series of small
informal gatherings of the experts of several countries who will
thus have the opportunity of discussing the views being developed
in the bi-lateral discussions.
3. The publication of the British and American plans has
created considerable interest in the subject among economists and
bankers, many of whom are sending their detailed comments and sug-
gestions to the Treasury for consideration. While the discussions
among the experts of the various countries are going forward, there
will be ample opportunity for the Treasury experts to sift these
criticisms and submit them to the various experts for careful
consideration.
4. Toward the end of the period it is our hope that there
will be an opportunity for a general discussion by those experts
available in Washington for the purpose of synthesizing the various
suggestions that have been made during the earlier discussions.
Such a general discussion will at the same time provide an opportunity
to evaluate the degree of agreement that exists on the more important
phases of the various plans and suggestions that have been made.
Should the meetings divulge an inadequate area of agreement, an
exchange of views on the points of basic disagreement could continue
through ordinary Governmental channels until the area of disagreement
on important points had been virtually eliminated.
5. Finally, a conference of Finance Ministers will not be
called until and unless there is an indication that there is sub-
stantial agreement among enough countries to warrant the expectation
of 8 successful outcome.
Regraded Unclassified
28
Washington, D.C.,
May 6, 1943.
Dear Mr. Secretary,
I have been instructed to convey to you
a message from the Chancellor of the Exchequer as set
out in the enclosure, and should be most grateful to
learn what reply you would wish to be conveyed.
Yours sincerely,
Hhillips
(F. Phillips)
The Honourable
Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D.C.
Regraded Unclassified
29
MESSAGE TO THE SECRETARY OF THE TREASURY
FROM THE CHANCELLOR OF THE EXCHEQUER
I thought I should like to let you know that
there is to be a debate on International monetary mechanism
after the war, probably on the 12th May, in the House of
Commons, and a subsequent debate in the House of Lords in the
following week. I shall be making a statement in the Commons.
I do not know what your experience has been,
but the impression I have of the position here is that informed
public opinion has not yet had sufficient opportunity to judge
the implications of the papers which your experts and ours have
produced for consideration. I propose therefore in my statement
to describe the problem as we see it and to give an outline of
the principles of the Clearing Union paper, making it plain that
the British Government is not committed to the scheme but has
authorised its publication as a contribution to the general study
of the matter, along with the American paper and any other papers
that may be produced.
I shall emphasize that at this stage the matter is
in my opinion one for further examination by experts before any
conclusions however provisional can be arrived at, and shall
express a welcome to the attention that has been given to the
subject both in the United States and mong the representatives
of the United Nations.
I think that I shall be expected to say something
about the Stabilisation Fund. I do not propose to comment in
detail on it. I shall underline the recognition which your
Treasury paper gives to the vital importance of the matter, and
to the need for orderly arrangements to be made. It is a paper
with similar objectives to ours, and I shall indicate that there
are inevitably at this stage certain differences of approach
which clearly deserve further examination in all interested quar-
ters.
I expect to be pressed by the House to tell them
what next step is now intended. Am I right in thinking that
after preliminary soundings which are now going on your intention
is to summon a general conference of experts to consider these and
any other schemes that may be produced, and to prepare proposals
for governments on the expert level but without commitment by any
government at this stage ? In my view it would not be advisable
to summon a meeting of Ministers until after the results of the
expert conference are available and have been carefully considered.
If I could say anything definite on probable future procedure it
would certainly help me.
Washington, D.C.,
May 6, 1943.
Regraded Unclassified
71
May 6, 1943
Dan Bell
Secretary Morgenthau
I don't know whether anybody has done anything about
giving publicity to my talk tonight, but please get whoever
18 left from War Savings and Victory Fund into your office
plus Chio Schwarz plus Callahan. And if nothing has been
done, I would like telegrams to be sent out immediately to
the Federal Reserve and the War Savings Staff telling them
that I'm going on the air tonight. Also tell Schwarz or
Callshan to ask the Columbia Broadcasting whether they
would announce it a couple of times, and do what still can
be done as late as this morning. I would appreciate it
if you would do it right away, and then write me 8 little
note: (1) had anything been done? (2) what you can still
do this morning. And tell everybody that's going to do
it that they should do it at once. fee tellis memo 5/6/13
Regraded Unclassified
02
THE UNDER SECRETARY OF THE TREASURY
WASHINGTON
way =, 1945
TO THE SECRETARY:
Reference is made to your mesorandum of this
morning regarding publicity given your talk tonight.
We discussed this last Honday in 2. ARY Finance
meeting in my office, as a result of which Stuart
Peabody sent a wire to the Presidents of all Federal
Reserve Banks notifying them of your talk to thank
the workers in the Second war Loan Drive.
In checking un with P. few of the Federal Reserve
Banks we find the following: In St. Louis and Cleveland
the Chairmen and all workers were individually notified
and stories carried in the press. In Chicago a bulletin
went out to all workers. In Boston all State Chairwen
were notified and naked to advise the workers of your
talk. In New York the wite sot lost but it came to
the oublicity desk t'is morning And they in ediately
not on the none with the Regional Chairmen or the
secretaries of the Chairmen and naked them to get word
so the workers and have it carried in the local after-
noon papers. They Also put it on the ticker service.
Here in the Treasury Harold Graves 138 nent a
wire today to the State Chairmen; Callaban will under-
take to get the Columbia Broadcasting Sygtem to announce
it tvo or three times today and will RISO sene a wire
to about 100 local stations that will carry the broad-
cast so that it will DE announced locally. I sent a
further wire to the Fecerals asking them to notify the
Chairmen and all workers if they had not already done
SQ on the unsis of Peabody's telegram of Monday. Chic
Schwarz will have a story in the afternoon papers.
DWB
FORVICTORY
BUY
UNITED
STATES
WAR
BONDS
AND
STAMPS
Regraded Unclassified
Room 278
33
Under Secretary
Exp. Loans - War
Finance Committee
May 6, 1943
To Presidents, Federal Reserve Banks:
Boston, Mass.
Chicago, Ill.
New York, N. Y.
St. Louis, Mo.
Philadelphia, Pa.
Minneapolis, Minn.
Cleveland, Ohio
Kansas City, No.
Richmond, Vs.
Dallas, Texas
Atlanta, Ga.
San Francisco, Calif.
Please take steps to see that, 30 far as practicable,
all workers in your district who contributed to
success of Second war Loan Drive are notified of
Secretary's thank-you address tonight if you have
not already done 80 on basis of Peabody's wire of
Monday. Address will occur ten-thirty to ten forty-five
over Columbie Broadcasting System.
BELL
(Initialed) D. W.B.
DWB:NLR
Regraded Unclassified
g
fart best 5/6/42 34
1.15pm
Follow Americans: Nwish you could hear what the Axis short-wave
propaganda broadcasts are saying tonight. I wish you could have heard
them during the past three weeks. You would have been vary amused WAS
the excowine success of
ta hear their hysterice brought on by
the
the bregendously successful Second War Loan. I can tell you that the
response K the American people has them frightened down to their
Mosabloods bots that have transled
6a
the boots lands and The fodies of reaceful peoples.
Phay have had a rude awakening. They thought they were going to be
up against a weak, flabby army, and now they know better. Field Marshal
Rommel, if he ever takes the time to look back over his shoulder, can see
and report to his people the kind of fighting men he is up against. And
now the people on the home fronts all over the world realize that the
American people -- that you and I and all of our neighbors -- are in this
war all the way. the fact that we have sold, according to the figures
well
already
in
over 18 billion dollars in War Bonds is proof enough.
1
M
Regraded Unclassified
35
How stupid the Axis propagandists must feel, if they have the courage
to face the facts. Only last week the German radio was screaming like
this:
SHORT WAVE: Flash from Washington, D. C. - Insiders in the
Treasury Department state that the Second War Loan Drive is proving
to be a complete failure because the people have no desire to invest
their money in War Bonds.
Mr. Morgenthau: Or listen to this one:
SHORT WAVE: In view of the threatening failure of the War Loan
Drive, the Treasury Department has hastily called together a meeting
of prominent bankers and has requested the banks to take over the
War Loan off the hands of the Government in the hope that the banks
will be able to sell them to the public later on.
Mr. Morgenthau: Or listen to this one:
SHORT WAVE: Under the circumstances, the Treasury Department
desires to prevent the people from gaining the impression that the
War Loan Drive is & failure. (Fade out)
Mr. Morgenthaut And listen to this one from Italy:
SHORT WAVE: The American people have lost faith in the American
system. At last they know that the Democratic way of life will not
stand up in a crisis.
We needn't take any time trying to Answer the Axis, because They have
Regraded Unclassified
N
36
won't
Well, we want waste more time laughing at the Axis. Certainly
gues
we don't need to answer these prompous demigoin then because, you, the American
people
have
already
provided
the
answer
You,
AND
marroes
have
shown that you stand solidly behind our commander-in-chief, you have
the world's
proved that you will fight with him to the last ditch to preserve
butwork
e
last great
of freedom and independent
Your answer 1s the record of the greatest financial trans-
action in the history of the world. I have it here. Let me read it.
As of this afternoon at 4:30, our workers and the Federal Reserve
Banks have reported a total sale, during the past three weeks, of
in Bonds,
$18,500,000,000. That is almost $5,000,000,000 more than we set out
to raise. Thatis th measure 8 on enthusenem and polution
These figures prove many things. They prove that the American people
recognize this is their war, and they are willing and eager to finance
it. It proves that through Democratic means, in three weeks' time, we
have raised sum of money that Germany, Italy, and Japan could not raise
by plunder, stealing, and outright confiscation. It proves that the
American people are not going to sit back and wait for any compulsory
savings plan in order to finance this most e: pensive war in our history.
-3-
And this, I might add, is vitally important very to me. I believe in the
American people. I believe that they will go the imit and
if they only understand the urgency of the situation. And the way the
American people have lived up to those an expectations chairman has won the acclaim of
my friend walt
everyone everywhere. Only yesterday Security George of the Senate Finance
he belt
Committee, told me that Mo the need for compulsory savings
now
is
gone.
have w
the American people, of their own -and free will and volition,
invest nearly 18 billion dollars in three weeks, that is R. record that even
the most fantastic scheme of compulsory savings could not equal.
Regraded Unclassified
- 4 - thes Seemel Was lon
37
100's logo into this Mar tom. What made no great a success?
that
First, I would BAX the spirit of the people. I have just returned
from a trip across the country which I made with the express purpose of
observing that spirit.
are
008
much
of
the
wish
I'could,
but
I
saw
enough ath country lun in my few stato
that America to fighting
But the
mad. Not everywhere, of course. fire occasional dead
spot
will not last long against the rapidly spreading spirit
of ver that exists in cities like Cedar Rapids, Iowa, where nearly every
and
men/ woman in town is working in a war plant or growing food for the free
world. Or in cities like Portland, Oregon, where in one war plant 23%
of the April payroll vas pledged to Bonds.
for thereads
Before many weeks have passed, this war spirit will spread like the
flames of a prairie fire, spreading from coast to coast, from Maine to
Florida. - the important
Verlambration
I am sure this is a reason, probably many reasons lie accident.
Perhaps it's the 'mix' they've got out there. The best baker in the
world, you know, can't bake bread if his 'mix' isn't right. The dough
just won't rise.
ment
seems to me, as an outsider, that their first achieve was a
deep determination to fight this war through to victory. Then, probably
as n. result of that, they have developed a real partnership between labor and
management. On that foundation, they have worked marvels of production. And
finally, to round out the total war effort, they established the highest Bond
records in the country in three of their shipyards.
And that seems to check with what our figures tell us. Yar spirit,
labor management relations, productions and Bond sales all go hand in hand.
But spreading the spirit is the job, now, for all of us -- a job
even more important than buying bonds. Americans who do know why we're
fighting have got to tell Americans who don't know. Communities that do
have the war spirit have got to spread it to communities that don't have
it. And it must be done fast! We haven't any time to lose!
basic, perhaps luce me Regraded
Unclassified
y
38
Insert
A much 8m R 2nd wa with Load rests
Second, success squarely the result of the great army of
patriotic men and women who have poured energy and enthusiasm into this
Second
You Leen Drive during all hours of the day and night. The splendid
job they have done is amazing and inspiring. I can only thank, humbly
and from my heart, the
Insert C
Thousands of Americans who must be given credit for their part.
That's as it should be. The Bondo are financing our war. We must by
them from to ourselves, sell buy then from to ourselves, without profit
on behalf onf on nation
And finally, the campaign was a success because country newspapers
and great metropolitan dailies printed millions upon millions of mensages
about Bonds. The radio stations of the country provided 220 network shows
about Bonds during the first day alone. AI must extend my warmest congratu-
lations and deepest admiration to newspaper and radio people, and to the the
business houses and industrial firms and stores and theaters and all others
who cooperated 80 splendidly. Thanks to them, the cost of promoting and
selling these Bonds was infinitional. inconsequential
Regraded Unclassified
39
But now let's look to the future.
The Second War Loan Drive is finished. But that does not mean that
we can stop buying Bonds, for the costs of war go on- - at the rate
8 5 millin dollars a day
check
Regraded Unclassified
41
- 3 -
and reverses until the final and complete victory is won.
And if we use military terms, w can speak of this success
in the Second War Loan Drive only as & victory in a minor
engagement. It is like the t aking of a single fortified
point while the main battlefield and the main forces of the
lie
enemy still Hes ahead.
10
In this drive that has just been completed we have
of our 18 -but
raised a total of bout billions whenges full
total of our war expenditures during this year will be
more than 100 billions.
My purpose in [speaking to you tonight was twofodd.
First, to tell you of our success, the success of the
American people in accomplishing this one task, and in
speaking of that success to thank the thousands of workers
Regraded Unclassified
42
- 4 -
who labored 80 devotedly to reach the goal that we have
reached. But the other half of my message is of far
greater importence It was to tell you that W 19 must
can
not deceive ourselves by thinking that now we could rest
less
on our cars. The real battle is still ahead of us, All
that we have learned in this Second War Loan Drive, all
the enthusiasm that we have gained, all our understanding
of how vital and urgently necessary it is that the war
will
be adequately financed must be useful in the bigger job
that we still have to do.
There is no automatic and easy process for winning
battles on the home front any more than there is an
automatic and easy process for winning battles in the
field. The war must be won and the war must be financed
by the voluntary, united effort of the whole American people.
Regraded Unclassified
43
- 5 -
There is no other way. Some people have imagined that we
could simply pass a law which would increase our tax reve-
nues and would require all of the American people to lend
out of their earnings and that our whole financial problem
would be solved in this way. That is simply not possible.
The abilities of our people to save and to buy Government
securities differ 80 widely that even if we wanted to do it
we could devise no law which would raise all the money we
need. This is not merely my opinion, it is the sober
judgment of allowho 11000 have given serious thought to the
subject.
Regraded Unclassified
44
Those upon whom we must depend most heavily throughout the
duration of this horrible war -- those who have most of the available
money are the working men and women -- the man that works at the next
machine, the family that lives on the corner.
The people who earn from $25 to $100 a week -- they are the
people whose dollars must either fight the war, through investment
in bonds, or else these dollars will baxthm have the liberty to create
the horrible nightmare of inflation. You know why. We all have more
money in our pockete. We all have fewer things to buy with our money.
I can tell you our dollars are a lot better off fighting the war than
they are fighting each other
competing -- your dollars against
mine -- in black markets or in illegal gasoline filling stations.
Let's be honest with ourselves. If we don't control our excess money,
our excess money will control us -- and there will be nobody to plan
blame but ourselves.
Regraded Unclassified
45
The other day I was discussing this with one of the people I have
just been talking about, a woman who works in a war plant here in
Washington, and I want her to tell you what she told me. Here she is,
speaking from her machine in the Washington Navy
Yard.
(Script)
Thank you, Mrs.
Now I thank you, and all of the millions who are listening here
now, will be interested in
Regraded Unclassified
46
second smot
5/6/43
Fellow Americans:
I take great pleasure in reporting to you
00 Secretary of your Treasury that the Second
War Loan Drive is an overwhelming success.
This is mighty bad news for the Axis. Americans
have
in less than three weeks, pushed over the
top the greatest single financing operation in
the history of the world, involving the collection
of more than eighteen billion dollars.
Speaking For myself, I should like to say it has
great
been a privilege to serve as your Secretary of
^
the Treasury during this drive, and this is not
just an empty phrase I feel privileged because
I have had an opportunity to watch Democracy at work.
109
Regraded Unclassified
47
-2-
There
Through Democratic means, in three weeks
we have raised a sum of money that Germany, Italy
could even
and Japan mot raise through plunder and stealing
and outright confiscation.
Thank
So tonight I must first all
who have contributed to me ke this drive or huge a
means Especially do 8 Thank
the great army of patriotic men and women who
have poured their energy and enthusiasm into the
Second War Loan Drive during all hours of the
day and night. The splendid job they have done
is little short of miraculous.
I
only
thank
ste depth of
them humbly and from my heart.
also
I want to thank the country newspapers
^
Natiotic
and great metropolitan dailies that printed free asa
millions upon millions of messages about Bonds and
106
Regraded Unclassified
48
-3-
gave us hundreds of
The radio stations of the country that provided
throughout the drive,
220
network
shows about Bonds during the first
the Treasing supartment
day alone. On behalf of our nation, I must
extend my warmest congratulations and deepest
admiration to newspaper and radio people, and
the business houses and industrial firms
and stores and theaters and all the others
who cooperated so splendidly. Decause of them,
the cost of promoting and solling these Bonds
was inconsequential
70
Regraded Unclassified
49
The successif -4- the seemd Was Loan
is
This has been America: Democracy's offective
answer to the Ax1s nations. I wish you could hear
what the Axis short-wave propaganda ists have been saying.
I wish you could have heard them during the past
entertained
three weeks. You would have been very amused to
by
their hystoried, brought on by the growing
success of the Second War Loan.
I can tell you
that the response of the American people has
Those
frightened them down to their boots -- the brutal
boots that sought to trample down freedom all over
During the entire drive
the world. All last week the Axis powers hurled
lies and abuses at us over the short-wave radio.
Listen now to - a sample of same
This 10 one of the things they had to say.
116
Regraded Unclassified
50
187
How stupid the Axis propagandists must feel, if they have the
courage to face the facts. Only last week the German radio was
screaming like Annomen I this:
I
SHORT WAVE: Flash from Washington, D. C. -- Insiders in
the Treasury Department state that the Second War Loan
Drive is proving to be a complete failure because the
people have no desire to invest their money in War Bonds.
and hear
Morgenthau:
listen
this one:
#
SHORT
WAVE:
In view of the threatening failure of the
War Loan Drive, the Treasury Department has hastily called
together a meeting of prominent bankers and has requested
the banks to take over the War Loan off the hands of the
Government in the hope that the banks will be able to
sell them to the public later on.
Mr. Morgenthau: Or listen to this one:
##
SHORT WAVE: Under the circumstances, the Treasury
Department desires to prevent the people from gaining the
impression that the War Loan Drive is a failure. (Fade out)
Mr. Morgenthau: And listen to this one from Italy:
SHORT WAVE: The American people have lost faith in the
American system. At last they know that the Democratic way of
life will not stand up in a crisis.
pnn
Regraded Unclassified
youther
>5,51
51
BEFORE THE WAR THE 9 BOASTED
We needn't take any time trying to answer the Axis, because
ALREADY
they have \had & rude awakening. They thought they were going to
and
But
be up against & weak, flabby army and now they know better.
Field Marshal Rommel, if he ever takes the time to look back over
Fuchrer
his shoulder, can see and report to his le the kind of fighting
men he is up against. And now the people on the home fronts all
over the world realize that the American people -- that you and
I and all of our neighbors -- are in this war all the way. The
to the finish
fact that we have sold well over 18 billion dollars in War Bonds
34/07/19 Sawn 9, 2042
is proof enough.
We have exceeded by more than five billion the goal we set
for ourselves. This is a measure of our enthusiasm and patriotism.
The result proves many things. It proves that the American people
recognize this as their war, and they are willing and eager to
finance it.
Through Democratic means, in three weeks time We have raised
a sum of money that Germany Italy and Japan could not raise by
plunder, stealing and outright benfiscation. This is evidence
that the American people are not going to sit back and wait
for any forced savings plan in order to finance this most expensive
war in all historyx this, I might add, is vitally important
to me
I believe in the American people! I believe that they
will go to the very limit of their capacity if only they understand
Regraded Unclassified
52
from which a have returned just
the urgency of the situation. And the way the American people
have lived up to our hopes and our expectations has won the
acclaim of every one everywhere
that
have
come
to
me
but
/
From OR reports I have gotten from all over the country
and as a result of a hat 9 saw and heard on
and from a seven-thousand-mile trip which made where I made
our se
I have Come 00 some definite conclusions an a the reasons
personal observation, It seems to me that the explanation
is found in the spirit of the American people and
their deep-rooted determination to fight this war through to
Victory.
Insert A- become aftaine
When the people really catch fire with the war spirit, all
the other problems seem to solve themselves. Labor and management
get together; production rises to an all-time high; and bond
sales go up automatically. that seems to check with what all
our figures tell us.
spirit
War, labor-management relations, production, and bond sales
all go hand in hand.
Regraded Unclassified
53
A
From reports that have come to me from all over the
country, and as a result of what I saw and heard on a
seven-thousand-mile trip from which I have just returned,
I have come to some definite conclusions as to the reasons
for our success. It seems to me that the explanation is
found in the spirit of the American people and their deep-
rooted determination to fight this war through to victory.
Regraded Unclassified
54
Military terms to describe this Second War
Loan victory -- and it is a victory -- are only
partly appropriate. There can be no comparison
between the self -denial needed to finance the war
adequately and the suffering and death which our
fighting men must face. Yet, there is a similarity
between the war on the home front and the war on
the fighting front. Neither is won in a single
engagement. On both fronts the war must go on
through a succession of gains and
reverses
until
the final and complete victory is won.
if
we use military terms, We can speak of this success
in the Second War Loan Drive only as a victory in
00
a minor engagement.
It like the taking of a single
fortified point while the main battlefield and the
main forces of the enemy still lie ahead.
Regraded Unclassified
55
-
In this drive that has just been completed
we have raised a total of more than eighteen
billions whereas the full total of our war
expenditures during this year will be more than
one hundred billions.
My purpose in speaking to you tonight
was twofold. First, to tell you of our success,
the success of the American people in accomplishing
this one task, and in speaking of that success
to thank the thousands of workers who labored
so devotedly to reach the geal that we have reached
But the other half of my message is of far greater
importance. It was to tell you that we must not
deceive ourselves by thinking that now we could can
rest on our oars. The real battle is still ahead of us.
Regraded Unclassified
56
All that we have learned in this Second War Loan
Drive, all the enthusiasm that we have gained,
all our understanding of how vital and urgently
necessary it is that the war be adequately financed
will
must be useful in the bigger job that we still
have to do.
There is no automatic and easy process
for winning battles on the home front any more
than there is an automatic and easy process for
winning battles in the field. The war must be
won and the war must be financed by the voluntary,
united effort of the whole American people.
There is no other way,
Regraded Unclassified
57
What success in financing means to our
fighters is illustrated by a conversation I had
with the Chief of Staff just two days ago.
General Marshall came over to the Treasury to
have lunch with me and, just before he left, he
said, "Mr. Secretary, I want you to answer a
question for me and to answer it with complete
frankness. Can we military leaders plan to fight
this war in an orderly way -- in the surest and
most effective manner -- or must we take extraordi nary
risks for fear the money will not hold out?
My answer was: "General, the American
people will take care of that.
107
Regraded Unclassified
58
What they have done in this Second War Loan
Drive -- the money they have produced and the
spirit they have shown -- is proof enough for
me that they will not let our fighters suffer
from lack of support until we achieve complete
victory, no matter how long that may be nor
how much it may cost."
This was my answer to General Marshall.
And I know it is also yours.
70
Regraded Unclassified
59
May 6, 1943
Reading copy of Secretary's broadcast
on the Second War Loan Drive which was
concluded May 1, 1943, broadcast from
studio of CBS in Washington 10:30 pm
60
Fellow Americans:
I take great pleasure in reporting to you
that the Second War Loan Drive is an overwhelming
success. This is mighty bad news for the Axis.
Americans in less than three weeks have pushed
over the top the greatest single financing operation
in the history of the world, involving the collection
of more than eighteen billion dollars.
Speaking for myself, I should like to say it
has been a great privilege to serve as your Secretary
of the Treasury during this drive. I feel
privileged because I have had an opportunity to
watch Democracy at work. Through Democratic means,
in these three weeks, we have raised a sum of money
that Germany, Italy and Japan could not raise even
through plunder and stealing and outright confiscation.
128
Regraded Unclassified
61
-2-
So tonight I must first thank all who have
contributed to make this drive so huge a success.
Especially do I thank the great army of patriotic
men and women who have poured their energy and
enthusiasm into the Second War Loan Drive during
all hours of the day and night. The splendid job
they have done 1s little short of miraculous.
I thank them humbly and from the depth of my heart.
I also want to thank the country newspapers
and great metropciitan dailies that printed free,
as a patriotic service, millions upon millions of
messages about Bonds, and the radio stations of the
country that gave us hundreds of shows throughout
the drive, and the business houses and industrial
firms and stores and theatres and all the others
who cooperated so splendidly.
Regraded Unclassified
62
-3-
The success of the Second War Loan is
America's answer to the Axis nations. I wish
you could hear what the Axis short-wave propagandists
have been saying. I wish you could have heard them
during the past three weeks. You would have been
entertained by their hysterical lies brought on by
the growing success of the Second War Loan. I can
tell you that the response of the American people
has frightened them down to their boots -- those
brutal boots that sought to trample down freedom
all over the world. During the entire drive the
Axis powers hurled lies and abuses at us over the
short-wave radio. Listen now to a sample of
some of the things they had to say ROM NAZIGERMANY.
Regraded Unclassified
63
-4-
ANNOUNCER #1. Flash from Washington, D.C. --
Insiders in the Treasury Department state that the
Second War Loan Drive is proving to be a complete
failure because the people have no desire to invest
their money in War Bonds.
MORGENTHAU: And hear this oneFRoM ITALY.
ANNOUNCER #2. In view of the threatening
failure of the War Loan Drive, the Treasury Department
has
heatily
colled
together
+
Suppose
of
prominent
has requested the banks to take over
the War Loan off the hands of the Government in the
hope that the banks will be able to sell them to
the public later on.
97
Regraded Unclassified
64
-5-
MORGENTHAU:
STILLANOTHER or licton FROM GERMANY.
ANNOUNCER #3. Under the circumstances, the
Treasury Department desires to prevent the people
from gaining the impression that the War Loan
Drive is a failure.
JAPAN
MORGENTHAU: And listen to this one from Italy:
ANNOUNCER #4. The American people have
lost faith in the American system. At last they
know that the Democratic way of life will not
stand up in a crisis.
62
Regraded Unclassified
65
-6-
We needn't take any time trying to answer
the Axis, because they have already had a rude
awakening. Before the war they boasted that
Democracy's armies would be weak and flabby.
1
But
now they know better. Field Marshal Rommel, if
he ever takes the time to look back over his shoulder,
can see and report to his Fuehrer the kind of fighting
men he is up against.
And now the people on the home fronts, all
over the world, realize that the American people --
that you and I and all of our neighbors -- are in
this war to the finish. The fact that we have
sold well over 18 billion dollars in War Bonds
is proof enough.
117
Regraded Unclassified
66
-7-
We have exceeded by more than five billion
the goal we set for ourselves. This is a measure
of our enthusiasm and patriotism. The result
proves many things. It proves that the American
stand solidly behind their comnmandr and chief; that they
people recognize this as their war, and they are
willing and eager to finance it.
It is evidence that the American people are
not going to sit back and wait for any forced savings
plan in order to finance this most expensive war in
all history.
This, I might add, 1s vitally important to me.
I believe in the American people; I believe
that they will go to the very limit of their capacity
if only they understand the urgency of the situation.
116
Regraded Unclassified
137
67
-8-
From reports that have come to me from all
over the country, and as a result of what I saw
and heard on a seven-thousand-mile trip from which
I have just returned, I have come to some definite
conclusions as to the reasons for our success.
It seems to me that the explanation is found in
the spirit of the American people and their deep-rooted
determination to fight this war through to victory.
When the people really become aflame with
the war spirit, all the other problems seem to
solve themselves. Labor and management get together;
production rises to an all-time high; and bond sales
go up automatically. That seems to check with what
all our figures tell us.
Pause
War spirit, labor-management relations, production,
and bond sales all go hand in hand.
Regraded Unclassified
68
-9-
Pause
Military terms to describe this Second War
Loan victory -- and it is a victory -- are only
partly appropriate. There can be no comparison -
between the self denial needed to finance the war
adequately and the suffering and death which our
fighting men must face. Yet, there 1s a similarity
between the war on the home front and the war on
the fighting front. Neither is won in a single
engagement. On both fronts the war must go on
through a succession of gains until the final and
complete victory is won. We can speak of this
success in the Second War Loan Drive only as a
victory in a minor engagement. It is like the
taking of a single fortified point while the main
battlefield and the main forces of the enemy lie ahead.
Regraded Unclassified
69
-10-
In this drive that has just been completed,
we have raised a total of more than eighteen
billions whereas the full total of our war
expenditures during this year will be more than
one hundred billions.
Pause
My purpose in speaking to you tonight was
twofold. First, to tell you of our success, the
success of the American people in accomplishing
this one task, and in speaking of that success
to thank the thousands of workers who labored so
devotedly.
But the other half of my message is
of far greater importance. It was to tell you
that we must not deceive ourselves by thinking
that now we can rest on our oars. The real
battle is still ahead of us.
120
Regraded Unclassified
70
-11-
All that we have learned in this Second War Loan
Drive, all the enthusiasm that we have gained,
all our understanding of how vital, and urgently
necessary it 1s that the war be adequately financed
-
will be useful in the bigger job that we still
have to do.
There is no automatic and easy process for
winning battles on the home front any more than
there 1s an automatic and easy process for winning
battles in the field. The war must be won and
the war must be financed by the voluntary, united
effort of the whole American people.
1
Pause There is no other way.
104
Regraded Unclassified
71
-12-
Pause
What success in financing means to our
fighters is illustrated by a conversation I had
with the Chief of Staff just two days ago.
General Marshall came over to the Treasury to
have lunch with me and, before he left, he said,
"Mr. Secretary, I want you to answer a question
for ma and to answer it with complete frankness.
Can we military leaders plan to fight this war
in an orderly way -- in the surest and most
effective manner -- or must we take extraordinary
risks for fear the money will not hold out?"
My answer was: "General, the American
people will take care of that.
106
Regraded Unclassified
72
-13-
"What they have done in this Second War Loan
Drive -- the money they have produced and the
spirit they have shown -- is proof enough for
me that they will not let our fighters suffer
from lack of support until we achieve complete
victory, no matter how long that may be nor
how much it may cost
1
Pause
This was my answer to General Marshall.
And I know it 1s also yours.
371 y
70
Regraded Unclassified
TO: nins Channcey 73
0
of you keep a
Heech this should
file m
So with it. I
Gen markells applicate
is endence nf
of the gante of him.
FROM: MR. GASTÓN
byll
74
5/6/43
I think all of you will be interested in a conversation
I had with the Chief of Staff just two days ago. General
Marshall came over to the Treasury to have lunch with me and,
just before he left, he said: "Mr. Secretary, I want you to
answer & question for me and to answer it with complete
frankness.
Can we military leaders plan to fight this war in an orderly
manner
way -- in the surest and most effective
--
or
must
we
take
extraordinary
risks
for
fear the money will not hold out?
My answer was: "General,
The American people will take care of that. What they have
done in this Second War Loan Drive the money they have
produced and the spirit they have shown -- is proof enough
for me that they will not let our fighters suffer from lack
of support until we achieve complete victory, no matter how
long that may be nor how much it may cost."
This was my answer to General Marshall. And I know you
ill stand back of it. it is also yours.
Item 5:06 scolening 6 k.m
5/6/43
as
correct 15th
Regraded Unclassified
75
May 6, 1943
Dear Grace:
I am sending herewith a statement
that the President asked me for this
morning in regard to our Second War Loan.
He would like to have this to use at his
press conference Friday morning. I will
count on you to see that he gets it.
Yours sincerely,
(Signed) Henry Morgenthau, Jr.
Miss Grace Tully,
The White House.
seeily 5:23pm act Montgomery.
Regraded Unclassified
Regraded 76 Unclassified
(1) The Treasury has just completed the Second War
Loan drive with total sales of Government securities of
18 billion 300 million dollars. This is more than 5 bil-
lion dollars over the goal set for the drive. More than
13 billion dollars came from investore other than commer-
cial banks as compared with a goal of 8 billion dollars.
(2) The savings of the people were invested in the
Second War Loan to the extent of 3 billion dollars by their
direct purchases, and another 3-1/2 billion dollars through
purchases by insurance compenies and sevings banks which
act as the repository of the savings of millions of individ-
wals.
(3) As of the latest reports today the sales of the
people's bend -- the Series E savings bond -- aggregated
1-1/4 billion dollars, and there are still some reports of
sales in April which have not yet come in.
(4) The people participated to a much larger extent
in the Second War Loan then in the First War Loan last
December. Sales to individuals in the drive just ended
were almost double those in December.
(5) The E bond progrem 10 just 2 years old this week.
In 2 years, more than 10 billion dollars of E bonds have been
purchased by 50 million Americans. Five-sixths of the people
working today or in the armed services own one or more E bends.
77
May 6, 1943
Dear Mr. LaHoches
At the close of the Treasury's December War Bond drive,
I took occasion to express my thanks and appreciation to the
Advertising Council for the splendid assistance it rendered.
The Second War Loan drive has now ended, and in its promotion
the Council has given us of its time, advice and talent in even
more generous measure. I wish again to express my sincere grati-
tude for this continuing support.
You know by now that our April goal was exceeded by more than
$5,000,000,000 and that this excess was all in the non-banking
classification. I think this is significant, as is the fact that
there was & marked increase in response among the masses of people
to whom the advertisements, radio messages, and other material
prepared by the Council were directed.
No are firaly commineed that our success must be measured
rather by the extent to which we achieve wide distribution of
Government securities than by the total amounts subscribed. The
help of advertising people who are versed in the techniques of
mass appeal is, therefore, of great and increasing importance to
us. This help the Advertising Council has given us willingly and
effectively.
will you please express to the Council and to Young & Rubicam,
Ruthrauff & Ryan, and Albert Frank-Ouenther Law, which agencies
I an informed created the advertising, By sincere thanks for an
invaluable contribution to the vital task of financing the war.
Sincerely,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury
Mr. Chester J. LaRoche,
Chairman, Advertising Council,
60 East 42nd Street,
Copies in Diary
New York, New York.
Initialed copy to Peabody
P.S. "My personal thanks to you, for your great interest."
SPeabody:amo
(Added by Secy)
Regraded Unclassified
78
MILO BOULTO
WE THE PEOPLE
35-55 73rd St.
Jackson Heights, N.Y.
May 6th, 1943
The Honorable Henry Morgenthau Jr.
Secretary of the Treasury
Washington, D.C.
My dear Mr. Morgenthau:
This afternoon I heard the recording of the
broadcast from Cedar Rapids. I hope you will
have the opportun' ty to hear it for I know you
will be as thrilled with the show as I was.
I sensed that it was a good program when we were
on the air, but until I heard the recording I
didn't realize how effective it was, with the
music in proper balance as the radio audience
would hear it.
You certainly have an excellent radio voice.
Your calm authority in reading the leads painted
vivid word nictures and you handled our guests
like a microphone veteran.
I hope I have the honor and the privilege of
turning the chair of "We the Peonle" over to
you egain.
Yours respectfully,
Milo Boulton
Regraded Unclassified
79,
May 6, 1943
TO: Mr. Bell
FROM: The Secretary
I wish you would take this up with Stuart Peabody
when he returns next week and decide what we should do.
Bill has been introduced- 5/15/43-
Regraded Unclassified
80
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
May 5, 1943
TO
Secretary Morgenthau
FROM
Mr. Paul
A bill to require the Secretary of the Treasury to
purchase annually from $25,000,000 to $30,000,000 of
newspaper space for advertising the sale of United
States bonds and other obligations, was introduced
yesterday by Senator Bankhead. At least one-half of
that sum would be required to be expended for space
in weekly, semiweekly, triweekly, and monthly pub-
lications.
The bill would require the Secretary, in coopera-
tion with representatives of publishers' associations
and newspaper advertising agencies, to prescribe regula-
tions designed to fulfill 8. number of general objectives
stated in the bill, such ES safeguarding the freedom of
the press, avoiding interference with independence of
newspapers, maintaining the nonpartisan character of the
war finance program and protecting editors and publishers
in the right to criticize the policies and conduct of
the Secretary of the Treasury and other public officials.
Regraded Unclassified
81
- 2 -
The bill further provides that the Secretary of
Agriculture, the War Food Administrator, the Price
Administrator, and the Chairman of the War Manpower
Commission may, with the consent of the Secretary of
the Treasury, also purchase newspaper space for the
purpose of carrying out "the advertising programs in
their respective agencies".
A copy of the bill is attached.
HD
Regraded Unclassified
82
78TH CONGRESS
1ST SESSION
S. 1073
IN THE SENATE OF THE UNITED STATES
V
MAY 4 (legislative day, MAY 8), 1943
8
Mr. BANKHEAD introduced the following bill; which was read twice and
referred to the Committee on Banking and Currency
or
II
A
BILL
SI
To aid in the stabilization program and the war effort by paid
newspaper advertising in connection with the sale of United M
States bonds, and for other purposes.
at
1
Be it enacted by the Senate and House of Representa-
en
2 tives of the United States of America in Congress assembled,
TI
3 That in order to provide for the more effective use of idle
81
4 currency in aid of the stabilization program and the war
RE
5 effort, and in order to improve the credit structure by re-
02
6 lieving the Federal Reserve banks and the various other
7 members of the banking system of the United States of the
8 necessity of purchasing additional vast amounts of United
9 States bonds and other obligations, the Secretary of the
10 Treasury is hereby authorized and directed to purchase and
Regraded Unclassified
2
)))
3
1 pay for during each fiscal year, beginning with the fiscal
1 ing agencies), prescribe regulations for carrying out the
2 year ending June 30, 1943, not less than $25,000,000 nor
2 newspaper advertising program herein provided for so as to-
3 more than $30,000,000 of advertising space in newspapers
3
(a) secure the best financial results for the United
4 published in the United States for the purpose of advertising
4
States consistent with such program;
5 the sale of bonds, notes, and other obligations of the United
5
(b) completely safeguard the freedom of the press;
6 States, and for the publication in such newspapers in con-
6
(c) fairly allocate advertisements to individual
7 nection with such advertising of information, sales arguments,
7
newspapers;
8 and appeals relating to, and promoting or encouraging, such
8
(d) prepare material for submission to newspapers
9 sales. The advertising space so purchased shall be divided
9
for use as advertisements;
10 equitably among newspapers of general circulation which are
10
(e) avoid interference in any manner with the in-
11 entered as second-class matter under the Act of March 3,
11
dependence of any newspaper or its responsibility in
12 1879, as amended: Provided, That not less than one-half of
»
12
serving its readers;
18 the total amount made available during each fiscal year pur-
13
(f) keep the war finance campaign in all of its
14 suant to this Act shall be expended for the purchase of such
14
phases as nonpartisan as possible; and
15 advertising space in weekly, semiweekly, triweekly, and
15
(g) protect editors and publishers in their right to
16 monthly newspapers.
16
publish criticism of the policies or conduct of the Secre-
17
SEC. 2. The Secretary of the Treasury is authorized to
17
tary of the Treasury or of any other public official when-
18 prescribe such regulations consistent with the provisions of
18
ever they determine that such criticism is justified.
19 section 3 as may be necessary to carry out the provisions
19
SEC. 4. For the purpose of carrying out the advertising
20 of this Act.
20 programs in their respective agencies, the Secretary of Agri-
21
SEC. 3. The Secretary of the Treasury shall, in coopera-
21 culture, the War Food Administrator, the Price Adminis-
22 tion with recognized existing publishers' associations to be
22 trator, and the Chairman of the War Manpower Commission
23 designated by him (including one such association repre-
23 may, with the consent of the Secretary of the Treasury and
24 senting only daily newspapers, one representing only weekly
24 under the regulations prescribed by him pursuant to section
25 newspapers, and one representing only newspaper advertis-
25 3, each spend for advertisements in newspapers such part
Regraded Unclassified
4
)))
1 of the total amount to be expended under this Act as the
2 Secretary of the Treasury may approve.
3
SEC. 5. There are hereby authorized to be appropriated,
4 out of any money in the Treasury not otherwise appropriated,
5 such sums as may be necessary to carry out the provisions
6 of this Act.
7
SEC. 6. The authority conferred by this Act shall ter-
8 minate six months after the cessation of hostilities in the
9 present war as proclaimed by the President.
bace
Regraded. Unclassified
83
TREASURY DEPARTMENT
FISCAL SERVICE
BUREAU OF ACCOUNTS
WASHINGTON
OFFICE or THE COMMISSIONER
May 6, 1943
TO THE SECRETARY:
In response to your letter of April 8, 1943 to
Under Secretary Patterson, the War Department submitted
59 letters of complaint relative to dependency benefits.
These complaints fall under four classifications, as
follows:
Group I - Involves 8 cases which were due to
failure of the War Department to receive applications
for benefits. The delays ran from four to twelve months,
the average being about 6 months. Forms and instructions
for filing applications have been furnished.
Group II - Involves 13 cases which were due to
failure of War Department to receive notices of change of
address. These delays ran from one to five months, the
average being about two months. The files show that new
addresses have been received, checks remailed, and the
accounts are now current.
Group III - Involves 15 cases which were due to
the necessity for obtaining new authorizations to take
care of dependent child born after the original applica-
tion was made. These delays ran from one to four months,
the Average being about two months. The files show that
all of these cases have been brought up to date.
Group IV - Involves 23 cases of a miscellaneous
nature, all of which appear now to be current. These
delays were due to lateness in receiving application;
claims involving persons who were ineligible, lost checke;
soldier first named his mother, wns subsequently married
and named his wife; etc. A further description of these
cases is attached hereto.
06.02antue
FORVICTORY
BUY
Attachment
UNITED
STATES
WAR
BONDS
AND
STAMPS
Regraded Unclassified
84
Excerpts from letters received
in the Office of Dependency Benefits
of the War Department in re
non-receipt of checks
Miscellaneous Cases
Sidney Friedman:
Application received late. All payments now current.
Dewey Hubert Jordan:
Sister included as dependent. Declared ineligible.
Allowance for her discontinued, and recovery of
payments being effected. All proper payments have
been made.
William Ranold Eden:
Record shows payments made. Dependent claims checks
have never been received. No record of checks returned.
Soldier requested to obtain from dependent signed state-
ment of non-receint of checks.
Reaford Hudson:
Named wife and sister as dependents. Sister was actually
sister-in-law and ineligible. Payment discontinued and
collection being made. Soldier now promoted to ineligible
grade. All payments due wife have been made.
