Volume 716, March 29 – March 31, 1944

Diary Book 716 March 29-31, 1944 If argestine les Latin America - C - Canada United States Dollar Balances See also Book 710 Schedule covering agreed-upon program 716 89 a) Discussion by HMJr and White - 3/29/44 77 b) HMJr's letter to Navy 97 c) # # # Crowley 101 d) . . # Reconstruction Finance Corp. 103 e) Memorandum to FDR 106 f) Ilsley-HMJr correspondence 108 1) Copy sent to State Department 113 Correspondence Mrs. Forbush's mail report - 3/31/44 330 Czechoslovakia See War Refugee Board - D - Deferments, Military Government Bond Dealers: Deferment discussed by HMJr, Daniel W. Bell, and Charles S. Bell - 3/30/44 225 - È - Elliott, Harriet See Financing, Government: War Savings Bonds (5th War Loan Drive) - 7 - Financing, Government War Savings Bonds See also Book 714 5th War Loan Drive Conference; present: HMJr, Eccles, Sproul. Bell, Haas, and Gamble - 3/29/44 34 a) Agenda for meeting 33 b) Recommendations by Executive Committee of Open Market Committee 59 e) Hass list of issues charted 62 Timing discussed by BVr and Gamble - - 3/30/44 227 . . Mr. Ganble. Bell, and lass - 3/30/44 245 a) June 12 choses Elliett. farriet IVr at limitle as ant visit to release for 171) to Regist - 3/31/44 350,297 -1- - (Continued) 2 1 Financing. Government (Continued) for Savings Bonds (Continued) 5th War Loan Drive (Continued) Conference of Treasury group - 3/31/44 716 291 a) "Basket" re-discussed 291.324 1) Securities to be offered 303 a) Press release on time and offering 304.325 - G - Government Bond Dealers See Deferments, Military Greece See War Refuges Board - I - - India See War Refugee Board Italy Sale of assets in neutral countries (example: Lisbon Legation's tea) - proceeds therefrom to be used only with approval of Allied Control Commission: American Legation, Lisbon-Algiers-British Ministry of Economic Warfare-State-Treasury correspondence - 3/29/44 156 - L - Latin America Argentina: Luncheon conference; present: HMJr, Wallace, Luxford, and Jones (Marvin) - 3/29/44 65 a) General Perlinger's (Argentina's Minister of Interior) attack on United States and Ambassador Armour discussed b) Proposed memorandum to FDR (not sent) 254 Lend-Lease Weekly report - 3/29/44 156 U.S.S.R.: Report under First and Second Protocols and eight months of Third - 3/29/44 168 United Kingdom: Federal Reserve Bank of New York statement showing dollar disbursements, week ending March 22, 1944 - 3/31/44 343 - o - Odegard, Peter 1. 2r. Stanley Elge. Address College. thanked for coeparation de releasing 3/29/44 151 Regraded Unclassified 2 1 Paul, Randolph 1. Senator George's letter upso Paul's learing Treasury - 3/29/44 726 108 Portugal See Var Refugee Board Post-War Planning Currency Stabilisation: Conference: Hall asked to see Harry White so that time say be set - 3/31/44 309 Procurement Division Rockaway. New Jersey: Warehouse fire reported on by Smith - - 3/30/44 237 Public Debt, Bureau of (Chicago, Illinois) Mrs. Doyle's report after visit - 3/29/44 154-A - R - Revenue Revision Simplification of Tax Program See also Book 711 Reducing value of $500 dependent exemption by amount of dependent's income: House Ways and Means Committee meeting reported in Blough memorandum - - 3/30/44 252,253 Rockaway, New Jersey See Procurement Division - S - Saxon, James J. See War Refugee Board - T - ( Taxation See Revenue Revision Turkey See War Refugee Board - U - - U.S.S.R. See Lend-Lease United Kingdom See Lend-Lease # War Refugee Board - 1 - Virgin Islands See Var Refugee Board March S. 1944 9.05 1.2. At the Secretary's request, b. Smith distated the following INSURE of the discussion with 12. John Rancock and Mr. Will Clayton to determine the disposition of the Surplus Property Disposal fucilities of the Procurement Division. Treasury officials present: Mr. Gaston Mr. Sullivan Mr. Smith Mr. O'Connell- Mr. Lynch, Mr. McConnell Mrs. Klotz The Secretary started off by saying that he had given a great deal of thought to the question of property disposal, and had come to the conclusion that, as Hancock originally believed, it ought to be under one head and all ought to be handled in one department. He said that in view of George's bill being introduced on Thursday, he thought this would be a good time to reconsider this whole situation and make a change to correspond with this bill if it is decided to make a change. Hancock pointed out that he had held the view in the beginning that everything should be under one head, but had eventually changed his mind. He had looked around Washington and tried to find which department of Government would be best suited to handle this job. He realized that it would be almost impossible to set up an operation from scratch to handle so elaborate a job as this is going to be. When the Secretary and McConnell asked for the disposal job, Hancock said he was very relieved, because he felt that the Treasury had an organization already set up and with at least some experience. He felt this experience would be valuable in this job. He said he didn't know how effective an organization Treasury Procurement was, or whether it was up to doing the job as it stood, but at least they had people and some experience that should be valuable and certain properties in the may of warehouses, and so forth, that could be used. Clayton agreed with Hancook, and pointed out that his organization use simply $ policy organization and mi not handling any property disposal as such. He said there were five agencies involved in handling prop- erty disposal, and all of them were subject to his super- vision. He said he didn't know which agency would take Procurement, if Treasury decided to let it go. Hancock then brought up the problems involved in getting out of the Procurement job. He asked the Secretary if he had made up his mind what he would say, and reminded him that all the reasons he had heard this morning added up to the fact that it was too big a job and the Secretary didn't want to tackle it. He said people would get the idea that it was a "hot potato," and the Secretary was letting loose of it. The Secretary pointed out that that was pretty much the situation. He said the fact of the matter was that he had fifty to sixty million bondholders, and for this reason he didn't think the Treasury was the best organ- ization in the Government to take the criticism that was bound to come. Hancock pointed out that the Angel Gabriel could handle this job and would still be criticized. He said there would be endless criticism, some of it just, but twenty times as much of it unjust; but it would all be criticism. The Secretary then suggested to Hancock that if he were to go back to Lehman Brothers and was about to float a substantial issue, he would want to make sure that the Lehman Brothers' name was clean and above scandals and criticisms. He would want to make sure that Lehman Brothers wasn't being discussed all over the country for wasting money and being incompetent, and so forth. Hancock said that made some sense. The Secretary said that his mil, which was very heavy, was very quick to react to anything that went wrong with the Treasury. Any time the Treasury is accused of wasting money or is accused of anything of that sort, people are quick to write to him and to return their 3 bonds for redemption. Be wondered, under these circum- stances, If the Treasury could stand the criticism that would come with Procurement. Hancock then said that this particular criticism made some sense, and he was considerably affected by it. He said that if the Secretary were to go to the President with this criticism, he would probably get somewhere with this idea. The President would listen, because he felt it was an important reason for not handling Procurement. Hancock, replying to the Secretary's question as to what he thought about this whole move, suggested that it was out of his jurisdiction, that this was an Executive Order and it was an Executive Order that had nothing to do with him. The Secretary, realizing that all the discussion up to this point had revolved around moving the property disposal project without the benefit of Procurement's people or properties, suggested that the entire oper- ation might be moved to some other department. Clayton wanted to know what other department, and the Secretary pointed out that Commerce might handle it; to which Clayton had no reply, except to say that he didn't know what the reaction of Commerce would be to taking on this job. Hancock said that Procurement was traditionally the Treasury's, and for that reason he had given no thought to the possibility of moving it. Hancock then said that there would be no problem of getting takers for the Procurement Division. He said there would be half a dozen people who would reach for it, largely for prestige reasons. The Secretary pointed out that some people in the room believed that he should not give It up for that same reason. He asked amin if there would be problems In getting rid of It, and both Clayton and Bansnek assured him that if there waren't plenty of bidders, It would be the first time that ever imported In insurington/ The Secretary then used about George's bill, and used Mother or act this comempleted nove weld be Involved in my my In this bill or in the discussion about it. Se wanted to know whether or not the intro- duction of this bill was foreing his hand one may or another. Hancock and Clayton agreed that this particular bill would probably not bring up the question as to who was handling what. The Secretary then said, "Then we have plenty of time. There is no need to decide this within the next few days?" Hancock said there was no reason that he could think of for deciding it in any given time. He said that he didn't think Congress would get around to doing anything very thorough for quite a while. He said Congress was promising him a lot of speed, and at the same time was taking a recess until April 12. The Secretary then asked Hancock and Clayton to keep the matter quiet and not discuss it with anybody unless he called them. He asked Hancock if he had told Baruch about it, and Hancock said he hadn't. He said he saw no reason to, and under normal circumstances wouldn't. The Secretary said he would think about it and decide whether or not to carry the thing any further. Hancock said that if anybody talked to Baruch, he wanted to do it; he didn't want anybody else to talk to Baruch. The Secretary said he would not talk to anybody, and that nobody else would be notified unless Clayton and Hancock were notified first. 5 March 29, 1944 9:30 1d. DISPOSAL OF SURPLUS PROPERTY Present: Mr. Gaston Mr. Sullivan Mr. Smith Mr. O'Connell Mr. Lynch Mr. McConnell Mrs. Klotz H.M.JR: Does anybody have any ideas? MR. GASTON: I think we are stuck with it. MRS. KLOTZ: That is priceless! H.M.JR: You are getting very "Will Rogers," Herbert. MR. SHILIVAN: Anybody got any more ideas about how anxious Hancock and Clayton are to take it away from us - specifically you, Fred? MR. SMITH: I didn't have any idea. MR. SULLIVAN: You told me Thursday Clayton and Hancock are trying to get this away from us. MR. SMITH: I did not. I said they would in time if it went hay-wire. MR. SULLIVAN: You told me how they were trying to get it away from us. E. O'WNNELL: I thought st the first part of the disc asion that either intentionally or because they been't thought of it - they apparently badn't thought 8 transfer of this sort sould involve & transfer of the organization, and 30 forth, because they kept talking about starting from scratch and building a new one. H.M.JR: Yes, well, I put it that way to them, be- cause yesterday during the day you people convinced me that I should keep Procurement, but just give them the surplus. MR. O'CONNELL: Yes, but I thought you were think- ing in terms of the possibility of giving them surplus, including the surplus organization, because it is possible-- H.M.JR: I don't see how you could separate the two. I mean, I don't know what is surplus organization and what is Procurement organization. MR. SULLIVAN: It is all one organization. You can't separate the ordinary functions of Procurement and the sale of any kind of surplus without requiring & great duplication of personnel. It is all the same administrative staff except for the specialists; it is pretty much the same personnel all the way through. MR. GASTON: Well, it seems quite apparent that if there is to be & transfer, first their view is that you have got to have the Procurement organization - if there is to be a transfer, it has to be to some permanent organization of Government. I suppose Commerce is the only one. There you get into what Budget thinks. MR. O'CONNELL: Federal Works Agency, as I under- stand it, has been not only willing but anxious to take over the Procurement Division for a long time. You know me split the Procurement Division once before in connection with the organization plan and the Public Pulldings part of Procurement went to the Federal Morks Agency. 3 - I understood within the past fee asotis the Federal Works Agency, which, of course, is not - busy organize- tion these days, would be very happy to inherit all or part of the Procurement Division. MR. GASTON: That would be the other possibility. MR. O'CONNELL: But I think Hancock was probably thinking of them when he mentioned the fact there were a number of agencies that would be happy to get it. H.M.JR: I was surprised when he said, "Well, I will have to tell Mr. Baruch." Well, let's think it over some more. At least I have learned this much, that it doesn't have to be settled between now and the time it goes on the Hill. MR. SULLIVAN: Who is going on the Hill tomorrow? MR. LYNCH: I think Hancock, himself, and repre- sentatives of six Procurement Agencies. MR. SULLIVAN: I say, who is going up there for Treasury tomorrow? MR. LYNCH: I don't know. I wanted to bring it up and get it settled today. H.M.JR: Who would have gone up, normally? MR. LYNCH: I think John and Bob would be the ones, the same people who have been going over to Joint Con- tract Termination Board. H.M.JR: Why not do shatever the normal thing is? M. LINCE: I would think that would be the thing to do. 1nc are still insertive Secretary to this croup, area't you! EL MC Wills I should taink In and John. Ene LYRCH: iell, the three of $2 can arrange that. D. O'CONNELL+ The problem is the shole problem of contract termination; Bob and Too and I were hoping to get together with the people here to have a discussion of viewsas to the bill, and at that time nake an agree- ment as to who would go up. John and Tom, I should think, or Bob also - any two of them. MR. SULLIVAN: I think all three should go and Bob and Tom should handle the contract termination part. But then you come to the other point as to what we are going to do in the sale of surplus consumer goods. MR. GASTON: Does that come up? MR. LYNCH: I don't think that will come up specifi- cally, John, because this bill covers so much. The points in controversy, where they haven't yet reached & definite agreement as between the Committee and Hancock's people with the agencies, do not involve property at all. The one point about property, as far as Scott Russell's position is concerned, is that he doesn't want to give too much attention to property at this time because it in- volves so many controversial questions. In other words, as he sees it, and as Senator George sees it, the only hope of getting legislation through quickly now is to avoid all controversial aspects about property, which means not who handles property or what the existing organization is, but what you are going to do about plants, about the aluminum plants and the steel plants and the pipelines, and the aircraft plants, and things like that. This bill doesn't deal with them specifically, and what they are going to recomend, shat 1 assune George smile any to the Senate is to say that this Mill contains DD provision respecting such Important matters as that, 5 that they are appointing 5. head MD to be is charge of property disposal who is to come back is sixty days or ninety days with his recommendations as to policy to be enacted by Congress. So the play is to avoid controversial questions as to property. MR. SULLIVAN: Well, then, the only testimony would be on contract termination, which you and Bob would handle. MR. LYNCH: Yes, and six specific provisions of the bill as to which there is a difference of opinion as between Russell and the Procurement. MR. SULLIVAN: All relating to contract termination. MR. O'CONNELL: That is right. MR. LYNCH: That is right. Such questions as what to do about subcontractors who are affected by insolvency of upper-tier contractors. H.M.JR: Is it understood, then, for tomorrow? MR. SULLIVAN: Yes, they are the ones who are going to testify. H.M.JR: Will you be present? MR. SULLIVAN: Yes, I will be glad to come up if I am out. H.M.JR: Will you be up there, too, McConnell? MR. McCONNELL: Yes, sir. H.M.JR: They let Republicans go up there, you know. - MaCONNELLE I u not are of that. 20 6 Only before dam. E. 0°CONNELL: The Republicans are safer up there than anybody else. H.M.JR: Sure, I think you had better have one Republican up there, anyway. MR. LYNCH: On that point, Mr. Secretary, I would like to say now, because we are together here-- H.M.JR: What about - Republicans? (Laughter) MR. LYNCH: That the ones who have been following such matters here, that we hope we can have a meeting about two o'clock today and make definite arrangements as to the hearing tomorrow. H.M.JR: Well, I don't have to be there, do I? MR. LYNCH: No. H.M.JR: Is it agreeable that we let Lynch sort of carry the ball to see that the right person is there? Is that right? MR. McCONNELL: That will be agreeable. H.M.JR: Is that all right with you? MR. SULLIVAN: Certainly. H.M.JR: It is your (Lynch's) job to see that the person gets his cue and is there on time. O.K.? MR. LYNCH: Yes, sir. H.M.JR: If they don't behave, let me know. Anything else? All right. 11/ Mardi 3. 2544 11 COLOT We Netto. Issued from: Bello. Mr: Morgenthau speaking. is Who? HMJr: Henry Morgenthau. a: Oh, how do you do, Mr. Morgenthau? HMJr: How are you? B: Very well, thank you. HMJr: Mr. Brown, I wonder if you could help me out. I -- you know, they're throwing a lot of this surplus war materials at us in Procurement. B: Yeah. HMJr: And we need a very outstanding merchandising man to head this thing up. You wouldn't know of anybody that's willing and patriotic enough to come down and take on this kind of a headache? B: I can't think of anybody off-hand. I don't suppose there's any possibility of getting Frank Folsom who was Chief Purchasing Agent of the Navy, who has now gone -- quit only a month or so ago to go with The Radio Corporation of America, but he was the Chief Merchandising -- the Manager and Vice President of the Montgomery Ward & Company. HMJr: I didn't get the name. B: Frank Folsom, F-o-1-s-o-m. HMJr: Yes. He's now.... B: The War Production -- or with the predecessor of the War Production Board, whatever they called it, along with -- Knudsen WAB in charge of it and he had charge of all the buying of soft goods. HWrt In be very able? 12 2 : = think be's 1 very able ML. HNJr: Ee 1st 3:11 Be served with great sacrifice down there. Then he was Chief Purchasing Agent for the Navy.... HMJr: Yeah. B: ....and in the Navy Department and he left six weeks or two months ago to become Sales Manager and a Director and Vice President of The Radio Corporation of America. HMJr: Yeah. B: He's a man who is known all over the country. He's extremely able. HMJr: Is there anybody in the Marshall Field organization who is outstanding? B: Well, there's Houston McBain, the President -- he's the only man who would possibly qualify and -- but he's had no such -- he's general executive of the company, but he's had no such experience in merchan- dising as Folsom has. I suppose General Wood would be impossible politically. HMJr: Who? B: General Wood, Chairman of the Board of Sears & Roebuck. HMJr: General Wood. B: Yeah. HMJr: No, you can have him. B: Well, he's very able.... HMJr: I know. B: ....as a merchandiser, however. HMJr: I know, but.... 13 - 5 B: But I think he's impossible MISS Me *America Piret* and all the other.... HMJr: Yeah. Well, you feel the vay : do about that. B: Yeah. HMJr: How do you spell this Folsom? B: Folsom, F-o-1-8-o-m. HMJr: Oh, yes. This -- is this man you mentioned in Marshall Field -- is he the fellow that reorganized it? B: No. HMJr: The man who reorganized it died, didn't he? B: The reorganizer died and made a miserable mess of it, too. HMJr: Oh. B: It developed after his death. HMJr: Oh. B: He's dead, a guy -- a fellow named McKinzie. HMJr: Yeah. And -- but no -- but the present president is McBride, you say? B: No, McBain, M-c-B-a-i-n. HMJr: Oh, yes. B: A Scotchman. HMJr: And is he very able? B: He's very able and quite young. HMJr: Quite young? B: I'd say about forty-one or forty-two. HMJr: Yeah. 14 Would you be willing for If or 00 47 behalf to sort of sound the sit? Better be smit get de a - ne, well, any ABOUNT of time just to get us started? B: Yes, I'd be willing to. I haven't such hope that he'd do It because -- but I'll be glad to sound him out and give you a ring, Mr. Secretary. HMJr: I mean, are you -- does your bank do his business? B: Yes, he's a director of our bank. I know him very well, and Marshall Field does most of their business here. HMJr: Well, he's forty-one? B: Somewhere in his early forties, I should say. HMJr: Has he -- he hasn't been one of these fellows that has come to Washington and gotten his fingers burnt? B: No, he's never been in Washington. He's grown up primarily with -- through the financial side of Marshall Field and he ran their mills in South Carolina. HMJr: Yeah. B: And then he became Executive Vice President and about a year ago, he became the President of Marshall Field & Company. HMJr: Yeah. Well, sound him out and see whether he'd be at all interested to come down and just talk the thing over with me. B: Yeah. HMJr: See? B: Yeah. All right, I'll do that and I'll call you -- call your secretary sometime during the day If he's in town. I think he 18, but.... Wr: Vell, you call se. Call se on Retrict 2-6-2-6. 15 5 = Instriet 2-6-2-6. in 2-6-2-6. EMJr: You just call me and I'll be waiting for you. 3: All right. Fine. HMJr: You can reverse the charges. B: No, don't worry about that. HMJr: All right. B: Thank you. HMJr: All right. 16 lard a, 25es 20412 4d Nr. ..... neighber. June Porrestal: How are you, Henry? HWr: I'm all right. How are you? F: Fine. HMr: Jim, did you know Folsom very well when he was with you! F: Yeah. HMJr: Ah -- how able is he? F: Oh, I think he's & good man. He's a -- he's a man who -- ah -- has B. lot of tremendous energy in a -- .... HMJr: Yeah. F: .... on a particular problem. HMJr: Well, do you think he could help us at all on this procurement and surplus goods that you and the Army are going to throw at us? F: Oh, he'd be -- he'd be excellent, Henry. I - I doubt very much whether you could get him. You might. HMJr: Well .... F: He did -- of course he worked for us down here two years, and he's - he's B. man of some means, but not -- you know, he hasn't got a great deal of substance. HMJr: But I meant to borrow him -- just to borrow him for awhile. F: Well, he'd -- you know, he's -- he's a very sensible fellow, and I -- he'd - I know he'd work well. He'd work -- he's 8. man that you'd find easy to work with. 3Wr: Well, would you -- I don't gather, though, that you feel he's outstanding. Is Well, I wouldn't say he was -- well, I'd -- yes, I'd say be is. I. I'd - the only reservation I have about him is that, st all - that he's bored with long meetings, and you know, the kind of detail you sometimes have to go through is government. 17 Nr. fall, : - M. = int, of course, that's at unique. Mr: Teah. F: I mean, he's not -- be's an impatient fellow. The wants to get the job -- to get on with it fast .... HMJr: Yeah. F: .... and that quality was of the -- was of great service to us here, and he was -- he was damn good. HMr: Yeah. F: But he's -- he's extremely impatient and intolerant with -- of people that want to talk a lot. HMJr: Sounds good to me. F: (Laughs) Yeah. HMJr: Well, I don't know whether I can -- but I just wanted -- I haven't the faintest idea whether the RCA would loan him to me. F: Well, I don't think you'd get -- you'd -- I can't think, off-hand, of anybody better. If you couldn't get him, he could -- he also would be -- he knows people of that calibre pretty well. HMJr: Yeah. F: There's another man named Stevens -- Jack Stevens in New York, who would be an extremely good man for you. HMJr: Well, Jack Stevens is in that -- the cotton business, isn't he? F: That's right. Mr: Well, now, I know Bob Stevens. " I guess it -- I guess it is Bob Stevens I'm thinking of. It's Bob Stevens -- Robert P. Stevens. Sin Teah, he -- there's tas. Date 450 tab brothers. Tesh. 18 2 5 3a . the - is - the - we - 479 you thinking street? it 2he fellow - the issure Board. Miss Dat's Rob - I think It - I think that's 30b, isn't it? F: I think you're right. FMr: What? F: There's another man in Chicago. A man in Montgomery Ward .... HMJr: Yeah. F: .... who Frank always spoke of very highly. I -- his name escapes me at the moment, but he was -- he was a fellow that -- I think he's the chief procurement man now for Montgomery. HMJr: The chief procurement man now? Do you know McBain of Marshall Fields? F: Oh, I used to know him slightly. HMJr: Ah -- have you got any opinion of him? F: I wouldn't have any one worthwhile. He's the man that got out of Marshall Field, isn't he? HMJr: No, he's the President now. F: He's the present man. He -- I - Folsom - I know mostly about him through Folsom. Folsom spoke very highly of him. HMJr: Was Folsom of Montgomery Ward? F: He had -- he was there, yes... HMJr: I F: and he had a disagreement with Avery. HMr: Ch, yeah. Well, anyway, or if you don't mind, the fact that I'm sort of checking up, would you keep that to yourself? Ps Not . Mt. I will. 19 - 4 - in Thank you. 411 right. 20 5 If - X8 LL Min Mis. Street Brown: Tello. Xr. Norganties, this 10 Net from 10 the First National in Chicage. MJr: Yes, sir. B: I got hold of McBain and he said that he was pretty positive that he couldn't take the job; that he would go down and talk to you if you wanted to, but he said that James L. Palmer, their First Vice President 1s in Washington now. Our boys seem to think that -- wondered if Palmer could see you and get the story as to what the thing is and bring it back to him before he went down. Palmer is the man who, a number of years ago was, I think, in the University of Chicago, was brought into Fields by MoKenzie. He's a very able man and really 18 the second man in Marshall Field & Company and happens to be in Washington. McBain thought that if he could talk with you or somebody in the office and get the idea what the job was about, it would save your time and possibly save.... HMJr: His. B: Give McBain an idea of how long the job might last or something. HMJr: What is Palmer doing here? B: Palmer is Vice President and he surveys -- what is he doing in Marshall Fields? HMJr: No, I mean is he here in the Government? B: No, he's not -- at the present time he's not under the Government. He made a survey of O.P.A. for Brown. HMJr: Yes. B: I think he's -- he was loaned some months ago for some months to Budget -- I mean, he knows something about Washington, but he's back as second man in Marshall Field now in Chicago. I think you'd have 8. such better chance of getting him than getting McBain. Se's about forty-five years old. 21 2 HNJr: Well.... E: Be VBS down in Washington - as 8. satter of fact, the Government leases 8 tremendous amount of space in the Merchandise Mart. HMJr: I see. B: And I think that Palmer thought Danny Bell was after it or something connected with the Merchandise Mart and the Government leases there. HMJr: Well, Dan just came in. Let me ask him. Do you mind holding the wire a minute? B: No. HMJr: (Speaks aside) Ed, he saw Dan yesterday. B: Yeah. HMJr: Well, you wouldn't mind if I called McBain direct? B: I wouldn't at all. I mean, McBain will be -- said that he'd go down there if you want to see him. I mean -- but I think that he thought that.... HMJr: Yeah. B: You might call McBain. I just got him at Marshall Field & Company so he's there. HMJr: It's M-c-B-e-1-n? B: M-c-B-a-1-n. HMJr: B -- B .... B: Houston McBain. His first name is H-o-u-s-t-o-n like the city in Texas. HMJr: Houston? B: Yeah. HMJr: Well, I think I'll call him and see what I can do. I'll talk to Dan 8. minute. di Teah. 22 . 3 - HNJr: And the if I oan get his nt least to cose down and see St. B: A nan -- thinking it over in the few minutes you've talked to se -- with Butler Brothers, one of the largest wholesale houses here HMJr: Yes. B: ....his name's Donaldson. He's the Vice President, who formerly was Comptroller of Montgomery Ward. HMJr: Oh, yes. B: who is a very able executive. I mean you might consider him as a possibility, I think. HMJr: Donaldson? B: Yeah, of Butler Brothers. HMJr: Of Butler Brothers. Well, I'll think about that. B: Yeah. HMJr: Well, thank you very much. B: Not at all. HMJr: Thank you. B: Good bye. 23 March 3, the 10.40 4de SW71 Hello. Souston McBain: Hello. HMJr: Mr. McBain. M: Yes, this is Mr. McBain of Marshall Field & Company. HMJr: Henry Morgenthau, Jr. M: Yes, sir. HMJr: I've just been talking with Ned Brown, who I think has been talking with you. M: Yes, I've talked to him twice on the phone this morning. HMJr: Now, I don't know whether Mr. Palmer is here or not. He saw Dan Bell yesterday. M: Yes. HMJr: But, I know it's an awful nuisance to come to Washington and all that sort of thing, but if you wouldn't mind coming to be here Friday morning, I would appreciate it -- so that we could take a. look at each other. M: I see. Well, it just happens that Palmer is still there .... HMJr: Yes. M: .... and I've talked with him since I first talked with Ned Brown. HMJr: Yeah. M: I reached Palmer on the phone. He's now at the Statler, and I suggested that he get in touch with your office immediately, which he is now trying to do. HMJr: Well, I'd -- I .... M: Now .... Hidr: Please. il .... it my be that I 082 come com: se far -- taking the job. it Looks out. Mt since Islaer is there .... 24 - **** at the anet, I wald appreciate it very much if you could see him, and discuss all the facts with his - give kis all the facts. SWri Well, 1- I can do that, but you - you say it would be out as far as you're concerned? X: It looks that way -- the may we're set up here now. Ah -- it might be that Palmer, himself, could do it. I don't know. HMJr: Uh - huh. M: He's extremely capable. He worked with Harold Smith for -- in Washington -- for three months a year ago. HMJr: Harold Smith? M: Yes, in the Bureau of the Budget -- we loaned him to Smith for three months. HMJr: Yes. M: Actually he knows his way around there much better than I do. He's the second man in this Corporation; he's & member of our Board of Directors. HMJr: Yes. M: And since he's right there now, and available this morning, I thought if he got all the facts, then when he gets baok here tomorrow morning, he and I could sit down and analyze it and see what we do next. HMJr: Yes. Well, I'd like it, if you've got a couple of minutes, I just -- I could tell you right now, but I'll -- I will see Mr. Palmer, anyway. M: Good. HMJr: Because what I had in mind, if you were coming, I would like to see you Friday morning. M: Yes. BWr: and If you have any trouble - transportation, m'd be glad to get 11 for your 25 A Yes. Mrs the point las this proup of have et Bancock and will Clayton are looking to Procurement to handle conser surplus goods of the Army and Dary **** 2: Yes. HWr: and what I really want is somebody with outstanding merchandising experience who'd come in here and set this thing up for us. M: Yes. HMJr: Now that's the job that I have in mind. M: When you say "surplus goods of the Army and Navy", I assume that excludes food and munition. HMJr: That's right. M: Yes. HMJr: It is consumer goods. M: Consumer goods. HMJr: Yeah. And it -- the food, as I understand it, would go to the War Food Administration, and shipping will go to shipping, and plants and so forth will go to RFC .... M: Yes. HMJr: ..... but this other huge group would come to us, and is coming to us now in -- in, oh, ten or twelve million dollars a month .... M: Yes. HMJr: .... at the present rate. But we -- we're not set up to handle the volume that's going to come, and I - I'm looking for the best merchandising man in the country to come down here and help me set it up. I don't know how to do it, but I -- all I know is where to get a good man- 1: (Laughs) Well, that's very kind. I nean I wouldn't attempt to do it myself, but it's going to be 6 perfectly hage thing, and they seem to feel that 36 4 Mr. (cont'd) IN an I - I 1 1 the # = # 00 - that se have the skeleton organization. il Yes. H/Jr: But we haven't got the people who are big enough, or who have grown up in the business .... M: Yes. HMJr: .... and now I've heard about you, and -- I - I asked Mr. Brown whether you have been burned by Washington before, and they said you hadn't .... M: (Laughs) HMJr: .... 80 you're fresh meat .... M: Oh, I see. HMJr: .... and -- but if you came, I mean, you'd have a complete free hand to go ahead and set it up on a business basis, and there'd be no politics in it. M: Yeah. HMJr: And, there'd be a straight business proposition to do this thing for your government. M: Well, I thought a lot of people in Washington didn't like business men, from what I gathered reading the press. HMJr' Well, don't believe everything you read in the press, but I - I'm looking for a business man with business experience, who'd bring in business associates, and do this on a straight business basis. M: Well, I'll be thinking about it, and I'd appreciate very much your seeing Mr. Palmer this morning. HMJr: All right. Supposing you tentatively get yourself a reservation so that you could be in here Friday? M: I'll do that, and I'll get in touch with you tomorrow as to whether it seens best or not. Him will you do that? 11 Yes, I will, b. Secretary. 27 - 8 - HWN Thank you so much. Ma Righto. Good-bye. Name 25, 1988 10:58 LA Handelph Ted: Hello. Mr: Are you at home? P: Yeah. HMr: Look, Randolph, you remember when Louis Weise came down to see us? P: Yeah. HMJr: And they had plenty of P: I saw him a good many times after that, you know. HMJr: Good. Well, we helped him, didn't we? P: Yeah, I think we -- we helped him in two or three ways. We helped him in the first place by keeping him in close track of the situation. HMJr: Well P: So he knew what was going on and I also talked with him on constitutional angles of the thing. HMJr: Yeah. P: We couldn't take an active place on the front line on it. HMJr: No. Well, let me explain what I've got, old man. I'm trying to get a Mr. Houston McBain, M-c-B-a-1-n, President of Marshall Field of Chicago..... P: Yeah. HMJr: to come down and help me out on this surplus property. Now, what I want to find out from you to Louis Weiss 1s -- is Marshall Field still the controlling interest. You see? P: Yeah. HMJr: I mean, does he control 117 P: Yesh. 29 = 106/m Sex, if be is the principal stork holder, I'd like de to tell Houston Molletn, *90 55 down and help Morgenthau". P: Yeah. HMJr: See? P: Well, may I write down that name? M-c.... HMJr: M-c-B-a-1-n. P: Yeah. HMJr: His name is Houston like Houston, Texas. P: Yeah. HMJr: McBain. P: Yeah. HMJr: And he's the president of Marshall Field's. P: Yeah. HMJr: Now, I've talked to him and I've asked him whether he wouldn't come down Friday to see me. P: This coming Friday? HMJr: Yeah. P: That's tomorrow -- no, day after tomorrow. HMJr: Day after tomorrow. And -- but he said he's practically sure he can't do it, but if Marshall Field was the dominating stockholder and we could get word to him through Weiss that this is something that I would appreciate... P: Yeah. HMJr: And if he will tell the other fellow, you know.... = Yeah. HMr: Put I little best on his. Regraded Unclassified 30 Test. Well, I DES get 10 trush with Wetse very - aproading -- I Address he's 18 die office. In fact, I pot - letter trie time a couple of days ago. EMI: And just ask him. I bean, be my say, "No, young -- 60-called young Marshall Field is not the dominating stockholder," but on the other hand if he is, then tell him that this is to come down and help us put this thing on its feet SO we can handle the surplus property. P: It's Just an organization job. It isn't a permanent -- I mean, it isn't something that.... HMJr: Well, I'd say, "Put it on it's feet and stay here long enough to get it going." P: Yeah. All right, I'll get after Weiss. HMJr: Because -- will you do that? P: Yeah. Be glad to. HMJr: And it's something that if he's going to do it, I'd like him to do it today. P: Yeah. All right, I'll -- I'll put a call right through and see if I can get Weiss. HMJr: All right. P: I know Weiss on a pretty good basis. HMJr: Have you had your coffee? P: (Laughs) I've been way down M Street already. HMJr: What? P: I -- well, I went to bed at nine o'clock last night so I was pretty good this morning. HMJr: You're flattering yourself. (Laughs) P: Hell, I can't take sore than ten hours sleep. HMJr: (Laughs) Okay. P: All right. HWri Bye. 31 March 29, 2944 ISSURANDUM FOR SECRETARY Prom: Assistant Secretary Sullivan Mr. R. S. Stevens, Vice President and General Merchandise Manager of Montgomery Ward, is to be in Washington on April 4. Last week we made arrangements for him to be available to talk with us that afternoon. Others we had intended to call in this week included: Mr. Houlder Hudgins, formerly of Montgomery Ward and now with Sloane-Blabon Corporation, New York City. Mr. Jack Strause, Macy's, New York City. Mr. Theodore Quinn, of the Maxon advertising agency who is the top man on the merchandising program for General Electric household ap- pliances. F. W. Binzen, merchandise manager of The Penney Company. B. C. Heacook, Chairman of the Executive Committee of the Cater- pillar Tractor Company. This represents the first group we intended to talk with. was 32 - Volume of Transactions at the Procurement Division, Monthly, July 1943 to date (In millions of dollars) ---- : : ---- : Month Purchases : Sales 1943-July $106 $ 4 August 120 3 September 172 4 October 75 12 November 125 5 December 82 5 1944 January 89 18 February 95 12 - Total $864 $63 Office of the Secretary of the Treasury, March 28, 1944. Division of Research and Statistics. Res AGENDA 1. Goal - 816 billion 2. Increase in naturing Certificates (a) May 1st - $2 billion (maturing $1,655 million) (b) August 1st - $1 billion (maturing $2,545 million) 3. Treasury bill program 4. Basket of securities 5. Date of Drive 6. Deferred payment for insurance companies, savings banks, pension funds, etc. 7. Time deposits of commercial banks. - 3 at 1 March 29, 1944 11:00 1.3. FINANCING Present: Mr. Bell Mr. Gamble Mr. Haas Mr. Ecoles Mr. Sproul MR. ECCLES: After we got Dan's memorandum on Monday, we spent practically all day yesterday discussing the memorandum and anything else that anyone wanted to bring up and discuss. And, of course, Goldenweiser and Piser have discussed the matter & good deal with the staff people for the last month off and on, and, also, they have talked back and forth with Bob Rouse 80 the staff people were fully advised. MR. BELL: There are a good many things that are being discussed that I didn't think necessarily had to be decided today, 80 I left those off the agenda. MR. ECCLES: That is correct. Now, here is a memorandum that we didn't have time to work off, particularly. (Distributes copies of "Recommen- dations by Executive Committee of Federal Open Market Committee to Secretary of the Treasury," attached.) H.M.JR: Do you want me to read it now? MR. ECCLES: That would be fine. H.M.JR: You got ay message, why I had announced that sixteen billion, didn't you? KR. BOCLS: Yes, Banson told as. Well, I sean, it we perfectly all right. I hadn't MC the fourteen. 35 2 18. HELL: It VII all DT87 the paper. 