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Volume 788, October 30, 1944
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Volume 788, October 30, 1944
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Henry Morgenthau, Jr. Papers
Diaries of Henry Morgenthau, Jr.
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DIARY
Book 788
October 30, 1944
Regraded Unclassified
- A -
Book Page
American Bankers Association
See Post-War Planning: Bretton Woods Conference
Australia
See Lend-Lease: United Kingdom - Phase 2
- B - -
Bergson, Peter H. (Hebrew Committee of National Liberation)
See War Refugee Board: Open letter to Eugene Meyer,
Washington Post
Bretton Woods Conference
See Post-War Planning
Business Conditions
Haas memorandum on situation, week ending October 28, 1944 -
10/30/44
788 180
- G -
Gerard, James W.
See Post-War Planning: Germany
Germany
See Post-War Planning
- H - -
Hebrew Committee of National Liberation
See War Refugee Board
- I ,-
India
See Lend-Lease: United Kingdom - Phase 2
Italy
U.S. Government to make available to Italian Government
dollars equivalent to Italian lira issued .... as pay
to U.S. troops in Italy - release discussed by HMJr
and Rosenman - 10/30/44
29,33
- I - -
Klein, Ernest L. (Kansas City Star)
See Post-War Planning: Germany (Gerard, James W.)
Regraded Unclassified
- L -
Book Page
Lend-Lease
United Kingdom - - Phase 2
See also Book 787
British Dominions: Discussion by groups from Treasury,
United Kingdom, Australia, New Zealand, India. Navy,
Army, State, and Foreign Economic Administration -
10/30/44
788
38
a) American statement as discussed with
British subcommittee
60
b) Minutes of U.S. subcommittee meeting - 10/27/44
65
c) Minutes of combined subcommittee (United States
and United Kingdom) meeting 10/27/44
67
d) British documents (1. on technical point of
where cut-off takes place, and 2. complete
information on Lend-Lease stocks of United
Kingdom) distributed at subcommittee meeting
74
e) New Zealand requirements: See Book 791. page 93
f) Supplement I to "British Requirements for the
First Year of Stage II".
94
g) ,Amplification of material in Chapter 4 of
"British Requirements for the First Year of
Stage II" (Australia, New Zealand, and India)
132
h) War Department memorandum on British Dominions
requirements: Book 790. page 43
1) Amplification of requirements of Australia,
New Zealand, and India: Book 790, page 46
J) Additional Australian information furnished
Combined Chiefs of Staff - 11/2/44: Book 790, page 229
(See also Book 791, page 283 - 11/4/44)
k) Additional Indian information furnished combined
Chiefs of Staff - 11/4/44: See Book 791, page 288
and Book 793, page 70
Statistical White Paper: Keynes sends to HMJr chapter on
finance - 10/30/44
153
Military expenditures data again requested of Keynes by
HMJr; Keynes reluctant to admit HMJr's legitimate
interest - 10/31/44: See Book 789, page 2
- N -
New Zealand
See Lend-Lease: United Kingdom - Phase 2
- P -
Post-War Planning
Bretton Woods Conference: American Bankers' Association
meeting with Treasury group described by White at
9:30 meeting - 10/30/44
13
Regraded Unclassified
- -P- - (Continued)
Book Page
Post-War Planning (Continued)
Germany
Gerard, James W.: Coincidence of views with Treasury
attitude called to HMJr's attention by Ernest L.
Klein (of Kansas City Star) - 10/30/44
788
202
Snow, Edgar: Saturday Evening Post articles indicating
reasons for a hard peace sent to Sir John Anderson's
wife and Lord Cherwell - 10/30/44
220
- S -
Snow, Edgar
See Post-War Planning: Germany (Treasury Plan)
Speeches by HMJr
"Of Human Rights"
Draft 1 - 10/30/44
167
II 2 - 10/31/44: See Book 789, page 17
Abandonment of speech, in light of Hannegan's silence,
told to Gaston by HMJr - 11/1/44: Book 790, page 30
a) Hannegan-HMJr conversation later: Book 790,
page 33
- U - -
United Kingdom
See also Lend-Lease
Wiesenberger-Treasury correspondence concerning conversion
of American citizen's estate in Great Britain into
American funds - - 10/30/44
194
- W -
War Refugee Board
Hebrew Committee of National Liberation (Peter H. Bergson):
Open letter to Eugene Meyer - - "Washington Post a Victim
of British and Zionist Intrigues?" - 10/30/44
226
Washington Post
See War Refugee Board: Hebrew Committee of National
Liberation (Peter H. Bergson)
Wiesenberger, Arthur
American citizen's estate in Great Britain - conversion
into American funds discussed in Treasury-Wiesenberger
correspondence - 10/30/44
194
Regraded Unclassified
1
October 30, 1944
9:30 a.m.
GROUP
Present: Mr. D.W. Bell
Mr. C.S. Bell
Mr. White
Mr. Gaston
Mr. Pehle
Mr. Blough
Mr. O'Connell
Mrs. Klotz
Mr. Gamble
H.M.JR: Dan, how was the Cleveland Conference?
MR. D.W. BELL: Cleveland was fine. We had a very
nice meeting. It went off very well, I thought.
H.M.JR: That is your idea of a vacation?
MR. D.W. BELL: Yes, it was a change. I really had
a nice time.
H.M.JR: You and Gamble have fine ideas of a holiday!
Harry, last night I called Mr. Cherwell to ask him
to come in a half an hour before we meet, but I now see
we have the Americans at eleven-thirty. When do we have
the British?
MR. WHITE: No, we have the British and the Americans
at eleven-thirty. There is no prior meeting.
H.M.JR: Is it O.K. if I have Cherwell at eleven?
MR. WHITE: Yes, because the meeting is largely a
formal one and there is no need for a prior meeting on
Regraded Unclassified
2
- 2 -
this particular problem with the Americans. We were
meeting on other problems.
H.M.JR: So it is all right for Cherwell?
MR. WHITE: Yes.
H.M.JR: I want to see him alone.
Herbert?
MR. GASTON: I haven't anything.
MR. O'CONNELL: I have a formal letter to the
Attorney General in connection with that surplus property
problem that we have been discussing, you know. If you
would be willing to sign it - it is merely a statement of
our position in the matter with respect to the personnel.
I would like to hold it, and we are pretty sure he is
going to go along with us far enough so we won't lose
our people in Procurement, but unless it has been cleared
all the way up to the Attorney General we don't want to
send him the letter.
H.M.JR: Who is going to head Procurement after the
first of December?
MR. O'CONNELL: As soon as Mr. Olrich leaves, of
course, we haven't anybody.
H.M.JR: Can it be a man in that business?
MR. O'CONNELL: Yes, if our present information is
accurate, Mr. Olrich and the people that are working for
him would have very little difficulty in staying on after
the first of December, as far as this Section 27 is
concerned. The Attorney General's office has swung a
little further in our direction than we had hoped a week
or so ago.
MR. D.W. BELL: Can they go out afterwards and
participate?
Regraded Unclassified
3
- 3 -
MR. O'CONNELL: It will permit Mr. Oirich or other
people to go back and work for a company that they worked
for before and take a full-time job with that company,
even though that company may have some dealings with the
Procurement Division after that in purchasing surplus
property. They personally will not be able to partici-
pate.
What we were afraid of was that anyone holding -
any of our people would be barred from holding a respon-
sible position with a company which had any dealings
with the Procurement Division after they left, but the
Attorney General's office is taking, so far, the view
that they will be proscribed from dealing directly with
the Procurement Division, but Mr. Olrich could still be
the president of Munsingwear, for example, even though
Munsingwear might be dealing with Procurement.
H.M.JR: Can a man who is an owner of a department
store come down here to head Procurement?
MR. O'CONNELL: Yes. Of course, the question is,
what can he do after he leaves?
H.M.JR: He would only come if he can go back to his
own business which he owns.
MR. O'CONNELL: If the Attorney General's office
finally rules the way he has indicated to us that he will,
it could be.
H.M.JR: The department store wouldn't be buying
directly from Procurement.
MR. 0' CONNELL: If they were not, then there would
be no problem.
H.M. JR: The chances are he would be buying through
an intermediary.
MR. 0' CONNELL: Then there is no problem.
Regraded Unclassified
4
- 4 -
MR. WHITE: A big department store would be. A
good many of the big ones buy directly.
MR. O'CONNELL: They might, but the problem doesn't
arise unless they do. It is only for the man who would go
back to Macy or Munsingwear and that company would want to
buy something from Procurement, that the problem arises
at all.
MR. WHITE: I think that they would be determined in
their attitude not by what they are certain to do, but
by what they might do, and a man wouldn't want to jeopar-
dize his future by--
MR. O'CONNELL: That is true. All these people will
expect to go back to firms that may, on occasion, want to
deal with the Procurement Division.
H.M.JR: I will try to think of - take Macy; would
Macy be buying directly?
MR. O'CONNELL: Might very well.
H.M.JR: Then this fellow couldn't go back to Macy's?
MR. O'CONNELL: That is the question.
H.M.JR: How about that ruling?
MR. O'CONNELL: If we get the ruling that we hope
to get from the Attorney General, the President of Macy's
could come down here and work for the Procurement Division
and then go back and work as president of Macy's. The
only thing he would not be in a position to do would be
to deal actively or participate in transactions where
Procurement is on one side and he is on the other.
MR. GASTON: What about 8. salaried employee of Macy's?
MR. O'CONNELL: We are speaking only of salaried
employees.
Regraded Unclassified
5
- 5 -
MR. GASTON: All salaried employees, owners or not?
MR. O'CONNELL: Yes.
H.M.JR: Will you explain it even more, SO Mr. Gamble
can understand it?
MR. GAMBLE: I understand.it.
H.M.JR: Will you put in a call for Frank and ask
him if he would be interested?
MR. GAMBLE: Yes, sir. he is in New York today.
H.M.JR: If he would be interested I would like to
have him come down here and see me, because these things
take so long.
MR. GAMBLE: Fine. You'will be here all week?
H.M.JR: Yes. What is the name of his store?
MR. GAMBLE: Meyer and Frank, twenty-eight million
dollars.
H.M.JR: He has got the finest business on the West
Coast.
MR. GAMBLE: I think he has the finest business in
America. I think any retailer would tell you that.
H.M.JR: He is a wonderful person, very public-
spirited. If I could get him we would be very lucky.
MR. O'CONNELL: I want to make clear that we are not
in a position to talk business with anybody.
H.M.JR: But I don't care. If he would say, "Ruling
or no ruling, I am not interested" - but on the other
hand, on account of his personal life he might be glad to
get away for a year or SO. He recently lost his wife.
Has he children?
Regraded Unclassified
6
- 6 -
MR. GAMBLE: Two boys in the Army.
H.M.JR: He might be interested in the change.
MR. D.W. BELL: I think it is too bad we can't get
the law changed. There always will be some doubt. Maybe
legally you are all right, but I think you are subject to
criticism.
MR. O'CONNELL: What we are hopeful of getting out
of the Attorney General is a ruling which will be, as a
practical matter, one that will give a reasonable amount
of protection to these people who are working for us and
the other agencies.
There is going to be a tremendous amount of pressure
for a lot of changes in the bill, and it seems to me one of
the things we can readily get is a clarifying amendment when
you have a lot of other changes being made in the Surplus
Property legislation after the Board has been established.
But I don't think we can do more at the moment than protect
ourselves by getting as good a ruling as we can get out of
the Attorney General, and Mr. Olrich has seen the language
which we hope to get from the Attorney General. He and
his people are satisfied that if that kind of ruling comes
out, they will be reasonably well protected. They wouldn't
be entirely happy. That is all I have.
MR. PEHLE: I have nothing.
MR. GAMBLE: Here are two letters for your signature -
one of them for the President's. (Hands Secretary two
letters to Eisenhower, over Secretary's and the President's
signatures; and letter to General Cobbs over the Secretary's
signature)
H.M.JR: How is the President going to know what the
Silver Lining War Bond Drive is?
MR. GAMBLE: Well, we can send a memorandum explaining
it to him.
Regraded Unclassified
7
- 7 -
H.M.JR: Better send a memorandum to Mrs. Klotz.
Hold this up. I don't know what the silver lining is.
MR. GAMBLE: This is a War Bond Drive in the
European theater of operations, in the Army.
MR. D.W. BELL: Silver lining?
MR. GAMBLE: That is the theme of it.
H.M.JR: Oh, this is a terrible letter. This is
from me to General Eisenhower. (Reading) "War Savings
Bonds offer an ideal form of saving for the future. When
the war is won and you will return again to your homes and
the ways of peace, these savings will give you a stake
in a better world your courage and sacrifice have won."
MR. GAMBLE: I rather liked it. I didn't write it
SO I can speak very freely.
H.M.JR: It doesn't strike a very good note. Herbert,
have a crack at this thing, will you?
MR. GASTON: Sure I will.
H.M.JR: Did you write it?
MR. GASTON: No, I didn't.
H.M.JR: Do you like it?
MR. GASTON: I don't know. I haven't read it!
H.M.JR: You can just hear the boys give me the
Bronx cheer on that one.
This is all right. (Secretary signs letter to
General Cobbs)
Don't you think I should thank the men who made the
trip?
Regraded Unclassified
8
- 8 -
MR. GAMBLE: Yes, sir.
H.M.JR: Supposing you prepare letters for that.
MR. GAMBLE: I have a note to do that.
MR. BLOUGH: Saturday night the President came out
in favor of accelerated depreciation, so we will undoubtedly
have many inquiries which I propose to answer very generally.
H.M.JR: Gently?
MR. BLOUGH: Always gently, of course - and generally.
He did not give several paragraphs which Lubin read me
over the phone that were written on taxes. I don't know
if they are coming in some later speech or not. I hope
not. I think it is a dead issue and the less said about
it the better, but not being a politician, I might be
wrong.
We are heading up into trouble with Stam, I think, over
the old, old problem of the relation of the corporation
and the individual income tax. You recall there has been
some difficulty with that before, the undistributed profits
tax, and so forth. I would like, if possible, to have
some conferences in the Treasury with policy level people
to go over the situation and see what position we want to
take, because Ways and Means Joint Committee will probably
hold a meeting very shortly after the 14th and we want to
have a joint report between Stam's group and our group to
present to that Committee when they meet. And I think it
is of some importance that we avoid any unnecessary fights
and therefore we ought to decide in advance where we want
to stand on it.
H.M.JR: O.K. Will you proceed? Do you want me in
on it?
MR. BLOUGH: That would be & very nice idea, Mr. Secretary.
I can go quite a long way with these other gentlemen if they
have the time, but eventually I think we ought to have a
meeting with you.
Regraded Unclassified
9
- 9 -
MR. D.W. BELL: It will be a policy decision in the
end, won't it?
MR. BLOUGH: That is right.
H.M.JR: Go as far as you can and then let's see. It
isn't that I am loafing, but I do have the English Lend-
Lease on my hands, and it is very time-consuming.
MR. BLOUGH: Why don't I go to the point that Mr. Bell
says, "We have to go now to the Secretary"?
H.M.JR: Fair enough.
By the way, Mrs. Klotz, I told Gamble yesterday that
I would lend him this copy of this economic policy speech
which we gave the President for him to read just for
himself - - the one we hope the President will give.
MR. BLOUGH: That is all I have.
H.M.JR: What I am trying to do - I have hopes, but
I don't know whether I am going to be able to make it or
not - I am hoping to get away on the 21st for two weeks.
I am opening the War Bond Drive on the 19th somewhere with
the President, I hope. On the 20th I am appearing in
New York. Is that right?
MR. GAMBLE: That is correct.
H.M.JR: And I hope after that to go away. What
day is Thanksgiving this year?
MR. GAMBLE: It is the 23rd.
MR. GASTON: It is the fourth Thursday, under the law
now.
H.M.JR: My problem is, my son will be back once more
before he goes to the Pacific and I am very anxious to
see him.
Regraded Unclassified
10
- 10 -
MR. GAMBLE: If you are going away on the 21st, which
means the first two weeks of the War Bond Drive, with
your permission I would like to book you for one other
speech between the 17th and the 20th, some one day in
Chicago with Admiral King at this big Navy show. I
planned to ask you to go out there during the first two
weeks of the Drive.
H.M.JR: When would that be?
MR. GAMBLE: I would like to set the date the 17th,
18th, or 19th.
H.M.JR: You are going to open it the 19th.
MR. GAMBLE: The 16th, 17th, or 18th - that is right.
We are opening this big Navy show on the 20th and we have
a preview of it on the night of the 17th in Chicago.
H.M.JR: If the opening night is the 20th, why do I
go to New York?
MR. GAMBLE: One is tied in with the Illinois Committee
and the other with the New York State. I wouldn't normally
want you to crowd up that way, but if you are going to be
tied up for two weeks--
H.M.JR: I just have to get away. I can't keep on
this thing forever.
When does your Navy show open?
MR. GAMBLE: We have a preview on the 17th. Actually
it won't get under way until Monday, the 20th, but it is
a big show. It is on the Navy Pier out there.
H.M.JR: Do you want me in Chicago on the 17th?
Regraded Unclassified
11
- 11 -
MR. GAMBLE: I will set the day if it is agreeable.
We will make it either the 16th, 17th, or 18th, SO it
will not conflict with your Sunday night appearance with
the President, or Monday night.
It will be better to make it Saturday night. That
would keep you tied up Saturday, Sunday, and Monday.
H.M.JR: I wouldn't object.
MR. GAMBLE: All right, sir.
H.M.JR: What do you think?
MRS. KLOTZ: Before you go away, all right.
H.M.JR: To do it on the 18th in Chicago and the 19th
somewhere with the President?
MR. GAMBLE: That is correct.
H.M.JR: Whatever we do with Navy, isn't that going
to take the edge off--
MR. GAMBLE: There will be so much Navy, Mr. Secretary;
and, after all, you have so many big affairs in connection
with the War Bond Drive that it won't detract in the
slightest from the President.
As a matter of fact, it will serve as a build-up,
really, for what we are going to do.
Regraded Unclassified
12
- 12 -
H.M.JR: Let me think an hour or two about this and
call you back.
MR. GAMBIE : All right, sir.
H.M.JR: The 18th in Chicago, the 19th somewhere
with the President, and the 20th in New York.
MR. GASTON: This rules out entirely the possibility
of going to New Orleans--the AF of L?
H.M.JR: Yes.
MR. GASTON: I will tell Larry Houghteling there is
no chance of your going to the AF of L.
MR. WHITE: Are you hopeful of winding up the British
before then?
H.M.JR: Yes. I originally wanted to go away on the
10th for one week. I figured they wouldn't be through.
And then other circumstances which I don t want to talk
about, I mean official, why I would like to be around
here--I just don't want to go away the week of the 10th.
I am just going to tell them today.
MR. WHITE: Tell the British? Well, it isn't the
British. I have a statement of just the status of each
one of the items. The one that may hold you back is
Navy, or at least I mean I don't know whether any progress
has been made there. If anything should come up from the
Dominions today, I don't anticipate that you will have any
difficulty there, but you may, I don't know. The other
things are well enough on the way so that I think there
is a reasonable prospect of getting through before then.
It is not the British that are holding us up.
H.M.JR: Well, all this is a pious hope, Harry, but
I have some date and something to shoot for. At least I
keep thinking, I am going to get away. There are certain
reasons 1 don't want to go into.
Regraded Unclassified
h-2
13
- 13 -
MR. WHITE: I think there is enough time left so you
ought to be able to complete it by then.
H.M.JR: Then, you see, if you wanted me the la st
week, I would be available.
MR. GAMBLE: The third week.
H.M.JR: I told Gamble there was no use my going to
the Pacific. I have cut that out.
MR. WHITE: I merely suggest that when you talk to
the Dominions you will have to put a lot of heat on them,
because they are starting from the beginning.
H.M.JR: If we have work to do, I am going to stay,
but at least I am going to make the effort.
MR. WHITE: We have been having discussions with the
Dutch for several months on some Lend-Leasing of silver.
They wanted a fairly large amount. We cut them down. We
said we would consider three million ounces for coining
certain silver coins. There is agreement all the way
around. We just need your approval.
H.M.JR: You have it.
MR. WHITE: We had a meeting last week wi th the
committee of the American Bankers Association and the
reserve city banks on the Dumbarton Oaks proposals. We
spent several hours--
MR. GASTON: Bretton Woods.
MR. WHITE: Bretton Woods, I am sorry. We spent
several hours with them.
H.M.JR: Do you think we should consult Freud?
MR. GASTON: I think we should.
MR. WHITE: No, it is all in the woods! We thought
that we had a very excellent discussion. We answered their
Regraded Unclassified
h-3
14
- 14 -
questions fully in great detail and told them we would be
only too glad to spend the evening or the next evening if
they weren't through.
Several days later I heard from various authoritative
sources that they had met with Jones and Wayne Taylor, and
had said that the meeting was very unsatisfactory, that
we were not at all frank, that we were withholding stuff
from them, and they weren't getting anywhere. Herbert
was at most of the meetings, about seventy or eighty-five
percent of them. What was your reaction?
MR. GASTON: I don't know how you could have been
any franker than you were. You answered every question
at length that they asked.
MR. WHITE: Not only that, but I also thought that
we went out of our way to be pleasant and helpful. And
that, to me, caps what I thought was the case, anyway,
with them, that they haven't the slightest notion of coming
down here to learn anything. They are coming down here
to get material for the preparation of a report in which
they are going to oppose it, but they are going to be
able to say they came down here and spent three days.
MR. GASTON: I can't recall that Winthrop Aldrich
asked a single question. He made notes all through the
meeting.
MR. WHITE: Yes, he made a couple. That is merely
an indication of what we may expect.
H.M.JR: That makes him a counterfeiter.
MR. D.W. BELL: The top level of bankers?
MR. WHITE: Aldrich, Hemingway, and Randolph Burgess;
they were the top people. There were about eight or nine.
MR. D. W. BELL: Was Mr. Potter from Guaranty there?
MR. WHITE: No, I don't think 80.
Regraded Unclassified
h-4
15
- 15 -
H.M.JR: Paraphrasing Mr. Hlough, is it to a point
where the Secretary "has to get in on it?"
MR. WHITE: No; I think, though, that it may require
a changein our strategy.
H.M.JR: I am sure it will, after election.
Anything else, sir?
MR. WHITE: No, that is all.
MR. D. W. BELL: Did you get any information on the
matter which you discussed with Colonel or General Groves that
you could tell me about?
H.M.JR: I can tell you everything. He walked in
here and said he wanted to open an account, period.
MR. D. W. BELL: Is that all?
H.M.JR: If you stay behind, I will whisper something
in your ear.
MR. D. W. BELL: O.K. That is what I want to know,
because what I have SO far through William raises a sus-
picion in my mind, and I don't think, if it is what I think
it is, we should have anything to do with it.
H.M.JR: I can teil you my impression.
MR. D. W. BELL: All right. That is all I have.
H.M.JR: This week I would like to get down to talking
to you about things we would like under reorganization of
government of the Treasury.
MR. D. W. BELL: There has been some work done on
that before I went away, and some done while I was away.
We will get together this week and see what we have.
H.M.JR: Other people have expressed interest in it,
Pehle for one. This is what we would shoot for if we
could have an ideal Treasury for the next administration.
Regraded Unclassified
h-5
16
- 16 -
MR. BELL: We will have something this week. We
will be able to discuss it with you, I think.
H.M.JR: My plans are to go up to the country Friday
night and stay there until after election, and then most
likely return with the President.
MRS. KLOTZ: Has your proposed speech been changed?
H.M.JR: I am waiting to hear from Hannegan. I put
it to him on the basis of whether they really wanted me.
MRS. KLOTZ: They are foolish not to have you.