Newton W. Kerr:
Application received October 21, 1942; commanding officer
advised effective date was September 1. Payment of ad-
justment in allowance to payee being made.
Edwin Rosenfeld:
Delay of about one week in mailing of check. Probably
received by time letter of complaint reached Newark.
Payments are current.
John F. Guy:
First dependent named was mother. Soldier was later mar-
ried and named his wife as dependent. All payments to
mother and wife have been made.
William F. Wise:
Soldier designated child by first wife as dependent.
Later married again and designated wife and stepchild.
Payments have been made to date to all three dependents.
Regraded Unclassified
85
- 2 -
Edgar Harrison Wilson:
Original application for parent only. Notice received
of marriage and reauthorization to include wife. Pay-
ments are current.
Melvin Labell:
Soldier alleges double deduction from October pay.
Commanding officer contacted in regard to alleged double
deduction.
John Grant Jackson:
First payment for month of February, 1943 was mailed
first week of March. Probably crossed writer's letter
in mails.
Edward John Letendre:
Mother complains of not receiving $20 from Government.
Allotment from Government is only $15. Account 1s cur-
rent.
Clarence Cecil Howell:
Original allotment evidently made to Mother. Soldier
married and made allotment to wife. No back payments
due because effective date was not given as of date of
marriage.
Sanford Henry Meyers:
Application dated December 16, 1942, received February
17, 1943, check mailed covering period from December 4,
1942 to date of discharge. Should have been received
about four days after date of letter of complaint.
Clio Kenneth Grant:
Soldier stated court allowed his children $75 per month.
Court order showed $52. Reauthorization was made in
correct amount. All payments made and account now cur-
rent.
Henry Stanley Bozenski:
Wife states allotment never received. Records show all
payments have been made and account is current. Record
does not show whether checks may have been lost in mail.
Adam Schlitt:
Soldier claims deduction made from June pay. Records
show allotment to wife started as of July 1. Commanding
officer is being contacted relative to refund of the
deduction claimed for June.
Regraded Unclassified
86
- 3 -
Nicholas Karels:
Delay appears to have been caused by soldier naming both
mother and sister, it later being discovered that sister
was ineligible. Records show all payments are now current.
Leon K. Cowen:
Soldier claims wife has not received allotment for June.
Records show all payments, including June, have now been
made.
John David Havrilla:
Original application named soldier's mother and sister.
Later reauthorization made to include wife. All payments
have been made to date, including those to wife.
George W. Castleberry:
Writer inquires about check for March. Cannot be mailed
until after first of April, when it actually accrues.
Roy L. Thompson:
Payee states she has received duplicate checks. Has been
requested to return those which she considers duplicates.
Records show no duplication.
Roy Easterday:
Original application for mother; subsequent reauthorization
to include wife and child. Wife had change of address which
further delayed payments. All payments made to date.
Regraded Unclassified
87
INTERDEPARTMENTAL WAR SAVINGS BOND COMMITTEE
WASHINGTON
OFFICE OF CHAIRMAN
Room 1209 - Federal Reserve Bank
TREASURY DEPARTMENT
230 South LaSalle Street
Chicago, Illinois
May 8, 1943
Red 5/10/43
Mr. E. F. Bartelt, Moting Chairman
Interdepartmental Committee
Treasury Department
Washington Building
Washington, D. C.
PERSONAL AND CONFIDENTIAL
Subject: Lt. Colonel Henry M. Burnett
Lt. Colonel Deane Hall
Dear Mr. Bartelt:
Following up your request that I report to you weekly concerning
the progress being made by Lt. Colonels Burnett and Hall in the Chicago
Army War Bond Office, I called on these gentlemen today and result of
my visit is given below:
Colonel Burnett's remarks in substance were:
"Bonds being issued since May 1, 1943. The first bond was
issued to a WAAC, the second bond to a Private, the third
bond to Major General H. K. Loughry. Bonds issued and
mailed May 1 - 2,076.
As of May 7 has issued 159,115 bonds for regular mail;
also as of May 7 has issued 6,251 bonds for safe keeping
in the Federal Reserve Bank of Chicago. Of the above
amount they have actually transmitted by regular mail
119,205 bonds and have sent 5,669 bonds to safe keeping.
The balance of the above issues will be mailed before
the close of business today.
Practically all new help as of May 1, 1943 - has plenty
of good help and vastly improved help over the former
Washington staff. Thinks will take another six months
POPYICTORY
before present employees are thoroughly conversant with
BUY
all various procedures.
ERITED
STATES
WAR
BONDS
AND
STAMPS
Regraded Unclassified
08
Mr. E. F. Bortelt
-2-
May B, 1943
No back log in his department of the Army War Bond Office
and considers that every phase of his work is on a current
basis."
The practice of returning allotment forms was discontinued at
the close of business May 6, 1943, in accordance with your suggestion
while in Chicago April 1 to 3, 1943, inclusive, Colonel Burnett
started using on May 7, 1943, forms identified as AWOB No. 70 of
which exhibits are attached. These gentlemen indicated their sincere
appreciation in adopting 3. form in the order of which you suggested
while here and stated the use of seme would greatly facilitate the
proper handling of the related documents.
Colonel Burnett asked no to inform you that his main trouble et
the present is that his office is not getting the number of new
allotments which WELS anticipated. Ties says he needs an average of
50,000 allotments daily in order to keep his staff in full operation.
For the week ending April 24, 1943, the daily average of new allot-
ments received was 45,000; for the week ending May 1, 1943, the daily
average of new ellotments received was 23,580; for the period of
May 3 to 7, 1843, inclusive, the daily average of new allotments
received was 19,783.
REFERS
Colonel Burnett attributes this heavy decrease during the past
three weeks to the fact that the Army War Bond Officers are waiting
STUPF
TCV
to see if the present plan works satisfactorily also to the fact of
the heavy back log of bonds to be issued in Colonel Rees' department.
REC
e
Action to remedy this situation is now contemplated in respect
FERR
⑇
to a meeting of War Bond Officers of various service commands,
anticipated in the form of a sales conference to be held in Chicago
beginning May 13, 1943, with the provision that the present plans in
WASHN
and
process will be approved by the War Department in Washington, D. C.
Colonel D. J. Almy, Promotional Division of the War Savings Bond
Office, Washington, D. C., operated under the Chief of Finance, is
expected to conduct this meeting if approved by the War Department.
It is possible that all War Bond Officers of the Civil Service Com-
mand areas will attend. This group of war bond officers will be taken
through Colonel Burnett's office on an inspection trip. By that time
Colonel Burnett expects to have all issues of bonds completed and his
staff and equipment will be more or less idle. The psychology of
this situation will be as Colonel Burnett pointed out, to impress
the attending war bond officers that he needs more business and that
it is their duty to organize a drive for increased allotments. To
substantiate the above remarks, Colonel Burnett advised that the
st"
of
April regular issue of approximately 325,000 bonds will be completed
issues of Mar Savings Bonds of approximately 100,000 will be completed
DAYS
15
and in the mail by Tuesday, May 11, 1943; further, the supplementary
and mailed on or before May 15, 1943.
in
Regraded Unclassified
DS
Dr. 3. F. Bartelt
-3-
May 8, 1943
During my visit to the Chicago Army War Bond Office on May
7 and 8, 1943, I renewed acquaintances with Mr. Frederick Louff of the
General Accounting Office, also Mr. E. E. Naylor, Fiscal Division, Mar
Department, Washington, D. C. and a Mr. Slaughter of the General
Accounting Office, who were in conference with Colonels Burnett and
Hall during Friday and Saturday of this week, in connection with
setting up the necessary procedure for handling a special deposit and
allotments plan. Evidently this conference has come about as B. re-
THIS
is
trust fund account for control of cash in connection with class B
sult of the questions which you raised with these gentlemen during
your recent visit. Mr. Neylor was in conference today with Colonel
To
11. D. Ayres, Finance Officer, 6th Service Command, this morning con-
Boyo
cerning his duties in connection with the negotiations In progress
Issu
between the representatives of the General Accounting Office and
is
the War Department.
CAS
A
Quoting from Colonel Deane Hall's remarks as passed to me this
DEQUET:
morning, the plan developed so far for establishing a. control of
cash in connection with class B allotments, follows:
"Army War Bond Office will certify B. voucher to Colonol Ayres,
Finance Officer, each month, the total of which will represent all
deductions from soldiers' pay for the purchase of war bonds as sup-
ported by allotments on file in this office. Colonel (yres will
issue B. check charging "Pay of the Army Account", which check will be
deposited to the credit of a special deposit account in Federal Reserve
I dan's
Bank of Chicago. As bonds are issued each month B. check will be
drawn in favor of the Treasurer of the United States for total amount
like
of bonds issued, which check will be charged to the special deposit
account. Also B. check will be drawn each month charging the special
account
deposit account, the total of which will represent the refunds due
soldiers because of allotment cancellations, which check will be de-
should be
posited to the credit of a "Trust Fund Account". Finance officers in
the field will make such refunds by voucher on information received
outh
from this office and will charge vouchers against Trust Fund Account,'
The
I have arranged to pay Colonels Burnett and Hall a weekly visit
Durs
for the purpose of keeping you fully informed of developments.
Very truly yours,
Grover G. Jones,
Regional Coordinator.
Regraded Unclassified
90
WAR DEPARTMENT
Penalty for Private Use to Avoid
Payment of Postage,$300
OFFICIAL BUSINESS
CENTRALIZED FIELD OFFICES
FINANCE DEPARTMENT
366 WEST ADAMS STREET
CHICAGO, ILLINOIS
ATTENTION: ARMY WAR BOND OFFICE
CENTRALIZED FIELD OFFICES
FINANCE DEPARTMENT
366 WEST ADAMS STREET
CHICAGO, ILLINOIS
Date
1. Class B Allotment of
Serial No.
cannot be Processed nor bonds issued until addi-
tional information is furnished as referred to on attached "Reply Card".
2. Personnel or other responsible officer will supply the informa-
tion, sign, detach and return "Reply Card" immediately and also obtain
signature of allotter when required.
For the Commanding Officer:
H.Z.Ohen OLSEN. Major, F.D.
Ass't to Chief - Army War Bond Office
Regraded Unclassified
90 - A
5/6/43
Original of this handed to Mr. Smith
by the Secretary as a joke, together with
copy of photograph of their visit to the
Hospital at Vancouver, Wash.
90- B
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
Press Service
Thursday, May 6. 1943.
No. 22-22
Mr. Fred Smith, public relations counsel, speech witer, phrase
turner, and raconteur, at the Kaiser Hospital in Portland, Oregon.
Mr. Smith is the Mr. Smith who came to Washington. He also came
to Cedar Rapids, Portland, San Francisco, and Dallas, but never came
to rest. The individual who unintentionally got between Mr. Smith and
the camera, thus causing Mr. Smith visible pain, is Secretary of the
Treasury Henry Morgenthnu, Jr.
Regraded Unclassified
91
THE SECRETARY OF THE TREASURY
WASHINGTON
May 6, 1943
Dear Felix:
I am enclosing herewith a copy
of a letter from Paul Freund. Where
do we go from here?
Yours sincerely,
Dear Henny themy
very foreg - and
from Honorable Nation Felix Frankfurter, Louis of ocean
Washington, Justice of the D. C. Supreme Court, Im nor
rine are a litice were
Lappy about the Bluest
twice for free this boughts =
Regraded Unclassified
92
SUMENT C
Office of the Solicitor General
Basbington, D.C.
May 5, 1943
My dear Mr. Secretary:
I have discussed with the Solicitor General, and he in
turn with the Attorney General, the subject about which we
spoke a few days ago. Both Mr. Fahy and Mr. Biddle are
strongly of the opinion that. it would be most unfortunate if
I were to leave at this time, particularly in view of the
specialized nature of the work of this office and the fact
that over a period of years I have had an opportunity to
become particularly conversant with it. The problem which
is thus presented has given me a good deal of concern. I
feel a strong sense of obligation to this Department, and
I hesitate to take a step which might embarrass it in a phase
of its work which is important and is not unrelated to the
war. After much reflection, I have come to the conclusion
that the proper course for me is to remain at my present job,
despite the great attractiveness of the work which you have
outlined.
I trust that you will understand my position in this
regard, and I want you to know that I an deeply grateful for
the confidence and courtesy which you have accorded me.
Very sincerely yours,
The Honorable
Henry Morgenthau, Jr.
Secretary of the Treasury
VICTORY
BUY
STATES
WAR
BONDS
STAMPS
Regraded Unclassified
33
May 13, 1943
My dear Mr. Freund:
I was very sorry to receive your
letter of May 5th, and find that you
could not see your way clear to com-
ing with me in the Treasury. I feel
that you would have been of great
help to me, and I regret that you
were not able to make the transfer.
Yours sincerely,
(Signed) H. Morgenthau, Jr.
Mr. Paul Freund,
Office of the Solicitor General,
Washington, D.C.
envelope "Personal"
File in Diary
Regraded Unclassified
94
STATE
CAUSTER
Office of the Solicitor General
Mashington, D. C.
May 5, 1943
My dear Mr. Secretary:
I have discussed with the Solicitor General, and he in
turn with the Attorney General, the subject about which we
spoke a. few days ago. Both Mr. Fahy and Mr. Biddle are
strongly of the opinion that it would be most unfortunate if
I were to leave at this time, particularly in view of the
specialized nature of the work of this office and the fact
that over a period of years I have had an opportunity to
become particularly conversant with it. The problem which
is thus presented has given me a good deal of concern. I
feel a strong sense of obligation to this Department, and
I hesitate to take a step which might embarrass it in a phase
of its work which is important and is not unrelated to the
war. After much reflection, I have come to the conclusion
that the proper course for me is to remain at my present job,
despite the great attractiveness of the work which you have
outlined.
I trust that you will understand my position in this
regard, and I want you to know that I am deeply grateful for
the confidence and courtesy which you have accorded me.
Very sincerely yours,
The Honorable
Henry Morgenthau, Jr.
Secretary of the Treasury
POLYICTORY
BUY
UNITED
STATES
WAR
BONDS
AND
STAMPS
Regraded Unclassified
THE WHITE HOUSE
WASHINGTON
May 6, 1943
Door Menry:
I an more than pleased to have those
manusomely bound volumes covering the report of
the Come ittoo on Intergoverneental Fiscal Re-
latters. The set is a most wolcome addition to
by personal library. Dany, many inanks.
Very sincerely yours,
fin
Conorable lienry for enthau, Jr.,
The Secretary or the Treasury,
assinaton, D. C.
Regraded Unclassified
98
MAY 6 1943
Dear Mr. Director:
This will acknowledge receipt of your letter
of April 30, 1943, enclosing & draft of a proposed
Executive Order vesting in the Reserve Board cortain
additional powers over the extension of credit which
the President has under Bection 5(b) of the Trading
with the Enemy Act, and inviting suggestions on the
general policies underlying the order.
The proposed Executive Order has been written
in such A way that the powers conferred by it are
sweeping, and this is doubtless desirable because
of the wide scope of problems involved in controlling
private credit notivities in wartine. The language
is 60 brond, however, that I an wondering if there
is any chance of its being construed as implying the
possibility of affecting Treasury berrowing opera-
tions or taxing policies at some future time. I
know that no such interpretation is intended, but
I as not sure that press resetions to the Order
would be clear in this respect. As discussions on
the proposed Order develop, it may be that the
Treasury will went to suggest that 41 suitable clari-
fication be made.
Under Secretary Dell will represent the Treasury
Department at the conference which you are seking
Mr. Cohen to arrange.
Sincerely,
(Signed) H. Mergenthan. Jr.
Honorable James F. Byrnes, Director
Office of Economic Stabilisation
The white House
Washington, D. 0.
Photo file in Diary
File to Thompson
NOT:WL:GCH:ek
By Mess. Bundy 4:00 5/6/43
5/5/43
Regraded Unclassified
97
Dear Mr. Director:
This will acknowledge receipt of your letter
of April 30, 1943, enclosing a draft of a proposed
Executive Order vesting in the Reserve Board cer-
tain additional powers over the extension of credit
which the President has under Section 5(b) of the
Trading with the Enemy Act, and inviting suggestions
on the general policies underlying the order.
It is, of course, assumed that the broad powers
to be vested in the Reserve Board under the proposed
order will not Le used so that they will interfere
in any way with the Treasury Department in the exer-
cise 01 its fiscal and taxing functions. As dis-
cussions on the proposed order develop, it may be
that the Treasury will want to suggest that a
provision to that effect be included in the order
itself.
Under Secretary Dell will represent the Treasury
Department at the conference which you are asking
Mr. Cohen to arrange.
Sincerely,
Honorable James F. byrnes, Director
Office of Economic Stabilization
The White House
Washington, D. C.
Regraded Unclassified
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE FOR EMERGENCY MANAGEMENT
OFFICE OF ECONOMIC STABILIZATION
WASHINGTON, D.C.
April 30, 1943
JAMES F. BYRNES
Director
Dear Mr. Secretary:
It has seemed to me that the present powers of the Reserve
Board should be supplemented by Executive Order vesting in it certain
additional powers over the extension of credit which the President has
under section 5(b) of the Trading with the Enemy Act. There may be
some question as to how far the Reserve Board should go in exercising
these powers, out it seems to me that they should be available for
use by the Board 68 occasion arises without the delay that might be
involved in getting out an Executive Order after a critical situation
has developed. I should think also the Order would have & wholesome
psychological effect on the general situstion, although I do not want
to exaggerate that aspect of the situation:
The enclosea araft of an Executive Order has been prepared
by the Reserve Board at my suggestion. I am asking Mr. Cohen to ar-
range a conference at the technical level of the various departments
concerned, including, of course, the Office of Price Administration,
Department of Justice, Buresu of the Budget, Securities and Exchange-
Commission, Federal Joan Administration and Food Distribution and
Production Administration.
I hope you will let me know who you would like to attend
this conference for the Treasury Department, and i should also wel-
come any suggestions from you on the general policies underlying
this order.
Sincerely yours,
Director
Honorable Henry Morgenthau, Jr
Secretary of the Treasury
Washington, D. C.
CTORY
BUY
Date
STATES
WAR
BONTS
RAMPS
Regraded Unclassified
was LIABILITY a -
DRAFT
4/30/43
EXECUTIVE ORDER
REGULATION if CHEDIT ONLISH NATIONAL TABILIZATION PROCEDUE
THEREAS the effective conduct of the present war and the
mintensnee of the national stabilization program authorised and di-
rected by the Congress in the Act if October 2, 1942, require that
means be available madily to control the extonsion or use of credit
for or incidental to buying or otherwise acquiring control or, carry-
ingo holding, or trading in commodities, real estate, or securities in
order to assist (a) in proventing hoarding and harmful speculation,
(b) in curbing profiteering and unwarranted, speculative, and abnormal
price advances, (o) in protecting and promoting the sound and construe-
tive interests of commerce, agriculture, and industry, and of consumers,
home owners, and investors, and (d) in supplementing and supporting
other governmental measures to restrain inflationary tendencies:
NOW, THEREFORE, by virtue of the authority vested in DO by
section 5(b) of the Act of October 6, 1917, as amended from tine to
time including the amendment made in the "First Ear Powers Act, 1941°,
and by virtue of all other authority vested in no, and in order,
during the ti e of the war and the period of the national emergency
declared by no on May 27, 1941, to promote the effective conduct of the
var and protect the national economy, it is hereby ordered as follows:
Section 1. To carry out the purposes of this order the
Board of Governors of the Federal Reserve System (hereinafter called
Regraded Unclassified
the Board) is hereby designated RD the agency through which there shell
be investigated, regulated, or prohibited transfero of credit or pay-
ment. between, by, through, or to any banking institution, which con-
stitute or arise directly or indirectly out of any extension or use of
credit for or incidental to buying or otherwise acquiring control of,
carrying, processing, holding, or trading in commodities, real estate,
or securities for imedinto or future delivery. For such purposes the
Doard shell have the owers set. forth in paragraph (1) of subdivision (b)
of section 5 of the aforesaid Act of October 6, 1917, and it say take
any lawful stops within its powers to carry out. such purposes, including
any other and further secures not inconsistent with this order or with
the aforessid Act of October 6, 1917. The Bourd is authorised to pre-
scribe definitions not inconsistent with the urposes of this order for
any and all torms used 11. this order or in any directives, orders, or
regulations which say be issued by its PROVIDED, That, unless the Board
gives more restricted moenings; (1) "extension or use of credit" includes
but is not limited to loans or discount transactions and agreements, oon-
tracts, options, demands, Liens, and similar claims against, or for the
imediate or future delivery of, money or property; (2) "banking insti-
tution" 200.18 any bonk or trust company or any other person, whether
incorporated or not, engaged in receiving, holding, or widng payments
of deposits, and any person or agency of the Covernment engaged, either
primarily or incidentally, as principal, agent, broker, or otherwise in
making or holding extensions of credit or making, holding, or clearing
Regraded Unclassified
payments for or incidental to buying or otherwise acquiring control of,
earrying, holding, or trading in commodities, real estate, or securi-
ties, for immediate or future delivery, with respect to which the Board
shall have issued directives, orders, or regulations.
Section 2. In effectuating the purposes of this order the
Board shall consider and make due provision for the legitimate and bona
fide credit needs of comerce, agriculture, and industry and of con-
sumers, home owners, and investors to the extent that the extension or
use of such credit is consistent with the national stabilization ro-
gran; and any action of the Board shall not affect credit outstanding
on the effective dates of its directives, orders, or regulations except
to the extent that the Board may deem it necessary to do so in effec-,
tusting the purposes of this order.
Section 3. In administering this order, the Board may utilize
the services of the Federal Reserve Banks and any other agencies, Fed-
oral or State, which are available and appropriate. It may, in its
discretion, delegate to such banks or agencies all or such part of the
administration of its directives, orders, or regulations as it deter-
mines will promòte simple or effective administration; and any such bank
or agency, to which such administration has been delegated, MAY utilise
all other powers vested in it not inconsistent with the aforesaid Act
of October 6, 1917, to carry out any functions so delegated. The
Board shall, so far as practicable, utilize the information of and con-
sult with other Federal departments and agencies which have activities
Regraded Unclassified
or functions related to the national stabilization program and, in
discharging 1ts responsibilities, shall take into account any recom-
mendation which any such department or agency may make on matters of
general policy. In exercising the powers conferred by this order, the
Board shall be governed by the general policy directives of the Eco-
nomic Stabilization Director.
THE WHITE HOUSE
Regraded Unclassified
103
FOR THE PRESS
IMMEDIATE RELEASE
MAY 6, 1943
James F. Byrnes, Director of Economic Stabilization,
today made public a report from Chester C. Davis, Administrator
of the War Food Administration, with reference to the mobiliza-
tion of farm labor, farm equipment, and form supplies for meeting
1943 crop production goale.
The report was in the form of EL letter to Director Byrnes
who had requested Mr. Davis soon after he took office B.B. Food Ad-
ministrator, to give his immediate attention to the problem of
supplying farmers with sufficient Labor, machinery, and supplies
to carry out the government's crop production program.
"A current appraisal of the farm labor situation indi-
cates there 10 an available labor supply sufficient to produce and
harvest & 1943 crop up to the levels of the announced goals," Mr.
Davis said.
As to farm machinery for 1943, Mr. Davis caid this vas
not entirely satisfactory in view of the high production goale,
but that etepa had been taken which would improve the situation.
The Food Administrator pointed out that the War Production
Board had agreed to an increase in farm machinery production in 1943
from 23 percent of the 1940 level to 40 percent, and farm machinery
parte had been increased 160 percent of the average production during
1940 and 1941. He said with few exceptions this would meet the needs
for repair parts.
Steps are being taken, Mr. Davis said, to manufacture
9,530 additional combines, 4,460 corn pickers, and 2,000 pick up
balors for delivery in time to relieve the farm labor problem in
this fall's harvest.
The War Food Administration has asked the War Production
Board to authorize for 1944, 80 percent of the 1940 production of
farm implements and place no limit on the manufacture of parts.
Mr. Davis caid control over manufacture and use of forti-
lizer assures 100 per cent requirements for cocential war crops and
75 percent of normal requirements for other crops including corn
and cotton,
The report also covered nails, staples, hay bale tice,
rope, twine, home canning supplies, bags and bale covers, gasoline
end oil for food production, rubber for farm machinery, insecticides
and fungicides,
Mr. Davis' letter to Justice Byrnee in full followe:
The outlook for mobilization of farm labor and form
equipment and supplies to meet the heavy demands of the
1943 crop continues to show ecme improvement. The follow-
ing progress report touches on both fields,
A current appraisel of the farm labor situation indi-
cates there is an available labor supply sufficient to
produce and harvest a 1943 crop up to the lovels of the
announced goale. If the potential 1a fully used, farm
production noed not suffer from lack of labor in 1943.
Regraded Unclassified
- 2 -
04
This conclusion follows four regional farm labor conferences
just completed, participated in by the USDA Extension Service from
the 48 States, the U. S. Employment Service, the War Lanpower Com-
mission, the Farm. Security Administration, the Office of Civilian
Defense, and the Office of Education. These conferences included
one in New York City on April 21 and 22 for the 13 Northeastern
States, in Chicago on April 25 and 21 for the 12 Hidwestern States,
in Memphis on April 26 and 27 for the 12 Southern States, and in
Salt Lake City on April 30 and May 1 for the 11 Intermountain and
Coastal States.
Reports indicate that a sufficient nucleus of experienced
farm workers will remain on farms as a result of agricultural de-
ferment by the Seluctive Service, the President's order prohibit-
ing from labor to leave the farm for more pay elsewhere, and the
War Banpower Commission appeal to employers not to rocruit farm
people from the farm. In addition, government provisions for
return to fams by men with farm experience not now in essential
industry, and release from the Army of such men over 38, will add
to this skilled labor supply.
In addition, a comprehonsive national program is under way
for recred ting and placing new workers; mobilizing the 11. 5. Crop
Corpe nf 3-1/2 million workers, including town and city men,
woman and youths for full time or seasonal work; and such train-
ing, transportation, shelter and supervision as may be necessary.
Progress already made locally within the States and counties and
communities by the USDA Extension Service, B. S. Employment Serv-
ice, War Manpower Commission, Farm Security Administration, and
other agencies promises successful completion of this mobilization
effort.
The War Food Administration's farm labor program contemplates
continuing by those same aguncios, wherever possible, the plans
already in successful operation, as in Oregon, Iowa, and various
other States. The success of these local programs last year in
recruiting labor to handle the record 1942 crop indicates A stat-
lar success this year.
It is believed that, except 11. 8. few areas of highly seasonal
fruit and vegetable production, most of the additional labor needed
will be found locally through local offorts. This labor supply
includes townspeople, college and high school students, women,
elderly people and part time workers. Preliminary recruitment
surveys indicate that this labor will be available in adequate
supply as needed. Reports from all areas show that it rose fully
to the occasion last year when the emergencies appeared, and last
year's experience in recruiting and placing should make It still
more likely to develop this year when the need arises.
Farmers this year will be nore receptive to inexperienced
labor because of its proved value and surprising efficiency last
year, Farmero will almo increase the per capita production of
themselves and their familios as they did under stress last year.
This additional effort by 6 million farm families is the equiva-
lent of many thousands of additional workers.
Workers from l'exioo, Báhama and Jamaice, brought to the
United States under agreement.with their respective governments,
will provide a small additional supply of labor that will be
highly useful in areas of seasonal labor denand. The agreement
with Mexico calls for 50,000 laborers, and about 7,000 are arriv-
ing each month for work chiefly in the critical fruit and vege-
table labor arcas in California and Arizona. About 10,000
Jamaicans are expected, for uso in the Northeast and Atlantic
Coast areas, and 2,000 Rahamans are already working in the South-
east.
The efficiency of power farming is another addition to the
farm labor potential. In some 2,700 counties, or 90 por cent of
the 3,000 farm counties, power farming cnables a substantial re-
lease of farm labor. In these counties the tractor's effect has
not yot been fully discounted nor the maximum per capita produc-
tion fully reached.
Regraded Unclassified
105
D -
None of these factore in the farm labor supply will alone
solve the farm labor problem, but the comoination of all these
indicates un adequate labor supply to meet the 1943 farm pro-
duction goals.
Farm Machinery Outlook
Although the farm machinery and supplies situation for 1943
is not an entirely satisfactory one in view of the high food pro-
duction goals, it has recently been improved. the War Production
Board has agreed to an increase in farm meninery production from
2a per cent of the 1040 level to 40 por cent, and farm muchire ry
repair parts production has besn increased to 160 per cent of the
average production during 1940 and 1941. With few exceptions this
will meet the necds for repair parts.
The Var Food Administration has requested the war Production
Board to authorize production of 9,530 auditional combines, 4,400
corn pickers, and 2,000 pick-up balers for doliver in time to
relieve the farm labor problem in this fall's harvest. The Wat
Production Board has tried to locate steel for this purpose and,
after canvassing the farm implement canafacturers, has assurance
that they, by exchanging steel in inventory, will produce these
machines for use this fall provided component parts are available.
The fat Production Board is following this tip.
Baseu on preliminary estimates, we have Asked the War Production
Board to authorize for 1944, 80 per cent of the 1940 production of
fam inflements. Estimates of minimim requirements from each of the
43 States are now being tabulated and the adjusted statement of needs
will be filed with the War Production Board 500.1. We have recommended
that the War Production Board place no limit on the manufacture of
repair parts in 1944, and have been assured that the Hourd concurs.
The limiting factor for 1944 production 18 the steel supply,
are the question, whether the amounts and kinds of steel tentatively
allocated to farm implements will be enough to net the ao per curt
einimum neod, is still being discussed between the Food Auministra-
tion ans the Var Production Board.
An organized uffort is being directed by the war Food Administra-
tion to promote the fullest and most economical use of existing fare
machinery through equipment pools, custom tillage and harvesting
agencies, ano other cooperative devices. A program calling for the
requisition of iule farm mechinery and its re-sale for productive use,
hus been submitted to the Har Production Board with our recommenuation
and plans for putting it into effect.
Commercial Fortilizer
The total tonnage of fertilizers available for 1945 will exceed
the amounts used in either 1941 or 1942. The increase is accounted
for by about 10 per cent additional phosphate and 1% par cent additional
potash us compared with last year, while Es slightly smaller supply of
nitrogen will be available. Control over manufacture and use of
fertilizer assures 100 por cent of requirements for essential war
crops including principal vogetables, long steple cotton, soybeans,
poanuts and curtain fruits for drying. The quantity available for
other crops, including com una cotton, will possibly equal 75 per cent
of normal requirements based on historical use. Some future improve-
ment in the nitrogen supply is expected.
Merchant Steel Products
sufficient volume to Dent urgent needs, although the production of
Nails, staples and hay bale ties are now being produced in
farm funce has been below requirements. A Tar Production Board order
is now In procuss which, if approved, will purmit jobbers to maintain
is workable inventory to supply farmers' essential needs for valves,
fittings, pipo, small ulectrical motors and other incidentals re-
quired for repair of milking machines, domustic water systems and
other farm plumbing repairs which are currently difficult for farmers
to obtain.
Regraded Unclassified
106
- 21 -
Rope and Twine
Rope from jute and jute scrap, a recent importation from Mexico
of henequen rope, the carryover of Manila and sisal rope, plus the
1943 manufacture will total approximately the 5,000,000 pounds needed
this year. The supply of binder twine also appears adequate.
liome Canning Supplies
Programs are under way to provide tin cans, glass jars and seals
for approximately five billion jars of home processed foods. Can
sealers, both motor driven and hand operated types, will be manufac-
tured in limited quantities. The manufacture of 150,000 pressure
cookers has been approved and provided for.
Bags and Bale Covers
Although the cotton and burlap bag supply is not adequate, some
relief will be afforded by withdrawals from government stockpiles.
Producers may help the situation by making more extensive use of used
bags, paper bags when practical and bulk shipments. The estimated
production of cotton bale covers should be ample for the estimated
cotton crop. The supply of bale ties and buckles from new steel will
be limited, but the 1942 carryover, together with orders requiring the
salvage and reworking of bale tie strips two feet or longer, plus the
OPA ceiling encouraging the use of reworked ties, will provide adequate
baling for the anticipated cotton crop.
Gasoline and Oil
The Petroleum Administration pledges a full supply of gasoline
for food production even though further cuts in civilian supplies
should become necessary. The production of keroséne is limited but
farm uses are being protected, subject to distribution difficulties.
Rubber
Reworked rubber is a bottleneck because of limited processing
capacity, although some relief is due as synthetic comes into produc-
tion. The outlook is good for putting 1944 tractors, combines, corn
pickers and balers on rubber tires, although this is not assured.
Insecticide and Fungicide
Adequate facilities are available to manufacture and to distribute
all the insecticides and fungicides needed in food production. Sufficient
arsenic has been assured to provide for 60 million pounds of lead
arsenate and 90 to 95 million pounds of caleium arsenate, which should
be sufficient to provide control for food and fiber crops. The supplies
of copper sulphate have been increased from 85 to 100 million pounds
to care for increased production of potatoes and other crops. It is
expected that adequate supplies of small packaged inscoticides and
fungicides will be available for home and Victory gardens.
The foregoing report gives only some of the high spots of a
situation that seems to be showing improved promise.
Regraded Unclassified
107
AGENDA
FOR THE BOARD OF ECONOMIC WARFARE MEETING
TO BE HELD MAY 6, 1943. AT 10:00 A. M.
ROOM 201, SENATE OFFICE BUILDING
Oral discussion of trade with Sweden, Switserland, Spain and
Portugal. Mr. Winfield Riefler, Special Representative to
England will be present to report on this matter.
Regraded Unclassified
108
MAY 6 1943
ky dear Mr. Secretary:
I an writing to acknowledge receipt of your
letter, reference number NS 868.51/1675, of May 4,
1943, enclosing a copy of your letter of April 26,
1943 to the President reviewing the steps taken to
neet the Greek Government's appeal for financial
assistance and a copy of the note on the subject
transmitted to the Creek Ambassador on May 4, 1943.
In my letter of Recember 28, 1942, I set forth
the view of the Treasury that the Greek Government
appears to have smple resources available to it to
met its neede for SIND time to COME. Under these
circumstances, it is difficult for us to understand
why arrangements were made for Lend-Lease Adminis-
tration to extend financial assistance to the Creek
Government amounting to approximately 01 million
per month without giving the Treasury an opportunity
to discuss the matter further.
Sincerely yours,
(Signed) Henry Morgenthau, Jr.
Secretary of the Treasury.
The Monorable,
The Secretary of State.
File to Thompson
Photo file in Diary
5/6/43
Regraded Unclassified
109
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE May 6, 1943
TO
Secretary Morgenthau
FROM
Mr. H. D. White
Subject: Draft reply to Secretary Hull regarding assistance to
Greece.
On December 28, 1942, you sent a letter to Secretary
Hull stating that on the basis of the information available,
it did not appear to us that the Greek Government was in
need of financial assistance and we added that "we shall,
of course, be glad to reconsider the question in the light
of any additional information on these points that may be
forthcoming". I am appending a copy of your letter to
Secretary Hull of December 28, 1942.
That 1s the last we heard of the matter until receipt
of Secretary Hull's communication in which he encloses a
letter written to the President on April 26th regarding the
Greek financial. situation. In that letter he states that
the State Department had arranged with the Lend-Lease Admin-
istration for aid of $1 million a month to the Greek
Government, with the implication that we ( the Treasury)
were consulted. The letter to the President, besides imply-
ing that we were consulted, gives a misleading impression of
the Greek dollar position. If the State Department recognizes
that our views on the adequacy of the dollar assets of
foreign governments should bear any weight at all in
decisions on financial aid to foreign governments, it seems
to me that their action in this matter if not an oversight
has been both discourteous and inexcusable.
I am appending two letters of acknowledgment, one
raising the issue with the State Department and the other
a simple letter of acknowledgment.
Attachments.
Regraded Unclassified
SPICAL
TO
ITAMY OF STATE
- a c.
DEPARTMENT OF STATE
WASHINGTON
In reply refer to
ME 868.51/1675
May 4. 1943
My dear Mr. Secretary:
With reference to the Department's letter of
January 21, 1943, addressed to Mr. Bell, there is enclosed
herewith for your information a copy of my letter of
April 26, 1943, reporting to the President the steps taken
to meet the Greek Government's appeal for financial assis-
tance, to which is attached the text of a note on the sub-
ject which he has approved for transmission to the Greek
Ambassador, The latter communication 18 being forwarded
to the Ambassador under today's date.
Mr. Kyriakos Varvaressos, Greek Minister of Finance
and Governor of the Bank of Greece 18 coming to this coun-
try in the near future B.B delegate of the Greek Government
to the Food Conference, It seems likely that he will pro-
fit by the occasion to discuss financial problems with you,
including the question of the financial position of the
Greek Government, and I believe that you may find the en-
closed documents useful in this connection.
Sincerely yours,
Enclosure:
To the President,
April 26, 1943, with
enclosure.
The Honorable
Henry Morgenthau, Jr.
VICTORY
Secretary of the Treasury,
BUY
UNITED
STATES
BONDS
---
STAMPS
Regraded Unclassified
DEPARTMENT OF STA.E
WASHINGTON
April 26, 1943
My. dear Mr. President:
You will recall that King George and Prime Minister
Tsouderos of Greese, during their visit to this country
last June, stated that the resources of the Greek Govern-
sent were declining rapidly and appealed for financial
assistance. You indieated that some arrangements should
be made whereby the Greek Government could be kept going.
A financial report WAS eventually received from the
Greek Government, and was supplemented by figures obtained
from the Treasury and the British Government, with which
we discussed this question. It appeared, in brief! That
the Greek Government would nearly exhaust its immediate
resources early this year and be faced by a prospective
deficit of some $10,000,000 in the fiscal year 1943-44;
that the British have been aiding the Greeks by equipping
their armed forces in the Middle East and are prepared,
in general, to meet Greek needs within the sterling area;
and that our problem vas thus mainly one of providing
aid required by the Greek Government in meeting its
dollar expenses,
As you know, there is no legislative authorization
for direct credits to the refuges Governments, although
the question of possible legislation for this purpose
has been under consideration for some time, principally
in commection with Polish needs. In any case, however,
it seened preferable to meet the Greek appeal under
existing legislation if this were possible, and the
matter has been pursued on this line.
By far the heaviest dollar obligation burdening the
Greek Government was the payment of the charter-hire on
Swedish vessels engaged in the Greek relief scheme,
amounting to approximately $1,000,000 per month. Follow-
ing discussions between the interested agencies and on
the recommendation of this Department, the Lend-Lease
Administration has taken over this expenditure as from
January 1, 1943.
I believe
The President,
The White House.
Regraded Unclassified
I believe that this assistance should adequately
neet the need of the Greeks for dollars, at least for
the time being. They appear still to have a small dollar
balance of Government funds on hand and to have a modest
dollar income from a few Greek vessels chartered to the
Swise. Their other expenditures requiring dollars
consist principally of expenses connected with the main-
tenance of their representation in countries outside the
sterling block. These can probably be net for an indefi-
nite period from the Greek Government's own resources,
possibly supplemented by modest advances from their OVA
Bank of Issue, which holds some $19,000,000 in dollar
balances.
In addition, the Greek War Relief Association of New
York is planning, with the approval of the President's
Var Relief Control Board and of this Department, to under-
take a program of assistance to the Greek refugees in the
Near East and Africa, This will provide further financial
relief for the Greek Government, which has been obliged
to support a constantly increasing burden in saring for
these persons.
I attach for your consideration and approval a copy
of a note which I propose to send to the Greek Ambassador
regarding this question.
Faithfully yours,
GOPHOLL Huily
Enclosure:
To Greek Ambassador.
Regraded Unclassified
My dear Mr. Ambassador:
I an glad to inform you that the report of the Greek
Minister of Finance, which you submi ted to the Department
last December, has had the earnest and sympathetic atten-
tion of this Government in connection with its considera-
tion of your Government's request for financial assistance,
Discussion of this matter with the British having
indiented that they were, generally speaking, prepared to
provide the sterling credits which may be needed by your
Government, ve have endesvored principally to find means
of assisting, within the limits of existing legislative
authorization, in meeting your Government's urgent needs
in the dollar field, It was evident that the bulk of the
dollar expenditure falling upon your Government vas payment
of the charter-hire for the Swedish vessels engaged in
transporting relief shipments to Greece. As you already.
know, arrangements have been made for these charges to be
taken over by the Lend-Lense Administration, for the
period beginning January 1, 1943 and continuing until
June 30, 1944, unless the Greek relief operation shall
have been terminated prior to that date.
In addition, the Greek Wer Helief Association,
Incorporated, of New York, 18 planning, with the approval
of this Department and of other appropriate agencies of
this Government, to undertake a program of assistance for
the Greek refugees in the Near Fast and Africa, which
should likewise lighten the burden of the increasing
charges which the Greek Government in having to meet in
this connection.
I hope that these steps will prove adequate to enable
your Government to neet its pressing financial needs,
Sincerely yours,
dues
Regraded Unclassified
Regraded Unclassified
DEC 2 8 1942
ky dear Mr. Secretary:
This is in reply to your letter, reference number NE 868.51/1662,
of December 14, 1942, concerning the financial position of the Creek
Covernment.
According to the report submitted to the Treasury Department by
the Greek Minister of Finance, Mr. &. Varvaressos, it appears that
the Greek Government and the Dank of Greece together have sufficient
resources for Bome time to COME. with present assets equivalent to
4185 million, annual revenues of 07 million and annual expenditures
of $19 million, there seens to be come question as to the need of the
Creek Government for aid from us at this time.
AS the Greek Government is requesting assistance mainly to pay
the salaries of the Armed Forces, we would like to know which
currencies will be required for this. It is our understanding that
the Armed Forces are located largely, if not entirely, in the Sterling
Area. About four-fifths of the assets of the Bank of Greece consist
of sterling holdings, primarily proceeds of sterling credits granted
before the fall of Greece by Britain to the Greek Government for war
expenditures within treece. Under the circumstances, it seese to us
that the Creek Government might be asked to consider further the
possibility of obtaining what it needs from its own central bank.
Iven if the Creek Government does not use the Bank's sterling holdings,
however, the Bank's other resources plus the Government's revenues
from the acrohant marine are sufficient to meet expenses for some
time to come at current retee of expenditure.
It may be, however, that there are reasons such as political
considerations, or claims on Greek assets or Greek legal restrictions
which would make it difficult for the Creek Government to utilise
these exchange resources for this purpose. To shall, of course, be
clad to reconsider the question in the 11ght of any additional
information on these points that may be forthouming.
Sincerely yours,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury.
The Monorable,
The Secretary of State.
HDW:ELN:dsl
12-28-42
116 Y
MAY 6 1943
Dear dr. Stettinjus:
This is to acknowledge receipt of your letter of
April 29, 1943, suggesting that the Subcommittee on
the Dollar Position of the United Nations reconsider
our policy with respect to the dollar position of
British Empire countries.
I have instructed Mr. White to call a meeting of
the Subsommittee to a into the matter.
Very truly yours,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury.
/r. E. R. Stettinius, Jr.,
Administrator, office of Lend-Lease
Administration,
515 - 22nd Street, N.W.,
washington, D.C.