13. BCCLFS: Ye agree with the sixteen, If a matter of fact. H.M.JR: You do? MR. ECCLES: Yes, we all agree that sixteen is the right figure; fourteen is too low. How would it be to read it--well, I don't know how you want it. H.M.JR: I have read the second paragraph. MR. ECCLES: How would it be to read it out loud? H.M.JR: There is nothing in there that I disagree with you on. MR. ECCLES: Wouldn't it be better before you either disagree or agree to go right through the whole thing? H.M.JR: Which way do you want me to do it? MR. ECCLES: I think that is better. Then you get the whole picture, you see. H.M.JR: All right. (Reads memorandum to himself.) Gamble really ought to be here, shouldn't he? I will see if I can get him over here. (Requests Mr. Gamble to attend conference.) May I say it is an excellent memorandum. If I could have had this & little earlier, it would have helped me. MR. ECCLES: Well, ne finally got that off the mimeo- graph at ten-thirty this morning. H.M.JR: Then I couldn't-- 36 a a. SPROUL: is s result of our conversations all day yesterday, this was drawn up last night and this morning. MR. ECCLES: You see, we had Dan's here. We got this Monday and so met yesterday all morning and again in the afternoon, and this was the result of the discussion of just the Executive Committee. On the Executive Committee there is Hugh Leach, McKee, Draper, Allan, and I. Then we had some of the staff people. MR. BELL: You have my table there, Mr. Secretary, I mean, the table of balances. Number one is the goal, which is agreed on. Number two on page two of their statement--they say they see no reason for doing any direct bank financing, and, therefore, recommend there be no offering of certificates or cash in connection with the May 1 refunding. That is the fourth column on that statement, where you have two billion dollars for May. That would increase the maturing certificates by two billion dollars, making it three billion six, and give us that much more cash. Now, they are recommending that be eliminated. The bankers did likewise, because they said it would draw funds from the corporations, and so forth, and take it out of the drive. They would like to leave that two billion dollar increase out at this time and leave a vacuum there so they could pick it up in the drive. H.M.JR: Now, wait a minute. You can't pick it up in the drive if the Federal Open Market Committee--I gather they want to eliminate certificates entirely. MR. ECCLES: Not in the drive. MR. BELL: No, no, they recommend the basket be the same, but they add the one and 8. quarter percent note. MR. ECCLES: Be are talking about four st the bottom of page two. H.M.JR: a I thought you 1871 recomending the aliai- nation. 37 13. SPROUL: 1e have is the past, and me would like to get any from 22, but M don't think you oan in this drive. H.M.JR: Maybe it was because I was told that is what you were going to ask. (Laughter) MR. BELL: I think you may have been thrown off by the last sentence, "You may wish to consider the inclusion of the one and a quarter note." MR. ECCLES: None of us feel, with the volume to be raised, that the certificate should be left out of the drive. We feel that you have already established it now. It is such an important part, that I don't think you can change any time from now out. I think to get corporate funds a certificate is with you for the duration. MR. SPROUL: It might be possible, if the rate on bills were increased to where we think it ought to be and if 8 short note were--you could get rid of the cer- tificate. MR. ECCLES: Our idea in suggesting a rate--and I think a half of what we had in mind may be too low-- instead of figuring that the bill is merely an instrument for the Fed to take, we would like to see more bills in the banks and less certificates. Instead of the banks getting seven-eighths for certificates--there isn't any reason for it. The banking situation is such that I think that the banks with what bank financing that you may have to take, there is no reason why the banks shouldn't take a bill. We have a half-rate bill here, but I can't help but feel that five-eighths bill for a period of four months--get all the new money that we expect to get from the banks on bills. Your outstanding amount of bills is only thirteen billion. (Mr. Gamble entered the conference.) H.M.JR: I as sorry, Tad, I should have let you mos earlier. You could take DE of these statements and read it. George has cce. 11. HELL: You see, with the tax William is lbs that would bring our balance down, guing est of las late June with n drive approaching, five billies nine instead of INVES billier nine. MR. ECCLES: If you started the drive, though, at May 23, instead of June, your balance would increase. MR. BELL: Yes. MR. ECCLES: Your balance would not gèt that low. MR. BELL: But this statement is based on the assump- tion that the drive would start early, June or not until after June 1, so your balance would be down to around six billion dollars at the end of May. MR. ECCLES: On May 23 it wouldn't fall; it would more likely be eight billion dollars. H.M.JR: Let me get one thing at a time. What you are talking about is not adding two billion to the cer- tificate that comes due on May 1. Is that right? MR. BELL: That is right. That is a billion, six hundred and fifty-five million maturing. With two billion you would have a maturity of three billion six next year. H.M.JR: But have the extra in the drive. MR. BELL: At least leave that money there and not pick it up in the certificate before the drive. H.M.JR: But figure you are going to do it in the drive. MR. ECCLES: Except you wouldn't make a public offer- ing at all; you would make your non-bank offering in the drive only of sixteen billion, getting as much 1 8 you can. 23. SPHOOL: You would hope to get st additional asount in the drive from non-bank investors rather than getting it before the drive from tanks. 29 6 1.1.78: I should think from the drive standpoint that that La 5 good suggestion. BL HILL: I think that is. H.M.JR: I would like Gamble to pass on that when he gets around to it. But I don't think we will have any difficulty on that; it is coming to me as a shock, and a pleasant one. MR. BELL: They leave the next one open, the August 1 increase. In that memorandum you show a billion increase in the same column for the August 1 maturity, and-- H.M.JR: As I say, it sounds all right. I am not making any commitment yet. Gamble, if you will just listen for one minute--the suggestion that Fed has made is that we don t increase our certificates by two billion dollars, and just hold that with the hope that we get-- MR. GAMBLE: that much additional in the drive. I think that is very good. H.M.JR: I am not saying yes or no, but it sounds all right. But I am a little conservative here; I don't like to be rushed by the Fed too much. MR. BELL: You notice there are eighteen billion dol- lars in that statement to get from the drive. H.M.JR: What is the next one? MR. HAAS: The next point is the Treasury is misquoted in the third paragraph. The Treasury forecasts that--I presume it is based on some of those memoranda. That wasn't a forecast--it is in the third paragraph, "exclusive of Federal agencies and trust funds, is forecast by the Treasury " 33.3 billion dollars for the calendar jest 1944." That isn't I foremet. That thing assumed that you sent 4D through the year a the seas basis as the Fourth lar Loan Drive. That is the mj it would case out. Brery- body in the Treasury, I & sure, hopes and is kind of inclined to believe it will be somewhat better. MR. BELL: It is just set out on 8. basis of past experience. H.M.JR: You have protected your honor. Now, let's go. MR. HAAS: That is the important part. H.M.JR: Says you! (Laughter) Having done that, do you mind-- MR. HAAS: Go on now; it is all right. MR. BELL: We have passed number one and number two. H.M.JR: George is so worried about his honor, which is in four, isn't it? MR. SPROUL: Four-F. (Laughter) H.M.JR: What about three? MR. BELL: Number three is raising the rate on Treasury bills, which we have discussed a good many times. Really I can't see any excuse for raising this bill rate from three-eighths to one-half when all it virtually is now is currency. H.M.JR: The only thing that would make me do it would be to get Wendell Willkie to come out. MR. SPROUL: Against it, or for it? H.M.JR: Well, I don't know. MR. ECCLES: I know we have discussed It s. good deal. MR. BELL: I don't see how you (az substitute Wills for certificates at the higher rate which they must and like. 42 XR. ECCEPS: By: If you don't put the certificate out, Dan, DOB I den : DM at sig the bank financing that they are going to do directly should be given HE- eighthe. It seems to 20 that If and nore hills in the banks. Boa, the banks have about six billion of bills. Now, of course, the three-eighths bill with the banks is, in effect, the reserve upon which they get interest, really. That is the way it is today, and they are not going to take these three-eighths bills as an investment. So far as the Fed taking bills is concerned, the three-eighths rate is certainly plenty, and it isn't an idea of getting any better return on what the Fed buys at all. We discussed that to see if we could find some way in which we could refund the Treasury, I mean, any different way, so it isn't an idea as far as we are con- cerned of getting any return; it is to get the bill more in line with the certificate, that is the certificate at seven-eighths for a year. A bill as a money market instrument should go much more to the banks than it does. H.M.JR: Which should go more to the banks? MR. ECCLES: The banks should get more bills; the banks should take more bills. MR. BELL: In place of certificates? MR. ECCLES: It wouldn't affect the reserve picture. We will have to buy whatever is necessary to give the reserves. H.M.JR: Are you worrying about the banks earning too much? MR. ECCLES: I think the money market banks don't need the seven-eighths today. It seems to ne that a bill as a shorter piece of paper, that is, related to the certificate, would tend to put out a great sany more bills that se DOW have cut. The volume of certificates is growing very, very ranidly, and you have to nake 1 roll-over of these certificates periodically. The hills work automatically. It becomes II automatic operation, and instead of having outstanding thirteen billion of bills which you now have out, and the banks ORN about six billion of them, if during this year the banks and the Fed together would have to get, say, fifteen billion, I think the twenty-two billion that you figured for the banks and the Fed is too high, George. I would think that fifteen would be much nearer to what we might get by with. MR. BELL: You mean the banks and the Fed? MR. ECCLES: Yes. Certainly ten billion of that amount should be in bills, and the banks, instead of owning so many other securities, including certificates, should have at least five or six billion more of bills. They won't take the bills at three-eighths; they will run into the certificate, go into the market and buy certifi- cates and bonds and other things. What I think we ought to try to do is to do more of the short financing on bills at a lower rate, of course, than certificates. I don't know whether the half is high enough; it may take a five-eighths to bear a relationship to the certificates, I don't know. H.M.JR: Could I interrupt you a minute? As near as I get your thinking--we have had this before, and you may be right--what you are worring about is that certificate rate of seven-eighths is too high. MR. ECCLES: I don't know that it is too high for certificates. MR. SPROUL: The three-eighths rate is too low in comparison with the seven-eighths rate for certificates. I think the seven-eighths rate for certificates is all right. Let's drop the rate on certificates to three-quarters. II. SPROTLY Tou DATE a pattern of rates DOE which is to pretty good aligment from seven-eighths out, tet your - 10 difficulty is with year pattern rates from seven-eighths to three-eighths. H.K.JR: But if you are going to aqueeze it, by not save 8 little money? MR. SPROUL: We think you would save money by increas- ing the rate on bills and getting more of the financing into bills than by keeping it all in certificates. H.M.JR: How about dropping the rate to three-quarters? MR. ECCLES: I think it would be all right from the bank standpoint, but the difficulty with the certificate is, it isn't only a bank instrument; the certificate has become a corporation instrument, and the corporations are very heavy buyers. The three-quarters would be plenty for banks if you just relied upon the banks to take the certificate, but you use the certificate in the drive for the non-bank in- vestor. That is the difficulty, 80 what we are trying to do is to get a higher rate on bills and let the banks take the bills instead of the certificates. H.M.JR: But just because we don't see alike on the three-eighths, how about saying the banks can't buy the seven-eighths but we will give them 8. three-quarters? MR. ECCLES: Of course, the trouble is-- MR. SPROUL: The corporations depend on the bank market being there if and when they want to get cash for the seven-eighths. H.M.JR: We have had this for about two years? MR. SPROUL: Yes, about two years. MR. BELL: Since May, 1942. S.M.7M: And se haven't seen eye to eye. I grant se have heat lucky 32 far. Last time the discussion NI that cc - 11 - you couldn't get 2074 bills distributed, and " late been fairly successful, haven't we? n. SPROUL: The have, but it is an indirect sale to the Fed. It is not 8 market distribution. H.M.JR: Doesn't it stick a little bit? MR. ECCLES: No. MR. BELL: Outstanding bills are going down because the Fed has to supply reserves to the market through Treasury bills. H.M.JR: Wouldn't it be just the same if the rate was one-half? MR. ECCLES: We would have to supply-- MR. SPROUL: If you increase the supply of bills, we probably would continue to get most of the bills, but we think more would stick in the banks than now stick there. MR. ECCLES: If you don't offer certificates--instead of making this offering of certificates that you talk of here to the banks, you work't make any offering of certifi- cates to the banks; you would increase the offering of bills instead of offering the certificates that you propose to offer, and the banks then would only get the bill. The certificate just wouldn't be available directly to the banks at all. Of course, the banks will go into the market and will buy bills, will bid them up to buy them as long as the certificate is as low as it is. They won't take the certificate at the present rate; they will go in and get the certificates indirectly. MR. BELL: They won't take the bills? MR. ECCLES: That is right. My point is, if you sould get the bill rate 50 that the pattern between Mile et 45 - 12 - certificates WE more realistic and you wouldn't offer certificates, the only thing available then in the offering would be the bill. And we would expect, then, the additional market offerings to be bills instead of certificates. H.M.JR: Well, now, I go along with you. There is no argument here on the Treasury's part. Everything should be done to sell every dollar to the non-banking group. There is no argument about that. I like your suggestion that we don't increase the certificates by two billion dollars before the drive and try to sell that much more, and so forth. Now, the other thing, I would like to pass it for the minute. It is a difference which we have approached every three months. We still haven't been able to see it. I don't know how much you have tried to wear Bell down on this thing, but you are young fellows, and I am not saying yes or no; I would like to pass it for the minute, because it is the most difficult thing, and I don't know whether we can get together on it or not. MR. ECCLES: Henry, let me just say this, and then pass it. We won't bring the thing up now, except you have an interim period, you have a different situation than we have had, in which we have to increase the bills substantially. We have been talking about, likewise, increasing the certificates for the banks. It is in connection with that that we thought it appropriate to at least call to your attention here what seems to us a better way of handling this, which is not to make available at any time certificates from the banks or other issues, but do what we can by getting a better rate so that the banks will take the bills in & nuch larger amount than they have taken, and take less of the certificates, so that the amount of outstanding cer- tificates that the Treasury has would not be so high, and the ascurt of bills they Lave out would be such higher. That is . situation, - different approach--It is 1 little different situation than jou have bed in De past. - 15 H.M.JR: I will give it careful consideration. MR. SPROUL: The net result would be that your finan- cing would be done in the aggregate at a lower rate rather than a higher rate. MR. ECCLES: It wouldn't cost you more money. MR. BELL: If you shift from a certificate, of course, back to & half bill, you save money. There is no doubt about that. But it seems to me that we have sold three-eighths to the country, to the money market, and now to raise that rate gives a basis for all of this talk about the short- term rate strengthening that we had last fall, and which we quieted, I think, very effectively. It starts all over again. MR. SPROUL: I think it no longer is a money rate; it is a Federal Reserve discount rate now, their three- eighths rate. MR. ECCLES: It isn't a money market rate at all. MR. SPROUL: It is just the way they borrow money from us at three-eighths, so I don't think, myself, an increase-- MR. ECCLES: If you raise to seven-eighths, that is another story. MR. BELL: They would be borrowing at a half if you stuck it up there. MR. SPROUL: I don't think that increase would have any effect on Government securities, except from-- MR. HAAS: If you thought about this, Marriner, right now, you are beginning to hear these comments about your reaching the bottom of the barrel; things are getting tight. Then you raise the rate, and It is liable to affect the shole thing all the my nt. 14 Sow, you DE have de opinion; I M DATE de; and the Secretary and Bell--everybody-but it is . speculative thing, and I think st this stage, aty speculate? KR. ECCLES: You can keep the three-eighths bill rate for the purpose, and you can put out only the amount of bills that it will be necessary for Fed to take to give the necessary reserves. That is all you can do. But you can't put out more bills and make them stick at three- eighths. MR. HAAS: Some of them-- MR. ECCLES: I think they will stay right down 8 round your present six billion level. MR. BELL: Of course, Marriner, you can't put out seven-eighths and make them stick unless you provide re- serves. MR. ECCLES: That is right, but you will just provide the reserves. What I am thinking of is, instead of the banks holding the number of certificates and notes, increas- ing their holding of certificates and notes to make up the slack, and that you don't get from non-banking investors, the banks would make up on a bill, rather than get the higher rate on these other securities. Speaking of money market banks, which is really the place where you get--I would like to see them have a lot more bills and less of the other paper to the extent that the bank money must be provided, and we can't get the banks to do that on the present differential of three-eighths, I mean, on the three-eighths bill, because the spread between three-eighths and seven-eighths is too great to get the banks--they will run into the market and buy up the other security, instead of holding the bill. That is the point that we had in mind. Can " think about 1t? EL BOCLIST Yes. 11.2b: 10m, sale four, % request that the tacket in the fifth drive be the case If is the fourth drive except for the substitution of 2 per cent fully unrketable bonds for 2-1/4 percent bonds of restricted 217- ketability." be have been over that in great length, and we are in accord with you on that. MR. GAMBLE: Yes, sir. MR. BELL: Yes. H.M.JR: You said it was two percent. Where did you say it would fall? MR. BELL: In '52-'54, eight-ten years. MR. ECCLES: The last was eight-ten. It would be just the same. H.M.JR: Would that be all right with you people, June? MR. SPROUL: Yes. MR. BELL: I had an interesting suggestion yesterday. Dominic Rich suggested that you have a ten and a half or eleven-year, two, definite maturity rate and allow the restriction to be on. MR. SPROUL: With restrictions on? MR. BELL: For that ten years, which is a new sug- gestion. I don't know whether you could put out a definite maturity date of ten and a half or eleven years or not with the restrictions. What do you think, George? MR. HAAS: You can put it out, but I am skeptical as to what would happen. MR. BELL: It is a little off the line. E. HAAST Yes, and that is protably mist be thought MII attractive. Regraded Unclassified - 15 1.1.21: I missed that. KR. BELL: Dominic Rich is 5. dealer in New York. He case in yesterday and suggested that we give consideration to 8. definite maturity rate rather than have 8 call date on the two and make it 8. little longer than the ten-year period, say, ten and 8. half to eleven years, that period over ten years being restricted to commercial banks. He said he thought it would go well and be popular because of its definite maturity date. At the same time within six months everybody knew they could get rid of them to the banks. H.M.JR: Is anybody interested? MR. SPROUL: I am interested, but I still think the two percent fully marketable would be better. MR. HAAS: This put a fixed maturity on it and lengthened it. MR. BELL: That is right. Now, there is another suggestion in that number four that we might want to consider, the inclusion of one and a quarter percent notes. I think that would be rather popular. What would you think of crowding another security? MR. GAMBLE: I don't think the basket is overcrowded. I think it would be fine to add it for this drive. MR. SPROUL: It was the principal question we had, whether the basket was overcrowded. But we were suf- ficiently interested to suggest it as something for your consideration. MR. GAMBLE: There has been an indication that there is a market for that. It has come from numerous sources, and with the rest of the basket set, I think there is no objection to adding that and experimenting with It. n. ROCLES: Instead of just the seven-eighths that se have stuck to continuously, there is still # lot st cash 50 17 that just spean't 00 into bonds. The stuff sticks in the banks, If you could crew some of It out on this that doesn t 80 into the seven-eighths, you are that such ahead. MR. SPROUL: We thought that anything which would broaden the market for non-banking investors ought to have serious consideration. MR. BELL: I think that is worth thinking about. H.M. JR: Five, "Our opinion would be that the drive should begin on May 23 or 29 and should cover a period of three weeks, but on this point we believe that the recommendations of the sales organization should be decisive." That is largely a thing, Gamble, you and all these people will have to discuss. MR. SPROUL: We put in there that we thought the sales organization idea should be decisive on this. MR. GAMBLE: They realize how they have to expand in a number of directions this time. They were going to shorten the period of the drive. MR. BELL: They wanted more time to get the organization ready. H.M. JR: What they want is three weeks, and have it run over the Fourth of July so they get the July 1 money, get that dividend money. MR. BELL: The salesmen suggested June 14 or July 8. MR. GAMBLE: Yes, the banks recommended June 7 to July 4, and the sales organization recommended two dates. They were not unmindful of the attractiveness of the earlier spring date and the vacation period and all the problems that cose in the summer. They recommended day 23 IP June 14, but they recommended June 14 as their first choice, for the reasons that this extra task that they 18 FR. DOCLES: I should certainly think that If the sales organization preferred that, I wouldn't question it. H.E.JR: I think just as you do, that they should settle that, unless it is something you object to. MR. SPROUL: No. MR. ECCLES: There is this in connection with quotas that I would like to suggest: There has been, as you know, a tendency for States to get over their quota in total, but it was because the corporations and those other than individuals got much larger than their quota. It seems to me that instead of thinking of an over-all State quota, we thought--I know you give two quotas, but I would ignore the total. Say that you have two quotas and that is all, that there is an individual quota and the corporate quota, and that you are not over the top until you get both quotas-- you might get one hundred and fifty percent of one and fall short on the other, but you still don't have your quota. Put the emphasis on your two quotas, and don't let them cover up their failure to get the individual. MR. GAMBLE: There was less of that this time. MR. ECCLES: It was an improvement, but there is a lot of these sales people in the States that in order to get over the hundred percent as a total they go to corpora- tions and others and say, "Now, we will be over the top if you will do this, see." It is the easy way out, instead of going the hard way and getting it from the individuals. MR. SPROUL: You contemplate giving more emphasis to that next time than you did last time, which was more than you had before? MR. GAMBLE: That is right. H.M.JR: Could I nake 1 suggestion, that if you people had fifters or twenty minutes when you 2020 over here, you could go to Bell's N/A or some place and let give you at outline of sinte se stand from the nales- and's standpoint. Rould that be agreeable to you people? Inc yes Lave the time? Regraded Unclassified - 29 - B. ROCLTS: Yes, se ought to be tack there by one c'clock. H.M.JR: I think me could finish here by twelve. Then if you had the time, I would like Gamble to go over and outline his plans to you and then get your suggestions. I think they ought to know. Is that all right with you and Bell? MR. GAMBLE: It is perfectly all right. MR. BELL: Sure. Number six? H.M.JR: Well, we have heard the discussion. Do you want to take that point, or should Gamble, why we don't think it is good? MR. BELL: I take it that this is really a partial- payment scheme borrowed from banks, and not a partial- payment scheme put out by the Treasury. MR. ECCLES: The Treasury put it out. MR. BELL: Or advocated it. MR. ECCLES: They put it out on a specific plan, the forms and everything. It won't be just left up to banks' discretion. We didn't take time to spell it all out here, because it calls for not less than twenty percent down and twenty percent a month, which would mean that in four months the loan would be paid. Now, one of the reasons for that is that if people get committed, say, 8 man is induced to take five hundred dollars; he hasn't the oash, but he expects to get it, or somebody else has it coming in and he can be pressed to take five hundred dollars. Then when that comes in, he isn't around spending it for something else. be has himself committed to make those payments. be has paid his twenty percent down, and he is then under pressure to seet the payments instead of spending his money. It has worked very successfully in Canada. It has been one of the big factors, they claim, in their successful drives in cetting people under pressure to neet these payments. Regraded Unclassified 20 H.V.IR: is long If you people only have until quarter of one, could use pass that up. and maybe Gamble and Bell could explain it? Could I leave that cne there? They CAZ handle that with you gentlemen, if that is agreeable. The next one goes down to 8 hundred dollars. We have been "agin" it all the time, but I will be open to argu- ment on that. It is getting hotter and hotter to sell. MR. SPROUL: Again, the general argument is to broaden the field wherever possible for non-bank investors. We think that is a field which hasn't been tapped. Those who don't want & registered security, who want a marketable bond, and want small denominations-- MR. GAMBLE: They voted against it, Mr. Secretary. H.M.JR: Again, may I pass that, and you as sales manager explain to them why, because I am weakening on it. MR. ECCLES: Every darn one of our Reserve Bank Presidents--there isn't a single one of them but said-- Hugh Leach, for instance, this morning said that if you put out that bond and you put it in the bank where it can be sold over the counter, a hundred dollars in cash, a market bond--he said that without question in his district you could very substantially increase the sale to non-bank investors that would not come in and take 8. registered security. H.M.JR: I have been opposed to it, but I am weakening. MR. GAMBLE: We discussed it very thoroughly for two days. The point was brought up that if the Treasury was ever disposed to do it, it probably ought to be on order to the Treasury, not made available for the sales people to sell. E. HAAS: I think it is the most important decision in the whole business. It is all we have left as the pattern of rates that distinguishes this war finance from the previous me. I think it is political dynamite. It (ste back to the - old argument. Regraded Unclassified 54 21 - 5.M.JR: Suppose you just let them be sold over the bank counter. MR. GAMBLE: In this last drive there were seventy- six thousand odd pieces sold only. You are talking about sixty-nine million nine hundred thousand sales in the E bond field. There is no indication--I am looking at it just from the point of view of demand on our securities. There is no indication that there is any great demand for securities. The arguments against it, from our point of view, far outweigh the argument for it. H.M.JR: I am going to duck it, because I am trying to get through at twelve. As I say, as far as I am con- cerned I have been opposed to it, but I am weakening. I am leaning a little bit your way on this thing. We have to get more of this non-banking money. MR. ECCLES: Every banker is for it, probably. MR. BELL: The bankers raised the question as to whether they should again bring the subject up. I told them it wasn't on the agenda, but they could feel free to bring up any subject they wanted to. They put it aside. I notice they didn't put it in the recommendation. MR. SPROUL: The bankers are a timid lot. MR. BELL: They were in favor of it. H.M.JR: Anyway, you people have another forty-five minutes after I leave. MR. BELL: The important decision is this raising the E from forty-five to fifty. MR. ECCLES: Of course, if you don't reduce the other to a hundred, then you mouldn't raise the 0 to five, but If you reduce the other, they have . marketable bond st a hundred. The G bond is s coupon bond. I 2011, it len't 8 exapan; It is . registered bend. le figured st that the Treasury mile 10% about four allia, dollar and a quarter checks I year, and the paper and the anywer and everything 22 being what It 10, four million checks at 6. dollar and - parter just doesn't see realistic at all. Son, the - bond, of course, is 8. registered bend, but you don't pay the interest semi-annually. But on this other bond, four million checks at 8 dollar and 8. quarter each, when you think of the cost of making them out, mailing them, the cost of clearing them through the banking system, it just isn't realistic. MR. GAMBLE: I wouldn't be too much concerned about the elimination of the hundred dollar G bond, because I think the same situation there is true--but on the twenty- five dollar E, we sold forty-seven million of them for eight hundred and fifty million dollars. It is like going into Woolworths and telling them to give up their five and ten cent articles. MR. ECCLES: But you are assuming that a great many people would take two of the twenty-five dollar bonds in lieu of the fifty. MR. GAMBLE: I think it is true. We would not put out a twenty-five dollar bond if we had to do it over again. But having raised a fourth of our money through twenty-five dollar bonds, I think it is surcide. H.M.JR: I would fight and bleed for the twenty-five dollar bond, and I realize we are throwing 8. terrific burden on the Federal Reserve Banks with this stuff. MR. SPROUL: The first burden is on your own organiza- tion. MR. GAMBLE: We have gone far enough in this drive, Hr. Sproul, to say, "Den't buy a twenty-five dollar bond If you can buy a hundred or two hundred dollar bond." le Date times working = 5 plan; se lave doce nothing about it, but " late discussed allowing then at: average deting X the sigher and is order to eliminate the twenty- five dalier lad. = think se CAS do that. I den t think the information = IN = 56 = # M.D. That is the cind of thing, Ted, I mould like you to explain to these centlemen. Waybe they have changed their sints. If you don't mind, I would like to pass that. That doesn't mean, Marriner, that you and I can't talk again. I would like to talk again between now and Friday noon. Now this last thing--aren't we in agreement on that? MR. BELL: On the 7th? The bankers recommended that it be ten percent and have a limit of five hundred thousand. They also recommended the certificates of deposit. MR. ECCLES: Held by individuals. MR. BELL: Now, there is that question of certificates of deposit. We said originally, when we put this first into operation that certificates of deposit could be played around with corporate funds, and we excluded it just for that reason. But I think we have probably got to include certificates of deposit. Maybe we can confine it to those issued to individuals, because many banks in the West don't have pass books. MR. SPROUL: That was the word when we had our meeting with all the presidents, that in many of the districts the banks didn't use pass books. It was 8 savings deposit, and it could be confined to certificates of deposit to individuals. You needn't slop over into other certificates of deposit. H.M.JR: Didn't we say five hundred thousand? MR. BELL: The bankers recommended it. MR. ECCLES: Why five? You had two last time, to percent. Now double it to four and teasty percent. MR. HAAS: This helps the little tank 2078 the the other. Regraded Unclassified 57 IN - 13. SPSOTL: That MAI our Idea. EE. HELL: I have no objection. NR. ECCLES: This was done for the little bank. H.M.JR: This would be all right with me. Well, there are some other things. As I say, if you will excuse me, I will be wanting to talk to you on the phone again. Will you be in New York tomorrow? MR. SPROUL: Yes, I will. H.M.JR: I will be talking to you, too, if I may. MR. BELL: I would like to see the increase in Treasury bills start next month of four hundred million dollars of extra money, in the third column, for April. H.M.JR: Is there any disagreement on that? MR. ECCLES: That is all related to the whole bill decision. If you are going to do nothing with reference to trying to increase the market for bills for banks-- and they are only considering bills as a means of furnishing additional reserves--then I can't see any objection to the hundred million of bills 8. week. MR. SPROUL: It is related to this whole bill question of rate and maturity as we put it up. It is also related, as I see it, to your need for funds and our general idea that you shouldn't go to the banks, that is, going to the banks until you need the funds. But as soon as you do, then under one scheme or the other you would go to the banks with the bills. H.M.JR: If we are not going to get the two billion dollars additional in certificates, I have certainly got to get my bills. MR. SPROUL: Then that is the time to start, nhen you want to get that money In. Regraded 58 2 I want to try to keep at eight or ten billies dollar balance. Soa, I will be getting down to five or six. MR. HELL: It will be down to five if you eliminate the bills for April and May. But I think we are going to be squeezed in the fall. We will really have to go to the banks directly. MR. SPROUL: We say we will take a look at it after the drive, how much you have for non-bank investors. MR. ECCLES: I think the first of October is the time when you should go directly, but if you accepted our recommendation on bills, you would be raising it in July, August, and September. You would be stepping up the bills during that period. MR. BELL: If you accepted our recommendation, you would be doing the same thing. MR. ECCLES: Except to step them up enough to offset the direct offering of the banks. and 186 - If DETIE STE 1 PERSONAL WD - X SECURITARY OF TB TREASURY Before ming specific recomendations on the points restioned by Under Secretary Bell in his letter of March 27. 19 should like to state certain general principles that are fundamental to our recommendations. The main objectives of Treasury financing policy and of credit administration, of course, are still the borrowing of the maximum possible amount from nonbank investors while maintaining an interest rate structure with a maximum market borrowing rate of 2 1/2 per cent. There is no ques- tion of our ability to maintain the maximum borrowing rate of 2 1/2 per cent, but we are still measurably short of the goal of maximum borrowing from nonbank investors. It seems to us that the Treasury's current estimates of sales to nonbank investors are too conservative in view of both the performance of the Treasury sales organization during the past two years and the amount of funds that are shown to be available by all estimates of current savings. The net absorption of Government securities by nonbank investors, exclusive of Federal agencies and trust funds, is foreeast by the Treasury as 33.3 billion dollars for the calendar year 1944. Since 1944 will include three drives and will begin and end with 8. drive, it seems likely that a larger amount of funds should be raised than in previous annual periods. In the year ending October 1943, which included three drives, nonbank investors absorbed 34.7 billion dollars of Government securities, and in the year ending February 1944. which also included three drives, nonbank investors absorbed about 36.4 billion. It should be possible in 1944, therefore, for the Treasury to sell 36 billion dollars net to nonbank investors, and with continued improvement in the sales program this amount could be further increased. It is recognized that the figures given above include sales in the first and second drives, when some idle funds that are no longer avail- able were reached. On the other hand, the organization of the drives has improved, and there has been considerable repayment of private debt, which is releasing funds and increasing the number of potential investors. The reduced rate of increase in national income this year should mean that non- bank investors will have less need to accumulate bank balances than in the past. For these reasons, we believe that Treasury estimates of sales to nonbank investors in 1964 are unduly low. Regardless of the amounts that may be taken by nonbank investors, however, it is our opinion that sales to banks should be considered as residual financing, to which the Treasury should have recourse only as . after of last resort. There 10 no question of the ability and the willings of the leterve System to provide the reserve funds needed to assure the recount of this retional Financing when necessary. To be lieve, cover, that Breat bask flawering streat at be constitutions still V912 are vigarma effetts lane teet már to sall u Increased and of veritie to subject invertors and and the treatury is to read of name to Regraded Unclassified and 192 sumit its working belanes at the sinime level that a advisable. > Y/A of the figures submitted is the tabilities accompanying Unlar Incretary Dell's letter, it Att not appear that the lutter celiting - arise until after the fifth time and there is, therefore, time further to tast present estimater of nonbank buying. In our opinion, the situation calls for (a) enlargement and strengthening of the sales organization, (b) changes in selling methods and security terms that will widen the nonbank market, and (c) increase in the bill rate. In selling securities to com- mercial banks further emphasis should be placed on bills rather than certificates and longer-term securities. Additional bills can be sold to banks, however, only if there is some increase in the rate. As wo have indicated before, we feel that the present rate on Treasury bills is out of line with the remainder of the pattern of rates and that an increase is justified in order to reestablish bills as a market instrument. With this background in mind, we should like to make the following recommendations on the points mentioned by Under Secretary Bell: 1. The goal for the fifth drive has been set at 16 billion dollars, and no comment is required. 