H.M.JR: I offered to speak in Harlem Friday or
Saturday night. I asked Hannegan to find out if they
really wanted me and if I could be helpful, and I haven't
heard from him.
MR. C. S. BELL: Senator Byrd has been pushing us
for a statement of post-war activities for the last couple
of weeks. We have been stalling him and holding up on it.
We had the material all ready to go over, but Dan and I
discussed it before Dan went away. We kind of felt he
might use it for political reasons, and we might hold up
until as close to November 7 as we could. A week later
he followed that up with a request for a complete statement
on the functions and personnel of the Treasury, and likewise
we are holding that up. It is quite an elaborate statement.
The Bureau of the Budget, incidentally, asked for the
same information, and that is all ready to go over today.
H.M.JR: That doesn't in any way cut across the things
I wanted to take up?
MR. C. S. BELL: No, sir.
MR. D. W. BELL: He wants to know what plans you have
for a post war reduction in personnel and functions in the
Treasury, and I felt that in view of the fact that he was
asking for it a couple of weeks before election, he intended
Regraded Unclassified
n-6
17
- 17 -
to come out the end of October with a blast of some kind
and it would be better if we worked a little slowly on the
statement.
MR. C. S. BELL: Here is a little letter you might
want to sign, too, about a Foreign Funds boy who was killed
in action rather recently, Black.
(Secretary signs letter to Mr. and Mrs. George Black,
dated October 30, 1944.)
H.M.JR: I talked with Gamble yesterday about this,
and he is going to try it out. I have a notion after
election I want to ask the radio people whether they care
to have me go on the air for fifteen minutes a week,
purely informational, largely questions and answers, and
so forth, and see how it goes, just handle various things
of Treasury business for fifteen minutes every week. Ted
is going to see the radio people and see if they will be
interested in doing it as a public service for fifteen
minutes. I would like to try it for thirteen weeks and
see how it goes.
MR. GASTON: Offhand, it strikes me as being a little
too often.
MR. D. W. BELL: That is the way it strikes me, too.
I think it is too much Treasury.
H.M.JR: Well, I disagree with all of you. This is
something I would like to try. Believe me, if I did it, I
would be raising hell with everybody to get things done.
I mean, if I get a letter from the Baltimore and Ohio
people at Pittsburgh and they can't get their bonds, I
want to give them an answer over the air, and tell them
why.
MRS. KLOTZ: Is this all on bonds?
H.M.JR: No, all Treasury, questions I get in the mail,
or anything that comes. It really would be a press con-
ference over the air, except I would be giving the questions
and the answers.
Regraded Unclassified
18
- 18 -
MR. D. W. BELL: It certainly will increase your
mail.
H.M.JR: All right. Believe me, I would be riding
people and finding things out about the Treasury, too.
And as I say, these various complaints that we get--I
would want an answer in time to put it on the air.
MRS. KLOTZ: I think it would be a good idea if you
wanted the Treasury to do that.
H.M.JR: No, like LaGuardia--he has built up a wonder-
ful listening audience. Anyway, it is something I would
like to do, and I don't think you people are going to be
able to discourage me.
MRS. KLOTZ: We are not trying hard; we just want to
think about it.
MR. GASTON: Mrs. Klotz expresses my views.
H.M.JR: I am going to be very, very original after
November 8. You people are all going to be surprised; so
is the President! I mean, if a question like this German
thing comes up and I get a letter, I am going to answer it,
and I am not going to ask the State Department. I am going
to answer it. If after I have answered it somebody doesn't
like it, O.K. I am not going to be behind the eight ball.
When these things come in, I am going to answer them. And
if I can't answer them publicly, I don't want to stay here!
I am not going to be the whipping boy any longer.
MRS. KLOTZ: I am all for that if you will really say
that.
H.M.JR: I am going to say what I like; and if the
time comes when Mr. Roosevelt or Mr. OWI, or Mr. Hull
doesn't like it, then we have a showdown, and it will be
decided. In the meantime, I am going to be building up
contact with the American people. I am going to give them
a frank, straight talk. MacArthur breaks the story on the
Philippines, and according to Drew Pearson, the Navy doesn't
like it. And so what! Are they going to recall MacArthur?
Regraded Unclassified
19
- 19 -
MR. GASTON: The point isn't as far-fetched as it
might strike you. The OPA has been doing it, and the
State Department has been doing it on the air.
MRS. KLOTZ: Doing it once a week is all right if
you will answer-I mean on the German thing--if you will
really answer it.
H.M.JR: I am going to. And the people around the
Treasury are going to have the answers for me, too.
MRS. KLOTZ: They have them already!
MR. WHITE: Not just on the German thing.
H.M.JR: A lot of them don't. You think about it,
you and Mrs. Klotz, and Mr. Gaston.
Now, what is this?
MR. C. S. BELL: This is not a good case, sir.
(Hands Secretary deferment application for William A.
Wheeler.) He is twenty-eight years old and lives in San
Francisco. They have been very liberal with his draft
deferments. He is married and has one child, a pre-
Pearl Harbor father.
H.M.JR: Where the hell does Herbert Gaston sign it?
MR. C. S. BELL: Mr. Gaston and Mr. Wilson both agreed--
MR. GASTON: Is that the Secret Service man?
MR. C. S. BELL: Yes, sir.
MR. GASTON: I was a little in doubt, myself, but
the main thing is that we have lost an awful lot of men
from Secret Service.
(Secretary marks application "rejected.")
Regraded Unclassified
20
- 20 -
MR. GASTON: This is the case where the local board
was quite willing to let him stay, but our letters denying
that we have asked for his deferment have provoked the
local board to put us on the spot. They wanted to defer
him.
H.M.JR: William A. Wheeler, U. S. Secret Service,
San Francisco, rejected.
MR. GASTON: He is a very good man.
H.M.JR: I can't help it. There are a lot of good
men in the Army.
MR. C. S. BELL: That is about all from me, sir.
H.M.JR: Charles, will you wait outside? After I
have seen Dan, I want to see you.
Regraded Unclassified
21
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE Oct. 30, 1944
TO:
Secretary Morgenthau
FROM: Ted R. Gamble
RD
In connection with the request of the President that
he sign a letter to be sent to General Eisenhower and Men
in the European Theatre of Operations, I em listing below
some information in order that the President will know
something about what he is being requested to sign.
Objectives of New $100 Million "Silver Lining" Drive In ETO
A. To reduce the net retained pay in the theatre and
thereby help to check inflation in areas occupied or
visited by American soldiers.
By accomplishing this purpose we can contribute
not only to the welfare of our own soldiers but also help
to foster more friendly relations with our allies both now
and in the years to come.
B. To increase the total volume of soldiers' savings
in order to give to as many men as possible a financial
cushion during the period of transition from military to
civilian life.
C. To support and strengthen the esprit de cords and
general morale of the officers and men of the ETO - to further
promote pride in their respective commands - to give officers
and men & sense of participation and ownership in their govern-
ment as citizens.
In the U.S. the promotion of war bond sales through
extensive and intensive education and publicity has made an
inestimable contribution to national unity, efficiency and
morale. The experience of BAD #2 and the Eighth Air Force
with War Bond Drives has demonstrated that these collateral
values are as great and as real in the Army as in civilian
life.
D. To maintain & voluntary savings program.
It is important that the savings program for the
ETO be based on the principle of voluntary action.
A soldier is subject to innumerable restraints and
Regraded Unclassified
22
- 2 -
compulsions. In deciding what to do with his
money he wants to do "as he damn well pleases".
We should also like to emphasize that in our
judgment & War Bond Drive in the ETO should be
voluntary in the best sense of that word.
A Word About The Theme - "YOUR SILVER LINING--WAR BONDS. "
This idea we believe to be catchy without being tricky.
It is dignified without being stuffy. It holds a promise
of hope for the soldier, and it is aimed directly at his
interests and his concern. There is 8 lofty quality to it
that gives it grandeur, yet it is written in a language
common to all men. And perhaps most important of all, it
has immediate significance, immediate meaning to all who
see it.
Regraded Unclassified
23
OCT 30 1944
My dear General Cobbs,
Dr. Odegard and the members of his Committee, who
have recently returned from the European Theatre, have
told me how cooperative and kind you were to them during
their visit in your area. I am sure they have already
written to thank you for making available the services
and facilities necessary to the success of their mission.
As Secretary of the Treasury I, too, want to express my
appreciation for the counsel and assistance you gave to
these Treasury representatives.
I have received from them reports of the excel-
lent work being done under your direction in the ETO.
I regret that during my own recent trip abroad I was
unable to hear more about this from you personally.
I am delighted to hear of the Silver Lining War
Bond Drive. I wish you every success.
Sincerely yours,
(Signed) H. Morgenthau, Jr.
Brigadier General Nicholas H. Cobbs, 0-8237
Fiscal Director, ETO,
A. P. 0. 887, c/o Postmaster,
New York, New York.
10-28-44
PHO:MC
Regraded Unclassified
24
October 30, 1944
10:24 a.m.
John J.
McCloy:
Hello.
HMJr:
Jack.
M:
Yeah.
HMJr:
Good morning.
M:
How are you?
HMJr:
Fine. In regard to this business of this
special account which Mr. Stimson has asked
us to set it up, see?
M:
Oh, yes.
HMJr:
I -- I don't know whether you know about it,
but I suppose
....
M:
I know very little about it.
HMJr:
Well, this is the point, if it's -- as I got
the impression that it's some secret weapon.
See?
M:
Yes, that's right.
HMJr:
If that's what it 1s, okay.
M:
Yes, that's it.
HMJr:
Is it that?
M:
Yes, that's what it 1s.
HMJr:
All right. Well, our boys will say that it
was something to keep a fund from lapsing.
M:
Oh, well, it's -- it's -- the whole background --
what the particular device of this account 1s
I don't know, except that I know that it's all
related to a secret weapon.
HMJr:
Well, if -- that's the impression I got from
Mr. Stimson -- if that's correct, then Bell and
I are perfectly happy about it.
M:
Yeah.
Regraded Unclassified
25
- 2 -
HMJr:
But if it's simply to keep a fund from lapsing
...
M:
What kind of a fund could it possibly be -- a
fund from lapsing -- what kind of a
....
HMJr:
Well, wait a minute, Bell's sitting here. Let
me ask him.
M:
Yeah.
(Pause)
HMJr:
He said if the fund had a date limit, let's say
of December 31st, that it would expire.
M:
Yes.
HMJr:
And it would return to the general fund.
M:
Yes.
HMJr:
By setting this aside in a secret fund, you'd
keep it from lapsing.
M:
Oh, I see.
HMJr:
Do you see what I mean?
M:
Yeah. In other words .... uh huh.
HMJr:
What?
M:
I don't -- well, I don't -- just don't know enough
about it to be sure whether that's not -- that that
is not in it. I do know that the whole thing is
designed for this -- this secret weapon purpose.
HMJr:
Well, now just -- just a minute. (Talks aside.)
Bell says this -- hello?
M:
Yes.
HMJr:
That even if it is a secret weapon
....
M:
Yes.
HMJr:
....
that the fund should be obligated. By that,
I take it, he means a contract let.
Regraded Unclassified
- 3 -
26
M:
Yes.
HMJr:
So even if it's a weapon that -- you're not
avoiding Congress -- criticism from Congress.
See?
M:
Uh huh.
HMJr:
Do I make myself
....
M:
Well, I think I begin to get some idea. Now,
whether it is that -- whether it has that aspect
to it, I just don't know.
HMJr:
Well ....
M:
But I can find out.
HMJr:
Well, for your own -- for the sake of Mr. Stimson
M:
Yeah.
HMJr:
And in a secondary position, myself
....
M:
Yes.
HMJr:
Just make sure that you're not flying in the face
of Congress by setting up a secret fund where the
fund might lapse, and in that way you're circum-
venting Congress.
M:
I get you.
HMJr:
See?
M:
Yes.
HMJr:
Now, that in no way is trying to break down
secrecy.
M:
No. Right.
HMJr:
Now, if it's a secret weapon and you can let the
contract and the fund is obligated
....
M:
Yes.
HMJr:
....
then nobody can criticize.
M:
Uh huh.
Regraded Unclassified
- 4 -
27
HMJr:
And I'm -- I'm pointing that out.
M:
Yeah, I see. I'll -- I'll get somebody that
knows something about it to
....
HMJr:
Just enough -- they don't have to tell us, what
it's for.
M:
Yeah, I get the point. Yes. Okay.
HMJr:
You get the point.
M:
Yes, all right.
HMJr:
Thank you.
M:
Thanks.
Regraded Unclassified
October 30, 1944
28
10:50 a.m.
John J.
McCloy:
The man -- I was trying to find the man who has
the answer to that question you asked me and I
finally tracked him down and I find that he's in
the next room to you now.
HMJr:
Oh, with Bell.
M:
He's in the ante-room to -- to Dan Bell's office.
HMJr:
Oh.
M:
And he's got the answer and I told him that he
could give you the answer to the question that
you out to me.
HMJr:
Well ....
M:
And he's prepared to do it.
HMJr:
Oh.
M:
His name is Groves.
HMJr:
Yeah.
M:
Okay.
HMJr:
Right.
M:
Thanks.
Regraded Unclassified
October 30, 1944 29
2:32 p.m.
Operator:
Go ahead.
HMJr:
Yes. Hello.
White House
Operator:
The Judge is -- here's the Judge.
HMJr:
Hello.
Judge Sam
Rosenman:
Hello.
HMJr:
Hello.
R:
Henry.
HMJr:
Speaking.
R:
Speaking -- ah ha -- my boy - talking about
speaking -- has a new gag which they use at
Harvard. You answer the phone as follows:
Busy Bee Bra. Co., Bessie speaking.
HMJr:
(Laughs) Yeah.
R:
Henry, I heard that they're making -- Treasury
is making some study of the -- I'm a little
vague -- about the invasion dollar and the lire
in Italy and 80 forth.
HMJr:
Well, I don't know anything special other than
that, I would say, was part of our responsibility.
R:
What I'm thinking about is whether it's going to
be possible to make any announcement before November
7th.
HMJr:
I -- I just don't get you, Sam.
R:
Well, I understood that the Treasury was making
some study of getting the lire correlated to our
invasion dollar the way we did with the franc 80
that it in some way or other would help the
HMJr:
Well, I'll tell you in ten minutes Stettinius and
Acheson and Harry White are coming in. If anybody
knows anything about it, they will.
Regraded Unclassified
30
- 2 -
R:
Are they the ones that are working on it?
HMJr:
Well, if anybody would, they would be. I'll
ask them.
R:
Well, my -- the only reason I called you was
that you understand politics better than they
do.
HMJr:
Well, I'll find out. In other words, if there's
anything that would help as far as the Italian
goes.
R:
That's right.
HMJr:
Is that right?
R:
That's right.
HMJr:
I'll find out.
R:
Fine. I thought there might be some -- something
there that might be helpful but I'm frank to say
I don't know enough about it to even guess, but
I just had an idea that it might help.
HMJr:
All right. I don't suppose you looked at my
talk to the business men.
R:
I certainly did. By God, didn't you see we used
some of it?
HMJr:
I thought you used a sentence or so.
R:
Well, we didn't use the language but we used the
idea.
HMJr:
Yeah. But I had a good crowd up there.
R:
And was it -- did they -- did they react all right
to 1t?
HMJr:
Very enthusiastic.
R:
We had a very bad place to talk about business
and taxes and things -- very bad, you know.
Ever been in Soldier Field?
HMJr:
Yeah.
Regraded Unclassified
- 3 -
31
R:
Well, it was my first experience. You know the
way they arranged it, they didn't let anybody
on the field except the President's car.
HMJr:
Yeah.
R:
And some few reporters and party. So he was
two blocks away from his nearest audience.
HMJr:
Oh, well, that's not so good.
R:
And it, you know, you get no sense
....
HMJr:
Cold.
R:
of unity with them.
HMJr:
Yeah.
R:
And the applause came back a few seconds late.
You know it takes sound that long to travel.
HMJr:
Yeah.
R:
And it was no place for that kind of a speech
but, the hell, we didn't have any choice.
HMJr:
Well, I didn't hear it but the people said he
got very enthusiastic
....
R:
I think they were. I think the way you fellows
tied the Bill of Rights in was very good.
HMJr:
Yeah. Tell me something, when does he leave for
Boston now?
R:
I think Friday.
HMJr:
Friday. Friday. Okey-doke.
R:
All right.
HMJr:
If I have anything you'll hear within the hour.
R:
Fine.
HMJr:
Thank you.
R:
Bye.
Regraded Unclassified
32
October 30, 1944
Dear Sam:
I am enclosing herewith a White House Release
which got very little publicity. I imagine this
is what you had in mind. You have my full per-
mission to use it freely, provided you give
credit to the President.
Sincerely yours,
(Augned) Henry
The Honorable Samuel I. Rosenman,
The White House,
Washington, D.C.
Regraded Unclassifie
FOREIGN PRESS
DEPARTMENT OF STATE
Radie Bulletin No. 245
October 11, 1944.
WHITE HOUSE
President made following statement last night: "I have today approved the
recommendation of the Secretaries of State, Treasury and War, and of the Foreign
Deonomic Administrator, that the United States Government currently make available
to the Italian Government the dollars equivalent to the Italian lire issued up to
now and hereafter as pay to United States troops in Italy. The dollar proceeds
of remittances made by individuals in this country to friends and relatives in
Italy are also being made available to the Italian Government as are the dollar
proceeds of any products exported by Italy to this country. It has been our inten-
tion to make available to the friendly Western Duropean countries dollars equival-
ent to the local currency issued B.B pay to American troops in thoir territory.
This policy differs from that to be applied in the case of Italy since in the latter
case it is subject to special restrictions reserved to the United States in connec-
tion with the final peace settlemont. The dollars made available to Italy will be
used by the Italian Government to pay for essential civilien supplies purchased in
this country for use in liberated Itely. The United States Army has supplied sub-
stantial amounts of certain essential civilian goods such as food, clothing and
medical supplies as a necessary part of military operations in Italy. The funds
ch I am now mnking available will enable the Italian Government under control
appropriate Allied authorities to obtain in this country other essential civil-
ian supplies end to continue to obtain essential supplies after the United States
Army program coases, This step has been taken after consultation with the British
Government which has also been providing casontial civilian supplies to the Ital-
ians and will continue to provide its share of an agreed program of such supplies,
but under different financial arrangoments. The Fascist dictatership which led
Italy into war against the Unitod States and the other United Nations has been
overthrown. Today, the Italian people are cooperating with the United Nations
forces in driving the Germane from Italy. Our soldiers, sailore and airmon are
welcomed and assisted by the civilian population in Italy wherever they go. Ital-
ian troops are joined with our forces at the front. And behind the Gorman lines,
Italian partisans are heroically giving their lives in the struggle. It is to our
intorests that Italy be able to contribute as fully as possible to the winning of
final victory. W:ilo the re-establishment of Itely ao a free independent and self-
supporting nation must be primarily the responsibility of the Itelian people them-
selvos, it is also to our interest that the Italian people be given the opportunity
to obtain and pay for themonessities they need from us if they are to be able to
help themselves."
Presidential appointmonts today included Rabbi Stephen S. Wise; Clark N.
Lichelberger; and Polish-American Congress Committee.
STATE DIPARTMENT
Dr. Guillèrmo Almenara Irigoyen, director of the Workers' Hospital at Lima,
i
hoad of Peruvien National Security Organization, in visiting medical and public
hoalth conters in this country as guest of Department.
miscelLAndous PRESS
Vessol Production. Whilo tonnage output for September increased but slightly
as compared to that of August, faster shipe predominated among the 124 vossels
aggrogating 1,185,997 doadwoight tons dolivored from merchant shipyerds during Sep-
tember, Maritimo Commission officials reported. Cf the 65 faster vessols turned
out in Maritimo yards 34 were to moot noeds of Navy and Army. Among these were
assault ships which Secretary Forrestal has described ns the "most urgent itom on
tho production program". licritime yards 80 far this year have turned out 1,233
vessels viti. combined deadweight of 12,245,583 tons. Sinoo Poarl Harbor to Octo-
bor 1, 1944, they have built a grand total of 3,884 ships of 39,666,116 tons dend-
weight.
Expension
Regraded
Unclassified
34
Meeting in Secretary's Office
October 30, 1944, 2:45 p.m.
Present: Secretary Morgenthau
Mr. Stettinius
Mr. Acheson
Mr. White
The meeting apparently grew out of a discussion which
Secretary Morgenthau and Mr. Stettinius had at some dinner
several days previously on the Argentinian situation.
Mr. Stettinius said that they had information from differ-
ent sources, including Chile, that the present military regime
in the Argentine was becoming increasingly vulnerable. He said
that he had spoken to Lord Halifax and wanted the British to
take a strong position with respect to their contracted purchase
of meat from the Argentine. Halifax had suggested that he send
Llewellyn over to talk to Mr. Stettinius about it, and Stettinius
expected him to show up soon. Mr. Stettinius said that he hoped
that the British would cease purchasing meat from the Argentine
under long-term contract but would purchase it on a month to month
or spot basis. He said that the State Department might want those
discussions made part of the more general discussions which were
going on between the British and the United States now.
The Secretary briefly reviewed his communications re
Argentina to the President and to Secretary Hull of January of
this year and June of this year. He stated that in June, in
response to the President's request, he had tried to see
Mr. Hull on the Argentine question but that for some reason
or other Secretary Hull had been unable to arrange a conference
with him on the subject. He said that he had not raised the
matter since June but now that Mr. Stettinius raised it he
wanted to tell him that he felt State Department had made a
mistake in not sending the cable to our Ambassador in the
Argentine last January that had already been drawn up and
which the President was ready to approve. The Secretary added
that he would, of course, do whatever State Department asked
him to do on the matter but he hoped that Mr. Stettinius would
review the whole business and see whether they couldn't come
forth with a whole program which would have the effect of
stopping the growth of fascism in the Argentine and neighboring
countries. We doubted whether getting England to change from
long contract to spot purchases of meat would mean very much in
Regraded Unclassified
35
- 2 -
this direction. Mr. Stettinius said that they were in the process
of reviewing the matter now and asked that he be excused from
further participation because he had to meet the Mexican Ambassador
and then go to the White House. The Secretary asked if Mr. Acheson
could remain behind so that we could finish the discussion and
Mr. Stettinius said, "Of course."
After Mr. Stettinius left, the Secretary went into great
detail regarding his memorandum to the President and his letter
to Hull on the Argentine. He again emphasized that he hoped the
State Department would have a complete program so he would be
ready to do whatever the State Department asked him in his nego-
tiations with the British. He referred to the fact that he had
discussed the matter of meat purchases from the Argentine by the
British over six months ago with Marvin Jones, and that Jones
then stated that though it would raise some difficulties it would
be possible for the United States to supply the necessary beef
to England if England ceased its purchases from the Argentine.
Mr. Acheson said that it was, of course, desirable to stop the
Argentine but he didn't feel that the public would be behind any
effort to increase our beef shipments to England at the expense
of domestic consumption and that we would be starting something
that we couldn't finish. The Secretary said that he was afraid
that he disagreed with him; that he felt the public would be behind
such action. He said that whenever Secretary Hull in the past had
taken a strong stand behind the Argentine that he had always gotten
an excellent press. The Secretary said that he would very much
like to be in the position of defending a strong attitude against
the Argentine because he felt that the public would be quite
sympathetic with such action. In fact, he said he would prefer
to defend a move of that character against the Argentine to de-
fending the program of lend-lease to England under phase two.