Photo file in Diary
File to Thompson
5/5/43
Regraded Unclassified
OFFICE OF LEND-LEASE ADMINISTRATION
FIVE-FIFTEEN 22d STREET NW.
WASHINGTON, D.C.
Stettimus Jr.
Administrator
April 29, 1943
The Honorable Henry Lörgenthau, Jr.
Secretary of the Treasury
Treasury Department
Washington, D. C.
My dear kr. Secretary:
You will recall that under date of January 1, 1943, the
Cabinet Committee, composed of the Vice-President, the Secretary of
State, the Secretary of War, yourself and myself, made a report to
the President on policy decisions relating to the dollar position
of lend-lease countries. The report was approved by the President
as submitted.
That report recommended the appointment of a permanent Sub-
Committee under the chairmanship of the Treasury, charged with the
responsibility of making recommendations to the Cabinet Committee
with respect to the problem involved.
Since the adoption of the original report, a number of factors
have come to the fore, which have persuaded me that, in addition to
merely reporting to the Cabinet Committee the present status of the
dollar position of the British Empire countries, the Sub-Committee
should recommend to the Cabinet Committee a reconsideration of our
policy with respect to the whole question, in the following respects:
1. We should reopen the question of what standards
are to determine the appropriate level of the gold and
dollar balances of the British Empire countries, including
particularly reconsideration of the question whether the
world financial position of the United Kingdom shall be
taken into consideration in arriving at a decision on this
point.
2. We should reconsider the question whether it may
not be advisable to canvas the whole problem frankly and
openly with representatives of the British Treasury before
arriving at any final decision with respect to our policy.
BUY
FINED
Regraded Unclassified
- 2 -
I should appreciate it if you would submit this matter to
the Sub-Committee in order that they may consider the recommenda-
kions herein made, and report thereon to the Cabinet group.
That Sincerely yours,
E.R. Stettinius, Jr.
a
Regraded Unclassified
119
MAY 6 1943
Dear Generalissimo Chiang:
I as deeply moved by the generous message
and lovely sift you have sent no for my birth-
day. I shall always cherish it as a memento
of the friendship of & truly great leader in a
most critical period of world history.
I an happy to have had the opportunity to
be of some assistance to your people and to the
cause for which they are fighting under your
valiant leadership. In my actions I have merely
reflected the wish of the American people and
their Government to help China toward a strong,
unified, and independent democracy.
The mutual good will and deep understanding
which characterizes the relations of our two
countries will be of immeasurable aid in help-
ing to bring vietery to the United Nations and
in helping to achieve the lasting peace and
economic prosperity to which we are all looking
forward.
Sincerely yours,
(Signed) Henry Morgenthau, Jr.
Secretary of the Treasury.
Generalissimo Chiang Kai-shek,
Headquarters of the Generalissimo,
Chungking, Ssechuan,
China.
(To T.V. Soong for transmittal -
by Mess. Manus 10:13 5/7/43)
Copies in Diary
Initialed copy to White
MDW:ISP1efa
5/6/43
Regraded Unclassified
120
May 6, 1943
My dear Dr. Soong:
I would appreciate it if you would
forward the enclosed letter to Generalis-
simo Chiang Kai-shek.
Yours sincerely,
(Signed) H. Morgenthau, Jr.
Dr. T. V. Soong,
Minister of Foreign Affairs,
Republic of China.
Chinese Embassy,
Washington, D. C.
By Mess. Manus 10:13 5/7/43
Copies in Diary
Copy to White
Regraded Unclassified
71
MINISTER FOR FOREIGN AFFAIRS
REPUBLIC OF CHINA
May 7, 1943
My dear Mr. Morgenthaur
Thank you for your letter of
May 6th. I shall be happy to forward the
letter you kindly enclosed for the General-
issimo.
with kind regards,
Yours sincerely,
than
The llonorable
Henry Morgenthsu, Jr.
Secretary of the Treasury
Washington, D. C.
Regraded Unclassified
122
Regraded Unclassified
PARAPHRASE OF TELEGRAM SENT
TO: American subassy, Chungking, China
DATE: May 6, 1943, 6 p.m.
NO.1 587
Ref erence is made to the subassy's cable of April 22,
no. TF-110.
sm Bu 6 28 e. 99
This is & message from the Secretary of the Treasury
for Mr. Adler.
The following is not to be discussed with the authori-
ties of the Chinese Government but is for your personal and
confidential information. Please reply immediatoly.
1. If possible you are requested to describe in more
detail the arrangements referred to in the second paragraph
of the cable under reference, You are also requested to
clarify the meaning of its last sentence "After the war the
account would be settled".
2. Has the Ministry of Finance's proposal been approved
by the Board?
3. Your views on the Ministry of rinance's proposal
would be appreciated by the Treasury. If you have already
made some indication approving this proposal, have you in
such indication gone on record as assenting to the 50 per
cent exchange compensation as reesonable and adequate?
4. Does the Ministry of Finance's proposal mean any
basic change in the attitude towards the granting of special
rates for special purposes held by the Ministry?
HULL
(FL)
/13
NOT TO BE RE-TRANSWITTED
SURY
COPY NO.
13
BRITISH LOST SECRET
U.S. SECRET
OPTEL
1943 MAY 7 NO. 148 AM 11 39
TREASURY UEVARTMENT
received up to 7 a.m., 6th Lay, 1943.
1. NAVAL
3rd/4th. 3 of His Majesty's Destroyers, off CAE BON, sank a
medium-size ship loaded with bombs, mines and motor transport, and a small
Destroyer of the Cassiopea Class (built 1936). One of our Motor Torpedo Boats
was sunk by mine in the Gulf of TUNIS on the 2nd. Further U-Boat attacks were
made yesterday and this morning on the outward Atlantic Convoy about 300 miles
South of CAPE FARE ELL. Including the three ships reported yesterday, 12 ships
have been torpedoed and 9 have sunk.
2, MILITARY
TUNISIA. 4th. 8th Aruy. Light armoured partols operated
towards SAOUAF and met enemy minefields which caused some casualties.
FRENCH SECTOR. 1st Army. Stiffening enemy opposition was cet
with considerably increased artillery activity, progress was slow. Forward
elements now established 9 miles Southeast of PONT DU FAHS across the ENFIDAVILLE
PONT DU FAHS Road.
CENTRAL SECTOR. The enemy attacked our position 38 miles South-
west of DJEBEL BOU AOUKAZ, 12 enemy tanks were knocked out and subsequently
destroyed by R.E. 2 more tanks and a tracked vehicle were also claimed knocked
out,
U.S. SECTOR. The U.S. advance continued in the MATEUR Area.
Armoured patrols gained contact with the enemy 4 miles Southeast of the town.
Further South infantry reached a point 8 miles East of DJSPEL SIDI MEFTAH with-
out contact with the enemy. French troops successfully resisted an enemy
counter-attack in the High Ground immediately North of Lake ACHKEL.
3. AIR OPERATIONS
WESTERN FRONT. 4th/5th. DORTMUND. 780 tons of H.E. and 671
tons incendiaries were dropped, including 222 4,000 lb., 73 2,000 lb. H.E. and
nearly 19,000 30 lb. incendiaries. No cloud, excellent visibility somewhat
spoilt by smoke from fires later in attack which lasted 53 minutes. Bombing
highly concentrated and considerable fires developed well. Unusually large
number of big explosions reported, 2 of them lit up aircraft at 15,000 feet.
Heavy A/A fire and many searchlights well handled. 5th. Typhoons and Spit-
fires off DIEPPE and CHERBOURG Peninsula damaged 6 ships, including a 2,500
ton armed merchantman and her 2 escorta, a 7th ship WOO left on fire. 5th/6th.
18 aircraft laid 101 mines in enemy waters, 1 aircroft missing.
TUNISIA. 4th. In cloudy weather 122 escorted bombers operated
against ZACHOUAN in support of our troops. A further 15 bombers and over 455
Fighter Sorties were flown over the battle area and in sweeps over the Culf of
TUNIS,
ITALY. Liberators dropped 22 tons on REGGIO and 14 tons at BRANTO
RUSSIA. 4th. The successful attack on KRYASKAYA was strongly
supported by Russian aircraft. The German Air Force is reported to have been
heavily defeated in this area.
BURMA. On the 3rd/4th, a total of 56 Fighters and Eedium and
Fighter-Bombers attacked railway targets in the MANDALAY Area and bridges near
MYITKYINA.
Regraded Unclassified
124
May 7, 1943
9:31 A. M.
HMJr:
Hello.
Operator:
No, they haven't heard from Miss Tully, but
Dorothy Brady is there.
HMJr:
I'll talk to her.
Operator:
All right.
HMJr:
She's fine. Hello.
Dorothy
Brady:
Mr. Secretary?
HMJr:
Hello.
B:
How are you?
HMJr:
I'm all right.
B:
What can I do for you?
HMJr:
Well, Mr. Paul is sitting here with me
....
Б:
Yes.
HMJr:
and he says that he's appearing before the
Senate Finance Committee on a tax bill
B:
Uh huh.
HMJr:
and that the thing 18 going very badly up
there
B:
Yes.
HMJr:
and if the President could call up Senator
Barkley this morning.
B:
Uh huh.
HMJr:
and tell him that - line up Senator
Barkley and his fellow Democrats 80 - otherwise
they're going to vote the Ruml plan out.
B:
Uh huh.
HMJr:
There's no interest up there whatsoever.
B:
I see.
HMJr:
All-time low.
Regraded Unclassified
- 2 -
125
B:
I see. All right. I'll get the message to
the President, Mr. Secretary.
HMJr:
I thank you.
B:
All right.
HMJr:
Goodbye.
Regraded Unclassified
126
THE UNDER SECRETARY OF THE TREASURY
WASHINGTON
May 7, 1943
CABINET MEETING
The President said that he only had one thing
to bring up, and that was a letter which he had from
the Librarian, Library of Congress, and the Archivist,
calling attention to the fact that during the last
war local records in occupied territory were pretty
much destroyed, and asking that something be done
to see that this time the records are preserved if
possible. He said he would like the Secretaries of
War and Navy and possibly the Secretary of State to
discuss this matter and give instructions to the
commanders of occupied foreign territory that the
local records, such as titles, municipal records,
etc., be preserved where it is at all practicable.
He thought this was mainly a War Department job as
the military is in charge of local Government in the
first instance.
Mr. Hull had nothing. The President asked him
to tell something about Robert in Martinique. He
said that the State Department had worked with the
Navy in its dealings with the Martinique situation;
while publicity of our control of this Frenchman had
been very favorable, yet he was of the opinion that
what they had done had been rather effective. He did
not think that this gentleman had been able to render
any assistance to Vichy or the Axis Powers. One of
the things that worried both the State Department
and the Navy is that if any attempt is made to go into
that island, all of the ships there will be scuttled
and all of our efforts will have been useless because
it is the ships that we want and nothing else.
The President asked him how the food situation
was. He said that it was not good yet he thought
that they probably could go along for some time. He
FORVICTORY
said that some one had made a. suggestion that one of
BUY
the French naval officers with the Bethouart Commission
UNITED
STATES
here in Washington be sent down there to try to swing
WAR
BONDS
the loyalty of the officers and sailors of these ships
ARB
STAMPS
Regraded Unclassified
127
- 2 -
from Robert to Giraud's cause. The President thought
this might be a good thing to do, but thought they
ought to try Guadeloupe Island first.
I had nothing, but the President said that at
his press conference he had lauded the Treasury's
efforts in the recent war financing drive; that he
said he thought it was an excellent job well done
and he was amazed at the number of people that par-
ticipated in this drive. He said he had told the
press that possibly 50,000,000 people bought bonds.
I did not know where he got the figures so I did not
question it. He said he had also told the press that
because of this $5,000,000,000 oversubscription the
Treasury would be able to put off the next drive at
least two months. I questioned this and he said he
told the press that the next drive would be September
or October. I told him I thought we would probably
have to have it not later than September,
The President said nothing at the Cabinet about
his statement about enforced savings, which came to
my attention later after talking to the Secretary on
the telephone when I had returned from Cabinet.
Mr. Stimson and Mr. Biddle had nothing, but both
said they would like to talk to the President after
Cabinet. It would seem that most of the Cabinet business
is handled in this manner, as always three or four
Cabinet members want to see the President after the
Cabinet meeting.
Mr. Ickes raised the question as to whether
Mr. Biddle wanted to discuss the memorandum he had
on deferments. Biddle said that was one of the things
he wanted to talk to the President about and the
President said that was something that was of interest
to every one and why not bring it out at the Cabinet
table. Mr. Biddle then read the statement to be issued
by the President.
Regraded Unclassified
128
- 3 -
It was a very good statement but I am not
sure that it will satisfy the hundreds of Government
employees in key positions who want to come out of
this war with some kind of war record and who are
now being detained because of their Department's
wishes. The President said that he would like to
have some examples cited in the statement without
giving any names of individuals. There was quite a
bit of discussion of the whole subject as to whether
the individuals concerned should receive a letter or
a certificate of some kind stating that they had been
deferred because of their work in branches of the
Government other than military. I believe that there
was a strong feeling around the table that this cer-
tificate or letter would not De of much service to
the individual after this war is over.
Mr. Walker had nothing.
Secretary Knox said he did not believe that it
would hurt to give the Cabinet some confidential
information. He said it was reported yesterday that
we had sunk seven submarines in the Atlantic and also
called attention to the fact that a recent convoy of
some sixty ships on its way to Europe ran into a pack
of submarines and before it was over they had sunk
five of the submarines and possibly seven.
The President then brought up the subject of
war films. He said that all of our war films are
too late to do any good and they are not being sent
to the soldiers. He called attention to "Desert
Victory" of the British, which was out just FL few
weeks after Tripolitania had fallen and was sent to
the boys at the front. He thought it was important
that the campaign in Africa be rushed, produced and
sent to the boys in Guadalcanal, and that Guadalcanal
and other area pictures be produced and sent to other
areas such as Africa, and he did not see why it needed
to take from three to six months to do it.
Regraded Unclassified
129
4
Mr. Ickes raised the question as to whether
it would not be possible for the President to
appoint a commission outside of the Government,
preferably of conservative Republicans, to pass
upon subversive cases in the Government. He said
the people whose names had been brought before the
committees in Congress had not been given a fair
hearing and he was quite certain that what was
happening was that this committee was trying to
find a certain number of cases which they could
throw Dies' way SO as to satisfy him. There was
not much agreement on this subject. I believe
Biddle was against it.
Wickard had nothing.
Jones said he had been asked by Justice Byrnes,
Mr. Brown and others to put up quite a sum of money
for subsidies and before proceeding in the matter
he would like to get the President's approval. He
did not say what the amount was or what commodities
were involved.
Mr. McNutt said that by August we will be draft-
ing married men in wholesale lots. He thought that
it was quite important that we immediately decide
what shall be done with respect to allotments and
allowances to the families. He has about 25,000
cases at the present time where married men are in
the service and their allotments, plus additional
amounts made available by the Government, are inade-
quate to sustain the families. He thinks it is im-
portant that we make up our minds as to what we
want and go get legislation before August 1.
There was some discussion as to whether this
could be on a needs test basis or whether we should
apply it uniformly. I believe there was a general
feeling that it should be applied uniformly as every
one is being paid the same amount. The President
asked them to work on the matter with the Army and
Navy and submit to him a report.
Regraded Unclassified
130
- , -
The President then said that he had run across
a couple of camps on his recent travel where the
medical officers had performed great services in
restoring psychopathic cases to normalcy and many
of them have gone back into the army. At Paris
Island, South Carolina, and Jefferson Barracks, in
missouri, the medical officers set aside a certain
part of the post, built barracks and took these
individuals out of army uniform and away from the
strict army discipline, and put them to farming. He
said they have a record of 80% cures and he thought
the Army and Navy ought to look into these two cases
and circularize all army posts with a view to estab-
lishing this as a. matter of Government. policy.
General Fleming said that a recent survey showed
there are many more automobiles being used than at
any time since rationing went into effect, and that
the speed has increased from an average of 30 miles
to well over 40, all this at a time when the gasoline
supplies are the lowest at any time.
He raised another question as to whether Govern-
ment employees could not be allowed to work 52 hours
a week with time off for shopping and other purposes,
to bring it down to the 48. In other words, he said
that the Government employees now have no time to do
their shopping and marketing and are forced to take
annual leave. He said that there was no authority
in the head of the Department to arrange for this
schedule. I told him that under the new bill that
just passed Congress and is before the President for
signature, he could permit the employees to work over
time any time during the week and give them an equiva-
lent amount of compensatory leave which would permit
them to do their shopping and marketing.
The President asked Fleming, Blandford and McNutt
to confer with Harold Smith on the matter to see if
something could be done.
Jim Landis brought up the subject of Flag Day
and said that no doubt many of the people around the
Regraded Unclassified
131
- 6 -
table would be asked to participate in different
occasions throughout the country and he hoped they
would accept these invitations and make it a real
United Nations Flag Day.
Messrs. Blandford, Nelson and Byrnes had
nothing.
DWB
Regraded Unclassified
Deeupt from
132°
Press comf.
May 7, 1943
MEMORANDUM
TO:
Secretary Morgenthau
FROM:
Mr., Schwars
SUBJECT: President's Press Conference, Friday, May 7,
1943 - 10:30 A. M.
SECOND WAR LOAN -- President Roosevelt said today
that the heavy oversubscription of the Second War Loan
very definitely decreases any need for forced savings.
He said we are coming along 80 well on a voluntary basis
that the situation is changed from what it was at the
time of his budget measage.
The President hailed one oversubscription au a grand
job, firstly on the part of the Treasury and secondly on
the part of the people of the United States. He opened
his conference by announcing that he wished to express
a word of commendation for the Treasury and that he had
the latest figures on the Drive, which the Secretary of
the Treasury had sent to him this morning. Felix Cotten
asked whether the oversubscription reduces the need for
16 billion additional dollars and the President said
there are certain totals we have got to get into the
Treasury and they haven't changed. Does it reduce the
need for increased taxes? No, the President answered,
we are 5 billions better off on the savings end and 10
pushes off the next drive by two or three months, but I
still think we need additional taxes.
The President said the reported total of
$18,300,000,000 was more than 5 billion over the goal
originally set, that more than 13 billion had come from
investors other than commercial banks, for whom the
original goal was 8 billion. He said that of the savings
of the people that were invested, 3 billion came by
direct purchase and another 3 1/2 billion through insurance
companies and savings banks, which acted in a very true
Regraded Unclassified
133
- 2 -
sense as repositories of the savings of millions of
people. The President said the people participated
to a much larger extent in the Second Loan than they
did in the first drive last December, the figures
being almost double. And since the B Bond has been
issued, the President pointed out, more than 10 bil-
lion dollars have been subscribed by more than 50
million Americans. There are 60 million people today
at work or in the armed services and five-sixths of
them own one or more bonds. The President said the
large oversubscription was excellent because it pushes
further off the date for a third drive, which the
Secretary of the Treasury originally had planned for
July and now could postpone until the end of September
or early October.
Regraded Unclassified
134
APRIL FINANCING
(In millions)
Cumulative to
May 6
May 7
Funds from banking sources:
Treasury bills
$ 800
$ 800
7/8% Certificates
2,138
2,138
2% Bonds
2,110
2,110
Total banking
5,048
5,048
Funds from non-banking sources:
7/8% Certificates
3,106
3,106
2% Bonds
2,825
2,825
2-1/2% Bonds
3,761
3,761
Series E
$1,316
Savings bonds
Series F
147
1,822
1,921
Series G
458
Tax notes
1,697
1,697
Total non-banking
13,211
13,310
Grand total
18,259
18,358
May 7, 1943
DWB
Regraded Unclassified
135
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE May 7, 1943
TO:
Secretary Morgenthau
FROM: Robert A. LeRoux
SAN FRANCISCO
While Southern California achieved its success in the Second
War Loan Bond Drive under operation of a program of conservative
campaigning, Northern California went "over the top" through
spectacular, theatrical-like methods of salesmanship, with no
angles overlooked that would create sales for the drive at hand
as well as establishing a substantial structure assuring success
for the duration.
In Northern California, showmanship was in evidence on all
sides. At labor meetings and at regular sessions of fraternal and
civic groups, sales talks were made part of the program for two
weeks. Hardly a show in Oakland and San Francisco failed to devote
some time to drawing attention to the importance of the Drive.
Rallies were held in Chinatown, as well as in the Italian and Greek
sections of the cities, and at these rallies, substantial sales were
recorded. For instance, at one of these rallies, the Greek-American
Bond sales committee sold a total of $178,000 in Bonds, while at
the meeting of California Lodge No. 163, B'Nai B'Rith, Charles
Rosenthal, Co-ordinator of the Payroll Savings Committee, San
Francisco War Savings Staff, obtained pledges of 210 members to
purchase at least one Bond each week in addition to purchases to
which they were previously pledged at their respective employment
firms.
Regraded Unclassified
- 2 -
136
It is interesting to note that at the B'Nai B'Rith rally,
Mr. Rosenthal made these pledges "legally binding" by having a
Notary Public on hand to notarize the pledges as for "the duration".
This organization is to be presented with a Treasury Flag on May 17th,
and the success achieved with this Lodge leads Mr. Rosenthal to
suggest that it might be worked out most profitable with all
fraternal organizations.
While Administrator Smyth and his associates of the War Savings
Staff are performing their labors aggressively and enthusiastically,
laboring with particular determination on the Payroll Deduction
phase of the program, one frequently hears the suggestion of how much
more could be accomplished if additional supervisory and clerical
assistance was authorized. They point to the good-will that could
be created with follow-up letters expressing appreciation for some
especial service rendered, "pats on the back" that would be returned
ten-fold in continued and renewed efforts. Men in charge of
particular divisions of the Payroll Plan contend that theirs is a
program for the "duration" and therefore they cannot afford to
overlook follow-up engles.
As was found in Utah, Nevada and Southern California, organized
labor in Northern California operates as if the Payroll Deduction
Plan was its own creation and is enthusiastically back of the Plan.
In fact, one is impressed in contacting leaders of Councils of the
A. F. L. and the C. I. 0., by the fact that Payroll Deductions are
referred to as THEIR PLAN. While heads of the C. I. 0. do manifest
resentment at some actions by the President, and while some of these
leaders "carry the torch" for John L. Lewis in the coal workers
Regraded Unclassified
137
- 3 -
controversy, they are not allowing these personal feelings to
affect their backing of the War Bond Drives and the importance of
lining up their memberships enthusiastically back of the movement.
In hardly any contact, however, is opportunity overlooked by labor
leaders and workers to severly criticize some of the rulings by
0. P. A. regarding prices on consumer goods. They claim the buying
public is being gouged right and left by profiteers and that what-
ever benefits they may have derived from higher wages are more than
offset by the higher cost of living.
"We're behind the President in the fighting of the present war,
and we're going to forget luxuries, and even necessities, to provide
the sinews with which our Commander in Chief will win, but after
this, we'll insist on waging a war against these gougers among our
own people," said one leader.
As was the case in Southern California, San Francisco and the
Bay area has been greatly agitated by the expressions in Congress
by Senator Chandler and keenly feels that the vulnerability of the
Pacific Coast should come in for greater protection by the Army
and Navy and the Administration. While this feeling may have
caused some fanatical few to withhold participation in the Second
War Bond Drive altogether and others to refrain from buying to
the extent they could have well afforded, a concerted campaign by
the Administrator and his associates and loyal volunteer workers
is said to be proving most effective.
With 75,000,000 acres in agricultural land and 100,000
farmers engaged in tilling the soil in Northern California, the
potential harvest of Bond-buying is tremendously important, and
Regraded Unclassified
138
- 4 -
Samuel J. Hume, Deputy Administrator for Agriculture, is
industriously working among farmers installing the Commodity
Check Deduction Plan and is meeting fine success with the program
suggested by Washington for the building up of adequate financial
reserves through investment in War Bonds. With hundreds of
thousands of workers to be recruited this year for agriculture from
colleges, schools and other sources, Mr. Hume is now working on
plans whereby most of the wages received by these seasonal workers
will be converted into War Bonds.
While some time was spent in interviewing management and
workers in smaller industries, contractors and their employees and
small merchants and their staffs, as well as labor leaders and heads
of labor Locals, especial attention was given to the operations of
the Permanente Shipbuilding Company yards of the Kaiser organization.
One entire day was spent at the four Richmond yards of the Kaisers,
studying the set-up for Bond sales, which are handled through the
Public Relations Division. With 29,000 workers at Yard No. 1;
33,000 at Yard No. 2; 23,000 at Yard No. 3; 4,500 at Yard No. 4;
and 7,500 at the Prefabrication plant, one therefore finds an army
of 97,000 within an area of 110 acres. Daily shows are given from
special stages at all yards both at the noon lunch hour and in the
early evening for swing shift workers, and -in addition to the
thousands who congregate at the entertainment platforms, programs
are available to all workers through loud-speakers. While the
entertainers generally are workers, special talent is recruited
from San Francisco show houses two and three times 8 week, and not
a program is given but that five minutes is given over to a talk
Regraded Unclassified
- 5 -
139
expounding the importance of the Payroll Deduction Plan for the
winning of the war. On every hand are posters, painted by Kaiser
workers, carrying the Kaiser slogan, "Torpedoes For Tojo";
monthly awards for best ideas are paid in War Bonds; special
programs are staged by fathers having sons in service; Bond purchases
among the various crafts are recorded on billboards, standing of
the crafts being shown by American Flags, with the board caption,
"Raise Your Flag"; Mother's Day campaign, with workers urged to
purchase additional $100 Bonds to present their mothers or in
memory of mothers. Regularly, programs are staged honoring "Anchor
Men", men who have been on their jobs for certain periods without
being absent or tardy. Bronze medals are given employees with such
records for six months of employment; silver medals for 12 months,
and gold medals for 18 months and over. There are now 5,000 or
more men and women proudly wearing these emblems of "Presenteeism",
a term coined by Mr. Kaiser to offset "Absenteeism". Whenever these
"Anchor Men" head the programs, War Bonds come in for particular
plays. The "Anchor Men" are now working on a plan whereby, on
Decoration Day, every "Anchor Man" will buy at least a $100 Bond.
The effect of the Bond pep talks at the Kaiser yards is
manifested at the end of each program when scores of workers call
at the adjoining Bond Booths to sign pledge cards. This week is
"War Bond Drive Week" at the Kaiser yards. The cover of "Fore 'n'
Aft", official publication, this week is carrying a War Bond cover.
Each employee receives a free copy of the magazine as he leaves the
yard. The objective of the drive this week is to bring the entire
organization within the Payroll Deduction Plan with at least 80%
participation and an average deduction of at least 10%.
Regraded Unclassified
140
- 6 -
Here are statements of some of the workers at the Kaiser yards:
(a) "Many of our workers have sons, brothers and sisters in
the service, and the least we can do is to work while they serve
and to lend our money to our Government to carry on."
(b) "I'm a riveter here, but I'm a War Bond salesman, too,
In my hours off shift, I sell life, accident and health insurance,
and every penny of my commissions goes into War Bonds. That's in
addition to the Bond I buy each pay day."
(c) "My boy is in the Navy and my daughter in the Waves, and
their old man is turning a double trick to help win the war. I'm
a boilermaker for Kaiser and off shift I sell and boost War Bonds
for Uncle Sam."
(d) "My husband quit his real estate office to become a crane.
operator. My daughter works in the yard. And thinking of my two
boys in the service, I decided I should also do useful work for the
duration, I'm on a swing shift here. And we're lending every spare
penny to our Government."
(e) "You can't win this war on what can be merely spared for
buying Bonds. All of us must sacrifice. Therefore, I'm living on
the same budget now as when I started work as a sweeper in Yard 2.
Now I'm operating a 200-ton giant roll as a boilermaker and making
twice more money, but every penny of that increase goes for Bonds."
(f) "I'm an equipment dispatcher in Yard One and I have five
brothers in the fighting forces, and I'd be a heel if I didn't
sacrifice to the limit to get them the necessary equipment. I hope
they make those fellows who are getting rich overnight by raising
food prices come through with proportionately as much as we workers
willingly lend."
Regraded Unclassified
141
- 7 -
(g) "I'm proud of the record of our family in this war.
1 work in the weld office of Yard Three. My father is defense
worker in Illinois. Three of my six brothers are in the Army and
the other three in the Navy. And I married a few weeks ago and
my hubby is in the Navy. And the nine of us are putting every
spare dime in War Bonds."
(h) "I'm an "Anchor Man" with Kaiser because I've been on
my job for 25 months without taking a day off and not once being
late. But I'm also an "Anchor Man" for Uncle Sam because I've
given him two boys in naval aviation and I'm lending him every
dollar of my wages excepting what I absolutely need for bare living
expenses. We owe it to our Country every day of the duration."
(1) "I'm a Coast Guard plant policeman. I have four boys
in the service -- one with the Medical Corps; one with the Navy,
a third with the Navy and the fourth with the Marine Corps. Fifty
cents of every dollar I get in wages is going into War Bonds and
I'll keep that up for the duration."
Another visit was to the Bethlehem Steel Company shipbuilding
yard at 20th and Illinois, San Francisco, which employs 19,500 men
and women, with approximately 92% participating in the Payroll
Deduction Plan with an average deduction of 9.8% The Plan here
was installed by Case Kellogg, 01 the Public Relations Division,
and it is functioning under the direction of W. C. Britton,
accountant and Chief of the War Bond Division. Mr. Britton has a
staff of 18 men and women devoting its work exclusively to the
War Bond program. The staff is given a "schooling" each month on
War Bonds, their cost, what they accomplish, methods and value of
Regraded Unclassified
- 8-
142
redemptions, etc. The staff has large and comfortable quarters,
and there are eight windows at which information is given out and
Bonds issued. Records show that the office has issued 700 Bonds
per hour, and on Monday, the window girls go on shift at 6:30 A.M.,
and work until 7:00 P.M. All Payroll Deduction Bonds are issued
to the buyers within eight days at most following the pay day from
which the deduction is made. As pay checks are issued five days
after completion of work, it will thus be seen that Bonds are
given out with but a delay of three days following issuance of
pay checks. Effectiveness of his organization was shown by the
fact that when I conferred with Mr. Britton on May 5th, he already
had on hand a check for $91,675.00 dated May 8th to cover bond-
purchase deductions for the Payroll of May 5th. Immediately the
money is taken from the payroll, it goes into the purchasing of
Bonds.
"After all, our Company wanted a sales organization and a
distributing office to give the employees that for which they'd
paid", said Mr. Britton. "And to insure utmost courtesy and
efficiency, we inaugurated our Bond-School, where we compound every
question that could possibly come from a Bond buyer. We have the
ammunition to battle possible cancellations, and we have finally
arranged so that cancellations can only be made through the foreman's
office. These fellows generally continue to buy Bonds, in many
instances, in a greater volume. Many workers become affected with
frayed nerves on these jobs, and to effectively handle these people,
we have had for our War Bond Staff schools films showing the various
crafts at work in the building of a ship. This gave our staff a better
Regraded Unclassified
143
- 9 -
understanding as to the intricacies of certain operations and how
these workers become affected with nervousness and must be handled
tolerantly if we're to serve our Government and our company well.
After all, our staff members should understand that War Bond sales
have created employment for them, and their employers are the men
and women buying Bonds. Our big job consists of Fighting and
Selling. In the service, they're enlisted for the duration, and
we're selling them Bonds for the duration."
Here are some statements by Bethlehem employees:
(a) "We're having a great time in our union with fellows
who come in and kick against War Bond deductions from their pay.
Our secretary tells them that we'll have to come through as long
as the war lasts and they'd better be good and do their share.
And they do."
(b) "One thing I like about the system here is that the Bond
staff sold me completely before letting me sign the pledge card.
They told me what the money was needed for; how much it cost to
run this war, and that the longer it lasted the hotter it would get
and the higher the cost. I'm loaning 20 percent of my wages now,
and when the Government needs 30 percent or 40 or more, I'm ready
because we've got a big job to do."
(c) "Lots of the men who at first refused to go on the
Payroll Plan are signing pledge cards now because they see nearly
all of their fellow-workers going to the windows cheerfully and
receiving their Bonds promptly. When it took six and eight weeks
to get a Bond, it was a tough pill to swallow, but it's all right
now."
Regraded Unclassified
144
- 10 -
(d) "They'll have to do some tall selling over again when
they put in that 20 percent withholding tax, but we're very
fortunate at that. If they'll only bring down prices on foods
and clothing to a reasonable level we'll be able to buy more Bonds."
(e) "I admire the calmness of our President in all emergencies
which have confronted him. His trips to various parts of the
Country to obtain first hand information as to our Army and Navy
are inspiring. We have the best fed, best clothed and best
equipped forces in the world, and it's doing little when we fellows
make all this possible for them."
(f) "I'm convinced, judging by expressions at the union
hall and here on the job, that the President's say so is all the
Nation needs as a command as to what is expected of us civilians.
If Roosevelt says he needs 25 or 50 percent of what we get in
wages, he'll get it."
Among other industries visited were the Marinship at Sausalito,
employing 19,000, an operation that has gone to 94% in participation
for an average of 10%; where they have a "Bond-A-Week-Club," with
all employees pledged to purchase a Bond each week in addition to
the purchase called for on the original pledge card; and where many
hundreds of employees are members of the "20-Per-Cent-Club", who
buy Bonds with one-fifth of their wages. It has now reached the
point at Marinship where 20% of the total payroll goes into War
Bonds. Then there's the Bassallt Rock Company at Napa, now building
ships, employing 1,400, which has never been below 90% participation
and 11% deduction, and the Barrett and Hilt Company, contractors
now building cement ships, whose 1,200 employees proudly point
Regraded Unclassified
- 11 -
145
to 92% participation for 10.4%. There is also the Wilmington
Transportation Company, operating ferries from San Francisco
to Richmond shipyards, whose manager prepared a sales-booklet
for his 423 employees carrying a personal letter, suggested
deductions, table of redemption values, operation of the plan, and
pledge card, effectiveness of which was attested by the fact that
within ten days, participation was 100% for deductions of 10%.
It is interesting to note that in the Bay area, 1,000,000
workers are in employment of 25 firms. There are 102 firms em-
ploying 500 or over and of these 99% are operating under the
Payroll Deduction Plan; 300 firms employ from 100 to 500 and
92% of these have the Payroll Plan, while 710 firms employ from
25 to 100, with 80% of these operating the Payroll Plan.
- 0 -
Regraded Unclassified
146
MEMORANDUM FOR THE SECRETARY.
May 7, 1943.
Mail Report
Aside from the enthusiasm and interest shown
in the Bond mail, correspondence this week was slight
and without spirit. The success of the Second War
Loan drive brought many letters commending the manner
in which it was carried out, clippings reporting over-
subscription, copies of ads, and suggestions as to
the conduct of the Third drive when that time comes.
The same excellent spirit was also reflected in
hundreds of telegrams replying to the form inquiry as
to the length of time required to deliver Bonds to
employees in industrial concerns. A number reported
that Bonds are delivered along with the checks from
which the last payments are deducted, but most of the
replies gave periods ranging from 3 days to 2 weeks,
and there were 3 or 4 which reported that the interval
was as long as 5 or 6 weeks. Many spoke of tremendously
increased employee participation since September, when
this same question had been answered. The suggestion
of using the addressograph as a means of expediting
delivery was frequently made.
Before the coal miners returned to work there
were 10 or 12 hot protests against John L. Lewis'
stand. These letters usually stated that the writer
would buy no more Bonds until the Government forced
settlement of the strike.
Outstanding among the many suggestions to further
Bond sales was the idea of a smaller Bond, usually a $10
denomination suitable as a gift or purchase by school
children, etc.
The total number of complaints from War Department
employees is up, rather than down, 80 that there seems
no improvement in the situation existing there. Last
Regraded Unclassified
147
- 2 -
Memorandum for the Secretary.
May 7, 1943.
week we had 60 complaints, this week there have
been 70.
The tax mail was surprisingly small, with about
20 endorsements of some sort of pay-as-you-go plan,
about half of these disapproving any type of forgive-
ness, and perhaps 2 or 3 protests against a 20% with-
holding tax. There were several sharp criticisms of
the inflexibility of the Tax Certificates.
Dissatisfaction with Salary Stabilization Regu-
lations brought an occasional protest. There was less
interest in the International Stabilization Fund, and
the Report of the Committee on Intergovernmental
Fiscal Relations.
Mail forwarded from the White House also fell off
during the month of April. There were 624 pieces
received in all -- considerably less than the heaviest
April, that of 1938 when 973 were received. In 1940,
however, we had only 266, and other years have had
between 450 and 500. Of the 624 received last month,
230 were rerouted, and 352 acknowledged. The former
figure represents almost entirely Bond sales suggestions,
requests for congratulatory telegrams, etc. Tax matters
ran a modest second to these, and the letters were
largely acknowledged and then passed on.
Regraded Unclassified
148
General Comments
Stephen Stanton Myrick, Inglewood, Calif. The under-
signed and wife cordially approve a world currency,
as also some kind of a Federation of the World. Please
accept our thanks for your very concrete thinking to-
ward such goals.
Moses E. Smith, Superintendent, U. S. Mint, Denver,
Colo. Your radio broadcast from Cedar Rapids was very
human and impressive. May I congratulate you.
David Levy, Young and Rubicam, Inc., N.Y.C. Now that
I am back in New York, I want you to know what a
pleasure it was to meet you and to work with you.
I speak also for the members of the staff of "We, the
People" who participated in the Cedar Rapids broad-
cast. On every side, we've heard favorable comments
about the program and particularly the manner in which
you handled 8 difficult assignment. All of us were
deeply impressed with your cooperative spirit, your
kindness and above all with your sincerity. And I do
hope I will have the pleasure of working with you
again. With kind personal regards.
Paul M. Deac, President, Americans-All, Penobscot
Building, Detroit, Mich. The German-American Central
Organization of Michigan, Inc., is offering 8. standard
field ambulance to the U. S. Armed Forces. Inasmuch
as Americans-All has handled similar arrangements for
other nationality groups in the past, the German-
American Central Organization of Michigan, Inc., has
asked us to extend them the same courtesy. Therefore,
may we request that in pursuance of the Second War
Powers Act, the enclosed manager's check of $1,607.02
be transmitted at once to the War Department in pay-
ment of the ambulance which is to be displayed Sunday,
May 16, in Detroit in the American-All parade and
rally in celebration of "I am An American Day".
Regraded Unclassified
149
- 2 -
Wasil Bowanko, Waterbury, Conn. I am herewith enclos-
ing a Money Order in the sum of one hundred dollars,
payable to your order, which sum is to be considered
a gift to the U. S. Government, and which is to be
applied to such War purposes in which the Government
is engaged as you deem advisable. I am making this
gift to the U. S. Government in appreciation of citi-
zenship which has recently been conferred upon me, and
for the many privileges which this country has given
me while I have lived here. In the meantime, I shall
continue my purchase of War Bonds to the utmost of my
financial ability.
C. F. Hummel, Secretary-Treasurer, Washington Bankers
Association, Wenatchee, Washington. The banks of North
Central Washington are seriously alarmed over the
threatened elimination of the Regional Agricultural
Credit Corporation from the fruit financing program
of this district. A special meeting of the bankers
of this area was called in Wenatchee on April 29, for
the purpose of discussing the situation. * * # The
bankers of this district recognize that the P resent
orchard financing plan has been of inestimable benefit
to the fruit industry in North Central Washington District,
and urge that it be continued with Federal funds. It is
hoped, however, that by the time the existing program
expires in 1946, the growers will be in a position to
finance their operations independent of Governmental
aid. But until that time, we ask your assistance in
maintaining the present plan of the U. S. Department
of Agriculture now in operation for grower financing.
Herbert W. Haldenstein, Wolf & Kohn, Counselors at Law,
N.Y.C. Since April 9 the Wage and Hour Division, act-
ing as agent for the National War Labor Board in the
New York Region, has refused to pass upon applications
filed on NWLB Form 1. The Salary Stabilization Unit
of the Treasury Department for the New York Region is
now also "frozen". The New York Regional Board of the
National War Labor Board is partially "frozen". No
regulations have been issued explaining what merit or
Regraded Unclassified
150
- 3 -
reclassification increases or changes in compensation
within 8. wage or salary range are permissible under
the President's Order of April 8. In almost all cases
decisions are not rendered by the National War Labor
Board for a period varying from one month to five
months. The Salary Stabilization Unit of the Treasury
Department was, until the recent "freeze" order,
practically up-to-date and acted promptly. Conse-
quently, employers have been left in a state of con-
fusion and bewilderment. Since the penalties for
error in salary or wage changes are severe, even though
the errors are made in good faith, and since it is im-
possible in most cases to obtain formal, written ad-
vice or rulings, I respectfully urge that steps be
taken promptly to remedy this unfair situation, to
arrange for prompter decisions, and to eliminate the
necessity of referring simple, non-contested cases to
Washington, and to expand the authority of the Treasury
Department and thereby relieve the National War Labor
Board.
Herlov Jorgensen, Somewhere in the Atiantic. I am a
Radio Operator in the Merchant Marine, and had the
pleasure to listen to your speech on the opening of
the Second War Loan drive. It was 8. most inspiring
speech, the best of them all, and when you had fin-
ished, I am sure that many, like myself, decided to
put forth all conceivable effort. # * I am on board
an oil tanker, belonging to the Atlantic Refining Co.
of Philadelphia, sailing under Panama flag. I am 8.
Danish citizen, but have my application in Washington
for a visa to the United States, and it is my inten-
tion to stay over here after the war. # # % There are
many men in similar situations, sailing for the U. S.
Maritime Commission. # * # Immediately after the United
States declared war, several of us officers aboard
(6 or 7 out of 9), made a request to our company to
buy War Bonds. The orders were for $50 - $100 Bonds
for each of us per month. Our Captain received the
reply, however, that the company could not fulfill
Regraded Unclassified
151
- 4 -
our wish as War Bonds could only be sold to people
having legal residence in the United States or its
possessions. Not until I heard your speech did I
realize that you are the man who can change these
rules. We have many nationalities here, but the
majority are Americans. I am certain that if we, the
officers, begin to buy war Bonds, the whole bunch of
sailors here, Americans or not, will buy Bonds. Sailors
make good money nowadays, and some (too many) of the
young men just spend it for useless things. Once the
example is set from the top, I am positive that every
one will order his monthly War Bond. Trusting that
you will take up this matter immediately, I remain
yours -- for victory sailing.
Regraded Unclassified
152
- 5 -
Favorable Comments on Bonds
Miss Edith R. Markley, Philadelphia, Pa. This letter
is written you in the hope that you will give some
publicity to the Series G War Bonds. # # # Numbers of
women, whom I do not know, have asked me at the Saving
Fund, and other places, about investing in War Bonds,
and they know nothing of the Series G. I have taken
several such women to the counter at the Saving Fund
and told the man there to explain about the Series G
on which the owner receives the interest semi-annually.
Even men at the counter for the sale of War Bonds do
not know that in the event of the death of the owner,
the full amount may be redeemed if notice of death is
given within four months of date of death. I feel
sure you would sell more Bonds if older people knew
of the Series G War Bonds. Always I hear the state-
ment that when the Bonds are redeemed, the owner will
receive 25% more than was invested. That is o.k. for
those employed.