2. For the reasons outlined above, we believe the Treasury should do no direct bank financing, at least until after the fifth drive. Therefore, we recommend that there be no offering of certificates for cash in connection with the May 1 refunding. Decision as to & cash offering in connection with the August 1 refunding should be deferred until after the fifth drive. 3. In our opinion and for the reasons outlined above, the rate on Treasury bills should be increased to 1/2 of one nor cent and the maturity extended to four months. By this means, not only would a more tenable market rate be established but the outstanding amount of bills could be increased by 4 billion dollars as funds are needed without increasing the present weekly offering of bills. 4. To recommend that the basket in the fifth drive be the samo as in the fourth drive except for the substitution of 2 per cent fully marketable bonds for 2 1/4 per cent bonds of restricted marketability. To can 500 no potes in placing restrictives on the eligibility of 2 per ceat bonds for Itst purchase. b seter that these bender may not become a vahicle for renewed resulation pardons, towner, - respond that the Treasury forcefully Finer 140 stund - operation lease by bucke to finance such recriptions, at If by inters. by treasury may wish also = - the I $ X - unter in the (rin - an Regraded Unclassified 51 are 21, 1966 funds from additional of obtaining/nombank investore who are set internated is the rate on certificates OF in the form of Series C notes and who de not with to invest in longer-term securities. 5. Our opinion would be that the drive should begin on My 23 or 29 and should cover a period of three weeks, but on this point 10 be- lieve that the recommendations of the sales organization should be decisive. 6. We recommend that nonbank investors be permitted to purchase securities in the drive on a partial-payment plan. Such purchases by in- surance companies, savings banks, and pension funds, which will be in relatively large amounts, could be handled by the Treasury. Such purchases by other investors (minimum $500) could be handled by commercial banks on the basis that the maximum rate charged would not exceed the rate on the securities. We also recommend that the lowest denomination on marketable bonds be placed at $100 in order to meet the needs of small investors who for one reason or another do not wish to place all of their funds in savings bonds. As a corollary to this rocommendation and in view of the manpower and paper shortage, we recommend that the lowest denomination on Series G bonds be in- creased to $500 and on Sories E bonds to $50. 7. We recommend that each commercial bank be permitted to increase its holdings of otherwise ineligible bonds to the smaller of the following amounts: (1) $400,000 or (2) 20 per cent of its total of savings deposits and time certificates of deposit of individuals. The inclusion of individual certificates of deposit is recommended because in some areas of the country it is customary to this type of instrument instead of savings pass books, The $100,000 limit on holdings of Series F and G savings bonds would, or course, continue. Regraded Unclassified 62 Attached to . list of pensiled charte given to the Secretary by b. Inco 4 3/29/44. List of Issues Charted Securities Outstanding at Beginning of Year: (1) 2-1/2% Bond, September 15. 1967-72 (sold before Pearl Harbor) (2) 2% Bond, September 15, 1951-53 (sold during Third War Loan) (3) 7/8% Certificate, December 1, 1944 (issued December 1, 1943) Securities Sold during Fourth War Loan: (4) 2-1/2% Bond, March 15, 1965-70 (5) 2-1/4% Bond, September 15, 1956-59 (6) 7/8% Certificate, February 1, 1945 Security Issued in Refunding Operation this Month: (7) 1-1/2% Note, September 15, 1948 64 March 29, 1944 Mr. Luxford. Secretary Morgenthau. Please read the story on the first page of the New York Times about General Perlinger's statement. See if you can get something out of the State Department on it and be sure to talk to me about it before lunch today. File Regraded Unclassified and =, 1004 ISSUE FUE TO SECURET'S PILES Secretary Morgenthau discussed the Argentine situation at lunch today with Vice President Wallace, War Food Admin- istrator Jones and me. The Secretary introduced the subject by informing Judge Jones of our keen interest in the Argentine situation and that he had invited Vice President Wallace to join up since he shared our interest. He said that today's story in the New York Times about Argentina underscored the urgency for prompt action and suggested that I review the article. I outlined the attack made on the U. S. and Ambassador Armour by General Perlinger, Argentine Minister of Interior; the fact that twenty-one of Argentina's thirty-three generals recently requested President Farrell and Colonel Peron to restore constitutional government and return Army officers to their barracks; and the announced lifting of Argentine press restrictions at the same time replacing these restric- tions with a registration requirement for all newspaper men. A copy of the article is attached. I said that I had dis- cussed this article with Messrs. Duggan and Bonsal of the State Department who confirmed its accuracy and that they agreed that General Perlinger, who is now a real rival to Colonel Peron for power, is even worse than Peron - if that is possible. I also referred to the acknowledged Fascist stripe of the present Argentine Government; the fact that Argentina was rapidly forging an anti-United States bloc in South America which already involved Bolivia, Chile and Paraguay and threatened to envelop Uruguay, Peru and Ecuador. Vice President wallace interjected at this point that he was much more pessimistic; he felt that all of Latin America was plac to turn Fancist unless ae uprooted it promptly in Argentina. lake Jense sude of wold see don Argentine au trouble- ist - ist Food Administrator be rould not igage the il an getting INC Argention is as (em of Comil. Regraded shoretary investion pointed out that Argentize's food inciribution to the United Datiens as [SA] in terms of the wells Argentina and conferring upon the many. Be told Pise president Wallace that is and obtained General harshall's permission to reveal to his the contents of sertain reports tast the Army had made available to him regarding Argentina and suggested that I summarize the data. I then reviewed these reports, covering substantially the points outlined in the proposed memorandum for the President which was fur- nished to the Secretary on March 28 (copy attached). Judge Jones appeared to be shaken by these disclosures. Secretary Morgenthau emphasized the fact that Germany's collapse would very likely find Hitler, Franco and their fellow war criminals streaming into Fascist Argentina to escape Allied justice. Vice President Wallace felt that this was almost a certainty. He expressed the opinion, based on certain secret information, that we might all be astonished at the speed with which we would be confronted by a real military threat in Latin America if the Axis leaders moved in. Judge Jones said that these arguments should be addressed to the State Department and not to him since obviously these were political considerations and outside his field. Secretary Morgenthau promptly challenged this view pointing out that the State Department was hiding behind the excuse that the Combined Food Board said it was impossible to take action against Argentina because Argentine food was absolutely essential to the war effort. This, said the Secretary, meant that Judge Jones and the Combined Food Board were preventing the issue of economic sanctions against Argentina from ever being thrashed out on the political level. The Secretary went on to remind Judge Jones that it was his impression that at a pre- vious conference the Judge had intimated that me could get along without Argentine food if we were willing to make the sucrifice here at home and It was really necessary. Vice resident Vallace reminded Jodge Jones that after all we were only discussing, at $ wise, a ten percent reduction in our net rations to provide substitute mest for the Regraded critish mid that this would not hars the Larina diet is the alightest. The Judge did not deny any of these points but labored over the grain shortage here in the United States; how we had an excess of cattle and hogs over available feed supplies, and how he might be able to use the threat of importing Argentine corn to force the farmers to begin marketing their animals. Vice President Wallace told the Judge that he wanted to discuss some straight agricultural and food economics at this point. He said that the Judge knew as well as he did that right now we had altogether too much meat "on the hoof" that if we had a bad break on the weather this year, affect- ing our crops, we could not possibly feed all this livestock; that the only real way to get the farmer to sell this excess meat was by making the price of feed too dear to hold it; and that imposing economic sanctions on Argentina now would give the War Food Administration a beautiful opportunity to bring our meat supply down to manageable proportions - it was a blessing in disguise. The Judge was mentally squirming by this time and addressed himself to the timing of economic sanctions right at the time everyone knew we were getting ready for big military operations. Secretary Morgenthau stated that it occurred to him that perhaps the military demands for shipping might be so great this Spring that the military would be glad to temporarily suspend Allied shipping with Argentina in order to gain extra bottoms for military operations. He indicated that he might check into this aspect of the matter. Judge Jones said that he thought all along that State should have cracked down on Argentina when things just began to go bad and when ze could have cleaned up the situation fairly simply; but sign did we have to strike right at this moment - any not wait until we could do It with fewer com- plications. Regraded Unclassified Secretary Norgenthau said that he had been pressing State for 2 year and 8. half on this point and that be did not think it could stand much more "waiting". Judge Jones turned to Vice President Wallace and said Henry, do you really think we have to do it right now too?" The Vice President said that it should be done now. The Judge said he wished it had been done before when it would have been easy. I reminded him of how it had been this fear of temporary inconvenience that had prompted the world to sit by and allow Japan to move into China; Italy into Ethiopia; Hitler into Austria - and Munich. I stressed that at each point there were those farsighted statesmen who said that we should clear up the dirty mess now but that each time the world found it somewhat inconvenient and hence World War II. I drew the analogy to Judge Jones' position on Argentina - that of waiting while every day that passes witnesses a further consolidation of the Fascist forces in Argentina and their steady spread to Argentina's neighbors. Secretary Morgenthau said that he was shocked to see us caviling over pulling in our protruding belt one little notch, being squeamish about imposing the slightest discomfort on our people for the sake of preserving our way of living, and at the same time our Russian ally had 25,000,000 men fighting Hitler and the British people too had demonstrated their willingness to make real sacrifices. The Vice President underlined these same sentiments, pointing out how little sacrifice we on the home front had been called upon to make and, in fact, how most of us were actually doing better during the war than we had before. Judge Jones then expressed his concern that the British might not join in the imposing of economic sanctions and that if they did not join us, we were powerless. The Secretary stated that he had been insisting that joint measures be taken but that if the British would not go along he, for one, still thought we should impose sanctions. The Judge inquired as to LOW this could possibly be effective against Argentina if the British continued to buy. The Secretary said that if the President care him the job of seelag this thing through be sould 500 to It that too British stagped shipping feel from argention 9782 if be had to bluckade Argentine pets. 69 - 5 - At this point the Judge gasped and turning to the Vice President said "Henry, would you go along on that too?" The Vice President agreed with Secretary Morgenthau's position without batting an eye. I pointed out to the Judge that in any event we were not called upon to cross this bridge at this time since the letter State had sent to the Combined Food Board on March 10, 1944 had requested the Board's views, assuming that joint U.S.-U.K. sanctions were imposed. I also emphasized that it was one thing for the Board to reply, "You will make our task more difficult by imposing sanctions, but, if this is politically necessary, we will get along - one way or another"; it was an altogether different thing for the Board to repeat its opinion of last January that it was impossible to get along without Argentine food supplies, since this latter position left no room for evaluating political considerations. Judge Jones said that he did not feel that he could make any commitments right then and there and that he wanted an opportunity to go over the matter with his associates before expressing a final view. The atmosphere at the luncheon was most cordial and I had the impression that Judge Jones was sincerely interested in getting our side of the picture, which was new to him. GOL Regraded Unclassified The New York Times. 70 1944 of Argentions Bi soda - OFFICIAL miro Farrell and Cel. Juan Peron, timest prover, - one of lajor of Wat, to restore consti- the most ardent nationalists and tutional government and return M the main spokerman for nation- IRS ANGER AT allen in the Argentine Cabinet. II army officers now serving in Fed- eral jobs to their barracks. was be who formulated the recent Diario, quoting unidentified measures against United States sources, said General Farrell and companies such as The Associated Colonel Perón had told the gen- Press, The United Prest, All- erais they fully agreed and that an tes Non-Recognition to Back America Cables and Pan American answer would be given within a isolation-Minister Foresees Airways. These measures were few days. taken by the Director General of Allies Turning on Russia Posts and Telegraphs, who is #- PRESS RESTRAINT LIFTED rectly responsible to the Minister of the Interior. Argestina Resclude Docree Carb- At the moment, General Part- by Freedem of Expression By Wireine to THE New The Time. Inger's stair appears in the éxcend- MONTEVIDEO, Uruguay, March ant since the Ministry of the In- By ARNALDO CORTESI terior has been growing la Impor- * Cable to Tax NW - Trues. 124-In his first statement to the tance. It recently was put to BUENOS AIRES, March 28- press since he took office five charge of the Federal police and The Argentine Government today months ago, Gen. Luis C. Pertinger, the Under-Becretariate of Infor- rescinded E decree dated Dec. $1, Argentine Minister of the Interior, mation and the Press and has prodicted that all the provent bd- taken offer censorship of foreign 1943, which placed Inany restric- films, which was formerly done by tions upon the local and foreign ligerents would soon unite to fight the Municipality of Buende Aires. press. Russia because the middle clivitie There has been far greater severity That decree was replaced by a in the United States and Great in censoring United States films "Journalists statute," which was Britain are so alarmed M the # since this task has been performed published today and regulates viet military I this diey by the Ministry of the Interior. regulations between newspapermen are almost more and-Romelan this A Bivel of Perón and their employers but does not enti-Orrman. General Perlinger is believed to enter into much political questions To this most smasing statement be & political and personal rival of as what newspapers may or may the War Minister, Col. Juan D. General Perlinger added that the Perón, and observers predict that not my. war was not being fought for free- a showdown between them cannot The new statute and the decree dom and that whoever won would long be deferred. A reorganisation of Dec. 31, are similar in only one rule the world and, of course, try of the Cabinet to expected and respect: That both require all to dominate Argentina. From this probably the best way of judging newspapermien to register, failing whether the Perlinger followers or he deduced that Argentina must the Perón clique triumphs will be which, they will not be allowed to remain completely aloof from the whether General Perlinger-keeps exercise their profession. his post in the Government. The earlier decree, however, em- confict. Argentine newspaper men who powered the Government to remove The Interior Minister rhade ft heard General Perlinger's remarks any journalist's name from a regis- clear that all his previous remarks described the interview as follows: ter for such vaguely defined of- were aimed principally at the "Pellinger, who spoke with en- fenses M "activities contrary to United States, for he urged all Ar- ergy and severity. referred to the the general interest of the nation." gentines to look with anger at Argentine International situation. The Journalists Statute states ex- He affirmed that he was neither a plicitly that no name may be United Bistes Ambassador Norman Nazi no rá Fascist but an Argen- struck from the register for "rea- Armour. General Perlinger said time and said he was against all sons connected with the freedom he always did so because Mr. Ar- those foreigners who had the pre- of the press or with journalists' mour la Ambalandor "of a country sumption to say that Argentina freedom of thought." that refuses to maintain relations did not know where she was going. It would appear, therefore, that with us, who are the masters of 'We do know,' he sald." within certain limits freedom of General Perlinger was further expression had been re-estabilshed. our home." He did not mention quoted as saying: The Journalists Statute estab- Mr. Armour by name, although he "We know that this was la not lishes 5. thirty-aix-hour working made It obvious whom be was fought for liberty but for week with regular weekly and other things which we must later yearly rest periods. IL sets down ferring to be prepared to accept. It is not minimum wages for each class of Made le Guide Prose possible, therefore, that we should newspaper employes with the pro- constitue emiling at the Ambansa- vision that the minimums will 3 1 t a 1 air of . certain country that N- automatically be increased by 5 person - - of the most extrain - - maintain relations with per cent every three years. All Civery - alimed kimself - . I Y 1 I e $ 1 persons halding directorial porta That 1 1 1 I I reyment - enterprises - be - Missipler any I 1 - the Town be - with - native - security Argentions 5 - 5 - - et that I 1 2 the 1 t : X 8 1 # I I - the - il d 1 - - - - - be - M - years. - 1 - for If - 1 and the the My 1 Inportal philed - Agentive help M y Agrico 1 1 5 - - Regraded Unclassified 71 COPY SECRET MEMORANDUM FOR THE PRESIDENT On December 30, 1943 General Strong furnished me with a report on Argentina prepared by Military Intelligence. The following points in this memorandum are significant: 1. Unless steps are taken quickly to insulate Argentina and to counter her activities in neighboring countries, Argentina will be able to create a bloc favorable to her and antagonistic to the United States, consisting of all or some of the following countries: Uruguay, Paraguay, Bolivia, Chile, and Peru. (State Department officials share this fear and the present situation in Bolivia, Chile and Paraguay suggests that a bloc of this character is not a mere figment of the imagination). 2. There is strong evidence indicating that the Nazis at least partially control the present Argentine Government. By means of loans, bribes, and financial transactions, the Nazis have a hold on certain members of the G.O.U. (Colonel's clique). It is believed that in order to avoid exposure and remain in power, they follow Nazi orders. 3. Argentina allows pro-Axis propaganda to flow into this hemisphere and Argentina is the headquarters for such activities; at the same time Argentina subdues pro-Allied vehicles of propaganda. The report states: "This propaganda has been very effective in that it has kept several countries internally divided and has lessened their assistance to the United Nations.' 4. Argentina is rendering positive economic aid to the German war effort by: (a) serving as a base of operations where smugglers engaged in clandestine purchases of diamonds, platinum and materials vitally needed by the Nazis may Regraded Unclassified 72 - 2 - concentrate purchases made throughout Latin America and ship them to Spain and then to Germany. (b) The two largest government-controlled Argentine banks are openly aiding the Axis. (c) Fritz Mandl, former Austrian munitions manufacturer, is now in Argentina actively engaged in founding an Argentine munitions industry. He was able to remove $12,000,000 from Germany with the consent of the German Government. (a) Argentine ports serve as depots from which Spanish and other neutral ships carry war materials and couriers engaged in espionage activities to Axis Europe. 5. Indications exist of possible aid to Axis submarines at sea. 6. The extent to which Brazil will provide expeditionary forces for overseas duty is limited by her need for having adequate defenses against Argentina and an Argentine bloc. 7. Argentina is a tool being used by the Nazis to create a diversion in Latin Americh will cause the United States to divert its concentration from the main war effort. 8. Argentina is being used as a cache for the loot of leading Nazis and will be the haven for their persons when they lose the war and have to leave Europe. In a report transmitted to me on March 16, 1944, by General Marshall, it is stated that the Argentine Government is cooperating with the Spanish Falange in Argentina and that the activities of the Argentine Government in the other American Republics duplicates and reinforces the Falangist movement in attempting to create anti-United States sentiment and an anti- United States bloc. Treasury investigations in the Foreign Funds field clearl establish that every important German cartel has branches in Argentina and that these branches are presently being used by Regraded Unclassified 73 - 3 - the Nazis to finance and otherwise facilitate enemy operations in this hemisphere. Moreover there are strong reasons for assuming that these branches will serve as a nucleus for German post-war cartel arrangements in this hemisphere. I call these matters to your attention not only because they illustrate how our whole Good Neighbor policy and doctrine of hemispheric solidarity are crumbling before the pressure of a Fascist Argentina but, of more immediate importance, because they offer tangible proof of how Argentina is prolonging the war. I am fully conscious of the objections which have been raised to date by the Combined Boards to the proposal that the United States and United Kingdom jointly impose complete economic sanctions against Argentina and I can fully understand their desire to avoid further complications in their respective fields. Neither am I unmindful of the fact that probably an undisclosed factor in British reluctance to participate in any such program stems from their fear that it might affect adversely British investments in Argentina and might prejudice British post-war trade. The extent, if any, to which these consid- erations may be influencing the British attitude on the Combined Boards is, of course, an enigma. On the other hand, it is not as clear to me that the Combined Boards have been acquainted with the extent to which Argentina is harming our war effort. If this were explained to them; if it were made clear that we in the United States are prepared to accept some civilian sacrifices in bringing Argentina to terms; and if it were emphasized that once she is brought to terms we could again count on Argentina supplies and stockpiles, I am hopeful that we would obtain a more favorable report. AFL:nrd - 3/28/44 copied 3/30/44 Regraded Unclassified 74 March 29, 1944 2142 7.3. NNM Do sheet. Midolph Paul: This 18 Randolph. HMJr: Yes. P: I wanted to report to you that I talked with our friend in New York. HMJr: Yes. P: He thinks that that -- his client doesn't own any stock in that company but he's not sure; that there may be some possible pressures that he can put on him. HMJr: Yeah. P: And he's trying to get him and he's going to call me back, but so far he hasn't called me back. I talked to him, oh, within ten minutes after I talked with you. HMJr: Good. p. As soon as I hear from him I'll let you know. HMJr: Well, in the meantime, McBain sent us a telegram asking us to get reservations for him to be here Friday. P: Yeah. Well, of course, I was very frank with him and maybe it's gotten back to McBain. I don't know. But anyway, I'll let you know. I've done everything I can until I hear from Weiss, but so much time has gone by, I thought I'd better let you know. HMJr: I thank you. F: All right. Regraded Inclassified 75 March 29, 1944 3:10 palle CANADA AND CHINA Present: Mr. White H.M.JR: The President sent me 8. copy of the cable which he sent to Mr. Churchill and it is as we wrote it. It went on the 24th. MR. WHITE: No comment on his? H.M.JR: I don't know whether that was in it or not. I have it right here. (Refers to attached suggested reply to Prime Minister Churchill from the President) I am scared to death. I don't know what to do with these things. MR. WHITE: It sounds identical. H.M.JR: What day was the 24th? That was last Friday. It went the day I sent it. MR. WHITE: Are you going to let State Department know that went, or will they know anyhow? H.M.JR: No, but I very much would like to have Stettinius know it. MR. WHITE: Stettinius? E.V.JR: Yes, he ought to know. Xive WHITE: Be is is England? He has gonet 1.1.75 Be has not. There 10 something funny shout the whole business. 76 2 I would let Mr. Hull know and say to please advise Mr. Stettinius and see that he gets - copy. MR. WHITE: Why don't I call Hull's secretary? H.M.JR: Yes. And I think a copy should go to Winant, somehow. The thing I am interested in, I want Winant to know that those things center here from now on. MR. WHITE: Why don't we just send & cable to him? H.M.JR: Yes, but I would like Winant and Stettinius to know. Will you take care of that? MR. WHITE: Yes, but you want the cable to Winant to go from you? H.M.JR: I don't care how it is done. Now, I asked to see the President, and I have only got another twelve hours, or so. When I go I want to give an answer to Madame Chiang. MR. WHITE: Now, this is what we have here, 8. suggested answer to Madame Chiang; there is a memorandum to you, and & suggested memorandum from you to the President. The memorandum to the President is a little long, and its length is justified only by the importance of the matter. (Shows drafts to the Secretary) he just got a cable five minutes ago which may call for a change. S.K.JR: Before I do this, is there a must on your list today? They said something about Canada. 13. WHITE: Yes, Canada is all wound up and all ready Inr signatures. Let's sold the other, then. Regraded Unclassified 77 - 3 - MR. WHITE: Canada first? JR: Whatever is important. MR. WHITE: I think Canada is a must, and I think also, from what you said, that there is a must on the question of the Ontario Conference. H.M.JR: I have a man coming in at three-thirty which will take fifteen minutes. You can leave every- thing here and come back again. MR. WHITE: The Canadian thing is all wound up - all the documents. I want to show you first a document of the schedule which Clark initialed, and he insisted on my initialing it, and we sent it back. You can keep that aside for a moment. (Refers to Schedule covering agreed program referred to in letter from Hon. J.L. Ilsley, Canadian Minister of Finance, to Hon. Henry L. Morgenthau, Secretary of the U.S. Treasury, dated March 24, 1944, attached) H.M.JR: Do I want Vincenthere when I talk about China - from the State Department? MR. WHITE: I think you better make that decision after - I just talked with Vincent. Now, here is the letter to Hull giving him the whole story and keeping him informed. (Hands the Secretary cover letter to Secretary of State, enclosing correspon- dence with Mr. Ilsley, Canadian Minister of Finance) H.M.JR: Now what did you do about that question of the end of the road of Canada - I mean its terminal? How was that settled? All. WHITE: Well, they took the part of that, and the nine million dollars on the highway; it is all lumped in. in also found seven million more dollars. The air- ports were going to cost seven million more dollars than they had informed us, so rather than put the question Regraded Unclassified 78 - 4 - in quite that form, I thought they would hit the roof; so I got in touch with Clark and I asked him - would the Canadian Government rather pay seven million dollars or would they rather take over the contract. You see, neither had been mentioned. And, of course, they came back saying they couldn't possibly pay seven million more after they had taken this matter up, so they will take over the contract. Our Army preferred to fill the contract themselves. They didn't like the Canadians to do it. But the position I took was that that is going to cost us seven million dollars whether they like it or dislike it. Wewould rather have Canada do it. H.M.JR: I think when you go out of here at three- thirty, we ought to send the same thing to the President that we send to Mr. Hull. MR. WHITE: This is what I have for the President. (Hands the Secretary Memorandum to the President on Canadian and U.S. Dollar Balances, which the Secretary initials) H.M.JR: I really ought to do this oftener, work- ing this way, then the girls know what it is all about. MR. WHITE: Now, here are four letters, one to the Secretary of War, one to the Decretary of Navy, one to Mr. Crowley, and one to Mr. Jones, telling each what they must do, what we have agreed upon with respect to Canadian contracts. (The Secretary signs the above- mentioned letters) H.M.JR: Those things that you gave me the other day - for instance, the rules to go by when they invade these various countries - did you draw those up? M. WHITE: Not the first one, Le did the other three. I.L.A: Who does that work? Regraded Unclassified 79 - 5 - MR. WHITE: Several of us - the lawyers - Taylor. They had an original there at the C.A.C. which is very different; we rewrote it. That is the Civil Affairs Committee. But even the draft they made was based on one of our earlier drafts of the earlier countries. H.M.JR: I was going to compliment you on it. MR. WHITE: It is a gradual process, because each country makes the next one easier. But the first paper was written by President Number One, and he didn't even permit it to be jointly written, which is usually done, and he is sending it to Churchill, asking for their approval. It was done deliberately that way. H.M.JR: Any more on Canada? MR. WHITE: That is all on Canada. Now we have nothing furter. H.M.JR: Let's do China. MR. WHITE: I just got a cable. This has a new proposal. I can explain it quickly. H.M.JR: Who is this from? MR. WHITE: This is from Stillweil to Somervell. (Refers to attached paraphrase of message No. CFB 15326, 27 March 1944, Corrected Copy, to General Somervell from General Stillwell) H.M.JR: What is CN? Regraded Unclassified 80 - 6 - MR. WHITE: That is Chinese dollars, yuan, I sup- pose. May I see it? Chinese dollars. I think there should be a dollar sign with a "C" before it. H.M.JR: You will have to explain this. MR. WHITE: I will see that you get a copy. The proposal which is being made is that the Chinese Government give them Chinese currency and that the Army merely advance them U.S. money as an advance. The rate at which the money will be advanced, they say, is any- where from one hundred and twenty-five to two hundred. We have been asking for & hundred rate, but the advance will take one hundred and twenty-five to two hundred, they think. But the question will not be settled; that will be money which we put at their dis- posal. Sometime after the war there will be a question as to whether that settles it, or whether China is entitled to more money. It will also make possible that probably China will use it, saying that she is extending aid to America in her war effort; and how much aid she will figure it, will probably bear no relation to the advance. Now, I think that puts us in a good position, be- cause I think we are in a better bargaining position later than we are now. H.M.JR: How much does that mean we would advance every three months? MR. WHITE: If they use five billion, and let's say they take the hundred-to-one rate, it would only be fifty million. H.M.JR: One hundred and fifty million for three months? MR. WHITE: One hundred and fifty for three months, yes. 81 - 7 - H.M.JR: That was a good guess on my part. I carry the fifty million a month in my mind. MR. WHITE: If they get 8. better rate, it will be less than that. I don't understand Chiang Kai-shek accepting that. If he wasn't too dumb he knew they would accept & fifty rate. H.M.JR: In the light of that, do you think the President should answer Madame Chiang? MR. WHITE: Maybe slightly different. This doesn't in any way settle the question. It settles the imme- diate need for currency for the air fields, and I think if you will read the memorandum from you to the Presi- dent - I could see why the matter is really important. We are cooking up quite a program - a real important program. H.M.JR: I don't think there is a chance of my going. Oh, Harry, My God! The President will never read it. (Refers to original draft of Memorandum to the President, attached) MR. WHITE: You can't get on top of that Chinese situation without reading it. We can boil it down, maybe, another page or SO. H.M.JR: He will never read this. MR. WHITE: How much do you think he would read? H.M.JR: He won't read more than two pages. MR. WHITE: We will try. You see, there is a rather serious point there. H.MJR: Talk at me for a few minutes. What is there in there? I know the President. He never in the world would read that. MR. WHITE: The memorandum to you is much shorter. 82 - 8 - H.M.JR: Can I read that? MR. WHITE: Yes. (Secretary reads Memorandum from Mr. White, dated March 27, 1944, attached) That was written before we got this cable. The important thing to stress to the President, I think - that you have to do - is that the program which the Army has will unquestionably aggravate an already bad situation, and that he should be cognizant of what to expect, and he should also be prepared for the charges that the Chinese Government unquestionably will make, that we have caused the serious deterioration in their economy. Now, I think he has to know that, because I don't think the Army has explained it to him, and I think that you have to have that for your protection - that he has got to know. H.M.JR: Do you do that in this letter? MR. WHITE: To Madame Chiang Kai-shek? H.M.JR: Yes. MR. WHITE: I don't see how we can. H.M.JR: Can you say, "I hear from General Stillwell we are making progress"? MR. WHITE: Well, we do say we are making progress. Maybe that is enough. H.M.JR: Oh, yes. Well, Harry, you have got to take me some place, up on the farm or some place, where I have a couple of hours to thrash this thing out, be- cause I am not ready yet to say I am willing to go to China. MR. WHITE: If you don't feel that the letter needs to be answered, and maybe it doesn't, then just wait. Negotiations are going on. 83 - 9 - H.M.JR: Couldn't he answer that letter without any reference to a mission? MR. WHITE: Oh, sure, sure. We can give him just a little more than a letter of acknowledgement, easily. We could easily say, "I understand from General Stillwell that progress is being made in the discussions. "I appreciate that an adjustment of that will not meet the larger problem, but we will take care of that later, or discuss that later," or something like that. H.M.JR: I think so, because I tell you, I know I have had a rule, which is a pretty good one, and that is that when it comes to doing business, Governmental busi- ness, I never want to get more than a hundred yards away from the White House. All these other trips that I have taken I was never on a mission. I mean, I want to let that sink in. MR. WHITE: Except this is a bigger job than I think anybody has ever attempted. H.M.JR: I have never gone on a foreign mission. I mean, I have gone abroad, but I went to get informa- tion. MR. WHITE: Well, I would need some time to talk to you about what needs to be done and what might be done. H.M.JR: All right. And when you do this thing - during the last ten years you look over the record of anybody who has gone abroad for the President and had a lasting success. You give me one example. MR. WHITE: Well, obviously, I don't think you should go abroad, and I know you won't unless you had something-- Regraded Unclassified 84 - 10 - H.M.JR: No, but you give me an example of somebody that the President sent abroad. You could say that Hull went to Moscow-- MR. WHITE: Well, it isn't comparable. H.M.JR: Wait & minute. He went to Moscow and now look what they are doing to him. Well, I want you to think about it - have somebody who could go, accomplish something and have it stick. MR. WHITE: I will. This is a big job. I don't think it should be approached unless you have a program in your mind to do the job, and money in your pocket. H.M.JR: What I have in mind is this, possibly - I am tired again. I am not going to let myself get down. I am planning to leave Friday. After I have had a day or two in the country, and if I can still stay, I may let you know. You may want to take in a couple of shows in New York and spend one day in the country with me. You like to go to New York and take in, a couple of shows. MR. WHITE: All right. H.M. JR: And then come up there, maybe, and we can walk around the place and talk this thing out. MR. WHITE: That can easily wait for that. Now, do you think you still need an answer to the letter? That can very easily be drafted, just an answer to the letter, which would satisfy requirements of an answer to the letter, and dodge the issues for the time being. It can easily be prepared if you feel that one has to be prepared. If it doesn't, you can drop the whole matter and leave the answer to that as an excuse to raise the issue later. 85 - 11 - H.M.JR: No, I think the President should give an answer dodging it. I would like you to get somebody started on that, on the theory I am going to see him in the next twenty-four hours, you see. MR. WHITE: Vincent told me that they seemed to feel certain that a letter has gone to the President from the Generalissimo or Madame - an important letter on the political developments. Do you know anything about it? H.M.JR: No. MR. WHITE: He didn't, either. He was just fishing for information. H.M.JR: My dear Harry, I always tell you these things. Now, if I can see Mr. Palmer - and after I have seen him - it will be about fifteen minutes. You leave your papers here. 86 X MEMORANDUM TO THE PRESIDENT In pursuance of your memorandum of March 10 to the Secretary of State and Secretary of Treasury, there is attached 6 suggested cable to be sent to the Prime Minister in reply to his cables 613 and 614 of March 9. This suggested reply has been approved by Secretary Hull and Mr. Crowley. Regraded Unclassified 87 To: Prime Minister Churchill From: The President 1. Thank you for your reply contained in your cables 613 end 614 of March 9. The points you raised have already been brought to my attention several times by Secretary Morgenthau and Secretary Hull. I an sorry If By message caused you anxiety. There is no dispute as to the understanding on the handling of ques- tionable items under Lend-Lease which was reached between Mr. Crowley, Secretary Hull, Secretary Morgenthau and Lord Halifex, and to which I had given my prior approval. As Secretary Morgenthau stated at the meeting, this understanding did not deal with the dollar position question and did not preelude the possibility of our reopening that question in the future should the situation seem to call for it. I raised this dollar position question since it is a troublesoms one of continuing concern with us here and doubt- less with you. I hope that ze say be able together to find 6198 reasonable solution to this problem before it becomes agre too blessome. 