Mr. Acheson said that he would be glad to see the government
in Argentina overturned but that the simplest way to do it would
be to have someone start shooting down there and we could go in
and clean the thing up within 90 days. The Secretary said that
his mind didn't run towards shooting; that he thought that a strong
economic program involving cessation of beef purchases would be the
thing to do. Mr. Acheson said that it would be a difficult program
because there were questions of wheat and corn and shipments between
Brazil and Argentina, and that there was a grave shipping scarcity.
The Secretary said that there were always difficulties in decisions
of that kind but that bold action was called for and that somehow
or other many of the difficulties were satisfactorily met. He
Regraded Unclassified
36
- 3 -
referred to the fact that in our invasion of North Africa and in
our shipments of lend-lease goods to Russia, etc. that those who
opposed such action had pointed to many of the difficulties but
that somehow many of the difficulties had been satisfactorily
overcome and that he felt the same would be true of the diffi-
culties of carrying through an economic program against the
Argentine. He said that if that decision were made he would be
only too happy to help where he could. In any case, he said he
would do whatever the State Department wanted him to do in his
current negotiations with the British.
H. D. White
Regraded Unclassified
LUNCHEON
Monday, October 30
37
1:00 p.m. - THE TREASURY
Secretary Morgenthau
Lord Cherwell
Lord Keynes
Sir Charles Hambro
Sir Robert Sinclair
Sir Henry Self
Right Hon. Ben Smith
Hon. R. H. Brand
Mr. Redvers Opie
Admiral Waller
Air Chief Marshall Courtney
Major General Bond
General Macready
Dr h. Stettinius
Mr. Dean Acheson
Mr. Leo Crowley
Mr. Lauchlin Currie
Mr. Oscar Cox
Mr. Artemus Gates
Admiral Fitch
Admiral Horne
Judge Patterson
Mr. John McCloy
Mr. Robert Lovett
sine Somerrell
General Giles
General Styer
General Handy, Deputy Chief of Staff
Mr. J. A. Krug
Mr. D. W. Bell
Mr. Harry White
Regraded Unclassified
Capies to Franb
Coe 8 Frank Lee-
October 30, 1944 10/31/194
11:30 a.m.
UNITED KINGDOM - DOMINIONS - AMERICAN
LEND-LEASE NEGOTIATIONS
Present: United Kingdom
Navy
Mr. Ben Smith
Admiral McCormick
Mr. Brand
Army
Lord Keynes
Mr. Patterson
Mr. Lee
Mr. Lovett
Mr. Frank Snelling
General Styer
General Kuter
Australia
General Giles
Sir Frederick Eggleston
Mr. Brigden
State
Mr. Macgregor
Mr. Acheson
Mr. Dunk
Mr. Taft
Mr. Jacobson
Mr. Collado
New Zealand
FEA
Mr. Sullivan
Mr. Crowley
Mr. Berendsen
Mr. Cox
Mr. Reid
Mr. Currie
Mr. Marshall
Mr. Davidson
Mr. Angell
India
Mr. Coe
Mr. Symon
Treasury
Mr. Casaday
Mr. White
Mrs. Klotz
H.M.JR: If it is agreeable to you gentlemen, I am
going to ask Mr. Coe, who acts as Secretary for the
American side, if he would state the purpose of this
meeting.
MR. COE: Well, as most of you gentlemen know,
there have been conversations following the Conference
at Quebec as to the Lend-Lease arrangements in the next
Regraded Unclassified
39
- 2 -
phase. These conversations have been carried on between
the American representatives and the British.
It has now become necessary to start off similar
conversations with the Australian and New Zealand repre-
sentatives, and with the representative of the Government
of India.
The general purpose of the meeting today was to
afford an opportunity for the top people to get together
to start the conversations and to discuss the requirements
and programs in a general way in the next period.
Lord Keynes, do you add to that?
LORD KEYNES: Mr. Secretary, we have prepared, or
rather the Dominion representatives have prepared for us,
rather a fuller, more detailed statement than appeared
for the requirements - than appeared in our original
statements. I am sorry to say we couldn't get this ready
in time to circulate before this meeting. Copies are
available now and no doubt will be studied afterwards.
I only wanted to make it clear that there is now an
amended statement on behalf of the Dominions. I should,
if you will let me have the time, like to make one or
two general remarks relating to the way in which we see
it. This ties into the main plan.
The United States and the United Kingdom are both
hoping for some modest measure of relaxation when the
German war is over, that we shall no longer remain war
mobilized to the tremendous extent that we are now -
sixty or seventy percent. And the program we have been
working out has been expressly 80 designed as to allow
that measure of relaxation and demobilization from
direct war effort that is proper.
Now, in the case of Australia and New Zealand and
also India, similar relaxation will not be practicable
owing to their geographical situation in relation to the
Pacific war.
Regraded Unclassified
40
- 3 -
However much the rest of us help, I think it is
certain that their war effort will remain on a larger
scale relative to what it has been in Stage II than in
the case of the United States or United Kingdom.
There are no practical means, with those countries situ-
ated as they are, and the tremendously important part
they are going to take - there is no opportunity for
the same production as we shall be able to enjoy when the
German war is out of the way.
Therefore we hope that these, as it seems to me,
very modest requirements, can be looked at with an easy
eye, because this is the only way in which some help can
be given in this difficult situation where they have to
go on for one year more, at least, at full tilt.
Some people imagine that this might compensate for the
fact that perhaps they weren't as fully engaged earlier
in the war. That isn't the case. Australia and New
Zealand and India, from the very first day, began
mobilizing to the full, SO that they will have experienced
a longer complete mobilization than any of the other parti-
cipants in the war. We feel that that general background
should be kept very much into account.
There is another point which I think is worth
emphasizing, and that is the tremendous scale - at any
rate, in the case of Australia and New 4ealand - that
reciprocal aid to the U.S. forces is being supplied.
It is never very easy to estimate reciprocal aid ahead
of events, but figures here show what it has been re-
cently.
In the case of Australia, Australia, on the non-
munitions side, is giving the United States between three
and four times the total amount that they are asking
for on Lend-Lease. That is not including munitions,
or oil, or shipping, because they are included in our
program. Dut taking the non-munitions field, the reci-
procal aid has been at a scale of between three and four
times. And in the case of New Zealand, I think something
very similar is the case.
Regraded Unclassified
41
- 4 -
I am a little handicapped here because I always
find it terribly difficult to transiate New Zealand
sterling into dollars at short notice, but--
H.M.JR: That was a sly one!
LORD KEYNES: But I think that there, also, the
rate - here it is done for me. New Zealand in 1944 has
been supplying seventy-eight millions on reciprocal aid
which is twenty percent of our total war expenditure.
The total program of Lend-Lease aid which is being asked
here is of the order of fifteen millions, SO that the
reciprocal aid which New Lealand is giving is five times
what they are asking for on Lend-Lease.
Well, now, I don't believe these proportions are as
widely known as they deserve to be, and I think they
create a background against which all details should be
considered.
Well, now, those details, I think, are likely to
present difficulties only under perhaps three heads.
There has been a practice hitherto, I understand, by which
the question of civilian end use in the case of Australia
and New Zealand has been more strictly scrutinized than
in the case of the United Kingdom. Certain supplies
which, in our case, would go through without much diffi-
culty, have experienced-more difficulty when they were
put up by Australia and New Zealand.
Well, now, with the use of their civilian population
for essential food production, the line between the two is
really very shady, and of course it is the civilians of
these countries that are producing the material which
makes up this enormous scale of reciprocal aid. We wonder
whether it really is appropriate to the existing circum-
stances that there should be such a very strict scrutiny
from this point of view, and whether the same sort of
standard applied to- the United Kingdom should not be
applied to Australia and New Zealand.
That is one point of possible difficulty.
Regraded Unclassified
42
- 5 -
A second point which relates, I think, primarily to
New Zealand is certain proposed diversions. Before
Lend-Lease materials arrived, New Zealand had to use
up great quantities of civilian stocks for various mili-
tary and semi-military and essential purposes.
At a later stage, Lend-Lease supplies arrived which
were intended - the New Zealand representatives will cor-
rect me if I am not telling this story quite right - which
were intended for strictly military purposes. Those pur-
poses are no longer necessary and the stuff is in New Zea-
land. It is a question of agreeing that these stocks can
be used by New Zealand for more general purposes in replace-
ment of what they used earlier. They are very essential,
necessary supplies. It seems to us that there is a very
good case for that being looked at with a sympathetic
eye.
The third case is that of rolling stock for India.
This has been passed on by the military authorities to
FEA. Mr. Patterson knows a great deal about this and he
has transferred it to FEA with the opinion expressed that
on the strictly military side, the case of high priority
is not made out; but as I understand, there would be no
objection from the War Department if FEA, on other grounds,
were to be more complaisant.
MR. PATTERSON: we deem it essentially a civilian
item.
LORD KEYNES: Well, here now again in India it is
very difficult to draw the line. We have a recent
telegram from the Government of India since the Quebec
decisions saying that those decisions will cause a great
pressure on their transport system, that civilian trans-
portation will have to be reduced particularly at the peak
operations of eight to twelve percent, and the refusal
of this rolling stock which cannot be provided from any
other source, will deprive the Government of India of any
transport margin to meet such contingencies as famine and
food. Bengal is always a food deficiency area, having
Regraded Unclassified
43
- 6 -
depended traditionally on rice from Burma. That has been
cut off and therefore there are great transport diffi-
culties. We believe that taking everything into account
there is a good case for this. Nor do we think it would
be just to say that India hasn't been pulling her full
weight and making immense sacrifices.
I think there are certain purely financial sides of
the matter where the British Treasury may have its own
feelings in the matter. But if you take the population
of India, the actual exhaustion of resources and effort,
I don't think there is any of the Allies which have
thrown everything in more completely or have, in fact,
suffered more, as the famine in Bengal, with more
casualties than any of the rest of us have experienced.
It is precisely in that context that the rolling stock
is important. There again we nope for sympathetic con-
sideration.
I fear I have taken up rather much time, but I felt
that these points might be put forward perhaps by a member
of the United Kingdom Delegation more fervently than those
more directly concerned might feel the right to do.
Mr. Secretary, with that introduction, possibly the
various Dominion representatives would like an opportunity.
H.M.JR: Could I just possibly, before we call on
them maybe Mr. Acheson might like to sort of state the
position of the Administration towards this problem, if
you don't mind - sort of giving a little review, an
attitude of how we feel and the spirit in which we are
approaching it.
MR. ACHESON: You mean the whole matter, Mr. Secretary?
H.M.JR: Yes.
MR. ACHESON: Well, I think all I can do is to sort
of summarize the way in which we have been approaching it
under your chairmanship. Is that what you have in mind?
Regraded Unclassified
44
- 7 -
H.M.JR: If you don't mind, for the benefit of these
gentlemen, so they will catch the spirit in which we are
trying to work.
MR. ACHESON: Well, I think that what the Secretary
has in mind is that before our original meetings with the
British Delegation that came over, we met together and
the Secretary informed us of the conclusions which had
been reached at Quebec, and the attitude with which we
all went at the matter was to carry forward the decisions
reached at Quebec in the spirit in which those decisions
were reached, without putting any technical or minor
difficulties in the way of a speedy resolution of all the
problems.
We had some meetings together to start with, and then
we broke into groups, with the Army authorities taking up
the Lend-Lease requests which were directed to them, the
Naval people doing the same thing, and the civilian items
going to representatives of the Treasury and State Depart-
ments for economic administration.
At one of our last meetings the Secretary gave the
Army a distinguished decoration because they had gone at
their job with great expedition and expertness, and were
practically through except for one of the most difficult
parts of it which, with great skill, they referred to the
civilians. We are waiting for some of the Dritish Naval
people to arrive and then we will go forward. The Naval
people will go forward. And at this time I think the
civilians have made very considerable progress.
I suppose you have in mind, Mr. Secretary, that we
should approach these requests in the same way and the
same spirit as the decisions that were entered into at
Quebec, and getting on as quickly as possible with the
various items.
H.M.JR: Thank you. I just wanted to give these
gentlemen a feeling that as part of the United States
Administration, we are operating as a whole, and that we
are approaching this matter in an entirely sympathetic
Regraded Unclassified
45
- 8 -
manner. And I think the progress that we have made so
far shows that when we all work together with a common
goal we can make real progress.
This thing has taken a form much more formal than I
had any idea, but Mr. Coe having been to Bretton Woods -
having been Secretary General up there - he has gotten
very formal and is making me very formal. I should have
had on my cutaway if I could have found it!
Anyway, I do what Mr. Coe tells me, and 30 far I
haven't gone wrong.
If Sir Frederick Eggleston could have a word now,
we would be very glad to hear from Australia.
MR. EGGLESTON: Mr. Secretary, 1 desire to thank you
very much indeed for receiving us here with a view to
presenting the case from the Australian point of view.
Personally, I have been around China for the past
three years and don't know very much about the details of
these problems, but the experts of the Australian depart-
ments are here, and I will ask Mr. Macgregor and
Professor Brigden and Mr. Dunk to deal with the Australian
case.
Mr. Macgregor may start.
MR. MACGREGOR: Mr. Secretary, no reference to
Australian requirements and Lend-Lease in Stage II of
the war would be appropriate without the most whole-
hearted expression of appreciation of the cooperation
accorded us by all American instrumentalities, the
service departments and FEA in Lend-Lease in Stage I of
the war. And on behalf of the Missions concerned, may
I tender to you an expression of our warmest thanks.
Lord Keynes has covered the major highlights of our
case. There is no doubt of the strain that the Australian
economy has withstood up to date, and I would just like to
underline his Lordship's point, that whereas some other
Regraded Unclassified
46
- 9 -
countries see relief in sight when the war ends in
Europe, we don't see any relief in sight until the end
of the war in the Pacific, also.
But up to the present, seven out of every ten males
in Australia between the ages of eighteen and thirty-five
have enlisted in one or the other of the armed services.
Seventy-one percent of the total population of Australia
between the ages of fifteen and sixty are either fighting
or engaged in essential industries.
There can be no question, sir, of the all-out charac-
ter of the Australian war effort.
We would therefore appreciate it if some considera-
tion might be given by our American colleagues to the point
made by Lord Keynes regarding the difficulties which have
ensued from the scaling down of Australian requests for
essential needs by various percentages predicated upon
considerations associated with the proportion of given
requirements to be utilized directly by the military
forces and by the civilian population. That scaling down
has entailed a good deal of delay; it has in some cases
retarded the implementation of allocations to Australia
for war-time needs.
I should like to emphasize this point, sir, that the
statement of our requirements by monetary value for Lend-
Lease in Stage II have been predicated upon existing con-
ceptions of eligibility, and if our American friends can
see their way to take a wider view on this question of
differentiating between different sections of the Australian
community, then that figure of one hundred and two million
would be to a small extent comparatively increased.
It is important that it be appreciated that a so-
called non-munitions requirement is really an indirect
military requirement. Taking a few cases by way of
example, one might cite timber; we have forbidden building
construction except for war purposes, so that the timber
is required for military and essential industrial purposes.
Regraded Unclassified
47
- 10 -
We have rigorously controlled the use of automobiles
so that the synthetic rubber is needed, primarily, for the
manufacture of tires for military equipment.
Agricultural implements are required for the food
program. Tin plate is mostly required for the production
of food for the military forces, and so therefore, a so-
called non-munitions need is very definitely an indirect
military requirement.
The reciprocal aid for the forces of the United
Nations was granted spontaneously, and the procedure
associated with it is smooth-working, entails little or
no delay, and the Australian population have readily
subjected themselves to just going without in order that
the forces of the United Nations might get what the
military commanders felt was necessary for the prosecu-
tion of the war.
These are the only points, sir, which it seems to
me desirable to underline in support of the statement made
by Lord Keynes and in support of Sir Frederick Eggleston.
MR. EGGLESTON: Is any further solicitation of the
figures required, because Mr. Dunk would be happy--
MR. DUNK: Mr. Secretary, in a presentation of this
sort one must necessarily speak in generalities, and in
general I think all are covered.
There is only one other and that is, however you
balance your effort, and whatever your effort is, you must
essentially come down to a sorting out of what, and how
much, and our effort as we plan it becomes fundamentally a
Treasury job to sort out the effort. Our plan is designed
as near as you can on the broad matters you are dealing
with, to give us the results in war production and in war
uniting of forces. It is designed on the basis of reci-
procal aid, and I don't have to speak of that. I think
the record does the talking.
Regraded Unclassified
48
- 11 -
So it is only on that design that this particular
program we present has been carefully based.
It has been designed to give us what we regard as
the minimum of requirement to obtain the effort as we
have designed it. And if it is considered, as I am quite
certain it will be, with that background in mind, I
think we can embark on the more detailed examination of
it without my taking up the time of this group.
Thank you, sir.
MR. EGGLESTON: Professor Brigden?
MR. BRIDGEN: I have nothing to say in elaboration
of the experts - of the remarks that have been made -
except this.
We appreciate those remarks made by Lord Keynes
on our behalf. And secondly, I wish to say that the
program as submitted would not give us the relief, the
equitable share in relaxation which we think they may
be entitled to.
The program as submitted would not do that, and we
do suggest, therefore, that at that point, as conceded,
we might be entitled to some share in the relaxation,
that the whole program be held a little more liberally
than the terms we have actually submitted.
Regraded Unclassified
h-1
49
- 12 -
MR. SULLIVAN: Mr. Secretary, it was a comfort to me
& moment or two ago when I heard you say that the United
States Administration was taking a sympathetic view in
regard to the whole problem, and I would like to join with
my Australian colleagues in expressing the very great
appreciation that we in New Zealand have of the magnificent
assistance and help that we have had from the United States
Government in regard to all our needs and our requirements.
In regard to what I assume to be the objective of the
meeting, Lord Keynes put the position in a nutshell so
far as our country is concerned when he said that so far
as Australia and New Zealand are concerned, that the
anticipated relaxation that will follow in the second
phase doesn't really apply to our country. As an actual
fact, there will not be relaxation, but, as we see it, very
definitely intensification of the demands that will be
made upon us in regard to meeting the requests from the
forces in the Pacific. I think that will be fairly obvious
with a little thought to us all. It follows, too, 80
far as New Zealand is concerned, that if we must continue
to supply not only upon the basis existing in phase one,
but upon an even greater or more intense basis that we,
I am afraid, will require even more help in the future than
we have had in the past in order to enable us to do the
task, to carry out the task that will be ours during phase
two. Might I be permitted to say that we have to the utter-
most tried to help ourselves in all the problems that have
been presented.
From the outbreak of the war, and, particularly, after
Pearl Harbor, the definite decision of our Government was
that we should give to the uttermost--and I think I can
reasonably say that we have given in the spirit of the
widow's mite, although I hope that our contribution throughout
has been on a larger scale than that. But the spirit in
which we have given has been to give all, sir, and I think
that has been faithfully carried out.
If I could devote for a single moment--I remember an
occasion when we had requests from the Naval representative
of the United States for some more ships. We thought that
we had given everything that could possibly be spared.
Regraded Unclassified
50
- 13 -
Our fishing fleet had been depleted, our coastal fleet,
and we are very much dependent upon our costal fleet to
supply areas that are not reachable in any other way. The
request came, and it seemed to us that we had nothing left.
We took one hour, perhaps less, to consider it, and we
met this request and did provide those extra ships, which
created very great difficulties for us ever since. But
the scene that took place in our War Cabinet room subsequently
when the Commodore asked as a special privilege that he
might be permitted to say thanks is one of the very happiest
recollections, sir, in the whole history of the war in the
South of gratitude that he expressed. I am merely quoting
that as an indication of the spirit by which our country
has been actuated, sir, from the very beginning, and we
have not screened with a microscope. The only thing that
we have screened is not the request made to us or the
arguments tendered in support of that request, but our
own capacity to supply, screen out our own capacity, and
whatever it was possible for us to give, whatever our
capacity would permit us giving, we have given.
I hope you will forgive me, too, if I say that we have
imposed upon our people, although we were a Government that
came into office with the definite and deliberate purpose
of improving standards of living; the result has been the
reverse during the period of the war, and we have imposed
austerity upon our people. We have rationed meat, butter,
sugar, tea, clothes, and footwear. To give an indication
with regard to footwear, our menfolk are permitted one
pair of boots a year. Our womenfolk are permitted two
pairs a year. Very great difficulty is being experienced
in getting many types of clothing, particularly children's
clothing, and in every direction we have imposed an austerity
upon our people that perhaps due to the very short time
that I have been abroad and the fact that I have not been
to the United Kingdom has up to the present led me to the
conclusion, based, as I say, upon very limited opportunities
of observation--but I have yet to see anywhere where people
seem to be under the necessity of going short of the
ordinary requirements of life in order to make a contribution
to the war effort. I hope you will forgive me for introduc-
ing that note, but I was rather anxious to convey to you,
Mr. Secretary--although I scarcely doubt you are aware now--
Regraded Unclassified
51
- 14 -
the spirit of our country in its determination to help
and to provide to the uttermost both in regard to the
United States forces in the Pacific and in regard to the
requirements of the United Kingdom.
We are most grateful, I assure you, for all the help
and assistance that we have had, but the fact is that we
could not have achieved the war effort which we have
achieved had it not been for the assistance that you have
with such wonderful generosity given us; and if we could
not have achieved that war effort in Phase One, it will
be, I think, obvious to you and to everybody that it would
be quite impossible to continue upon the even intensified
scale of supplying the Pacific unless we have the where-
withal in the way of Lend-Lease assistance that we have
had in Phase One.
Now I think that perhaps if I talked for a week or
a month that I couldn't say more in substance than I
have already said, and my attitude of mind is one of
gratitude for what has been done, and of hope and expect-
ancy in regard to what will be done in the future. Our
war effort will be very largely dependent upon the Lend-
Lease assistance that we get during the period of Phase
Two. Thank you very much.
H.M.JR: Mr. Sullivan, I think that I can say not
only for New Zealand, but also for Australia that this
Administration is very conscious of the real effort and
sacrifice that the countries. have made in contribution,
not only of men, but of supplies to the united effort, and
I think that we are beginning to see the results of this
combined effort. We certainly have in the last week opposite
Japan, and when this matter was broached and I was privileged
to be there at Quebec, I know that both our President and
Mr. Churchill arrived at this proposal with the very fact
in mind that this has been such a magnificent demonstration
of cooperation that we must continue in peace as we have
in war to cooperate, and that is the spirit in which we
are approaching this matter.
MR. SULLIVAN: Thank you very much.
Regraded Unclassified
52
- 15 -
H.M.JR: Now, is Mr. Symon here?
MR. SYMON: I should like to thank you, Mr. Secretary,
for giving me the opportunity of coming here this morning,
and I want to take this opportunity of expressing my
government's appreciation of the continuous Lend-Lease aid
and other aid which has been given to India.
I don't think I need add much to what Lord Keynes
has said and what is put in this new document. I should,
however, like to make the point that the estimates of re-
quirements given in this document were framed by the
Quebec decisions. All we know now is that those decisions
are likely to put feather-bedding on an already over-
straitened Indian economy. The Government of India has
expressed its concern to His Majesty's Government as to
the need for substantial additional outside aid if they
are going to carry on in 1946.
The second thing - Lord Keynes has emphasized the
transportation problem. Discussions have been going on
for some months now, and I should like to express that a
very early decision be given in regard to those additional
requirements.
H.M.JR: You ought to get an extra portion of what-
ever it is for brevity.
Mr. Crowley is the head of FEA. Wouldn't you like
to tell these gentlemen what you think we will be able
to do, and what we can do?
MR. CROWLEY: 1 would like to be able to tell them,
Mr. Secretary. We are approaching this thing with State
and with Treasury and the Military, along the plans out-
lined at the Quebec conference. I think our relationship
with all these representatives has been very pleasant.
We are working with them every day, and I hope very soon
that we can come back to our large committee with some
recommendations.