H. V. Nocton, Captain, War Bond Committee, The Newburgh-
Beacon News, Newburgh, N.Y. Please be informed that
the employees of the Newburgh News set 8. goal of 150
extra Bonds in the Second War Loan Drive. We are happy
to inform you that we purchased 171 extra Bonds during
this drive, thereby qualifying for three jeeps.
Sidney Weil, Cincinnati, Ohio. May I congratulate you
upon the simplicity and marvelous effectiveness of the
contents of the Worker's Kit prepared for use in the
Second Loan Drive? It made any ordinary person into
an efficient order taker. # # th
Regraded Unclassified
153
- 6 -
Unfavorable Comments on Bonds
Evelyn Gould, N.Y.C. * * I bought a $25 Bond (and
so did 2 of my friends) as the entry fee for viewing
the captured Jap sub touring New York City; but I re-
ceived no receipt of any kind for the $18.75 which
I gave over to the person transacting the sale. Now,
it isn't the $18.75 that I'm worried about, but hear-
ing the remarks of many people around me, What, to
lay down $18.75 without even a receipt?". It seems to
me that with so much paper printed these days, any
2-inch piece of paper would do to inspire confidence
in the authenticity of the sale.
Beth M. McArthur, Second Officer, W.A.A.C., Assistant
Recruiting Officer, Portland Armed Forces Induction
District, Portland, Maine. % # # I think it is reflect-
ing gravely on the Government that men and women in
the service must wait 80 long for their Bonds. I have
had the following deductions from my pay: (Lists Sept.
through April) In these eight months I have not re-
ceived one Bond, or one receipt, or one word from the
Treasury Department. In voicing my opinion, I speak
not only for myself, but for many others who have had
the same experience.
Eugene B. Troy, Lemoore, Calif. I am VOX populi.
Your payroll deduction plan for selling Bonds was a
stroke of genius. Unfortunately, the administration
thereof seems to be in the hands of morons. Together
with other civil employees of the War Department,
I am still waiting for Bonds paid for last June. Our
local finance office assures us the delay is in your
City of Washington. Personally, Henry, I must allow
8. great admiration for you -- and I'm an un-reconstructed
rebel!
Regraded Unclassified
154
- 7 -
Alice G. Merrill, Cambridge, Mass. I think I speak
for the majority of New Englanders when I say we resent
your criticism of recent date concerning our War spirit
and the buying of Bonds. I am enclosing an item from
the Boston Herald which will disprove your allegations.
Incidentally, we could (and justifiably) show our
resentment at the discrimination practiced against us
on fuel, gas, meat, etc., but apparently our background
forbids. such pettiness on our part. If you recall, it
was the ancestors of the people of New England who
settled this country of ours, consequently, we inherit
the ability to make sacrifices, particularly when our
Government is in jeopardy. Can you say the same for
your ancestors?
Stanley V. Modell, Signal Corps Inspector, San Francisco,
Calif. Since the War Savings Bonds, Series E, are
issued from your office, and bear the signature of the
Secretary of the Treasury, I am bringing the matter
directly to your attention, in the hope your o ffice
can and will expedite the delivery of War Savings Bonds
due me by virtue of payroll deductions started August
15, 1942, and ending December 31, 1942. # I shall
expect a reply to this letter with some information as
to when I will receive these Bonds. I shall further
expect a refund of $300.00 if the Bonds cannot be de-
livered before I die, for I may like to get some use
of this money, or I may want to go to a local bank and
purchase the Bonds there. I am sure I could have them
in 5 minutes, where the Treasury Department cannot give
them to me in 5 months. I may add that I have receipts
from local office to which I am attached for all deduc-
tions made and signed by the Bond Officer.
Regraded Unclassified
155
- 8 -
Favorable Comment on Taxation
James A. Lawrence, Jr., Bronx, N.Y.C. Permit me to
congratulate you in regard to your stand against the
Ruml Plan. It is certainly too bad that even real
Americans in our National Government have not the far-
seeing mentality to see the ill effects of such 8.
program. I applaud the President's stand behind you
in your effort to forestall this movement.
Unfavorable Comments on Taxation
S. E. Hallagan, Captain, U.S. Army Air Corps, Fort
Myers, Fla. I'm appealing, not for a reduction in
taxes, but for a more simplified method of paying them.
The forms are 30 complicated and involved that an
ordinary citizen like myself, and I know of hundreds
of us who want to pay our share, throw up our hands
in disgust, saying, "The hell with it!" That's not
the spirit and we know it, but your complicated forms
are making us all dishonest because we don't under-
stand them. * # # So here's to you -- to throw those
"slide rule" boys out you've got around you and inject
a little common sense in the program.
Congressman Ed. V. Izac (California) forwards a letter
he has received from George H. Stone, Attorney at Law,
San Diego, California, which reads as follows: "I am
mad and I wondered if you could help relieve me.
I have just learned that Tax Anticipation Bonds pur-
chased in my name with my earnings will be received
by the Internal Revenue Department in payment of my
tax only, and not that of my wife whose sole income is
also from my earnings. Further, that of the Bonds I
purchased to pay the 1942 tax, only one-half of them
can be used for payment of my tax, and the other one-
half has to be cashed wi thout interest, and one of the
Regraded Unclassified
156
- 9 -
Bonds has two year's interest. This is 8. very silly
and unreasonable and not understandable situation and
one of the very many Government kinks that are never-
theless very irritating. Inquiry at the bank informs
me that many others are having this same trouble, so
much so that the bank is If urging people not to buy those
Bonds any more.
*
Len Bulson, Stevens Point, Wis. I did not believe we
would get mixed up in this war, but when we did get
mixed into it, I started buying a $50 War Bond every
month, that is a little more than 10% of my earnings,
but when it looked as though they were going to skip
a year's taxes, I felt like 8. coward buying Bonds, so
I quit. It just does not make sense to sell Bonds and
forgive taxes. It is all right for those people who
can make the swag during the war and skedadle to some
other country after the war. I have no complaint if
they forgive those who had an income smaller than I.
But I will buy no more Bonds to save myself and those
with larger incomes from paying taxes. It sounds too
much like that 1928 stuff that we will travel steadily
onward to greater and greater prosperity.
Regraded Unclassified
157
TREASURY DEPARTMENT
OFFICE OF THE SECRETARY
May 7. 1943
CONFIDENTIAL
Received this date from the Federal Reserve
Bank of New York, for the confidential information
of the Secretary of the Treasury, compilation for
the week ended April 28, 1943. showing dollar
disbursements out of the British Empire and French
accounts at the Federal Reserve Bank of New York
and the means by which these expenditures vere
financed.
but. E.m.B.
kma:5/8/43
Regraded Unclassified
158
c
o
P
Y
FEDERAL RESERVE BANK
OF NEV YORK
May 6. 1943
CONFIDENTIAL
Dear Mr. Secretary: Attention: Mr. H. D. White
I an enclosing our compilation for the week ended
April 28, 1943. 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,
101 L. W. Knoks
L. W. Knoke.
Vice President.
The Honorable Heary Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D. c.
Enclosure
copy:hmail5/43
Regraded Unclassified
CREDITS
Net Incr
It
Rependi-
Official
of
Other
or Door.(+)
Total
Total
ities
-
Total
I
Canadian
Other
Total
(efficial)
tralian
Credits
in 1 Funds
Debits
Credite
in
Debits
Amount
Debite
Credite
Gold
(b)
Account
(c)
(4)
(a)
(e)
(d)
1,793.2
605.6
20,9
1,166.7
1,828.2
1,356.1
52.0
3,9
416,2
+ 35.0
866,3(f)
1,095.3(f)
+299.0
2,782,3
1,425.6
20.9
1,335.8
2,793.1
2,109.5
108.0
14.5
561.1
+ 10.8
878.3
1,098.4
+220.1
2,203.0
1,792.2
3.4
407.4
2,189.8
1,193.7
274.0
16.7
705.4
- 13.2
38.9
8.8
- 30.1
"
1,235.6
904.8
7.7
223.1
1,361.5
21,8
5.5
57.6
1,276.8
+125.9
18.5
4.4
- 14.1
30
56.1
37.2
19.0
61.6
-
0.5
20.5
60.6
+ 25.5
10.1
0.4
- 9.7
-
20
46.7
27.4
-
19.3
57.5
-
-
12,0
45.5
+ 10.8
-
0.3
+ 0.3
2
96.6
35.5
-
61.1
63.7
-
-
5.5
78,2
- 12,9
0,2
0.3
+ 0.1
13.3
17.1
51.9
8,0
43.9
+ 21.5
-
-
I
30
30.4
-
-
-
3
160.6
20.9
125.0
22.7
58.9
-
-
8.0
50.9
-109.7
-
-
-
07.2
17.8
37.7
31.7
120.8
15.0
105.8
+ 33.6
-
-
-
3
-
-
IN
35.3
12.9
-
22,6
66.6
-
-
5.0
59.4
+ 29,1
-
-
-
37.0
16.3
-
20.7
87.4
-
-
15.1
72.3
+ 50.4
-
-
-
Apr. 1 Apr. 28
ENTRO: Do
12.3
3.3
-
9.0
30.8
-
-
-
30.8
+ 18.5
I
-
If
Apr. 7
14
6.6
2.3
-
4.3
33.0
-
-
13.0
20.0
+ 26.4
-
-
-
2.3
3,5
9.0
2.1
6.9
+ 3.2
-
I
21
5.8
-
-
-
-
8.4
3.9
14.6(1)
-
/
-
-
14.6(1)
+ 2.3
-
-
-
28
12.3
I
Average Wookly Expenditures Since Outbreak of War
See attached sheet for footnotes.
France (through June 19, 1940) $19.6 million
England (through June 19, 1940) $27.6 million
England (June 20, 1940 to March 12, 1941) $54.9 million
England (since March 12, 1941)
22.9 million
Regraded Unclassified
(a) Includes payments for account of British Ninistry of Supply Mission, British Supply Board, Ministry of Supply lister
Control, and Ministry of Shipping,
(b) Estimated figures based on transfers from the New Tark Agency of the Bark of Montreal, which apparently represent the
proceeds of official British sales of American securities, including Chose effected through direct negotiation. In addition
to the official selling, substantial liquidation of securities for private British account occurred, particularly during the
early months of the war, although the receipt of the proceeds at this Bank cannot be identified with any accuracy. According
to data supplied by the British Treasury and released by Secretary Morgenthan, total official and private British liquidation
of our securities through December, 1940 amounted to 0334 million.
(c) Includes about $85 million received during October, 1939 from the accounts of British authorised banks with New York banks,
presumably reflecting the requisitioning of private dollar balances. Other large transfers from such accounts since October,
1939 apparently represent current acquisitions of proceeds of exports from the sterling area and other accruing dollar
receipts.
(d) Reflects net change in all dollar holdings payable on desand or maturing in one year.
(e) For breakdown by types of debits and credits see tabulations prior to March 10, 1943.
(f) Adjusted to eliminate the effect of $20 million paid out on June 26, 1940 and returned the following day.
(g) For monthly breakdown see tebulations prior to April 23, 1941.
(h) For monthly breakdown see tabulations prior to October 8, 1941.
(1) For monthly breakdown see tabulations prior to October 14, 1942.
(j) Includes $6.1 million deposited by British Ministry of Supply, $1.4 million transferred from New York accounts of British
authorized banks, and $1.0 million held for credit of U. S. Navy abroad.
Regraded Unclassified
OF CANADIAN AND AISTRALIAN ACCOUNTS
Strictly
(In Willions of Dollars)
Nesit Ended Auril 28, 1943
Confidential
BANK
OF
CANADA (and Canadian Government)
COMMINNEALTH BANK OF AUSTRALIA (and Australian Government)
DEBITS
CREDITS
DEBITS
CREDITS
Transfers
Transfers from Official
Transfers
to
Proceeds
British A/C
Net Incr.
to
Proceeds
Net Incr.
Official
of
(+) or
Official
of
(+) or
Total
British
Others
Total
Gold
For Own
For French
Other
Decr. (-)
Total
British
Other
Total
Gold
Other
Dec. (-)
PERIOD
Debite
A/C
Debits
Credits
Sales
A/C
A/C
Credits
in Funds(d)
Debits
A/C
Debite
Credits
Sales
Credits
in $ Punds(d)
First year of war (a)
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
War period through
December, 1940
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
Second year of wur(b)
460.4
-
460.4
462.0
246.2
3.4
123,9
88.5
+ 1.6
72.2
16.7
55.5
81.2
62.9
18.3
- 9.0
Third year of war (c)
525,8
0,3
525.5
566.3
198.6
7.7
-
360.0
+ 40.5
107.2
57.4
49.8
112,2
17.2
95.0
- 5.0
1942
Sept, 3 3- Sept, 30
46.3
-
46.3
53.6
13,2
-
.
40.4
+ 7.3
28.0
20.5
7.5
18.1
-
18.1
- 9.9
Oct, 1- Octs 28
44.9
-
44.9
51.5
16.6
-
-
36.9
+ 6.6
16.1
12.0
2.3
14.6
-
14.6
+ 0.3
Oct, 29 - Dec: 2
56.5
56.5
80,8
14.4
66.6
+ 24.3
10,2
5.5
4.7
9.4
-
9,4
- 0,8
-
-
#
Dog. 3 - Dec. 30
48.2
48.2
43.9
2,9
-
-
41.0
- 4.3
14.1
8.0
6.1
11.7
-
11.7
- 2.4
-
2943
Doc. n - 3
52.5
-
52.5
217-1
-
125.0
-
92.1
+ 164.6
16.2
8.0
8.2
17.3
-
17.3
+ 1.1
Feb. - Mar. 3
35,1
+ 66.1
15,9
15.0
0,9
16.0
16.0
-
35.1
101.2
-
37.7
-
63.5
-
+ 0.1
Dar. 6- Mar. 31
36.2
-
36.2
51.6
-
51.6
+ 15.4
7.1
5.0
2.1
6.7
-
6.7
- 0.4
-
1
Apr. 1 - Apr. 28
29.0
29.0
39.6
-
-
-
39.6
+ 10.6
16.4
15.1
1.3
19.3
-
19.3
+ 2.9
-
TEXAS
9.7
12.1
-
-
12.1
+ 2.4
1.2
-
1.2
15.3
-
15.3
+ 14.1
Apr. 2
9.7
1
-
2.6
2.6
12.0
I
I
12.0
9.4
13.0
13.0
-
3.5
-
3.5
- 9.5
14
-
-
10.6
11,5
+ 0.9
2.1
2.1
-
0,1
-
11.5
0.3
- 1.8
21
10.6
-
1
E
-
6.7(e)
6.1(g)
4.0(c)
1
-
-
4.0(c).
2.1
0.1
-
0.1
0,2
I
D.Z
+ 0.1
28
-
America. Backly Ementitures
year of wid
6,2 million.
(a) For monthly breakdown see tabulations prior to April 23, 1941,
Second year of was
8.9 million.
(b) For monthly breakdown see tabulations prior to October 8, 1941.
Third year of was
10,1 million.
(c) For monthly breakdown see tabulations prior to October 12, 1942.
Fourth year of war (through April 28, 1943)
8,6 million.
(d) Reflects changes in all dollar holdings payable on demand or maturing in one year,
(e) Does not reflect transactions in short term U. S. securities.
(f) Includes $ 2.1 million deposited by War Supplies, Ltd.
(g) Includes $1.8 million tran-ferred to New York account of Canadien bank for
account of Canadian Natio-al Railway Co.
Regraded Unclassified
162
NOT TO BE RE-TRANCE ITTER
BRITISH LOST SECRET
0.5. SECRET
TREASURY DEPARTMENT
1943 MAY 8 II 29
SECRET REASURY
COPY NO.
13
OFFICE
OPTEL NO. 149
Information received up to 7 a.m., 7th May, 1943.
1. NAVAL
Russion worshipe have sunk a transport and trawler in the BARKY
SEA. On 22nd, one of H.M. Submarines sonk a schooner off N.W. SICILY and on 27t.1,
torpedoed a 6,000 ton outward bound ship off PALERLO. No more ships in the outaved
Atlantic convey have been reported sunk or damaged. There were 24 attempted attache
during the night 5th/6th, all of which were beaten off and 5 U-boats claimed cush
by escerts. Total ships sunk now 7 and 2 abandoned,
2, MILITARY
TUNISIA. To 7 p.m. 6th, 8th Army. String enemy positions were
Incated south of SAOUAF and the area astride the ENFIDAVILLE-SAQUAF road is reported
heavily mined. In the coastal sector, there vas increased enemy artillery activity
French 19th Corps. The enemy has heavily mined the area west and
southwest of PONT DU FAHS during the past few nights. Although he is poticeably
thin on the ground here, the enemy is holding well-sited positions. A French at-
tack towards ZAGHOUAN on 6th is making progress against stiff opposition.
Central Sector. On the 5th U.K. forces preceded by an intense
air and artillery bombardment attacked the DJEBEL BOU AOUKAZ feature at 5 p.m.; by
last light, all objectives had been secured and 30 prisiners were taken. Enemy
N.T. north of the feature were succersfully engaged by our ortillery end aircraft.
At 3 0.0. en 6:5 U.K. 9th Corps with Fourth Indian Division on left und Forth
British Division in right. strongly supported by air attacked north-eastwards Crom
MEDJEZ EL BAB area, Ey 10:30 n.m. the first infantry bjectives were reper cap-
tured. 6th and 7th U.K Armoured Divisions were later mased through and by 3 2.2
were within 2 miles of MASSICAULT. Enemy movement southwards through TEBOURLA vas
shelled. Ocnaiderable enemy D.T. was reported moving southwards down the DJEDEIDA-
ST. CYPRIAN road, Enomy has suffered heavy ocsualties and many prisoners taken,
Northern Sector. On the 5th the high ground north and south of
LAKE ACHKEL was elenged end about 250 prisoners taken, Stiffer resistance was met
east of MATEUR. Purther south several enemy counter attacks were repulsed and
about 50 prisoners taken, 6th, U.S. forces are now 4 miles east of LATEUR, but
further south are mesting stronger opposition. They have advanced to within 3 miles
of CHOUIGUI. The advance along the north shore of LAKE ACHKEL continued,
3, AIR OPERATIONS
WESTERN FRONT. 6th, Mustangs damaged 3 A/A ships north of TEXEL.
TUNISIA. 4th/5th. 35 Vellingtons bombed TUNIS.
SICILIAN CHANNEL. 5th. 273 escarted fighter-bember service must
"lown against shipping. One stationary merchantman was set on fire una another Fio.
BURMA. 4th, U.S. Liberators effectively attacked railway and
other objectives at TOUNGOO.
Regraded Unclassified
COPY
163
May 8, 1943
Mr. Fred B. Smith
Miss Marjorie L. Spriggs
Confirming my telephone conversation with your secretary this
afternoon, we have received the following information from Mr.
Ferdinand Kuhn of the Office of War Information, Overseas Bureau:
The portion of Secretary Morgenthau's speech with reference
to the spirit on the home front here in America was short-waved in
all major languages -- English, French, Italian, Spanish, Portuguese
and German.
The program was probably not used by medium wave from London.
Mr. Kuhn has had no definite report on this but assumes that it was
not used.
Regraded Unclassified
164
MAY 8 1943
Dear Dave:
Vell, you've done 11 again.
I have had several good reports about the
speech last Thursday, and I think I can lay such
of the success to your direction. I hope I can
count on your help when the next drive comes
along and I an elected again to - on the sir.
I would appreciate 11 if you would sand me
the names and addresses of the - you brought
along. I should like to thank them for their
contribution and for taking the trouble to
snswer this emergency call.
Sincerely yours,
Mr. David Levy
Young & Rubican, Inc.
285 Madison Avenue
New York, New York
Copies in Diary
Initialed copy to Smith
FS:cf
5-7-43
Regraded Unclassified
165
MAY 8 1943
Dear Mr. Samish:
I vast you to know that you have By
despect approciation for the vay is which
you ensvered Mr. Stanffer's call and rounded
up a radio group for us Thursday. You have
earned the gratitude of all of M.
I realise fully that such a casting job
is not normally dons in so short a time, but
the sen when you sent were able to put KoMe-
thing into the speech which took 10 out of
the category of simply a Washington presennee-
ment. I think 10 greatly increased the
effectiveness of the message.
Sincerely yours,
(Signed) H. Morgenthau, Jr
Mr. Adrian Samich
MARCH OF TIME
Time, Inc.
Time and life Building
New York, New York
Copies in Diary
FS:ef
Initialed copy to Sm1 th
5-7-43
Regraded Unclassified
166
MAY 8 1943
Dear Don:
I vant to thank you for your enthusiastic
assistance is connection with my radio speech last
Thursday.
The reports that are coming in indicate that
the speech was quite successful, and in no small
measure this is due to your quick work on the tele-
phone, and the cooperation you were able to get from
the radio men in New York.
Some time soon I should like to sit down with
you and discuss Jur entire radio.operation, partiou-
larly as 10 involves cooperation with the Office of
War Information. With such help as you gave no last
week I certainly have no complaint to make. On the
other hand, before we launch may new drives, we ought
to carefully look over everything that can contribute
to smoother operations and success.
Sincerely yours,
Mr. Donald D. Stauffer
Chief, Demestic Radio Bureau
Office of Var Information
Room 3114
Railread Retirement Building
Washington, D. 0.
File in Diary
Initialed cc to Smith
FS:ef
5-7-43
Regraded Unclassified
167
Secretary Morgenthau
Fred Smith
Stauffer has suggested that we discuss the radio problem, particularly
where it involves cooperation by the OWI. He believes he can be of great
assistance, and that there are many needless complications to our picture
here. I think it would be a good thing to do while we are reviewing our
own radio problems.
FStef
5-7-43
Regraded Unclassified
168
MAY 8 1943
Dear Mr. Rubicam:
Fred Smith has told me how generously and
promptly you responded to my request through him
to make his services available to me on a. full-time
basis for a period of six months. lie has been
very helpful to me over the past few weeks and I
know he will continue to be. I would not of course
have felt justified in asking you to give him up to
me if I had not considered what he has done and will
do a real and important contribution to the war ef-
fort, and I know that it is on that basis that you
have been willing to release him.
I want you to know how deeply I appreciate your
action and to convey my very sincere thanks. It
adds one more substantial item to the fine war ser-
vice your agency and you personally have been giving
to the Government.
Sincerely,
(Signed) H. Morgenthan. Jr.
Secretary of the Treasury.
Mr. Raymond Rubicam,
Young and Rubicam, Inc.,
285 Madison Avenue,
New York, N. Y.
Copies in Diary
Initialed 00 to Gaston
Regraded Unclassified
169
MAY 8 1943
Dear Mr. Whipples
I want to thank you, as President of the
Investment Bankers Association of America, and
your sembers for the fine cooperation and help
that you gave to us in making the Second her
Loan Drive the greatest single financing opera-
tion in all history.
- have had such evidence that the securi-
ties industry patriotically set to work on the
task of attaining our goal with energy and er
thusinem, both in organisation and education of
workers and solicitation of investors.
I an sure that the Treasury can count on
your continued ecoparation and help in future
drives, for which I an most appreciative.
Sincerely,
Mr. J. N. Whipple
President, Investment Bankers
Association of America
135 South Insulle Street
Chicago, Illinois
RBHobbs:deb 5/7/43
Regraded Unclassified
170
MAY 8 1943
Dear Georges
The totals attained in the Second War Loan Drive
clearly indicate the tremendous energy and entlusiass
with which the great army of volunteer workers &
plished the greatest single financing operation in all
history. I want to thank you, the Chairman of the
Life Insurance Coordinating Committee, for the help
given by the life insurance industry.
We have had such evidence that life underwriters
throughout the country gave unselfishly of their time
and talents as workers for the United States Treasury
War Finance Committee to make the Drive the great -
cesa that it was.
lie know that the Treasury can count on your con-
timed cooperation and help in future drives, and both
are very smoh appreciated.
Sincerely,
Mr. George L. Harrison
Chairman, Idfe Insurance
Coordinating Committee
51 Madison Avenue
New York, New York
RBHobbs:deb 5/7/43
Regraded Unclassified
171
5/8/421
Dear Marriner:
All of us here in the Treasury are delighted
with the results of the Second War Loan Drive.
Much of the success of the Drive vas due to your
counsel and guidance and I want to thank you per-
sonally, the Board. and the entire Federal Reserve
System, for your cooperation.
I an sure you will agree, however, that there
is much yet to be done in broadening distribution
among individuals who are benefiting from the In-
crease in war activities. Future campaigns will
require all the energy and ingenuity that we can
muster in order to reach the objectives you and I
know are important.
I know I can count on your continued coopera-
tion.
Sincerely,
Honorable Harrinor S. Recles,
Chairman, Board of Governors
of the Federal Reserve System
Washington, D. 0.
An
GBuffingtonidwb
5/7/43
Regraded Unclassified
172
MAY 8 1943
Dear Mr. Hendngways
Now that the final figures the the Second Mr
Loan Drive have been computed, we know that the
American people have accomplished by far the greatest
single financing operation of all time. I want to
thank you, the President of the American Bankers Asso-
ciation, for the fine cooperation given the Treasury.
The bankers of the nation played a large part in
the successful First War Lean Drive, and the results
attained in the Second was Loan Drive clearly indicate
that the bankers entered with oven greater energy and
enthusiasm their task of making this Drive the success
that it vas.
I know that we can continue to count on the fine
occperation of the American Bankers Association and its
member banks, for which we are most appreciative.
Sincerely,
Mr. W. L, Homingway
President, American Bankers
Association
Bank & Trust Co.
st. Leuis, Missouri
RBMobbs sdeb
Regraded Unclassified
173
THE AMERICAN BANKERS ASSOCIATION
OFFICE OF THE PRESIDENT
MERCANTILE-COMMERCE BANK AND TRUST Co.
ST. LOUIS, MISSOURI
W. L.HEMINGWAY
PRESIDENT
May 10, 1943
Hon. Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
Dear Mr. Secretary:
This will acknowledge receipt of your letter
mailed on May 8 to Mr. Hemingway.
He is at the present time in Mexico, where
he addressed the Mexican Bankers Association in Chihuahua
last week. We do not expect him back in Saint Louis before
the end of the month, but you may sure that your letter will
be placed before him on his return.
Very truly yours,
John Jan Hemingway
Regraded Unclassified
174
THE UNDER SECRETARY OF THE TREASURY
WASHINGTON
May 7, 1943
MEMORANDUM TO THE SECRETARY:
I believe the attached letters for your signature
to Marriner Eccles, George Harrison, Mr. Whipple and
l/r. Hemingway are the only ones that you need to send out
at this time. I thought at first that you might send one
to each of the Presidents of the Federal Reserve Banks,
but your wire of last Saturday thanked them and their
workers for their cooperation and assistance in the Second
War Loan Drive.
swB
FORVICTORY
BUY
UNITED
STATES
WAR
BONDS
AND
STAMPS
Regraded Unclassified
EWS
175
May 8, 1943
TO:
HAROLD N. GRAVES
SUBJECT:
WEEKLY REPORT FROM WAR SAVINGS STAFF
NATIONAL ORGANIZATIONS DIVISION
Labor Section
At a luncheon April 28 for business representatives
of the Building Trades Unions in Cook, Lake and DuPage
Counties, Illinois, admission to which was gained by the
purchase of a War Bond, total War Bond sales were $105,500.
The Teamsters' Unions of Chicago are sponsoring
a War Bond drive which will terminate May 30. The goal is
$250,000 in Bond purchases by local union treasuries.
Independent Teamsters Local 705 of Chicago (one of
the few independent unions of teamsters in the country) with
a membership of almost 6,000, has recently received a $5.00
per week wage increase retroactive to January 1. The union
is campaigning for members to invest a substantial part of their
back pay in War Bonds.
hoted
$ 5/12
Regraded Unclassified
176
- 2 -
NATIONAL ORGANIZATIONS DIVISION
Labor Section (Continued)
At a luncheon on April 30, member unions of the
Central Trades and Labor Council of New Orleans invested $198,250
in Second War Loan securities.
The employees of the Delta Shipyards of New Orleans
have to date invested over $6,000,000 in Payroll Savings. On
April 1, the average weekly deduction was $145,000. As a result
of a drive by the Central Trades and Labor Council, it is now
$200,000.
Employees in the Higgins Industries, who have purchased
$3,000,000 in War Bonds to date, brought their weekly average
from $50,000 to $80,000 during April and now are investing 13%
of total pay in War Bonds.
The Georgia Federation of Labor has unanimously
endorsed the building of a Liberty Ship in a Georgia shipyard
by Georgia labor, to be financed by American Federation of Labor
unions and their members through the purchase of $2,500,000 of
War Bonds.
A recently completed analysis of the Payroll Savings
records of CIO shipyard workers will be used as a basis for a
union drive to increase Payroll Savings allotments of its members.
The Amalgamated Clothing Workers of America invested
$500,000 in Treasury securities during the April drive. Purchases
by various locals and joint boards brought the total to $1,783,817.
In addition, the Amalgamated Bank of New York and the Amalgamated
Regraded Unclassified
- 3 -
177
NATIONAL ORGANIZATIONS DIVISION
Labor Section (Continued)
Trust and Savings Bank of Chicago, affiliated institutions,
purchased $3,000,000 and $1,000,000 of Bonds, respectively.
United Automobile, Aircraft, and Agricultural Implement
Workers of America (CIO) invested $50,000 in Treasury securities
during the April drive. As of April 30, Local Unions of this
organization had invested approximately $2,000,000 in Second War
Loan Bonds.
Textile Workers Union of America (CIO) purchased $121,074
worth of Bonds during the April drive, while Local Unions invested
$125,000.
Of the Elgin, Joliet, and Eastern Railroad's 6,096
employees, 88% were participating to the extent of 9.74 of gross
payroll on March 31.
Payroll Savings on the Illinois Central System for the
month of February showed 73.2% participation and 4% deductions
from gross payroll.
The Colorado and Southern Railway Company's March Payroll
Savings report shows deductions from gross payroll of 8.4%.
Business and Trade Association Section
Eighteen member firms of the Toilet Goods Manufacturers
Association invested $1,396,500 in Second War Loan securities
during April.
Regraded Unclassified
- 4 -
178
NATIONAL ORGANIZATIONS DIVISION
Business and Trade Association Section (Continued)
Nine member firms of the Lead Industries Association
invested $9,032,725 in Second War Loan securities.
The National Confectioners Association is developing
a plan for a nation-wide War Bond program in the confectionery
industry. The plan will probably include the promotion of
"Candy War Bond Auctions" at various distributing points
throughout the country, at which jobbers will bid in War Bonds
for "ex-quota candy". Candy auctions held in Chicago on
April 16 and in St. Louis on April 19 resulted in sales of
$370,000 and $257,000, respectively.
Nine members of the Northern Hemlock and Hardwood
Association, operating in Wisconsin and the Upper Peninsula of
Michigan, invested $324,125 in Second War Loan securities.
Foreign Origin Section
The Office of War Information has asked the Foreign
Origin Section to cooperate in the program for United Nations'
Day (Flag Day) on June 14. Plans for enlisting the support
of foreign origin groups in the Flag Day program are being
developed.
Plans for celebration of "I Am An American Day" have
been completed through this Section for Los Angeles, San Francisco,
Seattle, Portland and Dallas. Similar programs for many other
large cities are being developed.
Regraded Unclassified
- 5 -
179
NATIONAL ORGANIZATIONS DIVISION (Continued)
Fraternal Section
Incomplete returns, as of May 4, show that the Knights
of Columbus $25,000,000 War Bond Campaign went over its quota
by $6,000,000, representing a per capita sale to the 400,000
members of approximately $77.50.
During July, B'nai B'rith District #2, which covers
the North Central States, will inaugurate a $12,000,000 War Bond
campaign.
Inter-Racial Section
A mass meeting was held on April 20 at the Negro Public
School Auditorium in Newport News to present an award of merit to
the employees (mostly Negro) of the Newport News Shipbuilding
and Drydock Company, in recognition of their record of 95%
participation in Payroll Savings and 9% of gross payroll invested.
Governor F. W. Dowden, of Virginia, presented the award. The
principal speaker at the ceremony was a representative from the
inter-racial section.
FIELD DIVISION
Women's Section
As the result of a conference with a representative of
this Section, the Garden Club of America in New York is
mimeographing a suggested War Savings program for distribution to
member clubs throughout the country.
Regraded Unclassified
- 6 -
180
FIELD DIVISION
Women's Section (Continued)
Material on the progress of the "Outfit The Outfit"
program was supplied to the Ladies' Home Journal at their
request, for use in the magazine.
Retail Section
Attached outlines are typical retailer cooperation
in 8 cities during the Second War Loan Drive. (Attachment #1)
Agricultural Section
Secretary of Agriculture Claude Wickard devoted his
regular portion of the National Farm and Home Hour broadcast
on April 30 to "A Savings Plan For Post-War Farm Needs." He
urged farm people to invest in War Bonds to help finance the
war, to help curb inflation, and especially to build reserves
with which to buy farm and home equipment and other necessities
after the war.
The chairman of the Delaware Agricultural War Savings
Staff Committee, who is also a director of the state's
Agricultural Extension Service, sent all neighborhood leaders
a letter which included "A Message To The American Farmer" by
Secretary Morgenthau, and which also urged them to support
the War Bond program in their contacts with their neighbors.
The Nebraska AAA chairman, Abner K. Chestem, has
written urging all Nebraska AAA committeemen to do everything
they can to increase War Bond sales among farm people.
Regraded Unclassified
- 7 -
181
FIELD DIVISION
Agricultural Section (Continued)
Both the Oregon State Administrator and Morton Tompkins,
master of the Oregon State Grange, have written 13,000 Grange
members in the state suggesting Grange funds be put in Bonds
and that members with savings accounts put as much as possible
in Bonds.
The National Association of Rural Electrification
Cooperatives is developing plans to sponsor a "Buy A Bomber"
campaign among member cooperatives.
The American Farm Bureau Federation is urging state
farm bureau organizations to cooperate with State Administrators.
The Farm Credit Administration has been sending War
Savings literature to its local production credit associations
and national farm loan associations for distribution to their
borrowers. In most areas both types of associations are issuing
agents, and have sold several million dollars worth of Bonds in
connection with "Victory Pig" sales and other related activities.
Education Section
Faculty and student representatives of sixteen colleges
and universities participated in the War Savings Conference held
at the University of Virginia on April 30. Resulting recommendations
for cooperation in the War Savings program by colleges will be
mimeographed and sent out to other state education committees.
Regraded Unclassified
- 8 -
182
FIELD DIVISION
Education Section (Continued)
In Birmingham, Alabama, April War Savings purchases
through the schools totalled $250,000 -- almost twice the
amount purchased from September through March. In Passaic, N.J.,
the schools bought Bonds to pay for 138 jeeps, which is 1/3
of the school jeep quota for the entire state. With a jeep
quota of 113, Kansas schools purchased 1400 jeeps.
A special broadcast of the new War Savings radio
script, "There Are No Little Things", was presented recently at
one of the general sessions of the Association for Education by
Radio.
One-thousand copies of the film-strip, "The Story of
Billy Dollar", are being distributed to elementary schools through
the Society for Visual Education, Inc. The strip consists of 25
pictures prepared for a 16 mm. machine and designed for classroom
use. It is accompanied by a suggested script to be read by the
teacher or by pupils, as well as topics for classroom discussion
and activities. (Attachment #2)
Motion Pictures and Special Events Section
The Special Events Section furnished the following
personalities during the past two weeks: For the "Four Freedoms"
show at the Hecht Company, Washington, D. C. -- Anna Kaskas and
Lansing Hatfield, Metropolitan Opera stars; Bob Ripley, "Believe It
Or Not"; Irving S. Cobb, author; Ted Straeter, orchestra leader;
Regraded Unclassified
- 9 -
183
FIELD DIVISION
Motion Pictures and Special Events Section (Continued)
Col. C. B. Adair, Army Air Forces; Marjorie Gainsworth, singing
star; Martin Agronsky and Earl Godwin, news commentators. For
"Freedom's Corner" at Gimbels', Philadelphia, Pa. -- Lucy Monroe,
singing star. For War Bond Rally in Austin, Texas - - Anna Lee
and Mary Brian, movie stars.
War Bond subjects were carried by Universal, Movietone,
and Paramount News this past week.
The Spokane, Washington, broadcast of "Truth or
Consequences", booked through this Section, resulted in Bond
sales of $7,518,830.
Attached are Chinese newspapers carrying War Bond
advertisements. (Attachment #3)
The Motion Picture Committee for Hollywood is running
special War Bond advertisements in many California trade
papers. (Attachment #4)
Payroll Savings Section
The attached list of companies have been reported as
having achieved the goal of 10% during the past week. (Attachment #5)
Attached is the analysis of exposure to payroll savings
plans of April 24, 1943. (Attachment #6)
The Consolidated Steel Corp., Ltd., Shipbuilding Division,
Orange, Texas, with approximately 17,000 employees, reports over 18%
of gross payroll being invested regularly in War Bonds. A special
Regraded Unclassified
- 10 -
184
FIELD DIVISION
Payroll Savings Section (Continued)
April drive boosted this percentage for the five-week period
beginning April 19, 1943, to over 271% of their gross payroll.
Employees of the Steel Recover Corp., Pittsburgh, who
achieved the 90% and 10% goals in February, 1943, now have over
98% participation with 15% of gross payroll being invested in
War Bonds.
Every employee of the Missouri Valley Bridge & Iron
Company last week invested his entire week's pay in War Bonds.
For the past several months these employees have maintained an
average of over 14% of gross payroll invested in Payroll Savings.
Field Memoranda
Recent memoranda sent to the field include numbers
599, 600, 601, 602, 603, and 604. (Attachment #7)
Special Activities Section
Vineland, N. J., bought over $2,000,000 in Second War
Loan securities, or $225 per capita. This is over twice the
quota allocated to it for April. Vineland has always over-
subscribed its monthly goals. Its plan of War Savings
organization has been published by the New Jersey War Savings
Staff as a pattern for other cities to follow.
Personal appearances in Brooklyn plants and factories
by members of the Brooklyn Dodgers baseball team accounted for
more than $75,000,000 of the $180,000,000 in War Bonds sold in
April in Kings County, New York. The Second War Loan quota for
Regraded Unclassified
- 11 -
185
FIELD DIVISION
Special Activities Section (Continued)
Kings County was $95,000,000.
The Virginia American Legion and Auxiliary will
spearhead the State's June campaign. Every Legion Post in
Virginia will be given a June quota.
The Connecticut War Savings Staff has developed an
industrial radio quiz broadcast that is conducted among employees
in the plants themselves. The plan will this month be adopted
throughout the state to stimulate Payroll Savings. The
broadcasts entail no expense to the War Savings Staff, as the
radio station's cooperation is gratis and the employers meet
other expenses, including Stamp and Bond prizes for employees
participating.
Bakery workers of New York's local 50, A.F. of L, in the
year ending April 15th devoted over a million and a half dollars
to Payroll Savings. Last week, when this annual Payroll
Savings report was made, the Union voted to set a goal of two
million dollars for the next twelve months.
At Kingsport, Tennessee, a War Bond rally on Sunday,
April 25, featured the Mutual Broadcasting Company's "Stars &
Stripes In Britain" program, which was dedicated to Kingsport
on that day. Two local servicemen with our forces in Britain
talked to the folks back home at the rally. Approximately $45,000
in War Bond sales were realized. Mutual's foreign broadcast
service is now being offered to State Administrators as & regular
Regraded Unclassified
- 12 -
186
FIELD DIVISION
Special Activities Section (Continued)
Sunday War Bond feature.
RADIO, PRESS AND ADVERTISING DIVISION
Radio Section
Secretary Morgenthau spoke over the CBS network
Thursday, May 6th, 10:30 - 10:45 P.M. His message included thanks
to the workers in the Second War Loan Drive.
William S. Robbins, Assistant to the Secretary, spoke
at the annual meeting of the National Association of Mutual
Savings Banks in New York May 6th. his talk, "The Financial
Mobilization of America", was broadcast over the NBC network.
War Bond sales amounted to $11,190,045.00 as a result
of the special Treasury Department Concert conducted by Arturo
Toscanini on Easter Sunday, April 25th. The manuscript of
Toscanini's original arrangement of "The Star Spangled Banner"
was offered to the highest bidder in War Bond purchases and went
to the purchaser of $1,000,000 in War Bonds.
Radio Station WBYN, New York City, in conjunction with
the Village Barn night club, sold $100,000 in War Bonds in one
evening. Admission was by purchase of War Bonds.
"The Parker Family" admitted a studio audience for the
first time April 30th, when the first purchaser of a $100 War Bond
was permitted to select and invite the guests to the broadcast.
Regraded Unclassified
- 13 -
187
RADIO, PRESS AND ADVERTISING DIVISION
Radio Section (Continued)
A three-hour musical fete by ten of radio's top-ranking
dance bands was broadcast May 1, over WEAF in a War Bond Rally
in Central Park, New York City.
Advertising Section
Previous estimates of volume of Second War Loan news-
paper advertising were too low, as evidenced by tear sheets
returned through the Advertising Checking Bureau. It is now
clear total lineage will approximate 60,000,000 agate lines, the
equivalent of 25,000 full pages of daily newspaper space.
The post-drive "continuing campaign" is increasing
daily. On May 6 the New England Newspaper Advertising Executives
Association wired that at their meeting this week over half the
papers represented had started, or were preparing to start, the
52-week War Bond page selling plan. They stated that there was
urgent need for them to be supplied with at least two pages
weekly and asked whether or not the Treasury was going to supply
them with 2 mats per week. This association includes about
one hundred important daily newspapers in the New England area.
Five full-page advertisements and five small newspaper
advertisements for May are already out. Future advertisements,
featuring Payroll Savings and anticipating the effect on Bond
sales of the withholding tax, are now being prepared by the
Advertising Council. Some 6,000 daily and weekly newspapers now
Regraded Unclassified
- 14 -
188
RADIO, PRESS AND ADVERTISING DIVISION
Advertising Section (Continued)
carry our regular War Bond advertising.
The American Association of Advertising Agencies
has submitted a request for 450 extra copies of the National
Advertising Portfolio, to be distributed to their member
advertising agencies throughout the country to promote War Bond
advertisements under local sponsorship.
Policy-making officials of the Treasury and the War
Savings Staff met with research experts in New York during the
past week to discuss a proposed research study by Dr. Likert.
As a result of conferences in Washington, the Timken
Roller Bearing Company has now scheduled a campaign of twelve
full pages in the Saturday Evening Post.
During the week of April 26 we received 99 War Bond
mentions and 6 complete ads all together in Collier's, Liberty,
Life, Newsweek, New Yorker, Saturday Evening Post, and Time.
Attached is & list of the War Bond advertisers and the publications
they used. (Attachment #8)
Attached is a color photograph of the War Bond copy
painted on trucks of the Kentucky Acres Dairy of Crestwood, Kentucky.