88 - 2 - 2. In any further discussion of these matters the Treasury would be the normal center of such conversations. The agenda which Stettinius has of topics to be discussed in London does not include the question of British dollar balances. 3. The question to which you refer in paragraph 2 of 614 may be withdrawn, although the Congressman concerned and the entire Foreign Affairs Committee are now alerted to the issue. You will be advised as soon as a definite decision is reached, and sonsulted fully before any information is proferred. SECRET. SCHEDULE COVERING AGREED PROGRAM REFERRED TO IN LETTER FROM HON, J. L. ILSLEY, CANADIAN MINISTER OF FINANCE, TO ON. HENRY L. ORGENTHAU. SECRETARY OF THE U.S. TREASURY. DATED MARCH 24. 1944. URES WHICH WILL REDUCE CANADA'S HOLDINGS OF U.S. DOLLAR BALANCES. Estimated Amount (Millions of Dollars) Payment to F.E.A. for imports of war supplies under Canex Requisitions 38.8 Payment to Metals Reserve Company to recoup capital advances and price subsidies made by that Company for development of certain marginal metal mining properties in Canada under the terms of an agreement with War Supplies Limited 5.2 5. Payment for costs incurred by U. 8. Army in connection with construction of permanent improvements to following airfields in Canada: (a) Airfields on the Northwest Staging Route, landing strips along the Canol Pipe Line and other airfields, landing strips and permanent air route facilities constructed by U.S. in Northwest Canada 35.3 (b) Airfields on the Crimson Route in Central Northeast Canada 30.0 (c) Airfield at Mingan, Quebec 4.2 Payment for costs incurred by U.S. Army for construction of that part of the telephone line from Edmonton to Fairbanks which is in Canadian territory 9.5 Reimbursement for progress payments made by U.S. Navy for production of PB2B1 aircraft 22.0 Payment in U.S. dollars for U.S. tanks purchased in the United Kingdom for use of the Canadian Army in Europe 140.0 Further payment on account in respect of imports under Canpay requisitions 20.0 500.8 Regraded Unclassified 2. ES WHICH WILL REDUCE CANADA'S FUTURE RECEIPTS OF U.S. DOLLARS. Estimated Amount (Millions of Dollars) imendment of U.S. Navy contract for PB2B1 aircraft so as to provide for assumption by Canada of financial responsibility to Boeing Aircraft of Canada Limited 41.0 issumption by Canada of expenditure incurred on U.S. account for construction of persanent improvements to airfields in Canada and at Goose Bay, Labrador (including newly projected $6 million program and contracts not yet completed 7.4 on Northwest Staging Route) 42.1 Assumption by Canada of refining and distribution costs of gasoline used to neet British commitment in connection with Air Training Plan in Canada 15.0(annu- ally) Elisination of Canadian participation in contracts for purchase of New Caledoniam nickel 2.5 (annu- ally) Contracts between War or Navy Department and War Supplies Limited terminated and/or cancelled after December 1, 1945, or to be terminated and/or cancelled. Undelivered value as estimated by Canadian Department of Munitions and Supply: 91.0 WSL 72-722 6 pdr. APC BC WSL 72-888 AS - 48 cable VSL 72-659 link spares WSL 72-450 fuel pumps WSL 72-157 propeller assemblies W8L 72-377 link trainers WSL 72-458 20 = discs WSL 72-796 pump assemblies WSL 72-821 wobble pumps WSL 72-240, 740 & 743 Range finders (other than U.S. type) WSL 72-169 75 12 shells H.S. WSL 72-812 40 an rounds WSL 72-391 powder propellant WSL 72-216, 643, 217 & 265 .505 ammunition WSL 72-284 Algerine minesweepers WSL 72-204 & 205 (old and new contracts) Cornell aircraft and spares WSL 72-265 & 921 (old and new contracts) Harverd aircraft and spares were 191.6 HDW Regraded Unclassif 91 March 29, 1944 MEMORANDUM FOR THE PRESIDENT In reply to your memorandum of March 16th forwarding letter of February 17th from Madame Chiang to yourself, I an attaching hereto suggested reply for your consideration. The principal reasons for the contents of the suggested reply are given herewith. 1. with regard to the matter of U. S. military expenditures in China, Madame Chiang has really raised two questions. The first is whether China's economy can support as large a program of airfield development as 18 now contemplated and, secondly, the question of how many U. 8. dollars the United States shall pay to acquire the necessary local currency to build these airfields. 2, It 18 my own feeling that If 8. collapse of Ohina's economy takes place -- and it is not at all unlikely - it will be due fundamentally to such basic causes 88 the growing disintegration of the military and political power of the Central Government, the isolation of China from the outside world and the failure of the Central Government to undertake necessary internal reforms, China today 16 suffering from an acute shortage of goods, particularly capital goods needed to maintain production and distri- bution; rapidly rising prices; large and constant ergansion in note issue resulting from the use of the printing press as the principal means of financing the war; large scale hoarding of commodities; decline in production, and disruption of the already erude means of transportation. At present prices are rising even more rapidly than ever. Prices trebled during last year and in February, 1944, retail prices in the leading cities of Free China were about 300 times their 1937 level, 1.e. an increase of nearly 30,000 persent! It 18 because of this general situation that the air- field program, as now contemplated, will have serious economic repercussions, The Army plans to superimpose on this already advanced stage of inflation e. program involving the expenditure of ON84 to 5 billion per month, concentrated in a few localities, At present expendi- tures of the Chungking Government in all areas total Regraded Unclassified 92 - 2 - about CN$7 to 8 billion per month, and about 0005 to 6 billion of the total is financed by note issue, Thus, in order to finance our military program in China, it will be necessary for the Chinese Government nearly to double note issue, thereby considerably increasing the already great inflationary pressure. Therefore, the continuation of large expenditures on the airfield development program for more than a few months will, of necessity, aggravate an already serious situation. It 10 not impossible that the situation may be so aggravated as to bring about a catastrophie runaway inflation. That the U. S. Army has to pay out these tremendous suns on the construction of a comparatively few airfields is in itself an index of the advanced stage of economic deteri- oration which China has reached. Furthermore, there is increasingly prevelant in Chungking Government circles a noticeable tendency to lay the responsibility for inflation on U. 8. Army expenditures, The principal reasons for this attitude are probably that the Chinese officialdom wishes to strengthem the bargaining position of China vic-a-vis the United States, and to find a convenient alibi and coapegoat for a situ- ation which the Chinese Government has handled badly. 3. The possible economic consequences of the airfield development program was discussed with General Somervell in conference at my office on March 20, 1944 on Ohina, at which a State Department representative was also present. I was informed by General Somervell that, notwithstanding the possible dire effects on China's economy of our airfield program, strategical require- ments necessitated the carrying through of this program. The Aray, by deciding to continue without reduction its contemplated program, 10 of course assuming a grave responsibility which can only be justified by important military considerations. I would like at this time to repeat what I have said before on numerous occasions - the amount of U. 5. dollars which we pay to acquire the local currency needed for this airfield program bears no relation to the infla- tionary impact of the expenditures of this local surrency. Thus, the economic and financial situation in Ohina would not be helped by 8 U. a. dollar loan or by paying an exorbitant price in U. 8. dollars for the local currency required. Regraded Unclassified 93 - 3 - 4. As for the question of the amount of U. 8. dollars to be paid out to obtain the local currency needed for our military program in China, no agreement has yet been reached on the price or on an exchange rate. There have, however, been some significant developments since Madame Chiang wrote to you. The Chinese Government has been advancing us the necessary year for the airfield program. Thus, the Chinese agreed to advance 5 billion of yuan to meet United States Army expenditures in China during March. we, in turn, in accord with our understanding with the Chinese to advance $25 million per month to cover Army expenditures in China, have deposited $25 million to the account of the Chinese Government without prejudice to any future agreement on price or exchange rate for local currency. In addition, the Army has ar- ranged to ship $20 million in U. S. currency and to trans- port $5 million of the $20 million to Chungking to be used by the Chinese Government to help bring down the black market premium on U, S. dollars. The other $15 million will be held in India pending outcome of these experiments on the black market. Funds provided China under this ar- rangement will be part of the $25 million per month which we have agreed to put up. 5. Madame Chiang in her letter to you also raises the question of a loan. It is noted that Madame Chiang writes that Dr. Kung would be willing to come to the United States if there was tangible possibility of & loan. That the Chinese seen to have given up, at least for the present, the hope of getting a loan is suggested by the fact that the General- issimo takes for granted that we will not invite Dr. Kung if it 10 necessary to promise & loan. Instead, as Madame Chiang goes on to say, the Generalissimo would appreciate your sending to China a representative empowered with full authority to consult with his Government on methods for solving of China's critical economic and financial problems. If such & mission is to be successful, the representative must have sufficient status to be able to speak frankly and authoritatively with the Generalissimo on what could be done to cope with China's economic and financial pro- blens. 6. General Somervell, in the conference at my office on March 20, 1944 on China, previously referred to, urged Be to undertake this mission, on the ground that it wee a matter of great importance to our war effort in the Far East. I as inclined to agree with him. Since the purpose would be to discuss financial and economic Regraded Unclassified .94 - 4 - matters of considerable importance, I would be glad, if you 80 wished, to make the trip. If you think this 1dea a good one, I could plead inability to go until June or July, giving us the advantage of post- poning the discussions with the possibility that the situation there will, in the meantime, have 60 changed as to heighten the possibilities of a successful economic mission. 7. If you agree that I should go, I will be glad to discuss with you what I have in mind could be done to help Chim out of her present chaotic situation. HDW/ISF/efs 3/29/44 Regraded Unclassified 95 March 27,1944 Secretary Morgenthau Mr. white Subject: Effect on China's economy of U. 5. Army expenditures. 1. on March 11 cable was sent to Adler instructing him to send immediately his evaluation of the economic situation in China, with partiouler reference to the effects of our present and projected military activities. Re was nsked to comment especially on the relative importance of our military expenditures in bringing about the rapid rise in prices AS compared with the other causes of inflation and the imminence of M economic collapse. 2. On March 25 a cable and received from Adler dated March 23, copy of which 16 attached hereto, replying to our cable. In general Adler takes the position that the economie situation in China 18 very scrious. In 1943 prices trebled, while in 1944 prices are rising even more rapidly. Production is declining and the Chungking Government continues to finance its excends- tures largely by the use of the printing press. Adler points out that the basic danses of China's economic difficulties are the growing disintegration of the military and political power of the Central dovernment, the isolation of China from the outside world and the failure of the Government to make necessary internal reforms. 3. with regard to the effect of the contemplated U. 3. Army program, he concludes that while the Chinese economy might be able to stand this extra strain se and he emphacizes the might -- he feels that it is highly questionable whether we should incur the rick of imposing this strain on her unless the Arsy has over-riding strategie reasons for doing 80. He recon- mends strongly that the Army should not make plans for further construction projects after June, 1944 which would entail the heavy expenditures which are contemplated for the first half of this year. At present projected expenditures for the three months, April to June, 1944, are CH$12 billion and notually are more likely to exceed CH815 billion. 4. Thus, Adler's cable bears out our feeling here that although Ohtma's economic difficulties are fundamentally Regraded Unclassified 96 - 2 - and chiefly caused by factors other than the United States Army military program, and that these would continue to grow even if our military program was sharoly curtailed. The decision, however, to carry out our contemplated military Drogram at this stage of economic deterioration will gravely accentuate China's economic difficulties and the Army, by insist- ing on continuing without reduction its contemplated program is, of course, assuming a grave responsibility bility which can be justified only by important military considerations. HDS/ISF/efe 3/29/44 Regraded Unclassified 97 25 MAR 29 1944 y dear -r. ecretary: This 16 in further reply to your letter of December 31, 1943 4.0 to the letter of Acting Secretary Patterson dated January 25, 1944, regarding ar Department contracts and projects in Ganada the financial responsibility for which could be taken over by the Canadian Government without hindrance to the was effort. Miscussions with the Canadian Treasury have been completed and the Canadian Government has agreed to include the following measures which involve the ar Department. 1. To pay for all construction of a permanent nature on U.S. s\rfield developments in canada. These include airfield developments in the Northwest and along the Crimmon loute as well as the airfield at Vingan. It involves reimbursements to the (ind ted States Government of an estimated $67.5 million - 833.3 million for the airfields in the Northwest, 130 million for the sirfields on the Crimson Route and $4.2 million for the airfield at ltingan. The Canadian Government has also agreed to assume the financial responsibility for any further expendi- tures which have been made but not yet paid for by this Government OF which are still to be made in connection with the construction of the airfield developments in the Northwest. Including the newly projected 16 million program and contracts not yet completed, these latter are estimated by the Canadian Government to total 42.1 million. It is 01- pected that the discussions soon to take place between the tate repart= must and the Canadian Government to finalise the figures of costs for the airfields in the Northwest will be extended to cover the airfields on the Crimson Route and at Mingan. 2. To accept full responsibility for the cost of construction of that part of the telephone line from Edmonton to Fairbanks wid.ch 10 in Lanada. The Department of Transport is prepared to reimburse the ar Department for its expenditures of 89.3 million as soon 08 the appro- priate accounts are received. 3. To make imediate payment for American tanks transferred by the British to the Canadian By for use in Europe. 1. Clark reports that this would amount to about $140 million including freight costs. They desire to make an immediate payment of this amount leaving the Final adjustment to be made upon presentation of the bills. Regraded Unclassified 98 - 2 - 4. To taxe over the uncompleted portion of the following at ejertment contracts with or Supplies Listed: Canadian-reported undelivered value as of Feb.29, 1944 SL 72-722 - 6 pdr. APC BC 420,685,008.00 ISL 72-888 - AS-48 cable 101,174.24 WSL 72-659 - Link spares 209,242.25 ISL 72-450 - Fuel pumps 53,288.73 15L 72-157 - Propeller assemblies 142,600.00 MSL 72-377 - Link trainers (spares only to ship) 126,000.00 $21,317,313.22 The repartment of Munitions and Supply 010 a to discuss the trans- for of these contracts with the appropriate officials of the lar epartment. r. Clark, Deputy Minister of Finance for Canada, reports that the Aircraft Production Franch of the repertment of Munitions and Supply requests that contract SL 72-157 be handled in such a way as to permit the contractor to retain the benefit of technical services now being provided by the U.S. Army Air Forces. The Department of Munitions and Supply further requests that cancellations of the above contracts with ar Supplies Limited to put into effect on a date which would give approximately one week's notice of the change-over, so that arrangements can be made with the manufacturers concerned to ship and bill to the proper accounts, and also to enable the canadian Mutual Aid Board to prepare and file the necessary requisitions to replace those which will be cancelled by War Supplies Limited. Dr. Clark informs us that the other Far Department contracts sufe gested by this Government as eligible for cancellation have been handled in the following manner: a. Contracts involving 120.5 million on basis of U.S. figures have been completed or transferred to the Canadian Government. These include: USL 72-458 - 20m discs SL 72-796 - Pump assemblies SL 72-821 - Hobble pumps Various - Range finders (other than 0.5. type) b. 0 ntreets involving $14.4 million 01 basis of U.S. figures have been cancelled and action has been taken to stop production. these contracts include: SL 72-169 - 75m shells only SL 72-812 - 40m rounds ASL 72-391 - Propellant powder Various - .303 ausard tion Regraded Unclassified 99 - 0. Contracts involving (13 million on the basis of U.S. figures and with an undelivered value as of February 29, 1944 of 1640 thousand according to Canadian figures, will be completed either in March or in April. The Department of Munitions and Supply people feel that the transfer of these contracts would require an amount of paper and administrative work out of all proportion to the fl ancial considerations in- volved and, accordingly, recommended that the request for their transfer be dropped. These contracts include: Canadian-reported To be undelivered value Completed Feb. 29, 1944 ASL 72-235 - 6-pdr. practice shot March 1944 269,572.80 5L 72-28 - .55 assmition # If 209,105 I, 72-402 - /19 radio Installa- tion kits A " 51,925 /SL 72-491 - Range finder press- ings # # 25,000 (approx.) SL 72-116 - Universal bomb racks - - 27,730 SL 72-501 - Chore horse generator a # spares 33,445.21 13L 72-810 - Wooden propellers April 1944 23,458.73 $640,236.74 The suggestion that Canada reimburse us for the 85.6 million ex- pended DIL the contruction of terminal facilities at Lewson Creek was not favorably received by the Canadian Government and at their request trie item was dropped from the program. It is our understanding that the negotistions necessary to the carrying out of the program agreed upon with the Canadian Treasury will be conducted tetmeen the appropriate Canadian Government agency and the appropriate U.S. Government agency, in the case of the above items the far epartment. I assume that in each case the agency con- ducting the negotiations with the Canadian Government will clear the matter with all other agencies having an interest in it. In order to enable us to complete our records, I should appreciate being kept informed of the progress of negotiations with the Canadian Government and of being notified when the program, so far as concerns the ar Department, is completed. Very truly yours, (Signed) W. Secretary of the Treasury. The Honorable, Hirl 21/11 the lecretary of ar. Regraded Unclassified 100 25 MAR 29 1944 by dear Mr. Secretary: This is in further reply to your letter of January 2, 1944 regarding Navy Department contracts and projects in Canada the financial responsibility for which could be taken over by the Canadian Government without hindrance to the war effort. liscussions with the Canadian Tressury have been completed and the Canadian Government has agreed, among other things, to assume the financial responsibility for the contracts for PERB sirplanes which the Navy Department has plesed in Canada. The Aircraft Production Branch of the Canadian Department of Muni tri.ess and Supply is to discuss with the Havy Department the revision of these contracts BO as to provide for (1) the reimbursement of the Navy Department for expenditures already made, outimated to amount to approximately $22 million, (2) the assumption by the Canadian Government of the respensibility for payments still due on these contrasts, estimated by them to amount to about $41 million, and (3) the continuance by the Navy Department of various engineering and technical services ch are called for in the existing con- tracts and which are necessary to their completion. This last item includes the provision of equipment by the United States Government. It is our understanding that the negotiations necessary to the carrying out of the program agreed upon with the Canadian Treasury will be conducted between the appropriate Canadian Government agency and the appropriate U.S. Government agency, in the case of the ace- tracts" for PR2B airplanes the Havy Department. I accuse that in each case the agency conducting the negotiations with the Canadian Govern- ment will clear the matter with all other agencies having an interest in it. In order to enable us to complete our records, I should appreciate being kept informed of the progress of megotiations with the Canadian Government and of being notified when the program, 90 far as it con- cerns the Havy Department, is completed. Very truly yours, a I of 1 Secretary of the Treasury. The Honorable, The Secretary of Navy. TNK:rl 3/23/44 Regraded Unclassified 101 25 MAR 29 1944 year I. Crowleys This 18 in further reply to your letter of December 30, 1943 regardi contracts and other arrangements between Foreign Economic Administration and Canada, the financial responsibility for which could be taken over by the Canadian Government without hindrance to the wer effort. Discussions with the Canadian Treasury have been completed and the Canadian Government has agreed to include the following measures which are of interest to Foreign Economic Administration. A. To reimburse us for goods shipped to Canada on Canex account. These shipments are estimated by the Canadian Department of Munitions and Supplies to total 838.8 million. The Canadian Treasury would like to make an immediate payment of $38 million on account, leaving the remainder to be settled upon the final presentation of bills. B. To make an immediate payment of #20 million on account for Canpay shi men's. Dr. Clork, Deputy Minister of Finance for Canada, is uncertain of the exact amount still due. He now estimates it at 115-(20 million instead of $47 million, the figure he had given us earlier. C. To pay for the refining and distribution costs of the gasoline used to meet the British commitment in connection with the Empire Air Training Plan. Dr. Clark informs us that this is already being done. The annual cost is estimated at $15 million. So far as concerns the crude petroleum used to neet this cound tment, the Canadians suggest that this is a matter which concerns the United Kingdom and accordingly should be discussed with the British. le told them that your agency would be the appropriate one to do 80, The amount involved is 08- timated to be $9 million annually. D. Mimination of Canadian participation in the contracts for the purchase of NOW Caledonia nickel. This is estimated by the Canadian Government to involve an annual 1000 of dollar exchange receipts to Caneda of 12.5 million. E. To reimburse the Metals Reserve Company for the unliquidated portion of the 1,311 thousand of capital advances and for the estimated 1.9 million of subsidy payments made by the Motals Reserve Company under a master agreement with Yor Supplies Limited for the operation of oor- tain marginal mines in Canada and to assume all future capital obliga- tions and operating aspects of the agreement covering these mines. Regraded Unclassified 102 - 2 According to Dr. Clark, the negotiations providing for repayment of capital advances are now in process between Retale Honerve people and the Canadian Vetals Centrol. It is expected that these die- cussions will De broadened to cover reimbursement for subsidy pay- ments already made as well as the question of the possible cancella- tion of the contracts. 50 far as concerns the Falconbridge Nickel Contract, the Canadian Government prefers not to take it over and at their request this item was dropped from the program. It is our understanding that the negotiations necessary to the carrying out of the program agreed upon with the Canadian Treasury will be conducted betwee the appropriate Canadian Government agency and the appropriate U.S. Government agency, in the case of the first three items listed above, the Foreign Reonomic dministration. I assume that in each case the agency conducting the negotiations with the Canadian Government will clear the matter with all other agencies having an interest in it. I have written to ecretary Jones informing him of the outcome of our discussions with the Canadian Treasury. In order to enable us to complete our records, I should appreciate being kept informed of the progress of the negotiations and of being notified when the program, BO far as it concerns Toreign Reonomie Administration, is completed. Very truly yours, Signed) EL Morganthan. Jr. ecretary al the Treasury. Ar. Leo T. Crowley, Administrator, Foreign Economic Administration, Room 414, National Press Building, 14th & F Streets, N.W., ashington, D.C. T.K:rl 3/24/44 Regraded Unclassified 123 25 MAR 29 1944 ity dear Mr. Decretary: This is in further reply to your letter of January 13, 1944 20 regard to contracts which the Reconstruction Finance Corporation and its subsidiaries have placed in Canada and which could be can- celled and transferred to the Canadian Government without hindrance to the war effort. Discussions with the Canadian Treasury have been completed and the Canadian Government has agreed to include the following two neasures which are of interest to the Reconstruction Finance Corporation and its subsidiaries. A. Elimination of Canadian participation in the contracts for the purchase of New Caledonia nickel. This ie estimated by the Canadian Government to involve an annual loss of dollar exchange receipts to anada of 12.5 million. B. Reimbursement of the Votals lieserve Company for the - liquidated portion of the 1,311 thousand of capital advances and for the estimated 11.9 million of subsidy payments made by the Metals Reserve Company under a master agreement with war Supplies Limited for the operation of certain marginal mines in Canada and assumption of all future capital obligations and operating aspects of the agreement cover- Lng these mines. According to Ir. Clark, reputy Minister of Finance for Canada, the negotiations providing for repayment of capital advances are now in process betw en the Metals Reserve Company and the Canadian Netals Control. It is e pected that these discussions will be broadened to cover reimbursement for subsidy payments. Dr. Clark believes that the Canadian Metals Centrol will probably want to cancel the contracts covering the marginal mines. If they decide to do 90, they will discuss the question with the Metals Reserve Company. I note your statement that all of your Canadian agreements were made on the recommendation of the lar Production Board and that before any of them are actually terminated or transferred to the Camadian Government the matter should probably be cleared with that agency. I answer that in each case the agency conducting the negotiations with the Canadian Government will clear the matter with all other agencies having an interest in 18, It is our understanding that these dis- cussions ad 1 be conducted between the appropriate Canadian Government Regraded Unclassified 104 - 2 - agency and the appropriate U.S. Government agency, in the case of the metals contract the Notals Reserve Company. I have written to Mr. Crowley informing his of the outcome of our discussions with the Canadian Treasury. In order to enable us to complete our records, I should appreciate being kept informed of the progress of these negotiations and of being notified when the program, 80 far as it concerns the Recorstruction Finance Corporation, is completed. Very truly yours, (Wigned) III Morgenthaw, Jr. Secretary of the Treasury. Honorable Jesse Jones, ceretary of Commerce, 811 Versont Avenue, Foom 1215, weshington, D.C. TMK:rl 3/23/44 Regraded Unclassified 175 SECRET Paraphrase of mesage No. CFB 15326, 27 March 1944, Corrected Copy, to General Somervell from General Stillwell. ad are now hopping that the Chinese may take a. more realistic attitude on money matters, provided we can save their faces. The GMO is pressing Kung to effect agreement although mention of the phrase "exchange rate" sends the GMO into a tailspin. We would like to have permission to explore the possibilities of the follow- ing plan, the only one which has a chance of success at the present time. That the Chinese continue to advance CN to U.S. Army according to our needs and their ability. At the beginning of each three-month period, the U.S. to decide on a sum of U.S. dollars which will be advanced to the Chinese during the period. For the next three- month period this sum to be figured between 100 and 200, probably between 125 and 165, U.S. requirements in CN to be kept secret, while the Chinese may publicize our "contribution" if they think wise for stabilization purposes. The rate of exchange will not come into the transaction, and the decision on final benefit derived by the Chinese and U.S. respectively will be left to post war negotiation. Ne think that the "tri-monthly ratio" between the two contributions will become the de facto rate of final settlement, since post war stabilization of rate must certainly be at a. much lower figure. To raise a portion of their contribution to U.S. in the least in- flationary manner the Chinese to be urged to sell gold and U.S. dollars on joint account. This procedure is preferable to our sale on our own account since the sales will probably produce Junly 20% of our requirement. Ne fully realize the disadvantage of post war negotiation on final rate, but think that the dangers are more imaginary than real. The proposal has tremendous face saving advantage for GMO. The Ambassador and Adler have seen this cable and indorse the scheme, and request copies of this telegram to be furnished State and Treasury Departments. No request no action be taken in Washington on our radio CFBX 15225, dated 24 March until initial steps in present negotiations are concluded. divisions mauringsd YORKET DATE SILM to matural department SECRET Regraded Unclassified 106 MAR 29 1944 NO ANDUM TO THE PRESIDENT On March 2, 1943, you approved the recommendation of an interdepartmental committee that appropriate action be taken to maintain Canada's gold and U.S. dollar balances et not less than about $800 million end not more than about 350 million. iscussions were immediately undertaken with the appro- primte U.S. agencies and Canadian officials to implement this decision. In pursuance of the arrangement, $107 mil- lion of U.S. Government contracts in Canada were cancelled in September 1943. However, despite these cancellations Sanadian dollar balances continued to rise and in December the question of taking additional measures to bring them into line with the above decision was opened with the snaddan Treasury and appropriate U.S. Government agencies. As 8. result of these discussions, the Canadian Govern- ment has agreed to measures which will reduce her current gold and dollar holdings by about 1300 million and her future dollar exchange receipts by about $190 million, as follows: 1. To assume all of the cost of the permanent air- field developments constructed by the U.S. Army in Canada. This will involve reimbursements to the U.S. Government of $67.5 million and the assumption of additional expenditures of $42.1 million. 2. To reimburse U.S. for goods received under "Canex" requisitions. These are estimated to amount to $38.8 million and represent goods lend-leased to the United Kingdom but made available to Canada for its own use in ex- change for expenditures incurred by it in the United States for materials used in production on British account. Regraded Unclassified 107 - 2 - 8. To take over the Havy contract for PB2B aircraft which involves reimbursement to us of $22 million and assumption of future outlays of $41 million. 4. To terminate OF sssume War and Havy Depart- ment contracts for munitions with an undelivered value of $91 million. This will reduce Canada's future dollar exchange receipts by this amount. 5. To make an immediate payment of $160 million for goods purchased from U.S.--$140 million for tanks purchased in the United Kingdom for use of the Canadian Army in Europe and $20 million on account for goods imported from the United States under cash reimbursable lend-lease. 6. To assume the costs of other projects pre- viously financed by U.S. and to eliminate Canadian participation in the purchase con- tracts for New Caledonia nickel. These in- volve reimbursements to U.S. of $12.5 million and an annual loss of dollar exchange to Canada of $17.5 million. Excluding the $126 million of dollar balances represent- measures will reduce Canada's gold and dollar balances as of ing net proceeds from security sales to U.S., the above the end of February 1944 from $650 million to $350 million. The Canadian Government has undertaken to put these measures into effect as quickly as possible. When the pro- gram is completed the only outstanding U.S. Government con- tracts in Camada will be those continued OF placed for other than financial considerations. In view of this fact and of the favorable outlook for Canada's dollar exchange position during the foreseeable future, it is agreed by the two Treasuries that there is no need to continue the arrangement under which their Governments undertook to take appropriate measures to maintain Canada's dollar balances within the limits of $300-$350 million. There are attached a copy of the schedule setting forth the agreed-upon program and a copy of the exchange of cor- respondence between myself and Mr. Ilaley, Minister of Finance for Canada. (Mand) H. Marganthon, Jr. TMK:MAB:r1 3/29/44 Regraded Unclassified 108 25 MAR 29 1944 Dear Mr. Ilaley, Receipt is acknowledged of your letter of March 24, 1944, regarding Canada's holdings of United States dollar exchange. The views ex- pressed in your letter are in accordance with our understanding of the agreement we have reached. The atmosphere of cooperation and under- standing in which these arrangements have been conducted is, for me, a source of genuine satisfaction. Sincerely, (Wigned) H. Merganthau, Jr. Honorable J. L. Ilsley, Minister of Finance, Ottawa, Canada. TMK:rl 3/28/44 Regraded Unclassified C or 1 OTTAWA, March 24, 1944. Hon. Henry L. Morgenthau, Secretary of the Treasury, WASHINGTON, D.C. Dear Mr. Morgenthau: During the last few weeks discuss- ions between yourself and myself and our officials have been taking place on the subject of Canada's holdings of United States dollar exchange. Last year, in keeping with the principles and the spirit of the Hyde Park Declaration, we had reached an understanding to the effect that the United States would follow a program of procurement of war supplies such as to prevent our holdings of gold and U. S. dollar balances from falling below an agreed minimum and that Canada would take appropriate action 1f our holdings of these reserves tended to rise above an agreed maximum. Unanticipated developments during 1943 served to increase our available supply of U. S. exchange beyond expectation. We have therefore now agreed upon a program intended to reduce our balances to the agreed range and, in accordance with our recent conversations, we undertake to put this program into effect as quickly as practicable. Accordingly, in view of this agree- ment there is no further need for the continuance of last year's arrangement and Canada and the United States are mutually released from the obligations assumed under such arrangement. As applied to Canada this means that Canada will be free to maintain, build up, or deal with its reserves as it sees fit. If the above is in accordance with your understanding of the agreement which has been Regraded Unclassified 2. arrived at, I should be glad to have your confirmation. May I express my appreciation of the understanding of our position which you have always shown and of the spirit of co-operation and good-will which you have manifested in seeking to achieve the objectives of the Hyde Park Declaration and in the conduct of our recent negotiations. Yours sincerely, Regraded Unclassified HERE. CHEDULE COVERING AGREED PROGRAM REFERRED TO II LITTER FROM HON, J. L. ILSLEY, CANADIAN MINISTER Q.E. FINANCE, TO la HENRY L. ORGENTHAU. SECRETARY OF THE U.S. TREASURY. DATED MARCH 24, 1944. IRES WHICH WILL REDUCE CANADA'S HOLDINGS OF U.S. DOLLAR BALANCES Estimated Amount (Millions of Dollars) Payment to F.E.A. for imports of war supplies under Canex Requisitions 38.8 Payment to Metals Reserve Company to recoup capital advances and price subsidies made by that Company for development of certain marginal metal mining properties in Canada under the terms of an agreement with War Supplies Limited 5.2 So Payment for costs incurred by U. S. Army in connection with construction of permanent improvements to following airfields in Canada: (a) Airfields on the Northwest Staging Route, landing strips along the Canol Pipe Line and other airfields, landing strips and permanent air route facilities constructed by U.S. in Northwest Canada 53.3 (b) Airfields on the Crimson Route in Central Northeast Canada 30.0 (c) Airfield at Mingan, Quebec 4.2 Payment for costs incurred by U.S. Army for construction of that part of the telephone line from Edmonton to Feirbanks which 18 in Canadian territory 9.5 Reimbursement for progress payments made by U.S. Navy for production of PB2B1 aircraft 22.0 Payment in U.S. dollars for U.S. tanks purchased in the United Kingdom for use of the Canadian 140.0 Army in Europe Further payment on account in respect of imports under Canpay requisitions 20.0 300.8 heat Hty Regraded Unclassified 2. ES WHICH WILL REDUCE CANADA'S FUTURE RECEIPTS OF U.S. DOLLARS. Estimated Amount (Millione of Dollars) Amendment of U.S. Navy contract for PB2B1 aircraft 80 as to provide for assumption by Canada of financial responsibility to Boeing Aircraft of Canada Limited 41.0 Assumption by Canada of expenditure incurred on U.S. account for construction of permanent improvements to airfields in Canada and at Goose Bay, Labrador (including newly projected $6 million program and contracts not yet completed 7.4 on Northwest Staging Route) 42.1 Assumption by Canada of refining and distribution costs of gasoline used to meet British commitment in connection with Air Training Plan in Canada 15.0(annu- ally) Elimination of Canadian participation in contracts for purchase of New Caledoniah nickel 2.5 (annu- ally) : Contracts between War or Navy Department and War Supplies Limited terminated and/or cancelled after December 1, 1943, or to be terminated and/or cancelled. Undelivered value as estimated by Canadian Department of Munitions and Supply: 91.0 WSL 72-722 6 pdr. APC BC WSL 72-888 AS - 48 cable WSL 72-659 link spares WSL 72-450 fuel pumps WSL 72-157 propeller assemblies WSL 72-377 link trainers WSL 72-458 20 mm discs WSL 72-796 pump assemblies WSL 72-821 wobble pumps WSL 72-240, 740 & 743 Range finders (other than U.S. type) WSL 72-169 75 no shells H.E. WSL 72-812 40 an rounds WSL 72-391 powder propellant WSL 72-216, 643, 217 & 265 .305 ammunition WSL 72-284 Algerine minesweepers WSL 72-204 & 205 (old and new contracts) Cornell aircraft and spares WSL 72-265 & 921 (old and new contracts) Harvard aircraft and spares 191.6 web HDW Regraded Unclassified 113 25 MAR 29 1944 My dear Mr. Secretary: I am enclosing a copy of the correspondence between Mr. Ilsley, Canadian Minister of Finance, and myself, incorporating the agreement on Canada's dollar balances and a copy of the schedule listing the measures which the Canadian Government has greed to take to implement this agreement. Very truly yours, (Migned) #. Mergenthan, Jr. Secretary of the Treasury. The Honorable, The Secretary of State. Enclosures MAB:rl 3/28/44 Regraded Unclassified / 114 OTTAWA, March2% 1944. Hon. Henry L. Morgenthau, Secretary of the Treasury, WASHINGTON, D.C. Dear Mr. Morgenthaus During the last few weeks discuss- ions between yourself and myself and our officials have been taking place on the subject of Canada's holdings of United States dollar exchange. Last year, in keeping with the principles and the spirit of the Hyde Park Declaration, " had reached an understanding to the effect that the United States would follow a program of procurement of war supplies such as to prevent our holdings of gold and U. S. dollar balances from falling below an agreed minimum and that Canada would take appropriate action if our holdings of these reserves tended to rise above an agreed maximum. Unanticipated developments during 1943 served to increase our available supply of U. 8. exchange beyond expectation. We have therefore now agreed upon a program intended to reduce our balances to the agreed range and, in accordance with our recent conversations, we undertake to put this program into effect as quickly as practicable. Accordingly, in view of this agree- ment there is no further need for the continuance of last year's arrangement and Canada and the United States are autually released from the obligations assumed under such arrangement. Às applied to Canada this means that Canada will be free to maintain, build up, or deal with its reserves as it 8000 fit. If the above is in accordance with your understanding of the agreement which has been Regraded Unclassified 2. 