Regraded Unclassified
53
- 16 -
If there is any difficulty that any of the countries
have with my associates, I will always be very happy to
see them and try and straighten out any differences they
may have. As I understand, up to this time State and
Treasury and ourselves - and the non-military stuff has
worked very well - we are getting along all right. Is
that correct, Oscar and Lauch?
MR. COX: Yes.
MR. CURRIE: Yes.
MR. CROWLEY: That is all, Mr. Secretary, that I can
say.
H.M.JR: Judge Patterson?
MR. PATTERSON: Well, speaking for the War Department,
we have not seen the proposed programs yet, nor studied
them. I take it, however, that they have to do with items
of non-military nature, the items of a military type
already having been presented or included in the U.K.
program. And the war Department, as a procurement agency
for war supplies of the ground forces and the air forces,
would have no comment on this program, save that it may
be that some of the requirements will affect our ability
to perform our mission in supplying the armed forces and
in making good the commitments we make on Lend-Lease for
military items for the armed forces of our Allies, and
only in that connection would we wish to offer any comment
at all upon the items in this program.
We are deeply appreciative, of course, of the amount
of reciprocal Lend-Lease that we have had in the Pacific,
particularly from Australia and New Zealand. It has been
a great assistance and a great economy in our shipping
requirements.
H.M. JR: I also just received this, 80 I have to do
a little home work, myself. (Refers to amplification of
material in Chapter IV, Lend-Lease Requirements)
Mr. Lovett?
Regraded Unclassified
54
- 17 -
MR. LOVETT: Mr. Secretary, we have not seen the
schedules, so we are in no position to comment.
H.M.JR: Admiral McCormick?
ADMIRAL McCORMICK: I would like to subscribe the
Navy's concurrence of Secretary Patterson's remarks, sir.
H.M.JR: Mr. White?
MR. WHITE: No, I don't think there is anything to
add. I presume that before you break up that the next
specific step in the arrangement as between the Dominions
and the working staff will be indicated. Mr. Secretary,
I don't know whether they want to meet individually, or
whether with the British, or what the procedure would be,
but we are ready to go to work as soon as they are.
H.M.JR: What would your pleasure be, gentlemen?
MR. EGGLESTON: We would like to find your reactions
to the case that has been put up, and the officers will
be able to give explanations to questions.
H.M.JR: We have two very competent secretaries,
if you wouldn't mind working through them, and as soon as
the members of the United States Government have assimilated
this, possibly they could contact through our two secretaries
and then make the arrangements to go forward as soon as
possible, because on our side we have dropped everything
just to push this thing.
Do you think that is all right, Mr. Crowley?
MR. CROWLEY: That is right.
MR. SMITH: I take it, now, sir, they will go to
their opposite numbers in an endeavor to work out this
thing and keep you informed.
H.M.JR: Keeping the two secretaries informed so that
they, in turn, can keep us informed.
Regraded Unclassified
55
- 18 -
Is that all right with you, Lord Keynes?
LORD KEYNES: Yes, Mr. Secretary. The only reservation I
put in is that there may be certain questions of principle
such as a more specific view toward civilian end use,
where more general instructions might help the Departments
lower down the line, and I think it is rather for you to
say whether you feel--
H.M.JR: Give us--
MR. SMITH: Specially in regard to the utilization
of their own stocks, which has militated against their
own building program. They have had great difficulties.
H.M.JR: Give us twenty-four hours?
MR. SMITH: Very well, sir.
H.M.JR: Mr. Acheson, do you want to add anything?
MR. ACHESON: I think that will bring out the ques-
tions, Mr. Secretary. I am a little puzzled about the
Australian situation, in which it was said that there
might be additional requests. "hat is the situation
about that?
MR. MACGREGOR: May I give you this concrete example?
One we had last week was paper, writing and printing
paper. Now, seventy percent of the writing and printing
paper requirements were conceded on Lend-Lease, and
thirty percent to be purchased for cash, not eligible
under Lend-Lease. That involves a split in the method
of procurement, where seventy percent is conceded under
Lend-Lease for the letting of a contract on behalf of the
American Government, where the thirty percent is stricken
out as ineligible, we as representing the Australian
Government have either got to go out and buy for dollars,
or ask the Australian Government to issue an import license
to Australian importers.
Regraded Unclassified
56
- 19 -
There are other instances which could be cited.
For example, tobacco for military requirement was con-
ceded, but tobacco for a fellow working in a coal mine
or munition plant was not conceded.
Take the members of one family, some in the home
guard, one engaged in some war work, and one a white-
collar worker. You have a division there of the eligi-
bility of requirements of tobacco under Lend-Lease.
The point that we have made in that connection, sir,
is that having regard to the all-out character of the war
effort, is it really necessary to make that subdivision?
It details work, details discussion, details delay,
heartburning - a complication of procedures here and at
the Australian end. And if you, sir, in your judgment,
and those of our associates, after you go into the thing,
you say that is inescapable, then we naturally must
acquiesce in your decision. But we are taking the
liberty, sir, of bringing under your notice the diffi-
culties associated with this matter as we proceed to
discuss Stage II of the war. If you say it must continue,
we know where we are and we take the opportunity of
laying the facts before you and your associates.
LORD KEYNES: Is this interpretation on the narrow?
MR. MACGREGOR: Yes.
LORD KEYNES: So the broader is allowed - some addi-
tional percentages--
MR. ACHESON: Is that brought out in the document?
LORD KEYNES: Not very well.
MR. ACHESON: So there are trapdoors through which
we may step.
H.M.JR: Wouldn't you say we should take that under
consideration?
Regraded Unclassified
57
- 20 -
MR. ACHESON: Yes, I think it would be helpful to say
what items are involved here.
MR. SMITH: Further, the difficulty of procurement
with regard to your thirty percent of paper--
MR. MACGREGOR: Mr. Secretary, in some cases, with
the utmost goodwill on the part of all concerned here,
there has been the greatest difficulty in getting imple-
mentation. Everybody has done their part, the War
Production Board, FEA, your Treasury Procurement for
procurement, but due to the fact that manufacturers here
are preoccupied with war work, or taking care of their
American domestic civilian customers, in a good many
cases of important commodities, Treasury Procurement has
had difficulty in inducing American contractors, American
manufacturers, to take contracts from Treasury Procure-
ment for the implementation of allocations made by WPB
and FEA.
Now, sir, in bringing these points under notice we
are not complaining. We know there are difficulties in
the way. Those difficulties have to be overcome. But
if those working with you, and your colleagues on the
American side, could find some way of facilitating an
implementation of the allocations you make to us in good
faith, that, as well as the civilian end use question,
would eliminate our basic difficulties in getting on with
our job.
H.M.JR: Does anybody want to volunteer something
which might be helpful as to how we can make progress?
MR. TAFT: Mr. Secretary, I think it is clear that we
would make greater progress on the non-Lend-Lease items
under present criteria if we had a list of what is re-
quested, as Mr. Acheson was indicating, because each one
of them is difficult.
In the case of tobacco the standard is not different
from the U.K. It is the same. So if we granted it to
Australia, we would then be committed on the U.K. request.
Regraded Unclassified
58
- 21 -
What we would like, I think, is a list of the re-
quirements that are suggested by way of relaxation of
current criteria.
H.M.JR: Is that not in this? (Refers to amplifica-
tion of Chapter IV)
MR. TAFT: No, sir.
MR. SMITH: We will undertake to do that.
MR. MACGREGOR: We merely raised it in the document
in principle.
H.M.JR: May I say on that point, the whole purpose
of setting up this Committee is that all of us lay our
cards on the table face up at one time, and then we con-
sider all the problems and there will be no jokers.
00 far we haven't found any jokers.
MR. SMITH: That is fine.
MR. CURRIE: Mr. Secretary, I think the same proce-
dure might be followed as we are doing in the earlier
British case, to give us a few days to do some internal
studying of the various items listed here, a preliminary
clearance with the WPB and War Food Administration, and
then arrange to work on the various categories.
Mr. Griffin of our British Empire Section is meeting
withhis opposite number, and then on any of the more con-
troversial points, we bring those back to the top committee.
H.M.JR: That is good. Anything else?
Might I just say again - I have said this each time -
so far we have been very fortunate that there has been no
publicity on any of these meetings. If that could be
continued, I would appreciate it. We have been very for-
tunate that there has been no publicity and we would like
to keep it that way, if possible.
Regraded Unclassified
59
- 22 -
00 I think we might adjourn.
Thank you all for coming here, and we will approach
the problem as best we can.
Regraded Unclassified
60
FOREIGN ECONOMIC ADMINISTRATION
WASHINGTON 25, D.C.
October 30, 1944
MEMORANDUM
To:
Mr. Henry Morgenthau
From:
Frank Coe F.C.
Subject: CC/LL - U.S. No. 15
The American group drew up this statement. The contents of it have
been discussed with the British subcommittee, the minutes of which
are attached.
However, this statement of principles is not being distributed
outside the small American Group and further work will be done
on it later.
Attachements
Regraded Unclassified
61
CCLL
Copy No.
3
U.S. No. 15
TOP SECRET
JOINT STATEMENT BY THE GOVERNMENTS
OF THE
UNITED KINGDOM AND THE UNITED STATES
Representatives of the Governments of the United Kingdom and the
United States have recently concluded discussions with respect to the
Lend-Lease and Mutual Aid programs for the calendar year 1945. In
accordance with previous practice, the magnitude of these programs will
not be fixed in advance but will vary with the changing circumstances
and requirements of the war.
The Governments of the United Kingdom and the United States have
reaffirmed their unswerving determination to prosecute the war against
Germany and Japan to the utmost limit of their resources until the
military power of both those nations is completely destroyed. No
substantial relaxation of the existing controls over manpower, materials
or facilities will be possible until the final defeat of Germany.
In view of the progress of the war, however, it is now possible
to readjust the Lend-Lease program so as to reduce substantially the amounts
and types of items to be supplied. No deliveries will be made under
Lend-Lease after December 31, 1944 of chemicals, of steel, copper and
other metals (except to meet certain limited and special requirements
for producing munitions), and of manufactured goods which are produced
in the United Kingdom for export.
The Mutual Aid program provided by the United Kingdom to the United
States will continue on the same basis as heretofore.
Regraded Unclassified
62
- 2 -
In view of the adjustments in the Lend-Lease program, the principal
circumstances which gave rise to the White Paper of September 10, 1941
relating to exports no longer exist. In the White Paper the government
of the United Kingdom stated that in general no article of types the use
of which was restricted in the United States because of short supply and
which were obtained either for payment or under Lend-Lease would be used
in exports. The elimination from Lend-Lease after December 31, 1944
of practically all such items makes the White Paper largely inapplicable.
Accordingly, the Governments of the United Kingdom and the United States
have made the following joint declaration of principles to deal with the
new circumstances.
1. No Lend-Lease or Mutual Aid goods delivered to the
United Kingdom or the United States, or items identical thereto,
will be exported in commerce. This restriction will not apply to
commodities which are provided in substantial quantities under both
the Lend-Lease and Mutual Aid programs.
2. Stocks held in the United Kingdom of Lend-Lease supplies
of types which will no longer be supplied after December 31, 1944,
will be reserved solely for the production of articles for military
use,
3. With respect to those raw materials of the few types
which will be supplied to the United Kingdom under Lend-Lease
after December 31, 1944, the United Kingdom will not receive
under Lend-Lease from the United States, and use from Lend-Lease
63
- 3 -
stocks held in Britain, amounts greater than are required for
essential civilian war purposes in the United Kingdom and for
military production.
4. No goods supplied to the United Kingdom under Lend-Lease
for use by the armed forces will be diverted to civilian use
without the consent of the United States.
These principles will safeguard exporters in both countries against
the possibility that either group may receive undue competitive advan-
tage in world markets as a result of the war situation.
Regraded Unclassified
STANDARD FORM NO. 64
64
Office Memorandum UNITED STATES GOVERNMENT
DATE: October 30, 1944
TO
: The Secretary of the Treasury
FROM : Frank Coe, Secretary
Combined Committee on Lend-Lease
SUBJECT:
Attached are minutes of meetings of the
U.S. subcommittee, held at 10:30 a.m.
October 27, and the Combined Subcommittee,
held at 11:30, October 27.
Attachments 2
0
65
TOP SECRET
Copy No. /
USS:402
U.S. Subcommittee on Mutual Lend-Lease Aid
CCLL
Between the U.S. and the U.K.
Minutes of meeting held in Mr. White's
office on October 27 at 10:30 a.m.
Present
Mr. White, Chairman
Lauren Casaday
Dean Acheson
Charles Taft
Mr. Fetter
L. Currie
J. Angell
A. Davidson
Frank Coe, Secretary
Exports and Stocks
Mr. Davidson circulated a draft "Joint Statement of Principles" (U.S. No. 17)
which had been prepared by himself and Mr. Angell on the basis of preceding
documents and discussions. After discussion, the American group agreed
tentatively to work on the basis of these principles with one modification.
In the draft it was provided that where goods were exchanged between the two
countries in substantial amounts, neither country was barred from exporting
the goods in commerce. This was changed so that the exception would be
allowed only where the goods were exchanged between the two countries in
substantially equal amounts.
As modified the principles are as follows, with the date on which they
are to go into operation agreed upon tentatively by the U.S. group as
December 31, 1944:
1. Lend-Lease, mutual aid and identical articles would not be exported
in commerce, except where the article was exchanged between the two
countries in substantially equal quantities.
2. In the case of goods no longer obtainable as lend-lease, stocks
would be reserved for military purposes, without a time limit.
3. In the case of goods which would continue on lend-lease, the quantity
used for military and civilian war purposes would have to exceed lend-
lease deliveries plus withdrawals from lend-lease stocks.
4. Consent would be required to transfer goods from military to civilian
end uses.
Regraded Unclassified
66
&
It was agreed by the American group that in the case of any announcement
on this matter, we would prefer that such a statement was written in terms
of the large changes which were due to take place in lend-lease and the
corresponding need. for new and modified principles, written in terms of
a withdrawal of export restrictions on lend-lease goods and the scrapping
of the White Paper. The U.S. group further decided that after today's
discussion of this question--to which it was expected that general agree-
ment would be reached--the subject might be laid over for some time until
other matters had been finished.
The following matters were discussed and it was agreed that they would
be brought up at the next meeting with the British:
a. Non-munitions program - Mr. Currie wished to raise a number of
points of procedure.
b. Oil exports - Question of whether Britain intended to export
any oil for cash.
C. Sterling Pool - Mr. Acheson wished a full dress discussion of
this matter.
d. Military reciprocal aid - Mr. Coe pointed out that the U.S.
Army Subcommittee on the ground program had recommended that
that program be contingent upon the underwriting of military
reciprocal aid from the Empire. This would have to be discussed
with the Dominions and in the top group.
Regraded Unclassified
67
TOP SECRET
COPY NO. 39
C.S.L.L. (44) 2nd Meeting
Combined Sub-Committee on Mutual Lend-Lease A1d
Between the U.S. and U.K.
Minutes of Meeting held in U.S.
Treasury on 27th October, 1944 at
11:30 s.m.
Present
Mr. White
(In the Chair)
U.S. Representatives
U.K.Representatives
Mr. Acheson
Mr. Ben Smith
Mr. Taft
Lord Cherwell
Mr. Fetter
Lord Keynes
Mr. Brand
Mr. Casaday
Sir Robert Sinclair
Sir Henry Self
Mr. Currie
Sir Charles Hambro
Mr. Davidson
Mr. Opie
Mr. Angell
Mr. Helmore
Mr. Lee
Mr. Coe
3
Joint Secretaries
1.
EXPORT FREEDOM AND STOCKS
At the Chairman's invitation Mr. Acheson communicated
to the meeting the tentative proposals which the U.S. group
would be prepared to recommend on this subject.
These proposals can be summarised as follows:-
(a) At the present stage the two groups would concentrate
on securing agreement on principles, leaving detailed drafting
for a later period.
(b) The date for the initiation of the new principles
would be the 1st January, 1945, since on that date the U.K.
would start paying cash for the raw materials and manufactured
goods which were to be taken off lend-lease.
(c) Lend Lease or mutual aid goods delivered to the
United Kingdom or the United States, or goods identical
thereto, would not be exported in commerce. Where the two
countries exchanged roughly the same amounts of a substitutable
commodity (e.g. rubber, oil products raw and refined) this
restriction would not apply.
(d) Remaining Lend-Lease stocks at the 1st January 1945
of materials and goods no longer furnished under Lend-Lease would
be set aside for "military" end-use. There would be no obligation
on the U.K. to consume such stocks within a given period.
(e) As regards raw materials remaining on Lend Lease,
the question of payment would not arise unless the quantity
received on Lend Lease exceeded the amounts required for con-
sumption for military and essential war purposes in the United
Kingdom.
Regraded Unclassified
68
(f) Articles requisitioned for military end-use would
not be transferred to civilian end-use without the prior
concurrence of the U.S. Administration.
MR. WHITE said the Americans were accepting almost
entirely the British proposals on these points.
LORD KRYNES said that the U.K. group welcomed the
proposals or the U.S. group and were glad to recognise that they
were almost wholly in accord with the proposals which had been
put forward on behalf of the U.K. His main comments would be
on points of detailed interpretation rather than of principle,
(1) He asked whether it was essential that the
restriction on the export of articles identical to those obtained
on Lend-Lease need apply in the case of articles identical to
stores requisitioned on Lend Lease for military end-use. He
pointed out that if it could be ruled that the obligation was not
to apply in respect of goods in this field, the difficulties of
administration and of interpretation would be very greatly
simplified. For instance, there would be no need to have trouble
with the difficult complications which would arise in connection
with components and spare parts. MR. CURRIE agreed that the
possibility of making an exception on the lines suggested by
Lord Keynes should be further considered by the U.S. group.
MR. ANGELL asked whether the U.K. case would be met if it could
be ruled that the obligations should not relate to components and
spare parts. LORD KEYNES replied that while he would prefer a
more comprehensive arrangement, a ruling applying to components
and spare parts only would meet part of the difficulties which
he apprehended, provided that it was recognised that the U.K.
would be requisitioning on lend loase components and spare parts
as such as well as those incorporated in or supplied with other
goods.
(11) LORD KEYNES circulated two notes for the information
of the U.S. group:
(a) A note (No. 17) giving more comprehensive
figures of stocks in the United Kingdom of raw materials of lend
lease origin. ( He explained that exact figures for steel stocks
of lend lease origin were not at present available),
(b) A note (No. 16) (attached as an Annex to these
minutes) indicating the arrangements proposed for effecting the
clean-cut removal as at the 1st January 1945 of the raw materials
and manufactured articles to be taken off Lend Lease: (Lord
Keynes emphasised that it would be dosirable for the arrangement
suggested in the above note to be discussed between the U.K.
Missions concerned and their opposite numbers, particularly as
it would be important that there should be no interruption in
the flow of goods because of the financial changes proposed,
and that the maximum quantity of lend lease goods should be
shipped before the 1st of January, 1945).
There was some discussion on the question of what public
statement would be required when the change was announced, The
U.S. group expressed the hope that the statement would not
emphasise a unilateral withdrawal of the White Paper but should
rather indicate that the White Paper had become inapplicable in
present circumstances, particularly in view of the impending
substantial changes in the Lend Lease programme -- especially
the withdrawal of steel and most manufactured civilian supplies
from the U.K. Lend Lease requirements
It was agreed that while further discussion of the
principles involved should be deferred for the present, progress
might be made with the drafting of a suitable public statement
for consideration at a later meeting. It was recognised (1)
that it would be essential during the negotiations absolute
secrecy should be maintained (11) that an announcement on December
1, or even sooner, might be suitable.
- 2 -
Regraded Unclassified
69
2,
OMINIONS AND INDIAN PROGRAMMES
LORD KEYNES expressed the hope that the requirements
which had been put forward on behalf of Australia, New Zealand
and India would be examined in a generous spirit, since the war
situation in Stage II would mean that those countries would not
be able to proceed to the same degree of demobilisation as would
be the case in the United States and the United Kingdom. In his
view therefore there would be a strong prima facio case for giving
them the full measure of Lond Lease for which they had asked,
particularly as they would presumably still be asked to furnish
a considerable amount of Reciprocal Aid.
It was agreed that there should be a formal meeting
between the U.S. group and representatives of the Dominions
Governments concerned and of India on Tuesday the 31st October
at a time to be arrangod, It was contemplated that such a
meeting would be a prelude to more detailed discussions of the
Dominion and Indian programmes.
3.
LOCOMOTIVES AND WAGONS FOR INDIA
LORD KEYNES referred at some length to the desirability
of having these requirements met on Lend Lease. He said that
there was admittedly a difference of opinion between the U.S.
and U.K. military advisers as to the degree of military
essentiality for both the locomotives and the wagons. Novertholess
on the U.K. side it was certain that the necessity for obtaining
the wagons in 1945 would be pressed, although it might be that
if lend lease terms were refused, provision of the locomotives
would have to be deferred until 1946, He understood that the
difficulty on the U.S. side was not so much one of supply as of
the export critoria. He pointed out, however, that at no previous
stage had the provision of given articles on Lend Lease terms to
parts of the British Commonweelth outside the United Kingdom,
been taken into account in connection with exports from the United
Kingdom. Thus in the view of the U.K. group the criterion
proposed by the U.S. group was irrelevant. In any case the only
identical locomotives which the U.K. would export in 1945 were
the remainder of the same requirement for India. There would be
no cash advantage to the U.K., since the receipts would merely
diminish outstanding sterling balances.
LORD CHERVELL, MR. BEN SMITH and SIR RCRERT SINCLAIR
supported LORD KEYNES'S arguments and urged that A distinction
between military and civil requirements in this field was unroal
since the non-fulfilment of a civilian necessity might well
radically affect the military situation.
MR. CURRIE said that the U.S. group would have to
consider this matter further. One of their main difficulties was
that if the locomotives and wagons were supplied on Lend Lease
they would still have a long life after the period of military or
quasi-military user was ended. LORD KEYVES said that in the
view of the U.K. group the U.S. position in this respect would
be safoguarded by their ability to recepture the equipment in
question.
4. FOOD
MR. CURRIE said that the F.E.A. had reviewed the
*
U.K. programme and was now prepared for detailed discussions
to take place with W.F.A. and the operating livels of F.E.A. The
general view of F.E.A. was that the over-all size of the programme
was reasonable, while they recognised that in the light of the
Quebec Agreement it was right that the programme should make
some allowance for an increase and an improvement in the diet of
the U.K. population. The most important points which F.E.A. would
wish to explore further related to (1) the extent to which the
U.S. would be called upon to meet the needs of other countries
especially for relief requirements (11) the extent to which the
U.K. proposed to meet any increased demand for food by running
- 3 -
Regraded Unclassified
70
down its stocks, (11) the amount of imports which the U.K.
proposed to drew from sources other than the United States in
1945. It was pointed out that (1) would be taken care of by
the ordinary allocation machinery of the C.F.B.: what the forth-
coming discussions should establish was a programme which would
be acceptable from a Lond Lease standpoint subject to allocations
boing agroed by the C.F.B. in the light of the over-all demands
on world food supplies, including those of the United States.
It was agreed that discussions should now proceed at
the operating level on the lines indicated by Mr. Currie. The
U.K. group noted that their representatives would be called upon
to provide detailed information on points (11) and (111) above.
5.
OIL
MR. CURRIE said that here again the U.S. wore now
prepared for discussions at the operating level. The point of
difficulty was likely to be that of the size of the stocks of
oil to be maintained in the U.K., a point which had already been
raised with the Resident Minister.