Attachment #9)
Attached are illustrations of posters distributed by
the makers of Double Cola. (Attachment #10)
Attached is e copy of a corner single-sheet, 50,000 of
Regraded Unclassified
- 15 -
189
RADIO, PRESS AND ADVERTISING DIVISION
Advertising Section (Continued)
which have been produced for use on outdoor 24-sheet billboard
structures. (Attachment #11)
Press Section
Attached 1s a proof of 24 new features in the
"What You Buy With War Bonds" series. These were released to
all dailies and mat-using weeklies. (Attachment #12)
Attached is a 20-page edition of the War Savings Staff
News, sent to all newspaper editors and publishers, thanking them
for their support of the Second War Loan, giving examples of that
support, and pointing out that the War Bond publicity samples
from other papers might suggest ideas for features for their own
publication. (Attachment #13)
A special story was arranged for and carried by the
Times Herald, featuring Mrs. Morgenthau's War Stamp table centerpiece.
A round-up statement was prepared for Mr. Harold N.
Graves' signature, at the request of OWI, covering the first two
years of the War Savings program, for short-wave broadcast.
Material was prepared for a speech by Mr. Graves over
the Mutual Network's "Saturday Night Bond Wagon".
A speech was written for Mr. Robbins for B. quarter hour
broadcast over the National Broadcasting Company network.
Attached are five examples of the use of War Bond mentions
on book jackets. (Attachment #14)
Regraded Unclassified
190
- 16 -
RADIO, PRESS AND ADVERTISING DIVISION
Press Section (Continued)
Attached are tear sheets from a recent issue of
POPULAR PHOTOGRAPHY promoting War Bonds photographs featuring
the "Four Freedoms". (Attachment #15)
The two attached movie magazines carry seven War
Bond mentions. (Attachment #16)
The attached issue of RADIO MIRROR carries two
"Penny Wise" boxes. (Attachment #17)
The May issue of MADEMOISELLE carries the Mother's
Day War Stamp corsage. (Attachment #18)
The May issues of PERSONAL ROMANCES, TRUE EXPERIENCES,
TRUE STORY and the April issue of TRUE EXPERIENCES carry ten
War Bond mentions. (Attachment #19)
The March issue of LIBERTY carries a one-column
article containing War Bond copy and also a cartoon based on
the War Bond theme. (Attachment #20)
The April 17 issue of THE SATURDAY EVENING POST carries
an editorial stressing the importance of War Bond purchases to
combat inflation. (Attachment #21)
The March issue of McCALL'S carries a picture and
copy on War Bonds. (Attachment #22)
OFFICE OF THE EXECUTIVE DIRECTOR
Promotional Research Section
Attached is the analysis of newspapers using the
carrier plan as of May 6, 1943. (Attachment #23)
Regraded Unclassified
- 17 -
191
OFFICE OF THE EXECUTIVE DIRECTOR
Promotional Research Section (Continued)
Attached is the analysis of redemptions of all series
E, F, and G Bonds through April 1943. (Attachment #24)
192
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE May 8, 1943
TO:
Secretary Morgenthau
FROM: Mr. Waldman
"If the Government doesn't really do something soon about
rolling back prices there'll be hell to pay. The men want eats
for themselves and their families at decent prices
This statement was made by one of the approximately 52
shipyard workers with whom I spoke between May 5 and May 8, in
my tour of 13 shipyards in Camden, New Jersey, the metropolitan
New York area and Newburgh, New York, and described the feeling
of the men (with whom I spoke) in twelve of those sixteen shipyards.
The feeling was less vehement in the remaining four shipyards; and
least vehement among the shipyard workers of Newburgh, New York.
The main preoccupation among the workers in the three
Bethlehem shipyards I visited (one in Hoboken and two in Brooklyn,
New York), however, had to do with labor-management relations.
These shipyards do work for the Navy and the Maritime Commission.
From what the workers said, relations between management and
labor at the Bethlehem yards could not be worse. At all three
yards, the workingmen charged that, if management willed, production
would be improved tremendously. Following are some statements
made by workers in the Bethlehem shipyards:
BETHLEHEM, HOBOKEN (Navy, Maritime and Army)
"Seventy-five men who broke a minor rule were told to lay off
work for three days. Sure
these men should have been punished
Regraded Unclassified
- 2 -
193
but not by laying them off. That's a big waste of man hours."
"The men 'shape-up' every day." (This means that the men
report for work every day and may or may not work, depending on
which ones are picked out by the foreman to work on that day.)
"If a man does not 'shape-up' on any day, then the next day --
when he does 'shape-up' -- he is told by the foreman that he will
not get any work for from two to eight days. It does not matter
if that day you do not shape-up is a religious holiday - such as
a Jewish holiday or Christmas." "And," commented this man, "how
can they expect you to shape-up for a 10-hour day, seven days a
week? A man has got to have e day off once every other week or 80.
Why, they give vacations in the Government, don't they...? The
way the Bethlehem Company handles shaping-up it hurts the morale
of the workers...'
"The management brings in a lot of young guys as supervisors.
We call them 'fugitives from Ft. Dix.' Most of these guys don't
know one end of a ship from the other... A man with experience
in the shipyards can't get to be a supervisor. Only the manage-
ment can name supervisors and they bring in a lot of young guys
who've got influence... This doesn't help morale either..."
"They don't have any advancement system at Bethlehem. That
means you stay what you are when you start in at the yards, no
matter how much you learn. You can stay at the same job in the
yards for 15 years..."
"There's what we call a bunch of 'Dutchmen' in foremen's jobs.
These men are enemy aliens, and the management got to keep them by
posting bonds. But the management would not help to keep on
Regraded Unclassified
- 3 -
194
ordinary workers who were enemy aliens, even if they knew they
were loyal. This bunch of 'Dutchmen' work as a tight little bunch
and play favorites. And they're in charge of the machine shop.
If they wanted to they could really do a job of sabotage. As it
is, what with their favoritism and going out to a saloon for a
drink in the middle of the day -- about which nobody says anything --
they're hurting morale
"
"What it all adds up to is that the management is 100% hostile
to labor If
"Sure we like to buy War Bonds ... to help win the war and to
save money
...
We buy as many as possible 'irrespective' of the
management. But we don't like to buy them through payroll savings
at Bethlehem. You got to wait two months or more to get your Bonds
through payroll savings at Bethlehem
If
"The company holds onto our dough to collect interest on it
"No.
that's not it, another man said. "It's because all
the payroll savings Bonds at all the Bethlehem yards clear through
the home office. That's what takes up all the time..."
"Well
I don't like to wait two months or more to get my
...
Bonds. I'd rather buy them at the post office
(All agreed at this point that, under payroll savings, they
would buy more Bonds than if they bought them at the post office
or bank.)
At this point one of the men brought up the payroll savings
case of the East Coast Shipyards, in Bayonne, New Jersey,
(Maritime) where he had worked. This shipyard was known formerly,
lie said, as the Marine Maintenance Corporation. Said he: "The
Regraded Unclassified
- 4 -
195
president and treasurer of this firm were indicted by the Government
and all the company's assets were confiscated. Among these assets
were about $13,000 of payroll savings-War Bond money ... belonging
to the men. These men don't know where they stand on their payroll
savings Bonds. These Bonds were due from last November
Right
now, this yard is building up again but the Bond drive there is
sour due to the men not knowing what happened to their $13,000 in
Bond money
"After July 1, when they start deducting 20% for income tax
the Bond drive is going to suffer. Just look at the way that 20%
adds onto deductions for social security, state unemployment, the
Bethlehem Company's relief plan and then consider the way prices
are going
Where are the men in the lower pay brackets going to
find the money to buy Bonds
They won't have money to eat
decently and feed their families
The mention by this man of the Bethlehem Company's relief
plan touched off considerable comment. It seems that, under this
relief plan, the men pay $1.50 to $2.00 a month, depending on what
they earn. "But," the men complained, "if you pay into the relief
plan for 15 years -- or more -- and then get laid off or quit to go
to another job you get nothing back. A man must join up in the
company's relief plan or get fired: It does not matter that he
may have his own policy If
"No matter what the records say, the production record at
this plant could be much better
Ships on which we work are
overloaded with men
not because they are needed but because
the Government pays for it...
And a man is not 'shaped-up' because
Regraded Unclassified
- 5 -
196
he's had a lot of experience but because the foreman wants him.
There's nothing like a seniority method of hiring workers
11
"Speaking of production
...
if a man makes a suggestion for
speeding up production he doesn't get a pat on the back or anything
like that ... he gets fired..."
"The way they work now, the Navy says do it one way, the Army
comes in and says do it another and then the Maritime Commission
says do it a third way
We spend too much time setting up and
tearing down jobs..."
"And this company 'rigs' prices against the Government
We've got all the facts on this
We went down to Washington and
told the Maritime Commission about it but nothing happened.
Right
now they're charging the Navy $4,000 for cleaning out two holds.
That's just a sweeping job. And they charge $750 for swinging a
gangplank into place. And they charge men's time to the Navy when
these men are working on a private job And, if you don't think
all this has an effect, when a Bond drive starts and the men are
asked to buy more Bonds ... then you're crazy!"
"And there's another thing," one of the Bethlehem-Hoboken
men added, "these Navy inspectors -- they act and talk as though
they were working for Bethlehem and not for the Government
Lots of them, besides, don't know bow from stern of a ship...!"
At this point a night-shift worker entered the room and the
conversation. He brought up the subject of eating facilities for
night-shift workers, of whom there are about 6,000. Said he:
"Rating facilities for night-shift workers are terrible. Most
restaurants around here are closed at night. Bethlehem has a
Regraded Unclassified
- 6 -
197
restaurant here at the yard but won't keep it open at night -- even
though we've gone to the management and told the management that
we'll guarantee any and all losses for operating the restaurant
at night
"What it all amounts to," said the local union official,
"is that the management knows it's got us over 8 barrel. We've
got a no-strike pledge in our contract. And we won't strike if
there is anything we can do to keep from striking. But, if things
keep on as they are, you'll see the biggest wave of strikes you can
imagine in the Bethlehem shipyards
BETHLEHEM, BROOKLYN
27th St. and 56th St. Shipyards -- (Navy and Maritime)
There were the same bitter comments, by workers at the two
Bethlehem Brooklyn yards, on Bethlehem's "relief plan".
Workers at the 56th Street Bethlehem yards were more vocal
than workers at the other two Bethlehem yards on the question of
safety precautions -- which they said were very lax. The workers
blamed this laxness on the fact that the management did not
cooperate with the union committee. Specifically, the workers said
that there were not enough lights in the yards, and that men fell
down "holds" due to this lack, causing many injuries.
There was also bitter comment by the Bethlehem, Brooklyn
workers, on the lack of toilets for the men. The men said that
there were only ten "seats" for 4,900 men.
As was true of the Bethlehem, Hoboken workers, the Bethlehem,
Brooklyn workers commented on the freedom with which men were leid
off for a week's time, for minor omissions: "How come, if our labor
in building ships is so needed to help win the war...?"
Regraded Unclassified
- 7 -
198
As at Bethlehem, Hoboken, there is no advancement system at
the Bethlehem yards in Brooklyn. This also seems to be a sore point
with the Bethlehem, Brooklyn workers -- who also commented on the
management's bringing in young, inexperienced men for the best-
paying supervisory jobs.
The Bethlehem, Brooklyn workers also complained about the long
wait for Bonds bought through the company's payroll savings plan.
Again several of the men commented that the company was holding
onto their money to use it for its own ends. Two of these men said
they had paid up for Bonds in February and got them just the other
day. A number of these men said they either had dropped out of the
payroll savings plan or were planning to do so, due to this delay.
Though the men agreed that they would buy more Bonds through
payroll savings they said they would rather buy their Bonds from
the post office because there was no wait.
At only one other shipyard (Federal, Kearny, New Jersey) was
there as bitter expression on the subject of high prices and the
cost of living. The men at the Bethlehem Brooklyn yards offered
such examples as 34 cents a pound for string beans and 11 cents
a pound for potatoes when you could find a store which had them.
And, they said, none of the stores seemed to have any meat -- though
you could get all you wanted at expensive restaurants in the area;
if you could afford to pay the price. The food at the low-cost
restaurants near the yards was very bad, they said.
The Bethlehem, Brooklyn workers also were vociferous (as at
Bethlehem, Hoboken) on the subject of vacations. "Take a day off
and you get laid off for a week," they said. "In order to get a
Regraded Unclassified
- 8 -
199
week's vacation a man has to work three years for Bethlehem
At this point a welder entered into the conversation and
brought up other complaints, with which the men agreed; "At the
56th Street shipyard, where I work, there are no lockers for 70%
of the men. That means we have to go home dirty. And, because
we've got no lockers in which to put our lunches, the rats get into
our food and we have to throw it away
"
Another welder, who followed the first one into the conversation,
said: "now about suction blowers in the holds, to keep us welders
from getting gas poisoning? I just got back from a week's sickness
because of gas poinsoning. We ought to have suction blowers in the
holds to draw off the fumes from our welding work. Lots of us
welders get gas poisoning It isn't just a matter of our health,
it's also important to keeping up production
"But the most important thing is to roll the prices back and
put price limits on food," said a pipe fitter.
"And we shipyard workers need more ration points. We do hard,
tough work, and we need more to eat
...
And we need more shoes than
three pair a year. This work uses up shoes "
"It takes too much time to get out of the plant, and the food
is lousy at these restaurants around the plant," said another.
"No have a shanty in the yard, where they sell sandwishes, but we
want St restaurant inside the yard
#
"I'd like to bring up a point about War Bonds," another said.
"Of course, we buy War Bonds
to help out the country. But how
about the way this Bethlehem management does? They put kids who
don't to know anything in as "snappers" (foremen and/or supervisors)
Regraded Unclassified
- 9 -
200
and they won't let an experienced man be a snapper ... You know
why? To keep down production! Hell, this yard doesn't want
production. One day you put up a job and you tear it down the next.
You know why they don't want better production? Because they make
more money this way!"
"Sure," said another man. "If material ... like a five foot
length of cable is left over it's wasted. It's thrown to the
'junkie', even if it's needed on another job. All they do with
that wastage is charge it to the first job and let it go at that."
"And," said another, "men are charged to the Navy even when
they are working on a private job." (As was charged at Hoboken.)
"Say, we could boost production 100% if the management wanted
to," one worker said. "And, about those Army and Navy inspectors,
lots of whom have never seen a ship before, they ought to be
shifted around and not let to stay in one place. After they stay
here a while you can't tell them from a Bethlehem boss, the way
they talk and act..."
Following this, there was a discussion of the pay-as-you-go
income tax, and one of the men said that "when they start deducting
20% for income tax, along with all the other deductions, I won't
have the money to buy Bonds ... if I want to be able to feed myself
and my family
It was during this discussion that one of the Bethlehem,
Brooklyn men made the statement which leads off this report.
FEDERAL SHIPYARDS -- Kearny, New Jersey (28,000 men)
and PORT NEWARK (8,000 - 10,000 men)
MARITIME
The dozen or so shipyard workers with whom I spoke, from these
yards, were more War Bond and war conscious than the others.
Regraded Unclassified
201
- 10 -
They were agreed that labor-management relations were excelled
and they must and would do everything possible to help win the war.
But they were disgruhtled and disturbed about the rise in prices
and the cost of living.
"The payroll savings plan works fine," one man said, and the
others agreed with him. (The yard is an issuing agent and the men
get their Bonds 8 to 10 days after their money is in.) "Where I
work," he said, "at Kearny, we've bought more than ten and a half
million dollars worth of Bonds. And, along with payroll savings,
we've got Bond booths on the grounds. Ninety-eight percent of the
men are signed up in payroll savings
"But that cost of living," another said. "A man in the lower
brackets
...
making about $42.50 a week
...
just can't seem to make
out. And we guys in the lower brackets are buying Bonds, don't
forget that! But that cost of living is making it tough. My wife
started complaining to me about two weeks ago ... she just can't
make out and feed the family on what I make
..."
(At this point
four or five of the other men laughed and said the same thing.)
"She made me go shopping with her. We were lucky to be able to buy
some fish. It cost 60 cents a pound. A year ago, my wife says, it
cost her 18 cents a pound. We got a head of lettuce, for 19 cents.
A year ago it was 5 cents. We wanted to get some peas. They cost
65 cents a pound!"
"It's the black market as well as price boosting which is
causing the trouble," another said. "Sometimes my wife can't get
out to shop ... because the kids are sick or something ... and I
have to try and buy on my way home. But I just can't find anything
in the stores If
Regraded Unclassified
202
- 11 -
"our kids are not getting the green vegetables they need,"
8 worker said. "Our women can't afford to buy them. And, believe
you me, our women are sore about that..."
"And what are we going to do when they start deducting 20%
from our pay for income taxes," 8. machinist said. "I make better
money than most of the men. I get $59 a week, for a six-day week.
I don't live like a king. But here are my expenses: $42 8. month
for rent; $12 on a monthly average for fuel; $1.40 a month for
insurance; something else for gas and electricity ...
Hell, add
in what I put out for Bonds and I find that I've got to draw out
a little bit regularly from my savings account to fill out my
food bills
When that 20% tax goes through I'm going to have to
cut out buying Bonds on the payroll plan.
H
"The men don't like these prices shooting up. They don't think
it's fair. That isn't helping their morale
"You know what?" another said. "Labor would be better off
being drafted. Say, it's not so bad, with food and clothes and
housing and those allowances for the family. It's not so bad
compared to the way it looks now and later on, when they start
slicing out another 20%..."
"Add up everything we've said and you'll see that we don't
want a wage boost so much as to have prices rolled back. Tell you
what. If prices are rolled back to September 1942 you won't hear
a squawk out of a single shipyard worker for more dough..."
"You look up our record and you'll find that we are subscribing
as heavily as possible to War Bonds and War Relief ... We used to
give $3,000 a month to the Navy Relief's cigarette fund. Now, with
Regraded Unclassified
203
- 12 -
prices the way they are, we're able to give only about $2,000
8. month. We're doing this because we know what's at stake for us
in this war. But those food prices have got to come down. Sure,
they stabilized wages, all right. But they stabilized them on the
basis of food prices in 1942, and those food prices don't exist
any more ... There's no question of us being sold on the war, but
we must get equalization of prices and wages in order for us and our
families to live..."
One of the men said that he had a relative who works for a
loan organization and this relative told him (in February) that
the shipyard workers' loans fell into these categories, at the
following percentages: 70% for fuel; 20% for clothing; 10% for
automobiles.
EUREEKA SHIPYARD, newburgh, NEW YORK (270 men)
MARITIME
I spoke with seven men who work at the Eureeka Shipyard, all
of whom said that relations between management and labor were
perfect -- with the exception only of very minor grievances which
they were taking up with the management.
Their major complaint had to do with the fact that the weather
limits their work. If the weather is bad they are sent home; and
this often limits their earnings to between #30 and $40 a week.
They can't make out on this weather-limited pay, they said. But,
they added, too, they expected less of such pay losses due to the
fact that the weather now will be better.
"We've got swell working conditions ... on the whole," one said.
Regraded Unclassified
204
- 13 -
"And the payroll savings plan works fine. It's a fine way of
saving money and of helping to win the war..."
There was some disagreement on whether the cost of living was
too high. Four of the men said that it was. Three said that "it's
not too much out of line, considering prices here and in Baltimore,
for instance."
Food prices are going up, they agreed. And all commented on
the fact that there was a housing shortage.
"On the whole I'm satisfied and I think all the men are with
working at the Eureeka Shipyards. We work steadily, except for that
weather business. And production really is picking up. All of us
men are really broken in to working together now and our production
is going to climb
"I think I can say for the men that we're satisfied with wages
except, of course, I never did see a man
myself included
who didn't want a raise. But wages are fair, except for that
weather business
TODD, HOBOKEN, SHIPYARD (Maritime and Navy)
Relations between management and labor are fine, according to
the Todd workers with whom I spoke. They like the fact that there
is an advancement system at the Todd yards, and that the men "shape
up" at Todd, at night; in other words, they are told at the end of
the day's work whether they are to work the next day.
"The payroll savings plan works fairly well at Todd. You only
have to wait about a month or so to get your Bonds..."
"The Navy inspectors at Todd are real guys
...
real Navy guys
who know what their job is and how to handle it..."
Regraded Unclassified
- 14 -
205
"But there's no where to eat for a man on the night shift.
You see, there's a bunch of shipyards around here
Bethlehem,
Todd, Erie, Tietzen and Lang
and all us guys pile out at the
same time. If they staggered the night lunch time it would be
better
"
ERIE, TIETZEN AND LANG Small Hoboken Shipyards
(mostly MARITIME)
I spoke with three workers from these smaller shipyards and
it was agreed among them that "working conditions couldn't be better.
When you got an idea to help production the boss is glad to hear
it
If
SULLIVAN DRY DOCK (MARITIME & NAVY), IRA BUSHEY & SONS (MARITIME)
ROBBINS DRY DOCK (MARITIME) -- Three smaller shipyards in the
Brooklyn area.
At Sullivan and Ira Bushey the workers I spoke with commented
on discrimination against union workers and the fact that the
management laid off workers for minor reasons. At Sullivan, the
men complained that there were only ten toilets (seats) for 2,200
workers. Also at Sullivan, there was the complaint (as at Bethlehem,
Brooklyn) that there were not enough lights for night workers and
that, as a result, men often fell down holds and injured themselves.
At Sullivan and at Robbins, the men said that the payroll savings
plan was working out very well and that they were getting their
Bonds quickly.
PENN-JERSEY SHIPBUILDING CORPORATION, CAMDEN, NEW JERSEY
MARITIME
Conditions here are on the same high level with that of the
New York Shipbuilding Company in Camden. Labor-management relations
Regraded Unclassified
206
- 15 -
are good. The men are extremely war and War Bond conscious.
There was some talk of high prices and the high cost of living,
but not such vehemence as at the Federal Shipyards in Kearny and
Port Newark, New Jersey and in Brooklyn, New York.
- 0 -
Regraded Unclassified
207
207
FEDERAL RESERVE OPI
TIONS IN
ERNMENT SECURITIES
Page 1.
Column A above Federal Reserve
Marketable Issues:
operations is millions of
Special one-day certificates 2/1
Market purchases 1/
Column 3 above price changes is 32ade
dollars as follows:
Net increase.
&
Market sales 1/
for all securities except certificates.
Net decrease.
-4
For certificates, Column 3 above
Naturities Direct purchases free Treasury
1
yisld changes in decimals.
STRICTLY CONFIDENTIAL
last Yesk
This Work
Monday
Tuesday
Velanciary
Tharaday
T
Triday
Saturday
Full Week
Index
Description
Monday
Tuesday
Vednesday
Age. 26
28
Therelay
27
Friday
Saturday
29
30
May 1
fall Vest
May 3
4
a
3
5
6
A
A
A
3
1
7
I
A
A
3
&
3
A
a
1. Bummerz
A
3
A
3
&
3
&
1
&
1
À
3
A
-
Marketable Insuer
+44.0
+95.5
+118,4
+77.3
+146.4
+283.6
+761.2
Market purchases
+45.5
-47.1
-05.7
-96.2
=129.3
+107.2
*195.1
-32.5
-30,2
-43.1
+67.6
+53.2
+120.8
+609.4
Market sales
-116.5
-224.4
-44.6
4296.8
+4296.8
-54.3
-105.2
-105.5
-654.5
Direct purchases from freasury
@llj.1
---
-296.8
-2409.5
Maturities
-a54.7
-ash.7
-3.2
+9.8
-97.0
-52.0
Special one-day certificates: Net change
+113.9
+253.4
+225.0
Total set Increase (+) or decrease (-)
-71.0
6346.9
-117.2
+65.0
+29.3
-52.0
+15.3
-129.8
Vednesday report of total portfolio
6530.9
п. Tarable securities
Bills - all issues combined
+44,0
+95.5
+116.4
+16.3
+145.7
+278.5
+754.4
Market purchases
+13.3
+71.7
-47.1
+180.1
-85.7
-98.2
-129.3
-31.5
-26.4
*62.1
48.2
+120.5
+516.2
-416.3
Market sales
-81.0
-146.4
-113.1
-19.0
-43.4
-m113.1
-$8.5
-102.6
-480.9
MaturiMes.
-3.2
+9.8
-97.0
-53.0
+114,2
-ad4.7
+252.1
+223.0
Total
Increase
or decrease (-)-
-67.7
-74.7
+76.4
+38.7
-40.2
+18.1
-49.5
Certificates
-292.3
-m292.3
655
5-1
43
+,01%
-.015
+.01%
+.01%
o
1.
7/8
1-
I
43
+5.0
+11.0
+.019
-.02%
-,011
+16.0
-5.0
+5.0
-.02%
0 2
1/6
D - 11-1 N3
+.015
-.02%
*.019
+5.0
+,02%
-.02%
-,025
45.0
-.02%
o
3
7/8
1 - 12-1 43
+26.5
+.02%
+21.0
-.015
+.01%
of
+6.0
45.0
+2.0
+60.5
+.025
-.02%
-.02%
c
7/6
A-
2-1
F
+.015
+.015
o
an
7/8
1-
E
lab
+2.0
015
+3.0
+5.0
-,015
-1.0
-.015
+4296.8
+4296.8
--015
0
7/6
0-
5-1
lake
-.2
+.015
(
-3.0-.018
-5.0
-4.2
-3.0
-4.0
Treasury notes
-1
-1
11
3/45
D -
9-15
lake
+1
-1
12
1-1/4 C - 3-15 45
+2
of
+1
+1
-1
-1
-1
-3
I 3
3/4
12-15 45
+1
-1
-3
I in
+1
-1
-1
1
A - 3-15 46
+1
+1
-1
&
# 5
1-1/2 12-15 46
-1.6
-1.6
Treasury boads
-1
+1
1 1
X
3-15
46-50
1.
4
-2
+1
-1
12
1-3/4
- 6-15 le
+1
+1
+1
+1
&
-1
-1
+1
+1
2
3
2
- 6-15 49-51
-1
-19.7
+1
-.8
2
5
-.5
41
-.3
-20.7
+3
-1
+1
3
2
9-15 49-51
2
+1
+2
+1
=
-1
+2
=
3
one
2
12-15 49-51
-1
-23.3
+2
-2.8
+1
-8.4
+1
-10.6
-1
-45.1
A
4
+2
=
2
3-15 50-52
-34.0
-1
-34.0
+2
-10.5
1.
-1.0
+2
-79-5
s
"
2
- 9-15
+3
+1
+1
$
+1
+1
=
2
12-15
7
+1
+1
et
+1
-1
-2
&
+2
is
"
2-1/2
3-15
52-54
-1
+1
2-
1
-1
7
4
1
-1
7
3 10
2-1/4
-
6-15
52-55
-1
+1
+2
&
+1
+7
A
7
+3
-1
$ 11
2-1/2
-
3-15
56-58
-1
+1
&
1
2-1/2
62-67
+5
&
+7
-
12
- 6-15
A
+1
23
+3
-1
+1
â
4
13
2-1/2
- 12-15 63-64
+1
+1
=
+1
&
3 14
2-1/2
- 6-15 64-69
+2
4
to
3
+3
+3
15
2-1/2
. 9-15 67-72
1
=
-2.9
=
4
-2.5
4
Guarant securiti
$1
000 1-1/85 2-15 is
11
RFC 1-1/8 1- 7-15 43
5 3
270 1
1. 4-15 la
All tanable securities
Marketable Issues:
44.0
-35.5
*114.8
+76.3
+145.7
v283.5
v759.
Market purchases
+44,8
+103.7
+193.2
+67.1
+53.2
+120.4
+602.7
-47.1
-45.7
-98.2
-129.3
-32.5
-29.4
-422.)
Market sales
-115.2
-223.4
-39.0
Direct purchase from Treasury
-53.3
-104.1
-102.9
-634.5
+4296.8
+4256.6
-113.1
292.)
Naturities
-
#poolal ene-day certificates Net change
ARE
49.5
-97.0
-11.0
+113,2
$58.6
Total an (+) DC decrease (-)-
-70.4
one
cor
GIF
-50.1
OTH
-120,6
Office of the Secretary of the Treasury, Division of Research and Statistics,
, Original figures revised.
. Lass this @50,000.
Purchases and sales recorded as of Lay of transaction and net day of delivery. Transactions after 4 e'cleck are included is the sext 4ay.
Transactions are entered - of the 4ap following that se which they apply. since date are not available until the follewing serving.
Beset Data are resaled at my not all to the totals.
Regraded Unclassified
208
208
FEDERAL RESERVE OPERATIONS IN GOVERNMENT SECURITIES
Page a
Column A shows Federal Beserve
Market purchases 1/
Column 3 showe price changes is 32nds,
operations is millions of
Market sales
dollars as follower
Maturities
STRICTLY CONFIDENTIAL
Last Week
This Yesk
Mendaz
fundar
Thursday
Friday
Saturday
Index
Full West
Description
Mondaz
Vednesday
Thursday
Friday
Returday
Agr. 26
27
26
29
30
Fall Week
May 1
May 3
.
5
6
7
E
&
,
A
I
A
3
A
3
A
3
A
3
A
3
A
3
A
3
A
3
à
3
A
1
A
B
&
»
111. Tax-exempt securities
Treasury notes
+1
=1
If 101
1-1/86 A- 6-15 43
7
-1
, 102
1
C - 9-15 43
-1
-1
A
. 103
1-1/8
- 12-15 43
-1
-1
7
. 104
1
1 - 3-15 late
-1
-1
If 105
3/4
A 6-15 lake
-1.0
+1
-1.0
+1
-1
-1
, 106
1
C- 9-15 lale
-1.0
-1,0
-3.5
-1.0
-1,0
-1-5
-1
-1
-2
. 107
3/4
A - 3-15 45
Treasury bonds
, 101
3-3/85
-
6-15
43-47
-1
*.5
-1
+.5
7
-1
-1
-2
, 102
3-1/4
10-15
+,2
+1
+2.0
+2.2
To
-1
-1
*.7
*.7
7
, 103
3-1/4
k-15
+2.0
7
+2.0
-1
-1
-1
7
1 104
&
- 12-15 44.5%
-1
+1
-1
-1
-1
-1
+1
-1
3 105
2-3/4
9-15 45-47
+1
+1
3 106
2-1/2
12-15 las
+2
-1
+1
A
----
-1
+1
-1
3 107
3-3/4
. 3-15 46-56
«1
+1
-1
+1
» 108
3
- 6-15 46-48
+1
+1
-1
-1
+2
3 109
3-1/8
- 6-15 46-49
+1
+1
-1
-1
B 110
4-1/4
- 10-15 47-52
+1
+1
-1
+1
B 111
2
12-15 NT
+1
-1
-1
+1
+2
+2
3 112
2-3/4
- 3-15 48-51
+1
+2
+3
-1
-1
+1
+1
3 113
2-1/2
- 9-15 48
-1
+1
*2
A
-1
-1
+1
+1
3 114
2
- 12-15 48-50
-1
-1
3 115
3-1/8
12-15 49-52
4
+2
-1
-1
B 116
2-1/2
12-15 49-53
-1
-1
+1
â
+1
+1
+3
+1
-1
3 117
2-1/2
- 9-15 50-52
-1
+1
+3
+1
+1
$
+1
-1
3 118
2-3/4
- 6-15 52-54
-1
+1
&
-.5
+3
#
-.5
T
+1
-1
3 119
3
- 9-15 51-55
-1
+1
&
+1
3
-1
-1
+2
3 120
2-1/4
12-15 51-53
-1
4
+1
+3
4
+7
-1
7
+1
Y
3 121
2
- 6-15 53-55
+2
+6
+1
+9
-1
-1
-1
-1
+2
7
3 122
2-1/4
- 6-15 54-56
+1
&
á
+1
+12
+3
-1
+2
123
2-7/8
- 3-15 55-60
+1
+3
-.5
:
7
+1
-.5
+15
+1
1
-1
all
3 12%
2-3/4
- 9-15 56-59
+1
to
+13
+2
-.1
+1
-.1
+21
-2.0
+1
-2.6
-1
+4
2
3 125
2-3/4
6-15
+1
3
-.5
+13
-1
+3
+23
-2
-1
-1
+1
of
of
-1
-.
&
, 126
2-3/4
12-15
$
-.3
+1
-.5
+7
-2.5
+13
+3
-.*
+1
-3.8
8
Quaranteed securities
-04.5
-24.5
000 3/4 5-1 43
-2
-2
o 101
P/NC 3-1/4
3-15
44-64
-1
+,5
-1
+-5
-2
0 102
TTNC 3
5-15 44-hg
+.5
+.5
0 103
BOLO 3
5-1 44-52
+1.0
+1.5
+.5
v.1
--
+.5
0 104
HOLD 1-1/2
.
6-1
15-47
=1
-1
0 105
FILL
8
All tax-axempt securities
+,7
+.1
+1.8
Market purchases
+.7
+3.5
+2.0
+,5
+6.7
+1.0
-.8
-.8
Market sales
-1.)
-1.0
-5.0
-5.0
-1,1
-2.6
-16.0
-gh.5
i
Maturities
+1.0
+.7
-5.2
-3.5
Total set increase (+) or decrease (-)
-.6
+2.5
-3.0
-4.5
-1.1
-2.6
-9.2
ffice of the Secretary of the Treasury. Division of Research sal Statistics.
F Original figures revised.
Less than $50,000.
y Voter Date are rounded and say ant all to the totals.
Purchases and sales recorded. as of day of transaction and not day of delivery. Transactions after . s'alock are included is the sert day.
Regraded Unclassified
209
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
MAY - 8 1943
TO
Secretary Morgenthau
FROM Mr. Paul
Senator George had inserted in the Appendix of the
Congressional Record on May 3 a copy of an address he
delivered before the War Council of the United States
Chamber of Commerce on April 29.
In this address the Senator stated that, while most
plans for the future give some attention to taxation, in
his view "dependable post-war planning in the business
field begins and all but ends within the four corners of
our Federal revenue laws". Referring to the Revenue Act of
1942, he stated that "Its high rates frequently extract for
the Treasury as much as 95 cents out of every dollar of
industry's profits. It can remain in force during the war
only if there is hope of reasonable taxation after the ces-
sation of hostilities."
In conclusion, Senator George summarized his views as
follows (I have underscored the points which may be of
special interest to you):
Regraded Unclassified
910
- 2 -
"1. Corporate and individual income taxes cannot be
greatly increased.
"2. Reserves for post-war contingencies and for con-
version to peacetime activities, and for deferred main-
tenance and repairs, must be established and built up out
of earnings during the war.
"3. The present rate of tax upon capital gains may
prove too high-certainly it should not be increased--and
the greatest benefit of the special treatment of capital
gains and losses lies in a certainty of their stability.
"4. A system of encouraging the purchase of War bonds
out of current earnings is preferable to 8 scheme of com-
pulsory saving.
"5. Our tax laws and policies should not be nullified
by the imposition of taxes by uncontrolled administration
under the guise of renegotiation or price fixing.
"6. There are several potent mistakes which must be
corrected, particularly in the excess-profits tax and the
post-war credit provisions.
"7. A reasonable pay-as-you-go plan for individuals
should be adopted.
"8. If we require greater revenues than the present
laws will produce, they should be sought from new sources,
and 8. general sales tax should be considered.
"9. The nonwar expenditures of our Government, both
during and after the war, must be maintained at a minimum.
"10. The excess-profits tax should be repealed or
greatly reduced promptly upon the cessation of hostilities.
"11. The profits of industry should be taxed but once,
and we must find 8. satisfactory substitute for the present
system of taxing them as earned and again as they are distri-
buted."
Regraded Unclassified
211
- 3 -
An excerpt from the Record containing Senator George's
address is attached.
Book
Attachment
Regraded Unclassified
212
A2232
CONGRESSIONAL RECORD-APPENDIX
MAY 3
of inter-American unity. toward the end that
say, in times of normal or above-normal pro-
Industry. Under the system Government
the Bolivarian Ideal may be perpotuated for
duction, the Government should abitain from
would merely assume responsibility to nasure
be mutual benefit of all the American re-
public-works expenditures but should make
& sustained consumption by providing all the
sublica in every field of human relations after
plans for beeded public works and carry these
additional income necessary. Lately, and
we have effected the pesce which we 80 ans-
plans into execution at the beginning of a
since the outbreak of the war in Europe, the
tously await.
depression for the purpose of supplementing
Idea that we have built up our great national
the Income of private business and checking
Income by vast expenditures of public money
unemployment. This Idea did not involve
and that the same device can be retained not
the borrowing of money by the Government.
mernly in & period of emergency but continu-
Planning for the Post-War Period
It sought a condition of balance by which the
oualy to produce the name results in peace-
Covernment would not add to the boom
Ume, has been pressed home with increasing
tendencies during . period of expanding pro-
vigor.
EXTENSION OF REMARES
duction trut would withheld Its spending for
The theory that public spending of bor-
6 period of declining production.
rowed money must not be as an
OF
In 1983 the pump-priming theory was ad-
emergency device but as a permanent instru-
HON. WALTER F. GEORGE
vacced. Deficit financing by Government WM
ment of public policy is too widely accepted,
defended upon the theory that public money
The majority of those who have scorpted the
OF GROWITA
in quantities would net the slackened pri-
theory have done ao on the implicit under-
IN THE SENATE OF THE UNITED STATES
vate-business machine working again. This
standing that Government would borrow
was an emergency device, to be abandoned
money to invest in needed public Improve-
Monday, May 3, 1943
as BOOD as the private-enterprise system be-
ments, to supply the consumptive demand
Mr. GEORGE. Mr. President. I ask
gan to work. Later, however, the theory of
for increased and increasing production, but
certain academic economista was heard la
that the Government itself would not enter
unanimous consent to have printed" In
Government circles, to wit, that depression
into direct competition with private Indus-
the Appendix of the RECORD an address
18 a chronic phenomenon in the free-enter-
try. Already, however, the recommendajigo
I delivered in New York City on Thurs-
price system. If Indeed it does not grow out
for & form of between Goven-
day, April 29, before the War Council of
of It. It was said that the capitalist system
ment and private industry in certain enumer-
the United States Chamber of Com-
or the system et free entarprise is no lenger
ated key industries has appeared. Clearly,
capable of functioning effectively because the
the Idea la held that the Government must
merce.
dynamic element in the eyetemic has been pri-
borrow the savings of the people to be used
There being po objection, the address
vate Investment: that the savings of millions
to invest in private Industries, purchasing
was ordered to be printed in the RECORD,
of people must be brought back by the Gor-
the overriding and controlling stocks and
as follows:
ernment Into the streem of spending: and
securities in great industries: and It will fol-
The war in not yet won, but we are moving
that private investment cannot be revived
low as a corollary that Government Ibelf
forward on many fronta toward final victory.
on a scale sufficiently broad to absorb the
must eventually become more and more the
We are witnessing the mobilisation of our
savings of the people because opportunities
sole owner of such industries. It is difficult
manpower and resources on a scale hitherio
for investment are no longer upen. Other-
to envision a system of enterprise half Gov-
unknown A tast production program is ap-
ally, is was asseried that the fruntiera had
ernment owned and half privately owned
proaching its pak and may reach the peak
disappeared with the opportunity for terri-
Let it be dearly understood that Govern
in the early winter months.
tortal and resource expansion: that the popu-
ment responsibility in the economic Reid wills
lation increase was slowing down, and that
increase rather than decline in the post-war
By the and of 1945 We will have about P.-
700,000 men in the armed fores. We will
technological development had matured. You
period: that Government controll will be ex-
have about 20,000,000 men and women SG-
remember the familiar atatements that there
arted as 10 bas not been exerted in the past
were no longer in sight any great Inventions
to correct the struse in our highly complex
2nd in direct war industries. Parhaps
as the raflroads, as the automabiles, which
economic system. In short, that the private-
J00,000 meo in the armed forces will not
called for huge expenditures and investment.
enterprise system la not an end but that
seek to return to private employment. Fac-
tory employment today to half egain as large
If the premise la accepted. then the condu-
back of It are people with privileges and
rights to be preserved, and that, above all,
se the average for 1929, and about two and
wion necessarily follows that the free-enter-
one-half times that of the low of 1932. After
price system is helpless to recover Its energy
human values must be annserved.
the war some of the women in Industry. both
and that this to not puraly an emergency
That the private-enterprise system has
condition but a characteristic of the system
sometimes failed or else has proven to
peacetime and war, will wish to return to the
itself which will remain constant.
be Inadequete expnot be denied. in view of
home, many of them will be reluctent to
Por these reasons, and more which peed
our experience of one short decade part.
give up their jobs. Many of the aged groups
not be repeated, & new type of or-
That agatens in definitaly on the spot again,
will want to get at once on the pension
list, but galnful employment for about 00 to
ganimation was recommended-s system un-
or will be when the war ends. If fairly con-
der which the Government will become a
stant employment cannot be provided, the
56 millions will be necessary after the war.
continuous borrower of the savings of the
American people will turn to Government,
How will we meet the imperative demand for
people and will use these savings on various
even though the mistakes, inadequacion, or
reasonable and constant employment of fifty-
kinds of projects for the purpose of creating
policies at Government are, tronically, re-
Ave or fifty-sts million wurkers? or one fact
national income. It follows as a curollary
sponsible for the failure. It to this turo
we are certain: Employment, production, and
that continuous increase in the national
which must be forestalled. By and large,
economic demand are interdependent.
debt to contemplated, not se a matter so be
the American people do not wish to are their
We may And IS necessary to make tem-
feared and registed but M a destrable means
Government turned general employer. In
portry provision for the DEG and women in
by which the national Income will be in-
this thought we are united. Again, wa be-
the armed forces and services, This should
creased. even though the national deficit
lieve the vast majority of too American ped-
be done now and before the war enda. If
euntinues at Ave, ten, or even fifteen billions
ple are willing to rely upon our free-Anted
postponed. political groups and parties will
of dollars, or more. We are admonished that
prise system as the surest means of present-
vie with ans another in trying to secure the
this condition peed not create alarm because
ing essential human values and Treedoma with
soldiers' support and vote. Through slow
of the savings of the people will be mar-
which we are blessed, If we are to succeed.
densobilitation over a period of many months,
shaled to support 5 permanent program of
public policies must be adopted and followed
with wartime compensation continued, we
public works, supported by high tasstion and
which will make possible, not only the op-
may in part meet the immediate problem.
eration of the free-enterprise system but its
deñcit burrowing.