115 arrived at, I should be glad to have your confirmation. May I express my appreciation of the understanding of our position which you have always shown and of the spirit of co-operation and good-will which you have manifested in seeking to achieve the objectives of the Hyde Park Declaration and in the conduct of our recent negotiations. Yours sincerely, In Maley Regraded Unclassified SECRET. 116 EDULE COVERING AGREED PROGRAM REFERRED TO IN LETTER FROM HON, J. L. ILSLEY, CANADIAN MINISTER OF FINANCE. TO HENRY L. ORGENTHAU. SECRETARY OF THE U.S. TREASURI. DATED MARCH 24, 1944. M: RES WHICH WILL REDUCE CANADA'S HOLDINGS OF U.S. DOLLAR BARANCES Estimated Amount (Millions of Dollars) 1. Payment to F.E.A. for imports of war supplies under Canex Requisitions 58.8 2. Payment to Metals Reserve Company to recoup capital advances and price subsidies made by that Company for development of certain marginal metal mining properties in Canada under the terms of an agreement with War Supplies Limited 5.2 5. Payment for costs incurred by U. 8. Army in connection with construction of permanent improvements to following airfields in Canada: (a) Airfields on the Northwest Staging Route, landing strips along the Canol Pipe Line and other airfields, landing strips and permanent air route facilities constructed by U.S. in Northwest Canada 55.5 (b) Airfields on the Crimson Route in Central Northeast Canada 50.0 (c) Airfield at Mingan, Quebec 4.2 4. Payment for costs incurred by U.S. Army for construction of that part of the telephone line from Edmonton to Fairbanks which is 9.5 in Canadian territory 5. Reimbursement for progress payments made by U.S. Navy for production of PB2B1 airoraft 22.0 8. Payment in U.S. dollars for U.S. tanks purchased in the United Kingdom for use of the Canadian 140.0 Army in Europe 1. Further payment on account in respect of imports under Canpay requisitions 20.0 500.8 What HDW Regraded Unclassified 2. RES WHICH WILL REDUCE CANADA'S FUTURE RECEIPTS OF U.S. DOLLARS. Estimated Amount (Millions of Dollars) 1 Amendment of U.S. Havy contract for PB2B1 aircraft so as to provide for assumption by Canada of financial responsibility to Boeing Aircraft of Canada Limited 41.0 2. Assumption by Canada of expenditure incurred on U.S. account for construction of permanent improvements to airfields in Canada and at Goose Bay, Labrador (including newly projected $6 million program and contracts not yet completed on Northwest Staging Route) 42.1 5. Assumption by Canada of refining and distribution costs of gasoline used to meet British commitment in connection with Air Training Plan in Canada 15.0(annu- ally) 4. Elimination of Canadian participation in contracts for purchase of New Caledoniah 2.6 (annu- nickel ally 5. Contracts between War or Navy Department and War Supplies Limited terminated and/or cancelled after December 1, 1945, or to be terminated and/or cancelled. Undelivered value as estimated by Canadian Department of Munitions and Supply: 91.0 WSL 72-722 6 pdr. APC BC WSL 72-888 AS - 48 cable WSL 72-659 link spares WSL 72-450 fuel pumps WSL 72-157 propeller assemblies WSL 72-377 link trainers WSL 72-458 20 mm discs WSL 72-796 pump assemblies WSL 72-821 wobble pumps WSL 72-240, 740 & 743 Range finders (other than U.S. type) WSL 72-169 75 mm shells H.E. WSL 72-812 40 mm rounds WSL 72-391 powder propellant WSL 72-216, 645, 217 & 265 .503 ammunition WSL 72-284 Algerine minesweepers WSL 72-204 & 205 (old and new contracts) Cornell aircraft and spares WSL 72-265 & 921 (old and new contracts) Harverd aircraft and spares 191.6 wele HDW Regraded Unclassified 118 March 29, 1944 4:19 p.m. HMJr: I'm fine. I feel like the forgotten man. Grace Tully: (Laughs) Why? HMJr: Well, twenty-four hours have gone and I figure there are only twenty-four hours left. T: (Laughs) About the appointment? HMJr: Yeah. T: Well, I don't know just at the moment when we can make it. HMJr: Have you tried? T: Uh -- I saw the Boss earlier and he didn't know just then and I may see him again this afternoon. HMJr: Yeah. White House Operator: Excuse me. Can I break in here just a minute? HMJr: Yes. T: Yes. Operator: Mr. Secretary, I have to break in for the President. Just a minute. 4:21 p.m. Grace Tully: Hello. Sorry, Mr. Secretary, but that was the Boss. HMJr: Well, it's all right. T: (Laughs) HMJr: That gave you a chance to ask him for me. T: Yeah. That will give me a chance. I'm going over now. Regraded Unclassified 119 - 2 - HMJr: Oh, good. T: Yeah. HMJr: Good. T: So, I'll let you know just as soon as I have returned. HMJr: Yeah. T: All right, fine, sir. HMJr: I take it I've still got about twenty-four hours, haven't I? T: You might have that, or more. HMJr: Oh. T: Uh huh. HMJr: Oh. Well, anyway, do your best. T: Yes, sir, I will and I'll let you know. HMJr: Thank you. T: Right. Uh huh. 120 Artical Receipts Int for Dates 1930 to 1943, includive, (In williams of dollars) General and Special Accounts Estimated 1945 1943 1942 1941 1944 1940 1939 1938 Receipts: Internal revenues Income tax 33,336 32,970 16,094 7,960 3,470 2,125 2,189 Miscellaneous internal revenue 6,742 2,640 5,422 4,553 3,847 2,967 2,345 2,232 Social security taxes: 2,279 Employment taxes 1,605 1,250 1,130 896 691 605 530 514 Tax on employees of 8 or more 200 188 158 120 98 108 101 90 Taxes upon carriere and their employees 273 265 209 170 137 12 109 150 Rdlroad uremployment insurance contributions 13 12 10 a 7 5 - - Customs 438 420 324 389 392 349 319 359 Miscellaneous receipts 2,037 2,443 906 277 508 268 180 208 Total receipts 44,644 42,970 23,385 13,668 8,269 5,925 5,668 6,242 Deducts Net appropriation to Federal old-age and survivors insurance trust fund 1,574 1,220 1,103 869 661 538 503 387 Net receipts 43,070 41,750 22,282 12,799 7,607 5,307 5,165 5,855 Expenditures: War activities: War Department 47,600 48,800 42,265 14,070 3,678 667 490 432 Nevy Department 28,500 27,000 20,888 8,580 2,313 891 673 596 United States Mari time Commission 4,700 4,500 2,7% 929 52 99 44 1 War Shipping Administration 1,900 1,900 1,105 132 - - - - Agriculture Department 2,500 2,300 2,011 696 3 - - . Treasury Department 1,200 1,200 1,201 519 24 - - - Other 1,800 3/2,800 1,863 1,084 232 - - - Sub-total 88,200 88,500 72,109 26,011 6,301 1,657 1,206 1,029 Interest on the public debt 3,750 2,650 1,808 1,260 1,111 1,041 941 926 General (including revolving funds and transfere to trust accounts): Agriculture Department 651 896 1,168 1,233 945 1,571 1,242 867 Federal Security Agency 545 545 573 799 836 805 758 727 Federal Works Agency 125 222 447 1,136 1,654 2,065 2,827 1,885 Interior Department: Reclamation projects 59 % $ 91 86 96 79 65 Other 85 89 86 111 108 111 134 100 Post Office Department (deficiency, etc.) - 13 9 18 30 42 40 47 Railroad Retirement Board: Railroad Retirement Account (transfer to trust accounts) 275 297 215 141 124 121 107 146 Other 14 17 14 14 15 e 3 1 River and harbor work and flood control 162 189 201 191 219 213 193 199 Tennessee Valley Authority 26 77 111 127 51 39 41 42 Treasury Department: Refunds of taxes and duties 1,799 411 79 94 90 91 68 100 Other 342 290 225 159 147 177 1% 168 Veterans' Administration: Adjusted service certificate fund (transfer to trust accounts) 9 - - - 10 - - - National service life insurance fund (trans- for to trust accounts) 500 250 30 1 - - - - Other 758 623 572 555 553 557 557 582 Government employees' retirement funds - U. S. share (transfer to trust accounts) 197 177 107 103 93 87 75 73 Other departments and establishments 457 629 357 353 340 317 260 293 Sub-total 6,004 4,801 4,262 5,125 5,299 6,300 6,560 5,284 Total expenditures, excluding debt retire- sent 97,954 95,951 76,179 32,397 12,711 8,998 8,707 7,239 Excess of expenditures over receipts 54,684 5/54,201 55,897 19,598 5,103 3,611 3,542 1,384 Esta:- Classifications are on the basis of present location of activities and functions. Figures are rounded to marest adilion and will not meassarily add to totals. Excess of credits, deduct. Retinates - basis of 1945 Budget, Estimated receipts show the effect of the Sevenue Act of 1943. Net receipts are 12,301 aillions greater in 1945 and $564 millions greater is 1944 than Budget estimates, Includes anticipated supplemental appropriations of $650 millions for 1945 and $800 millions for 1944. Includes anticipated supplaintal appropriations of 845 millions for 1945 and $170 additions for 1944. per cash financing purposes the treasury notimates for 1944 that - expenditures will be about $1,000 adllions less than Subject estimates, resulting to . sorresponding redaction in the extimated deficit. Regraded Unclassified 121 Sumary of Expenditures of the Department of Agriculture for the Fiscal Incro 1938-1943, and Estimates for 1944 and 1945. (In millions of dollars) Budget Extimates # Actual 1945 If 1944 # 1943 T 1942 I 1941 I 1940 1939 455 E 1 I I Farm Credit Administration: Banks for cooperatives - capital stock - - 28 55 $ - 3 6 Federal intermediate credit banks - capital stock - - - - 40 - - - Production credit corporations - capital stock - - - 15 n/ 15 - - - Crop loans, etc. 4 24 41 2 1 s/ 1 1/7 aso Farm Tenant Act - - 4 6 28 41 27 3 Federal Farm Mortgage Corporation: Capital stock - - - - 100 - - - Reduction in interest rateson mortgages - 7 9 10 9 7 8 6 Federal land banks: Capital stock - - 54 - a/ 57 - - 5 Reduction in interest rates on mortgages - 22 24 27 28 29 31 32 Subscriptions to paid-in surplus - - 4 - s/ 42 1 12 33 Forest roads and trails 5 6 5 8 8 12 14 13 Rural Electrification Administration: Loans 30 1 1 5 21 35 36 14 Other 3 2 3 4 4 3 2 1 ( T Food Administration: Agricultural Marketing Administration: Surplus marketing 7 6 - 4 53 91 77 23 Surplus commodit stamp program - - 71 126 91 18 - - Farm Security Administration 30 38 45 60 62 159 184 180 Soil Conservation and Domestic Allotment Act 265 350 458 474 465 605 478 304 Other: 47 39 50 49 62 6 Administration of Sugar Act of 1937 53 53 Agricultural Adjustment Act of Aug. 24, 1935 72 91 55 61 97 34 133 15 Commodity Credit Corporation, restoration of - 2 - 120 - 94 capital impairment - - Federal Crop Insurance Acts Administrative expenses 1 1 5 7 5 3 3 - 5 15 6 6 3 5 - Subscriptions to capital stock - Price Adjustment Act of 1938 and parity payments 9 160 203 197 198 215 20 - 92 90 18 2 2 2 8 14 Other Regular departmental expenditures 1/88 1/ 87 122 124 129 146 147 128 - 5 - - - Foreign war and refugee relies - - - 867 Sub-total 651 896 1,168 1,233 945 1,571 1,242 315 - - - Add back non-recurring credit - - - - Total 651 896 1,168 1,293 1,260 1,571 1,242 867 Excess of credits, deduct. Excludes certain functions transferred to War Food Administration. 3/ Represents payments into the Treasury of capital and surplus of certain agricultural corporations, of which $70 millions as resubscribed in 1942 and $99 millions was resubscribed in 1943. Regraded Unclassified 122 Major Public Marks Activities (In millions of dollars) Budget Estimates I Actual 1945 1944 # 1943 : 1942 # 1941 I 1940 I 1999 - 2238 moral: Federal Works Agency: Public Buildings Administration: Construction 2.7 12,2 13.9 33.8 51.7 50.1 51.4 76.7 Other 44.5 44.5 34.1 26.6 17.0 16.9 14.8 14.8 Public Roads Administration 77.1 126.6 1/ 129.3 152,6 174.1 164.5 191.0 223.4 Public Works Administrations Administrative expenses +4 .3 .1 .5 3.7 17.9 23.4 15.1 Grants (Act of June 21, 1938) - 18.5 13.1 27.7 98.8 248.7 265.0 - Loans (Aot of June 21, 1938) - - - .3 1.0 21.8 18.7 - Revolving Funds Loans and grants to States, etc. - 9.4 1.4 11.3 22,8 59.4 100.8 136.9 Loans to railroads - - - - - - - 3.3 Other - 7.0 6° .5 4 .1 - - Work Projects Administration - 2.6 299.0 882.4 1,284.6 1,477.5 2,161.5 1,421.3 ( Interior Departments 55.2 72.3 68.6 91.4 85.6 96.4 79.3 65.4 Reclamation projects River and harbor work and flood control 161.6 187.8 201.2 190.5 218,5 212,9 193.0 198.6 National Housing Agency: Federal Housing Administration: Administrative expenses, etc. # 3.0 3.5 6.0 10.2 7.0 9.1 11.7 Federal Public Housing Authority 10.9 11.2 9.7 10.1 6,0 1.9 8,6 20.7 .6 .6 1.3 1.5 1.3 1.2 1.1 1.3 Other Tennessee Valley Authority 26.0 77.0 111.5 127.0 51.2 39.1 40.8 42,0 Veterans' Administration, hospital facilities, etc. 44.6 8.1 2.7 4.0 3.4 6,0 6,6 9.3 Total, General 423.6 581.1 887.5 1,566.2 2,030,3 2,429.4 3,165.1 2,233.9 War Activities: Federal Works Agency: Public Roads Administration 85.7 120.6 96.3 15.5 - - - - Public Works (comunity facilities) 139.5 130.0 114.4 34.1 - - - - Other (Public Buildings Administration) 1.4 4.7 4.5 12.0 - - - - 50.0 507.5 607.6 297.0 42.0 - - - National Housing Agency Total, War Activities 276.6 762.8 822.8 358.6 42.0 - - Less than $100,000. Excess of credits, deduct. Includes $42.4 millions work performed for the Har Department. Includes $49.0 millions work performed for the Mar Department. Includes $4.4 millions work performed for the War Department. Includes $127.5 supplemental appropriation pending in First Deficiency Act, 1944. Includes 87.5 supplemental appropriation pending in First Deficiency Act, 1964. Includes $30.0 supplemental appropriation pending in First Deficiency Act, 1944. Regraded Unclassified 123 123 Details of "Other Departments and Establishments" (In millions of dollars) Estimated 1943 1942 1941 1940 1939 1938 1945 1944 Commerce Department: Civil Aeronautics Authori ty 42 87 33 29 27 24 18 10 Reconstruction Finance Corporation: Disaster Loan Corporation - capital stock - - - - - 6 8 4 Other (payment of interest to Treasury under notes cancelled pursuant to Act of February 24, 1938) - - - - - - - 3 Other (Census Bureau and other departmental activities 35 32 29 31 45 43 25 23 Matrict of Columbia (U. S. share) 6 6 6 6 6 6 5 5 inscutive Office (White House Office, Budget Bureau, etc.) 3 2 2 2 3 3 2 2 Federal Emergency Relief Administration - - - - - 1 2 & Judicial Establishment 14 12 12 12 11 6 9 Justice Department 73 63 63 64 58 59 48 52 Labor Department 23 23 23 23 24 19 14 13 Legislative Establishment 30 29 27 27 24 23 22 26 National Housing Agencyr Federal Housing Administration - 3 3 6 10 7 9 12 Federal Public Housing Authority 11 12 10 10 6 2 9 21 Federal Home Loan Banks: Administrative expenses 2/ 1 1 1 1 1 1 Capital stock - - - - - - - 5 Panama Canal, (operation, protective works, etc.) 21 34 31 38 29 25 10 11 State Department 41 35 33 29 23 24 19 21 War Department - civil functions (cemeterial expenses, Alaska communication system, etc.) 3/ 3/ 3/ 3/ 4 2 3 3 Miscellaneous independent offices and commissions: Employees' Compensation Commission 12 11 General Accounting Office 38 27 Interstate Commerce Commission 9 8 82 70 70 64 60 74 National Advisory Committee for Aeronautics 23 19 Other 31 57 Unclassified items - - 1 - - - - - Adjustment for certain disbursing officers' checks outstanding - - 1 5 -1 1 -5 - Expenditures from anticipated supplemental appropriations 45 170 - - - - - - Total other departments and establishments 457 629 357 353 340 317 260 293 Included under Department of Justice. Included under"Trust accounts, increment on gold, etc. - Transactions in checking accounts of Governmental agencies". Included under "War activities. WAR ACTIVITIES EXPENDITURES EXCLUDING RECONSTRUCTION FINANCE CORPORATION AND SUBSIDIARIES, OH THE BASIS OF CURRENT DAILY TREASURY STATEMENT CLASSIFICATIONS (In millions of dollars) National Housing Maritime Var Shipping War Havy Agriculture Agency Treasury Commission Administration Other 3/ Total BY fiscal years: Fiscal year 1940 667 936 - - - 99 - e 1,711 Fiscal year 1941 3,678 2,313 3 45 24 51 - 167 6,301 Fiscal year 1942 14,070 8,580 696 297 519 929 132 787 26,011 Fiscal year 1943 42,265 20,888 2,011 608 1,201 2,776 1,105 1,256 72,109 Fiscal year 1944 - Budget estimate 48,790 27,000 2,300 500 1,150 4,500 1,900 2,360 88,500 Fiscal year 1945 - Budget estimate 47,597 28,500 2,500 50 1,000 4,700 1,900 1,953 88,200 By months: Fiscal year 1942: July, 1941 516 362 5 21 7 41 - 17 969 Aug. . 598 441 19 26 9 -6 - 46 1,131 Sept. # 746 424 37 30 16 46 - 32 1,330 Oct. # 834 497 66 40 24 44 - 33 1,537 Nov. " 771 493 41 29 29 57 - 29 1,448 Dec. # 1,072 545 43 29 52 69 - 41 1,850 Jm., 1942 1,282 575 63 27 35 86 - 37 2,104 Feb. # 1,369 581 53 19 42 95 2 48 2,208 Mar. . 1,432 946 105 18 63 121 16 108 2,809 Apr. " 1,594 1,101 65 22 63 98 42 253 3,238 May . 1,850 1,307 80 17 83 130 33 59 3,560 June a 2,007 1,309 119 21 99 150 39 85 3,829 Total fiscal year 1942 14,070 8,580 696 297 519 929 132 787 26,011 Fiscal year 1943: July, 1942 2,861 1,103 90 26 95 184 54 85 4,498 Aug. . 2,875 1,376 61 42 110 211 99 111 4,084 Sept. . 3,519 1,294 94 45 102 141 113 77 5,384 Oct. " 3,417 1,596 51 48 110 46 111 100 5,481 Nov. . 3,538 1,478 433 50 81 274 85 102 6,042 Dec. . 3,770 1,380 21 50 83 275 127 119 5,825 Jan., 1943 4,053 1,274 18 44 95 331 77 56 5,947 Feb. . 3,239 2,002 12 39 79 223 68 108 5,770 Mar. . 3,985 2,053 17 55 103 285 103 141 6,744 Apr. " 3,727 2,102 514 61 120 248 $ 134 6,974 May a 3,857 2,251 382 77 106 243 85 93 7,092 June " 3,424 2,980 318 70 117 315 116 129 7,469 Total fiscal year 1943 42,265 20,888 2,011 608 1,201 2,776 1,105 1,256 72,109 Fiscal year 1944: July, 1943 3,808 1,898 12 72 95 319 105 122 6,432 Aug. . 4,219 2,037 180 68 118 361 119 129 7,232 Sept. . 4,036 1,909 239 50 114 366 130 109 6,952 Oct. . 4,142 1,955 176 54 100 294 148 120 6,989 Nov. . 4,173 2,134 332 44 111 402 216 130 7,541 Dec. . 3,841 2,050 45 39 108 356 164 114 6,718 Jan., 1944 4,170 2,082 140 42 125 308 153 117 7,138 Feb. . 3,792 2,757 184 38 127 331 182 107 7,518 Mar. - Apr. . May . June . Total fiscal year 1944 Includes functions presently classified as To Activities". Includes certain expenditures of Federal Security Agency and Federal Torks Agency, and expenditures of Office for Emergency Management, Selective Service, Atd to China, etc. Includes supplemental items of $800 If for fiscal pg 1944 end $650 X for fiscal year 1945. Proe 1965 Budget. mm klotz 125 TREASURY DEPARTMENT WASHINGTON DUB March 29, 1944 MEMORANDUM ON MEETING OF THE JOINT COMMITTEE ON REDUCTION OF NONESSENTIAL FEDERAL EXPENDITURES A meeting was called for 11:15 A.M., March 29, 1944, in the Senate Appropriation Room in the Capitol. There were present: Senators: Committee Staff: Byrd Mr. Borda George Mr. Moore Congressmen: One other Woodrum Bureau of the Budget: Cannon Mr. Lawton. Taber Senator Byrd announced that the meeting was for the purpose of considering a proposed report on unexpended balances. He also announced that the preliminary draft had been changed 80 as to meet the objections of the Secretary of the Treasury and to incorporate the corrections which the Bureau of the Budget indicated were necessary. Senator Byrd also indicated that Congressman Taber had voiced some objection to the report. Congressman Taber said that while he had certain criticisms to direct to the report, they were not of major consequence but were from the standpoint of clarification. He stated that certain of the proposed recommendations were inappropriate because the matters which were the subject of the recommendations were already being performed by the Appropriations Committees. He objected to the second recommenda- tion relating to the return of unobligated balances to the Treasury at the end of each fiscal year and pointed out that it would involve a great deal of additional work because it would be necessary for the Congress to appropriate for thousands of audited claims allowed by the General Accounting Office. Congressman Taber suggested certain general changes which he thought should be incorporated in the report. He pointed out that the unobligated balances shown in the tables as of the end of January, 1944 were not significant because these balances were necessary to cover activities to the end of the fiscal year. He suggested that the tables be amended to show the estimated unobligated balances which will be on hand at the end of the fiscal PORDEFENSE year. BUY Congressmen Cannon indicated that in his opinion the proposed UNITED STATES report contained very serious and far-reaching indictments of the EWISCE BONDS Regraded UInclassified 126 - 2 - activities of the House and Senate Appropriations Committees and pointed out certain statements which he had in mind. Senator Byrd agreed that the statements to which Congressman Cannon objected would be eliminated. Congressman Cannon also called attention to certain general statements in the proposed report and said in his opinion the statements should be clarified and more definite recom- mendations made rather than to suggest changes by general comments. Senator Byrd said that the report had not been prepared from the standpoint of intending it to be a reflection on the Appropriations Committees. There was a further general discussion that perhaps the best approach would be to have a complete revision of the report which could be presented to the members of the Committee for their further consideration. It was suggested that the report be confined more to factual details. Senator George suggested that it might be well to wait until the end of the fiscal year before filing a report on the subject of uner- pended balances, at which time such report could reflect the factual situation as it would then exist. It was agreed that the suggestion of Senator George be adopted and the proposed report be postponed until after the end of the fiscal year. Congressmen Woodrum and Cannon left the meeting at 12:00 o'clock. There was B. further general discussion between Senators Byrd and George and Congressman Taber with respect to a suggested program for the Committee's future activities. Congressman Taber indicated that some work should be done on the War Shipping Administration and Maritime Commission setup which he claimed to be very bad and pointed out that these agencies were overstaffed with high paid personnel which were doing practically nothing from day to day. Senator Byrd indicated that the Committee should give some con- sideration to the duplication and overlapping in labor activities. He pointed out that there were 26 separate agencies now working on functions relating to labor. The Committee adjourned at 12:15 P.K. next Regraded Unclassified di Farm feb 127 TREASURY DEPARTMENT WASHINGTON UNDER March 29, 1944 MEMORANDUM FOR THE SECRETARY: Re: Possibilities for reduction in governmental expenditures The January budget shows that for the current fiscal year ending June 30, 1944, total expenditures, excluding amounts neces- sary to retire the market obligations of government corporations, are estimated at $99.3 billion. It appears, however, that expen- ditures for this year will be approximately $2.5 billion less than such estimates, of which $1.9 billion is on account of regular war activities and $.5 billion on account of war activities of the Reconstruction Finance Corporation and its subsidiary corporations. Unless expenditures for war activities continue at their present rate the budget estimates of $99.8 billion for the fiscal year 1945 may also be too high. Fiscal Year 1944 1945 (In Billions) Budget operations: General $7.5 $9.8 War activities- 88.5 88.2 Corporate operations: General -,2 - War activities- 3.5 1.8 FORDEFENSE Total $99.3 $99.8 BUY A general review of the estimates of expenditures for the UNITED STATES ENVINGS fiscal years 1944 and 1945, as shown in the 1945 Budget submitted BONDS - 128 - 2 - by the President in January, 1944, after consideration of subsequent developments, indicates that there are a number of major programs, excluding direct activities of the Army and Navy, where substantial savings in anticipated cash expenditures (as distinguished from mere reductions in current appropriations) might be effected. Savings from these programs in any magnitude would require the adoption of major changes in policy. Even though immediate cuts are made in these programs they would not be reflected in reductions in expendi- tures much before the fiscal year 1945 (beginning July 1, 1944). These programs are as follows: Estimates, 1945 (In Millions) Reconstruction Finance Corporation Defense Plant Corporation (Not stated) Maritime Commission - $4,700.0 Administrator of Civil Aeronautics ---- 121.0 Federal Security Agency Office of Education (defense training)- - 112,2 Rural Electrification Administration- -- - 57.6 Farm Security Administration 127.5 Farm Tenant loans 16.5 Agricultural programs Exportation and domestic consumption of agricultural commodities 71.8 Federal Works program Public roads 162.8 Community facilities (defense)- 140.0 Defense housing 119.8 Total $5,629.2 No examination of expenditures for the direct var activi- ties of the Army and Navy, and the related lend-lease program, or the expenditures connected with subsidy operations, has been made for the purpose of this memorandum, Regraded Unclassified 129 - 3 - Reconstruction Finance Corporation R.F.C. R.F.C. transactions Net expen- for Defense Plant Corp. ditures for all purposes Advances Repayments (In Millions) Fiscal year 1941 $725 $141.8 $.7 . # 1942 - 1,936 1,216.8 148.5 If If 1943 - 2,462 3,611.4 1,456.4 . . 1944 (Estimated) - - 3,550 (Not available) If # 1945 N - - 1,950 # # Actual - July, 1943- - 283 327.7 58.7 Aug. If - 277 247.7 67.2 Sept. If 227 254.3 40.6 Oct. a 199 207.3 80.3 Nov. # - 249 199.1 50.4 Dec. If - 199 177.9 60.4 Jan., 1944 - - 197 162.7 60.8 Feb. # 201 135.2 38.7 Defense Plant Corporation (In Millions) Commitments through February 29, 1944 - - $10,480 Commitments withdrawn and cancelled - - 1,985 Net commitments $ 8,495 Gross disbursements 6,682 Undisbursed commitments - $ 1,833 Comments It will be observed from the foregoing that the greater part of the net expenditures by the Reconstruction Finance Corporation have been accounted for by transactions in connection with the Defense Plant Corporation. Gross advances to the Defense Plant Corporation reached their peak during the period January - July, 1943, when then averaged $325 million per month. During the period December, 1943 - February, 1944, they averaged $155 million per month. Total gross advances to February 29, 1944 amounted to $6,682 million. Regraded Unclassified 130 - 4 - In addition to the outlays through Defense Plant Corporation large expenditures for plant facilities have been made from appropria- tions of the War and Navy Departments and Maritime Commission. It would appear that the need for additional facilities at this stage of the war program could be reexamined with special reference to the discontinuance of all new construction and the cur- tailment of pending projects wherever possible without jeopardizing production of vital war material. 131 - 5 - Maritime Commission Expenditures (In Millions) Fiscal year 1938 - $1.2 If M 1939 - 43.8 # # 1940 - 98.8 . If 1941 51.3 N il 1942 929.5 # # 1943 3,193.0 Estimated - 1944 - 4,500.0 # 1945 - 4,700.0 Actual - July - Sept. 1943 1,046 # Oct. - Dec. 1943 1,053 # Jan. 1944 308 # Feb. 1944 331 Expenditures for ship construction are expected to reach $4,700 million in the fiscal year 1945, compared with Budget esti- mate of $4,500 million for the current year and comparable expendi- tures of $3,193 million in 1943. The Independent Offices Appropria- tion Bill for 1945, as passed the House, includes an appropriation of $6,766 million ($10 million less than the Budget request) for the Construction Fund and contract authorizations of $5,700 million, toward which $4,665 million is included in the amount appropriated. These funds will become immediately available upon passage of the appropriation bill and the contract authorization, according to the Budget, will be practically entirely obligated before June 30, 1944. This, of course, assumes final enactment considerably in advance of June 30. The bill has reached the stage of debate in the Senate. 132 - 6 - Comments It will be noted that by the end of the present fiscal year the Maritime Commission will have spent since the beginning of the war about $8} billion for ship facilities and for the construction of ships. In addition, #4-3/4 billion are estimated to be spent in the next fiscal year. In view of the great reduction in the number of cargo ships lost as a result of enemy action, there may be some possibility of slowing down the 1945 ship construction program. The military and naval authorities probably contend that all ship construction facilities should be operated at full capacity because a large reserve of ships are needed to avoid any critical situation in the event the enemy should launch a successful campaign by sea or air in which large numbers of cargo ships may be destroyed. It would seem that substantial sums may be saved from this source without risk of adverse effect upon our military operations. A 10% reduction in projected expenditures, for example, would amount to $450 million. Regraded Unclassified 133 - 7 - Administration of Civil Aeronautics Expenditures (In Millions) Fiscal year 1938 $10.1 If # 1939 - 18.4 If II 1940 - 25.3 # # 1941 - 52.9 # Il 1942 - 127.1 M . 1943 - 222.9 Estimates - 1944 272.0 N 1945 - 126.2 The program of the Administration of Civil Aeronautics, as indicated by estimates of expenditures in the 1945 Budget, is as follows: Estimated Estimated Actual Actual 1945 1944 1943 1942 Establishment of air-navigation facilities $6.0 $14.0 $10.2 $7.9 Maintenance of air-navigation facilities 23.0 21.0 22.1 15.1 Civilian pilot training (National defense) 9.5 45.3 50.5 29.0 Development of landing areas for National defense 75.0 140.0 112.4 67.9 Development of Civil landing areas - 5.0 .5 - - Working fund from War & Navy for training courses - 45.0 19.1 - All other 7.7 6.2 8.6 7.2 Total $126.2 $272.0 $222.9 $127.1 Comments (a) Landing areas It will be noted from the foregoing table that approximately $320 millions are scheduled as expenditures on account of "development Regraded Unclassified 134 - 8 - of landing areas for national defense" during the three-year period ending on June 30, 1944. In addition, $75 million are estimated to be spent for this purpose in 1945. One of the reasons for the establishment of the program for development of landing areas was to provide landing fields for use of airplanes for emergency defense purposes in the event of attack. The development of the war indicates that the probability of direct attack on the continental United States on any large scale by enemy forces is remote. In view of this situation, the need for the continuation of this program for military purposes would seem to be unnecessary. If the program is justified from the standpoint of benefit also to com- mercial aviation, it would seem that it could be postponed until after the termination of the war. (b) Pilot training The Budget indicates that the civilian pilot training program payable from direct appropriations to the Administration of Civil Aero- nautics will be curtailed in 1945. This is because the authorization to make appropriation to Administrator of Civil Aeronautics expires in the fiscal year 1944. However, it will be noted that a large training program is carried on payable from funds transferred from the War and Navy Departments. It may be contemplated that this program will be continued in 1945 from funds to be transferred from War and Navy Departments. Since this program appears to be tied in closely with direct military operations, no attempt has been made to evaluate its necessity. Regraded Unclassified 135 - 9 - Federal Security Agency, Office of Education Expenditures (In millions) Office of National Youth Education Administration Fiscal year 1938 $26.8 $51.2 # # 1939 27.7 78.1 E M 1940 - 27.8 94.6 # II 1941 85,8 136.4 = # 1942 141.2 129.5 II . 1943 162.5 58.5 IS # 1944 (Estimated) -- 130.7 Il # 1945 . -- 1/112.2 1/ Includes $10 million under pending supplemental estimate. A breakdown of estimated expenditures contained in the 1945 Budget, including supplemental estimate and actual expenditures for 1942 and 1943, is as follows: Estimated Estimated Actual Actual 1945 1944 1943 1942 (In millions) Further endowment of colleges of agriculture and the mechanic arts - - $2.5 $2.5 $2.5 $2.5 Loans to students (national defense) - - 1s2 3.9 - Colleges for agriculture and the mechanic arts (permanent appropriation) 2.6 2.6 2,6 2.6 Miscellaneous items .5 .4 -,2 .4 Vocational education: Cooperative vocational rehabilitation (1) (1) (1) 2.7 Further development of vocational education 14.0 14.0 13.7 13.4 Promotion of vocational education (permanent appropriation) - 7.0 7.0 7.1 6.8 Other .5 .5 .5 .6 National defense: Education and training, defense workers 82.0 100.0 131.2 111.3 Visual aids for war training ---- 2.0 1.5 - - Salaries and expenses 1.1 1.1 1,2 1,0 Total $112.2 $130.7 $162.5 $141.2 (1) Now included under "Office of Administrator". Regraded Unclassified 136 - 10 - It can be seen that of the programs administered by the Office of Education, the one involving the greatest cost is that for education and training of defense workers. Expenditures for the fiscal years 1941 through 1943, under this program were as follows: 1941 - - $45.4 1942 - - 111.3 1943 - - 131.2 The training project is carried on through payments to states and other subdivisions and certain schools. A breakdown of Budget estimates for 1944 and 1945 is as follows: 1945 1944 (1) Vocational courses of less than college grade (courses supple- mentary to employment in occupations essential to the national defense, including certain pre-employment and refresher courses) - 45.0 66.0 (2) Short courses of eollege grade (designed to meet the short- age of engineers, chemists, physi- cists, and production supervisors) 25.0 19.0 (3) Vocational courses in food production and conservation, etc. (Farm machinery repaid and farm" labor training designed to give general pre-employment mechanical training and to assist in attaining food production goals) ------ 12,0 12.5 Comments The National Youth Administration reached its peak in expen- ditures in the fincal year 1941, namely, $136 million. In the fiscal year 1942 that agency shifted its program to national defense training, its expenditures amounting to $130 million. In the meantime, the Office of Education increased its expenditures under the impetus of national de- fense training from $28 million in 1939 and 1940 to $141 million in 1942. Regraded Unclassified 137 - 11 - On November 14g 1941, the Secretary of the Treasury sub- mitted to the Joint Committee on Reduction of Nonessential Federal Expenditures a number of economy suggestions, among which he included the following statement with respect to agencies engaged in vocational activities! "It would seem that the regular activities of the Civilian Conservation Corps and National Youth Administration must conflict with the more important defense program, and should be eliminated or drastically reduced. "It is suggested that all vocational training activities be consolidated in a new Bureau of Defense Training- Any overlapping functions or duplication of work could be eliminated and one comprehensive training program, integrated with the defense program, could be formulated and administered more economically than appears possible under the present organizations." Subsequently, the National Youth Administration was abolished in 1943, at which time the expenditures of the Office of Education reached their peak of $162 million, or an amount equivalent to its pre-war expenditures, plus the peak expenditures of the National Youth Administration. Estimated expenditures of the Office of Education are $102 million greater in 1944 and $85 million greater in 1945 than its pre-war program. These increases are on account of education and training of defense workers. It would appear that employment in var industries has about reached its maximum level. Under these circumstances & greater reduction in 1945 expenditures for this purpose than is anticipated in the 1945 Budget would seem possible. Regraded Unclassified - 12 - 138 Rural Electrification Administration Expenditures General R.F.C. Budget Funds (In millions) Fiscal Year 1936 & 1937- - $10.3 - If If 1938 15.2 $46.5 II # 1939 - 37.7 100.0 = If 1940 - 38.0 - # # 1941 24.2 36.0 II # 1942 9.1 54.0 If If 1943 4.0 13.5 $138.5 $250.0 Estimated - 1944 3.6 10.5 If - 1945 32.6 25.0 R.F.C. In addition to loans and expenditures authorized from appro- priated funds under the budget, the R. F. C. has been authorized from time to time to advance moneys for making rural electrification loans, as follows: Fiscal Year 1943 - - - $10,000,000 Fiscal Year 1942 - -- 100,000,000 Fiscal Year 1941 --- 100,000,000 Prior years- - - 146,500,000 $356,500,000 Practically all expenditures of the Rural Electrification Administration through the fiscal year 1943 were for loans and the purchase of property in accordance with the Rural Electrification Act of May 20, 1936. It will be noted that up to June 30, 1943, about $138.5 million had been expended from appropriated funds. During this time collections returned to the Treasury amounted to $1,167,000 of which 139 - 13 - $439,000 was on account of interest and $728,000 on account of principal. In addition to expenditures from appropriated funds $250.0 million were expended from R. F. c. funds, of which $18,400,000 has been repaid on principal, in addition to the payment of current interest due on the R. F. C. advances. Comments During the fiscal year 1943 and 1944 the Rural Electrifi- cation program was curtailed because of the limitation on the use of copper and other critical materials. There appears to be & sub- stantial increase contemplated in expenditures for 1945. The fact that the Rural Electrification Administration has operated during the past two years with average expenditures of $15.0 million per year, while at the same time its collections have amounted to more than $15.0 million per year, would seem to indicate that its program could be further suspended until after the termination of the war. Regraded Unclassified 140 - 14 - Farm Security Administration FARM TENANT ACT Farm Security Farm Tenant General R.F.C. General R.F.C. Budget Funds Budget Funds Expenditures (in millions) Fiscal year 1938 - $180.1 $ - $3.1 $ - II = 1939 - - 183.6 - 26.6 - II If 1940 - - 158.5 - 41.8 - If # 1941 - - - 62.2 111.3 27.3 29.4 If If 1942 - - 78.8 123.7 6.1 51.3 # If 1943 - - - 61.6 97.3 4.3 27.1 $724.8 $332.3 $109.2 $107.8 Estimates Fiscal year 1944 - 37.0 67.5 1.5 30.0 II # 1945 - - 28.5 97.5 1.5 15.0 1/ The Department of Agriculture Appropriation Bill, 1945, as reported by the House Appropriation Com- mittee on March 21, 1944, does not include any funds for the Farm Security Administration, since there is pending a bill to reorganize the agency. Comments It will be noted that in the six years ending June 30, 1943, the Farm Security Administration spent more than $1 billion, primarily for Rural Rehabilitation loans and grants, and during the same period about $200 million were spent for farm tenant loans. Expenditures for the current fiscal year are estimated at $105 million by the Farm Security Administration and $32 million for farm tenant loans. During the period 1938-1943 about $88 million was repaid to the Treasury on account of principal and interest on rural rehabili- tation loans and about $186 million was repaid to the R.F.C. on the principal of its advances in addition to current interest payments. Similar receipts from farm tenant loans amounted to $1 million and $12 million, respectively. Regraded I Inclassified 141 - 15 - In view of the general improvement in farm conditions and the income of farmers, it would appear that substantial our- tailment of these programs would be possible. It will be noted that the House Appropriation Committee has temporarily deferred reporting any 1945 appropriations for the Farm Security Administra- tion until the Congress acts upon a pending bill to reorganize that agency. Dearadod id 142 - 16 - Food Distribution Administration Exportation and domestic consumption of agricultural commodities, Sec. 32, Act of August 24, 1935. Permanent Appropriation, Expenditures (in millions) Total 30% of Customs Fiscal year 1937 - $35.2 $35.2 II If 1938 - 35.0 35.0 # # 1939 - 210.5 210.5 II # 1940 - 143.6 73.0 II . 