LORD KEYNES said t t there had been a modification
of the British requirements as a result of which the net Lend
Lease demands were now expected to amount to $413 million as
against a provious figure of $475 million. He mentioned, as a
matter of interest, that the U.K. would be providing a greator
quantity of oil on Reciprocal A1d than the amount for which it
was asking on Lend Lease, but owing to the fact that the
Reciprocal Aid oil was largely made up of low priced fuel oil,
the value would be less than the value of Lend Loase oil. He
confirmed that the revised figure of $413 million did not include
anything in repect of certain oil products (1.e. identifiable
lubricating oils) which were now being excluded from the Lend-
Lease programme because of export considerations,
It was agreed that detailed discussions on oil should
now proceed with Mr. Ernst of F.E.A.
6.
SHIPPING
It was agreed that the detailed discussions would
now begin between the British Merchant Shipping Missions, Mr.
Martin of F.F.A. and Mr. Cornwall of W.S.A.
7.
RAW MATERIALS AND MISCELLANEOUS MANUFACTURED GOODS
MR. CURRIE said that he thought that the way was now
clear for detailed discussion of these programmes with Messrs.
Griffin and Lebensburger of F.E.A. He thought that there was
perhaps some misconcoption about the U.K. demand for open cast
mining machinery since his information was that all the U.K.
demands had either already been supplied or were in course of
procurement. It was agreed that this point could be cleared up
at the detailed discussions.
8.
FUTURE ARRANGEMENTS
LORD KEYNES said that he proposed to communicate to
the U.S. group on the 30th October a paper which, he hoped, would
contain (a) certain revisions in the detailed figures of the U.K.
requirements together with the revised oil programme to which
he had referred, (b) a more detailed breakdown of Dominion and
Indian requirements which the Governments concerned were now pre-
paring, (c) a more comprehensive version of Chapter 3 setting
out ways in which, in the U.K. view, the gold and dollar reserve
position of the U.K. could be strengthened.
- 4
Regraded Unclassified
71
It was agreed -
(1) that there should be a formal meeting in
Mr. Morgenthau's room, with Dominion and Indian
representatives on the 31st October at a time
to be agreed,
(11) that the next meeting of the Combined Group should
be on 1st November, at 11:30 a.m.
(111) that on the 30th October Lord Keynes should give a
talk on the working of the Sterling Area dollar
pool. It was agreed that this talk would probably
be of interest to a wider audience of both U.S.
and U.K. officials than those comprising the
Combined Committee, and it was tentatively arranged
that it should take place in Mr. Acheson's office
at the State Department.
(Signed)
Mr. Lee
Mr. Coe
Washington, D.C.
- 5 -
Regraded Unclassified
72
ANNEX
STATEMENT BY LORD KEYNES
I confirm what I said at the discussion on the 24th
October - namely that in order to assist agreement on the date
of 1st December, 1944, for the removal of White Paper restrictions
on U.K. exports, we had proposed that all raw materials and
manufactured goods not included in either the Munitions Programme
in Chapter 1 or the Non-Munitions programme in Chapter 2 of our
document should be taken off Lend-Lease with effect from the
1st January, 1945, whether Stage II actually begins on that date
or not.
You will remember that I reserved the question of
whether the proposed terminal date of 1st January, 1945, should
apply to materials requisitioned after that date, or to
materials shipped after that date, or to materials made available
for shipment after that date. I am now able to let you have
our considered views. I am, of course, dealing solely with the
"financial" point and nothing in our suggestions to meet this
point should have any effect on the flow of goods.
We suggest that the most convenient arrangement will
be to proceed on the following lines:-
1. Goods which we do not require either on Lend-Lease
or on cash terms during 1945.
(a) Goods covered by Lond-Lease requisitions which are
placed on board ship before the 1st January, 1945,-
defined as goods which are included on a Bill of
Lading sighed by the Master of the ship concerned
terms, before the 1st January, 1945 - will be on Lend-Lease
(b) Goods covered by Lend-Lease requisitions which
have not been placed on board ship before the 1st
January, 1945, in the sense of the foregoing
paragraph, but which have been made available for
shipment by that date - defines as having been
invoiced from the works for transport to a ship's
side - will continue to move forward and be shipped,
but will be paid for on a cash reimbursable basis
unless other arrangements for their disposal are made
by mutual agreement.
(c) Goods covered by Lend-Lease requisitions which by
1st January, 1945, have not reached the point of
having been issued from the works for transport
to the ship's side, will fall outside the scope of
(a) and (b) above. We hope that the amounts involved
would be very small as we shall, of course, do our
best to give particulars of goods we shall not require
at the earliest possible date, so that cancollation
action can be taken where appropriate. We assume,
however, that in accordance with the usual practice
there would be no commitment on the U.K. to take
such goods or to pay cancellation charges.
Regraded Unclassified
73
2. Goods which we have proposed to take off Lend-Lease
but of which we shall still continue to need supplies
in 1945.
Goods not placed on board ship (in the sense of
(a) above) before the 1st January, 1945, will be
purchased for cash. The question of whether such
goods would need to remain on a cash reimbursable
basis and the time at which they would be
transferred to U.K. Government procurement or
private trade channels, would require to be
considered case by case, and settled by mutual
agreement.
We hope that the above proposals will be found to
constitute a practical means of effecting a "clean cut at given
date" solution which we believe to be in the mutual interests of
both Governments.
(Signed) Keynes
27th October, 1944
- 2 -
Regraded Unclassified
74
FOREIGN ECONOMIC ADMINISTRATION
WASHINGTON 25, D.C.
October 30, 1944
MEMORANDUM
To:
Mr. Henry Morgenthau
From:
Frank Coe
Subject: CC/LL - U.S. Nos. 16 and 17
There are attached two Documents which were distributed by the
British at the Subcommittee meeting. One of them is on the
very technical point of where the cut-off takes place. The other
is the most complete information the British have given us on
stocks.
Attachments
Regraded Unclassified
Copy No. 7
75
CCLL
U.S.No. 16
TOP SECRET
I confirm what I said at the discussion on the 24th
October - namely that in order to assist agreement on the date
of 1st December, 1944, for the removal of White Paper restrictions
on U.K. exports, we had proposed that all raw materials and
manufactured goods not included in either the Munitions Programme
in Chapter 1 or the Non-Munitions programme in Chapter 2 of our
document should be taken off Lend-Lease with effect from the
1st January, 1945, whether Stage II actually begins on that
date or not.
You will remember that I reserved the question of
whether the proposed terminal date of 1st January, 1945, should
apply to materials requisitioned after that date, or to
materials shipped after that date, or to materials made available
for shipment after that date. I am now able to let you have
our considered views. I am, of course, dealing solely with the
"financial" point and nothing in our suggestions to meet this
point should have any effect on the flow of goods.
We suggest that the most convenient arrangement will
be to proceed on the following lines:-
1
Regraded Unclassified
76
1. Goods which we do not require either on Lend-Lease
or on cash terms during 1945.
(a) Goods covered by Lend-Lease requisitions which are
placed on board ship before the lst January, 1945,
- defined as goods which are included on a Bill
of Lading signed by the Master of the ship
concerned before the 1st January, 1945 - will
be on Lend-Lease terms.
(b) Goods covered by Lend-Lease requisitions which
have not been placed on board ship before the
1st January, 1945, in the sense of the foregoing
paragraph, but which have been made available
for shipment by that date - defined as having
been invoiced from the works for transport to
a ship's side - will continue to move forward
and be shipped, but will be paid for on a cash
reimbursable basis unless other arrangements for
their disposal are made by mutual agreement.
(c) Goods covered by Lend-Lease requisitions which by
1st January, 1945, have not reached the point of
having been issued from the works for transport
to the ship's side, will fall outside the scope
of (a) and (b) above. We hope that the amounts
involved would be very small as we shall, of course,
do our best to give particulars of goods we
shall not require at the earliest possible
date, so that cancellation action can be taken
where appropriate. Te assume, however, that in
accordance with the usual practice there would
be no commitment on the U.K. to take such goods
or to pay cancellation charges.
2. Goods which we have proposed to take off Lend-Lease
but of which we shall still continue to need supplies
in 1945.
Goods not placed on board ship (in the sense of
(a) above) before the 1st January, 1945, will
be purchased for cash. The question of whether
such goods would need to remain on a cash
reimbursable basis and the time at which they
would be transferred to U.K. Government
procurement or private trade channels, would
require to be considered case by case, and
settled by mutual agreement.
We hope that the above proposals will be found to
constitute a practical means of effecting a "clean cut at given
date" solution which we believe to be in the mutual interests of
both Governments.
(Signed) Keynes
27th October, 1944
Regraded Unclassified
CCLL
4.S.No.17
COPY No. 3
77
SECRET
Raw Materials
Estimates for Dates Specified
Materials
Unit
Stock of
%-age of
Number of months
Date
L/L Origin
Total U.K.
consumption represented
Remarks
Stock
by Total Stock
1944
GROUP I
Raw Cotton
L.T.
87,000
27%
6
Oct. 1
Rosin
If
14,000
85%
5%
Oct. 1
Liquid Rosin
If
1,500
100%
6
Aug. 31
Turpentine
#
2,000
90%
2
July 1
Pine Tar
If
200
100%
1
Oct. 1
Pine Oil
If
250
100%
2
Oct. 1
GROUP II
Tood Fulp for paper
Manufacture
S.T.
21,000
15%
3
Sept.9
Bagasse
n.a.
Vulcanised Fibre
n.a.
Kraft Liner Board
S.T.
8,000
50%
3
Aug. 31
Building Board (all kinds)
.
nil
nil
Aug. 31
Paper & Board excluding
Kraft Liner Board
#
1,000
0.5%
2
Aug. 31
GROUP III
Softwood (including
sleepers and crossings)
Stds.
nil
nil
Aug. 31
Hardwood
C.Ft. 2,500,000
12%
2
Aug. 31
Constructional Plywood
Sq. 160,000,000
75%
4
Aut. 31
Ft.
Veneers Oak
nil
nil
Aug. 31
Regraded Unclassified
78
Materials
Unit
Stock of
%-age of
Number of months
Date
L/L Origin
Total U.K.
consumption represented
Remarks
Stock
by Total Stock
1944
GROUP IV
Synthetic Rubber:
GRS
L.T.
51,136
100%
8
GRM
Aug. 25
.
2,041
100°,
7
GRI Butyl
Aug. 25
E
147
100%
negligible
Perbunan
Aug. 25
E
136
100%
If
Aug. 25
IRON AND STEEL
L.T.
n.a.
n.a.
5
As at Aug. 31, 1944, U.K. stock of alloy and carbon
imported from Canada and U.S.A. (cash as well as L/L was
estimated at 639,000 G.T. This represents 14% of total
U.K. stock.
OTHER METALS & MINERALS
Molybdenum
1,000 lbs.
2,838
100%
8
Oct. 1
Enamelled Copper Wire
nil
nil
Other metals
Oct, 1
Shiments going straight to production.
n.a.
n.a.
n.a.
Apart from silver-which is excluded because of the
special conditions of the L/L requisitions - the notals
about which me have no readily available information are
metals in special forms ordered for specific purposes in
small tonnages.
ABRASIVES
Grinding Wheels
000's
1,000
33%
2
Oct. 1
Artificial Abrasive Grain
L.T.
800
12%
4
Oct. 1
CHEMICALS
Phosphate Rock, Industrial
L.T.
20,000
100%
7
Oct. 1
Triplesuperphosphate
nil
nil
Oct. 1
ALCOHOLS
Acetone
L.T.
2,300
25%
3/2
Oct. 1
Butyl Acetate
If
650
25%
5
Oct, 1
Butyl Alcohol
n
1,250
30%
5
Oct. 1
Cellosolve
#
225
100%
2/2/2
Oct. 1
Regraded Unclassified
79
Materials
Unit
Stock of
%-age of
Humber of months
Date
L/L Origin
Total U.K.
consumption represented
Remarks
Stock
by Total Stock
1944
ALCOHOLS CONTD.
Ethyl Alcohol
L.T.
nil
nil
Isopropyl Alcohol
"
Oct. 1
140
30%
Methyl Ethyl Ketone
3/2
"
Oct. 1
200
100%
5
Oct. 1
Carbon Black - Channel:
for Paint & Ink
L.T.
400
100%
2/2/2020
for Rubber
Oct. 1
L.T.
3,000
100%
Carbon Black - Furnace
12
Oct. 1
L.T.
4,193
100%
3
Ethylene Glycol
Oct. 1
L.T.
3,200
75%
3
Formvar
Oct. 1
n.a.
n.a.
n.a.
(No recent information. Our last L/L
Freon
1,000 lbs.
40
(Requisition was cancelled in 1943.
100%
2½
Phthalic Anhydride
n.a.
n.a.
Polyisobutylene
n.a.
S.T.
161
100$
No material supplied under L/L in last year.
4
Polyvinyl Butyral
Oct. 1
negligible
negligible
negligible
Oct. 1
No stocks at June 30, 1944. Small current
Polyvinyl Chloride
If
182
25%
shipments will go straight into production,
1
Sulphur: Acid
Oct. 1
L.T.
115,000
98%
8
=
Oct. 1
Regular
If
38,000
95%
7½
Oct. 1
B.R.M.M.
Tashington
October 26, 1944
Regraded Unclassified
80
TOP SECRET
COPY NO. 39 20
C.S.L.L. (44) 1st Meeting
COMBINED SUB-COMMITTEE ON MUTUAL LEND-LEASE AID
BETWEEN THE U.S. AND U.K.
MINUTES of Meeting held in U.S.
Treasury on 25th October, 1944
at 12.10 p.m.
PRESENT
Mr. White
(In the Chair)
U.S. Representatives
U.K. Representatives
Mr. Acheson
Rt. Hon. Ben Smith
Mr. Taft
Lord Cherwell
Mr. Collado
Lord Keynes
Hon. R. H. Brand
Mr. Casaday
Sir Robert Sinclair
Sir Henry Self
Mr. Currie
Mr. R. Opie
Mr. Cox
Mr. J.R.C. Helmore
Mr. Davidson
Mr. Angell
Mr. F.G. Lee
Mr. F. Coe
--
Joint Secretaries
LORD KEYNES explained that there were three main reasons
why it was essential that the United Kingdom should be freed
from export restrictions at as early a date as possible. In
the first place, owing to the inevitable operation of the time
lag it was very necessary that U.K. exporters should be free to
make their export plans and to get into touch with markets as soon
as possible, otherwise such slender hopes as there were of the
achievement of the U.K. export target in 1945 would be greatly
diminished. In the second place, manpower was already being
released to a limited extent from the services and from the
munitions industries. Tar needs, of course, must continue to
have first priority, but in so far as manpower and capacity became
available for non-war purposes, it was very important that they
should be allocated to exports rather than that they should be
precluded from being devoted to export needs and become absorbed
in producing goods and services for the domestic market. Lastly,
there was considerable restiveness on this subject in the House
of Commons, Hitherto it had been possible to persuade critics to
dofer putting embarrassing enquiries or seeking a full-dress
debate, but that position could not be maintained very much
longer.
LORD KEYNES went on to make certain suggestions in regard
to the treatment of Lend-Lease stocks, He said that where it
was proposed that a commodity -- like cotton -- should be main-
tained on Lend-Lease no immediate question ought to arise, The
U.K. proposal was that the principle of substitution should
continue to apply, as in the White Paper: the question of what
should be done with Lend-Lease stocks left over after Lend-Lease
had coased to apply would not ariso until the end of the Japanese
war. In the case of matorials which it was proposed to take off
Lend-Lease -- of which steel was the most important -- it was
suggested that arrangements should be made to hypothocate Lond-
Lcase stocks at the given date (say the 1st January, 1944) to
Regraded Unclassified
81
non-export user in the ensuing period. He suggested that if
this were done, criticism as regards the user of such stocks
ought to be procluded, particularly since it could be maintained
that the restrictions imposed by the Export White Paper were
applied from the date of the issue of that paper although at
that time the Lend-Loase element in the U.K. stocks of raw
materials was very limited. In other words the restrictions
which the U.K. had accepted on its cash stocks at the beginning of
the Lond-Losse poriod could be regarded ns balancing the freedom
which it would receive in respect of its Lond-Lease stocks at the
end of the period.
Considerable discussion took place on the suggestions
put forward by Lord Keynes. In particular the U.S. represent-
atives urged that the U.K. would not be in a position to make
offective exports for some two or three months at least after
the beginning of 1945. It might thus be held that it was the
less necessary for an early dato to be announced as that from
which export restrictions would coaso: in other words it might
be possible to make the ending of export restrictions (as
distinct from the beginning of freedom to plan exports) date
from some lator time at which Lend-Lease stocks could be presumed
to have been exhausted. Some doubt was also expressed as to
whether acceptance of the substitution principle for all raw
materials remaining on Lend-Lease would provido an adequate
defence against political criticism, since it could be urged
that the U.K. was only enabled to export by reason of the receipt
of Lend-Lease supplies. The U.K. representatives urged in
reply that (1) the principle of substitution was already
accepted and had operated ever since the introduction of the
White Paper for non-scarce materials (11) that it would be
essential not to delay the beginning of export freedom for B
period during which Lond-Lease stocks would be presumed to
have been exhausted.
In the course of the discussion Lord Keynes was asked
whether he would be prepared to modify his suggestion as regards
the proposed hypothocation of Lend-Lease stocks so as to make
hypothecation apply only to war production and not to the whole
range of domestic user. LORD KEYNES said that he would wish to
consider this further but that personally he thought that it
would be possible to accept e limitation of hypothecation to
the field of war production.
It Was decided that the U.S. representatives should
consider the suggestions which had been put forward on behalf
of the U.K. and that the question should be further discussed
at a meeting to be held at 11:30 a.m. on the 27th October.
The U.K. representatives undertook that in the meantime they would
make available figures showing the amounts of Lend-Lease stocks
on hand in the United Kingdom in the field of food, oil and
raw materials.
F. G. Lee
(Signed)
F. Coe
Washington, D.C.
2
Regraded Unclassified
82
TOP SECRET
COPY NO. 40
C.C.L.L. (44) 3rd Meeting
COMBINED COMMITTEE ON MUTUAL LEND-LEASE AID
BETWEEN THE U.S. AND U.K.
MINUTES of a Meeting held in Mr. Morgenthau's
Room in the U.S. Treasury, on 25th October,
at 11:30 a.m.
PRESENT
Mr. Morgenthau (In the Chair)
U.S. Representatives
U.K. Representatives
Mr. Acheson
Rt. Hon. Ben Smith
Mr. Taft
Lord Cherwell
Mr. Collado
Lord Keynes
Hon. R.H. Brand
Dr. White
Sir Robert Sinclair
Mr. Casaday
Sir Henry Self
Mr. R. Opie
Mr. Currie
Mr. Cox
Mr. Davidson
Mr. Angell
Mr. Patterson
Hr. Gates
Mr. F.G. Lee
Hr. F. Coe
3
Joint Secretaries
1. MUNITIONS PROGRAIDIES
MR. PATTERSON informed the Committee that a combined group
of U.S. and U.K. representatives had now submitted agreed recommenda-
tions on the U.K. Group Army requirements in Stage II. In general,
complete agreement had been reached on all items examined, He
wished, however, to draw attention to two particular categories in
respect of which special considerations arose:-
(a) It had been proposed that the question of the
procurement of certain locomotives and wagons required
in India should be remitted to F.E.A.
(b) It was proposed that F.E.A. should examine the U.K.
requirements for certain "civilian" items (tires, tire
fabric, nylon for parachutes, and paper and board for
packaging) in respect of which the U.K. appeared to be
asking for very substantial quantities of materials which
were in short supply.
SIR ROBERT SINCLAIR said that the United Kingdom
representatives deeply appreciated the spirit of understanding and
cooperation which the U.S. War Department had shown in the
discussion of the Ground Army programme. Sir Robert agreed that
as regards the locomotives and wagons required for India a
difference of opinion existed, in that the War Deprtment had not
felt able to accept the British contention that the locomotives
and wagons were military requirements needed in 1945. He understood,
however, (and Mr. Patterson confirmed) that the War Department
would see no objection to these requirements being provided by
F.E.A. Accordingly he assumed that the next stop would be for
these requirements to be considered by F.E.A.: in that event, the
U.K. representatives participating in the discussions with F.E.A.
Regraded Unclassified
83
would probably suggest that while the delivery of the locomotives
in 1945 was desirable from at military standpoint, it could not
perhaps be regarded as absolutely ossontial, On the other hand,
we should urge that the delivery of the wagons in 1945 was an
urgent military necessity, As rogards the other four items to
which Mr. Patterson had drawn attention, SIR ROBERT SINCLAIR said
that the U.K. reprosentatives looked forward to discussions with
F.E.A.: admittodly our requirements were substantial, but in
view of the U.K. reprosentativos they had sound military
justification.
It was agreed that both as regards the locomotives and
wagons and the further four itoms mentioned by Mr. Patterson,
the nuxt stop should be for discussions to take place butween F.E.A.
and the U.K. representativos, and that the War Department was to
be kept in close touch with those discussions.
SIR ROBERT SINCLAIR drow attention to paragraph 10 of
the report of the Combined Group on Ground Army requirements which
rolated to Rociprocal A1d and explained that it was not possible for
the U.K. Government to onter into commitments relating to the
grant of Reciprocal Aid by the Governments of Australia, Now
Zoaland or India. LR. PATTERSON said that he understood that the
difficulty was likely to be that the Australians would be unwilling
to accord Reciprocal A1d to the U.S. forces unless their commitment
in this respect wore underwritten by the U.K. Government. LORD
KEYNES doubted whether in fact this would be found to be the
difficulty: he felt that in practice the question would prove
to be one of allocated available Australian supplies between the
demands of the U.S. forces and the U.K. forces operating in or
near to Australia. Ho confirmed that in any event the U.K.
Government could not accept commitments in respect of Reciprocal
Aid to be furnished by Australia. Ho would, however, explore
further in consultation with the ropresentatives of the Commonwoalth
Government what word, in fact, likoly to be the difficulties, if
any, in this fiold.
2.
MUNITIONS PROGRAMME: AIR REQUIREMENTS
MR. PATTERSON reported that the discussions on U.K. air
requirements in Stage II had been proceeding satisfactorily and that
an agroed combined report would be available very shortly.
MR. MORGENTHAU said that he would wish to congratulato
the War Department on the expedition with which Ground Army and
Air requirements had beon examined in consultation with the U.K.
representatives and on the very substantial monsure of agreement
which had been achieved.
3.
MUNITIONS PROGRAME: NAVAL REQUIREMENTS
MR. GATES said that, as regards Naval requirements proper,
discussions had taken place as a rosult of which the U.K.
representatives had boon asked to furnish cortain further information.
When that information was available the discussions could be resumed.
As regards the Fleet Air Arm requirements it had not been possible
to make progress owing to the absence from Washington of Captain
Abel Smith. He pointed out, however, that the Fleet Air Arm
requirements as presented in the British Document were the same
as those submitted in respect of 1945--1.0. irrespective of
whether or not 1945 and Stage II wore co-terminous. He suggosted
that it might well be preferable to consider the requirements on
that basis--i.e, as a 1945 requirement without reference to the
question of whether 1945 and Stage II worein fact co-torminous.