But the American soldier will not be long
A few induential leaders in Government
cunstant expansion.
content with this or any like plan: he will
have accepted this theory and much of the
There are factors favorable to the post-war
be looking for constant employment. We
planning for the post-war world is built upon
prosperity of private enterprise, These have
may and n expedient to continue temporarily
IL. It La not the character or sise of the
been often stated. First, It may be poied
the operation of some of the wer plants. But
projects to be carried on which la Important,
that the major engineering problems of re-
this Le not the final answer.
the matter of high importance is the philoso-
conversion to peacetime operation may not
Much official post-war planning le proceed-
phy upon which is rests. Flainly stated, is la
be as great AS commonly supposed. An econ-
Ing un the theory that with the end of the
that our system of free emmomy is through:
omist of note has setimated that difficult
was the Government must smbark upon &
that It cannot provide the consumptive de-
engineering problems of conversion will be
mand which will enable 19 to produce at a
confined to industries responsible for less
program of public spending in order to avert
widespread unemployment and en economic
rate and on a scale sufficient to provide earn-
than 10 percent of commodity production.
crista. It 18 now possible to state with more
stant employment. The theory, which has
At the and of the war it ta certain that de-
or Texas accuracy the steps in the evolution of
been but inadequately described, has been
ferred demand and shortages will be large-
le spending in the United Blates. Until
called the dual consumptive economy as dis-
perhaps twenty-five to thirty billion dollars
CRDE date. public spending bas been de-
tinguished from a dual productive sconomy.
by mid-1944. It is also certain that the
fended as a means to be employed by Gov-
AS first is was not suggested that the Gov-
expendable surplus of the people m the form
ernment in periods of economic crisis to re-
emment would borrow money to take OVER
of cash, demand deposits, time deposits. War
stüre balance and to provide relief. & public-
Industries or to operate them either in com-
Savings bonds, etc., will be larger than EVER
works reserve was first proposed; that is to
petition with or to the esclusion of private
before a our history. This spendable sur-
Regraded Unclassified
213
1943
CONGRESSIONAL RECORD-APPENDIX
A2233
più has brea referred to as liquid surplus
etc., will face very difficult problems U not
7. A ressonable pay-an-you-go plan for
units, and It is ressonably certain that the
bankruptcy or receivership, This un-
Individuals should be adopted.
prople are holding such assets, not for the
doubtedly will be true unless we meet the
B. If we require grester revenues than the
vurpose of permanent saving but for the
threat through some form or savings for use
present laws will produce, they should be
urpose of spending when the opportunity
in the post-war years, and the spendy change
sought from new sources, and a general males
to gund again exista,
in our revenue laws to permis the creation
tax should the conaldered.
During the period of depression business
of reserves, before taxes or at least upon
9. The nonwar expenditures of our Govern-
accuatomed (taelf to think of levels of pro-
favorable tax terms. Reserves must be ade-
ment, both during and after the war, must
quetion and locime which we now know to
quate, not only to Bnance conversions back
be maintained at a minimum.
be les Several careful students have con-
to pesce, but for new enterprise, the building
10. The excess-profts tax should be re-
cluded that the present level of employment,
of new industry.
peaind or greatly reduced promptly upon the
If sustained. will produce a gross national
We must reesamine the tax treatment
commition of hostilities.
product " current prices of approximately
which we 030 now giving to dividends paid.
11. The proûts of Industry should be taxed
#155,000,000,000. This la above the produc-
I do not suggest that dividends to the bands
but once. and we must find a mathsfactory
tion in (942-dightly under the present rate
of individual stockholders should be -
substitute for the present system of taxing
of production. But & normal increase over
empted but STELL here some favorable -
them as earned and again - they are dis-
1929 would fall not far short of the $155,000.-
treatment must be considered. I do not aug-
tributed.
000,000 figure. We must again accustrim our-
gest that the tax burden should be lighter
The American people are united for victory.
selves to think in terms of the normal, despite
now during the progress of this war. eisher
for final metory. to the crucible of war,
the lingering memories of the low levels of
on the Individual or the corporation. It Is
which la net yet won, America is Bnding her
the depression yours. There are also factors
better that tates be placed as high as - can
soul again, and more and more our people
unfavorable to the prosperity of post-war
now bear them, provided always that . ren-
will shaire themselves free of the seductivo
enterprise which need not be here listed.
sonable portion of the earnings of Individuals
voices, speaking in terms of Old World
The matter of supreme importance le the
and organized business la DOTERED into the
theories and concepts falmely advr 4 45 the
procept approval of pubite policies which will
Treasury and there held me n. certain reserve
basta of progress and a final Dtopla. We will
make se possible for the entérpriae system to
against the day when the war enda. Direct
constantly strive tur security
furnish the jobs and to meet the certain
tax Jevies cannot be greatly increased, If at
ad our people-but 90 will not forget that an
obligations of the post-war period. Private
all, during the war but additional levies may
the large pages in human history have been
enterprise must face termination of contracts
be cusde for the purpose of savings or loans.
written by the men and rachs who were will-
with hugs sums due from the Government.
Provision should be made at code legalising
Ing to fight for economic freedom, civil and
It must also face the possibility of a huge vol-
adequate reserves birth to the individual and
political liberty. The vast majority, at least,
ume of Government-owned surplus property,
to the corporation.
understand that political liberty is Insupar-
These factors, on the une hand, with excessive
The eum up, industry must be financed.
ably linked with semunie freedom. In the
taxes and severe regulations of many kinds,
Pree enterprise supplies the required funds
meantime, "the good-neightor policy" at
on the other hand, can place enterprise be-
from savings-Crom sommulated earnings,
home between government and the people.
tween the Jaws of a vise, There must be no
from investors, from creditors. The savings
without class division or distinction, will
serious errora in there matters.
of the people, in turn, bave their source only
strengthen America's arm for the hard task
Most plans for the future give some atten-
in earnings. The circle is simple: The
of peace ahead.
tion to tasation, but It may be stated (with
lives upon the envings of the people: those
savings are available only If industry can
regard to the errors of generallaation) that
offer an attractive Inducement: and hope of
dependable post-war planning in the business
neld begins and all but enda within the four
profit after taxas is the sound incentive.
But the circle is also fragile: It is broken.
Money-The Most Important Issue in the
cornam of our Federal revenue lawe. Many
perhaps beyond repair, If taxes destroy all
World Today
post-war problems which now engage atten-
in will take care of themselves. industry by
hope of profit. When the pircle is broken,
then free enterprise cannot function; and the
dustry. plant by plant, through the or-
EXTENSION OF REMARKS
dinary operation of the incentive system If
Government steps In.
During war, at leart during a war of Tea-
OF
the revenue laws permit. We are excluding
in this generalization, as & matter of course,
sonably short duration. the trimediate return
the all-important question of our relations
to the Industry, and to Its owners and cred-
HON. COMPTON I. WHITE
itore. becomes a secondary consideration.
OF IDAHO
with the rest of the world after this war sad
of our participation in any kind of world
Our "take" for the Treasury osta be much
organization. Most of the anticipated
greater. Industry generally has turned to
IN THE HOUSE OF REPRESENTATIVES
troubles which are likely to arise ous of labor
war production without regard to profits,
Friday, April 16, 1943
relations, tendency toward monopoly, un-
Industry is to be commanded upon its posi-
ployment, and the Tike, will largely adjust
tion that 11 MID no pront from war. But
Mr. WHITE Mr. Speaker, by the in-
we must not destroy confidence In future
duigence of the House there is presented
themselves if the free economy is preserved.
Certainly Incre than one-half of the capital
profits, The Bevenue Act of 1942 TM framed and
herewith the ninth Installment of Sen-
in American business is so-called equity capi-
ator Cockrell's speech on money. In this
tal. From what sources have we obtained
adopted by the Congress with all these INC-
Installment of Senator Cockrell's speech
this capital? We have issued and and com-
tors, and many others. considered and bal-
anned. Its high rates frequently extract for
he brings us to the most momentous ID-
mon and proferred stock: we have borrowed
money from Individual Investors: but more
the Treasury M much as as cents out of
ternational monetary undertaking ever
every dollar of industry's profits. It can III-
tried, up to that time, in the world's
than one-half of 11. by and large, represents
reinvested earnings. Public Issues of com-
main in form during the war only If there
financial history. The monetary cop-
men and preferred stocks and direct personal
is hope of reasonable texation after the costs-
vention of Prance, Belgium, Italy, and
Investments of the owners of business will
time of hostilities. Speaking. M I can. only
Switzerland-joined later by Greece, Ru-
remain important sources of equity capital.
for myself, I am happy to outline briefly my
mania, and the States of the Church-
There are strong ressons supporting the be-
present views:
in a convention or contract to standard-
net that tx the immediate future reinvested
1. Corporate and individual Income taxes
ise their coinage and do away with the
earnings must be depended upon to furnish
cannot be greatly Increased.
2. Reserves for post-war contingancies and
inequalities of International exchange.
/ven a greater part of the equity capital of
for convention to peacetime activities, and
more commonly known as the Latin
industry. Industry was generally prosperous
in le entered World War No. 1, and taxes did
for deferred maintenance and repairs, must
Union.
not prevent bustpess tram making Large earn-
be established and built up out of earnings
In the succeeding installments of Ben-
mga and creating considerable reserves dur-
during the was.
ator Cockrell's speech, we will find the
ing that war, We had but shortly emerged
1. The present rate of tax upon expital
record of the negotiation of the repre-
from a great depression at the beginning of
galhs may prove too high-certainly It should
sentative of this Government in dealing
World War No. 2. Government debt was very
not be increased-and the greatest benefit of
with the representative of European
high and taxas were already high. TM rates
the special treatment of capital gains and
Jonnes ties in . certainty of thair stability.
governments in an effort to effect one of
have rapidly risen. The national debt la still
rising. I beed not remind you that our tax
4, A system of encouraging the purchase of
the greatest monetary reforms of that or
this st present are the highest in our history
War bonds out of current earnings is pref-
any other time
and that the "TAX take" is much larger than
erable to . scheme of compulsory saving.
The review of the reports and recom-
many of the experts estimated at the time of
B. Our tax laws and policies should not be
mendation of the Department of the
the passage of the 1043 Revenue Act, The
nullided by the imposition of taxes by un-
Interior of that day as to the tribute to
d expansion of our Industries for wer
controlled administration under the guise of
be extracted by the Government from
Juction La & familiar tale. Certain = la
that with the end of the war and the whole-
repegetiation or price dxing.
mining the orea in public land closely
sisle cancelation of Government orders,
8. There Are several potent mistakes which
resembles the present-day policies of the
many workers will be out of jobs and many
must be nurrected, particularly in the excess-
profits tax and the post-war credit provisions.
head of this great Government depart-
Inqustries, wich as aviation, shipbuilding,
Regraded Unclassified
214L
TREASURY DEPARTMENT
AA
INTER OFFICE COMMUNICATION
DATE MAY 81943
TO
Secretary Morgenthau
FROM
Randolph Paul
Confidential
We have learned from an application recently
filed and approved at the request of the State Depart-
ment that the son of Admiral Darlan, who is suffering
from infantile paralysis, his doctor, and members of
the family are enroute to Warm Springs, Georgia, where
Darlan's son will be treated.
But
Regraded Unclassified
215
TREASURY 1943 MAY DEPARTMENT DEP " AM " 50
SECRE
NOT TO BE RE*TRANSMITTED
COPY NO.
13
BRITISH MOST SECRIT
U.S. SECRIT
OPTEL NO. 152
Information received up to midnight 8th May
TUNISIA. 8th Army. Still no sign of general enemy withdrawal.
Slight advance by our forces on right and left of army front. French 19 Corps.
Or right hand fighting against stubborn resistance. Steady advance by Centre
Division and rapid progress on left Northeast of PONT DU FAHS. ZAGHOUAN oc-
cupied.
1st Army. 6th Armoured Division engaged all day in hard
fighting against enemy rear guard near HAMMAM LIF. 1st Armoured Division
advancing eastwards from area Southeast of MASSICOULT met no opposition and
joined up with 6th Armoured Division at CRETEVILLE, 12 miles Southeast of
TUNIS. 7th Armoured Division cleared Area Northwest of TUNIS, taking large
number of prisoners. TUNIS is completely occupied and all fighting there has
ceased, 1st British Infantry Division captured TEBOURBA and DJEDEIDA and joined
up with 7th Armoured Division. U.S. Sector. U.S. Forces reached DJEDEIDA Area
and continued advancing north, northeastwards. Their armour was clearing area
Southeast of BIZERTA. Heavy casualties inflicted on enemy who showed signs
of disorganisation, much equipment captured.
Regraded Unclassified
216
NOT TO BE RE-TRANSMITTED
à ANY &
a
U.S. SECRET
BRITISH MOST SECRET
COPY NO.
13
OPTEL No. 150
Information received up to 7 a.m. 8th May.
1. MILITARY
Tunisia. Advance elements of British and U.S. Forces
entered Tunis and Bizerta on afternoon 7th. This morning
it is officially reported that both towns have been
occupied, although details of the later fighting are not
yet available.
U.S. Sector. During the afternoon of the 6th, French-
Colonial troops on the coastal sector made further progress
in the hills. To the South U.S. Forces continued to
advance towards Chouigui. On the 7th they occupied
Djebel Lanserine, 8 miles west of Tebourba. Ferryville
was captured and they pressed on towards Biserta taking
many prisoners.
First Army. The attack astride the Medjez El Bab-Tunis
road continued to go forward on the afternoon of the 6th.
To the south of the road, 6th Armoured Division with a
Guards' brigade in support, met increasing resistance
and a tank battle developed to the south of Furna.
Having suffered loss the enemy drew off to the southeast.
The Furna area was cleared and forward elements had reached
Massicault by evening. Enemy remnants remaining in the
Ksar Tyr area being thus isolated meanwhile to the north
of the road 7th Armoured Division passing through
4th Indian Infantry Division found Furna defended.
The armour by-passed the village and advanced rapidly to
the East. Some enemy opposition was overrun and our
troops were established in the area immediately north of
Massicault by 1800 hours, the town itself having been
occupied during the afternoon. During the evening 20
enemy tanks which were engaged on the Massicault-Tebourba
road, withdrew. On the morning of the 7th, 6th Armoured
Division continued their advance south of the road and
captured La Mornaghia. To the north of the road our
armour occupied St, Cyprien by 0830 hours and then pushed
on 4 miles to the northeast, whence they were directed on
Le Bardo, a suburb 21 miles northwest of Tunis.
French 19th Corps. Some progress was made on the south
of the sector and enemy counter-attack on 6th/7th was
repulsed.
Eighth Army. On the left the New Zealand Division
made a further advance south of Saouaf in spite of
opposition and extensive minefields.
Burma, Arakan Front. Some further withdrawals have been
made by our troops. An enemy force thought to be at
least one battalion has succeeded in infiltrating through
our positions and is firmly established astride the
Buthidaung-Maungdaw road about 3 miles west of Buthidaung,
where a bridge has been destroyed. Counter measures are
being taken. Fighting is continuing in the hills to the
south of the road.
- 1 -
Regraded Unclassified
217
2. AIR OPERATIONS.
Western Front. 7th. 6 Spitfires damaged a large ship
south of Ushant. 10 enemy aircraft flew over East Anglia,
one was destroyed. 7th/8th. 7 enemy aircraft flew over
southwest England and South Wales. 2 were destroyed and
a third was also destroyed over its base in northern
France. 8th. 6 enemy aircraft flew over southeast
England. 3 of them penetrated to the Greater London area.
Spitfires destroyed 2 and probably destroyed a third.
Tunisia. 5th. A total of 53 Fortresses bombed Tunis
and La Goulette harbours. One large and several small
ships were hit. Fighter-bombers attacked an enemy airfield
near Protville, destroying or damaging about 25 aircraft
on the ground. 6th. The heaviest scale of air effort
ever attained in Africa was made in support of First Army
operations.
Sicilian Channel. 5th. 6 escorted Mitchells met 6
escorted S.M. 82 transport aircraft destroying all of them,
as well as 3 fighters for the loss of 2 fighters.
On 5th and 6th, Allied aircraft made several attacks on
enemy shipping. A large ship, 3 small ones, and a
destroyer were sunk. A medium-sized ship and a destroyer
were set on fire and 2 more ships were damaged.
Italy. On 5th/6th and 6th, heavy bombers dropped 133
tons on shipping in Reggio Harbour. At least 3 ships were
hit and set on fire.
3. HOME SECURITY.
7th. In the morning bombs and cannon fire caused considerable
damage to house property at Great Yarmouth, where 13 persons
were killed.
- 2 -
Regraded Unclassified
NOT TO BE RE-TRANSMITTED
218
COPY NO.
BRITISH LOST SECRET
U.S. SECRET
OPTEL NO. 154
the period 1st to 8th May, 1943,
1, NAVAL
Following 1a ate DEPARTMENT lementary resume of operational events covering
Meditekrances
Destroyers sank a Destroyer bei waitter-
carrying Merchantman off MILIBIA 3rd/4tc H.M. Submarines report I Dortoger 1%
1 Schooner aunk, 1 6,000.00 ntmand robably sunk. 4 Storoabire und - Proble
reached BALTA in convoy 4807 During the whok about 6,000 tons of ensimy shipping
end 1,500 troops in Destrovers arrived at MINS.
SUBLARINE WARRARE. 0-Boat activity consuntrated mainly butwoon
NEW FOUNDLAND and GREENLAND, escopes of an outward bound ocean convoy made highly
successful countorattacks after the convoy, dispursed by heavy weather had austript
SOMO lossos from a large force of U-Boats; solac U-Boat activity against local
convoys off FREITO N. Wook ending 5th, 37 attacks on enemy submarines of which 7
promising.
SHIPPING CASUALTIES. During wook 1st-7th, 29 ships have been
torpodood and presumed lost. In sttack on outbound convoy off GREENLAND, 9
British, 2 U.S. and 1 Norwogian ship torpodood, 1 large British ship also tor-
pedocd Northwost approachos. Panamenian tanker off East coast of U.S.A. Greck
ship mid-Atlentic. Local convoy attacked off FRESTOWN, 5 British, 1 Dutch, 1
Belgion torpodoed, also one independent Swodish ship. In Indian Cocan, 1 Britist
tanker, 1 Dutch ship terpodood southsouthoust DURBAN. In Pacific, 4 chips tor-
podocd; 2 U.S. ships southeast of FIJI ISLANDS, 1 British and 1 Norwogian off
East coast AUSTRALIA. In Moditorruneen, Dutch ship mined or torpedood, 1 British
tankor and merchant ship sunk by aircraft.
TRADE. Imports in convoy into United Kingdom weck onding 2nd/-
337,000 tons, including 144,000 oil.
2. MILITARY
TUNISIA, Operations fully reported in daily tolograms.
3. AIR OPERATIONS
WESTERN FRONT. Night. 707 of our bombors operated, 31 are
missing. One very heavy attack on DORTHUND believed successful, though dotails
not yet svailable. 167 Soa Wines laid, 1 Aircraft lost. Day. U.S. Fortresses
made 2 heavy attacks; 1st on ST. NAZAIRE in heavy cloud was disuppointing, but
2nd on Ford and General Motors Assembly Plant noar ANT/ERP believed very successful
Enomy. 23 Aircraft crossed our coasts. 6 wore destroyed.
TUNISIA. Up to 5th, our air offunsive was on modorato scalo.
On 6th, WG put in heavicst attack 80 far. Details not yet available, but belioved
Allied aircraft flow botwoon 2,000 and 2,500 Sortics on that day alone.
WEDITERRANTAN. TARANTO and MESSINA both bombod, also REGGIO
twice. 2 more successful intercoptions of transport aircraft, 11 destroyed.
Heavy attacks on energy shipping. Following losses inflicted in SICILIAN CHANNEL,
2 Dostroyers, 1 largo and 3 small ships, a largo launch and an E-Boat were sunk,
1 light Cruisor, 1 Dostroyer, 5 Ships, a Sicbel Forry and an E-boat were hit and
net on fire.
RUSSIA. Considorable activity reported HOVOROSSISK Area, where
Russian Air Force is actively supporting their ground troops both by ongaging the
Gorman Air Force and by attacking Ground objectives in the forward battlo sone.
In the IZYUL and BALAKLAYA Sectors, Russion activity was mainly against Airfiolds
and Railway Stations. Russian long-range bombers aguin raided KOONIGSBERG. Gorman
acale of air operations in KUBAN Arca somowhat 1000 during lost 2 wooks, though
still groater than a month ago, Gorman Air activity on receinder of front con-
ldored not great.
EXTRACTS FROM PHOTOGRAPHIC AND INTELLIGENCE RE ORTS ON RESULTS OF ALLIED AIR
ATTACKS FROM UNITED XINGDOL BASES.
STETTIN. Photographs taken 36 hours after attack show 24 fires
still burning. Particularly severe damago in POLI ENDORF District whore about 100
90708 of closoly groupod industrial buildings is completely dovastated. Damage to
) shipyards and the naval baso, Military buildings have suffored severely, 1n-
cluding the polico barracks. Eye witnoss report statos Firemon unable to copo
with number of fires and had to concontrato on public utilitics and dockyard
buildings, An appeal to BERLIN firubrigados WAS rejected owing to approhonsion
caused by 8 small divorsion by Mosquitocs. Residential proporty was loft to burn.
8 days Inter, some districts still ¿opondod on candles and oil lamps for lighting
and water had to be pumpod from the river and boilod for drinking.
5. HOME SECURITY. No scrious civilion casualtios reported.
Regraded Unclassified
219
TREASURY
NOT TO BE RE-TRANSMITTED
BUSY vs now EVEL
COPY NO.
13
BRITISH MOST SECRET
U.S. SECRIT
OPTEL NO. 151
Information received up to 7 a.m., 9th May, 1943.
1. NAVAL
3 medium-sized ships, 2 British and (? one) U.S. were damaged
yesterday morning by external explosions in GIBRALTAR Bay and beached. 3 of
H.L. Destroyers bombarded KELIBIA twice during 8th/9th. Very little opposition
at first but resistance increased during second attack at dawn. Operation com-
pleted successfully.
2. MILITARY
TUNISIA. To 12 noon 8th. In the coastal sector, French-Colenial
troops are clearing up the high ground Northwest of BIZERTA and U.S. Infantry are
clearing the Area North of Lake BIZERTA. Further South, the general U.S. advance
continued and considerable Axis forces are being pushed back towards the coast in
the area between TUNIS and BIZERTA. British forces have entored TEBOURBA and are
now operating in the Area Northwest of TUNIS, in conjunction with U.S. troops.
Their patrols are pushing Northwards, being now about 2 miles South of PROTVILLE,
in contact with enemy tanks, and are also moving Northwards from DJEDEIDA, on the
road to MATEUR. LA GOULETTE has been occupied and 7th Armoured Division are
clearing up the MARSA Peninsula. South of the MEDJEZ EL BAB - TUNIS Road, our
forces have made a further Eastward advance and are now on approximate line
CHEYLUS - MASSICAULT. Southeast of TUNIS, we are now in contact with the enemy
in the region of (? Hammamet). Our Armour is pushing Southenstwards along the
TUNIS - HAMPAT Road. French troops have captured PONT DU FAHS and re contin-
uing their advance Northeastwards, while British patrols as far North as DEPIENNE
have made no contact with the enemy. There has been no advance on the 8th Army
Front. About 15,000 prisoners have so far passed through the British and U.S.
cages.
BURLA. ARAKAN Front. Our troops have evacuated BUTHIDAUNG.
3. AIR OPERATIONS
TUNISIA. 6th. About 1,000 aircroft attacked objectives near
MASSICAULT and elsewhere in the battle area. Enemy casualties - 20, 4, 11.
Ours - 2, o, O.
SICILY. 6th. 80 escorted Heavy and Modium Bombers attacked
docks at MARSALA, TRAPANI, and FAVIGNANA. One ship was probably sunk, another set
on fire, and 2 more possibly damaged. These places were attacked the same night
by Wellingtons. On the 6th and 7th, our aircraft destroyed 12 small craft and
damaged many others in the SICILIAN Channel.
Regraded Unclassified
220
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
TO
Secretary Morgenthau
May 10, 1943
FROM Randolph Paul
Following my conversation with you this morning, I
telephoned Mrs. Brady and told her I would have a memorandum
over to her as promptly as possible. I sent one over about
11:05. A copy of this memorandum is attached hereto.
After the hearing, I talked with Senator George who
said he was disposed to file & minority report but that he
was puzzled as to whether a fight on the floor would do any
good. I told him that I had talked with Senators Barkley,
Connally and Hill and that I was to report back to Hill after
I had talked with him. He said he would get in touch with
Hill himself and discuss the matter of a fight on the floor.
Senator George and I talked while walking over to the
Senate and when we got there I discussed the situation with
Bob LaFollette who was sending down his minority report for
suggestions. Currie happened to be in the same room and was
present at this conference. We talked about the possibility
of a fight on the floor and LaFollette urged the view that
the Administration would not be able to make any capital on
the pro-Ruml stand unless it makes a record in the Senate.
This he thought the Administration ought to do even if it
loses.
I then called my office and found that Miss Tully had
called during my absence. I immediately called her on the
telephone and she said that the President had read my memo-
randum and immediately telephoned Senator George. Senator
Connally happened to be with Senator George at the moment
of the call and the President apparently talked with both
of them. This may account for George's attitude that he
Regraded Unclassified
221
- 2 -
might file a minority report and his speculation as to
whether a floor fight would accomplish anything.
Apparently George had not realized how sick Barkley
was and was disturbed by the prospect of his absence. I
told Senator George about my conversation of this morning
with Senator Barkley, a copy of which is attached hereto.
Attachments
Regraded Unclassified
222
C
0
P
Y
May 10, 1943
Memorandum on Taxes
The Senate Finance Committee on Saturday, by a vote
of twelve to seven, decided to report a pay-as-you-go bill
closely modelled on the Ruml-Carlson bill, providing for full
forgiveness of a year's tax with two so-called "windfall"
provisions, the first providing for forgiveness of the lesser
of the 1942 and the 1943 tax, and the second providing for a
special tax on the excess of the income of the forgiven year
over the income of 1938, 1939, or 1940, whichever is larger.
The Senate Finance Committee is meeting at 11:00 a. m.
today, Monday, to put the bill in final form and officially
report it. There is no expectation that any substantial change
will be made.
If the bill passes the Senate in substantially its
present form Lyndon Johnson believes (and I agree) that there
will be no conference. The House was so nearly equally divided
on the Ruml plan at the time of the last vote that it & ppears
they would accept the Senate bill and not risk the danger of
having some compromise like Senator George's adopted in
conference.
Senator George has indicated his opposition to the House
Bill, and seems to favor a uniform 75 percent forgiveness from
top to bottom, with the remaining 25 percent payable over a
two-year period. His reason for supporting this plan as against
the 100 percent forgiveness appears to be the additional revenue
that the Government would receive. I doubt if Senator George
will make any determined fight on the floor against the bill in
general.
I have just talked with Senator Barkley and he regrets
that he will not be available to lead a floor fight against
the bill on account of illness. Senator Lister Hill is not
familiar with the subject and is not in 8. good position to lead
a fight. Senator LaFollette expects to file a minority report
Regraded Unclassified
223
- 2 -
and to make a speech against the bill, but does not care to
carry on an extended fight unless he gets strong support
from the Democrats.
The only man in a position to lead any fight is Senator
Connally. He is going to make 8. speech against the Ruml plan,
but is unwilling to lead a fight because of his many other
irons in the fire. If the President were to talk the situation
over with Senators Connally and George the former might be
willing to make an active fight on the floor. This seems the
only hope on the Senate floor. Even if we lose on the Senate
floor, a strong fight might help the President later.
(signed) Randolph Paul
Regraded Unclassified
224
Mr. Paul's conversation with Senator Barkley 10:00 a.m., May 10, 1943
P: I hear the doctor was with you.
B: I have been laid up ever since Friday. I think I will have
to go back to the hospital. I had a terrible rheumatic
attack in my feet, hands and legs; I have been unable to
walk since Friday.
P: What is it, a flu condition?
B: Yes. I was at the hospital the week before last and felt
all right until last Friday and it hit me again and I have
been laid up ever since. I think I have to go back to the
hospital for the rest of the week. I am not going to be
able to be on the floor on the tax bill.
P: I cal led you because I wondered what would be the Administra-
tion position on the floor. Saturday afternoon, I knew you
were sick, and I talked to two or three people - Connally and
Hill. Hill said he was with us but didn't know enough about
the subject.
B: What is George going to do?
P: George said he wasn't going to make a fight. He expected to
do something in conference but I don't think the bill is
going to conference.
B: I doubt it myself.
P: I had a talk with Lyndon Johnson yesterday and be said he
was pretty sure they would adopt a motion to take the
Senate bill. The only thing that can be done will have to
be done on the floor. I think George may make a speech in
favor of 75% forgiveness as a compromise. I don't know
what will happen. Connaily is going to make a speech against
the bill but didn't feel he could in your absence take
charge because he had too many irons in the fire.
B: When I am away Hill takes over formally to run things, but
he wouldn't feel justified in undertaking
Regraded Unclassified
225
- 2 -
P: If he wanted to organize a fight I would get the material
to him, but I didn't want to do anything definite until
I found out about you.
B: When will the bill be up?
P: Tomorrow.
B: They are going to file a report today. I think it is going
to be hard to beat the Senate with the Republicans lined
up for it. There are 38 Republicans, 57 Democrats and Bob
LaFollette.
P: LaFollette is going to file 8. minority report and will make
a speech but would like to have the Democrats with him.
B: I haven't made a canvassto see how this stands on our side.
Take fellows like Scott Lucas and George Radcliffe in the
Committee who voted for the bill - there are going to be a
good many Democrats that will vote for it.
P: I don't know what the President's position is, of course.
I know he is against the Ruml plan, but I don't know what
his position will be with respect to 8. veto. I am afraid
he is going to ask what he should do and that's a tough
question. Is there anything you would like me to do? I
would like to help in any way I can in regard to your
position or if you want anybody else to take over.
B: I think Connally and George.. Maybe Harry Byrd will speak
against the bill. I should think that he is with us.
P: I think he is with us for the wrong reason.
B: Yes, that's true. Lister is not in a very good position to
make & very good fight.
P: The real key man is Connally.
B: I think so. You have to be careful. George is with us but
you've got to be careful not to make him feel
Regraded Unclassified
226
- 3 -
P: Oh I will talk to him and I will ask him and be perfectly
frank.
B: Have a chat with Connally, and you get together with the
three of them. Hill doesn't attempt to speak for me when
I am not there and really isn't an assistant leader. But
because he is the Whip he takes over to make formal motions
and have the meetings adjourned, etc. He wouldn't like
undertaking to speak for me on this bill.
P: That's what he told me.
B: It might be well to get the three of them together and talk
it out. I am chagrined to death that I can't function.
P: Let me repeat I am awfully sorry. I am sorry that you are
not feeling right and from the standpoint of this bill it
puts a hole in our leadership, but you can't help that.
Take care of yourself and I will follow your suggestion and
talk to George and Connally.
B: Good luck.
P: Good luck to you.
Regraded Unclassified
The Secretary
227
APRIL FINANCING
(In millions)
Through
Final
May 8
May 10
Funds from banking sources:
Treasury bills
$ 800
$ 800
7/8% Certificates
2,138
2,138
2% Bonds
2,110
2,110
Total banking
5,048
5,048
Funds from non-banking sources:
7/5/- Certificates
3,106
3,106
2% Bonas
2,825
2,825
2-1/2% Bonds
3,761
3,761
Series E
1,481)
Savings Bonds Series F
154)
2,015
2,149
Series G
504)
Tax Notes
1,697
1,697
Total non-banking
13,404
13,538
Grand total
$18,452
$18,586
* Includes Seris A Tax nots whereas
May 10, 1943
figures released today to not.
DWB
Regraded Unclassified
228
Analysis of Subscriptions to Securities Offered During Second War Loan
By Classes of Investors and By Issues
Amount of subscriptions -
In millions of dollars
Class of investor
Savings bonds
Tax
2-1/2%
2%
7/8%
Series
Series
notes-
bonds
bonds
Certif-
Bills
Total
I
7 and G
Series C
1964-9
1950-2
icates
1/
I. Nonbanking investors:
(a) Individuals, partnerships, and
personal trust accounts
1,473
425
132
540
472
246
-
3,290
(b) Insurance companies
-
-
-
1,582
703
123
-
2,408
(c) Savings banks
-
-
-
550
539
105
-
1,195
(d) Eleemosynary institutions
-
-
-
35
41
41
-
117
(e) State and local governments
-
-
-
181
82
241
-
503
(f) Other corporations and associations
-
242
1,520
504
789
1,983
-
5,038
(g) Subtotal - all nonbanking investors
1,473
667
1,652
3.392
2,626
2,738
-
12,550
0.
II. Banking sources (allotments only)
-
-
-
2,110
2,138
800
5,048
III. Other sources:
(a) Dealers and brokers 2/
-
-
-
-
189
355
-
544
(b) U. S. Government agencies and
-
-
-
369
10
13
-
391
trust funds
IV. Total - all investors
1,473
667
1,652
3,761
4,935
5.244
800
18,533
May 10, 1943.
Note: Classifications are preliminary and some figures are partly estimated. Figures are rounded and
do not necessarily add to totals.
Net increase in amount outstanding during month only.
Excluding the amounts distributed or earmarked for distribution to nonbanking investors. These have
been redistributed among the appropriate nonbanking investor classes.
Regraded Unclassified
229
Comparison of the Ibscription to Securities Offered
During Second War Loan with the Goals Set for These Subscriptions
By Major Classes of Investors and By Federal Reserve Districts
Amounts in millions of dollars
Percent of goal accomplished
Nonbanking investors
Individuals,
Corporations
Subtotal for
Banking
Other
Grand total
Individuals,
Corpo-
Subtotal
partnerships
and
all nonbanking
sources
sources 1/
Grand
partnerships
rations
- all
District
and personal
total
associations
investors
and personal
and
non-
trusts
- all
trust
associ-
banking
inves-
Sub-
Sub-
Sub-
Allot-
Sub-
Sub-
accounts
ations
sources
tore
scrip-
Goal
scrip-
Goal
scrip-
Goal
ments
Goal
scrip-
Goal
scrip-
Goal
tions
tions
tions
tions
tions
166
200
933
600
1,099
800
-
-
83
156
137
-
Boston
-
-
-
I
New York
737
600
4,119
2,400
4,856
3,000
-
-
-
-
-
-
123
172
162
-
Philadelphia
202
150
444
325
645
475
-
-
-
-
-
-
135
137
136
-
668
972
550
122
223
177
-
Cleveland
304
250
300
-
-
-
-
-
-
195
150
393
200
350
130
197
168
-
Richmond
588
-
-
-
-
-
-
448
189
169
179
-
236
125
211
125
250
-
-
-
-
I
Atlanta
124
186
162
-
Chicago
495
400
1,210
650
1,705
1,050
-
-
-
-
-
-
406
250
-
155
167
162
-
-
100
251
150
-
-
-
-
St. Louis
155
168
170
169
-
Minneapoli
126
75
170
100
296
175
.
-
-
-
-
1
-
-
163
140
150
-
163
100
175
125
338
225
-
-
-
-
Xaneas City
199
146
167
-
Dallas
149
75
183
125
200
-
-
-
-
333
-
-
121
126
124
-
San Francisco
333
275
502
400
835
675
-
-
-
-
-
-
-
-
-
-
29
5,048
5,000
935
-
6,012
-
Unallocated
29
.
-
-
-
Total
3,290
2,500
9,259
8,000
5,048
5,000
935
-
18,533
13,000
132
168
157
143
5,500
12.550
May 10, 1943.
Note: Classifications are preliminary and some figures are partly estimated. Figures are rounded and do not necessarily
add to totals.
1/ Consists of U. S. Government agencies and trust funds and those subscriptions of dealers and brokers not distributed
or earmarked for nonbanking investors.
Regraded Unclassified
230
Summary of the Business Connections of the Chairmen
and Co-Chairmen of the County War Finance Committees
Washington
Business connections
War Savings
Victory Fund
Chairmen
:
:
Chairmen
Banking
18
2
Insurance
2
-
Other business
12
7
Professions
2
-
Government
9
-
Other
-
1
Not available
-
5
Total
43
15
Office of the Secretary of the Treasury,
May 10, 1943.
Division of Research and Statistics.
Note: There are 39 counties in Washington. Some of these have
two or more persons who hold the title of Co-Chairman.
Persons who are members of both War Savings and Victory
Fund Staffs are counted in each column.
Regraded Unclassified
231
County Chairmen of the War Finance Committee
Washington
County
:
Chairman
:
Occupation
VFC
WSS
Adams
David Hoefel
Automobiles
Rex Phillips
Retailer
Asotin
M. L. Martin
Government
Benton
Ted Robertson
Publisher
C. W. Dykes
Banker
Chelan
Perk W. Low
Insurance
Clallam
Roy Jensen
Banker
Clark
Marion Sexton
Radio
Columbia
Mrs. Levi Ankeny
Banker
Cowlitz
H. Sanford Saari
Banker
Douglas
J. M. G. Wilson
Government
Ferry
Lawrence Brown
Merchant
Franklin
O. H. 01son
Not available
C. H. Brewer
Banker
Garfield
H. H. Cardwell
Retailer
Grant
J. Robert White
Not available
C. F. Burke
Banker
Grays Harbor
Stuart Polson
Lumber
Island
C. H. Ruthford
Banker
Jefferson
H. E. Anderson
Government
Morris Sterrett
Government
King
Charles F. Clise
Banker
Dietrich Schmitz
Banker
Kitsap
Clifford R. Christensen
Merchant
Office of the Secretary of the Treasury,
May 10, 1943.
Division of Research and Statistics.
Regraded Unclassified
- 2 -
232
County Chairmen of the War Finance Committee
Washington
:
Chairman
:
Occupation
:
County
VFC
:
WSS
:
:
:
:
Kittitas
John Kelleher
Automobiles
R. E. Rudolph
Communications
Klickitat
A. C. Keefhover
Banker
Oscar Gardner
Merchant
Lewis
R. W. Sprague
Government
Lincoln
Joe K. Alderson
Not available
W. P. Gray
Government
Mason
C. C. Cole
011 Business
Okanogan
V. B. White
Government
Pacific
Ed. Pederson
Auto Dealer
Newspaper Man
#
Pend Oreille
Fred L. Wolf
E. L. Sheldon
Attorney
Banker
*
Pierce
J. I. Kaufman
Leon E. Titus
Automobiles
Harry P. Cain
Government
San Juan
H. B. Averill
Newspaper Man
Cecil L. Carter
Banker
Skagit
H. B. Averill
Newspaper Man
George Monson
Insurance
Skamania
George F. Christensen
Banker
Snohomish
J. H. Pilz
Not available
Thomas W. Paul
Banker
Spokane
Harper Joy
Business
Stevens
J. Lou Johnson
Government
Banker
Thurston
A. K. Matzger
Wahkiakum
C. Edwin Carlson
Banker
Office of the Secretary of the Treasury,
May 10, 1943.
Division of Research and Statistics.
Regraded Unclassified
- 3 -
233
County Chairmen of the War Finance Committee
Washington
:
Chairman
:
County
Occupation
---
:
VFC
:
WSS
:
:
:
Walla Walla
D. F. Baker
Investment
Banker
F.E. Quist
Banker
*
Whatcom
Jack Green
Fisherman
Harry C. Heal
Banker
Whitman
Wyman Cox
Business
S. R. Clegg
Attorney
Yakima
Ted Robertson
Not available
Frank D. Arnold
Banker
Office of the Secretary of the Treasury,
May 10, 1943.
Division of Research and Statistics.
Regraded Unclassified
234
Summary of the Business Connections of the Chairmen
and Co-Chairmen of the County War Finance Committees
Illinois
Business connections
War Savings
Victory Fund
Chairmen
Chairmen
Banking
44
100
Insurance
2
3
Other business
35
11
Professions
8
1
Government
4
1
Other
5
1
Not available
6
-
Total
104
117
Office of the Secretary of the Treasury,
May 10, 1943.
Division of Research and Statistics.
Note: There are 102 counties in Illinois. Some of these have
two or more persons who hold the title of Co-Chairman.
Persons who are members of both War Savings and Victory
Fund Staffs are counted in each column.
Regraded Unclassified
235
County Chairmen of the War Finance Committee
Illinois
:
County
Chairman
:
:
:
Occupation
VFC
wss
Adams
Howard T. Fuller
Banker
Andrew Schnack
Banker
Alexander
V. M. Brown
Banker
Harry B. Emerson
Banker
Bond
G. J. McCune
Banker
George V. Weise
Banker
Boone
A. V. Dempsey
Banker
John Foley
Banker
Sidney Gorman
Banker
Brown
Carl Husted
Banker
E. W. Steinbeck
Banker
Bureau
A. W. Boyden
Banker
L. H. Luther
Banker
Calhoun
R. O. Stout
Banker
George W. Carpenter
Government
Carroll
Laurence H. Miles
Banker
Chas. E. Stuart
Not available
Case
Floyd Condit
Banker
M. M. Cruft
Banker
Champaign
Frank Amsberry
Public Utility
Christian
Bert Hopper
Industry
Clark
D. E. McReaken
Banker
Victor 0. Miller
Business
H. D. Friend
Banker
Clay
0. C. Hemphill
Banker
Clinton
Leo B. Frerker
Banker
D. W. Foran
Industry
Coles
F. W. Claar
Banker
E. W. Vollmer
Banker
May 10, 1943.
Office of the Secretary of the Treasury,
Division of Research and Statistics.
Regraded Unclassified
236
- 2 -
County Chairmen of the War Finance Committee
Illinois
:
Chairman
:
County
Occupation
:
VFC
:
WSS
:
Cook
J. N. Whipple
Banker
Crawford
J. B. McKnight
Banker
#
Joe P. Benson
Banker
Cumberland
Wilton A. Carr
Attorney
B. C. Willis
Banker
De Kalb
Clifford Danielson
Banker
De Witt
T. S. Dinsmore
Banker
Raymond Luttrell
Banker
Douglas
Grover R. Helm
Banker
Boyd Pond
Public Utility
Du Page
H. L. Engstrom
Banker
E. H. Krele
Banker
*
C. B. Weaver
Banker
*
Edgar
Ward E. Dillavou
Industry
*
Wm. W. Lucas
Banker
#
Edwards
Alan B. Gill
Banker
Effingham
George I. Danks
Banker
George L. Delin
Banker
Fayette
H. E. Rogier
Banker
Coral H. Brooks
Banker
Ford
Banker
#
D. A. Frederick
Ernest Swanson
Industry
Franklin
Charles M. Johnson
Banker
Francis C. Spence
Chamber of
Commerce
R. H. Havens
Banker
H.E. Morgan
Business
Fulton
H. B. Heald
Banker
Fred Mercer
Not available
Office of the Secretary of the Treasury,
May 10, 1943.
Division of Research and Statistics.
Regraded Unclassified
- 3 -
237
County Chairmen of the War Finance Committee
Illinois
:
County
Chairman
:
:
Occupation
VFC
WSS
:
Gallatin
W. B. Phillips
Banker
J. T. Colnon
Not available
Greene
W. W. Wilkinson
Banker
S. P. Vaughn
Banker
Grundy
Arley Munts
Attorney
W. G. Penn
Banker
Hamilton
George W. Hogan, Jr.
Banker
Herman E. Gibbs
Banker
Hancock
James L. Garretson
Banker
Fred J. Reu
Banker
Judge Burton A. Roeth
Government
Hardin
E. F. Carter
Banker
Henderson
Arlington Gittings
Government
ienry
Arthur Cook
Business
Fred A. Pope
Banker
Iroquois
J. 8. Evans
Banker
C. R. Clark
Industry
Jackson
J. E. Mitchell
Banker
R. A. Crawshaw
Industry
Richard L. Beyer
Industry
Jasper
William E. Shackmann
Banker
Roy McCormack
Banker
Jefferson
George W. Howard, Jr.
Attorney
Marlin Rich
Banker
Jersey
Earl Adams
Banker
R. Leo Smith
Business
Jo Daviess
Paul Jones
Business
F. F. McGuire
Banker
Office of the Secretary of the Treasury,
May 10, 1943.