1941 - 223.4 93.8 # . 1942 - 196.3 85.2 . If 1943 - 112.9 55.6 . If 1944 (Estimated) - 91.0 70.0 If . 1945 Il - 71.8 70.0 Program authorized Sec. 32 of the Act of Aug. 24, 1935 (7 U.S.C. 612c), appro- priates for each fiscal year an amount equal to 30 per centum of the gross receipts from duties collected under the customs laws during the period Jan. 1 to Dec. 31, both inclusive, preceding the begin- ning of each such fiscal year, to be used by the Secretary of Agriculture to (1) encourage the exportation of agricultural commodi- ties and products thereof by the payment of benefits in connection with the exportation thereof or of indemnities for losses incurred in connection with such exportation or by payments to producers in connection with the production of that part of any agricultural com- modity required for domestic consumption; (2) encourage the domestic consumption of such commodities or products by diverting them, by the payment of benefits or indemnities or by other means, from the normal channels of trade and commerce; and (3) reestablish farmers' purchasing power by making payments in connection with the normal production of any agricultural commodity for domestic consumption. Regraded Unclassified 143 - 17 - In addition to the permanent appropriation authorized under Sec. 32, the Congress has appropriated additional amounts for expenditure pursuant to Sec. 32. The activities under this expenditure caption, as indi- cated in the estimates of expenditures contained in the annual Budgets, are as follows: 1945 1944 1943 1942 1941 Food stamp plan, redemption pay- ments - - - $49.2 $114.2 $83.5 Purchase of agricultural commodi- ties for distribution through State welfare agencies- $10.0 $12.0 6.6 42.6 84.2 Encouragement of export of agri- cultural commodities program payments- - - 7.0 13.3 12.4 Diversion of agricultural com- modities to by products and new uses 13.3 13.6 13.2 9.1 16.0 Maintenance and operation of school milk and lunch program- - 50.0 50.0 15.3 - - Administration, etc. 3.3 3.8 6.3 6.6 6.7 Other - - - .1 1.0 - Cotton stamp plan, redemption payments - - - 3.5 20.2 Adjustments to expenditure figures- -4.8 +11.6 +15.2 +5.9 +.4 $71.8 $91.0 $112.9 $196.3 $223.4 Comments The House Appropriation Committee on March 21, 1944, in re- porting the 1945 Department of Agriculture Appropriation bill eliminated the $50 million authorization for the school milk and lunch program and also provided a direct appropriation of $40 million in lieu of diverting a like amount from the permanent annual appropriation to the soil conservation program. Regraded Unclassified 144 - 18 - The permanent annual appropriation of 30% of customs receipts estimated to be available for 1945 is $117 million. In- asmuch as the school milk and lunch program has been terminated by action of the House of Representatives, there are only about $25 million of regular expenditures scheduled in the 1945 Budget for payment from this source. It would appear that the balance of the permanent appro- priation could be placed in Budget reserves by direction of the President, thus about $90 million could be saved. Regraded Unclassified 145 - 19 - Public Roads (Highways, roads, streets, etc.) Expenditures (in millions) Public Roads Emergency Public Works Ad- Fiscal Year Administration Relief Act ministration Act Total 1932- - $185 $ - $ - $185 1933- - 165 - - 165 1934- - 255 - - 255 1935- - 307 - - 307 1936- - 231 414 - 645 1937- - 341 611 - 952 1938- 223 515 - 738 1939- 191 886 47 1,124 1940- 165 568 51 784 1941- 174 460 25 659 1942- - - 168 248 - 416 1943- - - 218 - - 218 1944 (Estimated) 247 - - 247 1945 (Estimated) 163 - - 163 The program of the Public Roads Administration as shown by the 1945 Budget, is as follows: Public Roads Administration - Regular 1945 1944 1943 1942 Federal-Aid Highway system $46.0 $43.3 $66.0 $107.1 Federal-Aid secondary or feeder roads 5.0 6.0 6.6 16.0 Elimination of grade crossings - 8.0 8.7 13.4 26.0 Mt. Vernon Memorial Highway- - .1 - - Public-land highways - .2 .3 .2 .8 $59.2 $58.4 $86.3 $150.0 Flight strips (National Defense) --- $ - $ 5.4 $4.6 $ - Strategic highways network (National Defense)- 20.0 10.0 - - Access roads (National Defense)- 58.0 100.0 90.7 10.1 Surveys and plans (National Defense) - 5.0 3.0 - - Inter-American Highway 11.5 11.6 2.7 - Working fund (defense aid) 4.4 49.0 30.8 - Other- 4.7 9.2 2.9 7.0 $103.6 $188.2 $131.7 $18.1 Total $162.8 $246.6 $218.0 $168.1 Regraded Unclassified 146 - 20 - Comments It will be noted that while the regular program has been substantially curtailed from the pre-war (fiscal year 1942) level, expenditures for 1943 and 1944 have been higher than those for 1942 because of the roads being constructed for National defense pur- poses. Even the 1945 estimates about equal expenditures for 1942. The net curtailment in expenditures for highways, roads, streets, etc. since the beginning of the war, has been brought about through the discontinuance of the Work Projects Administration. 147 - 21 - War Housing and War Public Works (Community Facilities) Community War Housing Facilities (millions) Expenditures Fiscal year 1941 - 42.0 - # # 1942 - 301.6 34.1 II # 1943 - 635.9 108.5 Estimated Expenditures Fiscal year 1944 539.6 130.0 II If 1945 - - 119.8 140.0 1/ Reflects expenditures from supplemental appro- priations amounting to $7.5 million for War Housing and $127.5 million for Community Facili- ties, as passed by the House. Total authorizations amount to $1,500 million for war housing, excluding temporary shelters, and $520 million for community facili- ties. Taking into account supplemental appropriations now pending, unappropriated authorizations are $142 million and $25 million, re- spectively. Comments War Housing The House Appropriations Committee, in considering the First Deficiency Appropriation Bill, 1944 (Reported March 7, 1944) pointed out that the total war housing program has approximated $6 billion, of which $4 billion has been through private sources and $2 billion by Government funds. The Committee stated that the pro- graming and assignment of housing has passed the peak, this being borne out by the expenditure estimates shown above. The necessity remains of providing for shifting conditions in connection with man- power and production changes and the necessities arising in connec- tion with areas around silitary and naval stations. 148 - 22 - The Budget does not include & request for new appropria- tions for the fiscal year 1945. Community Facilities These facilities consist of schools, child-care centers, hospitals, sewage systems, roads and streets, etc., necessary to prevent impairment of community operations where there has been a large influx of war workers. The program of construction projects is now on a diminishing scale while the necessity for maintenance and operation of projects is increasing. No new appropriations are requested in the Budget for the fiscal year 1945. TREASURY DEPARTMENT OFFICE OF THE UNDER SECRETARY To The 4% soldier deposit fund is only for enlisted men. The amount increased from $28,897,000 in July 1943 to $63,481,000 in March 1944. The number of accounts increased from 157,626 on July 1, 1943 to 266,818 on March 1, B44. These deposits carry restrictions as to withdrawal. They cannot be withdrawn except in emergency upon approval of commanding officer. Otherwise they must be left on deposit until separation from the service. 150 March 29, 1944 My dear Governor Stainback: I wish to take this opportunity to congratulate the people of Hawaii on the first anniversary of the organization of their "Work to Win" Committee. Re- ports have reached me which indicate that this Commit- tee has been of great benefit in the War Finance Pro- gram. This work has been 80 ably carried on in Hawaii that all quotas assigned have been oversubscribed in good measure. I hope that the success which has attended your efforts will encourage a vigorous contin- uation of this great project. Sincerely yours, (Signed) H. Morgenthon, Jr. The Honorable Ingram M. Stainback, Governor of Hawaii. RWC:EN:deb 151 March 29, 1944 Dear Dr. Kingt I have just learned that you are letting us have Peter Odegard to handle 8 very important assignment. When I discussed this with Peter, I volunteered to write you about it but he requested that I do nothing until after he had had an opportunity to talk to you. You know, of course, how much fine work he has done for us, and I feel that you and all your associates at the college can be proud of the contribution that he has made to our wartime finencing program. The task that he is now undertaking is one that can only be done adequately by him, and we at the Treasury are most appreciative of your gracious willing- ness to help us in our work. I understand that we are to have him only until September 1st. With all good wishes, I am, Sincerely yours, (Rigned) H. Morgenthan, as Dr. Stanley King, President, Amherst College, Springfield, Massachusetts. Amherst TRG:hsh Regraded Unclassified 152 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE TO Miss Chauncey March 29, 1944 FROM Kay Alger Mr. Paul thought the Secretary might like to read the letter from Senator George. Kay alger Attachment SA., CHAIRMAN 1 - MAST ROBERT M. m., wis. ARTHUR H. VANDEMERS. MICH. 153 - COMMITT. TLF JAMES 4. DAVIE, PA. I . BAILEY. HENRY CABOT Leose, a., MADE. CHAMP JOHN A. BANAMER. COMM. party FLOOD BYRD ROBERT A. TAFT. - GENRY. JOHN THOMAS. IDAHO United States Senate 4. SUFFET. - BUTLER, NEW. - c. JOHNSON, EUGENE p. MILLION, COLD. COMMITTEE ON FINANCE Γ I I I on w. LICAR LL CHRISTIL a. KENNEDY, CLERK March 27, 1944 Honorable Randolph Paul United States Treasury Washington, D. C. Dear Mr. Paul: I sincerely appreciate your letter of March 25. The kindness and courtesy you have shown me since your connection with the Treasury and your patience and willingness to work with the Committee have made our association most pleasant. On some questions of policy we have differed, but I question whether our differences have been 80 great upon the underlying and basic theory of taxation as disagree- ment over some particular recommendation might indicate. I have always regarded you as honorable and fair and I wish for you continued happiness and success. Sincerely yours, Regraded Unclassified 154 March 29, 1944 MEMORANDUM FOR THE SECRETARY From: Mr. Blough Subject: Taxes. (For your information; no action required) 1. The Ways and Means Committee met from 2 p.m. to 4 p.m. today. The Committee discussed methods of revising the dates for filing and of amending declar- ations of estimated income tax but reached no conclu- sions. 2. The Ways and Means Committee is to meet again at 10:30 tomorrow (Thursday) to resume the discussion of declarations and to consider the problem of treating the income of dependents. These are the two remaining undecided points in the simplification plans under con- sideration by the Committee. 3. On March 27 the House passed H. R. 3592, the so-called O'Hara Bill. This bill has the effect of restricting state taxation of a Federal employee to taxation by the state of "domicile." Thus an employee domiciled in Ohio, living in Maryland, and working in the District of Columbia could be taxed only by Ohio, which at the present time has no income tax. The Treasury reported in opposition to this bill. RB Regraded Unclassified TREASURY DEPARTMENT 154-A INTER OFFICE COMMUNICATION DATE March 29, 1944 TO Mr. Thompson FROM Mrs. Doyle Subject: Visit to the Bureau of the Public Debt, Chicago, Illinois, March 21 to 25. 1944. I. General Information A. Number of Employees: 7224 people in all, of which 6651 are women and 1084 are negroes B. Number of Buildings: 1. Merchandise Mart The main office of the Bureau of the Public Debt is on the 6th floor of the Merchandise Mart. The Bureau's activities are housed on 8 separate floors of the building. 2. Furniture Mart The Bureau of the Public Debt occupies space on 3 floors and will soon occupy space on the first floor. 3. Nash Building This building houses the printed material and mailing lists for the War Bond Drives. It is constructed with ramps and delivery trucks haul all material to each of the 3 floors by use of the ramps. At present about 300 people are employed there, but during War Bond Drives several hundred more are added. This building has no elevator and the steps are steep. A request for an elevator is in, I understand. C. Volume of Work: The volume of work is immense. The file is, according to Mr. Sloan, the largest in the world. 300,000,000 cards, flowing at the rate of 1,000,000 a day, was the record of 1943. The classification, sorting, filing, microfilming, of all records of War Bonds purchased. Series 1, 1. and G, the ledger books thereon the checking of Var Savings Stamps, the disposal under constant official supervision of cancelled stamps and bonds, represent a flow of work that has to be seen to be believed. The Fourth Var Bond Drive sales have not yet reached the Chicago office, but visa they arrive. the work will be substantially increased. The Jash Building handled 95,000,000 pieces of literature far- Ing the Third 1st lest Drive, and continuessly existains the on- protensive milling lists. w. Devez, the sanger of the tome - resurimble yes of arganismtion, Regraded Unclassified - 2 - 154 B 11. Administration The fact that the functions of the Public Debt are carried on in three separate buildings, considerably apart from each other, and on floors and parts of floors in broken sequence, make many problems of administra- tion. A large force of guards is necessary to control entrance to the various offices. If everything could be housed in one building, many administrative problems would be solved. More space is badly needed in the Merchandise Mart and condemnation proceedings will doubtless obtain it. This will necessitate the moving of several tenants and they, naturally, will not like it. Other Govern- ment Departments, including the Interior Department, are housed in the Merchandise Mart. They have generous space for their rather limited activities and the condemnation proceedings may bring out that fact. Mr. Sloan is personally very active in visiting all the buildings. On my trip through with him I saw that he was thoroughly conversant with even minor details of administration. III. Working Conditions A, Light and Air Partitions in the rooms of all the buildings have been torn out and work is done in buge rooms. Because these were display rooms there are large windows both on the exterior walls and on the corridor sides. The walls are all being painted B. pale green. The executive office on each floor is in the back thus giving to the workers the maximum of light and air. The ceiling lights are numerous, The windows are opened 5 minutes at intervals for ventilation. This procedure unfortunately cannot be always followed in the Furniture Mart as the wind from the lake is too strong. There is very little air-conditioning. The program of making over these floors into effective working space has been a difficult one but the resulting work rooms are excellent. B. Facilities for Eating 1, Merchandise Mart This building has canteens on the 4th, 7th and 17th floors There are also located in the building 4 public cafeterias to which the Treasury employees may go. These canteens serve coffee, soft drinks, sandwiches and such. They have very limited space at present, but when the additional space is acquired on the 4th or 7th floors, tables will be put is and employees can have the opportunity to relax at seals. 2. Aniton Mart - cadeteria will be built in the additional space 18 the in flast. At present they taxe only canters with tables, Regraded Unclassified - 3 - 154-C 3. Nash Building Hot food is brought into the building in trucks. There are several restaurants nearby so canteen facilities are not needed, C. Rooms for Women Employees There are an adequate number of lavatories for women employees. One woman is employed to make the rounds to see if they are clean and to watch for problems connected with smoking. The smoking is a real problem. No smoking is permitted anywhere in the three buildings because of the nature of the work: handling so many valuable records. Smoking is done, therefore, in the lavatories and there is a great amount of it. Mr. Sloan has a definite program planned to meet this problem. As he gets new space he plans to open up small recreation rooms for women smokers. This will not only provide relaxation but will curb the present practice where rest rooms are really smoking rooms. Until he can get such a program in operation he would like to have a couple of women guards who could police the rest rooms to curb careless smoking. D. Emergency Rooms and Nursing Service 1. Emergency Rooms are located in each building. The nurses are employed by the Bureau of the Public Debt, Nurses are on duty to cover all shifts. The rooms are good, and privacy for treatment is afforded through use of screens. There is no doctar That patients are sent to a Civil Service doctor, and in cases of emergency, to a doctor who has his office in the Furniture Mart. I 2. Nursery Program Miss Anderwon, the chief nurse, 1a a progressive person, She has one visiting nurse who visits homes and advises the employee on any home condition that should be corrected. In one section a serious bed-bug situation was controlled by two measures. First, the room was fumigated by experts in that work, and second, after this funigation each ea- ployee had to be examined before he or she could return to work. Each supervisor led the line of her employees. 4 or 5 were found to be carriers of the pests and these were instructed in proper procedure to get rid of them. Their homes were visited, and they were instructed in how to rid their homes of the pests. Regraded Unclassified - 14 154 - D 3, Items under consideration by Mr. Bloan further to improve working conditions and relieve tension from monotonous work 1. Calisthenics once & day for 5 minutes in large work rooms when windows are open. 2. Trial use for 90 days of piped in music in the large work rooms 3. Radios in canteens. IV. Conference with Mr. Willard Scott, Chief of Personnel and the Employee Relations Section À, Recruitment and Placement Section 1. A Civil Service Commission employee works on the premises to process appointments. 2. The new employees are met at the train and taken to their living quarters. The Bureau of the Public Debt has several rooming houses and 5 hotel rooms are kept for Treasury recruits, 3. An "orientation course" of a day or a day and a half is given each employee by this Section. This includes: First Day 1. Induction 2. Lunch 3. History of the Treasury 4. Safety Film or War Effort Film 5. Blue Book entitled "Information for Employees" is given out. (Supply now exhausted. They would like a new edition) Also city maps and city recreational activities. Second Day 1. Review of preceding day including & quiz on the History of the Treasury. 2. Explanation of paydays, Credit Union, etc. 3. Request for suggestions on how the orien- tation course can be improved. 4. Placement by Mr. Chrissie. 4. After 60 days the new employee returns to the Recruitment Section, for advice or to make suggestions. B. In-Service Training 1. Classes on typing are given for 3 hours E. day. These classes will shortly be reduced to 1 hour a day. 2, A special pamphlet has been prepared for employees of the Stub Files. A copy is attached. This was prepared to impress these file employees with the importance of their work, Although their work is modotonous, it is of course very important. 3. Special Training Course on Letter Writing: Mr. Earle A. Buckley, a professional specialist on letter writing, comes ,tobhicago from Philadelphia during one week sequimonth. on He gives & course in letter writing from Tuesday through Friday to 50 especially selected girls. Mt. Sloan Instituted this course because he thinks that the importance of good letters cannot be over-emphasized in the business of retaining all the customers for Var Bonds. Regraded Unclassified - 5 - 154 - E C. Employee Relations Section This is composed of an Acting Chief, Mrs. Rose, a Mrs. Fugitt, Mr. Landvoight and a Negro, Mrs. Grant. 1. All exit interviews are handled by the Employee Relations Section. 2. Mrs. Grant handles cases as they come to her, not just Negro cases. 3. They work closely with the nurses. 4. They have not yet been able to do much about the care of children of working mothers. D. Absenteeism à special committee of 3 section managers is working with Mr. Scott on the problems of absentees. The rate is about 12%. E. Personnel Conferences Mr. Scott holds regular staff conferences with the personnel people in each section. V. Special Activities I talked with Miss Epps, Administrative Assistant to Mr. Sloan. 1, Red Cross Miss Epps works with the Red Cross Unit of the Merchandise Mart. She sends to them Treasury employees who wish to do knitting, sewing, etc. She also arranges for blood donors. 2. Posters on Absenteeism Miss Epps is working with a young employee who formerly worked with Walt Disney in the hope of obtaining some good posters for display. 3. Miss Epps organized Christmas V-mail letters to all former employees who are now in the service. 400 were sent and the answers reflect the appreciation of the men in the service. VI. Special Situations 1. Union (0. I. O.) a. The present leader within the Bureau of the Public Debt is B. colored man named Anglin. The officials feel he has poor judgment. Although no figures are given out, officials estimate the number in the Union to be 150. b. Mr. Elkine, Chicago leader of the C. I. 0. is, in the opinion of the officials, fair. He asked to have the C. I. 0. meetings within the building, but the request was refused on "Treasury policy". c, At present there are 20 unusual problems with the Union. Regraded Unclassified - 6 - 154-F 2. Negro Situation At the present time there is no problem. Mr. Sloan confers often with Negro leaders of his own personal acquaintance. VII. General Conclusion Throughout this report I have indicated the plans that Mr. Sloan discussed with me for the betterment of employees under his direction. He is aware of the problems and has progressive, well-thought out plans to meet them in every case. Mr. Sloan, in my opinion, has done a note-worthy job in the face of many difficulties since he arrived in Chicago in July, 1943. I am confident that with his ingenuity, drive and genuine interest in the well-being of all his fellow workers, he will carry to a successful conclusion the program he has planned. Regraded Unclassified 154- 154-Gle VICTORY TREASURY department BUY - FISCAL SERVICE CHICAGO, ILL. BUREAU OF THE PUBLIC DEBT - of LOANS AND CURRENCY CHICAGO BARNCH MERCHANDISE MART February, 1944 TIME REPLY REFER To To Employees in Stub Assignment Subunit: Subject: Filing and Indexing The purpose of this manual is to explain briefly the principles of filing and indexing as applying to the particular filing and searching problems in our Stub Files. For the year 1943, we estimate there will be about 300 million cards (stubs) which must be arranged in strictly alphabetic order and maintained that way at all times for the convenience of those who must locate the records of any War Bond purchases. This is a big job. It is the largest card file in existence. No group of people has ever before had the tremendous responsibility of creating such an enormous file, or maintaining one representing such valuable data, involving the investments of nearly every family in the United States. With so many hundreds of people filing and searching in this file, we must all have the same rules to follow. The principles of filing must be the same in every part of the file. There must be no exceptions. It is your personal responsibility to go over this explanation carefully and understand each phase of filing and indexing thoroughly so that you can cooperate to the fullest extent of your ability to make our Stub File a perfect file, as well as the largest one in the world. Sincerely yours. HJDean Assistant Manager Registration and Retirement Section Regraded Unclassified Indexing Series E Bond Stub Files Indexing. What it is and what it does. Surname Guides and red tab Back Guides. indexing consists of dividers or markers, correctly For every surname (family name) having an inco called index guides. These index guides divide the of stubs at the end of the year, we want to N cards or stubs into small groups, to make it easy to a Surname Guide to mark where the first care of find any card without searching through a whole drawer name is, and a red tab Back Guide to show where and to file cards accurately in the least time. last card of that name is. The special indexing designed for our Stub File has Surname Guides for all common names are provided been made as simple as possible- it is easy to set up are ready to be filed. We shall typewrite head in the files and it is easy to understand, so stub for additional names later, and thus we shall have index guide for every name that needs Indexing. assignment clerks should have little trouble in filing accurately and rapidly. and the searchers will be able It is quite important that for every Surname Call there must be a red tab Back Guide, filed back of to find stubs quickly. last stub of that name. A red-tabbed Back Guide Surname Guide Subdividing stubs by first names. Indexing the Adams stubs. Surnames which will eventually occupy one or two file drawers are provided with sets of 30-division made-to- On pages 4 and 5 is & chart showing how large order First Name index guides as illustrated on the like Adams are indexed. Study that chart there opposite page. Some of the guides are ally first and understand the purpose of each guiden If - initials, some are for full first names, and other. are this, you .111 discover that filing and = A 3 : in I MM) È E for the first two If three letters of First wws. 5 = !!! $ we. - these guiden are filed will notice that the stubs are quite manly subdivided. and reference to any The care 20010 Priciples of intexing - : 1 ! = COMMON first - is quite resid and en. ve by only 10 guidex of as fally - - 30-division First Name Index William Abbe W Abbe T Abbe S Abbe Robert Abbe R Abbe P Abbe N Abbe Mary Abbe M Abbe U Abbe L Abbe Jos Abbe John Abbe , Abbe I Abbe He Abbe ENAD UF P H Abbe Ger Abbe G Abbe F Abbe Er Abbe El Abbe E Abbe D Abbe CI Abbe Charles Abbe c Abbe R Abbe 5 Abbe Abbe This is typical of indexing for a name which will occupy one or two file drawers when all stubs for the year are filed Regraded Unclassifie How the Adams Stubs Are Indexed Read chart from bottom Zi Adams This page illustrates all Zell Adams Z phases of indexing and is Adams X-Y typical of all indexing of Adams surnames which will occupy 100 file drawers when all the stubs for the year have been filed. John Will Adams Read chart from bottom. John Wa Adams S Towns L Towns John William Adams, etc. D Towns John W Adams John Walter Adams, John Ward Adams John W. Adams John A Adams S Towns Beginning of John A. Adams 1 Towns FROM SALINA. SAN FRANCISCO, etc. D Towns FROM LANCASTER, LOS ANGELES, etc John Adams FROM DANVILLE, DENVER, etc. John Adams, no middle initial Bart Adams Barbara J Adams Barbara A End of Barbara Adams Adams Barbara Adams Barbara A. Adams B Adams Barbara Adams, no middle initial Av BEGINNING OF FULL FIRST NAMES SUCH AS BAB, etc. Adams B. Adams, with no full first name Anstin Avery Adams, Avis Adams, etc. Regraded Unclassifi Watch Out For These Discrepancies THE FOLLOWING DISCREPANCIES MUST BE CLEARED BEFORE STUBS ARE INSERTED is THE FILES: 1. REGISTRATION IN ANY FORM OTHER THAN IN THE NAME OF AN INDIVIDUAL. IN THE NAMES OF TWO PERSONS AS CO-OWNERS, IN 11. REGISTRATION IN THE HERES OF TWO PERSONS WHERE ONLY ONE THE NAME OF AN INDIVIDUAL PAYABLE ON DEATH TO A SINGLE SURNAME IS GIVEN: FOR INSTANCE, 'MI, JOHN J. OR NRS. EMMA M. SMITH". BENEFICIARY, OR IN THE NAME OF AN INDIVIDUAL PAYABLE ON DEATH TO THE TREASURER OF THE UNITED STATES. 12. REGISTRATION IN THE NAMES OF MORE THAN TWO PERSONS. OR 2. REGISTRATION IN WHICH ANYTHING OTHER THAN A NATURAL REGISTRATION FROM WHICH IT IS IMPOSSIBLE TO DETERMINE PERSON IS DESIGNATED AS BENEFICIARY OR CO-OWNER: FOR WHETHER INTENDED. THE NAMES or MORE THAN TWO PERSONS WERE INSTANCE. "SAMUEL C. SMITH. PAYABLE ON DEATH TO PRINCETON UNIVERSITY", (EXCEPT THAT REGISTRATION IN THE FORM "A, 13. REGISTRATION IN THE NAMES OF TWO INDIVIDUALS WHERE THE PAYABLE ON DEATH TO THE TREASURER OF THE UNITED STATES* INTEREST OF EITHER IS IN DOUBT: FOR INSTANCE. *MISS IS SATISFACTORY). EUNICE M. SMITH OR SURVIVOR, MISS EDWA M. JONES". OR "MISS MARIA J. WRIGHT OR MRS. ALICE G. WRIGHT, IF 3. CITY OR STATE OMITTED FROM THE ADDRESS, (EXCEPT THAT THE SURVIVOR", OR "JOHN J. JONES OR MISS MARY M. JONES, STATE "NEW YORK MAY BE OMITTED IF THE CITY GIVEN is BENEFICIARY". "NEW YORK CITY"). 14. REGISTRATION OF SEVERAL BONDS IN SLIGHTLY DIFFERENT NAMES, OR WITH AN APPARENT MISSPELLING IN ONE NAME OR 4. (a) ADDRESS OF A SOLE OWNER, EITHER OR BOTH CO-OWNERS. A DIFFERENCE BETWEEN MIDDLE INITIALS, BUT WHERE, FROM OR BENEFICIARY GIVEN AS AN ENEMY COUNTRY (BULGARIA, THE NAME AND ADDRESS, IT APPEARS THAT THE BONDS MAY GERMANY, HUNGARY, ITALY, JAPAN, OR RUMANIA): BELONG TO THE SAME PERSON: FOR INSTANCE, *MISS ALYCE (b) ADDRESS OF SOLE OWNER OR BOTH CO-OWNERS GIVEN AS C. SMITH. 10 SECOND STREET, ATHENS, OHIO" AND MISS OUTSIDE THE UNITED STATES. ITS TERRITORIES AND ALICE D. SMITH. 10 SECOND STREET, ATHENS, OHIO". POSSESSIONS, OR THE CANAL ZONE (EXCEPT THAT AN "APO" 15. REGISTRATION IN THE NAME OF A MARRIED WOMAN WHERE HER (ARMY POST OFFICE) ADDRESS is ACCEPTABLE FOR MEMBERS OWN GIVEN NAME IS NOT USED: FOR INSTANCE. "MRS. JOHN OF THE ARMED FORCES OF THE UNITED STATES): J. SMITH" OR "MR. AND MRS. JOHN J. SMITH". STUBS IN- (c) ADDRESS OF À SOLE OWNER OR OF BOTH CO-OWNERS GIVEN SCRIBED. FOR EXAMPLE, *MR. JOHN H. SMITH OR MRS. JOHN AS THE PHILIPPINE ISLANDS, IF THE BONDS WERE ISSUED H. SMITH FOR BONDS ISSUED BY THE WAR DEPARTMENT, THE ON OR AFTER JUNE 17, 1943. NAVY DEPARTMENT. OR THE DIVISION OF LOANS AND CURRENCY SHOULD NOT BE QUESTIONED. 5. ISSUE DATE INCOMPLETE. INCORRECT. OMITTED, OR ALTERED. 16. STUBS NOT MARKED AS HAVING BEEN FILMED. 6. DATING STAMP OMITTED. INCOMPLETE. ILLEGIBLE. OR OF MONTH 17. DUMMY STUBS WITHOUT NOTATIONS THAT THEY ARE REPLACEMENTS EARLIER THAN THE ISSUE DATE. FOR PAPER STUBS MUST BE EXTRACTED IN ORDER THAT THE ORIGINALS MAY BE OBTAINED. (PINK STUBS. WHICH ARE 7. ERASURES OR ALTERATIONS IN THE INSCRIPTION. (A STRIKE- CERTIFIED COPIES, SHOULD BE TREATED AS ORIGINAL STUBS.) OVER IN THE MIDDLE INITIAL IS NOT QUESTIGHED.) 18. STUBS WHICH BEAR A MARGINAL NOTATION CORRECTING A NAME 8. INSCRIPTION IN LEAD PENCIL. IN THE INSCRIPTION SHOULD BE FILED IN ACCORDANCE WITH THE ORIGINAL INSCRIPTION, NOT IN ACCORDANCE WITH THE 9. DESIGNATION OF A PERSON AS "ATTORNEY" OR "AGENT" FOR NAME IN THE MARGINAL NOTATION. UNLESS THE MARGINAL ANOTHER, FOR INSTANCE. *MR. JOHN J. JONES. PAYABLE TO NOTATION STATES SPECIFICALLY THAT THE BOND IS INSCRIBED MR. HENRY SMITH, ATTORNEY-IN-FACT" OR *MR. JOHN J. JONES, AS STATED IN THE MARGINAL NOTATION. ALL DISCREPANCIES AGENT. (ATTORNEY) FOR MISS MAY SMITH". BETWEEN MARGINAL NOTATIONS AND ORIGINAL INSCRIPTIONS 10. STUBS IN THE NAME OF AN INDIVIDUAL FOLLOWED BY THE WORDS. SHOULD BE REFERRED TO YOUR GROUP SUPERVISOR. "A MINOR (OR AN INCOMPETENT) UNDER LEGAL GUARDIANSHIP". 19. REGISTRATION IN CO-OWNERSHIP FORM WHERE THE CONJUNCTION WHEN THERE ARE OTHER STUBS FOR THE SAME PERSON WITHOUT "AND" APPEARS, UNLESS THE TOTAL AMOUNT REPRESENTED BY THESE WORDS. THE STUBS is LESS THAN $100. OUES. ANS. QUES. ANS. QUES. ANS. QUES- 195. Regraded Inclassified Albert W Adams End of Albert Adams Albert S Adams Albert N Adams Albert L Adams Albert J Adams Albert G Adams Albert J. Adams Albert F Adams Albert E Adams Albert A Adams Albert A. Adams 1 Towns Albert Adams (no middle initiall FROM Albert Adams LANCASTER. PA., LOS ANGELES. eld. AI Adams Beginning of Albert Adams, BITH - middle initial or middle name Agnes M Adams End of Agnes Adams Agnes A Adams Agnes Adams Ado Adams Beginning of Agnes Adams Ade Adams Adolph, etc. Add Adams Adele, Adelaide, Adeline, att. Add, Adda, Addie. Addison, eit, Ada Adams End of Ada, Beginning of names SUCH M Abr Adams Ada Adams Adaline, Adams, all. Ab Adams Abraham Adams, Abram Adams Ab Adams, Abbie Adams, etc. M. Adams End of FIRST INITIAL "A" Adams and beginning of Aaron Adams Adams A. M. Adams to A. 2. Adams A. Adams to A. L. Adams Read chart up Indexing is to assist those filing and searching. Keep your filing and indexing as nearly perfect as possible. Regraded Unclassified General Filing Rules 1. All aterial should be arranged is signabetic order, sequence of letters seing naintained to the last letter, 1. Surnames word. joined by & hyphes shall be regarded as one EXAMPLE: ABBOT, Henry EXAMPLE: ABBOTT, Arthur John Higgins-Smithrile as Higginssmith, John ABOTT, Alice ADAMS, Edward Au-Pah-Sho-Kah John Higgins Smith # # Smith, John Higgins ", " Aupahshokah ADAMSON, Benjamin ALLAN, Frank 6. Indian Names. Indian names shall be filed as follows: ALLEN, F. Albert ALLERT, Elizabeth (a) when the name is composed of a given first name and ANDREWS, Samuel an Indian last name, file under the first letter of ATWOOD, Catherine the last or Indian part of name, even though the Indian name be composed of several words. 2. Proper names should be filed by the surname first, then EXAMPLE: by the given name or initial. Rain In the Face, John EXAMPLE: Red Crow, Annie Marie BROWN, James BROWN, John Wolf Bear, Maggie BROWNLEE, John BROWNLEE, Katle (b) when the entire Indian name is descriptive, and it is impossible to tell the family name, file from the BURTON, Lester beginning. BYERS, Anna BYERS, Charles EXAMPLE: Nas Ta bega 3. An initial should precede a name beginning with that Rain in the face letter. Reed that Bends EXAMPLE: Sitting Bull CARTER, H. CARTER, H. A. (c) When the Indian name is composed of an Indian first CARTER, H. J. name and a last name which is a common surname, CARTER, H. John file under the surname. CARTER, H. S. CARTER, H. Stanley CARTER, H. W. (d) when the Indian name is broken by a comma, file from CARTER, H. William the beginning. CARTER, Harry EXAMPLE: CARTER, Harry C. Bear Going up Hill, Sallie CARTER, Henry Quast Quah Me, Joseph Roubidoux CARTER, Henry J. Wa Ko the Quah, Josephine Masquat CARTER, Henry Jack CARTER, Henry John 7. (a) The alphabetic arrangement is to be followed for CARTER, Horace names beginning with MBC. This means that names CARTER, Horace A. beginning with the prefix "Mac" are to be filed in CARTER, Horace Albert the letter "M". CARTER, Hugh EXAMPLE: 4. Given names or surnames spelled as two words are treated Maar as one word. This covers such prefixes as "La," "Le," Mabb "De," "ter," "Van," "Von," and "von der". MacBride EXAMPLE: Madden de Puyster ... file as Depuyster Di Bianco " " Dibianco (b) All surnames beginning with are to be filed Du Pont " " Dupont separately from all other surnames beginning with Le Blanc " n Leblanc "K". the "Mc's" to follow all the other "M's". Le Roy " If Leroy L'Hommediu " " Lhommedlu (c) *M apostrophe" (M*) is to be considered as ME and Van der Au " " Vanderau filed accordingly. Von Allen If " Vonallen EXAMPLE: ter Muelen " M'Gregor file as McGregor el Termuelen 7 Regraded Unclassified General Filing Rules #. The prefixes and "- when used an other abbreviated names or nicknames should be filed part of given rents. middle - or naties of cities only as spelled. are filed exactly as spelled. EXAMPLE: EXAMPLE: Ed file as Ed JONES, Malcolm Edw " " Edw JONES, McArthur AI " " A1 JONES, McBride Chris " " Chris JONES, McKinley Will " " Will JONES, Meredith Abe " " Abe JONES, M'Gregor Bob " = - Bob Dick " " Dick 9. when one name occurs with different addresses, alpha- betic arrangement according to towns is maintained, 11. Senior and Junior. "Jr." and "Sr." shall be disregarded the state being considered only when there is a in all cases except when the names and addresses are duplication of town names. identical: then "Jr." shall precede "Sr." EXAMPLE: John L. Brown, Adams, Mass. When either *Junior* or "senior" represents a given or a surname, it shall be filed as a name. John L. Brown, Bridgeport, Conn. EXAMPLE: John L. Brown, Chicago, 111. John L. Brown, Springfield, ill. George Junior John L. Brown, Springfield, Ohio Frank, Senior Junior Walters Compound geographic names are considered as two words. Senior Walters EXAMPLE: Miss and Mrs. "Miss" and "Mrs." shall be disregarded in John L. Smith, New Bedford all cases except when the names and addresses are iden- John L. Smith, New London tical; then "Miss" shall precede "Mrs." John L. Smith, New Troy EXAMPLE: John L. Smith, New York Miss Blanche Hale, Harlan, Ind. John L. Smith, Newark Mrs. Blanche Hale, Harlan, Ind. John L. Smith, Newberne John L. Smith, Newport 12. (a) Foreign names should be filed first by the last John L. Smith, Newton name, in alphabetic order. EXAMPLE: 10. Abbreviations which can represent but one word are Cheang Wing Shek file as Shek, Cheang Wing treated as though spelled in full. Chee Kee Fat " " Fat, Chee Kee EXAMPLE: Cheen Kyung Mar " If Mar, Cheen Kyung Wm file as William Chew Juing Shee " Jno " " " Shee, Chee Jung ... John " " Hernandos, Fernandez II Fernandez, Hernandos Jos ... Joseph Chas " " Charles (b) Also follow this rule in filing religious names St or Ste " n Saint or Sainte when the secular name is not given. N. Y. " If New York EXAMPLE: Heavenly Joy file as Joy, Heavenly Father Bernard " .... If Bernard, Father QUES. ANS. QUES. ANS. QUES. ANS. QUES. ANS. THIS 300% is THE PROPERTY OF SUPERVISOR Regraded Unclassified - STANDARD FORM NO. 44 155 Office Memorandum UNITED STATES GOVERNMENT DATE Mar 29,1944 TO : Secretary Henry Morgenthan Ja FROM : Osear Cox SUBJECT: On second thought, I thuck your first thought of not using a memo is a good one. Oral presentation doubtless be for better And a written with your force and knowledge- - would presentation at this time might detract. osc 156 MAR 29 1944 My dear Mr. Secretary: This will acknowledge your note of March 22, 1944 enclosing copies of communications dealing with the proposed sale of a stock of tea in the possession of the Italian Legation at Lisben. The procedure established in these cables wherety Italian assets in neutral countries may be disposed of and proceeds used only with the approval of the Allied Control Commission is agreeable to this Department. Very truly yours, (Higned) H. Morgenthau, Jr. Secretary of the Treasury The Honorable, The Secretary of State. -3-27-44 Regraded Inclassified 1 nat DEPARTMENT OF STATE WASHINGTON reply re March 22, 1944 The Secretary of State presents his compliments to the Honorable the Secretary of the Treasury and encloses for the information of the Division of Monetary Research copies of several communications dealing with the proposed sale of a stock of tea in the possession of the Italian Legation at Lisbon. This matter has been the subject of discussion between Mr. Taylor of the Division of Monetary Research and an officer of the Department. Enclosures: 1. Paraphrase of telegram from Lisbon, February 4, 1944. 