SIR ROBERT SINCLAIR confirmed that as regards the Naval
requirements the U.K. representatives hoped to be able to supply
answers within the next two or three days to most of the questions
Requirements, it was 3 matter for regret that Captain Abcl Smith's
put by the Navy Department. Às regards the Fleet Air Arm
2
Regraded Unclassified
arrival in the United States should have been dolayed by adverse
weather. It was hoped that he would arrive very shortly when
84
discussions could be begun. For his part he appreciated the
force of what Mr. Gates had said about the basis upon which our
Floot Air Arm requirements had been presented and he thought that
it might woll be advantageous for them to be considered as a 1945
requirement,
4,
EXPORT FREEDOM
MR. ACHESON circulated a paper (which is attached as
an annex to these minutes) in which the U.S. representatives had set
out their understanding of certain points in the U.K. proposals,
On question (1) LORD KEYNES said that the intention of the
U.K. document was that all raw materials and manufactured goods not
included in the programme set out in Chapter II or included in the
munition programmes in Chapter I, would be taken off Lend-Lease with
effect from the lst January, 1945, irrespective of whether Stage II
actually began on that date or not,
It was pointed out that it would be necessary to be clear
75 to whether the proposed terminal date of the 1st January, 1945,
would apply to materials shipped after that date to materials
delivered to the British for shipment after that date or to materials
requisitioned after that date. LORD KEYNES said that he would wish
to reserve this latter point for consideration: He had personally
contemplated that any supplies delivered to the British after
1st January, 1945, would be paid for even though they had been
requisitioned before that dato.
As regards (2) LORD KEYNES agreed with the statement of the
position as contended in Mr. Acheson's note, on the understanding that
the U.K. could, as now, make application to transfer for export.
As regards (3) LORD KEYNES said that the critorion which
the U.K. representatives had had in mind was that the manufactured
goods to be obtained on Lend-Lease would not be of types which the
U.K. would normally expect to export. He would not wish the
United Kingdom to be bound not to bogin the production in 1945 of
any articles similar to those included under this heading. For
instance, at present no crawler tractors were produced in the
United Kingdom but it might well be that the United Kingdom would
"ish to begin the production of such tractors on a very small scale.
The point was that the U.K. should not expect to export such
tractors.
MR. ACHESON 3011 that Cord Keynes's statement clarified
the issue satisfactorily for the U.S. represontatives. If, as
was contemplated, locamot: vos and reilway wagors were added to the
list of manufactured goods which F.E.A. would be asked to provide
on Lond-Lease, special considerations might arise in regard to them,
but these could be examined at a later date.
As regards (4) LORD KEYNES said that thore were very
weighty reasons why export restrictions should be wholly removed
from the 1st December, 1944. He approciated that in so far as the
difficulties apprehended by the U.S. representatives had not been
removed by the statement which had already made in regard to
question 1, they probably related to the question of the use of
stocks of Lond-Lease goods after the materials in question had been
taken off Lend-Lease. As he had already said, the U.K. representatives
felt that there wore decisive reasons for selecting 39 early a date
as possible for the inception of freedom from export restrictions:
but they were conscious of the possible difficulty in regard to
stocks and would be glad to put forward certain concrete
suggestions which they had been considering among thomselves.
It was agreed that the suggestions referred to by Lord
Keynes should be considered at a Sub-Committee meeting. Accordingly
the discussion was continued by a Sub-Committee consisting of those
present at the Main Meeting with the exception of Mr. Morgenthau.
A note summarising the proceedings at the Sub-Committee is circulated
with these minutes.
F.O. Lee
(Signed)
F. Coe
Washington, D.C.
-3-
Regraded Unclassified
85
ANNEX TO MINUTES
The following comments rofer to
(a) Chapter 2, Sec. V, Raw Estorials
(b)
"
", Sec. VI, Manufactured Articles
(c)
"
1, (So far as raw materials totaling
$13, 816, 000 are concerned, see
P. 33, bottom)
(d)
n
5, White Paper and Export
Comments:
(1) The U.S. side understands that if the non-munitions
program set forth in Chapter 2 should go into offect on January 1,
1945 all other raw materials and manufactured goods (except
munitions items) would go off lond-lease. Should the effectivo date
be postponed, an intervening non-munitions program might be
required (see p.l). But in such event, when the effective date
should be reached the same action would be taken. This applies
whether or not non-munitions items on prior requisitions are still
undelivered.
(2) The U.S. side understands that the Quebec agreement,
that the articles which have been received under lend-lease or
mutual aid will not be exported, will stand. The U.S. side also
understands that nrticles lend-leased for military end use (motors
for instance) will not be transferred to civilian end use without
agreement.
(3) The U.S. side understands that the manufactured
goods included in the Stage II program in Chapter 2, Sec. VI, are
not produced and are not expected to be produced during Stage II
in the U.K.
(4) The U.S. sido understands the U.K. proposal to be
that the White Paper export restrictions (except those referred to
in Paragraph 2 above) should be liftod on December 1, 1944, as a fixed
date.
The U.S. side believes that these restrictions should
be lifted at the expiration of definite period following the
inauguration of the programs for Stage II set out in Chapter 2
and the termination of other lend-loase Stage I programs ns contom-
plated in Paragraph 1 above This is to remove the necessity for
complicated rules relating to the use of stocks of lend-lease
materials in the manufacture of goods for export,
- 4 -
Regraded Unclassified
COLL
86
U.S. No. 13
TOP SECRET
BRITISH REQUIREMENTS FOR THE FIRST YEAR OF STAGE II
SUPPLEMENT
LEND-LEASE STOCKS IN THE U.K.
The following tables contain, in respect of itoms asked
for on Lond-Lease in Chapter 2, the bost available ostimates of
stocks of goods of Lond-Lease origin held in the U.K. at the
present time. It has not boon possible to give estimates for
all groups of commodities as of a single date, but in overy
case the ostimatos are the most recent which can be provided.
A.
FOODSTUFFS ETC.
(as of September 30, 1944)
Esti a ted
Lond-Leaso stocks as
COMMODITY
Stock of Lond-
% of bulk stocks
Loase food etc.
from all sources
000 tons
89
Maize and maizo products
a
15
Ediblo pulses
44
100
Soya flour
10
100
Soya beans and grits
18
100
Lard
105
98 (a)
Evaporated milk
81
56
Driod milk
55
78
Cheese
18
36
Dried eggs
41
79
Carcase meat
84
27
Frozen pork for curing
8
46
Points cannod meat
88
83
Canned cornod pork
12
5 (b)
Special service packs
52
50
Bacon and ham
14
28
Canned fish
55
48
Dried fruit
50
39
Starch
36
57
Soeds
2.7
- (c)
million lbs.
Tobacco
35
18 (d)
(a) Animal lard only,
(b) Proportion of stock of canned corned moat of all kinds.
(c) Total stocks. No figuro of sceds of lend-loase origin can
be given as those seeds become merged with others of non-
lend-lease origin in the hands of distributors.
N.B. In addition to the above there are quantities of a large
range of miscellaneous items amounting to a total of less than
80,000 tons. Some of the itoms are no longer in the present
Lend-Loase programme, nor included in that proposed for the
first year of Stage II,
Document received from Frank Lee 10/26/44.
Regraded Unclassified
87
B.
PETROLEUM PRODUCTS
(as of October 12th, 1944)
N.B. The figures below represent stocks of both sterling and Lend-
Lease oil. The anount of each which moves to the U.K. is
determined by the application of the principles of the pooling
of resources and the short haul, and therefore the proportion
between stocks of sterling and Lend-Lease oil in the U.K. at
a giver momert does not reflect the true position on a global
basis. For instance, U.K. stocks are r.ow tending to be drawn
incressingly from Lend-Lease sources because shipments of
sterling oil from Curacao under Reciprocal Aid to the Pacific
have been increasing. On the basis of the proportions of
oil drawn from dollar and sterling sources during the first
nine ronths of 1944, however, it may be estimated that the
proportion as between stocks of oil of all types in the U.K.
is roughly 4 Lend-Lease to 1 sterling.
(000 tons)
TOTAL
7500
less military stocks* as follows
Aviation Gasoline
1240
Admiralty Fuel 011
1681
M/T Fuels
1285
4206
Stock held against "other" requirements viz -
Military requirements* of other
products such as lubricating oils
and civilian requirements
3294
Includes a considerable proportion held on account
of U.S. forces. A formula has recently been proposed
to determine at any given time the proportion held
against U.S. military account, the application and
details of which, however, have still to be worked
out between U.S. and British authorities.
- 2 -
Regraded Unclassified
88
C.
RAW MATERIALS
Estimates for Dates Specified
Estimated
Estimated
Materials
Unit
Stock of
%-age of
Date
L/L Origin
Total U.K.
Stock
1944
GROUP I
Raw Cotton
L.T.
87,000
27%
Oct. 1
Rosin
If
14,000
85%
Oct. 1
Liquid Rosin
II
1,500
100%
Aug.31
Turpentine
#
2,000
90%
July 1
Pine Tar
If
200
100%
Oct. 1
Pine 011
"
250
100%
Oct. 1
GROUP II
Wood Pulp for paper
manufacture
S.T.
21,000
15%
Sept.9
Bagasse
n.a.
Vulcanised Fibre
n.a.
Kraft Liner Board
S.T.
8,000
50%
Aug.31
Building Board (All kinds) If
nil
nil
"
Paper & Board excluding
Kraft Liner Board
II
1,000
0.5%
"
GROUP III
Softwood (Including
sleepers and crossings) Stds
nil
nil
"
Hardwood
C.Ft.
2,500,000
12%
"
Constructional Plywood
Sq.Ft.
160,000,000
75%
"
Veneers Oak
nil
nil
"
GROUP IV
Synthetic Rubber:-
GRS
L.T.
51,136
100%
Aug.25
GRM
If
2,041
100%
"
GRI Butyl
II
147
100%
"
Perbunan
If
136
100%
If
- 3 -
Regraded Unclassified
89
TOP SECRET
October 27, 1944
To:
V
The Secretary of the Treasury
The Secretary of the Navy
Leo T. Crowley, Administrator, Foreign Economic
Administration
Edward R. Stettinius, Under Secretary of State
Robert P. Patterson, Under Secretary of State
Dean Acheson, Assistant Secretary of State
Harry D. White, Assistant to the Secretary,
Treasury Department
A. L. Gates, Assistant Secretary of the Navy
for Air
Charles P. Taft, Director, Office of Wartime
Economic Affairs
Emilio G. Collado, Special Adviser, Department
of State
Oscar Cox, General Counsel, Foreign Economic
Administration
From:
Frank Coe, Secretary for the American Group,
Combined Committee on Lend-Lease
Subject:
Attached Minutes
There is attached a copy of the minutes of
the third meeting of the Combined Committee
on Mutual Lend-Lease Aid Between the
U.S. and the U.K.
Attachments (1)
Regraded Unclassified
90
TOP SECRET
COPY NO. 38
C.C.L.L. (44) 3rd Meeting
COMBINED COLMITTEE ON MUTUAL LEND-LEASE AID
BETWEEN THE U.S. AND U.K.
MINUTES of a Meeting held in Mr. Morgenthau's
Room in the U.S. Treasury, on 25th October,
at 11:30 a.m.
PRESENT
Mr. Morgenthau (In the Chair)
U.S. Representatives
U.K. Representatives
Mr. Acheson
Rt. Hon. Ben Smith
Mr. Taft
Lord Cherwell
Mr. Collado
Lord Keynes
Hon. R.H. Brand
Dr. White
Sir Robert Sinclair
Mr. Casaday
Sir Henry Self
Mr. R. Opie
Mr. Currie
Mr. Cox
Mr. Davidson
Mr. Angell
Mr. Patterson
Mr. Gates
Mr. F.G. Lee
Mr. F, Coe
3
Joint Secretaries
1. MUNITIONS PROGRAID.ES
MR. PATTERSON informed the Committee that a combined group
of U.S. and U.K. representatives had now submitted agreed recommenda-
tions on the U.K. Group Army requirements in Stage II. In general,
complete agreement had been reached on all items examined. He
wished, however, to draw attention to two particular categories in
respect of which special considerations arose:-
(a) It had been proposed that the question of the
procurement of certain locomotives and wagons required
in India should be remitted to F.E.A.
(b) It was proposed that F.E.A. should examine the U.K.
requirements for certain "civilian" items (tires, tire
fabric, nylon for parachutes, and paper and board for
packaging) in respect of which the U.K. appeared to be
asking for very substantial quantities of materials which
were in short supply.
SIR ROBERT SINCLAIR said that the United Kingdom
representatives deeply appreciated the spirit of understanding and
cooperation which the U.S. War Department had shown in the
discussion of the Ground Army programme. Sir Robert agreed that
as regards the locomotives and wagons required for India a
difference of opinion existed, in that the War Deprtment had not
felt able to accept the British contention that the locomotives
and wagons were military requirements needed in 1945. He understood,
however, (and Mr. Patterson confirmed) that the War Department
would see no objection to these requirements being provided by
F.E.A. Accordingly he assumed that the next step would be for
these requirements to be considered by F.E.A.: in that event, the
U.K. representatives participating in the discussions with F.E.A.
Regraded Unclassified
91
would probably suggest that while tho delivery of the locomotives
in 1945 was desirable from a military standpoint, it could not
perhaps be regarded as absolutoly ossential, On the other hand,
we should urgo that the delivery of the wagons in 1945 was an
urgent military necessity. As regards the other four itoms to
which Mr. Patterson had drawn attontion, CIR ROBERT SINCLAIR said
that the U.K. reprosentatives looked forward to discussions with
F.E.A.: admittedly our requirements woro substantial, but in
view of the U.K. representativos they had sound military
justification.
It was agrood that both as rogards the locomotives and
wagons and the further four items mentioned by Mr. Patterson,
the noxt step should be for discussions to tako place butween F.E.A.
and tho U.K. representativos, and that the War Department was to
be kept in closo touch with those discussions.
SIR ROBERT SINCLAIR drow attention to paragraph 10 of
the report of the Combined Group on Ground Army requirements which
rolated to Reciprocal A1d and explained that it was not possible for
the U.K. Government to enter into commitments relating to the
grant of Reciprocal Aid by the Governments of Australia, New
Zoaland or India. HR. PATTERSON said that he understood that the
difficulty was likoly to be that the Australians would be unwilling
to accord Reciprocal Aid to the U.S. forces unless their commitment
in this respect word underwritten by the U.K. Government. LORD
KEYNES doubtod whether in fact this would be found to be the
difficulty: ho felt that in practice the question would prove
to be one of allocated available Australian supplies between the
demands of the U.S. forces and the U.K. forces oporating in or
near to Australia. Ho confirmed that in any event the U.K.
Government could not accept commitments in respect of Reciprocal
A1d to be furnished by Australia. Ho would, however, explore
further in consultation with the representativos of the Commonwealth
Government what were, in fact, likoly to be the difficulties, if
any, in this field.
2.
MUNITIONS PROGRAMME: AIR REQUIREMENTS
MR. PATTERSON reported that the discussions on U.K. air
requirements in Stago II had been proceeding satisfactorily and that
an agreed combined report would be available very shortly.
MR. MORGENTHAU said that ho would wish to congratulato
the War Department on the expodition with which Ground Army and
Air requirements had been examined in consultation with the U.K.
reprosentatives and on the very substantial moasure of agreement
which had been achieved.
3.
MUNITIONS PROGRAMME: NAVAL REQUIREMENTS
MR. GATES said that, as regards Naval requirements proper,
discussions had taken place as a result of which the U.K.
representatives had boon asked to furnish certain further information,
When that information Was available the discussions could be resumed.
As regards the Fleet Air Arm requirements it had not boon possible
to make progross owing to the absence from Washington of Captain
Abel Smith. Ho pointed out, however, that the Fleet Air Arm
requirements as presented in the British Document wore the same
as those submitted in respect of 1945--1.0. irrespective of
whether or not 1945 and Stage II wore co-terminous. He suggested
that it might woll be preferable to consider the requirements on
that basis--i.e. as at 1945 requirement without reference to the
question of whether 1945 and Stage II were in fact co-terminous.
SIR ROBERT SINCLAIR confirmed that as regards the Naval
requirements the U.K. representatives hoped to be able to supply
answers within the next two or three days to most of the questions
put by the Navy Department. As regards the Fleet Air Arm
Requiroments, it was a matter for regret that Captain Abol Smith's
2
Regraded Unclassified
arrival in the United States should have been delayed by adverse
weather. It was hoped that he would arrive very shortly when
92
discussions could be begun. For his part ho appreciated the
force of what Mr. Gates had said about the basis upon which our
Floot Air Arm requirements had been presented and he thought that
it might well be advantageous for them to be considered as a 1945
requirement,
4,
EXPORT FREEDOM
MR. ACHESON circulated a paper (which is attached as
an annex to these minutes) in which the U.S. representatives had sot
out their understanding of certain points in the U.K. proposals.
On question (1) LORD KEYNES said that the intention of the
U.K. document was that all raw materials and manufactured goods not
included in the programme set out in Chapter II or included in the
munition programmes in Chapter I, would be taken off Lend-Lease with
effect from the 1st January, 1945, irrespectivo of whether Stage II
actually began on that date or not.
It was pointed out that it would be necessary to be clear
15 to whother the proposed terminal date of the 1st January, 1945,
would apply to matorials shipped after that dato to materials
delivered to the British for shipment after that date or to materials
requisitioned after that date. LORD KEYNES said that he would wish
to reserve this latter point for consideration: He had personally
contemplated that any supplies delivered to the British after
lst January, 1945, would be paid for ovon though they had been
requisitioned before that dato,
As rogards (2) LORD KEYNES agreed with the statement of the
position as contended in Mr. Acheson's note, on the understanding that
the U.K. could, na now, make application to transfer for export.
As regards (3) LORD KEYNES said that the critorion which
the U.K. representatives had had in mind was that the manufactured
goods to be obtained on Lend-Lease would not be of types which the
U.K. would normally expect to export. He would not wish the
United Kingdom to be bound not to begin the production in 1945 of
any articles similar to those included under this heading. For
instance, at present no crawler tractors were produced in the
United Kingdom but it might well be that the United Kingdom would
"1sh to bogin the production of such tractors on a very small scale.
The point was that the U.K. should not expect to export such
tractors.
MR. ACHESON will that Lord Keynes's statement clarified
the issue satisfactorily for the U.S. represontatives. If, as
was contemplated, locament: YOS and reilway wagors were added to the
list of manufactured goods which F.E.A. would be asked to provide
on Lend-Lesse, special congiderations might arise in regard to them,
out these could be examined at a later date.
As regards (4) LORD KEYNES said that thore were very
weighty reasons why export restrictions should be wholly removed
from the 1st December, 1944. Ho approciated that in so far as the
difficulties apprehended by the U.S. represent tives had not been
removed by the statement which had alroady made in regard to
question 1. they probably related to the question of the use of
stocks of Lond-Loase goods after the materials in question had been
taken off Lend-Lease. As he had already said, the U.K. representatives
felt that there were decisive reasons for selecting as early a date
as possible for the inception of freedom from export restrictions:
but they were conscious of the possible difficulty in regard to
stocks and would be glad to put forward certain concreto
suggestions which they had been considering among themselves.
It was agreed that the suggestions referred to by Lord
Keynes should be considered at a Sub-Committee meeting. Accordingly
the discussion was continued by a Sub-Committee consisting of those
present at the Main Meoting with the exception of Mr. Morgenthau.
A note summarising the proceedings at the Sub-Committee is circulated
with these minutes.
F.G. Lee
(Signed)
F. Coe
Washington, D.C.
-3-
Regraded Unclassified
93
ANNEX TO MINUTES
The following comments refer to
(a) Chapter 2, Sec, V, Raw Matorials
(b)
=
", Sec. VI, Manufactured Articles
(c)
"
1, (So far as raw materials totaling
$13,816, are concerned, see
p. 33, bottom)
(d)
"
5, White Paper and Export
Comments:
(1) The U.S. side understands that if the non-munitions
program set forth in Chapter 2 should go into effect on January 1,
1945 all other raw materials and manufactured goods (except
munitions items) would go off lond-loase. Should the effective date
be postponed, an intervening non-munitions program might be
required (see p.l). But in such event, when the effective date
should be reached the same action would be taken. This applies
whether or not non-munitions items on prior requisitions are still
undelivered.
(2) The U.S. sido understands that the Quebec agreement;
that the articles which have been received under lend-lease or
mutual aid will not be exported, will stand. The U.S. side also
understands that articles lend-lensed for military ond use (motors
for instance) will not be transferred to civilian end use without
agreement.
(3) The U.S. side understands that the manufactured
goods included in the Stage II program in Chapter 2, Sec. VI, are
not produced and are not expected to be produced during Stage II
in the U.K.
(4) The U.S. side understands the U.K. proposal to be
that the White Paper export restrictions (except those referred to
in Paragraph 2 above) should be lifted on December 1, 1944, as a fixed
date.
The U.S. sido belioves that these restrictions should
be lifted at the expiration of definite period following the
inauguration of the programs for Stage II set out in Chapter 2
and the termination of other lond-loase Stage I programs ns conton-
plated in Paragraph 1 above This is to remove the necessity for
complicated rules rolating to the use of stocks of lend-lease
materials in the manufacture of goods for export,
- 4 -
Regraded Unclassified
CCLL
U.S.No.18
Received 94
TOP SECRET
COPY NO. 37
SUPPLEMENT TO "BRITISH REQUIREMENTS FOR THE
FIRST YEAR OF STAGE II"
INTRODUCTION
As a result of various developments which have taken
place during the two weeks since the document relating to
British Requirements for the First Year of Stage II was pre-
sented to the Combined Committee, it has been thought desirable
I
to prepare supplementary notes on certain aspects of our
programme. These follow in the same order as the chapters
in the original document. They are as follows:-
SUPPLEMENT TO CHAPTER 2 REGARDING OIL AND SHIPPING
ADDITIONAL MATERIAL FOR CHAPTER 3.
AMPLIFICATION OF MATERIAL IN CHAPTER 4.
At the conclusion of this supplement we have
provided a table of amendments to statistics, etc. in the
document itself, many of which are consequent upon the
developments referred to in the notes.
Washington, D.C.
29th October, 1944.
Regraded Unclassified
95
TOP SECRET
COPY NO. 37
SUPPLEMENT TO CHAPTER 2.
NON MUNITIONS REQUIREMENTS IN 1945
III. OIL.
The passage relating to 011 on pages 28 and 29 of
our document should now be regarded as out of date except for
the first two sentences.
The review of the United Nations 011 and Tanker position
to which we referred in the first paragraph on page 28 of
the document, has now been completed and in the light of
this review amendments to our programme have become necessary.
In addition, stock levels in the U.K. both during
the continuation of Stage I and in Stage II have been under
discussion. At recent Anglo/U.S. discussions in London
the view was taken that the existing level of approximately
7,300,000 tons should be maintained during Stage I. This is
still subject to ratification in Washington. The authorities,
both military and civilian, in the U.K. have, however, been
considering the question of what reduction in stock level
can justifiably and soundly take place by the end of the first
year of Stage II, The military authorities have not yet
completed their investigation but we have been authorized in
the meantime to indicate a tentative figure of 5,750,000 tons
as approximately the minimum level to which stocks could be
allowed to fall. On the assumption, therefore, that we
maintain a stock of 7,300,000 tons during Stage I, and that
it is subsequently decided that this be reduced to 5,750,000
by the end of Stage II, there would be a reduction in Lend/Lease
requirements as follows:
Thousand tons
Million dollars
Aviation gasoline
940
81
Motor gasoline
425
22
Gas 011
85
2
Lubricating oils
50
6
Other products
50
1
1,550
112
Regraded Unclassifie
96
The above reduction in U.K. stocks has, therefore,
been assumed in preparing our ostimate of our Lend-Lease require-
monts.
The total does not include oil of U.S. origin that
will be re-transferred to U.S. Forces in the U.K. or Iceland,
nor of any U.S. aviation spirit that will be re-transferred
to U.S. Forces in Australia and India. Supplies so made
available have hitherto been included in our Lond-Lease require-
ments and have been treated as reciprocal aid when re-transferred
to the U.S. Forces. In our Stage II estimates, however, (see
table below) such supplies have been treated as if they had
been consigned to the U.S. Forces direct through U.S. channels.