Division of Research and Statistics.
Regraded Unclassified
- 4 -
238
County Chairmen of the War Finance Committee
Illinois
:
County
Chairman
Occupation
VFC
WSS
:
Johnson
P. T. Chapman
Banker
Max McGraw
Business
Kane
A. J. Wilkening
Banker
C. W. Ross
Banker
Kankakee
George H. Cooley
Business
Kendall
P. H. Miller
Business
Ed. I. Gutel
Banker
Knox
Sidney F. Smith
Banker
R. C. Worchester
Banker
Lake
James F. Stiles, Jr.
Business
Charles Steele
Banker
LaSalle
Fred A. Gerding
Banker
W. NeVoy Strawn
Banker
Lawrence
H. W. Madding
Banker
Karl A. Glover
Banker
Lee
Clyde Lennox
Banker
0. L. Dehant
Business
Livingston
J. C. Greenebaum
Banker
Ed. M. Hoffman
Banker
Logan
Roy H. Johnson
Business
James M. McGrath
Banker
McDonough
H. Dewey Ewing
Attorney
James H. Foster
Chamber of
Commerce
McHenry
H. T. Cooney
Banker
W. M. Carroll
Business
McLean
George R. Morrison
Banker
Macon
Lynn W. Clark
Business
E. B. Evans
Business
Office of the Secretary of the Treasury,
May 10, 1943.
Division of Research and Statistics.
Regraded Unclassified
239
- 5 -
County Chairmen of the War Finance Committee
Illinois
:
County
Chairman
:
Occupation
VFC
:
WSS
:
:
Macoupin
Ira McCollom
Banker
Geo. W. Darmstaedter
Business
Madison
Lawrence Keller
Banker
Henry D. Karandjeff
Banker
Marion
Ben Ober
Banker
A. H. Bachman
Banker
T. G. Braden
Not available
Marshall
Robert V. Dewey
Farmer
B. J. Ghiglieri
Banker
Mason
Lyle W. Anno
Banker
Clyde D. Easton
Public Utility
Massac
Lindell Sturgis
Banker
Paul Miller
Business
Menard
Rev. B. H. Selcke
Clergyman
Elmer L. Primm
Banker
Mercer
L. Boyd Finch
Business
J. F. Schmidt
Banker
Monroe
Montgomery
E. R. Davis
Business
Omer Poos
Not available
Morgan
C. A. Johnson
Banker
Francis R. Rantz
Not available
Chester Horn
Retailer
Moultrie
Paul M. Krows
Banker
Banker
Ogle
L. 0. Lundgren
Gerald M. Poley
Banker
N. Curtis Cation
Banker
#
Peoria
Lester O. Schriver
Insurance
May 10, 1943.
Office of the Secretary of the Treasury
Division of Research and Statistics
Regraded Unclassified
240
- 6 -
County Chairmen of the War Finance Committee
Illinois
:
County
Chairman
Occupation
VFC
WSS
:
:
Harry Lancaster
Banker
Perry
A. J. Guerrettaz
Banker
William Crawford
Banker
#
Piatt
W. B. Porterfield
Banker
#
Bela M. Stoddard
Farmer
Pike
E. J. Stauffer
Banker
#
Dallas Wellborne
Public Utility
*
Pope
O. R. Kerley
Banker
Pulaski
H. H. Melton
Government
Putnam
E. R. Harris
Banker
Robert V. Dewey
Business
Randolph
C. R. Torrence
Banker
E. J. Karsch
Banker
*
Richland
Alan Hyde
Banker
James P. Wilson
Banker
Rock Island
J. E. Schearer
Banker
H. Parker Weeks
Attorney
F. B. White
Insurance
Saint Clair
Arthur Erdman
Banker
Paul S. Abt
Banker
Dan D. Goodell
Banker
C. A. Herligenstein
Banker
Banker
#
Saline
F. B. Gray
G. O. Davenport
Industrialist
H. B. Bartholf
Insurance
Sangamon
George W. Bunn, Jr.
Banker
Banker
Logan Coleman
Business
Noah Dixon
Banker
H. Goodsett
Benjamin Harrison
Insurance
Banker
Fred H. Luers
Banker
R. E. Patton
Insurance
John L. Taylor
May 10, 1943.
Office of the Secretary of the Treasury
Division of Research and Statistics
Regraded Unclassified
241
- 7 -
County Chairmen of the War Finance Committee
Illinois
:
County
Chairman
:
Occupation
VFC
WSB
:
:
Schuyler
Robert A. Lawler
Retailer
C. S. Loring
Banker
#
Scott
S. G. Smith
Banker
Shelby
G. L. Tullman
Business
Russell Younger
Banker
Stark
Dr. Fred Brown
Physician
Earl O. Turner
Banker
Stephenson
J. H. Rosenstiel
Banker
Paul Seitz
Attorney
Tazewell
Fred J. Moenkemoeller
Business
I. M. Weimer
Banker
Union
Melvin C. Lockard
Banker
W. P. Harper
Banker
Vermilion
Harold C. Grays
Banker
Philip F. Theurer
Business
Wabash
J. E. Williams
Banker
L. R. Leach
Public Utility
Warren
M. G. Soule
Farmer
Washington
A. H. Maschhoff
Banker
Charles R. Huegely
Banker
J. K. Williamson
Business
D. R. Garrison
Banker
Wayne
J. G. Endicott
Banker
White
J. F. Marlin
Railroad
Whiteside
W. L. Hendricks
Banker
Business
Lyle B. Wiloox
Will
Louis R. Peyla
Banker
Banker
0. R. Reardon
May 10, 1943.
Office of the Secretary of the Treasury
Division of Research and Statistics
Regraded Unclassified
242
- OR -
County Chairmen of the War Finance Committee
Illinois
:
Chairman
:
County
Occupation
.....
:
VFC
:
WSS
:
:
:
:
Williamson
Floyd P. Bracy
Banker
H. A. Whittenberg
Banker
J. C. Keltner
Banker
F. P. Berriger
Business
Winnebago
P. N. Peterson
Banker
Woodford
Richard Dickinson
Labor
Frank M. Rice
Banker
*
Office of the Secretary of the Treasury
May 10, 1943.
Division of Research and Statistics
Regraded Unclassified
243
Summary of the Business Connections of the Chairmen
and Co-Chairmen of the County War Finance Committees
Indiana
War Savings
Victory Fund
Business connections
:
Chairmen
Chairmen
:
:
Banking
22
81
Insurance
7
-
Other business
25
6
Professions
10
-
Government
10
1
Other
3
-
Not available
2
4
Total
79
92
Office of the Secretary of the Treasury,
May 10, 1943.
Division of Research and Statistics.
Note: There are 92 counties in Indiana. Some of these have
Persons who are members of both War Savings and Victory
two or more persons who hold the title of Co-Chairman.
Fund Staffs are counted in each column.
Regraded Unclassified
244
County Chairmen of the War Finance Committee
Indiana
:
:
County
Chairman
Occupation
VFC
WSS
:
:
Adams
Earl Caston
Banker
*
T. F. Graliker
Banker
*
Allen
Merle J. Abbett
Government
+
Charles H. Buesching
Banker
#
Bartholomew
Edwin S. Andersen
Business
*
Meredith Lienberger
Banker
Benton
Glen E. Buzick
Banker
F. Edward Dumas
Attorney
Blackford
Mrs. Hazel H. Cook
Housewife
James Cronin
Banker
#
Boone
J. M. Cline
Banker
*
Lester Jones
Banker
#
Brown
Howard S. Zody
Banker
Carroll
Chris Chamales
Business
C. D. McKinley
Banker
Cass
W. A. Deniston
Banker
#
Wilbur H. Van Horn
Public Utilities
Clark
Harry Leist
Banker
Clay
Dane E. Burns
Banker
John H. Riddell
Banker
#
Clinton
Banker
#
Paul C. Cullom
Arthur Lorretti
Insurance
Crawford
Irwin A. Fahr
Banker
Daviess
Theodore Reininga
Banker
Dearborn
Cornelius O'Brien
Banker
Crawford A. Peters
Attorney
Investment
Decatur
George Redelman
Judge Raymond Rolfes
Jurist
May 10, 1943.
Office of the Secretary of the Treasury,
Division of Research and Statistics.
Regraded Unclassified
245
- 2 -
County Chairmen of the War Finance Committee
Indiana
:
County
Chairman
Occupation
VFC
:
wss
:
De Kalb
J. D. Haggerty
Banker
Fisher C. West
Insurance
Delaware
Frank B. Bernard
Banker
James Clawson
Chamber of
Commerce
Dubois
J. 0. Sanders
Banker
Elkhart
Robert E. Proctor
Attorney
C. B. Wright
Banker
Roy S. Ruckman
Not available
Gordon Pease
Industrialist
Fayette
Angus E. Deaton
Banker
Floyd
A. R. Rue
Banker
Fountain
Marvin H. Cook
Banker
Benno Scheidler
Business
Franklin
John P. Goodwin
Banker
Carl C. Hofer
Banker
Fulton
Lisle Krieghbaum
Amusements
Percy Smith
Banker
Gibson
Henry W. Reinhart
Banker
Grant
T. C. Wilson
Banker
Robert Batton
Attorney
Greene
Charles B. Hollars
Banker
Hamilton
Alden H. Baker
Banker
B. F. MoLaughlin
Banker
Hancock
A. C. Downing
Banker
J. 8. Fletcher
Banker
Harrison
R. Earl Miller
Banker
May 10, 1943.
Office of the Secretary of the Treasury,
Division of Research and Statistics.
Regraded Unclassified
246
- 3 -
County Chairmen of the War Finance Committee
Indiana
:
....
:
County
Chairman
Occupation
:
VFC
:
WSS
:
:
Hendricks
John A. Kendall
Attorney
*
C. G. Pike
Banker
Henry
R. R. Jones
Banker
#
Willard T. Jordon
Banker
Howard
Carl F. Johnson
Industrialist
#
Huber Waggaman
Industrialist
Huntington
D. R. Wygant
Banker
Delano Trovinger
Merchant
Jackson
C. G. Steinwedel
Banker
Jasper
R. L. Helvie
Banker
*
Merchant
#
Phil Wood
Business
#
Jay
Orren E. Holsapple
L. W. Hoover
Banker
#
Banker
*
Jefferson
Richard Johnson
Jennings
Leslie Helm
Merchant
*
Banker
*
A. E. Siener
Johnson
Harry Grose
Banker
Will R. Johnson
Banker
#
Knox
Broker
*
M. W. Welsh
Harold Axe
Government
#
L. V. Phillips
Government
Herbert L. Espich
Public Utility
#
Kosciusko
Eugene T. White
Banker
Floyd Perkins
Banker
*
Lagrange
#
Howard Yoder
Government
Public Utilities
Lake
Lawrence Dorsey
W. W. Gasser
Banker
May 10, 1943.
Office of the Secretary of the Treasury,
Division of Research and Statistics.
Regraded Unclassified
- 4 -
247
County Chairmen of the War Finance Committee
Indiana
:
County
Chairman
:
Occupation
VFC
WSS
:
:
:
La Porte
John M. French
Government
Ara K. Smith
Government
J. C. Smith
Banker
Lawrence
Arch C. Voris
Banker
Madison
James R. Day
Insurance
Linfield Myers
Banker
Marion
Robert Adams
Attorney
William C. Griffith
Banker
Marshall
H. M. Cox
Banker
Marshall F. Kizer
Attorney
Martin
J. T. Prather
Banker
Miami
Paul Crodian
Government
O. A. Life
Banker
Monroe
M. R. Currie
Business
A. 0. Henry
Baker
Montgomery
Herbert C. Morrison
Banker
T. A. Hendricks
Insurance
Morgan
M. R. Wilson
Banker
Newton
George Sammons
Attorney
Edgar Teague
Banker
Donald M. Campbell
Banker
Noble
Eugene V. Carteaux
Insurance
Leonard G. Gibson
Merchant
Ohio
J. M. Glatz
Merchant
Orange
Raymond Stout
Banker
Owen
Carter C. Jackson
Not available
Frank R. Stewart
Drugs
May 10, 1943.
Office of the Secretary of the Treasury,
Division of Research and Statistics.
Regraded Unclassified
248
- 5 -
County Chairmen of the War Finance Committee
Indiana
:
County
Chairman
:
Occupation
VFC
WSS
:
:
Parke
R. P. Crays
Banker
Curtis Hostetter
Publishing
#
Perry
Sam Anderson
Banker
#
Pike
R. L. Burns
Banker
#
Porter
Paul Nuppnau
Banker
#
Harold A. Sievers
Insurance
Posey
L. P. Cox
Banker
*
Herbert Leffel
Newspaper Man
*
Pulaski
Ralph E. Horner
Banker
$
Clarence G. Long
Banker
#
Putnam
Fred L. O'Hair
Banker
+
*
Randolph
Business
#
Russell McHatton
Purl I. Turner
Banker
#
Ripley
John A. Hillenbrand
Banker
#
#
Rush
I. Lee Endres
Furniture
Jurist
#
Judge William F. Marshall
Saint Joseph
William Klusmeier
Insurance
Albert MoGann
Securities
#
Scott
E. B. Johnson
Banker
#
Shelby
William F. Loper
Government
Banker
#
Walter R. Myers
Spencer
R. E. Schroer
Banker
#
Starke
G. C. Johnson
Banker
*
*
Perry W. Uncapher
Banker
Steuben
Hon. Alphonso C. Wood
Attorney
*
A. E. Jackson
Banker
si
Sullivan
Banker
Gus Lowry
May 10, 1943.
Office of the Secretary of the Treasury,
Division of Research and Statistics.
Regraded Unclassified
249
- 6 -
County Chairmen of the War Finance Committee
Indiana
----
:
:
County
Chairman
:
:
Occupation
VFC
WSS
Switzerland
E. W. Tilley
Banker
#
Tippecanoe
Harry G. Jenkins
Mail Order
Ralph M. Mayerstern
Not available
Burr S. Swezey
Banker
#
Tipton
R. S. Martin
Banker
Judge Frank B. Russell
Jurist
Union
Robert B. Driggs
Merchant
Norman H. Johnson
Banker
+
Vandenburg
F. J. Bernhardt
Banker
#
Vermillion
V. N. Asbury
Banker
Mrs. Della S. Swinehart
Housewife
*
Vigo
Thomas J. Doherty
Not available
#
Anton Hulman
Industrialist
#
Wabash
B. P. Allen
Banker
#
Claude E. Minear
Industrialist
Warren
R. H. Shannon
Banker
Warrick
Kenneth Weyerbacker
Not available
#
Washington
Paul A. Graves
Not available
*
Wayne
Banker
*
Dudley N. Elmer
Wm. E. Roney
Furniture
Wells
Don. L. Carnall
Public Utilities
*
White
C. H. Gladen
Banker
#
Charles Siferd
Attorney
Whitley
F. N. Northam
Banker
Foster W. Riddick
Publisher
Office of the Secretary of the Treasury,
May 10, 1943.
Division of Research and Statistics.
Regraded Unclassified
250
Summary of the Business Connections of the Chairmen
and Co-Chairmen of the County War Finance Committees
New York
War Savings
Victory Fund
Business connections
Chairmen
Chairmen
Banking
20
50
Insurance
3
1
Other business
19
3
Professions
6
-
Government
9
-
Other
5
-
Not available
2
3
Total
64
57
Office of the Secretary of the Treasury,
May 10, 1943.
Division of Research and Statistics.
Note: There are 62 counties in New York. Some of these have
two or more persons who hold the title of Co-Chairman.
Persons who are members of both War Savings and Victory
Fund Staffs are counted in each column.
Regraded Unclassified
251
County Chairmen of the War Finance Committee
New York
:
County
Chairman
:
Occupation
VFC
WSS
:
:
Albany
Herbert J. Kneip
Banker
Thomas W. Cantwell
Lawyer
*
Harold E. Deuel
Broker
Allegany
George B. Rooth, Jr.
Banker
Bronx
John Kadel
Attorney
Broome
Bruce L. Babcock
Industry
Cattaraugue
Mark M. Holmes
Banker
#
Robert L. Davis
Banker
Cayuga
Frederick E. Worden
Banker
William B. Haeffner
Industry
Chautauqua
C. George Niebank
Banker
Charles Teschner
Banker
Elmer W. Sellstrom
Not available
Chemung
W. H. McElwein
Public Utilities
Chenango
Otis A. Thompson
Banker
Clinton
Roger B. Prescott
Banker
E. B. Doherty
Banker
Columbia
F. I. Ellenberger
Banker
C. E. Dooley
Business
Cortland
Hugh H. Williams
Banker
#
Geo. C. Marsted
Business
Delaware
E. Burnham Guild
Banker
Dutchess
Paul J. Miller
Government
John R. Evans
Banker
#
Erie
Stanley A. Neilson
Banker
Walter J. Monro
Banker
Howard Kellogg
Business
Carlton P. Cooke
Banker
Office of the Secretary of the Treasury,
May 10, 1943.
Division of Research and Statistics.
Regraded Unclassified
252
- 2 -
County Chairmen of the War Finance Committee
New York
:
County
Chairman
:
:
:
Occupation
VFC
WSS
Essex
Roger B. Prescott
Banker
W. W. Waite
Attorney
Franklin
Roger B. Prescott
Banker
*
E. T. Rider
Chamber of
Commerce
Fulton
Everett Karg
Banker
#
John Lafabregue
Banker
Genesee
Charles A. Graham
Banker
Rev. William C. Kirby
Clergyman
Greene
F. I. Ellenberger
Banker
Judge Paul Fromer
Government
Hamilton
Everett E. Karg
Banker
John Collins
Business
Herkimer
Arthur M. Roberts
Banker
#
George J. Sluyter
Banker
Jefferson
B.A.Gray
Banker
Lester H. Morgan
Not available
Kings
Nole Maxey
Insurance
#
Lewis
G. H. P. Gould
Banker
#
C. D. Kingsbury
Government
Livingston
James E. Welch
Banker
Mrs. F. D. L. Stowe
Housewife
Madison
Banker
#
William F. Santry
Lynn E. Johnson
Government
Monroe
Elmer B. Milliman
Banker
Mrs. John R. Booth
Housewife
Montgomery
James E. Vorhees
Banker
Ed. W. Shineman
Business
#
Nassau
William F. Ploch
Banker
#
Leone D. Howell
Government
Office of the Secretary of the Treasury,
May 10, 1943.
Division of Research and Statistics.
Regraded Unclassified
253
- 3 -
County Chairmen of the War Finance Committee
New York
:
County
Chairman
:
:
:
Occupation
VFC
WSS
Niagara
George F. Bates
Banker
George W. Hetley
Business
New York
W. Randolph Burgess
Banker
Oneida
Francis P. McGinty
Banker
Graham Coventry
Taxpayers
League
Edwin D. Bevitt
Insurance
Onondaga
Albert B. Merrill
Banker
Paul H. Conway
Insurance
Ontario
Philip E. Thomas
Public Utilities
Orange
William E. Cross
Banker
#
John S. Sammis
Banker
#
Orleans
Clayton A. House]
Banker
Francis H. Blake
Business
Oswego
John K. O'Connor
Banker
William G. O'Brien
Business
Otsego
M.P. Neal
Government
B. C. Lauren
Banker
Judge S. P. Harrington
Government
Putnam
Leland Ryder
Banker
Queens
Louis C. Gosdorfer
Banker
Rensselaer
Business
*
R. O. Kennedy
John Tower
Not available
Richmond
Richard H. Crowe
Banker
*
*
Rockland
M. Montgomery Maze
Banker
St. Lawrence
Ralph H. Michaels
Banker
C. Peter Scheller
Public Utilities
#
Office of the Secretary of the Treasury,
May 10, 1943
Division of Research and Statistics.
Regraded Unclassified
254
- 4 -
County Chairmen of the War Finance Committee
New York
:
County
Chairman
:
:
Occupation
VFC
WSS
Saratoga
W. M. Bowden
Insurance
F. P. Moynehan
Banker
Neil Hodsoll
Banker
*
Schenectady
J.W. Lewis
Business
#
W. W. Trench
Public Utilities
Schoharie
B. C. Lauren
Banker
#
W. H. Golding
Attorney
Schuyler
Warren W. Clute
Business
Seneca
Thomas P. Bevins
Banker
Henry W. Koch
Attorney
Steuben
William H. Curtiss
Industry
Suffolk
Hon. L. Barron Hill
Government
Sullivan
Eimer Dell
Banker
*
Tioga
Harold C. Watrous
Banker
E. B. Cornell
Banker
Tompkins
John C. Burns
Business
Ulster
Mrs. Howard Lewis
Housewife
W. H. Van Etten
Banker
#
Warren
W. M. Bowden
Not available
#
Banker
*
F. P. Moynehan
Hubert C. Brown
Banker
Washington
W. M. Bowden
Not available
F. P. Moynehan
Banker
*
James Gibson, Jr.
Government
Wayne
John W. Hickey
Banker
Harrison C. Bloomer
Business
Office of the Secretary of the Treasury,
May 10, 1943.
Division of Research and Statistics.
Regraded Unclassified
255
- 5 -
County Chairmen of the War Finance Committee
New York
....
:
:
County
Chairman
Occupation
-----
VFC
:
.....
WSS
:
:
:
Westchester
Andrew Wilson, Jr.
Banker
#
John Krepps
Banker
O. W. Birckhead
Banker
#
Richard A. Greer
Banker
#
Wyoming
T. G. Lindstrom
Banker
#
Reade Clarke
Publishing
Yates
Harry M. Putnam
Banker
#
Wells Jewett
Business
#
Office of the Secretary of the Treasury,
May 10, 1943.
Division of Research and Statistics.
Regraded Unclassified
258
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
CONFIDENTIAL
DATE May 10, 1943
TO
Secretary Morgenthau
FROM
Mr. Hass
Subject: The Business Situation,
Week ending May 8, 1943.
Summary
Wage control: The outlook for effective wage stabilization
continues uncertain, with the United Mine Workers still
refusing to participate in WLB proceedings and organized
labor generally critical of existing policies. Indicative
of the pressure to which it is being subjected, the WLB
has been pressing Stabilization Director Byrnes for
"clarifications" of the wage provisions of the hold-the-
line order.
Subsidies: Increased use of subsidies to out living costs 18
foreshadowed in the food subsidy program announced last week
by the OPA. Effective June 1, retail prices of meats, butter
and coffee are to be rolled back 10 percent by means of
subsidy payments from the RFC. Actually, subsidy payments
for various purposes already are being made on an extensive
scale, with press reports estimating amounts thus being
spent at more than $600 millions annually.
Price control: In furtherance of its recently announced 4
point price control program, the OPA has just put into
effect specific dollar-and-cents ceiling prices on about
50 percent of all grocery products in 150 cities. This
move is expected to reduce prices in high-cost areas.
During the next few weeks the OPA expects to impose further
community ceiling prices until most foods are covered.
National income payments: Income payments attained an annual
rate of $137.7 billions in March, as compared with $135.0 b11-
lions in the previous month and only $107.0 billions in
March 1942. Salaries and wage payments during March were
nearly 32 percent above 1942 levels. In contrast, interest
and dividend payments were only 2 percent higher.
Stock prices: Both stock prices and trading activity rose re- to
new highs for the year last week, 8.8 prices more than on
Friday, gained industrial stock prices at the close on
last month's loss. Despite a rather sharp Saturday drop
were about 2 percent higher than a week earlier.
Regraded Unclassified
257
- 2 -
Progress of anti-inflation program
Some significant shifts in the hold-the-line program
appeared to be under way last week as evidence accumulated
that modifications in policy would have to be made before
effective stabilization of prices and wages can be achieved.
The WLB resumed hearings in the coal wage dispute despite
the continued refusal of the United Mine Workers to
participate. While maintaining an outward show of strength
and reaffirming adherence to the "Little Steel" formula,
the WLB admitted that it had been pressing Stabilization
Director Byrnes for "clarifications" in connection with the
wage provisions of the hold-the-line order.
Meanwhile increased reliance on subsidies in the
struggle to cut living coste was foreshadowed in the OPA
announcement that retail prices of meats, butter and coffee
would be rolled back on June 1 by means of subsidy payments
from the RFC. In another move to tighten price control, the
OPA has just put into effect specific dollar-and-cents ceiling
prices on about 50 percent of all grocery products in 150 cities.
Wage control outlook uncertain
Confronted with the general discontent of organized
labor and the absolute defiance of John L. Lewis, it remains
to be seen whether the WLB will be able to cope with the labor
situation without some further changes in present wage
stabilization policies. Under the "Little Steel" formula the
WLB aims to limit wage increases to the 15 percent rise which
occurred in the BLS cost-of-living index during the period
from January 1941 to May 1942.
However, as 1s well known, living costs have shown a
further substantial rise since last May. Thus by February,
the latest month for which the BLS cost-of-living index 1s
available, living costs were 20 percent above the January been 1941
level. To further complicate matters, the BLS index has
officially discredited by the Price Administrator as failing BLS
to reflect the full rise in actual living costs. A new
index is now being constructed which will doubtless show a
greater rise than 20 percent since the base date used in rise the
"Little Steel" formula, as compared with the 15 percent be
covered by the formula. This new index 18 expected to
published in the near future.
technically vulnerable. However, from a practical standpoint,
In the light of the foregoing, the WLB position 18
Regraded Unclassified
258
- 3 -
the WLB position 18 fortified by the fact that workers'
average weekly earnings have increased much faster than
living costs, owing to the longer work week, larger
earnings from overtime, and higher basic wage rates.
Average weekly earnings of factory workers have risen 54 per-
cent since January 1941, through February 1943.
Subsidy plan to reduce living costs announced
As part of a major effort to roll back living costs
2-1/2 percent to the level of September 15, 1942, and thus
in part remove the ground for increased wage demands, a food
subsidy program estimated to cost $495 millions was announced
Friday by the Price Administrator. Under this program, to
be financed by RFC funds paid to processors of these
commodities, retail prices of meats, butter, and coffee will
be reduced approximately 10 percent beginning June 1. The
inclusion of only rationed goods will help to insure the
workability of the program and will tend to minimize costs.
Extension of the subsidy to canned vegetables is looked
for shortly. Together with the subsidies already announced,
this part of the program is expected to bring about a
reduction of 1 percent in the cost-of-living index. A plan
to reduce prices of fresh vegetables (without use of subsidies)
1s also under consideration, intended to reduce living costs
an additional 1/2 percent. Finally, a 1 percent reduction 18
expected from rigid enforcement of existing and forthcoming
OPA regulations, 88 black markets are brought under control.
The subsidy plan will apparently face some opposition
from the farm bloc in Congress. Labor interests, on the other
hand, have called for an expansion of the program to include
all essential foods, and for a roll-back to the May 15, 1942
levels. The Wholesale Grocers' Association, while continuing
its opposition to subsidies "in principle", has indorsed the
Meanwhile, some editorial comment has cautioned against illusion relying
current program as preferable to a price squeeze or to inflation.
of price stability which actually does not exist, and represent
too much on subsidies, on the ground that they give an
a costly expedient which must be used with much discretion.
Subsidies follow British and Canadian experience
stabilizing The living costs follows successful experience with were
decision to make extensive use of subsidies in
in Great Britain and Canada, where subsidies from
accepted their use as an essential factor in price stabilization
the very beginning of general price control. Food prices
Regraded Unclassified
259
- 4 -
and living costs in those countries, as reflected in
published indexes, have shown a marked degree of stabilization
for more than a year, in decided contrast to the trends of
similar indexes for the United States. (See Chart 1.)
Although little publicized, subsidies have been used
more extensively than generally realized in the United
States, prior to the plan to employ them more largely for
holding down living costs. Best estimates of the amount
being spent annually in this country for subsidies of
various kinds, according to press reports, total $600 mil-
lions or more. (These figures do not include parity and
soil conservation payments.) Most of the subsidy payments
have been dispensed by three agencies; the Reconstruction
Finance Corporation, through its subsidiaries, the Defense
Supplies Corporation, the Metals Reserve Corporation, and
the Copper Recovery Corporation spending about $373 m11-
lion annually; the Department of Agriculture, through the
Commodity Credit Corporation, the Agricultural Marketing
Administration, and the Agricultural Adjustment Administration,
8114 million; and the War Shipping Administration, from $103
to $120 million.
Three types of subsidies
Subsidies currently used in this country fall into
three general classifications: (1) direct payments to private
concerns, (2) purchase and resale at a loss, (3) grarting
Government insurance or services at rates not high enough to
compensate for losses sustained. The following table indicates
some of the important items subsidized and the methods used:
Petroleum: Payments to East Coast "importers" to defray
higher transportation costs.
Coal: WSA bears increased cost of water shipments and
DSC compensates New England and New York receivers
for higher rail costs.
Copper, lead, zino: Premium paid for all output of
mines over certain quotas.
Chilean nitrate: To compensate for increased trans-
Nitrate Sales Corporation and resells it to them
portation costs, DSC buys nitrate from Chilean
at a loss.
Cheese: CCC buys No. 1 American cheddar cheese from
factories and resells it to the same companies below
purchase price.
Regraded Unclassified
260
- 5 -
Sugar: Payments to refiners to defray higher trans-
portation costs.
Grain alcohol: CCC sells corn and wheat to manufacturers
of industrial alcohol at prices below cost.
Other subsidized commodities are the 1943 pack of canned
tomatoes, peas, sweet corn, and snap beans; vegetable fats
and oils going into food; nicotine sulphate for insecticides;
and many imports including coffee, cocoa, henequin, sisal,
oilseeds, copper, tin, antimony ore, wool, tea, tobacco, and
drugs.
Specific community ceilings placed on many foods
Dollar-and-cents price ceilings on 8 substantial number
of grocery products will go into effect today in about 150
cities. This represents the first step to become effective
in Price Administrator Brown's four-point food price program.
The new ceilings are expected by the OPA to reduce food costs
in high-cost areas, including most of the larger cities, by
facilitating the enforcement of price regulations and
discouraging black market sales. With the community ceilinge
published, the consumer can now more readily determine whether
the price paid for an item 18 within the ceiling price.
The new ceiling program covers poultry, fluid milk,
bread, eggs, butter, packaged cheese, cereals, evaporated
and condensed milk, and a few other items. It specifies
the highest legal price which grocers may charge in the
cities covered, but stores which are restricted by present
regulations to prices lower than the new ceilings are
required to adhere to the lower prices. According to the
OPA, community ceiling prices will be imposed on additional
groups of commodities during the next 3 weeks until most
foods are covered.
Meat prices, however, will not be included under
community maximum ceilings, but will be governed by ceilings
applicable to all stores of 8 given type in various price
zones. Pork has been under dollar-and-cents ceilings since
April 1, and beef, veal, lamb, and mutton will be placed
under such ceilings May 17.
Food prices of outstanding inflationary importance
It is doubtful whether enough recognition has as yet
been given in this country to the fact, apparently well
Regraded Unclassified
261
- 6 -
recognized in Great Britain and Canada, that the problem of
inflation control is essentially a problem of controlling
food prices. In addition to the well-known effect of food
prices on wage demands in creating an inflationary spiral,
both statistics and recent experience emphasize the key
position that food holds in our price structure.
Department of Commerce estimates of the gross flow of
finished commodities, for example, show that in 1940 (the
last year before the general price advance began) food
products made up 39 percent of the total flow of consumers'
and producers' commodities combined, and 45 percent of the
flow of consumers' commodities alone. If tobacco products
are added to the food group, the proportion in that year
would be raised to 43 percent of the total, and to 50 per-
cent of consumers' goods. In the current year, the proportion
of food among consumers' goods has doubtless increased, while
war production has reduced the proportion of food in the total
flow of commodities,
Under the so-called "inflationary gap" theory, a
deficiency in supply of goods, as compared with the volume
of spendable funds, must be adjusted through an increase in
savings or P. rise in prices, or both. Looking back over
recent experience, it is worthy of note that the rise in
prices necessary to close the "gaps" in 1941 and 1942 was
centered largely in foods. (See Chart 2.) During the period
from January 1941 to March 1943, according to BLS data, food
prices at wholesale rose 46 percent, while commodities other
than farm products and foods rose only 14 percent.
That the greatest impact of consumers' surplus funds
is being felt in the food markets 1s clearly evident from
recent experience with food "shortages", black markets, and
faulty distribution. While the rapid rise in food prices
has been partly due to less extensive early price control in
that group, the difficulty of enforcing price control on
foods testifies to the amount of underlying pressure. The
solution is a difficult one, since it requires either an in-
crease in supplies of the desired foods, or a curtailment of
demand through reducing surplus funds of consumers by taxation
and bond sales programs, supplemented by rationing.
Family food expenditures show great variation
Food occupies a unique position among consumers' goods
in that purchases of food are almost continuous, and the daily
Regraded Unclassified
262
- 7 -
and weekly expenditures of a family for this item are
susceptible of great expansion and contraction with changes
in incomes. Flexible spending habits for food are facilitated
by the wide variety of types and qualities conveniently
displayed in retail stores. Some indication of the
differences in food expenditures by income classes may be
seen in the following table, which shows recent revised OPA
estimates of average family expenditures for food (not
including single consumers) in 1942:
Expenditures for food and beverages, 1942
Income group
Annual expenditure
Under $500
$159
$500 - 1,000
313
1,000 - 1,500
482
1,500 - 2,000
587
2,000 - 2,500
680
2,500 - 3,000
767
3,000 - 4,000
865
4,000 - 5,000
984
5,000 - 7,500
1,132
7,500 - 10,000
1,244
10,000 and over
1,721
These facts are significant in the inflation problem
from several angles. They indicate the importance of
centering attention directly and strongly on stabilizing
food prices, if wage advances and general inflation are to
be avoided. They indicate the futility of trying to control
food prices by price ceilings alone, when buying pressure 18
being expanded by the rising incomes of consumers, and
emphasize the need of reducing surplus purchasing power if the
supply of foods cannot be increased. They suggest that if
consumers' spendable surpluses continue high after the war, the
and particularly if part of our food supply 18 used in
rehabilitation of Europe, the food situation may continue
an inflationary factor despite adequate post-war production
of other consumers' goode.
National income payments at new peak
current economic situation continues to be featured
As by a result of further expansion in March, income payments
the The unprecedented high level of national income payments.
Regraded Unclassified
263
- 8 -
reached a new record annual rate of 8137.7 billions. This
compares with $135.0 billions in the previous month and only
$107.0 billions in March 1942. (See Chart 3.) Payments for
salaries and wages, the dominant factor in national income,
continued their long upswing and ran nearly 32 percent above
March 1942 levels.
As shown in the lower section of Chart 3, entrepreneurial
income (including farm), and income originating from Govern-
ment sources, also scored wide increases during the past year,
with the last-named group showing the sharpest relative gain
because of the vast personnel expansion in the military
branches. Interest and dividend payments in March 1943 were
only 2 percent higher than in 1942, while "other income pay-
ments", including social security benefits and relief pay-
ments, were 14 percent lower.
Stock prices and trading activity rise
The rise in national income undoubtedly has been a
potent factor in the rising trend of stock prices and trading
activity. Last week both prices and trading activity on the
New York Stock Exchange showed further gains and reached new
highs for the year. Following a rather sharp decline on
Friday, a renewal of strength on the following day enabled
industrial stocks, as measured by the Dow-Jones average, to
close the week with a net gain of about 2 percent. Both
railroad and utility stocks also moved up to new highs during
the period. (See Chart 4.)
As a result of last week's advance, the stock market
has more than recovered the orary setback which followed
the President's hold-the-line order last month. The renewed
advance to new high levels emphasizes the possibility that
an inflationary boom in stock prices may be developing under
the pressure of surplus funde of individuals.
an accelerated rise in stock prices would interfere with the
Primarily (as mentioned in our memorandum of April 12)
bond sales program by attracting surplus funds from various
classes of investors. It would also advertise the fact that
buying of commodities, to unrest among labor groups, and
inflation 18 getting under way, and thus lead to speculative to
demands for higher farm prices. Finally, it might accentuate
the difficulties of readjustment after the war.
Commodity prices steady
markets Commodity last week, ae Government efforts to stabilize
prices showed little change in the wholesale basic
Regraded Unclassified
264
- 9 -
commodity prices appeared to be having some success. A rise
in flaxseed prices of 3.4 percent largely accounted for &
elight rise in the BLS index of 28 basic commodities, but the
index continues at practically the same level as in early
March. (See Chart 5.) The BLS all-commodity index remained
practically unchanged in the week ending May 1.
Steps taken to increase feed supplies
Taking additional steps to meet the feed requirements of
the increasing numbers of livestock, the War Food Administration
last week drastically limited cash corn transactions and hold-
ings in an effort to prevent the hoarding of feed. The order
limits the amount of corn which can be purchased and delivered
by manufacturers, feed mixers, and feeders, and prevents an
accumulation beyond ourrent needs. At the same time the CCC
was ordered to call all loans on 1938, 1939, 1940, and 1941
corn crops, which amount to about 55 million bushels. It is
expected that this action will stimulate the marketing of
corn during the next few weeks, when corn will be needed by
processors and feeders in deficit corn areas.
Recently the President suspended the import quotas on
wheat and wheat flour (with respect to Government purchases)
as a necessary step before any sizable amount could be imported.
(The quota had limited the importation of Canadian wheat to
795,000 bushels annually.) In order to permit the suspension,
the Tariff Commission had previously reported to the President
that imports above the quota "would not render ineffective or
materially interfere with any program of operation undertaken
under the Agricultural Adjustment Act of 1933". The suspension
makes possible the delivery of the 7,250,000 bushels of wheat
already purchased by the CCC, and also permits the release of
large stocks of Canadian wheat held under bond in American
warehouses.
The wheat export subsidy of 30 cents a bushel will be
suspended after May 14, the War Food Administration announced
last week. This action, it 1s estimated, will make available
an additional 14 million bushels annually for domestic use.
Regraded Unclassified
Chart 1
265
COST OF LIVING. U.S., U.K. AND CANADA
August 1939 . 100
1939
1940
1941
1942
1943
PERCENT
PERCENT
Cost of Living
135
135
U.K.
(Min. of Labor)
130
130
125
125
Eit
120
120
115
115
Canada
(Dom Av of Stat/
110
110
U.S.
(BLS)
105
105
100
100
95
95
1940
1941
1942
1943
1944
1939
PERCENT
PERCENT
Foods, Retoil
Est
145
145
140
140
135
135
130
130
UK
(Min of Labor)
125
125
Canada
(Dam. Bur of Ster.)
120
120
U.S.
-(8L5)
115
115
110
110
105
105
100
100
95
95
1942
1943
1944
1939
1940
1941
C-486
Regraded Unclassified
WHOLESALE PRICES
August 1939 . 100
1939
1940
1941
1942
1943
PERCENT
PERCENT
180
180
160
160
Foods
140
140
All Commodities
120
120
Commodities other than
Form Products and Foods
100
100
80
80
J M M J S N J M M J S N J M M J. S N J M M J s N J M M J S N
1939
1940
1941
1942
1943
Chart 2
Office of the Secretary of the Treasury
- of Research and Statesties
P-259
Regraded 266 Unclassified
Table 3
267
NATIONAL INCOME PAYMENTS AND COMPONENTS
1939
1940
1941
1942
1943
DOLLARS
DOLLARS
Billiens
Billines
Annual Rate. by months
140
140
130
130
120
120
income Payments, Actual
110
110
100
100
90
90
80
80
70
70
AS ONDJFMAM a J $ ON o di F M A J J A $ o - o J # M A M a JASONOJFMAMJJASOND
1939
1940
1941
1942
1943
Dollar Totals for Selected Components, March 1942 and March 1943"
DOLLARS
DOLLARS
Billions
Billiens
3.5
3.5
March 1942
March 1943
3.0
3.0
2.5
2.5
2.0
2.0
1.5
1.5
1.0
1.0
is
.5
o
DIVIDENDS AND
GOVERNMENT
OTHER INCOME
o
COMMODITY FID-
THOMANALS FROM
INTEREST.
INCLUDING
PAYMENTS.
DISTRIBUTIVE
AND SERVICE
DUCTION INDUSTRIES
NONDORPORATE
MILITARY
(CHIEFLY arai,
ENTERPRISES.
INDUSTRIES,
(INCLUDES FAME)
SALARIES AND MARCS
*March 1943 date are proliminary
Source: Department of Commerce
C-495
Office of the Secretary of the Treasury
- of - -
Regraded Unclassified
268
STOCK PRICES, DOW-JONES AVERAGES
I I
1942
1943
142
Daily
Chart 4
NOT.
-
-
-
APPLIL
-
20 Inhetrial Blooks
160
30 Industrial Brocks
142
INC
130
135
140
140
in
-
1.00
130
-
a
1,80
125
125
ne
115
190
NO
100
us
K
8
IH
118
as
ao
38
110
M
to
-
34
45
45
ao Mattroads
30 faliroads
-
1
45
&
a
is
at
as
30
30
30
NI
25
as
a
29
#
20
A
a
is
as
24
a
20
30
is Vilities
is Utilities
20
a
a
as
18
18
e
20
16
=
is
18
14
=
is
the
-
-
-
-
BILLINE
Volume of Trading
Volum of Trading
CAVERAGE - BAILY)
a
a
,
II
1
-
a
@
@
.
is
=
-
19
22
,
4
13
N
at
-
18
EF
24
If
14
a
#
14
21
a
.
=
a
a
-
MPT.
-
-
APRIL
-
1943
THE
1943
7
Regraded Unclassified
MOVEMENT OF BASIC COMMODITY PRICES
1942
1943
PERCENT
PERCENT
August-1939-100
210
210
205
205
200
200
195
9 Uncontrolled Commodities
195
190
190
185
185
180
IBO
175
175
28 Commodities
170
170
165
165
160
I60
19 Controlled Commodities #
155
155
MAR.
MAY
JULY
SEPT.
NOV.
JAN.
MAR.
MAY
1942
1943
PERCENTAGE CHANGE DEC. 6, 1941 TO APR.30. AND MAY 7 1943
PERCENT
PERCENT
*Flommed 7048
19 Controlled
9 Uncontrolled
Commodities
Commodities
+60
+60
+50
+50
Hoge 4542
Com 4368
+40
+40
269
+30
(Lord ta.ex
+30
Max
Shellee 123%
Steers 276X
Lood aux
Wheat 23/X
Print Cloth zer
riben 2242
+20
Dugar 69%
+20
Cottonwed Oil 5.93
Cotton 2v. 68
Wes/ Tope 21%
Time 22
+10
0% Change
+10
Mides. Sall
Tim. Rubber,
Coffee, Copper,
St Screp dom,
o
se Screptimp
o
Coooo -.4%
Follow 4/2
funtip -4.3%
-10
-10
Dec. 6
Apr.30
May?