2. Copy of telegram from London, February 21, 1944. 3. Paraphrase of telegram to Algiers, March 4, 1944. 4. Paraphrase of telegram to Lisbon, March 4, 1944. of Regraded Unclassified PARAPHRASE OF TELEGRAM RECEIVED FROM: AMLEGATION, Lisbon. TO: Secretary of State, Washington. DATED: February 4, 1944, 5:13 p.m. NUMBER: 332 The following telegram is sent to Washington and repeated to London as the Legation's 53. Approval has been requested by the Legation of Italy here of the following proposal which it has under consideration. The Legation has a stock of tea which it wishes to sell to approved buyers in Switzer- land or Tangier. The funds derived from the sale would be used to buy blankets manufactured in this country, to be shipped to liberated Italian territory for relief purposes. Only a small part of the re- quired quantity of blankets could be purchased on the basis of the escudos which would be yielded at the best price offered thus far. The matter V:S con- sidered by the Anglo-American Economic Committee yesterday which did not believe that the transaction in itself would interfere with our own purchase arrangements here. However, the Committee decided that Washington and London should be asked to de- aide the polloy question of permitting the Italians to stilize Regraded Unclassified -2- Bilize the proceeds of the sale of Italian assets abread for purchases for their own purposes. It would be appreciated if the Legation could be fur- nished the Department's views regarding this as- peet of the proposal. NORWEB LA(JJR:eph Regraded Inclassified 160 PLAIN London Dated February 21, 1944 Rec'd 4:42 p.m. tary of State, Washington: 1444, Twenty-First. CONFIDENTIAL. FOR LIMITED DISTRIBUTION ONLY. FOR DEPARTMENT AND FEA The following stetement represents MEW'S viewe uing male by Italiane of assets they may have abroad purchases for their own account reised by Lisbon in ram 332 to Department, February 4: "The general position 1° that RO long 8° H M G S G continue to share equally any necessary expenses the maintenance of Itelian interests, Italien assets nly be sold with our coneent and the proceeds must ed 88 we direct to the maintenence of such interests uld otherwise have to be maintained pt our expense. I think covers the aple of the ter, #0 long, of e, as it 1e disposed of in accordance with the requirements Regraded Inclassified 4, Twenty-First, from London. ente of the blockede. Ae regard= the purchase of blankete, I have no tion at present whether these blenkete are to be ied under the general plan of relief in Italy. If then since in the absence of purchase with Itelian story, we should have jointly to foot the bill, I see no objection to the Italian= purchesing the blankets". Embaesy would appreciate expression of your views. WINANT Regraded Unclassified PARAPHRASE OF TELEGRAM SENT FROM: Secretary of State, Washington TO: American Consul, Algiers DATED: March 4, 1944 NUMBER: 688 CONFIDENTIAL ATTENTION OF L'HEUREUX FOR GRADY. A request has been made by the Italian Legation at Lisbon for approval of the sale of the stock of tea in the possession of the Legation and for use of the proceeds to buy blankets manufactured in Portugal. It 1s their intention to send the blankets to Southern Italy for relief purposes. It 1s our understanding that there is also a quantity of blankets in possession of the Legation. The total number of blankets would probably not be large. Lisbon is being asked to furnish you information as to quantity and type and as to whether there have been proposed any shipping arrangements. Lisbon has been informed by us that disposition of Italian assets abroad can be made only with approval of the Control Commission and that the matter is being sub- mitted to the Commission. We are also asking the Legation whether it appears possible to dispose of other goods which are being held by the Italian Legation. No objection -2- No objection is made by us to the sale of the tea nor to the use of the proceeds either for purchasing supplies, which we would otherwise have to furnish, or for the maintenance of the Italian Legation. It 1s our understanding that similar views are held by the British. Since the Legation has initiated action looking teward the sale of the tea, we suggest that the Italian Government give appropriate instructions to the Italian Legation at Lisbon. STETTINIUS (Acting) Regraded Unclassified PARAPHRASE OF TELEGRAM SENT Secretary of State, Washington American Legation, Lisbon TQt DATED: March 4; 1944 NUMBER: 689 CONFIDENTIAL No disposal may be made of Italian assets abroad ithout United Nations' consent as expressed by the Allied Control Commission with which the matter is being taken up. There is no objection on our part to the disposal to approved sources of the tea and other cargo under the Italian Government's control provided it is done with the Allied Control Commission's consent and the proceeds used only with its approval. London informs us that this is the British view also. The importance of observance of blockade requirements in disposal of tea is emphasized by the British. The ase of the proceeds to maintain the Italian Legation t Lisbon or to purchase goods which we would otherwise pply appear to be unobjectionable in general. We gest that it might be desirable to handle both the rchase of blankets and the sale of tea through the erican and British Missions in Lisbon. Any shipment of goods to Italy would have to be rried out in accordance with Allied Control Commission's rectiven. The view of the Comission will be given to you. Regraded Unclassified - 2 - t 18 requested that you inform us of the number pe of blankets which could be purchased and whether has been any discussion regarding shipping arrange- na It is our impression that the Italians already there a some blankets in Lisbon. It 1a also requested that you report whether it appears possible to dispose of rether cargo which the Italians hold. Please repeat the foregoing to Algiers from L'Heureux for Grady, The foregoing message has been repeated to London 0,8 Department's cable No. 1662, referring to Embassy's wire of February 21, 1944, No. 1444. STETTINIUS (Acting) 2000133 - Regraded Unclassified 166 VICTORY TREASURY DEPARTMENT PROCUREMENT DIVISION WASHINGTON 25 OF - DIRECTOR CECRET March 29, 1944 EMORANDUM TO THE SECRETARY: There is transmitted herewith the weekly report of Lend-Lease purchases. We have been requested by the Foreign Economic Administration to take over the Army Shoe Reconstruction Plant at Buford, Georgia, for the purpose of rebuilding 1,200,000 pairs of used Army shoes to be furnished to us by the Salvage Branch of the Quartermaster General. The War Department expects to relinquish operations between April 15 and April 30, and it is expected that the processing of 1,200,000 pairs of shoes will be completed by October 1944, and will cost from $1.50 to $1.80 a pair, exclusive of export packing or freight. We are now investi- gating the matter to determine the requirements for this operation. Army Ordnance has requested FEA to transfer the purchase of heavy machine tools to the Procurement Division, which will require a deletion from their budget, and an inclusion in the FEA budget. We are amending our 1945 budget, recently submitted, in accordance with this proposal. stirton E. back Director of Procurement Regraded Unclassified 167 LEND-LEASE TREASURY DEPARTMENT, PROCUREMENT DIVISION STATEMENT OF ALLOCATIONS, OBLICATIONS (PURCHASES) AND DELIVERIES TO FOREIGN GOVERNMENTS AT U. S. PORTS AS OF MARCH 22, 1944 (In Millions of Dollars) Administrative Viscellaneous - Total U.K. Russia China Expenses Undistributed Allocations $4698.0 $2290.7 $1877.3 $113.9 $12.6 $403.5 (4696.9) (2289.7) (1877.3) (113.9) (12.6) (403.4) Purchase Authoriza- $3636.0 $1883.2 $1436.5 $44.9 - $271.4 tions (Requisitions) (3577.7) (1846.6) (1421.4) (44.7) - (205.0) Requisitions Cleared $3538.6 $1835.2 $1400.4 $44.6 - $258.4 for Purchase (3521.5) (1824.9) (1399.4) (44.5) - (252.7) Obligations $3416.8 $1807.9 $1372.7 $44.2 $10.6 181.4 (Purchases) (3397.4) (1796.3) (1369.0) (44.1) (10.5) (177.6) Deliveries to Foreign $1794.8 $1181.5 $558.9 $21.9 - $32.5 Governments at U. S. (1764.8) (1170.0) (540.5) (21.8) - (32.5) Ports* *Deliveries to foreign governments at U. S. Ports do not include the tonnage that is either in storage, "in-transit" storage, or in the port area for which actual receipts have not been received from the foreign governments. Note: Figures in parentheses are those shown on report of verci 1., 1044. Regraded Unclassifie 168 25 March 29, 1944. My dens General Veeson: For the Secretary I as acknowledging the copy of the Soviet Aid Report as of February 29, 1944, which you vere ⑉ good as to send him. Mr. Morgesthau much appreciates receiving these current reports, and has asked no to thank you for your courtesy in bringing them to his attention. Sincerely yours, (Signed) H. S. Klotz I. S. nots, Private Secretary. Major General c. N. Vessom, Director, Division for Seviet Supply. Foreign Feenesis Administration, Five-Fifteen 20sd Street, N.V., Washington 25, D. 0. GEF/dbs Regraded I Inclassified 169 FOREIGN ECONOMIC ADMINISTRATION OFFICEXOF LBNDI PASE ADMINISTRATION FIVE-FIFTEEN 22d STREET NW. WASHINGTON 25, D.C. March 28, 1944 MEMORANDUM To: The Honorable Henry Morgenthau From: Maj. Gen. C. M. Wesson Director, Division for Soviet Supply Subject: Soviet Aid Report Attached herewith is your copy of the Soviet Aid Report as of February 29, 1944, which summarizes the amount of aid furnished to the U.S.S.R. during the First and Second Protocols and the first eight months of the Third Protocol. Unclassified SECRET Copy No. IRA 170 STATUS OF THE SOVIET AID PROGRAM AS OF FEBRUARY 29, 1944 Prepared for the President's Soviet Protocol Committee Foreign Economic Administration March 25, 1944 Regraded SECRET PERFORMANCE DURING FEBRUARY 1944 Shipments to the Soviet Union from United States and Canadian ports fell ",0 375,300 long tons in February, the smallest quantity shipped in any month since July, 1943 but 95% of average monthly Protocol require- monts. Shipments from July 1943 through February 1944 total 4,011,600 long tons, 1321 of Protocol requirements for the period and 88% of re- quirements for the full Protocol year. Shipments during March are ex- pected to total 375,000 long tons, bringing total shipments to 96% of the year's plan. Cargo shipped during February and the Third Protocol period is sum- marized as follows: February July-February Long Per Long Per Tons Cent Tons Cent U. S. SUPPLIES Trucks & Other Vehicles 38,800 10 428,200 11 Metals 51,000 14 648,700 16 Chemicals & Explosives 21,600 6 332,300 8 Petroleum Products 33,300 9 399,600 10 Industrial Equipment 25,900 7 340,700 9 Food 123,500 33 1,271,500 32 Other 32,900 14 410,700 10 Total 347,000 93 3,831,700 96 BRITISH & CANADIAN SUPPLIES 28,300 7 179,900 TOTAL 375,300 100 4,011,600 100 No losses were experienced in February. During February 6,706 trucks, 30 locomotives, and 286 flat cars were dispatched to the Soviet Union. Aircraft dispatched from North America in February totaled 461: 346 for U.S. Protocol Account and 115 for U.K. Account. Of the total number, : were shipped by water to Murmansk, 163 by water to the Persian Gulf, 57 by sir via the South Atlantic, and 236 from Fairbanks by the Alaskan- Siberian ferry route. Foreign Economic Administration March 25, 1944 Regraded Unclassified AIRCRAFT DELIVERIES TO U.S.S.R. FACTORY DELIVERIES BY ROUTE OCTOBER I, 1941 - FEBRUARY 29, 1944 & 3559 1885 895 LOSSES IN % OF DEPARTURES PERCENT o 5 IO 15 20 ALSIB FERRY SOUTH ATLANTIC FERRY 3609 NORTH RUSSIA, WATER PERSIAN GULF, WATER SECRET Foreign Economic Administration - Regraded Unclassified SECRET SHIPMENTS TO U.S.S.R. SHIPMENTS, ARRIVALS AND LOSSES 10 10 LOST 8 8 CUMULATIVE MILLIONS OF GROSS LONG TONS EN ROUTE 6 6 EXPORTED 4 4 CUMULATIVE - MILLIONS OF GROSS LONG TONS 2 2 ARRIVED o o Oct Nov Dec Jan Feb Mor Apr May Jun Jul Aug Sep Oct Nov Dec Jon Feb Mor Apr May Jun Jul Aug Sep Oct Nov Dec Jon Feb Mor Apr May Jun 1941 1942 1943 1944 NUMBER OF SHIPS THIRD PROTOCOL CLEARANCES SAILING EACH MONTH FROM U.S. PORTS 100 5 PROTOCOL RATE 4 80 3 60 2 40 ACTUAL CUMULATIVE MILLIONS CUMULATIVE-MILLIONS OF GROSS LONG TONS I 20 O o (he OCT - See New - - Apr Fax - May Jun 944 (943 (944 943 I SECRET EXPORTS AND AVAILABILITY OF SELECTED ITEMS CUMULATIVE SINCE OCTOBER 1, 1941 Exported Lost En Route Quantity mode available of Arrived U.S. centers of production BOMBERS PURSUIT PLANES 4,000 4,000 3,000 3,000 2,000 2,000 1,000 1,000 o o Jul Aug Sep Oct Nov Dec Jan Feb Mor Apr May Jun Jul Aug Sep Oct Nov Dec Jon Feb Mor Apr May Jun Jul Aug Sep Oct Nov Dec Jen Feb Mor Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mor 1 May Jun 1942 1943 1944 1942 1943 1944 MEDIUM TANKS ANTIAIRCRAFT GUNS 37 & 40 mm 3,000 6,000 2,500 5,000 2,000 4,000 1,500 3,000 1,000 2,000 500 1,000 o o Jul Aug Sep Oct Nov Dec Jan Feb Mor Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mor Apr May Jun Jul Aug Sep Oct Nov Dec Jon Feb Mor Apr Moy Jun Jul Aug Sep Oct Nov Dec Jan Feb Mor Apr May Jun 1942 1943 1944 1942 1943 1944 JEEPS TRUCKS 50,000 250,000 40,000 200,000 30,000 150,000 20,000 100,000 10,000 50,000 D o ? I - i : Des IM Feb and Age May ! del I one - DIES ! FAB Apr sum 1 Ave Out I Dell Jan Feb Age 1 1 D4k Fab 2 $ 94) ($44 (942 IN3 (944 - SECRET EXPORTS AND AVAILABILITY OF SELECTED ITEMS CUMULATIVE SINCE OCTOBER I, 1941 Exported Lost En Route Quantity mode dvoilable of Arrived U.S. centers of production FIELD TELEPHONES ARMY BOOTS 400 8 300 6 200 THOUSANDS 4 100 2 THOUSANDS OF TONS o o Jul Aug Sep Oct Nov Dec Jon Feb Mor Apr May Jun Joi Aug Sep Oct Nov Dec Jan Feb Mor Apr May Jun Jal Aug Sep Oct Nov Dec Jon Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jon Feb Nor Apr May Jun 1942 1943 1944 1942 1943 1944 STEEL AND STEEL PRODUCTS ALUMINUM AND DURALUMINUM 2,000 150 Comulative 13 Fab.29,1944 (Short Tonal to Production far U.S.S.R. 1,898,270 125 for Redistribution 90,770 Exported to U.S.S.R. 1,463,860 1,500 Balance Avoidable for Export 243,640 1,000 THOUSANDS OF TONS 100 75 50 THOUSANDS OF TONS 500 25 o o Jul Aug Sep Oct Nov Dec Jan Feb Mor Apr May Jun Jul Aug Sep Oct Nov Dec Jon Fab Mor Apr May Jun Jul Aug Sep Oct Nov Dec Jon Fab Mar Apr Moy Jun dul Aug Sep Oct Nov Dec Jon Feb Mor Apr May Jun 942 1943 1944 1942 1943 1944 CHEMICALS AND EXPLOSIVES FOODS 600 2,500 500 2,000 400 300 THOUSANDS OF TONS 1,500 1,000 200 THOUSANDS OF TONS 500 100 o I o 115 MM I I ! Fab : Age I ! Jul I SAP od : Ded wer 2 I Apr May 1 pro Avg Sep Del Now Dec Jan Fee : MV May ! ? Avg Sap DES I Des Juste Fails Mor Age May . ! 942 943 (944 1942 845 944 Insp. United SECRET PROGRESS OF INDUSTRIAL PROJECTS FOR THE U.S.S.R. As of February 29, 1944 PUTROLEIM REPINDRY PROJECT This project was developed to replace doviet facilities destroyed by the German Army. It was designed to produce aviation gas, motor gas, and lubricating oils. or the entire project valued at $43,938,000, equipment valued at $43,219,000 has been made ready for shipment. valued at 439,564,000 has been exported. Most of the equipment remaining to complete the project of relves, instruments, bpare parts and tank cars which are expected to be shipped before summer. Willsteen 0.00 engineers are in the U.S.S.R. siding in construction. Approval issu bosin given for additions to supplement the facilities already supplied. This additional valued at $25,150,000 in now being engineered. POLICE PROGRAM Under the Second Protocol program 320,000 KW of stationary steam generating equipment has been made available. This includes nine units with a total capacity of 40,500 KW furnished with the potroines refinery project, two units totaling 11,000 KW furnished with the tire plant and 42 units totaling 1,100 Kis to be furnished with the Block Signal System. The remaining units of the Second Protocol program totaling 258,500 KW are rated from 250 KW to 35,000 KW and are for installation as power utility plants. Over 70 present of this equipment has been exported. Dissel generating equipment totaling 162,000 KW and 59 industrial stean boilers have been made available for export. Power equipment approved under the Third Protocol has now been placed under contract. Designing and manu- (ecturing are progressing on schedule. The program consists of generating equipment as follows: stationary stom Generating Equip. 166,500 KW Mobile Diesel Generating Equip. 32,000 KW Robile storm Generating Equipment 217,000 KW Rydro-electric Equipment 68,150 KW stationary Diesel Generating Equip. 106,925 KW Total 590,575 KW Thirty-two industrial steam boilers and transmission equipment valued at $5,000,000 are also being supplied. blook SIGNAL STATEM This project is to permit automatic signal operation of a portion of the U.S.S.R. railroad system. When installed it will increase the carrying capacity of existing rula facilities rithout increase of rolling stock. The system valued at $11,558,000 will provide signal and Now operating equipment for 3,000 Km of track. Equipment valued at 63,488,000 has been made ready for ship- cent of which $81,000 has been exported. In addition 42 power plants of 40 KW each, all valued at $500,000, are being furnished to provide the Accountry electricity to operate the system. Production of the power units has connenced. FOLLING LILLS An sluninum rolling mill to supply aluminum sheet for the U.S.S.R. aircraft industry Is nearly complete. or the total valued at $6,377,000, equipment valued at $6,290,000 has been made ready for aldpment and 25,018,000 has been exported. One LB* merchant mill, 5. blooming mill, rail and structural mill, R.R. tie plate and uplice bar mill, and à (4je Fabricating mill, all estimated to cost $19,347,000 are now in production. A portion of the 18* merchant mill bar been prepared for shipment but has not yet been exported. EXPANSION PROGRAM Production of equipment valued at $12,664,000 for expansion of U.S.S.R. steel produc- tion is now progressing. This equipment, all of which in to supplement existing facilities, is expected to increase Soviet production of carbon steel ingots by 2,500,000 tons a year. Equip- sent vilued at $729,700 has left suppliers but none has been exported. OTHER FLARTS Cost Manufactured Exported Wall Board Plant $536,563 $404,737 0 Glass Bulb and Tubing Plant 1,400,000 o 0 Voltol Plant (Pilot) 142,785 134,072 $72,624 Nitric Acid Plant 528,277 436,046 o Hydrogen Gas Plant 531,800 531,800 51,783 Hydrogen and Catalyst Plants 2,616,900 488,165 0 This $9,000,000 project was designed to permit the production of a minime of 1,000,000 silitary ins a. year from U.S.S.R. supplies of synthetic rubber and natural rubber obtained from shrubs. » equipment basic elements of the tire plant of the Ford Hoter Company have been acquired. to complete the production cycle for large size silitary tires has been purchased. made the necessary steam and alectrical poser is being supplied at a cost of $1,100,000. expect valued et 28,500,000 has beet tale genilable of ruppliers. Systement volued at unported. in - . mail prin IAP simily an the Velted zured, Regraded Unclassified SECRET STATEMENT OF VESSELS SAILED TO U.S.S.R. As of February 29,1944 Number of Vessels Sailing For For For For En Route Cargo Losses Date of Solling North Persian Soviet Soviet Total Arrived na of Disch. Lost by Russie Gulf Arctic Far East Feb. 29 in U.K. Month 1961 Oct 10 - - 5 15 14 - - 1 - flow 9 1 - 3 13 12 - - 1 - [eo 14 7 - 4 25 22 - - 3 1 1942 Jan 20 - - 4 24 19 - 1 4 3 Feb 13 2 - 4 19 16 - - 3 1 Var 31 6 - 6 43 32 - 4 7 9 Apr 62 6 - 10 78 46 - 13 19 - May 14 10 - 7 31 21 - 4 6 6 Jun 8 11 6 9 34 27 I - 7 6 Jul 2 5 16 12 35 34 - - 1 16 Aug 11 5 1 19 36 33 - - 3 1 Sep 4 B - 17 29 29 - - - 10 Det - 13 , 19 32 32 - - - - llov - B - 26 34 32 - - 2 3 Dec 4 11 - 24 39 38 - 1 - - 1943 Jan 12 12 - 22 46 38 - 8 - - Feb 23" 7 - 28 58 36 - 20 2 1 Har 1 19 - 26 46 44 - 1 1 2 Anr - 18 - 37 55 54 - - 1 1 May . 15 4 4 63 62 - - 1 - Jun , 4 5 45 54 54 - - # 2 Jul - 17 16 24 57 57 - - - - Aug I : 7 38 $ 67 - - 2 2 Sen - 27 - 50 77 76 1 - - - Oct 10 25 - 27 62 61 1 - - - liov 20* 25 - 32 77 76 I - 1 - Inc 29+ 21 - 39 89 79 8 I 2 - 1944 Jan 30 26 - 27 83 25 58 , - 3 Feb 20** 16 - 19 55 - 55 - - - Total Oct. 1941 to Feb. 29, 1944 347 349 55 627 1,378 1,136 123 52 67 67 . Includes one tanker from U. K. for U. S. Protocol Account. #4 Includes the tankers from U. K. for U. 8. Protocol Account. or the 1,378 sailings from October 1, 1941 to February 29, 1944, -652 were ende by American vessels, 462 by Soviet vessels, 238 by American vessels transferred to Soviet registry, 25 by British vessels and 1 by a Swedish vessel. In addition to the 1,378 anilings, there were 10. ships that loaded par- tial cargoes in the U.S. for the U.S.S.R. In addition to the 67 ships shown above as lost, several ships have been sunk on their return voyages. ACTUAL SHIPMENTS COMPARED WITH PROTOCOL SHIPPING OBJECTIVES July 1943 - February 1944 FIGURES IN LONG TONS Atlantic Pacific Total Route Route Protocol Objective 1,428,600 1,607,100 3,035,700 Shipments 2,246,900* 1,764,700 4,011,600 Stipments in : of Objective 157% 1106 132$ Invoice 9,000 toma of petroles products from Under for :- 1. Protocol account, the material 7 3 Dues J 2 s - 1-1588 SECRET STATEMENT OF CARGO SHIPPED TO U.S.S.R. As of February 29, 1944 (Thousands of Gross Long Tons) For For For Soviet Persian Gulf For Far East En Route Cargo On North Loases Month Full Partial From Soviet Total Arrived as of Hand or Lost Russia by Full Partial Cargoes Cargoes Arctic Feb. 29 Diverted Abadan Month Cargoes Cargoes In U, K. 1941 o 48 - . - - 17 - 65 62 - - 3 - % 41 3 - - - 14 - 58 55 - - 3 - De 50 10 - I - 11 - 71 63 - - 8 3 1942 Jai 63 - - - - 26 - 89 72 I 1 16 9 Feb 66 4 1 - - 20 - 91 76 . - 15 5 Mar 171 17 1 - - 25 - 214 163 - 5 46 42 Apr 376 21 . . - 38 - 435 267 , 40 128 . May 92 79 8 - - 33 - 212 141 I 19 52 38 Jun 55 84 7 - 18 31 - 195 139 . - 56 55 Jul 13 39 25 - 46 59 1 183 174 - - 9 114 Aug $ 40 25 - 2 83 - 219 197 - . 22 7 Sep 28 63 9 - - 79 - 179 179 - - , 65 Oct - 109 12 - - 108 - 229 229 - . - 2 Nov - 66 5 - - 106 1 178 165 - . 13 17 Dec 29 83 9 - - 123 - 244 237 - 7 - 2 1943 Jan 73 83 4 I + 98 - 258 210 - 48 - 2 Feb 173 40 - - 1 129 # 342 178 . 150 14 a Mar 9 131 - - , 123 - 263 246 - 9 a 16 Apr - 138 4 - - 194 , 337 330 - . 7 7 May - 112 € - 13 216 - 350 343 - I 7 - Jun # 25 4 - 16 229 1 275 275 - - - 15 Jul - 116 10 to 58 152 - 346 346 - - I - Aug - 173 4 7 32 262 - 478 464 - - 14 14 Sep - 194 4 8 - 313 I 519 512 7 . - - Det 66 187 6 10 - 181 - 450 441 9 - I - Nov 145 194 1 10 - 229 - 579 571 - - 8 - Dec 214 167 - 10 - 262 , 653 581 57 - 15 - 1944 Jan 222 202 - 12 - 176 - 612 197 415 , - 23 Feb 149 114 - 12 - 100 I 375 12 363 - - - Total Oct. 1941 2,152 2,494 149 79ª 185 3,437 3 8,499 6,925 851 279 444 444 to Feb. 29, 1944 # Petroleum products by rail ex Abadan for U. S. account, replacement to U. K. from U. S. DISTRIBUTION OF TONNAGE SHIPPED TO FEB. 29, 1944 BY REGISTRY OF SHIPS Other 295,000 tons 3.5% Soviet Ships 1,961,000 tons U.S. Ships 23.1% 4,491,000 tons 52.8% U.S. Ships Transferred to Soviet Registry 1,752,000 tons 20.6% DATA ARE GROSS LONG TONS SECRET AIRCRAFT DELIVERIES TO U.S.S.R. October 1, 1941 to February 29, 1944 protect: requirements are considered filled upon delivery of aircraft from factories. points true Narth America are: U.S. porte for water shipments, Fairtanks for flight-deliveries via the Alaskan-Siberian Parry Route, Departure visal, Florida or adjacent fields for flight-deliveries via the South Atlantic. Planes shipped by water to North Russia are considered and inlivered upon arrival at or Archangel. Planes shipped by water to the Persian Dulf are assentled at Abadan and with planse arriving use one the Bouth Atlantic Ferry Route are delivered at Abadan to U.S.S.R. pilota. Alaskan-Siberian Ferry route planes are delivered to Sprint diese at Fairbanks. Rise the acception of 59 P-40 fighters shipped from U.S. porta in September, 1941 and arrived in North Ruasia in November and December 1941, une actuals includes all aircraft departed from the U.S. for direct delivery to the U.S.S.R. Aircraft shipped from the U.S. Intended for use is the Delted Kingdom but retransferred from the United Kingdom to the U.S.S.R. are not included. In North America Lost in Delivered Feb. 29, 1944 Lost En Route North America Departed Diverted Arrived Delivered After N.A. to at In Canada In Canada North to Destina- at to USSR at Factories Depart- In U.S. and In U.S. and America Others Destins- Destine- Mon Alaska are Alaska 2/29/44 tion tion 5% ROUTES ilarkan-Siberien Forry Route 3,559 195 123(77)* 49 38 3,154 o o o 3,154 3,154 South atlantic Farry Route to Abadan 895 16 0 16 0 863 38 1 23 801 758 Date: to North Masta 1,485 3 0 0 0 1,482 310 1 30 1,141 1,141 step to Persian Julf Assembly at Abaces 3,609 275 0 o o 3,334 175 0 278 2,881 (16)- 2,736 Total 9,548 489 123(77)* 65 38 8,833 523 2 331 7,977 (10** 7,789 M. PROTOCOL ACCOUNTS Purpuit Planes P-LO un 50 o o o 2 48 0 o o 48 48 P-40 Nerth Russia, water 1,149 o 0 o o 1,149 248 1 22 678 678 P-O Persian Oulf, enter 722 81 0 o 0 641 25 0 20 596 (4)** 1-39 Light 602 19 12(8)* 5 11 555 o 0 o 555 555 1-39 Sorta Russia, enter 57 o o 0 0 57 7 0 0 50 50 NB Fersian dulf, water 971 45 o o 0 926 28 0 150 748 (1)** P-47 Listb 3 0 o o o 3 o o 0 3 3 7-67 forth Russia, enter 5 o o o o 5 o o 5 o o N Persian Guif, water 91 86 o o o 5 0 o 5 o o 1 Berth Russia, enter 3 3 o o o 0 0 0 0 o 0 Total Pursuit Planes 3,653 234 12(8)* 5 13 3,389 308 1 202 2,878 - Light josters 4-29 Albib 1,102 57(a) 55(40)* 20(d) 8 962 o o o 962 962 4420 Soute stisstic 767 16 o 16 o 735 34 1 23 677 634 126 126 4.20 lerts linets, vater 165 o o 0 o 165 39 D o 4.20 Verstan sar, vater 637 o 0 0 o 637 79 o o 55% (8)** 550 2,671 a 55(40)* 36 6 2,499 152 1 23 2,323 (8)** 2,272 Total Light Sentera Bumbers X 304 31(b) 21(16)* o 1 251 o o o 251 251 3-3 Arth Atlantie 128 0 o D o 128 & o o 124 124 o o 5 o o 0 5 5 NO "arth bards, enter 5 0 o Total "edium Bonbers 437 31 21(16)* a 1 384 4 o o 380 380 Heavy Formes PV Alain (total) 1(e) o o o 0 1 o 0 0 1 1 Cargo Places o o 233 233 na 250 10 6(5)* 1 o 233 o Discription Pilnes 04) tire ester 30 o 0 0 0 30 11 o o 19 19 Trainers (7-b-) Insta, enter a 0 o o o 6 o 0 3 5 5 Permion sar, ester 0 o o o 22 o o o 22 (1)** 3 22 0 o o 30 o o 3 27 (1)** 25 Trainers 30 0 ACCOUNTS o 0 300 o o 0 300 mar 300 o 0 1,217 = 29(3)* 23 13 1,0% o o o 1,0% 1,0% 0 g o a 35 5 o o 30 30 35 o o M C o 103 536 (1)** 765 63 0 2,297 162 29(1)* R 13 2,091 45 a 103 1,960 o o , 27 a o a 27 5 30 o o o o = N o 0 9 28 1 28 5 e o 18 9 9. : 123 III- ut 0 , . a 3 176 # . OF 199 199 - - sinder - mil two intivery - U.S.M. pilline mini - at mumbi - - Mails - - Easin - - is DR - - insulant - - - - . U.S. as Name - - tel NO for - mind - 45 - - che win - 1.5 for OM - - - activery - MMA - as - EXPORTS AND AVAILIBILITY As of February 29, I944 SECRET Steel I - Protenal Performance they 1. 190 - Exported Performana les, - - 305 Protects fairuary a, INA Detaber 1, INC la friending 20, THE Items Ind Offered Made there 1/1/21 Ibde i Divertal Protessi to draft. APPLYER la c. L Fat. Into to Sale 2/29/46 mill. Started Last the Offering 1944 . 4 Smillag a - . . Report . . Permet- Feb. my SAE # Hu . MULTARE THE and , For e, a Protectional promote 1 14 1 pandi 2,400 1,600 1,706 147 1,498 3,453 3,389 10 light 1,200 800 850 1,34 75 2,6m 3,299 1 25 secie justaré 300 300 217 21 199 437 38d 18 it servy 0 0 0 o 0 1 1 IM Zarga Flanes are 160 170 34 LSD 250 233 T IF advasied Trainers o 0 o 0 a 30 30 -- Classration Planes e a o o 0 30 30 for 2. 1. Protocol (Sular Indiprional Agreementa) See Detailed 14 Furnit Planes 1,800 1,200 1,147 150 1,131 2,297 2,091 For Account 14 healt Planes o o e o 9 179 1% IM us (Dromi) Trainers f o o 10 5 5 19 5 o 0 a # I Tasks f I IN Light Tanks o 0 o 0 0 1,680 1,480 1,222 433 o o 25 a Taxas 2,000 1,334 1,260 170 1,303 2,980 2,09 2,117 371 o e 351 - with r F AA Come 90 - o o % 0 1,56 224 224 172 - e a as 14 AA - a as. o o 3,366 192 4,136 4,541 1,279 3,461 154 o 0 592 148 AA Cuma 3T - o 0 o 0 0 424 424 340 16 o 48 o IN 5 AA so Cal. 4. o o - 0 1,025 - 1,825 1,125 o o 400 300 TAX AA JT - 3.F. o o - 25 50 - 50 a o o o 25 14 M. Due 50 Calls 1.7. o o - 390 444 - 4M o o o o MM 1 58 AT Due 37 M. o o 0 0 o 63 e) a 29 D o 7 IM AT 76 - 3. F. (Tank Destroyers) o o 5 D , 5 , 5 o o 0 a 1 % AT 57 - 3-1- (Tast Sestroyers) o o 657 o 657 657 557 65 o o 0 o IN AT " 5-7- (fank Destripars) o o 50 o 50 52 sa 52 0 o 0 0 a Dumachine Date -45 Call. o o 1,637 o 700 134,420 133,483 106,863 21,490 o 0 5,000 19 Hosket launters D o 0 o o 3,000 3,000 3,000 0 0 o o IS Mortare, e a. o o o o o 30 30 30 0 0 o o IS " Pistola ent Revolvers o D 6,000 o 8,000 11,950 8,000 7,950 o 0 o 50 Ammunition la being supplied for all wespons furnished by the 1. s. La securdance etta etanlarda preseribed for 1. 8. Forms. Additional La furnished for wespons of Serial manufacture. Tracks (with equipment and spare parta including time) THE Cargo & Rescon Carriere D/4 too) 5,412 334 4.42 10,414 9,290 7,794 - 598 o 1,220 18 truis De ton) 38,590 3,368 42,144 98,033 94,375 77,572 5,994 1,826 1,446 9,538 1 100 Trucks of tos) 34,856 2,988 31,644 96,232 47,148 72,406 4,1% 7% 3,418 6,442 100 frais IS too à over) 29 28 a e 42 56 0 D e 28 108 fasi Transporters (20 a S too) 222 . 194 298 270 242 16 o e 12 Total Truise 132,000 64,000 79,306 6,706 18,692 203,062 193,165 157,669 10,264 3,128 4,864 17,240 Net Vehicles E IN % and less Care 4,500 - 1,985 224 1,458 2,099 2,372 1,425 168 o o 579 18 Jespa le tos 4x4) 14,855 1,082 14,232 39,987 35,680 20,995 3,636 1,3% o 2,4m I W « too) 24,000 16,000 1,783 595 1,650 1,785 1,052 575 a o e 777 K Personnel Cerriere (§ track) 600 uso 292 28 286 623 615 LB9 54 0 o F 18 Cargo Curriers (1) tom, , track) 0 o 2 o a 2 2 2 o o o a 17 12,000 6,000 0,30 1,122 4,522 20,481 19,922 15,408 1,592 1,100 o 1,823 18 Military Tractors 2,400 1,600 1,622 145 1,740 4,670 3,633 2,9% 223 o 155 261 LOT Tack Secovery Unite 0 o 145 o 130 145 130 102 o o o 28 34 Finid Repair Trucks 0 o 2% 17 M) 1,437 987 MIL 3 o o 103 1 13G Gas & Stated Bigines the truika 0 o 2,584 100 1,101 3,107 2,458 1,398 o o o 1,100 Elgnal Equipment e - Redio Stations (over 1. DI) as 27 La o to - -- too Radio Stations (1 o & under) 12,000 9,400 9,099 1,479 8,638 - -- 200 Redio Receivers 2,230 1,1% 1,456 214 1,575 - -- a Ground Medio Loostore 0 o o 0 22 2 25 a e 0 0 a 1 26 Badlo Seasons 0 o 202 25 157 - : 27 Sello Direction Finders 150 as LA 0 N - - a Tadio Parte 6 Arease, ($1000) - -- - -- DE bedie Noss. à Test. 8q. (81000) 3,000 2,000 1,100 - -- - -- => Redio Tubes [1000 dative) 2,400 1,90 1,284 " - - - 11 Field Telephones 100,000 66,66% 93,323 6,000 89,652 - 277,943 216,965 30,448 600 11,600 18,130 La Field Telephone Rine (siles) 186,000 162,000 141,672 9,111 181,808 - 860,142 690,966 127,008 0 12,604 29,584 TH las Drives Generators 4,000 3,334 1,512 TO 3,520 - 14,573 14,250 103 0 0 234 34 Dry Talla for Redice o o - o 119,810 - 158,778 120,238 o 0 0 30,560 na Fishilights visa Dry Salle o 0 45,000 o 60,000 100,000 85,000 $5,000 0 9 o e Explosives (toma) 4 Forder 64,328 3,837 48,001 111,751 103,649 84,007 4,403 # 1,309 9,6% at Fundar 72,700 48,300 BIT a 306 BOT 306 119 a e 0 187 -18 1.1.1. 26,881 17,920 33,350 3,200 12,528 84,361 75,896 64,000 3,849 a 1,453 9,142 11 TAM Tymalle (Monthe) 12,306 21,803 18,617 16,929 o e 8 1,48 a 0 11,9% D Tital Emplotives (toma) 99,580 M,220 110,458 7,217 130,441 218,62 190,368 164,057 8,452 250 7,822 20,481 Item Willtary I na - Finale a e a a . 3,10 3,000 1,798 252 o 90 . 45 1 . a is . 4. 15 & 4 . o 9 e le Rise ($1.000) # 369 - € 179 9 o # a . . - I I à . # 10.00 10,210 407,568 NOT,448 60,50 9 # . 330,00 - - Plantine - atio e . a . # 4 a - . . . 8 : , : 7 I - - - - - - - - - - . - - - CASH - - - of - - of elairs MEMO - - - - - - of - - - - - - - positie - deler - - - the be - - - made - - - - fortail - - - - - - - - - - . - Informa - - - - - - - - - - - - - - - had - - - - - - - - - - - The - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 14. - - - - - - - - - - - - - - - - - - - - - - - - - Regraded Unclassified SECRET Steel = and Provided Performance July 1, INC) Exportal Commission Performents Let, and - 3rd fairuary 29, 1944 October 1, na 1a Patinary 21, This i - Offered Made restanal to buring Made intered Diverted la s. L smill. Fab, 7/3/23 - Difering Into To Date INA 2/29/11 will. Departed Lest after insting a - à # # tiport . Purment- No. a . . line INA * (coth) Lines lestier (tom) 18,000 12,000 8,094 TM 10,965 37,352 16,560 27,133 - 1,615 FN, o 1,118 une (1000 al 3,600 2,400 2,519 223 2,751 a 7,587 4,730 11 5,549 555 a 254 as - (1000 100 370 15 109 IM 225 148 116 o 0 & 48 sur (1000 unite) o 0 938 258 TLI so 2,318 1,9% 1,275 193 o o 509 $ % Carther (100 unital 0 o 36 - ⑉ 196 - - 1 - I - 18,000 12,000 8,933 3,219 11 TM your Data (1000 pda) 18,999 28,400 27,211 20,182 É 0 1,000 4,997 - (stime Cinta (Sug) (da.) 25,045 17,366 29,7% 7,262 11 35,850 119,489 16,207 40,9% 1,222 9 1,4% 12,536 II ? (1000 yds.) 12,000 4,000 15,544 3,313 12,655 99,264 N.M 24,819 2,207 3 2,027 5,289 # à - (1000 plac) 3,000 2,000 2,306 - - 10,2% : - : - - - - Textiler ($1000) 0 1% y o 3,101 940 7,617 6,506 4,669 2,9% Lie a 3 1,50 = # - apparal ($2300) o o 3,034 É 3,095 7,779 6,613 4,356 47 a ⑉ LIM NOVIAL EMPLOS Distracts, - all. (100) (Protemil Quantities all 12,000 8,000 3,845 - - - - MIDIALS interne wells ILF Dapt 41,586 3,163 35,254 79,665 77,334 60,7% 4,533 o o IN Fabricated 35,750 8,027 23,860 15,731 1,921 12,896 48,857 45,360 37,300 2,393 o 14 5,434 IT A 74 Vines 3,600 2,400 2,900 too 2,310 7,622 6,805 1,281 628 0 0 496 02 Toral Name: Stree 952* 6354 are e 15 415 75 a o 0 o 0 04 E, Under Products of Mintal -> VRL - 57 206 163 104, 13 o o 4A 05 #vigidence Consectrates 4,000 2,468 2,448 207 2,587 11,000 10,958 8,624 1,429 o 0 905 CLA Copies, Electrolytis o 0 142 1,146 1,144 1,144 0 o 0 o in. - atc. 107,520 71,580 77,858) 8,287 06,494 230,791 201,463 151,929 11,457 a 5,209 30,088 04 Capier Tuber,ett. 15,000 10,500 8,8732 475 8,150 27,002 22,523 19,920 1,193 36 264 1,090 EL # 4,00" 2,000 2,355 us 2,807 4,37) 4,173 1,593 o o o THO DE time flate 13,440 4,160 10,323 66 10,300 49,054 49,560 4,997 1,323 o a 2,240 un Invoice Indima Kirsi 209 180 98 THE to an 454 417 4 a , 30 E Time and Strip 134 360 294 33 308 1,020 1,013 92 0 a F 3du Mater results -6 in o 75 508 502 477 0 0 25. 0 Vergary o 0 0 a 30 695 RVS 895 o 0 o 0 11 18 Certial Retailis D 0 0 0 4 18 18 17 o o g 1 If NAIS Retaille o o 343h 67 256 1,443 1,399 1,0% ast 3 0 67 UN o 0 0 o 11 11 11 11 o o o o ne Last 0 e D o N 43 43 43 o o o 0 us III 0 o o o . 10 10 10 0 $ a o AND Fail 5 2 6th 0 is 217 215 230 4. 2 o 1. 11% a Netal a a 34a 0 5 162 106 No 20 + : e no Telative un 38 a o o 201 202 201 0 o : e 11% at Cobalt n. 11 SL o R 249 216 216 o 2 e # Total retain (tass) 185,306 143,530 163,737 14,851 141,779 466,008 423,003 338,206 27,567 36 1,339 LT di ter visits and Theirte ($1000) - I 915 se 60 101 E 13 a o D 54 (cont Calle - Rive warts Cable (miley) Tell AVE 741 12 233 1,353 1,136 905 127 o x u #: Cable (attes) 373 249 $ o ass 839 833 no 50 a 0 0 us et insulated Calle (PLOCO) (12,300mg) 15,92°FM 1,13 11,904 39,593 24,008 17,764 218 a 9,140 TM Bare Cable à 15m (tome) 20,000 13,336 in 113 1,149 - 4,073 2,816 o a no 1,177 Ferro-Alloge (tome) nu Perro-dilizan 9,00 6,272 To N/ 4,351 4,345 8,309 6,855 1,049 a 28 377 IIII 5% 1,184 : 45 2,154 4,139 4,139 3,311 494 o 0 734 De o o 4 4 é o o o o 5 # 223e 56 as 225 225 a 0 o o a 11 #7 = 213m 93 20) 234 205 2 0 0 o 203 =n = 1,141m 250 1,021 1,10 1,001 0 0 0 a 1,021 Total Name-Alloys (tota) 14,7% 9,956 1,050 1,295 7,952 14,0% 13,903 20,17% 1,50 a 28 2,158 lieu (same) If # = finated 0,2111 33 13,102 21,501 18,663 16,465 vie 0 288 922 11 4 amount Plate 0 o o 8,951 1,95 5,707 2,897 267 a o 1116 Palished bill Para 14 3 172 420 362 297 2 o se 53 no up Total Tasil Steel 4,534 1,003 3,339 9,504 7,978 5,914 386 o 43 1,995 00 THE Steel 10,739 1,806 10,00) 25,629 23,675 19,783 939 25 un 1,48 11 14 Code Flatened lare 21,609) 3,7% 40,413 111,311 95,638 4,485 280 3,0% 5,0% LE 2 8.3. Resl 37,508 4,960 61,247 153,244 122,003 108,498 1,94 o 657 11,344 02 Dr. IN. as. Rillata (-14,097p o , 83,518p 75,288 44,012 9,431 an 3,234 0 HR cas Balled Steets (-)N59 0 LOS 15,397) #1,153 49,079 29,65) 1,709 - 13 a Das Pollied Stris (-)26,918p 5.36 8,174 75,7% 72,809 57,498 11,264 797 1,089 2,159 a Steel à 658 2,725 4,2% 6,473 5,548 o RS4 RA / 33,956 759 12,212 112,919 67,907 99,360 10,602 970 1,902 1,113 an 412e (-125,667) 1,328 23,201 87,264g 78,900 06,352 1,077 4/2 - 1,833 TLM Rige 1,0% 95 9,031 29,479 23,954 22,036 I e 344 I n Piesl Alleg Tules 17,955 1,726 11,000 39,000 22,999 20,136 265 e 105 2,455 = Paintess Stand Fine / 367 ses 313 2,765 2,616 2,352 % 13 " 113 = Firs and Risples 478 2,444 52,499) 48,209 36,417 10,538 at) $ vsa . PLA kid Tubling 188 23,040 1,980 63,308 147,4519 101,952 1,90 15,428 1,1% MS = 1.8. Thests and lates / 29,6030 1,49 60,424 201,179 172,904 10,000 18,42 1,933 4,38 1,180 known and Name are 2,000 in. at wight Brijanted Data - amilable . Terings to are in ------ of the aggregate of commitments - resomative risits. Production convictions of the Provided - - exercised - will return profertive Min offertage is - offerings far ein - are curted in - Protect - - required - the basis of time elagned. . - of is addition - qualities - bet at expirted an and of Protunal serial - whe - of committee repassement - before - - - offer of replaced - cred win expirs. - information Ever una Persian Survider norted - Pursian will parts. - - is 14. - - - - - Le - - - M - -- - - LAS of - - - Inc - - above - - 1044 - - - -- of - - for There - - - & - - - - - - - - the - - offering - - - S.A. of - MI - - - - 940 a - - - - - - - - - - - - offering - - - - # I E - - I # - $ - Regraded Unclassified SECRET Steet 3 M Protent July 1, 280 Exported Performance let, - - 3d Provide 29, This Scholer L. 3961 to Istriary 29, The time tal 3rd Offered Mile Protocal la dmill. hering 1/1/23 Made NEL Offering Date The Date Feb. mil. Exported last the AMERICAN la linds . . . 3944 . - Deport # No. 29 Lag . 