Thus against gross oil demands from U.S. sources of some $620
million, only $338 million will be needed to meet British
requirements, the balance being for the use of the U.S. Forces.
Even when Lend-Lease oil for U.S. Forces in U.K. is taken out
of the account, the balance of $338 million which appears in
our estimates is in reality a statement of our gross, and not
of our net requirements. For it is estimated that we shall
be supplying to the U.S. under reciprocal aid during the first
year of Stage II some $193 million of sterling oil from British
sources. There are, moreover, three points in connection with
this storling oil to be supplied under reciprocal aid to which
we consider attention should be drawn.
Firstly, on a tonnage basis it is actually greater
than our requirements under Lend-Lease (12,287,000 tons as
compared with 9,201,000 tons).
Secondly, while all the above figures are on an
f.o.b. basis, the delivery of storling oil to the U.S. Forces
under reciprocal aid, unlike that of Lend-Lease oil, involves
substantial expenses in storage, handling and packing charges,
which are not included in the above figures, particularly in
cases such as U.K., or again in India, where long rail hauls
are frequently necessary or where packed oil is dolivered on a
more or less retail basis, and the f.o.b. value of the oil
itself may therefore represent only a small proportion of the
total cost involved.
Regraded Unclassified
97
Thirdly, the so-called sterling oil supplied to the
U.S. Forces under reciprocal aid in fact involves a
substantial volume of dollar expenditure. The financial aspect
of this is further considered below in the supplement to
Chapter 3 (paragraph 2(111)) and certain proposals are made.
As far as U.K. is concerned, it is assumed that strict
rationing of civilian consumption is still in force in Stage
II, but that some relaxation of the present severe restrictions
may have to be introduced in order in particular to relieve
the heavy load on public transport, and to facilitate movement
of materials for certain special programmes, including housing.
Following is the revised statement of our requirements
in Stage II to replace that contained in the second column of
page 29:-
Tons 000
$Million
Aviation spirit
232
11
Motor spirit
3207
121
Korosene
990
24
Gas-Diesel
1212
33
Fuels
1947
27
Lubs: Crudos, etc.
1613
108
Wax, T.E.L., etc.
14
Totals
9,201
338 *
It may porhaps be desirable to add a further note
on the subject of supplies to South American countries,
Continental Europe, etc., for which no allowance has been
made in the above, either for Lend-Lease or reciprocal aid.
For shorthaul reasons it will not always be possible to
arrange for shipments from British or American sources
to meet the exact British or American share of trade in
particular countries. A certain number of "exchange"
shipments can no doubt be arranged within the industry,
but it is not possible to give any precise estimate
of what these will be. Net deficiencies in the supply
of British oil for the British share of the trade, of an
estimated value of $15 million, should in our view be
added to the total requirements in the fourth column,
making a total of $353 million.
Regraded Unclassified
98
IV SHIPPING
With the completion of the United Nations oil and
tanker review, there are some consequential changes to be
noted in items 6 and 14 of the Shipping Requirements table on
page 31.
On the assumption that the European war ends early
in 1945, our Stage II estimates under these needs should be
reduced as follows:-
$000
6.
Freight on petroleum products
carried in tankers allocated by
W.S.A. to British Empire
programmes
190,000
14. Surplus bunkers discharged in
U.K. ports
nil
The Revised total 1s thus
876,720
(instead of the figure previously
given, namely
992,960)
We should like to draw attention to the fact that,
of the above figure of $190 million, slightly over $90 million
represents freight moved in U.S. lend-lease and British tankers
on oil which will ultimately be supplied to the U.S. Forces.
Furthermore, it is expected that a number of British tankers
will be allocated under reciprocal aid to assist with the
movement of oil to areas of U.S. programming responsibility.
It is estimated that the cost of reciprocal aid thus involved
will be $15 million at British rates and excluding W.S.A. 25%
surcharge.
Regraded Unclassified
99
TOP SECRET
COPY NO. 37
ADDITIONAL MATERIAL FOR CHAPTER 3.
ADDITIONAL ITEMS TO SAFEGUARD THE BRITISH RESERVE POSITION.
1.
The suggestions already made in Chapter 3 of the
British Requirements for the First Year of Stage II are not
exhaustive. In this supplementary statement particulars are
given concerning some further items, and also some amplification
and further explanation of items already mentioned. The
proposals fall into three categories:-
I. The inclusion in the Lend-Lease programme of various
items which otherwise would cost cash, thus safeguarding the
British reserve position.
II. The inclusion of new items which the U.K. will have
to go without if they cannot be obtained under Lend-Lease, the
furnishing of which would materially ease the British economy
in other respects, but would not affect the estimated reserve
position in terms of gold and dollars.
III. Certain claims which have been in dispute or have
been left in abeyance which would, if they were conceded, have
the same effect as I. above, namely, to improve the reserve
position.
2.
Under heading I the following items already suggested
may be briefly recapitulated:-
(1) Tobacco
$90 millions
(11) Off-shore Sugar
$64 millions
This is a revised figure. There are also dollar
freights involved which would be eligible for Lend-Lease if the
cargo is eligible and would be eligible anyhow if the proposal
made subsequently in connection with shipping is conceded.
(111) Dollar Expenditure in respect of 011
Here the statement previously made needs some
correction and amplification. In addition to the actual
purchases of crude of $22 million it is necessary to pay dollars
to the Venezuelan Government for royalties on crude oil
produced by British companies in Venezuela and subsequently
Regraded Unclassified
100
transferred to U.S. Forces under Reciprocal Aid. This item is
estimated to amount to $8 million in the first year of Stage II.
There are, however, many other dollar outgoings
involved in the production of so-called "sterling oil". Besides
the purchases of crude and the royalties already referred to,
there are purchases of equipment, salaries and wages of oil
field technicians, stores and spare parts, all of which have to
be paid for in dollars. Indeed, there is no doubt that a
substantial proportion of the cost of providing oil on Reciprocal
Aid does in fact represent actual dollar expenditure and it is
suggested that the United Kingdom might reasonably ask to be
reimbursed for this proportion, particularly as we expect to
supply on reciprocal aid terms, a greater volume of oil
measured by quantity (though not in value) than we are ourselves
receiving on Lend-Lease terms.
It is recognized, that it would be extremely difficult,
if not impossible, to agree upon a basis for reimbursement on
these lines. The proposal is, therefore, that the United States
Government might find it convenient to make this reimbursement
in the form of direct payments for oil from the Curacao and
Bahrein refineries (being those refineries where the dollar
proportion is highest). The value of the oil to be provided
on Reciprocal Aid by these two refineries in Stage II is $100 m.
p.a. Alternatively the United States Government might prefer
to make lump sum payment of $100 million in respect of Reciprocal
Aid supplies from all sources, leaving undisturbed the present
arrangements whereby oil from Curacao and Bahrein is supplied
under Reciprocal Aid.
(1v) The total dollar expenditure incurred by the Ministry
of War Transport is now estimated at about $125 million per annum.
Of this it is thought that $57 millions comprise items which are
not suitable for Lend-Lease. There remain the following items
which deserve consideration:
(a) Under present rulings freight is in general only
eligible under Lend-Lease in respect of cargo of Lend-Lease
origin shipped from U.S. ports. A relaxation of these rulings
to cover shipments from U.S. ports of Government cargo not
Regraded Unclassified
101
procured under Lend-Lease would, it is estimated, save some
$15 million, with the probability of a small increase in the
future as items now under Lend-Lease cease to be so procured.
Similarly freights on W.S.A. ships loading Government cargo in
Canada or the Caribbean have in the past accounted for a dollar
expenditure estimated on page 38 of the previous statement
at $40 millions but now provisionally calculated subject
to checking at some $15 millions, which it is hoped might be
made eligible retrospectively. For the future this item is
likely to be greatly diminished, but operating efficiency
may require W.S.A. ships to be again so employed, and a possible
maximum of $10 million might in this case be involved.
(b) A sum of about $40 million is paid annually for
services and supplies to British controlled vessels in U.S.
ports which is not covered by Lend-Lease. This figure is being
analysed to see how far it comprises items which are suitable
for Lend-Lease. For the present the possibly eligible figure
might be put as a rough estimate at $10 million. It is
suggested that the further analysis of this aggregate should
be passed over to the shipping authorities on both sides.
(c) Dollar proportion of hire on Norwegian vessels time-
chartered under the Tripartite Agreement of 1941. This item
of $5 million was formerly under Lend-Lease, but ceased to be
so in 1943. It is hoped that this might be reconsidered with
a view to its inclusion retrospectively which would raise the
figure to $7 millions. It should disappear with the termination
of the charters after the end of the European war.
(d) Certain items on Allied vessels on time charter to
us for which we provide dollars, $18 million. There are
certain technical complexities arising out of the charter terms
which would need careful consideration in relation to this
item, which will of course disappear with the termination of
the charters.
(e) Repairs and reconversions which F.E.A. have
refused to finance because, admittedly, proper procedure had
not been followed by us, $5 million. This might be reconsidered.
Regraded Unclassified
102
(v) Machine Tools. There is here nothing to add to the
statement already made. Total relief might amount to $10
to 27 millions, according to the exact rulings given.
(vi) Possible Additions to the Food Programme. There are
a number of items here for which we are currently having to
pay cash, the eligibility of which for Lend-Lease might be
reconsidered, as follows:-
$
Essential oils
1,500,000
Chewing gum base
600,000
Vitamin "A" oils
1,400,000
Hops
500,000
*Purchases for NAAFI for sale to
British and Allied Forces
covering a large number of items,
such as, biscuits, fruit juices,
confectionary, chewing gum,
pickles and sauces
9,000,000
Pickles etc. for the U.K. forces
5,000,000
18,000,000
It is perhaps appropriate to mention here that the U.K.
is similarly providing a large variety of goods on
Reciprocal Aid. These goods are sold to U.S. Forces
by the Post Exchanges.
(vii) The eligibility of Supplies for the Colonies has been
much narrowed, since most of them are now declared to be
non-combat areas. These decisions were given before raw
materials and foodstuffs from the Colonies were being supplied
on Reciprocal Aid. Now that substantial supplies on Reciprocal
Aid are being thus furnished, it is hoped that the previous
decisions could be reconsidered.
A rough analysis of purchases made through Government
channels during 1944 is attached showing a total figure
of $18 million. It is anticipated that approximately the
same volume of supplies will be required in 1945,
Regraded Unclassified
103
BRITISH COLONIES SUPPLY MISSION
ANALYSIS OF GOVERNMENT CASH PURCHASES DURING 1944
(in thousands of U.S. Dollars)
DESTINATIONS
BRITISH BRITISH BRITISH
COMMODITY
WEST
WEST
EAST
CEYLON
OTHERS
TOTALS
INDIES AFRICA AFRICA
FOOD
3,000
-
-
500
500
4,000
TEXTILES
-
-
-
500
-
500
PAPER & PRODUCTS
-
-
-
300
200
500
MISC.GEN.STORES
100
100
100
100
100
500
Manufactured &
semi- IT STEEL
1,000
500
1,250
750
500
4,000
ENGINEERING STORES
1,000
650
850
500
50
3,050
RUBBER MANUFACTURES
including TIRES &
TUBES
1,000
-
-
-
-
1,000
AGRICULTURAL
EQUIPMENT
500
100
1,000
500
400
2,500
OTHER RAW MATERIALS
1,000
50
500
50
50
1,650
MEDICAL SUPPLIES
100
50
50
50
50
300
TOTALS
7,700
1,450
3,750
3,250
1,850
18,000
Regraded Unclassified
104
3. Under heading II, there are the following items. If these
could be furnished on Lend-Lease, substantial aid would be given to
the British economy, but as no allowance has been made for any
substantial gold or dollar expenditure under any of these headings
in calculating the prospective reserves, there would follow no
direct relief to the gold and dollar position:-
(1) The Repair and Equipment and Replacement of Bomb Damaged Houses
Some further examination has been given to this subject since
the main statement was put in, but we still lack the fuller
material from London which we hope to get. In the first
place, it should be explained what was perhaps insufficient-
ly clear, that in the raw materials programme on Page 33
of the main statement some items are already included for
the repair and equipment of bomb damaged houses which, as
is pointed out in the first sentence of Page 32, will only
be eligible for Lend-Lease if a more favourable attitude
is now adopted in regard to the eligibility of such items.
The details of items under these headings already included
on Page 33 are as follows:-
Required for
Housing
Repairs to
Utility
Unit of
Bombed
Furniture
Commodity
Quantity
(a)
Buildings (b)
Quantity
Value
Quantity
Value
Quantity Value
($000)
($000)
($000)
Bagasse
S.T.(000)
11
250
nil
nil
nil
nil
Insulation
(Building)
Board
S.T.(000)
16
1,625
*
*
nil
nil
Softwood
Stds.(000)
200
19,300
*
*
nil
nil
Hardwood
cu.ft.(000)
nil
nil
nil
nil
1,650
1,750
Constr.
Plywood
sq.ft.
(millions)
nil
nil
12
1,008
60
5,400
Total Values
21,175
1,008
7,150
Some of the building board and softwood would probably be used
for repair of bombed buildings, but we have no information about
quantities; the effect of such usage would be to reduce the
value figure of column (a) and increase the value figure of
column (b).
The above requirements, however, have been kept down to
the minimum. Greater quantities of insulation building board and
Regraded Unclassified
105
softwood and bagasse would be of the greatest help. We should also
wish, if a favourable ruling is given, to put in requirements of
slag wool or suitable substitutes, which are not at present
included in our requirements on Page 33.
Next as regards miscellaneous equipment. Here, subject
to possible difficulties of shipment which have not been fully
explored, a wider interpretation of Lend-Lease eligibility would
allow a most helpful supplement to the meagre supplies likely to
be available from U.K. production in 1945. Examples are utility
furniture, steel furniture, doors, metal window frames, stoves,
and water tanks. It is difficult without further examination to
give a reasoned estimate under this head. We think, however, if a
favourable decision in principle could be given, that a programme
of the value of some $10 millions could be prepared. If complete
kitchen or bathroom units were available and were technically
suitable, the total might well be higher.
Possibly, however, the most material assistance could be
given in the shape of profabricated houses. We have not attempted
so far any technical examination of the possibilities under this
head. But if supplies were available, and the problems of shipping
and differing building standards and practice in the two countries
can be surmounted, such spectacular assistance to the housing
problem created by bomb damage, and particularly by the recent fly
bombs, as would be represented by the supply of houses complete in
themselves, might affect the public opinion of both our countries
more favourably and sympathetically than almost any other expenditure
of similar volumo. The housing problem during Stage II, particularly
in the London area, will be most acute. Apart from the alleviation
of human suffering, war efficiency would be directly increased, if
assistance can be accorded in this way. It may be mentioned that
U.S. manufacturers have already tentatively approached British
Missions here about the prospects of the provision of prefabricated
houses for the U.K. Without technical examination of the
possibilities we can hardly put forward any definite figures of cost,
but we fear that the cheaper Goodyear type of house, costing $1,800
with equipment, would probably be unsuitable. Nevertheless it would
Regraded Unclassified
106
be of the greatest assistance if a programme of the order of (say)
25,000 to 40,000 units proved to be practicable.
(11) Civilian Relief Supplies Required for Recovered British Territories
in the Far East. There is as yet nothing further to add to the
statement on Page 40 of the main statement.
4, There remains under Heading III the category of claims under
dispute or in abeyance. In addition to the two examples already
set forth on Pages 41 and 42 of the main statement, the following
may also be mentioned. Some of these, it will be seen, are of a
trifling amount, but nevertheless add something to the aggregate.
$ millions
(1) Pre-Reciprocal Aid supplies of rubber.
This claim is still outstanding, and no
reason is known to the British Missions
why it should not be met
11.8
(11) Suez Canal dues on W.S.A. ships allocated
to sea transport services, at present held
in abeyance
1.3
(111) Production contracts transferred as "take-
outs". This claim as such is not in
dispute, but no settlement of the amount
has yet been reached; we put the full
value at
2.2
(1v) Diversions to U.S.S.R. This is a compli-
cated story about which we are in a position
to give details. The short descriptions are
as follows:-
(a) Diversions of Bostons for which we had
paid dollars, with the promise of
replacement, which in our view has not
been made
12.5
(b) The delivery to U.S. forces in U.K.
of Airocobras for which we had paid
dollars, intended for Russia, in which
event we should have received dollars.
Sir Frederick Phillips did not press
Regraded Unclassified
107
$ millions
this claim at a time when our dollar
balances were increasing, but it was a
claim which he believed ought to be met
sooner or later
16,
(c) The fulfilment of a U.S. commitment to Russia
by delivery of Wright engines from U.K. for
which we had paid dollars. The Russians
rejected our demand for payment, saying
the matter was one between the U.S. and the
U.K. This has not been previously taken up
by us and is now raised for the first time
4.0
(d) Powder manufactured by the New Jersey Powder
Co. for which we paid dollars, but which was
shipped to Russia on U.S. account. This
claim has never been withdrawn, but has been
left in abeyance
2.2
(v) Certain capital facilities in the way of
machine tools and other equipment, for which
we had paid dollars, has been subsequently
made available to U.S. manufacturers engaged
in U.S. Government orders without payment.
The capital value of facilities used for
U.S. benefit was in 1942 $100 millions,
in 1943 $50 millions, and in 1944 $27 millions.
The annual value of the right of free use might
be anywhere between 10 per cent. and 20 por cent.
of the capital value, which yields a total figure of 18-36
In connection with this claim it should be
particularly borne in mind that this is a good example
of the expense incurred by the U.K. in building up the U.S.
munitions industry at a time when the U.S. was a
neutral, which greatly accelerated the date at which
the U.S. was in a position to become fully armed. All
this cost the U.K. hard dollars. The above item was
a small part of the expenditure by the U.K. of some
Regraded Unclassified
108
$2 billions in building up the U.S. munitions
industry, of which about $1 billion was spent
after the U.S. came into the war, these being
the expenditures which were primarily responsible
for the initial exhaustion of the British
reserves down to virtually zero,
Regraded Unclassified
109
TOPSECRET
COPY NO. 37
AMPLIFICATION OF MATERIAL IN CHAPTER 4
LEND-LEASE REQUIREMENTS OF AUSTRALIA, NEW ZEALAND AND INDIA
1.
As explained in para. 1 of Chapter 4 of the document
relating to British Requirements in the First Year of Stage II,
the programmes submitted by the United Kingdom include
supplies required from the United States by Australia, New
Zealand and India in the field of munitions (except aircraft
and aircraft components), oil and shipping. The following
notes by the Australian, New Zealand and Indian supply
representatives in Washington explain the need of their
respective countries for food, raw materials and civilian
goods under Lend-Lease in Stage II and itemise these
requirements in greater detail. Where the figures given
below differ from those in the earlier document, the previous
estimates should be disregarded.
AUSTRALIA
The Australian War Effort
2.
The Australian war effort is likely to have to
continue at the maximum degree of intensity for a longer period
than that of most other members of the United Nations. At
the earliest possible time Australian forces were engaged
in the Mediterranean area and supplies of all kinds were
being sent to that and other theatres of war. When Singapore
fell, Australia was short of men and munitions, because
everything possible had been sent abroad to the actual fields
of action. American forces and American supplies filled the
gap and became the basis for the counter-offensive. The
remnants of the Australian Navy and some of Australia's
experienced jungle troops are now in the Phillipines.
3.
The Australian war effort has strained her resources
and manpower to an extent which is hard to measure, because
much of it is in the production of ordinary foods and farm
supplies. But the austerity of civilian life in Australia
has become very pronounced.
4.
Every possible fighting man has been used. Seven
out of every ten males between the ages of 18 and 35 have
Regraded Unclassified
110
served in the fighting forces. From a total population of about
7t millions, 891,000 males were enlisted and 80,000 have
become casualties. The numbers engaged in fighting and
essential industries exceed the prewar total of the working
population by 170,000 and comprise 71% of the total population
between the ages of 15 and 60.
Reciprocal Aid
5.
Comparisons with other countries are not really
practicable even if they were desirable. It may be of interest
to note that one fifth of the total war expenditure in
Australia is for reciprocal aid to the U.S.A. forces. The
dollar value of this aid, so far as it can be measured at all,
is of course incomplete. But to the end of June 1944, the
value was estimated at a total of $570 millions. The dollar
measure understates the Australian contribution in terms of
manpower and of real effort, because the rate of exchange
which must be used to convert Australian currency into dollar
values does not correspond to real values.
6.
Reciprocal Aid to the U.S.A. forces commenced long
before there was any formal agreement on the subject. It
commenced with food sent to Bataan. The Australian people
have given unstintingly and have gone without normal
necessities in co-operation with their Government in the
provision of requirements for the American forces. The needs
of these forces have been given a high priority in Australian
production and have indeed required many adjustments of the
Australian production programmes.
Lend-Lease Requirements in 1945.
7.
The attached figures are estimates of Lend-Lease
requirements for delivery in Australia during the calendar
year 1945. They divide the programme into categories which
include "non-munitions" items. But it must be emphasized
that the so-called non-munitions programme is very largely
made up of military requirements, direct or indirect. For
instance, the food requirements are largely for the use of the
armed forces; the timber is required almost entirely for
war purposes, inasmuch as general building construction has
Regraded Unclassified
111
been rigorously controlled; the synthetic rubber is needed
for the manufacture of military and essential war service
vehicles; agricultural implements are needed for the Food
Programme designed to meet the requirements of the armed
forces and United Kingdom needs, and so one could go on through
each item on the list. These are cited by way of example.
8.
It may be observed that the non-munitions require-
ments for 1945 (exclusive of Petroleum and Shipping Freights
included in the United Kingdom programme) total $102 millions.
By way of comparison, expenditure in Australia upon non-
munitions items provided under Reciprocal Aid has been at
the rate of $360 millions per annum. It is submitted that
continuance of a substantial measure of Lend-Lease, without
continual scaling down on questions of eligibility, civilian
end-use, etc., is necessary to enable the maintenance of a
reasonably balanced economy.
Australia's Need for some Relief of War Strain
9.
As prospects are at present, there is in sight no
relief for Australia of her present war strain until the war
in the Pacific is ended. Indeed as operations in that vast
area are accelerated the strain could become so intense as to
pass the limits of tolerance, having regard to the five years
already suffered. There are no prospects of converting war
production to peace production, nor any diversions of effort
such as are contemplated elsewhere. This prospect has now
become serious in view of the almost desperate shortage of
housing and of other elementary necessities of normal civil
life. In our transport and our farm and industrial equipment,
the wear and tear of the war effort has reached far beyond
normal limits of tolorance.
10.
There is an expectation that some general
relaxation of effort on a substantial scale, both in the
United States and in the United Kingdom, is to follow the end
of the war in Europe. Since Australia will remain in the area
of hostilities, it is most unlikely that comparable relaxations
or demobilisations from the war effort will be possible for
112
her. For this reason, Australia considers it reasonable that
such steps as are practicable shall be taken to allow her such
relief as is possible, and she hopes that, in consideration
of the present problems, this aspect will not be overlooked.
11.
The Australian Agencies in Washington stand ready
to furnish any further information which may be required, to
supply further substantiation on any point which may be in
doubt and to represent the Australian case in any manner which
may be deemed to be desirable or helpful.
Regraded Unclassified
113
LEND-LEASE REQUIREMENTS OF AUSTRALIA IN STAGE II
NON-MUNITIONS BREAKDOWN
EXCLUDING PETROLEUM AND SHIPPING FREIGHTS
(all figures in millions of dollars)
Description
Value
Remarks
(a) Food
Tobacco - Leaf
3.1
Military requirements
only. An additional
$81 millions required
for civilian purposes.
Tobacco - Native Twist
.9
Used for payment of native
porters in forward
battle areas.