Dec. 6
Apr. 30
IHI
1943
1943
May 7
1941
1943
1943
"20 Controlled of a Uncontrolled previous to - 26
Office of the Secretary of the heary
Denien of Prisench et Maintes
P-244-44
Regraded Unclassified
270
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE May 10, 1943
TO
Secretary Morgenthau
FROM
Mr. White
ject: Recent Developments of Treasury Interest in French
African Program
1. Additional Treasury personnel for French Africa
Arrangements are presently being made to send eight addi-
tional Treasury personnel to French Africa as requested by
Treasury representatives now in the area. Four of the men re-
quested--Kerekes, Lawler, Hicks and Ullmann--are former Treas-
ury personnel now in the Armed Forces. Mr. Snider, who is now
in London for the Treasury, is to be sent in place of Lieuten-
ant Ullmann who is not available.
The remaining four are to be made up of one man each from
the Division of Monetary Research, the Division of Tax Research
and Foreign Funds Control, and a male stenographer. If all of
these men arrive in French Africa, there will be a total of
eighteen people working under Treasury directives in the area
of whom seven are in the Armed Forces.
I believe that arrangements are currently being considered
to assign Lieutenant Southard to duties pertaining to fiscal
and monetary matters abroad.
2. Purchase of gold from French West Africa
In answer to an inquiry made by the Bank of West Africa as
to whether the United States Government was willing to purchase
gold belonging to the French West African Government, Treasury
advised the French authorities that before it was possible to
enter into any arrangement for the purchase of such gold a com-
plete statement of the ownership of all gold held in French
Africa should be furnished to the Treasury so as to establish
S. clear title and avoid rish of later claims by third govern-
ments. The Treasury has since been informed that according to
French authorities the gold that the French West African Gov-
ernment wishes to sell to the United States has been recently
mined and is clearly not related to gold held in the name of
the Bank of France in French West Africa.
Regraded Unclassified
271
- 2 -
Division of Monetary
Research
Pending receipt of the views of Treasury representatives
in Algiers and Dakar as to whether the furnishing of full in-
formation should be a condition to granting the request, Treas-
ury is taking no further action.
3. Sale of gold by the United States to the Bank of
Morocco
The French authorities have requested Treasury representa-
tives in French Africa to ascertain 1f the Bank of Morocco may
be permitted to purchase gold from the United States with its
dollar holdings for the purpose of building up its gold reserve
against banknotes outstanding. The Treasury representatives
were advised that Treasury is prepared to consider a request
from the Bank of Morocco to purchase gold for this purpose.
The British have since indicated that they would be reluc-
sect to see the United States sell gold in any substantial
amount to the Bank of Morocco for currency reserve purposes or
any other purposes. They appear to be apprehensive leat the
State Banks of French Africa should request the British Treas-
ury that they be permitted to use their sterling balances for
the purchase of earmarked gold in London.
4. Yellow-seal currency
Of the $128 million of yellow-seal currency which has been
printed only about $14 million is not in the hands of the Treas-
ury or the United States Army.
$10 million in yellow-seal currency 18 held by the Treasury
in Washington, $13 million is held by the U. S. Army in New York,
36 million is held by the U. S. Army in England, $74 million is
held in the Bank of Morocco at Casablanca for the account of
Army Finance Officers, and $10.8 million is held in the Bank of
Algeria for the account of Army Finance Officers.
5. Dollar position of the French African Government
The French North African authorities had available to them
as of April 30, 1943, $65.1 million held in the name of the
State Banks of Algeria and Morocco. $10.8 million has been
credited since that date to the account of the Bank of Algeria
against yellow-seal currency transferred to Army Finance Of-
ficers in French Africa.
Regraded Unclassified
272
Division of Monetary
- 3 -
Research
This figure takes into consideration the $15 million pay-
ment on account made April 29, 1943 by the French authorities
to the Office of Lend-Lease Administration for goods shipped
to French North Africa for civilian consumption.
6. French request to use dollar funds for diplomatic
expenses
Early in March the French North African authorities re-
quested that they be permitted to make payments from the
French African dollar accounts to provide funds for the opera-
tion of former Vichy French diplomatic offices in the Western
Hemisphere now supporting General Giraud. The State Depart-
ment informed Treasury that it had canvassed the matter and
wanted the requested transfers licensed.
Treasury took the position that the transfers should be
denied in view of the undesirability of the beneficiaries and
the unfortunate political considerations that are necessarily
involved in the support of former Vichy diplomatic missions by
the North African regime. This position received the support
of the War Department.
A compromise was finally arrived at whereby the French
authorities were informed that this Government is willing to
facilitate the transfer of funds to such individuals in the
Western Hemisphere whom the Governments to which they are
assigned recognize as the official representatives of the
Giraud regime. The French authorities were also urged not to
choose former Vichy diplomats as their representatives except
after careful investigation.
The dollar transfers from French North African funds to
Vichy officials in Panama, Bolivia, Uruguay, Colombia, Chile,
Cuba as requested by the French were denied on evidence that
these persons were undesirable. Remittance of dollars to cer-
tain of the other French diplomatic offices in the Western
Hemisphere were authorized when satisfactory investigation in-
dicated that the persons involved were desirable.
Regraded Unclassified
273
Division of Monetary
- 4 -
Research
7. Request by the French for the release of Vichy
dollar-currency in Latin America
Treasury has denied a request of the French African au-
horities that United States currency surrendered by the for-
mer Vichy French officials in Brazil and Chile to the central
banks of those two countries be exchanged for milreis and
pesos to meet expenditures of the Giraud regime now that the
Vichy officials concerned have rallied to Giraud. The French
were informed that such action would be inconsistent with Treas-
ury's currency control program.
8. Financial arrangements for movement of French
refugees from Spain to North Africa
As requested by French authorities the Treasury has all-
thorized a total transfer of $850,000 from the French North
African dollar funds for the support of French refugees in
Spain and for the transportation of French refugees from Spain
to French North Africa.
9. Release of blocked funds of former French Government
for payment of French pensions in United States
The French North African authorities have requested that
the blocked funds of the former French Government be released
for the payment of French pensions in the United States. The
pensions have not been paid since November 8, 1942. The Treas-
ury Department is presently reviewing this matter with the in-
terested Government Departments.
10. Status of obligations of Metropolitan France in
French Africa
The French North African authorities have assumed full
responsibility for the obligations of the Government of Metro-
politan Frence outstanding in French Africa. It 18 the present
understanding that all such securities in French West Africa
validated by registration and stamping on February 28, 1943, are
now being serviced by the French African Government.
Treasury has cabled representatives in French Africa ask-
ing for full information as to the amount of French Treasury
bonds outstanding and as to the provisions governing their
Regraded Unclassified
274
Division of Monetary
- 5 -
Research
status. Special concern is given to the status of French Treas-
uny bonds held in North Africa for the account of individuals
resident in Metropolitan France which may be benefitting from
any servicing arrangements.
From December 1, 1942, through March 15, 1943, the French
authorities issued 8 billion francs of short-term Treasury
bills and repaid 4 billion francs of outstanding obligations of
the Treasury of Metropolitan France.
11. Sale of French North African securities in the
United States
The French North African authorities requested permission
of this Government to sell French North African securities in
the United States to French residents of this country. It was
proposed that the securities be issued at the same time an
announcement was made of unity with De Gaulle forces. It was
indicated that propaganda and psychological motives, rather than
the funds acquired, were the purpose for issuing these securi-
ties.
The Treasury advised its representatives in Algiers that
the French Government 1s one of the Governments in default in
the payment of its obligations to the United States Government
and, therefore, persons within the United States are prohibited
from purchasing French North African securities by the Johnson
Act of April 13, 1934.
12. Exchange rate for De Gaulle territory
No further developments have been reported on the progress
of the British Government in persuading the Fighting French to
adopt the 50-france to the dollar and the 200 francs to the
pound rate of exchange and thereby establish & uniform rate of
exchange in all French territories.
13. Transfer of French African dollar funds to French
Guiana
The French North African authorities have advised that they
plan to transfer $80,000 monthly from French African dollar
funds to the French Guiana Treasury for the purpose of financ-
ing exports from the United States to the French colony now sup-
porting Giraud.
Regraded Unclassified
275
- 6 -
Division of Monetary
Research
The Treasury Department has approved the first transfer
of 80,000 and has issued a general license over the account
of Banque de la Guyane for account of French Guiana Treasury
similar to general licenses granted the French African State
Sanks.
14. Exchange rate in planning financial proclamation for
Spanish Morocco and Tangiers
The Treasury recommended a rate of 12.5 pesetas to the
dollar in planning a financial proclamation for Tangiers and
Spenish Morocco should the Allied Governments occupy that area.
This rate was suggested in that it has the advantage of con-
venience for military operations and also depreciates the pese-
ta from the present official rate of 10.95 pesetas to the dollar
in the same approximate proportion as the North African franc
was depreciated from the official rate of 43.80 francs to the
dollar to 50 francs to the dollar.
The representatives of the Treasury Department and the War
Department in Africa have cabled that they concur in the sug-
gested 12.5 rate.
15. Shortage of banknotes in French West Africa
The Bank of West Africa submitted a memorandum to the
Treasury representative in Dakar indicating that it critically
needed a minimum of 10 million of the banknotes now being man-
ufactured in the United States.
A first shipment of approximately 3 million notes was
expected to arrive in West Africa in the last few days. A
second and larger shipment 1s reportedly now on its way.
The shortage of banknotes is further alleviated in that
Algerian and Moroccan notes were recently decreed to be legal
tender in French West Africa. This was in B. large part due to
the efforts of the Treasury representative in Dakar.
The currency circulation in French West Africa has increased
from 1,654 million francs on November 30, 1941 to 4,019 million
francs by February 28, 1943.
Regraded Unclassified
276
Division of Monetary
- 7 -
Research
16. Appointment of Maurice Couve de Murville as
Secretary-General of the French High Command
The appointment of Maurice Couve de Murville as Secretary-
General of the French Civil and Military High Command was
received favorably by the American Consul in Algeria and the
American Embassy in London.
The French authorities have indicated that they would like
to select Couve de Murville as their representative to the
conversations on post-war monetary stablization. The State
Department informed the French that de Murville would be par-
ticularly welcome in this capacity,
17. American Express Company travelers checks in
French Africa
The American Express Company has recently been negotia-
ting arrangements with the Bank of West Africa for the latter
to handle travelers checks in French West Africa for sale and
delivery to the Allied forces, Red Cross workers, and for
French officials that may be traveling abroad.
The Treasury has informed Dakar that it is not disposed
at this time to permit the sale in French Africa of travelers
checks issued by the American Express Company as the issuance
of such checks at the present time might facilitate the trans-
fer of French francs of questionable ownership into travelers
checks which could be hoarded and thus escape the effective
control of Allied and French authorities.
18. USCC to act as agent for purchase of North African
exports to the United States
The American representatives in French Africa have been
informed that arrangements are completed whereunder the United
States Commercial Corporation will be used for consummating
purchases of North and West African commodities for export to
the United States.
Regraded Unclassified
277
Division of Monetary
- 8 -
Research
The American representatives are asked to take such steps
BS may be necessary to obtain formal assurance from the French
authorities that the USCC may do business in French Africa as
an agency of the U. S. Government and will not be subject to
restrictions or taxation as a private corporate enterprise.
19. Economic warfare controls in French Africa
Treasury representatives feel that they have been success-
ful in securing the adoption by the French North African Govern-
ment of a sufficient range of safeguards to insure that persons
within French Africa do not act on behalf of or for the benefit
of the enemy. These safeguards include censorship, import and
export licensing, financial and exchange controls, freezing
measures, internal and external lists of undesirable firms and
persons, sequestration of enemy property and internment.
However, the French authorities do not appear to be eager
to apply these economic warfare measures in full. They have
also proven unwilling to provide an adequate staff for the
effective administration of their controls.
20. Treasury program for Tunisia
Three Treasury representatives in French Africa have been
assigned to the Tunisian area and are presently participating
with the French authorities in solving the financial and
economic problems that are presented as the occupation of that
area progresses.
Decrees and instructions to meet the immediate currency
and banking problems have been issued. These include provisions
for depositing and exchanging Bank of France notes with Bank
of Algeria notes, blocking of all bank accounts with permission
for necessary withdrawals, and freezing of German and Italian
accounts.
It is reported that the Axis armies are taking captive the
bank personnel in Tunisia, removing all currency stocks, and
carrying off all gold, machinery, lumber and other movable
stores. The Nazis have damaged power plants, but not gravely.
Regraded Unclassified
278
Division of Monetary
- 9 -
Research
If necessary yellow-seal currency will be used for U. S.
Army expenditures in Tunisia, but it is expected that the stocks
of Bank of Algeria notes will be adequate.
21. Taxation of Allied Governments by French African
authorities
Under the Darlan-Clark Agreement of November 22, 1942,
governing the Allied occupation of French North Africa, the
property of and the transactions engaged in by the Allied
Governments or their agencies, both military and civil, are
exempted from taxation by the French North African authorities.
The French have made repeated representations that the agree-
ment be amended pointing out that, if the present blanket
exemption is continued in effect, difficulties will develop
which will seriously hamper their fiscal administration and
deprive the Government of urgently needed revenues. The situa-
tion is further complicated in that the Boisson-Darlan Agree-
ment of December 7, 1943, governing the relations between the
Allied Governments and French West Africa, provides that the
Allied Governments and their agencies shall be subject to the
same tax levies as apply to the French Government and its
agencies, thus making it impossible to follow uniform tax policy
for both areas.
To resolve the problem and at the same time preclude any
revision of the Agreements which is deemed to be politically
inadvisable at this time, the Treasury, after clearance with the
interested Government Departments and the British, instructed
the Treasury representatives in French Africa to come to an
operating agreement on taxation with the French African author-
itios which will govern for both French North and West Africa
alike. The operating agreement in general provides: (1) All
imports by Allied military and relief organizations are to be
duty-free and tax-free, (2) all taxes on purchases in the area
by Allied military or relief organizations are to be refunded
under & convenient general formula, (3) The French authorities
may levy reasonable duties and taxes on all imports into
French Africa by the Allied Governments for civilian consump-
tion providing that the levies are not borne by the Allied
Governments, (4) The French may levy reasonable taxes on com-
mercial exports from North Africa for the Allied Governments.
Regraded Unclassified
279
Division of Monetary
- 10 -
Research
22. Prices in French Africa
Logal prices in French Africa have remained substantially
the same since the Allied occupation, but tremendous increases
have been evidenced in black market prices. The importance of
the black market in this area is indicated by the estimate that
50 percent of the sales to consumers in urban areas are made
at black market prices.
23. Hoarding of cereals in French Africa
Hoarding of cereals by the natives continues to necessitate
large shipments of flour and cereals to North Africa for civil-
ian consumption. The French authorities appear to be apathetic
toward the introduction of dehoarding measures in dealing with
this problem despite continuous pressure from American repre-
sentatives.
The present grain crop appears favorable, however, and if
the French authorities can be persuaded to introduce effective
dehoarding measures, surpluses in cereals may result that can
be stockpiled for future invasion areas.
Regraded Unclassified
280
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
MAY 1 0 1943
TO
Secretary Morgenthau
FROM
Messrs. Paul and White
There is attached a report on the financial manipula-
tions in North Africa of the French Collaborationists.
Although in the nature of things we cannot produce
documentary evidence on every point, this report tends to
confirm the general tenor of such articles as Johannes Steel,
Drew Pearson and Nicholas P. Gregory have been writing in the
papers. It tends to show that there are large amounts of
collaborationist assets in French Africa and that we can
expect that every effort will be made by the collaborationists
to translate these franc assets into free dollars, free
sterling, etc. Much of the pressure will be at the political
level.
There are strong reasons for circulating a report of
this character on a confidential basis to all of the groups
dealing with the problem of French Africa, particularly the
State and War Departments, BEW, Lend-Lease, Lehman's
Organization and War Shipping Administration. In this way
they will be forewarned as to what to expect and be in a
better position to evaluate the barrage of proposals which
are bound to come forward under every possible guise. Sooner
or later we will have to make use of the facts in the report
to combat such proposals and a strong offensive may be our
best defense. Certainly the scope of the memorandum is well
within our jurisdiction in the occupation field.
On the other hand, the decision to circulate this
memorandum involves the following considerations:
(1) Some parts of the government, sensitive about
the mere mention of Vichy, may regard this as a veiled
attack on our political policy in North Africa. Other
parts of the government, of course, would be delighted at
the report and might tend to use it at the political level.
Regraded Unclassified
281
- 2 -
(2) Murphy et al will obviously not be pleased with
this report. It is possible that whatever independence of
action our men in North Africa may have in this field may be
reduced. On the other hand, our position may be strengthened
since no one wants to be placed in the exposed position of
defending these manipulations.
(3) The report may prejudice our participation in
occupation programs for further areas at least to the extent
that our men may be confined more than ever in their efforts
to obtain access to the facts. On the other hand access to
the facts is unimportant if such facts cannot be used.
In our opinion the gains which may be achieved from
the dissemination of the information in this report to
appropriate agencies outweigh any possible risks which we
would be taking in circulating the report.
We should like to discuss this matter with you.
ABT HDW
Attach.
Regraded Unclassified
282
CONFIDENTIAL
MAY 1 01943
MEMORANDUM FOR THE SECRETARY
Re: Financial Manipulations of
Collaborationists in French Africa.
The techniques of Axis looting have been common knowledge
for years. The fact that the collaborationists in each of the
occupied countries shared in the "pay-off" on Axis looting is
equally well known. This memorandum will not repeat this
story. Rather, it will outline some of the financial manipu-
lations in French Africa of the French collaborationists.
As early as September 30, 1942 we were informed that the
appointment of Jacques Guerard as the Vichy Government's
ambassador to Portugal was probably evidence that "the rats
were leaving the ship" and that Guerard was probably trying
to arrange transfers of funds for Laval and others where they
would be available when the "breakup of France comes."
Guerard is an old-time collaborationist and is associated
with the Banque Worms group.
After November 7, 1942 we were reliably informed by a
prominent French banker (now in the United States) that:
Regraded Unclassified
283
- 2 -
For & considerable period prior to the Allied
invasion of North Africa, French industrialists and
bankers prominent in collaboration had been transfer-
ring francs to North Africa. It is estimated that
such persons, notably, the Banque de l'Indochine, the
Banque de Paris et des Pays Bas, Banque Worms, the
liersents, Mirabeau, etc., had prior to November, 1942,
accumulated in North Africa funds in excess of
25,000,000,000 francs.
These francs represent their reward for facili-
tating the successful handling of the "occupation
costs' by Germany in France, which was accomplished
in the following manner. The collaborationist banks
and industrialists received from the Germans all
property of refugees, Jews, and labor unions which
had been expropriated by official decree. The most
valuable of these properties were then sold to the
Germans and payment therefor was made by debiting
the credit balance created by daily write-ups of
500,000,000 francs on the books of the Banque de
France pursuant to German fiat. The collaborationist
financial institutions, with large assets in foreign
centers, were apparently willing to participate in
the German occupation scheme, whereby they in effect
became potential defendants in suits for these
properties after the war, provided they would be
allowed to remove the francs received for these
properties to North Africa. This accounts for the
estimated 25,000,000,000 francs accumulated by these
institutions in North Africa.
The attached articles by Drew Pearson, Johannes Steel,
Nicholas P. Gregory and Time Magazine indicate that this
story is no secret.
As a matter of fact there is no need to speculate about
the fact that the French collaborationists were funneling
Regraded Unclassified
284
- 3 -
assets from Metropolitan France into North and West Africa.
On March 11, 1943 Treasury representatives interviewed M.
Pose in Casablanca. Pose is the director and general manager
of Banque Nationale Pour Le Commerce et L'Industrie (B.N.C.I.),
Paris. Shortly before November 8, 1942 Pose suddenly showed
up in North Africa and was subsequently named Economic Minister
in Giraud's administration. While he was recently forced to
resign from this position, he is still most active in the
affairs of B.N.C.I., Afrique. B.N.C.I., Paris, the parent of
B.N.C.I., Afrique, was organized in 1932 through the auspices
of Pierre Laval who used the funds of the French Government
to reorganize the defunct Bank Nationale de Credit into B.N.C.I.
The fortunes of this bank have followed the fortunes of its
political sponsors.
Pose's significant statements to Treasury representatives
may be summarized as follows:
(a) B.N.C.I. opened its first office in North
Africa in September, 1940 (after the Armistice).
At the present time B.N.C.I. has 50 branches in
North Africa, approximately equally divided between
Morocco, Algiers and Tunis and there are six more
branches in West Africa, the first branch having
been opened in November, 1940. By 1942 the B.N.C.I.
was doing 20% of the commercial business in Morocco
and 12% of the deposit business.
Regraded Unclassified
285
- 4 -
(b) Throughout the past 2-1/2 years - between
the fall of France and the landing of the Allied
forces in North Africa - Pose has consistently and
deliberately funneled off assets of the B.N.C.I.
in Metropolitan France to the colonial empire. In
following this practice of funneling its assets into
the colonies, Pose contended that the bank has had
to be very careful not to allow the procedure to
become too evident to the Nazis, and hence in some
areas it has bought out established banks and kept
the name of such banks rather than put them under
the name of the B.N.C.I. (e.g. Madagascar).
Accordingly, we have the frank admission of one of the
collaborationist banks of its practice of diverting its
assets into North and West Africa and the other French
colonies. The other big French collaborationist banks have
similar outlets in French North and West Africa. Thus, for
example, the State Bank of Morocco (Banque d'Etat du Maroc)
is the subsidiary of the Banque de Paris et des Pays Bas;
Societe Generale in Algiers is the subsidiary of Societe
Generale (France); the State Bank of Algiers is a subsidiary
of the Comptoir National d'Escompte; Banque de Tunisie and
Banque Commercial du Maroc are controlled by Credit Industrial
and Commerciale. Banque Worms also has branches in French
Africa.
It must be kept firmly in mind that the state banks in
French Africa are privately owned and controlled subsidiaries
Regraded Unclassified
286
- 5 -
of financial groups in Metropolitan France--the same col-
laborationist group that is influential in shaping policy
in North Africa.
Moreover, the exchange control agencies in French Africa
are not independent government agencies. They are in fact
the instrumentalities of the so-called state banks in French
Africa. Thus M. Ben Bechier, the head of the Algerian Office
des Changes, is an employee of the Bank of Algeria and has his
office in their building. A similar situation prevails in
Morocco and in the A.O.F. (West Africa). In the A.O.F. the
director of the Office des Changes and the managing director
of the Bank of West Africa are one and the same person--
M. Bottin.
The foregoing has been set forth to show:
(a) That all the facilities were available
for the pouring of collaborationist funds into
French Africa.
(b) That in fact such funds did funnel into
French Africa prior to the Allied occupation; and
(c) That the collaborationist group in France
did control, and still controls, the financial
institutions in French Africa and the exchange
control authorities in such area are the servants
of the so-called French African state banks, which
are in reality privately owned.
Of course, the final objective of these financial manipu-
lations was not merely to transfer collaborationist loot into
Regraded Unclassified
287
- 6 -
franc assets in French Africa. Collaborationist francs in
North Africa are merely searching for a bridgehead into free
dollars, free sterling or some other valuable currency. The
black market rate for French francs in France is variously
quoted between 150 and 300 to the dollar against the official
rate of 50 francs to the dollar in French Africa. In terms of
paper profits the collaborationists made enormous profits in
getting their francs into French Africa whether the official
rate there was 75 or 50 francs to the dollar. But the collabora-
tionists are not after mere paper profits evidenced by franc
accounts which inevitably must be largely lost when the franc
seeks its natural level at the end of the war. This group knows
that it must translate these paper profits into dollars or sterling
currency, credits, or investments - preferably dollars - if they
are to be realized upon.
Accordingly the financial proposals emanating from North
Africa must be carefully considered in their proper frame of
reference, in order to ascertain whether such proposals are
designed to provide 8. means whereby collaborationist groups can
cash in on their franc holdings, or, even though such
proposals may be suggested by perfectly proper motives, whether
such proposals will have the result of providing a vehicle for
Regraded Unclassified
288
- 7 -
collaborationist groups to move their assets into realizable
foreign exchange. Some of the financial developments in this
connection have been:
(1) Demand for free dollar accounts. One of the first
demands was that we ought to free all of the blocked accounts
in the United States of the North African banks and if this
were not possible as 8. minimum we should free the accounts of
the Offices des Changes (exchange control accounts). Treasury
representatives who have just returned from Africa, refer to
requests of this character by M. Ben Bechier, Director of
Exchange Control for Algeria, by M. Tron, Secretary of
Finance to the French High Command, by the State Bank of
Morocco, as well as by the highest political quarters in the
French African Government, e.g. General Giraud, probably
prompted by Pose, Lemaigre-Dubreuil, Bergeret, et al.
Obviously, the neatest way of "cashing in" on these franc
profits is to get the French dollar accounts here freed from
our freezing control 80 that such dollars can be manipulated
into cloaked collaborationist accounts both here and in South
America.
Regraded Unclassified
289
- 8 -
We have countered by issuing a license over the official
accounts which require that we be given ten days advance notice
of any transfers and that during this period we can veto any
transaction. As set up, and in practice, this licensing
procedure is.very flexible and it causes little or no delay
or inconvenience for any bona fide transaction.
(2) Accumulation of dollars through financing franc
expenditures for our forces in French Africa. Tying into
item (1) above is the financing of our forces in French Africa.
To furnish our forces with francs we have established dollar
accounts at the Federal Reserve Bank of New York for each of
the State banks. As our forces need francs, we credit these
accounts with dollars. At the present time the accounts of
the Central Banks of Algeria and Morocco have more than
$75,000,000 to their credit, arising from these transactions.
While technically these funds belong to the "French Treasury
in Africa", we should not be misled by either the title of the
account or the source from which we get the francs.
The "French Treasury in Africa" borrows the francs with
which our forces are supplied from the French banks in Africa.
In other words the collaborationists in their political
capacity secure the francs from themselves in their financial
Regraded Unclassified
290
- 9 -
capacity. We buy the francs with dollars which are credited
to the accounts of the French African state banks "for the
account of the French Treasury in Africa." This puts the
French Treasury in Africa in the position of owing large
balances to the collaborationists banks and having as its
only substantial asset with which to repay such balances its
dollar holdings in the United States. If these dollar holdings
were free of the United States controls as the French would
like, the French Treasury in Africa would be under considerable
pressure to transfer its dollar balances to the collaboration-
ists banks.
(3) Efforts to gain control of the balances of the
former French Government and the Bank of France. There is no
need to repeat in this memorandum the various moves made in
the name of Giraud to establish the right to use the blocked
assets of the former French Government and the Bank of France,
even though the French African authorities had tens of
millions of dollars on deposit here. To date we have parried
all such attempts but Murphy has been advised by the
Commandant en Chef in 80 many words that his acceptance of our
refusal is "without prejudice" to reopening this matter again.
Regraded Unclassified
291
- 10 -
One very neat way for the collaborationists to realize
on their franc assets in North Africa would be to shoulder
the French people with the francs and for the collaborationists
to take the dollars of the French people in return. This,
however, is looking at the "end product" of such deals, rather
than the immediate proposals by which the effort is being made
to establish the right to draw on such assets.
(4) Floating a French dollar loan in the United States.
One of the most recent maneuvers bearing on this subject is
reflected in B. cable dated March 30, 1943 from the American
Consulate General in Algiers. This cable stated:
"This is a message for Secretary Hull and
Secretary Morgenthau from Messrs. Glasser and Murphy.
"United States Government permission to sell
North African securities in the United States to French
residents of the United States has been asked by Tron.
The proposal contemplates introducing the issue of
securities at the same time announcement is made of
unity with the forces of deGaulle. Except for payment
in dollars the terms of issue of the securities would
be the same as the terms of securities issued in North
Africa. Psychological and propaganda motives, not the
funds acquired, according to Tron would be the purpose
of issuing the securities. He also said that General
Giraud considers this matter to be of great importance.
In reply we said that it was possible that there would
be complications with the Securities Exchange Commission
regulations insofar as concerns immediate action but a
Regraded Unclassified
292
- 11 -
reply is considered by the government here to be of
the greatest urgency. Similar requests have been
made to Spain and Great Britain but as yet no reply
has been received. A similar request received a
favorable reaction in Brazil."
This proposal was side-stepped by the following cable
which we prepared and which was sent on:
"This is a message from the Secretary of the
Treasury for Messrs. Murphy and Glasser.
"With regard to the Consulate's No. 514 of
March 30, concerning the sale in the United States
of North African securities to Frenchmen resident
here, the Treasury Department has advised that the
Government of France is one of the governments
which defaulted in payment of debts to the Govern-
ment of the United States. For that reason, under
the so-called Johnson Act of April 13, 1934 (U.S.
Code, title 31, section 804a), persons resident in
the United States cannot buy securities of the
French Government. It has not been possible,
accordingly, to look into the merits of the
request made in the telegram under reference. The
Department of State agrees with this conclusion."
The possible ramifications of this proposal were outlined
in the attached article by Johannes Steel. In brief, Steel
indicates that while the French talked about floating a dollar
loan in the United States, in reality, the B.N.C.I., et al
would take up the loan in francs. This means the B.N.C.I., et
al would have, in effect, converted their francs into French
Regraded Unclassified
293
- 12 -
Government dollar bonds, constituting a dollar obligation
against the dollar assets of any French Government hereafter
established.
Methods of Counteracting these Manipulations
In discussing the French financial proposals, some of
this Government's counter-moves have been noted. By and
large the bulwark of this defense has been our freezing orders
pursuant to which French assets in this country may only be
used pursuant to Foreign Funds Control license. This strategy
is purely defensive on our part and leaves the collaborationists
in a position to maneuver on any level in searching for the
weakest link in the control. While our controls are effective,
it would be foolish to be lulled into any sense of false
security--for the freezing controls are no stronger than our
licensing system. The French will press for licenses on all
fronts--making full use of political tactics to achieve their
end. It is on this level that the defense of our freezing
regulations will most likely crack, for much will be made of
the fact that the French are a "proud and sensitive people"
and that our controls are incompatible with their status as
& sovereign ally. It may be expected therefore that pressure
on the State Department will be great.
Regraded Unclassified
294
- 13 -
Immediately after November 7, 1942, Treasury representa-
tives in North Africa did take all the measures possible
within the fabric of the political situation prevailing to
frustrate the financial activities of the collaborationist
group. However, our forces in North Africa were in no
position to issue decrees as an army of occupation. Instead,
we had to persuade the French to take action. Under the
prodding of our Treasury representatives the French on
November 16 issued "Instructions to Banks", which, among
other things, provided for the blocking of all bank accounts
belonging to European nationals, including people in
Metropolitan France.
On December 20, after lengthy and prolonged negotiations,
the Treasury representatives succeeded in having signed &
"Trading With The Enemy Ordinance", under the terms of which
severe penalties were laid down for any trade or communications
with the enemy, or enemy-occupied areas, and under the terms
of which & black list would be issued--the French authorities
have subsequently issued black lists for several European
countries and their colonies.
Control over Dakar and French West Africa by the French
North African authorities was delayed for some weeks following
the events of November 8. It was not until December 7 that
Regraded Unclassified
295
- 14 -
French West Africa formally allied itself with French North
Africa on the side of the United Nations. During this interim,
it would have been possible for financial transactions and
communications to have been carried on between this area and
Metropolitan France. When French West Africa finally came
within the sphere of influence of French North Africa, it was
on political terms so favorable to the French that financial
controls other than those indicated above could not be
insisted upon.
On March 5, 1943, the French issued 8. sequestration
decree, the negotiations for which were instituted by Treasury
representatives in early December, 1942. This decree, at
least, sets up the legal and administrative framework within
which the franc balances of the collaborationists could be
blocked in North Africa if it were the disposition of the
authorities there to deal with the situation. Needless to
say this is in fact the real place to tackle such spoils.
If these looted balances were blocked in the banks in North
Africa there would be less need for us to be concerned about
an attack on our own freezing regulations since the funds
would be blocked at their source. However, no one should be
Regraded Unclassified
296
- 15 -
overly optimistic that the collaborationists in their
political capacity are going to impose effective controls
on themselves in their financial capacity.
Parenthetically, it should be noted that United States
Treasury representatives carried with them on their landing
at Algiers on November 8, 1942, drafts of decrees which, if
issued, would have imposed really effective controls over
such looted francs from the very start. It was not that we
had failed to anticipate the problem - rather there was no
vehicle available through which the necessary controls could
be established.
As things now stand, our technicians in North Africa are
limited as to what they can do to combat the situation. They
must use persuasion with the French. They can pick out the
most sordid cases and force the French to deal with these.
But they cannot hope to be really effective until they can
get sincere French Government cooperation.
To the extent possible the Treasury Department has taken
and will continue to take a strong position against the
efforts of the collaborationist group to transfer its looted
Regraded Unclassified
297
- 16 -
assets out of French Africa. However, it seems clear that
this is not a problem which may be adequately dealt with by
the Treasury Department without the support, both on a
political and economic level, of the other interested
governmental agencies.
By
HDW
Regraded Unclassified
238
TREASURY DEPARTMENT
PROCUREMENT DIVISION
OFFICE OF THE DIRECTOR
WASHINGTON
May 10, 1943
LIVORANDUM TO THE SECRETARY:
Supplementing report to you of May 3, 1943,
the purchases against the African Program from
Pay 3, 1943, to May 9, 1943, totaled $4,220,182.56
or a total of purchases for the program thus far of
$32,501,994.72.
Attached is report giving status of shipping
against these purchases.
Clifton E. Mack
Director of Procurement
FORVICTORY
BUY
UNITED
STATES
WAR
BONDS
AND
STAMPS
Regraded Unclassified
299
SHIPPING REPORT AS OF MAY 8, 1943
Tonnage
Tonnage
Tonnage
Tonnage
Shipped to Date
Under Load
On Hand at Port
En Route
Commodity
From U. S. A.
At Port
Waiting Vessels
To Port
Aluminum sulphate
14.5
Asbestos sheet packing
2
Boiler tubes
17
Bone glue
53
Books& booklets
2
Brass rods & sheets
23
38.05
12.8
88.7
Babbitt metal
53.5
Brick
129
40
Calcium carbide
247
2244.2
Cement
20
Cement, rubber
19.5
Chemicals
163.5
258.2
497.3
352.18
Coal cutters
12
Copper tubing
21.6
27.5
Corrugated boards
59
17.9
69.5
Clothing
2217.71
51.55
172.93
26.17
Copper sulphate
5697.75
47.5
Cotton thread
69.25
21.5
Cordage & twine
225
5
40
Drugs
6.5
Electrodes
9
3.9
Envelopes
9
1
9.18
Files, steel
15
15
Fullers earth
72
Gelatin
1
1
Glass, window
76.2
45.3
Glass lamp chimneys
17
Glycerine
12.75
horse shoes & nails
125.9
31
61.03
10.75
Mosiery
26
3.5
8.5
1.5
Regraded Unclassi
-2-
300
Tonnage
Tonnage
Tonnage
Tonnage
Shipped to Date
Under Load
On Hand at Port
En Route
Commodity
From U. S. A.
At Fort
Waiting Vessels
To Port
Light bulbs
8.5
Lithopone
10.2
Lumnite
30
Mach. finished book paper
2
Matches
389.75
4.6
70.15
Newsprint
892
21
234
28
Nipples, bottles, eye cups
9
Paper products
5
217.4
338.4
373.97
Paper bags
190.6
54
Phonograph records
1000 Each
Piece goods, textiles
7735.5
2123.1
2157.6
277.05
Pig tin
64
Powdered milk
119
Printers ink
.1
Raw sugar
1545
Refined sugar
4196.5
Sheet copper & rods
41.4
29.1
24
Shoe tacks
4
19.5
Spare parts for autos,
tractors & harvesters
232.25
45
156.56
715.69
Spark plugs
2
2.5
Storage batteries
47
4.8
6.95
13.5
Steel, pipe, bars, angles
27.5
62.5
1706.1
1162.32
Shoes, boots & soling
247.25
93.75
4.5
Sulphur commercial flour
323.2
2591
Tin plate
845
Tires, tubes & tape
175.75
20.2
343.04
Tools
9
57.9
209.1
Tooth brushes
.75
Tea
171.5
Regraded Unclassified
-3-
TOE
Tonnage
Tonnage
Tonnage
Tonnage
Shipped to Date
Under Load
On Hand at Port
En Route
Commodity
From U. S. A.
At Port
Waiting Vessels
To Port
Typewriter ribbons
.5
Wire nails
100.5
Wire rope
88.5
X-Ray films
1
Paint pigments
15.5
40.7
7.1
Pig iron
350
Jute bags
175.4
986
Totals
25,790.46
3,744.75
7,245.02
9,095.3
Regraded Unclassified
302
BRITISH air COMMISSION
1785 MASSACHUSETTS AVENUE
WASHINGTON, D. C.
TELEPHONE HOBART 9000
PLEASE QUOTE
REFERENCE NO
With the compliments of British Air Commission
who enclose weekly Statement No. 102 covering
Aircraft Flight Delivery as at May 4, 1943.
The Honourable Henry Morgenthau, Jr.
Secretary of the Treasury
WASHINGTON, D.C.
May 10, 1943.
Regraded Unclassified
U.S.
SECRET
OGEANIES SELVICE AIRCRAFT
2
(Govering Revenuate through May 4. 19/3)
BRITISH
MOST SECRET
(1)
(2)
3
(4)
(5)
(6)
(7)
(6)=
(9)
(10)
(11)
(12)
(13)
(M)
(15)
B270
LB.
1
100.
not BOAT
var.
BD.
BOST.
RAIN.
,
E
(mail
(MS)
(man)
(mo)
(RM)-L/L)
(10)
(L/3)
(L/L)
(1/1)
(11/1/1)
(1.3.)
(10)
(am)
(1/1)
WITH
20
%
432
240
295
2
299
155
63
229
99
4
15
1,
BAST
5
95
48
n
SOUTH AFRICA
129
92
MASTRALIA
29
9
3
3
If CANADA
45
$
165
16
1
13
13
39
I
9
5
2%
a
reute
5
2
6
32
1
9
54
1 É
3
4
1
5
1
14
- reste)
,
5
%
1
14
daty (sun. - Barn.)
2
1
15
4
11
2
2
5
20
18
-
1
9
14
1
2
APTER EXPORT
XS
19
,
32
14
10
,
1
6
export
1
15
2
1
1
,
-
1
39
3
1
10
1
R
installation our
2
sellification -
27
32
one
11
& 1 I
1
3
1
2
1
1
2
yotat(Lang
29
1
5
n
J.
1
2
5
a
1
,
2
2
,
DIVERIED to E. s.
90
20
an
to
TOTAL
20
165
see
649
-
2
945
299
411
$
-
198
n
IW
1,00
. Including - transferred to 8. s, after delivery to 8. L
PLANTING - survey
oo the figure in column 6 - Repart No. 302 -
MAIN AIR
They should have tem (mating dem with positions)
of I of
153-2-7-2-18-34-3-1-199. Column 15 should have been offurted accordingly.
Regraded Unclassified
18
304
BRITISH AIR COMMISSION
1785 MASSACHUSETTS AVENUE
WASHINGTON, D. c.
TELEPHONE HOBART 9000
PLEASE QUOTE
REFERENCE NO
With the compliments of British Air Commission
who enclose Statement No. 84 - Aircraft Despatched
- for week ended May 4, 1943.
The Honourable Henry Morgenthau, Jr.
Secretary of the Treasury
WASHINGTON, D. C.
May 10, 1943.
ST SECRET
STATEMENT NO.84
Aircraft Despatched from the United States
Week Ended May 4th, 1943.
ASSEMBLY
BY
BY
FLIGHT DELIVERY
TYPE
DESTINATION
POINT
SEA
AIR
FOR USE IN CANADA
CONSOLIDATED
Catalina 1 B
U.K.
U.K.
1
Liberator III
Bahamas
Nassau
1
Liberator GR V
U.K.
U.E.
10
Liberator GR V
Canada enroute
Canada enroute
3
Liberator GR V
Bahamas
Nassau
1
DOUGLAS
Dakota III
M.E.
M.E.
1
Dakota III
India
India
2
FAIRCHILD
Cornell I
Canada
Canada
7
LOCKHEED
Hudson VI
Canada enroute
Canada enroute
1
Ventura
Canada
Canada
1
GLENN MARTIN
Baltimore III A
M.E.
M.E.
5
Baltimore IV
M.E.
M.E.
37
NORTH AMERICA
Mitchell II
Bahamas
Nassau
2
Mitchell II
U.K.
U.K.
9
STINSON
Reldant
Trinidad
Trinidad
3
Total
76
8
Re Statement No.82 - 12 Baltimores IV reported as having been exported to Middle East. -
please note one was diverted to U. Kingdom where it is expected to remain.
Movements Division
British Air Commission
May 8th, 1943.
Regraded Unclassifie
NOT TO BE RE-TRANS, ITTED
306
COPY NO.
&
BRITISH LOST SECRET
U.S. SECRET
OPTEL NO. 153
$ OFFICE SECRETA
"
Information received up to 7 a.m., 10th
1. NAVAL
3 of H.M. Destroyers again bombarded KELIBIA yesterday. On
9th morning, another 3 of H.M. Destroyers sank 2 small ships and yet another
one of H.M. Destroyers sank a barge full of men, oil and ammunition North of
CAPE BON, One of H.M. Destroyers was slightly damaged by a shell from shore
batteries. Yet another of H.M. Destroyers was bombed and damaged by a near
miss in the Gulf of TUNIS but has reached port.
2. MILITARY
TUNISIA. To 6 p.m. on the 9th. Pursuit of enemy continues.
6th Armoured Division WBB fighting in HAMEARET Area where enomy still holds
high ground to the South. Enemy resistance increased in area South of CRETEVILLE.
Advanced elements of 7th Armoured Division have joined up with U.S. Armour
Southeast of BIZERTA.
U.S. SECTOR. General Klauser surrendered unconditionally to
U.S. Armoured Division in the morning with all Gorman forces between Lake
BIZERTA and PORTO FARINA, including 10th and 15th German Panzer Divisions.
3. AIR OPERATIONS
WESTERN FRONT. 9th. Mustangs of Army Cooporation Command
damaged 4 enemy aircraft on the ground and 9 goods trains in Northern FRANCE.
9th/10th. 19 Aircraft laid 63 sea mines.
TUNISIA. 7th. 320 Allied fighters operated against road
traffic in TUNISIA and Londing Grounds on the CAFE BON Peninsula. At night,
Wellingtons bombod SOLIMAN, GRONBALIA and KELIBIA, starting large fires end
causing a violent explosion at KELIBIA. 8th, 88 medium bombers attacked
PANTELLERIA Landing Ground and 300 additional Sorties were flown during anti-
shipping and other operations. Casualties: Enemy - 9, 7, 7, in the air, and
14 destroyed on the ground. Allied 6, 0, 2, (4 pilots sefe).
SICILY. 9th. MALTA based Spitfires bombed and hit a bridge
at LICATA and carried out sweeps 05 diversion to an attack by U.S. aircraft on
BURMA. Between 5th and 9th, about 160 Sorties were flown; over
140 PALERMO. tons of bomba were dropped on railway installations, bridges and industrial
objectives in the MANDALAY, RANGOON, UPPER CHINDWIN and AKYAN Areas.
CHINA. 4th. Liberators dropped 23 tons on SAMA Airfield (Hainan
Island) and Mitchells bombed HAIPHONG Docks. One aircraft missing.
Regraded Unclassified