1964 . NATIFIALS (10g) (see) F BILL Note, ato. 2,306 265 7,386 12,431 7,317 6,924 # a # 40 streets Lanting Hald 8,533 o 5% 8,533 4,533 8,333 8,533 a a a o 1. halls and 158,205 14,493 185,319 322,429 296,397 If 204 and Nurled Theels & Asies 233,932 21,441 1,485 418 30,700 0 0 20,416 24,0% 22,138 0.177 8 e 933 250 101 and Dar That Three (ar sales 0 0 14,2% 35,910 33,990 27,916 1,387 9 4,050 417 3,982 1,197 10,339 16,960 13,922 12,366 53 a 4dd 1,429 um Balled Steel Car Resis 3,2% 1,062 5,333 11,Ms 7,167 5,593 o a 512 1,00 LIVE use 0 0 141 255 183 183 a 0 o a por tales o o 0 300 - m 9 0 0 a Tesal (tote) 500,000 333,334 298,996 39,863 551,939 1,707,481 1,462,858 1,182,855 149,337 1,89 24,219 97,935 IF The following quantities relassed from export stocks for redistribution have been delarted Dra securio made emilable, July 1943- July 10 July - Pat. 1944 Pab.29,'44 Feb. 1944 Pals. 1944 M.IN 1% bit Finished tara 945 056 II 22A Cold Relled Dtrip 38,454 29,454 II 32 Plan and Thirding (-) 15,609 60,197 11 20 I.I. timesft (teal g 7) II 25 Stael Wire 32,955 31,955 II 33 N.S. Basta and Plates 1,192 17,396 == milline 4,141 30,866 na Wire Repe 350 430 == that failed Cheese 345 3,305 II 31 Burled Bire & 6,586 17,127 Total Released (toma) 58,209 190,768 II 318 PLE Inc. (tors) - - 1,27% 9 2,209 4,4% 4,113 4,133 a 5 o e 3543 Dates est instrure (toms) 1 - 1,77% D 1,117 2,697 1,6% 1,683 0 # o 11 350° New Botlers ($2000) . = 6,622 311 1,5% 7,7%7 1,586 1,273 0 0 o 311 11.754 Flor. Perrous Metale à Proda. ($1000) - - 1,60% a - 2,275 1,299 1,120 6 a 0 189 II ? Petrolam Products from c. 8. 4,566 321,738 5 721,414 954,563 10,786 o 64,128 fruit E.L. for 3-8- Amount 360,000 240,000 . 8,930 18,023 29,219 28,239 - - - - Replacement to 7.2. the 9.8.) The (tades fun 1.5. Account Replacement - British from 2.3.) 120,000 80,000 - 14,143* 86,909* 6 86,909* 66,9094 - - - - Thigements tra t.c. to T.J.B.B. M - - - - Replacements for Strenden to B.E. (31,667) (31,867) Additional T.S. allocation to U.S.S.R. " S.E. expense .. Reglacement - , - = - 29,9724 - for liverates M t.s. (Line) use 5,720 4,480 1,868 536 1,933 2,800 2,840 2,027 a o e eu = Yes stemi, U.S. Acet. 109,843 9,529 107,924 130,236 128,060 98,132 199 o o 29,789 may from B.K. for 0.8- 107,520 71,560 20,187 10,022 20,187 20,187 20,187 20,187 - - - - (leplassment to U.E. from 1.5.) = sur Casetta Sale 40,320 26,880 25,275 438 26,523 $2,7% 30,369 45,159 707 D o 4,503 14 34 clyes 3,360 2,240 1,792 e 4,131 8,744 6,442 7,866 189 0 358 249 Il SEALL tra M.S. 2,151 4a 3,146 11,816 10,313 9,948 301 o o E Dymarine, Retransfer 6,720 4,180 (ne 1.8. 5,478 o 5,478 5,478 5,479 5,478 -- 6,720 4,480 1,4991 450 4,247 18,6091 17,266 12,332 2,963 371 MD 927 II in Phonel 11,160) 7,832 7,991 ME 7,953 25,190 22,422 18,765 1,543 170 148 1,4% TL 4433 as 155 52 227 410 395 2n e o 0 124 TIN Total 40,320 25,307 31,327 o 27,343 75,431 43,120 51,017 3,292 359 1,810 4,70 11:40 Destruption 6,720 4,480 4,40 378 4,977 12,727 10,486 8,755 254 or 201 1,117 Other Chestrais (tome) - Mounta Chieride (-)nu 0 a 4,594 T26 726 0 o o o II NAME Aminta Sitrate (-12,4061 0 a 3,3961 3,7% 2,602 113 o 479 0 Ameria Tyanide o o o 3 ) o o o 0 11 Alam Inlike en H2,1911 o 0 3,5211 3,525 2,456 907 16 112 o II Al 0 o 0 9 # 9 o 0 e o 11 % to lerie 1 o 0 132 106 106 o 0 o o 11 Flack the (toos) # o 530 2 ses - o 0 e 20 4347 barie Acté 560 o 0 1,009 459 293 167 o e 0 Ha Butyl Alcohol 303 155 159 303 155 e 0 o 0 159 VIAR Calries Carkide 168 o 186 424 354 356 o o e 0 11 - Carlen 4 Lamp Elacks e 0 o 13 2,251 2,251 2,251 o o o 52 Contralite, Kingl 1,096 199 970 1,767 1,479 1,210 o 0 0 262 R NAME Citris Acté 501 40 533 1,044 1,044 666 sé 0 o 292 IT LA Collaxyline (est) o a 2% #,136 5,040 1,426 1,339 86 130 a = 0 or E 292 434 E 0 o 0 Cressi o e Pathalate 399 54 1,230 1,579 4,557 3,530 859 8 20 P NAIT Giynal 307 30 282 552 457 you 0 o 0 65 0.00 Restigt antites o o sa 2,510 2,302 1,797 420 o BS o o Dipherplantes o o 3 2,080 1,489 1,233 256 e 0 o 192 192 152 o 0 o 40 que 150 5 E to o o 993 4,615 2,062 1,042 e 0 o 0 ONT Formidatyle 0 o 0 560 494 4.52 E o o a 5000 area 0 e 127 600 127 127 "0 o o 0 n State 0 o 34 504 504 504 6 e o 0 300 al o o 0 sur - Pleased Formaldanyda 0 o o M 447 - (-)%01 a 300 1,821 2,353 1,00 485 e 0 DE 1.44 Fierle Acté MT 18 MI 1,487 1,238 500 90 # 147 ass FATE FINANCIAL 221 30 390 1,344 an 744 4 8 40 30 (-14104 a 1,013 1,2011 2,138 1,867 e 0 LM 13 e 0 45 0 Sulpharte a 179 5801 580 535 - a 1 130 62 $2 e o to 0 - # # e 5 & # e a $ - / # as 303 26 - u . s 5 - 402 - - 2,000 Iss. - wight Mariage - - 1448 - is - of - agreest onlysing - - - - - 1 of the - - - - will - parte - - be - - for - - - emericas - - - - se is - Inview - - - - - - - - - - - - - - - - of - - - - - are - of - - - - with - - metia - - other - - - - - - inform - . - - Tax - - - surgle - - - - - - - vitamine - - M.A. - - wills - - - - - - - - - - - - - - - - - - - - time Miller - - - - - - - - - $ 1 # I UNIT I 1 I - - - - - - - - - FML - - - - - - - - Regraded Unclassified SECRET Sheet a IN Provided day 1, 2963 Separial Let, - - Ind fairuary 29, INA Invier 4. 260 - Internety a. TINA 1140 caf. 3rd Offered Made Protent to stall. I Psis. 1/1/0 1 Brand is 5. L. offering Date To Into 1/8/4 south. Departed antined Last the switting a festa . . & 1944 . 4 Squart . Formal- Pain. if las . 1944 . MATERIALS (noth) (ing) (toma) (ant.) bills, No. sivels, are. 2,306 255 3,386 la 12,432 7,317 6,934 6 # a ADD 24 Lending Mate 6,533 0 8,533 8,533 8,333 4,133 e 0 o 0 = L 1. Maile and 158,205 14,493 185,329 322,629 294,397 233,932 13,461 1,421 as 20,785 Mount Jase, Music à Agles 0 4 D 127 30,416 AL.0% 22,138 23,277 a 0 913 - Car Lides o (2) 0 ID 14,256 35,950 33,990 27,914 1,387 0 4,050 617 0.14 and CAP Thesl Time 3,982 1,197 10,339 16,960 15,992 12,566 13 0 4A 2,819 2 Balled Steel Car Thesis 3,2% 1,062 5,333 11,448 7,167 5,993 a o su 1,068 LIFE Lacturitive isles o e E 255 183 MO e e 0 4 E Destric inles o 0 0 300 a 222 or o o 0 Total Stan) (tome) 500,000 333,336 298,996 29,863 351,039 1,907,481 1,663,858 149,337 1,00 Bate: , The following quantities released from 1.6.8.3. export stenke for relistribution DATE less defusted fine - made smilable. July no- July 'A3 004.1941- July % Feb. 1944 Feb.29,'44 Park. 1944 Pub. 1944 IV Date Finished face 945 956 11 22A Cald Rolled thrip 28,466 28,456 II 32 Pipe and Tubling (-) 15,669 60,297 Li 0 8.74 street Steal o e II 25 Steel Rive 31,955 31,995 II " M. Basta and Plates 1,152 17,796 a D.B. Billeta 4.10 50,866 II 26 Wire Rape 350 430 E Date Belled Sharte 345 3,305 11 a Baried Rice & 6,586 17,127 Total falmend (toma) 58,200 190,769 = PM Pie true (tona) - 2,27% o 2,209 4,676 4,113 4,113 0 o o a U BM- Diadne and nature (toma) - - 1,73% o 1,117 2,699 1,6% 1,683 a o 0 11 II y Pumer Bullers ($1000) . - 6,622% 311 1,5% 1,767 1,9% 1,273 e o 0 331 El 154 Rist. Ferrous Metale . Proda. (81000) - - 1,66% 21 Me 2,275 1,295 1,120 a o 0 109 yr Products The 1. S. 4,566 321,738 . 723,414 154,563 10,794 07,95W o 66,128 The I.I. for 1.1. Assount 360,000 140,000 . 8,930 18,023 28,219 26,219 - . . - Registement to T.A. from 9.5.) True stades for t.a. Account (Replarement to British Dros U.B.) 120,000 80,000 . 14,141* 66,909* à 66,909* 86,909* - . . - Shipments fra 1-1. to 2.3.1.1. as - replacement far Diversion to D.K. - - - (32,867) (32,897) additional t.1. Allotation to it U.E. expects sa Replacement - - - . . 29,9714 - for M U.S. Creditals (toma) un Interes 6,720 4,480 1,000 536 1,933 2,800 2,840 2,027 0 0 a a EL 38A Hand, Etay) from C.S. mit. 109,843 9,529 107,914 130,236 128,000 98,132 159 o a 29,769 kinnel, Finyl from U.K. for 5.5. 107,520 71,680 20,187 10,022 20,187 20,187 20,187 20,187 - . - (Reglanment to O.L. fra 0.8.) READ Deatic Soda 40,320 26,880 25,275 638 26,523 52,7% 50,309 45,159 707 o o 4,503 ch IN Rigless Slymol 3,360 2,240 1,792 o 6,151 0,744 8,642 7,866 189 o 358 269 o From c.s. 2,151 & 3,146 11,016 10,313 9,948 301 o 0 F Lend-Lesse Retermater 6,720 4,180 The t.c. 5,478 o 5,4% 3,4% 5,478 5,478 , - et 6,720 4,480 1,4891 450 4,247 19,6891 17,266 12,332 2,M) ym an 917 Preside 11,160; 7,832 7,591 658 7,953 25,190 22,422 18,743 1,581 170 us 1,470 - Tetracrida 11 165 52 227 do y95 in 0 o a 124 1 DA Triest 40,320 25,387 11,327 o 17,30 73,431 43,120 51,017 3,190 259 1,815 6,12 : a 6,720 4,480 4,650 ym 4,977 12,727 10,686 8,785 358 25 R 1,117 Other Chestrais (toms) Il LA - Thiertia (-)2111 e E 4,9941 T26 T26 o o o o Il - America Birefe (-12,4064 0 o 3,3941 3,394 2,602 113 0 6/99 o us si America NIN Cyenide o o o 3 3 3 @ 0 e o sur Antline an 192,1911 o o 3,5211 3,521 2,446 $ 15 112 0 DO o o o 9 9 9 0 0 D o N. Feruzida 1. o o as 106 106 a o 0 o MAIL Black Eyes (see) 9 0 530 752 § $ o o 0 or 1347 AC34 560 o o 1,019 459 292 167 o o 0 If - NAME Alrohol 303 155 155 303 155 e o o o 155 - Calcia Carbide 156 o 186 E 356 354 o 0 o o 13 Carton & LARD o o 13 2,251 2,251 2,254 o 0 è D 13 54 Centralita, 1,096 199 VXI 1,767 1,479 1,258 0 o o 263 Date 4414 531 40 533 1,044 1,044 696 56 o 0 2901 That [well) 0 a 2% 8,156 5,040 3,426 1,339 # 110 * 11 % = Creant 0 o 0 441 292 as 61 4 0 0 04 4 Cityl Phisalate 139 54 1,230 5,579 4,557 3,538 R59 P 20 R If MAIT digrest 457 yes o o 0 65 307 R 262 552 al Clastify) Antitne o o 52 2,510 2,302 1,797 LIC 0 #5 o to 0 0 3 2,080 1,499 1,233 256 o o o 11416 Euglam Chlorohydrin 160 5 141 192 192 152 o e o a 11 stato Evylone o a 593 4,461 2,045 2,042 o o o 0 It FAIT Furnaldetyde 4% 432 2 0 0 0 0 0 e 560 is NÃO Registrate arte 9 0 127 600 127 127 0 0 0 0 - Nectora o e 34 5% 9% 304 0 o 0 0 Pienci Formaldalyde 0 e a 3 447 369 - e 0 o VII (-)7401 3 . 590 2,4231 8,598 2,001 ARS o 0 so 1444 Pueriz Antal 1,238 598 92 I 147 401 597 178 001 1,487 THE NI Chiereta ESS. 30 3% 1,344 814 1 9 a 40 R Extensive Bitrate (-14301 $ 1,013 1,251 2,178 1,967 0 $ 1.34 " - H1,2491 a 17) 3801. 580 535 0 $ = 9 EV Publicate o a 120 of St a # is e E 6 & 4 # e # . - . 0 3 1437 us o as SD I 264 12 , # - Add - are 1,30 The - wigh - of the Protenal - - - - - - - der - - - the relacted - 9444 - to - - - - of - - - - - - for - - The workly infortion - - - - effice - - - - - - - - - - - - - - - - - - - - - - - the - of partinal - - - - - - - - - - - - - - 1 - -- - - - - - de - - - - - - - - - - - - - - - - 14. - - - - - - - - - - - - F. 1 # 1 , 2 - I . $ - 1 - - - - - $ 9 I 1 E $ I - - - - - - Regraded Unclassified SECRET Shoot 4 I I I , I 2 4 Reportal Performance Let, 2nd set 3rd Protonale € / Delater 4 I/MAI to Internary a. The - I 1 Inview a INC. During 1/2/0 I Streeted In #. L below offering Sale 5 Date Superiet APPLINE 1/29/11 Last Ifter smiling A 1 . . . 1944 . di Report hours. É & . INC . 1946 , MINIST - - Tomal (noth.) - - - au a 754 1,501 1,380 1,388 0 a - - License am 0 so è 250 TOL 1% bille Spable 1-22481 475 55 0 0 : as E se # 2,1791 1,812 inalate / 1,399 334 0 11 e o 58 52 F # so # 0 two stimie o # 0 g 4 11.47 o is 13 4 4 - leagest 0 as 387 e 307 @ 722 5d4. I o 0 e a , 258 e 251 501 458 391 , o 25 " sure - 1,00 1,241 5,530 11,173 20,529 7,720 129 0 23 2,47 Total Utser Chemicals (tome) 9,200 6,134 3,124 2,700 15,767 74,001 95,312 47,854 1,496 178 1,4% 6,338 THAT (toma) 230,782 158,073 215,040 25,033 229,806 437,254 794,910 30,801 14,906 1,007 4,992 30,114 Sole: 1 The fullowing all of min same bees released during the Third Protocol Period from U.S.B.S. export for redividation to attars lare been delaried free security más svailable. 11 43 T27 1140 1,027 TOTAL CHEMICAL# ISSUED II LA Amounts Chlarida 211 11 90 Polassion Birste 410 II 61A33 Mitrale 2,406 11 60 Pulphate 1,246 8,90 - II 549 intline JEL 2,207 11 39 Soling Browlde 129 Valoriale A Proteste investre Grain (toma) 4,000 2,667 5,528 307 4,3% 8,170 5,755 5,096 % o 200 11478 atrestra Products ($1000) 346 4,000 2,447 3,354 Z 3,40 10,128 9,520 1,777 956 33 346 000 Craptite Certribes (tone) 5,757 3,439 4,259 667 4,581 13,199 12,723 10,427 1,319 = 40) 11 MC * Craphite Fonder (Last) 539 1,120 747 1,971 136 1,390 2,400 2,001 1,4% 125 0 o 5 Other Grandite Coods ($1000) (1,128,73) (1,6918.7.) 405g 50 320 1,272 1,209 1,028 100 o 29 52 11 F time [1000 unlia) - va 101. 1,061 2,316 7,217 1,865 92 51 o 209 11 % F Tubes (1000 unite) - - you 101 1,057 7,418 2,162 1,009 90 52 0 zu 15 - Fulter time ($1000) - - 3,359% 162 2,973 5,256 3,751 3,08) 207 D 0 521 = e 3ther fuller Protucte ($2000) - 9,155k 439 7,722 14,361 9,683 7,514 109 o a 2,030 11 % Sheet Files (tom) 1,000 667 1,3m 149 2,186 4,322 1,725 2,092 496 , 147 347 04 Short Absorter Card (yds.) o o -- o 5,000 : 171,111 146,111 o o 9 5,000 0.00 Relailer Cloth & paren ($1000) 1,000 667 367 22 375 1,360 1,212 1,00 , o D IN 00 Contener Paper (tome) 144 - 37 o 20 193 157 157 o o 0 o its Liguratte Paper (toma) 334 224 o a 142 1,042 534 457 $ 0 0 9 118 Parchases & Other Paper (tone) 1,680 1,120 Two $ 1,931 4,326 2,718 1,7% 0 o g we par Falitar ($5000) 531 26 647 981 906 - o o @ 8 Dec their Footwear except C.M. ($2000) . - 4747 7 553 918 831 420 12 0 . 192 CL Y54 Clier Apparal except c.m. ($1000) - - THE 23 122 444 258 222 23 o o 43 ON Testiles except Q.M. ($1000) - - if D 19 aso 154 129 . 0 * 10 7 Fine Reta (toms) , , o 301 479 353 1% o 0 o 187 0.00 Tupe (tome) - 432f 265 sse 1,163 1,8% 1,608 o o 16 266 IN Twice 1,4% o o o e o o o 0 o o Minerals & Frod. ($1000) sar e 125 792 Mes il 61. 0 o to 11 The Livi Products of Leather ($1000) are e 16 34 27 27 o o o o 05 Materials - Products ($1000) Nor @ 937 1,3% 1,1% 711 X 20 o 394 MACHINEST AND Military and Namel) This $1000 at a & - 15,000 10,000 6,999 444 1,4% 11,990 9,237 7,531 150 o 1,136 0 1% Catented Carbida Tips 4 3,000 2,000 1,168 59 1,196 2,457 2,3/1 1,850 10 0 5 243 a 1981. the Custing Dias, Drilla, atd. 6,601 732 5,705 21,982 19,761 18,977 42 o , TAY 1982 Portable Metal Cutting Washines 15,000 10,000 42 0 45 149 138 133 4 a o - 1583 Other DATE à luring Tools 943 R 1,100 4,214 1,470 3,530 58 o 0 an DE Precision Insuring Tools 3,000 2,000 369 20 744 1,274 991 830 : o 144 0 € e Wedking Toda 120,000 80,000 93,602 10,033 1,039 254,006 164,700 157,650 o 1,055 19,524 (Thite) II H (10,202) (1,00%) (11,899) (28,581) (23,924) (20,255) (1,00) D (515) (2,110) Destrict Furnance 11,000 9,000 5,435 515 4,509 12,500 9,591 7,8% € 0 $ 980 (Tettal (297) (75) (281) (754) (579) (432) (40) o (5) (100) la Ties) Billing fills & Epda. 14,000 10,667 2,200 o 114 2,522 439 396 0 0 0 43 E # Forges, Pressur, via, 30,000 20,000 29,824 1,443 15,7% 60,613 30,449 24,858 953 24 1,121 1,491 E #tre Drawing Bechines 2,000 1,336 550 0 19 550 o o e a 19 Sevipment su 14,009 9,272 334 o 2,478 0% 12,500 8,3% 5,970 6,723 16,398 1,925 Trues & Tracter Crasse 2,000 1,3% 246 T3 877 2,446 2,241 1,7% as o 33d. 115 Dther Craces 20,000 13,334 7,836 E 1,847 10,642 7,626 5,650 55 o 132 1,809 AND Compressors 1502 9,000 3,119 46 3,921 7,254 6,122 1,335 340 0 182 265 Pass and Flowers 6,000 339 19 106 376 109 91 0 o o 18 Date Theye 8,000 1,3% 4.121 MI 1,7% 4,553 3,560 2,902 in o 159 XY DW 11 Mg Wining, Chaning, Completing Male- 10,000 6,607 5,080 445 3,211 8,443 4,558 3,666 e è LIM 691 Mask Finale 10,000 6,667 1,067 as 296 1,147 306 220 0 o 0 à 21.458 Welling Equipment IT MI 4,000 2,667 2,708 229 2,870 4,289 3,521 2,508 so o o 963 Talves AND Fittlege 2,000 2,570 86 2,119 6,379 3,267 2,968 F o o 225 nw 3 3,000 Tenis 11 46 5,000 3,334 1,967 @ 1,490 4,000 1,696 2,480 o o o 236 E B Instruments & Test. Sevia- 12,000 8,000 754 $ 530 1,066 797 417 25 a 7 148 VSR178 1.2. State Elgsal Rystem 12,000 8,000 3,343 , #: 3,343 as # e o e 5 Authory Markinery . ($1000) è Inginee and 2,467 - - 1,915 7,314 6,987 4,360 133 0 18 476 Trurba * Tracture HD E 2% 1,015 1,502 3,107 1,430 = - 225 317 Power Treas. , o , 22 N as o o 0 o HA Place General Purgose fasis. = 0 17 R E I 0 a o e en HD. Brurs, Generature, etc. 10,000 30,445 52,901 47,450 11,70 197 , 133 4,5% hisary Des. Pumer a Dipalyment FR de 1,603 2,256 4m 1,441 4 . e LIB Former 1,30 - 5 1,431 4M 103 9 a D E PM larriery la. & Mirling Invined an R 326 150 TRY 706 1 43 a e 76 know, Fanters . Contrallers 20% a 182 E 437 - " a a 182 - as - - I,MF Da. - eight - - - - - - - - - - - will - pointe - a - Cortaines. offerings - - MAA - be - - - upon of - - and - - the - - - - - - - - - - - - - - - DO of provided time sispet. - - - - - - - - M - enjoyed 45 - of - - period - um 1 1 1 I $ 1 I 9 1 1 » 1 1 , 1 1 2 E 1 5 $ 1 5 $ I e $ 1 3 $ = 1 - $ # I 1 1 & I I I 5 I # 1 5 I - income - - - - - - - - - - - - - - - - - - - 4d # 1 - I I / all E 1 - 1 . - , 1 - 1 - 1 - - 3 - - - SECRET Sheet $ ted - this 1, 180 Reported I { 1 1 1 I 29, - I I di I # É INC. - offered 1 Burdag W/W Protend 3 smill. 8/29/14 1 - to 9. a. I Offerias the # I 1964 PULL - 1 after I A 1 . a I - I É # Les. WOUND AMC (nost) institing maing will OTHER # # 8 11 MD League 15 . LOS N at MA Electric deplicance @ # a a a INDI no. Certrical Products an 13 A 778 Date - a 19 13 MDI Food mistery 179 LIT 337 638 430 E 129 fustile ministry 439 " as VAL 937 / use C - Paper Insurary Massinery E 0 344 / 435 E Printing 0 s 44 44. 44 time Flast 3,529 338 10,196 0.00 4,293 IN 1907 Machinery 449 14 265 over 435 301 12 as infinery Body- 13,380 o 37,134 u.re 40,44 38,768 and 48 1,000 MALE Glase Anda. 136 o IN 1% 1% 1% Chanical Industry 760 o 156 998 179 LTD 05823 Card Producting university 1,7% 499 1,400 4,127 1,000 1,380 SIN FIRMP Special 0,161 51 1,2% 3,439 8,130 1,000 , e 20 Cartridge are. Lines 800 8 1,75 14,500 12,170 11,000 17 134 189 Selting , Casting Revis- an o 135 RST 267 252 as o Billing mille 1,915 1 1,003 6,980 3,44 1.00 a HER wine. Detail Marking Stude- LETT 386 3,479 1,747 1,580 1.18 $ - for Martine taske 755 B2 320 1,604 052 TLL 17 14 110 05827 Agricultural Machinery 306 155 334 169 LEL e - 000 ora Mall Drilling Equipment 1,29 55 3,182 1,633 4.m 4.483 . E % HER list brilling Bystpment 387 o 401 LA 13 0 Construction Marklinery as 139 338 331 sa * o Office Markinse e o 49 all LA MIN SAT 609 LIS 136 456 e Communication 7,015 F 2,40 7,455 3,225 1,00 36 10 TM HDM Apparative 199 179 ass 606 690 0 e 0 6 99134 Industrial 113. Transp- 585 aoo 1,214 I.IM 1,00 1,441 as as 668.75 Mater Vehicles & Parta 24 o 14 LAS 170 LA? 6 Refrigeration Bysis. n. u x as 3.8 0 14 4507 Lighting Pixtures 16 61 380 as as u 0 15838 Photograchie 361 129 441 1,10 1,414 NA a 394 124 B Indicating à - Instruments 1,100 as 996 1,737 1,3M 2,160 a e 145 HOW Professional Instru . Apparative 208 as 338 138 a NT " 36 - Equipment 182 111 521 - - a 15 II now list 10 19 158 LES 137 , o 1 Total unillary 36,500 26,334 105,364 4,217 105,176 190,529 148,180 132,370 1,203 24 1,000 Swirgency Equipment 25,000 14,444 of her trugree 13,000 50,000 * Total Markthary ent System (30,000 306,670 290,307g 23,429 190,762 433,811 480,337 393,990 11,770 to 9,9% 67,330 500 147 E 30 as 272 as 139 . o a R non Flat Dara 10,000 LINE 1,689 195 1,053 3,469 1,013 154 07 o a 475 12. Chimp Care 0 500 e o 500 b a o o a 5 MIAL 1 WHERE NE 2 Barthe Cassel Englines TO 433 173 17 506 1,051 RW 793 9 o a # Marine insuline Engloses 154 104 1.4M 1% 1,717 3,341 2,995 1,529 o 2 su Betore 0 o 400 e as 600 600 600 o 0 o a "I" try Cargo Transferred 1 e 58 58 RE # Tadlers Transferred e 13 13 NET 10 T is e 10 a M RES Chasses o b. u - m 12 u RL 10 -enting 0 o 30 2 30 30 30 o . o # instructure Transferred 0 o 1 1. # 00 Molor Terpedo Roate 0 o - 19 IT e DI as Credit Roate 0 o 67 19 45 en à 12 no Sal. D.B. - 200 57 LAS 30 2% 352 214 e # 5*/38 Oal. P.B. Date e 3 * á 0 : 50 u 138 134 $ 39 0 G . . 0 * RE 50 Call Tela N. 900 500 324 50 400 400 280 120 RE 17 the (20 - 500 101 are 0 as 1,998 1,337 133 150 0 0.00 for Noval Pursianed visa na livengs latieries to Jule 15 10 6. o as as 39 €120 Class) Generature à Sex. Compres. 850 667 108 137 354 298 - R >>> English Generatore 300 200 o 0 o o na Marias There Jeserators 10 , o as 14 14 14 4 a no Des. Motor & - 2,250 1,5% 550 - MO 422 ADR à D Fortative falar Page 425 142 79 43 as a a 0 or Les 228 225 0 : 11.29 *Artine Paus to Fortable 257 in 227 as 25a Marine Turbo-Pase o o al 56 = a o na o Internation Electric Pumps 100 a - Purtable ALP Compressure 60 20 0 o e via living Patient or 14 20 20 20 20 8 0 e 0 8 11 29 a 20 0 0 0 Del. Mitting & Cetting in- (Ma) 0 RI 33 to 20 0 200 200 200 0 a Lies. 1 Prematte Tools "In Electric Plations a 20 3 3 a E 68 e a 0 CR For Salvage (Serta) 20 14 e o 0 e 43) e 0 0 Tertinal These Bullars 10 7 e ILM o g . Name Chesters 1 o 0 a RL 35 with Return , ** Line. Vesillating Sata a 433 w o 304 E § 225 o a a no Warias Terio-Tentilature I 5 6 30 30 32 a e o 8 UM LLT 15 x o e 30 0 e o a 10 79 as , 5 0 0 e Treling Resiss 0 TAX 3,000 8,000 eso 4,385 aso EN 0 a a Relary I 4 el - Susse aso 180 160 - 140 5M a 0 a 5 a a suillary for Ships (Seta) E 1 # . Eles. law. à Finance (83000) MY 144 148 - iss . a 0 LBS = Belar Exis Duise 8 0 un 60 100 100 100 a 0 132 a - E = * 8 a listinal . larte, cla. - # . # . Revel Aircraft ($3000) - ($5000) - LAS IN - 307 17 e E 1M . o - 599 434 e 13 " Then Martine But * Sexis, ($1200) # . - 18 345 X # 30 403 388 is F inder Cas. in. 4 Not ($1000) 21her tadle finds. ($LX) 0 32 602 1 2 En Him a Revis- # - - 1,63 2,79 1,00 a - Name - - - - - repaired - - la ... Paria, - applied with - for Unit - ! 422 - - 2,00 The - - - - - - - estected - 1.1.1.1. - M - of - aggregate of establing - - - - - - - - of the Phytemal - - - - will - profession - diving to - - Iffertage the I - - . - - - - - - - - - all - of - - - sine - - medical are - - - - - - - - - of - - - - of INCOM - - - - - The Meto - - - - 4 - - - - - - I I $ 1. $ 5 1 1 I I 3 I # I I I 1 3. - - for - - - - - - - - - - -- - - - - / - - - - - I - I - I I - 1 Regraded Unclassified SECRET Sheet E Ird. Protonal Performent July 1, 1943 to Expiried Dedation Performed 184, IN - 21 Primary 21, UNA 1, 1961 to Primary n. the Ini Offered 1 Protonal to smill. During 1 Date to Data M. 1/21/11 smill. Offering Expertal invived M.E.E. JULA Laws . . a After beiting be Peute - a Permed- 7ab. 29 Inc. . 1944 « ROUTIFY (tons) IN LA must / 27,578 12,304 27,578 14,836 54,826 / / 41,377 ADO 0 0 If 1014 2,200 of 1,200 14,449 5,342 5,362 / 1,360 o 206,926 35,830 a e , LA Bart fluir 206,926 e 444,718 444,728 you fillen First / / 36,09 7,466 280 4,493 3,062 o 7,466 14,807 18,807 70,924 / 18,407 o 0 THE our Subte Oralin and Prode. 5,809 o 0 1,009 400 20,438 20,428 19,303 1,30 / o 28,116 o y 1114 MUMT Finished Cereals & Prode 6/75 28,116 993 41,921 81,921 / / 73,168 1,065 528 , a THE Pass & - 97,733 4,986 © 97,733 3,160 209,853 209,855 157,289 7,441 23,134 o Tital Best, Certals, - 500,0004 21,777 333,3344 375,836 53,975 375,836 #37,917 437,917 681,145 13,139 26,728 o 114,109 pa squar from 2.3. Mainland 112,000 74,667 182,725 22,020 182,723 353,674 353,6% pa Sqpr from ather Sugm 224,8004 149,8674 265,739 14,441 12,366 o o o 59,130 o 26,517 26,317 26,517 o o 0 o 23 2 Comed dest / / 95,196 8,597 95,296 325,824 325,826 267,100 17,089 / 14,842 381 a X Date: 92,859 3,442 26,212 92,869 y Calined Seats / 97,964 97,964 90,370 / 1,160 o 0 4,063 al 6,434 4,063 4,740 4,740 1,447 0 or e 3,295 liest 215,184e 140,51% 192,138 12,109 192,128 628,528 08,58 398,917 18,249 14,862 541 35,920 2 LA Secret STATE / / 3,932 o 3,932 13,993 15,993 15,192 4/99 302 o e P à New: Preparations - nost / / T2 o 72 236 236 236 0 a o If 5 Cariar's Served (056 accord grada o word / / 1,604 914 1,604 1,604 1,604 at o 0 e / 1,532 if u (and 76,877 9,993 76,877 146,657 140,897 101,789 6,861 16,846 o 114 7a5 Ivia / / 18,161 93,254 4.846 93,254 183,970 183,970 168,630 3,148 4,343 o TT II animal Fase & otle / 8,050 / 7,560 289 7,560 22,938 22,938 20,662 437 539 o 1,100 Tital Animal fale, Pat Cuta and Sevent Name 308,000 205,334 183,299 16,040 183,299 371,398 371,398 309,581 11,145 21,429 o 28,80 If LOTA Butter 39,300 26,134 19,514 404 39,516 11,112 51,312 48,827 1,010 735 o 790 , à Regetable Qtle / / 108,070 4,058 108,070 227,755 227,753 203,665 E 0 o 23,456 a is 12,112 o 12,112 24,332 24,332 21,278 286 2,140 a us = an 31,033 2,250 31,033 35,796 15,796 29,456 458 0 o 1,882 Total Vegetable ets. 222,760r 149,5526 151,215 4,318 152,219 267,883 287,853 254,799 1,428 2,140 o 29,916 su 7 Plant 30,134 4,427 30,134 32,528 32,528 25,978 1,122 a 0 5,428 du XA àrtre / / 12,632 2,958 12,632 12,792 10,792 7,475 a o o 5,119 If 114 Trial VATA / / 29,690 500 29,698 45,677 46,577 34,867 896 4,3% 0 6,520 9 109 Cashet aux (Contenaed & Evap.) 5,824 o 5,826 11,123 11,123 10,841 282 0 o o If 111 Crief to 26,409 2,941 25,409 57,412 37,412 43,461 4,574 5,296 o 4,081 7 tou Pruits / / 300 o 300 983 903 98) g o o 0 2 us Crief Tegatables (Bareyt Pass - / 3,288 172 3,288 3,845 3,845 2,621 o o o 1,224 9 this Cersals / 5,099 196 5,099 6,239 5,239 5,739 91 o o 405 , LIAB tried Soupe 6,451 o 6,451 6,722 6,722 5,998 109 0 o 619 , a Conver / / 14,80 LB7 14,863 18,564 18,564 15,327 295 0 o 2,962 If DM that 4 Tegetable Passes and Furnes / / 2,951 453 2,951 3,361 3,361 1,713 o 0 0 1,648 ? Be Investrated 181 o 181 556 556 556 o o a o Tytal Concentrates, etc. 177,000 118,000 137,810 12,234 137,810 200,802 200,802 155,759 7,169 9,690 0 27,994 If A SAI / 1,270 o 1,270 6,0% 6,0% 1,097 in o 0 de a , their / / o 0 0 322 322 a o 322 o 6 Telas - una Gat 11,200 7,467 1,70 o 1,270 6,396 6,396 5,897 111 322 o 56 DI 1456 - Pricts o o 1,509 o G y EM Regulation 1,178 o 1,1% 1,509 1,509 a o 0 . line Prima Pruits o 581 0 5 1,325 1,323 1,323 o # e o a as o o 49 o 49 53 53 57 0 o 9 o o a 1,030 b 1,030 1,100 1,100 1,100 o e o 0 . M The with o 0 320 0 320 1,856 1,856 1,856 e 0 0 o e IF Tes 0 o 249 0 249 en 671 #71 e o o 0 . 118 litter 9 Isa 5 o 4,053 1,7% 4,053 6,817 6,817 3,331 o 560 0 2,926 2 as Tatrante 0 © 1,143 0 1,143 1,214 1,214 1,214 o o o 0 e o 15 0 15 187 167 185 - o o 0 IP ITLA The Note Time Turlity TH use Othge o o 3,638 a 3,638 3,638 3,638 3,638 o 0 a o o 0 o o o 58 50 58 0 o D 0 . - 9 E TITAMINE o a 414 o 414 723 T23 577 o 112 0 34 0 o 91 , 91 359 399 314 , 36 o 4 # 120g Seria lend-Lease o . 20 Plass a 4,332 3,2% 4,332 12,855 12,855 9,154 LA a 0 3,60 . 134 Feet o 0 1,547 o 1,547 2,347 1,347 2,345 1 0 0 1 o D 3,282 o 3,282 5,358 5,258 5,258 0 @ 0 o Total Froda o 0 21,922 5,009 21,922 40,168 40,148 32,786 26 TOR G 5,44 - Bar Belief a o IM E LAS 1,153 1,633 1,590 e 5 9 M Total Products [Now] 1,410,144 1,204,872 128,290 1,205,886 2,606,250 3,506,250 2,141,147 60,728 91,350 5. 303,446 ALL tatal are 2,000 Its. set wight . minima Probate and Products más evailable as exported - Instudes milests for signature Previan Certifier reported arrived is Parsise Dalf parte 1967 Castarged La 5. &- segilared M smiling furneting - stier date Le not evailable se maine . to - Tue - Time, formals, visa. termed by 100,000 use, wish . corresponding refurtize is Tiger from Dther . - - - return W 2.17 - for - - of maybetal - shipped - - - of MD leis fundabet - S.E. - . waster of - - Article 1. 14. - relaw w - 1 I I 1 Deaft given to 171 Surretary h Me. Bahl 3/29/44- MEMORANDUM FOR THE PRESIDENT In the Executive Order creating the War Refugee Board you directed that the Board make appropriate recommendations to you to overcose any difficulties encountered in the rescue and relief of war refugees. Although the Board has already initiated many measures which, if fully implemented, may result in saving the lives of refugees, there is one basic obstacle which lies athwart all our efforts. This 1.a the simple fact that the United Nations have not been prepered to supply even temporary havens of refuge for substantial of the persecuted peoples of Europe, particularly the Jews. Why This Is The Main Obstacle The following brief summary will reveal why this constitutes the Date weakness in our whole program. (1) Our best chance of saving many people from death, parti- colurly after recent events in the Balkans, lies in an effort to expire the Hitlerite forces, and more particularly their function- -rios and subordinates, that it is in their interest to spare the lives of these people. In this connection, the statement issued w you on March 24, which is being given the widest possible posticity in German controlled territory, will of course be most Lelyful toward this end, especially if followed by concrete action. (2) And there is also an opportunity to actually bring some of these people out of enemy territory. The recent developments in the Balkans limit opportunities there, but there still remains possibility of stimulating the flow of refugees to Spain and Syltavrland, (8) It is essential to both of these avenues of approach, 26 and our allies convince the world of our sincerity illingness to bear our share of the burden. Thus, great will Le added to our threats, and other countries would ready to cooperate In siding the nacape of refugees, 11 clour now by action that our doors 276 open to these 30 Defind must not serely threeten our sceales - 0502 Willing Jers; the United Nations must offer Only in that PV cal the great noral ab slwar. 2 sut - stop would show the Germans clearly that our xr junishment and promises of action are not mere words, possible that after such an announcement the Germans To prepared to release or permit the escape of these procuted peoples. (5) And such a step would certainly cause the neutral countries to encourage the entry of more refugees into their territory since they would then know that they would not be required to keep all refugees until the war ends. Thus, one of the reasons why we are not meeting with any success in Spain is the fact that the Spaniards are not convinced that we will take the refugees off their hands. Although we have been stating Pue long while that we are going to take the Jewish refugees in Sisin to e small camp in North Africa, none have been moved Here to date. This has been due primarily to the reluctant <<!!tude of the French. And the inarticulate major premise of the French attitude undoubtedly is the conviction that such refugens are to be dumped and left in French Africa and that neither the United States nor Great Britain will receive them. Proposed Solution John W. Pehle has strongly recommended that this Government net at once in this humanitarian cause and announce to the world that DE will provide temporary havens of refuge in this country for all oppressed peoples escaping from Hitler - these people to le ,Inced in camps established in this country and to remain there with the termination of the war at which time they will be re- lucord to their homelands. Nature and Benefits of Proposal (1) Under this proposal the refugees would be treated in procet as prisoners of war. They would be brought into the country valside the regular immigration procedure just as civilian internees from Latin American countries have been brought here and placed in internment camps. No violation or attempt to evade immigration lears would be involved since the refugees would remain only until the termination of the war and would not come in under the quota There could be no objection on security grounds any more in the 08.88 of prisoners of war. (7) The principal United Nations involved have already agreed vools of them will receive after the wer its nationals who 11.5 for their lives and have been given ssylum in other in. Tiese notions have also agreed that It is Di part of pelicy to assure such conditions In essay and speay nutries -s will permit the return livereto of all persons do have sugght resure elgenhere. This agree- in w the Halted States, Treat Britain, 173 - 3 Union, Luxembourg, Yugoslavia, Norway, The French Treese, Belgium, Poland, Czechoslovakia, and the runda should serve to make clear to those concerned that such refugues 8,5 may be accepted in camps here will be returned to their homelands at the end of the war. (3) The humanitarian considerations which might be urged weirst the confinement of the refugees are answered by the simple rect that treating them as prisoners of war is better than letting Ca. die. (4) The general idea has been discussed with a number of organizations, Jewish and non-Jewish, and they have all expressed their "-- roval. Most of them feel that it is by far the biggest stay the Board can take to accomplish the purposes for which it CUS established. (5) The necessity for unilateral action now by this Govern- not lies in the fact that we cannot expect others to do what we mirselves will not do, and if we are to act in time we must take the lead. (6) The practical effect of such a step by the United States be tremendous. Our allies would without doubt follow our Tast this country, which has always been a refuge for the ligitive from injustice, oppression and persecution, should take ship in this matter would be in keeping with our heritage na with our ideals of liberty and justice. (7) In the hearts and minds of all peoples under Nazi domina- tian and throughout the world such action might well have an effect yes, much favorable to our whole war effort and to our reputation to E nation which has always carried the torch in great undertakings. (8) Even if no refugees were ever actually brought to these the mere announcement of our readiness to receive them sould remove the basic obstacle to our efforts to save them. In view of prographical and time factors, it is not likely that many would actually come to the United States. The important is U.st be offer to receive them. Risks of Proposal risks Involved is this ant 30 valtarian and other continued flow: the rest so - Toe into 10 that with dut DIP Regraded Unclassified 174 - 4 - people returning to their homes when the will not want to return, and that an almost will be created on Congress to change the such people to remain in this country. the danger that it would provoke unfavorable public Id give anti-Semitic and other groups as well plements in Congress an opportunity to attack you hourd. Recommendation of the Board Secretary Hull, Secretary Morgenthau and Secretary Stimson considered this proposal at the meeting of the Board on Dear N. Although there was no disagreement as to the potential of such a program, Secretary Stimson felt that the risks involved outweighed the benefits. It was decided that in view :f the importance and urgency of this matter and the great evapomsibility involved in making a decision; it should be sub- to you for your consideration. In your consideration of how this matter could be presented -- Use public, you may wish to examine the attached draft of a statement which might be issued by you. 10 would appreciate an early expression of your views. Secretary of State. Secretary of the Treasury. Secretary st The. 175 STATEMENT BY THE PRESIDENT As President of the United States, I have recently expressed the horror with which this nation views the systematic extermination of the Jews and other minorities by the Namis, To the Hitlerites, their subordinates, functioneries and satellites, to the German people and to ell other peoples under the Nazi yoke, I have made clear our determination to punish all participants in these acts of savagery. In the name of humanity I have called upon them to spare the lives of these innocent people. I Leve said that we shall find havens of refuge for these persecuted people and that we shall find the means to sssure their maintenance and support until the tyrant is Iriven from their homelands. Let it now be proclaimed to the world that this great nation, which from its inception has been & refuge for the fugitive from injustice, oppression and persecution, is prepared to furnish temporary asylum for Ell oppressed persons who escape from Hitler. Although all such people 30 brought into this country will in view of military necessities be required to remain in refugee centers during their stay here and subjected to the same security restrictions as prisoners of war, they will receive the immane treatment which our civilization provides, and here they will be safe. Upon the termination of the war they will be sent back to their homelands. With the cooperation of the other United Nations we determined to insure that refugees from death may live 2157 DE their own soil. To this end those members of the 3118 Nations principally concerned have already pledged colma to insure that refugees who are given ssylum Child countries will be welcomed to their native lands the 12. No votice la not earaly Be promote of C homanitarian 19 :- the Plant again? of MJ trimph, she Divine no the Time X below that in mini 176 EXECUTIVE OFFICE OF THE PRESIDENT MA WAR REFUGEE BOARD WASHINGTON 25, D.C. MAR 29 1944 My dear Mr. Secretary: I am forwarding to you herewith the proposed minutes of the third meeting of the War Refugee Board. The approval of these minutes will be on the agenda for the fourth meeting of the Board. Very truly yours, W. Pehle Executive Director The Honorable The Secretary of the Treasury 177 Minutes of the Third Meeting of the War Refugee Board Held in the Office of the Secretary of State, 10:15 A.M., Tuesday, March 21, 1944. Present: Secretary of State Hull (acted as Chairman) Secretary of the Treasury Morgenthau Secretary of War Stimson Assistant Secretary of War MoCloy Acting Executive Director, War Refuges Board, John W. Pehle. The Board took the following action: (1) The minutes of the second meeting of the Board, held on February 4, 1944, were approved. (2) The Acting Executive Director summarized the develop- ments since the last meeting, including the following: (a) Resoue activities through Turkey, especially the work of Ira Hirschmann, representative of the War Refugee Board in Ankara. Mr. Hirschmann has succeeded in evacuating children and some adults from Bulgaria through Turkey to Palestine and in obtaining Turkish Government's permission for the use of Turkish boat to evacuate refugees from Constanza to Istanbul. (b) Resoue activities through Spain, including the efforts of the War Refugee Board to remove from Spain the refugees now in Spain 80 that the Spanish Government will be more helpful in permitting refugees from France to enter Spain. Pehle reported that the Board had been unable to get any real measure of cooperation from Ambassador Hayes in Madrid and consideration was being given to the steps which could be taken to solve this problem. (o) The psychological warfare program, including cooperation of OWI, the warning to the satellite governments made through various neutral govern- ments, and the proposed statement by the President. Secretary Hull indicated that the British Government has asked for two days in which to consider the statement. 2 178 Regraded Unclassified (d) Cooperation of Russia. The State Department has sent a strong cable to Harrison at the Board's request soliciting the assistance of the Soviet Government in the work of the Beard. (e) Financing of the Var Refuges Board's operations. It was made clear to the Board that no projects are being refused because of lack of finances and adequate financial assistance is available from private agencies. As recommended by the Acting Executive Director, the Board took the position that it was not necessary to ask Congress for an appropriation at this time, but that if, at & later date, private finances were not adequate an appropriation could be requested. The Board was advised that the sum of $100,000 in private funds was available to the Board for financing confidential activities and that the $1,000,000 obtained from the President's funds was largely being used for payment of the salaries and other administrative expenses of the Board. $200,000 of this amount is being made available to the Intergovernmental Committee as this Government's contribution to the Intergovernmental Committee's work. (3) Secretary Morgenthau reported that at the President's request he had had a conference with Myron Taylor, American Delegate to the Intergovernmental Committee, and had explained to Mr. Taylor the accomplishments of the War Refugee Board in the short time it has been in existence. Mr. Taylor has invited Sir Herbert Emerson and Patrick Malin to come to the United States to confer with the War Refugee Board concerning mutual problems. (4) The Executive Order establishing the War Refugee Board provides that the Board shall make frequent reports to the President. Pehle indicated that a. report to the President was being prepared and that it would be circulated to the Board members for approval in the near future. (5) The Board then gave careful consideration to a recommenda- tion by Pehle that temporary havens of refuge be provided in the United States for all oppressed peoples escaping from Hitler. Under this suggestion these people would be placed in camps established in this country and remain there until the termination of the war at which time they would be returned to their homelands. Pehle urged that 179 the Board recommend to the President that he announce publicly that the United States was willing to take these people for the duration of the war in order to save their lives, and pointed out the many advantages inherent in such action. There was a general discussion of the proposal and it was agreed that the matter should be placed before the President. (6) The Board discussed naming Pehle as permanent Executive Director and Pehle's designation was agreed upon subject to the President's concurrence. (The Acting Executive Director was not present during the discussion of this item.)