Canned Fish - Salmon
1,4
For requirement of armed
- Pilchards
.6
forces only. Civilian
use prohibited
Seeds - Vegetable
.6
Australian food programme
for allied forces.
Sausage casings
.1
Australian food programme
- artificial
for allied forces,
Coca Cola Concentrate
& misc,
.3
Coca Cola Concentrate in
amount of $275,000
7.0
entirely for U.S, Forces.
:
-
(b) Raw Materials
Tinplate
14.0
95% for use in canning
programme for allied
forces
Metals - Carbon Steel
1.2
Various industrial
- Alloy Steel
1.0
purposes directly
- Non-Ferrous
"8"
connected with munitions
programme.
Timber - Soft Wood
2.4
Military and war product-
- Hard wood
1.4
ion and construction.
- Plywood
.2
Civilian construction
prohibited,
Pulp & Paper - Woodpulp
2.0
To augment Australian
- Fine Paper
3.5
production which is in-
- Wrapping
adequate for war
Paper
1.8
purposes -- paper usage
- Sanitary &
all under strict and
Tissue
1.0
rigid control.
- All Other
Paper
.7
Raw Cotton incl. Linters
- Raw
2.8
Military textiles,
- Linters
.2
surgical dressings etc.
Synthetic Rubber - GRS
6.0
Largely for use in
military tire programmes-
supply under instruct-
1ons of Combined Boards.
Regraded Unclassified
114
Description
Value
Remarks
(b) Raw Materials (Cont'd)
Carried forward
39.0
Chemicals - Phosphate
Rock
2.1
Required in connection
with food programme.
- Insecticides
1,8
Required in connection
with food programme.
- Sulphur
.5
Required in munitions
programme.
- Photographic
.6
Required for indirect
military uses.
- Alcohols
.6
Industrial alcohols
required for munitions
programme
- Chrome
.6
For tanning and textile
industry - producing
direct military require-
ments.
- Miscellaneous
1.8
Miscellaneous
- Abrasive Grains
.6
General war production
usage.
- Carbon Black
1.2
Tire programme.
- Plastics
1.5
General war production
usage.
- Miscellaneous
.7 51.0
(c) End Products
Automotive - Vehicles
7.0
Essential civilian war-
- Spares
2.5
time transport and
agricultural transport-
civilian gasoline
rationing extromely
rigid.
- Stationary
Engines
.5
Required for incorporat-
ion in mobile welding
sets, pumping units,
etc. required by armed
forces.
Argricultural Implements
- Tractors
5.5
Required for food
- Spares
1.1
programme.
- Miscellaneous
2.4
Coal Mining Machinery
(Underground)
.5
Bearings
.5
Required for maintenance
of armed services'
equipment performed by
civilians. An addition-
al $1,000,000 required
for general industrial
purposes related
directly to the war
effort.
Medical Supplies
For use in Australian
- X-Ray
.8
hospitals at the service
- Surgical
.3
of Allied forces.
- Drugs
1.1
- Proprietary
.2
- Miscellaneous
.6
Regraded Unclassified
115
Description
Value
Remarks
(c) End Products (Cont'd)
Carried forward
23.0
Textiles - Belting Duck
.5
General industrial war
production use.
- Cotton Tyre Cord 4.6
Military tyre programme
- Rayon Tyre Cord 2.1
Military tyre programme
- Rayon Tyre
Fabric
2.8
Military tyre programme
Silver-Bullion/Coinage
5.0
Returnable in kind under
special agreement.
Miscellaneous - Film
.2
Entertainment of armed
forces.
- Photographic .2
Entertainment of armed
forces.
- Business
Machines .5
To be used directly by
armed forces.
- Hand Tools 2.0
General war production
use.
- Elec.
Equipment 1.9
General war production
use.
- Industrial
Eqpt.
1,2
General war production
use,
44,0
GRAND TOTAL $102.0
Regraded Unclassified
116
NEW ZEALAND
The New Zealand War Effort.
12.
New Zealand approaches Stage II after over five years
of war - five years of unremitting and undeviating endeavour to
apply the full manpower and the full economy of the Dominion
to the common end.
13.
During the period when it was necessary to prepare
against the possibility of actual invasion 190,000 men of a
total of 355,000 of military age (18 to 45 years) wero taken
into the armed forces. Strenuous and successful efforts wore
made to meet this diminution of productive power and by the
extension of working hours over a wido field of industry, by
substantial overtime, by the compulsory recruitment of large
numbers of women into industry, by compulsory limitation of
the production of unessential goods, and by compulsory
diversion of labour from unessential to essential industries
it was nossiple on the whole to maintain production and in
most fields to increase it.
14.
The fighting record of New Zealand during the
war has, it is folt, boon fully worthy of the Dominion.
More than 100,000 men, the equivalent of one in every 3t mon
of military age in the total population, have been despatched
abroad to the fighting fronts in Europe and in the Pacific,
and the casualties have been grievous. The total Now
Zoaland casualties up to the middle of this year have
oxceeded 30,000 - the equivalent of 1 in 55 of the total
population of the country, or one in every three and a half
of those dospatched abroad. Those figures will bear the
closest comparison with those of any other allied combatant.
15.
While the actual combatant functions of the Dominion
in Stage II have yet finally to be decided in cooperation
with the United States and the United Kingdom and while there
will no doubt be some necessary adjustment botwoen the
proportions of the Now Zealand population ongaged in a
combatant capacity and those engaged in the equally essential
functions of war production services, it is novertheless clear
that the total war effort of New Zealand in Stage II will be
no loss than in Stage I.
Regraded Unclassified
117
16.
Clearly, the capacity of New Zoaland to continue her
contribution to the total war effort of the Allies must depend
to a substantial extent upon the Dominion's boing provided in
turn with the supplios necessary to maintain its people at a
minimum standard of health and well-being, as well as for the
production of those Now Zealand commodities which are specifi-
cally required for war purposes.
New Zoaland's Special Economic Position.
17.
During the war years New Zealand has become
progressively impoverished. This is due partly to the fact
that her basic industry is farming and that heavy industry
is not developed, but it is also duo to Now Zealand's substantial
contribution to the war in mandower, to the lack of maintenance
of equipment usually imported, and to New Zoaland's individual
oconomic position.
18.
Now Zealand's farm lands have suffered particularly
because of fortiliser deficiency and also because of lack of
maintenance. Now Zoaland's farm production is falling because
of these factors and in successive years it is likoly to fall
furthor because annual maintenance, so necessary in Now Zoaland,
has not been carried out. Labour has been directed rather into
increasing production than into maintaining the land. New
Zealand's railways have not been adequatoly maintained: the
road-buds, the bridges and vinducts, signalling apparatus,
loconotives, rolling stock, and workshops machinery are all
below standard, and a substantial proportion of it has
detoriorated to the stage of obsolescence. New Zealand's roads
also have doteriorated because of lack of upkoop due to shortage
of mannower and to lack of earth-noving machinery. In this
respect it should be noted that Now Zoeland's earth-moving
machinery is required for all types of developmental and public
works and a substantial proportion of it was sent to Malaya, to
the Middle East, and to the Pacific Islands. New Zealand's
power industry has also suffored because of lack of normal
maintenance; for example, the hydro-electric system has been
able to maintain only 2/5ths of its normal annual necessary
paintenance. Factorios in New Zealand have been operating for
much longor hours than formerly and in many cases have not
Regraded Unclassified
118
received normal replacements of equipment. Many machines over
a wide sector of Now Zoaland's economy are completely obsolescent,
New Zealand's timber stocks have been rapidly depleted because
of the vast building programme necessary for New Zealand's
defence, for United States troops and for buildings in the
South Pacific and other war areas. Some of this capital loss
is irreplaceable,
19.
Not only did Now Zoaland enter the war with depleted
stocks, much below normal requirements, but during the war the
Dominion has been living on a hand to mouth basis, consuming
its industrial capital. Unlike other countries which are in a
position to replace worn out equipment to a large extent from
their own onhanced industrial and skilled labour capacity and
from basic materials within the country itsolf, Now Zealand
must continuo for a long time to come to be a specialised
agricultural country unable to provide herself with machinery
and other equipment from her own resources.
Effects on Civilian Economy of Rationing and Austority
Programmes and Manpower Shortages.
20.
Now Zealand is predominantly an agricultural and
pastoral country with manufacturing industries capable of
catering for only a small porition of local requirements. The
impact of the war with shipping difficulties and losses,
coupled with production shortages overseas, had a most
immodiate effect on the availability of practically all consumer
goods in New Zealand except locally produced foodstuffs. The
only action possible was the quick and immediate imposition
of a very strict rationing system.
21.
All cotton and woollon textiles were severely
rationed; these included not only wonring apparel, but house-
hold linen, such as blankets, sheots, towels, etc, Imported
foodstuffs such as tea and sugar were rationed and the require-
ments of the United Kingdom, and Reciprocal Aid to the United
States, led to the subsequent rationing of meat, butter and
cream, Many articles were prohibited from importation to
conserve shipping space and some items, while not rationed,
virtually disappeared from the market; such itums are canned
fish, citrus fruit, canned fruit, eggs, pork and bacon.
Gasoline was severely rationed and the present-day allowance
Regraded Unclassified
119
is 1 gallon a month for small cars and not more than 2 gallons
a month, irrespective of the size of the car.
22.
As one contribution to the war effort Now Zealand
voluntarily imposed controls, generally more rigid than in most
countries not actually in the front line of battle. Manpower
was brought under most rigid control; both men and women were
directed under Manpower regulations into specific jobs in
essential industry and those already in such industries were
frozon in their jobs. It is expected that these controls will
romain in force until after the defeat of Japan.
23.
The guiding principle was the desire of the whole
country to devoto all its onergics to the waging of war and
to the production of essential war materials with particular
omphasis on New Zealand's role in the production of foodstuffs
for the Arned Services, for the United Kingdom, and for United
States forces in the South Pacific. The standard of living has
been drastically cut to provide for increased production for
these purposes.
Reciprocal Aid to the U.S. Forces.
24.
Thore is no need to elaborate on New 3ealand's
Reciprocal Aid contribution to the U.S. Up to April 30th, 1944,
the following foodstuffs had been delivered:
Lbs.
Butter
26,098,439
Choose
8,043,615
Bacon and Han
27,269,438
Meat, fresh
131,109,717
Meat, canned
42,945,982
Milk, evaporated
18,242,168
Sugar
40,265,729
Tea
595,525
Vegetables, canned
13,169,559
Potatoes
48,049,741
Other fresh vegetables
45,283,694
Apples, frosh
18,457,010
Regraded Unclassified
120
25.
In addition to the above are camps, hospitals,
landing barges, mine sweepers and other ships, footwear,
uniforms, and countless other items. The estimated value for
1944 is 6 N.Z. 24 millions ($78 millions) equivalent to some
20% of New Zealand's total war expenditure. In Stage II New
Zealand expects that it will be necessary to maintain the
present level of Reciprocal Aid; in fact, programmes already
submitted by United States Services are at least one-tenth
larger than for the current year.
Requirements and Justifications in Stage II.
26.
The principal items required during Stage II (other
than petroleum and shipping) are as follows (all figures in
dollars) :-
Raw Materials
Steel
3,500,000
Tinplate
2,000,000
5,500,000
Phosphates
240,000
Sulphur
760,000
Miscellaneous
fertilizer and
chemicals
450,000
Naval stores 250,000
Miscellaneous
Raw
Materials
250,000
1,950,000
7,450,000
Tobacco
1,250,000
Manufactured Items
Trucks
1,000,000
Automotive
Parts
1,000,000
Agricultural
Implements
including
Tractors
3,000,000
Hand Tools 700,000
Miscellaneous
Items
375,000
6,075,000
GRAND TOTAL
$14,775,000
27.
Dealing with each item in turn, the following will
indicate its relationship and essentiality to the war effort:-
Regraded Unclassified
121
Steel ($3,500,000) This requirement consists not only of needs
for direct munitions and war production but also for the
maintenance of New Zealand's economy on a basis to continue
maximum war production. While these end uses might seem to be
"normal civilian", in the case of New Zealand the general
civilian economy has been short for such a long period that a
failure in supply now can result only in a diminution of the
war effort. New Zealand has no steel industry.
Tinplate ($2,000,000), This is needed for the packing of
foodstuffs for supply to American and other military forces
overseas, to the United Kingdom, and to a very limited extent
to New Zealand of those articles which can be packed only in
tinplate containers. Full details are available to show that
the use of tinplate is strictly controlled - certainly to an
extent no less strict than with the other United Nations,
Phosphates ($240,000) and Sulphur ($760,000). These items
are required for the manufacture of phosphatic fertilisers.
These are essential for the maintenance of food production in
New Zealand, Information has already been transmitted through
the appropriate channels to the effect that the land in New
Zealand is suffering serious deficiencies through the shortage
of fertilizer over a number of years. It has been agreed that
food production is vital to the war effort and increased out-
put in the Dominion is directly related to the availability
of phosphatic fertilizer. An overwhelming proportion of
production is for export for war purposes and the small
residual is itself fundamental to the maintenance of the
civilian population which is in turn vital to the maintenance
of all production, The high percentage of export is shown in
the following cases:-
Butter
81% of production exported.
Lamb
96% of production exported.
Cheese
98% of production exported.
Miscellaneous Fertilizer and Chemicals ($450,000) Naval Stores
(Resin, etc.) ($250,000) Miscellaneous Raw Materials ($250,000).
Directly or indirectly the supply of these materials is vital,
particularly to the maintenance of food production - fertilizer
for the land, materials for sheep dip, weed-killer, insecticides,
etc.
Regraded Unclassified
122
Tobacco ($1,250,000). This requirement is calculated to cover
only the proportional requirements of military forces, prisoner
of war shipments, and other supplies related to military needs.
Without question, tobacco is necessary to maintain the morale
of the fighting forces.
Trucks ($1,000,000) Automotive Parts ($1,000,000). It is
obvious that a factor essential to the maintenance of the war
effort, the shipment of foodstuffs, and the movement of raw
materials and military goods, etc., is transport. All transport
is strictly controlled. Gasoline is rationed on a strict
basis as previously outlined. These transport needs are vital
and any "civilian" proportion is itself necessary to the
functioning of the whole effort.
Agricultural Implements ($3,000,000). The necessity for these
is obvious and the role of foodstuffs as a war factor has been
referred to above.
Hand Tools ($700,000), Miscellaneous Manufactured Items ($375,000)
It is apparent that the general industrial war effort of New
Zealand needs maintenance attention in the form of miscellaneous
hand tools, equipment, etc., in a situation aggravated by a
long period of shortage of manpower for maintenance purposes,
lack of importation of capital equipment, and over-working of
existing plant. In many cases, since the equipment must go
into stock for call as needed, it is impossible to pre-
identify war uses, but, nevertheless, essentiality remains.
Petroleum and Shipping.
28.
This submission does not cover our requirements
under the heading of Petroleum and Shipping since these
categories are being discussed in a global sense in the United
Kingdom presentation. The requirements under these headings,
however, are at least of equal importance to New Zealand as
those categories of goods dealt with in this submission. It
is requested, therefore, that no action be taken to disturb
present policy relating to petroleum or shipping.
Regraded Unclassified
123
Diversions
29.
It is submitted that particular consideration
should be accorded to New Zealand owing to the special position
in which New Zealand was placed at the outbreak of the
Japanese war. Materials imported (not manufactured in New
Zealand) for essential national purposes were placed at the
disposal of the Armed Services. For example, tractors were
withdrawn from maintenance of roads, forestry operations, etc.,
and despatched to the Pacific Islands to construct aerodromes.
Stocks of materials that would normally have been used for
maintenance of industry were utilized for emergency construction
of military camps, hospitals, and other facilities for the
large number of American forces that arrived at short notice
in New Zealand, In this connection, it will no doubt be
borne in mind that while a large proportion of New Zealand's
Reciprocal Aid has necessarily taken the form of consumable
goods the Lend-Lease assistance it has received has been
predominantly non-consumable goods used for the most part
solely for war purposes.
30.
A limited quantity of Lend-Lease goods already in
New Zealand is not now required for its original purpose but
is urgently needed in New Zealand for essential civilian
requirements including, for example, rural housing, necessary
for the continued production of foodstuffs, and an expeditious
procedure is necessary in regard to the diversion to essential
civilian use of goods originally supplied through Lend-Lease
for other purposes.
Civilian Proportions.
31.
There has been an increasing tendency to exclude
proportions of requirements because they are "civilian", even
though these requirements have been endorsed both by the
Foreign Economic Mission and the representative of Comsopac
in New Zealand as being necessary to the Dominion's war effort.
The war effort of New Zealand is the maximum the country can
undertake. This war effort is dependent on the maintenance
of 8 minimum economy and thus these "civilian" requirements are
Regraded Unclassified
124
just as essential as direct military materials. It is
submitted, therefore, that this form of differentiation with
a view to the exclusion of "civilian" proportions should be
discontinued because failing the supply of these goods the
New Zealand war effort must decline. This situation is
peculiarly applicable to New Zealand because of the
specialisation of its economy, its dependence on imports,
the mixed nature of its war production, its distance from
supply sources, and thus the necessity for the holding of
advance stocks, the comparative lack of direct military
manufactures and the long-maintained drain on civilian
facilities. For these reasons it is submitted that the
maintenance of essential civilian activity is itself essential
to a continued and sustained war effort and that no distinc-
tion should properly be drawn for Lend-Lease purposes.
Final Observations
32.
It is desired to emphasise that the predominant
purpose of the New Zealand Government in expressing these
views on Lend-Lease in Stage II, so far as it applies to
New Zealand, is to enable the Dominion to continue in the
future the policy adopted in the past of endeavouring to
carry out to its fullest capacity any war measure it is
requested to undertake.
Regraded Unclassified
125
INDIA
33.
The attached statement gives a more detailed breakdown
of the non-munitions requirements of India during Stage II
(1945).
34.
In putting forward this statement it is desired to
emphasise (a) that India has received comparatively little
Lend Lease aid for her non-military needs, and (b) that her
military needs are not confined to munitions. For example, steel
supplied on Lend Lease is mainly for military requirements; and
this is more or less true of the remainder of the programme of
Lend Lense requirements in the non-munitions field.
35.
The difficulty of distinguishing between strictly
military and general requirements is well illustrated by the
application for locomotives and freight cars on Lend Lease
specified below. This was originally included in the military
requirements, but has been referred back by the U.S. "ar
Department for inclusion in the non-munitions programme. From
the strictly military point of view, if the U.S. supplies are
treated as marginal to the corresponding orders for
locomotives from the U.K. and Canada already under contract,
they are not considered of the first order of priority. The
freight wagons, on the other hand, are considered by the
British and Indian military authorities as indispensible for
war purposes, and will probably have to be purchased for
cash in the United States if the application for supply on
Lend Lease is not agreed. Quite apart, however, from the views
of the military authorities, this rolling stock is unquestionably
of the highest significance for the maintenance of the Indian
civilian population in conditions where thoy are able to put
forth their best efforts for the war. The recent famine in
Bengal was greatly aggravated by lack of rolling stock. Bengal
is always a deficiency food area, and the loss of rice from
Burma has greatly increased the transport problem. The
following 1s an extract from a telegram just received from the
Government of India:-
"The decisions of Quebec are serious in their effect on
Regraded Unclassified
126
port capacity and transport facilities in India. The
satisfaction of the additional military requirements will
put a strain mainly on the railways, which will necessitate
a reduction of civilian traffic of from 8 to 12%. At the
peak of the military movement, not only passenger traffic
but also industrial production, military works services and
possibly food, will have to be curtailed for a considerable
time. This strain can be considerably relieved by the
provision of more coastal shipping and by expediting the
delivery of railway rolling stock from the United States".
h refusal to supply the additional rolling stock will be
taking the responsibility of allowing no margin to meet such
contingencies as food difficulties or famine in any part of
India. It would be impossible for the U.K. to produce the
locomotives and wagons by the time that they will be needed,
because manufacture could not commence until at least six
months after it could be put in hand in the United States.
36.
The estimates given in the statement below were
framed prior to the decisions reached at the Quebec Conference.
The increased burden which will be placed on India as a result of
the Cuebec decisions is not yet ascertainable. Present indication
are, however, that the additional burden will be substantial.
The effect of any such increase on the already strained
resources of India is giving very serious anxiety to the
Government of India, who have recently submitted representations
to the United Kingdom Government in the matter.
37.
India's war effort has been all-embracing. The best
available statistics suggest that nearly a quarter of the n
national income of British India is being absorbed by the way
effort in the form of direct military expenditure in India,
the production of militory stores end net exports of raw
materials for use elsewhere. Disbursements in India for
defence purposes are in fact seventeen times the pre-war figure,
which itself was high in relation to the resources of the country.
38.
This eontribution must not be judged by direct comparisc
with the corresponding figures for highly industrialised oeonomies
Regraded Unclassified
127
with comfortable standards of living, where a substantial
margin existed on which, in emergency, drafts could be made.
It has been wrung from a country where, though there are a few
very high incomes, the great majority are so near the very
border-line of subsistence that the average income comes down
to the equivalent of about $40 a year. Nowhere, except perhaps
in China, has the human cost of the war behind the lines been
higher. The large numbers who have perished from famine and
disease are only the most outstanding and measurable illustration
of this.
39.
In the view of the Government of India the peak of
national effort has been reached: hence their anxiety as to the
effect on the national economy of any further burden arising from
the Quebec decisions. Substantial and increased aid from
outside is essential to maintain India's war effort and her in-
ternal economy.
Regraded Unclassified
128
INDIAN REQUIREMENTS UNDER LEND LEASE IN STAGE II
(excluding military requirements, oil and shipping)
REQUIREMENTS
REM.RKS
1. Steel
$23,000,000
Includes -
(a) wire rope for collieries,
shipping operations, rail-
ways, harbours, etc.;
(b) mill rolls for steel rolling
mills;
(c) boiler tubos, rails, wheels,
tyres and axles etc. for
railways;
(d) tinplate fro foods and med-
icines for the armed forces;
(e) bolts and nuts for use in
munitions production, ship
repair, construction of
rolling stock, militory
vehicles, rmy bridges, docks,
etc.
(f) hoop and strip for baling jute,
cotton etc.
2. Other raw
materials
$13,000,000
Includes. -
(a) carbon blacks required for
paint for military end
camouflage purposes; for
cable manufacture; indust-
rial hose, gas masks, army
footwear, etc.
(b) tyre manufacturing materials
required for manufacture of
military and aircraft tyres.
(c) rayon and nylon used in the
production of U.S.A.A.F.
aircraft tyres.
(d) sulphur, mainly required for
production of sulphuric acid
for war industries.
(e) abrasives for the manufacture
of grinding wheels used in
the manufacture of rifles,
machine guns and other
ordnance.
(f) battery materials for use in
two Indian factories whose
output is mainly for
military use.
(g) mesonite for construction of
bodies and radio boxes for
for military vehicles, combat
and cargo vessels, pontoons,
instrument panels for
aircraft, etc.
(h) paper for militory and
government use.
(1) timber for construction of
harbour lighters and small
craft and for ship repair
generally.
(j) ferro alloys for use in the
manufacture of mill rolls and
high speed tool steels.
Regraded Unclassified
129
3. Miscellaneous
$12,000,000
Includes
manufactured
(a) woodworking tools.
goods
(b) metal cutting tools and files
and rasps for the manufacture
and maintenance of equip-
ment in ordnance factories,
shipyards, railway shops, etc.
(c) spares for pneumatic tools
required for use by rail-
way shops, mica mining,
ship repair shops, etc.
(d) farm tractors.
(e) lamp batteries and cells for
flashlights for the armed
forces and for maintenance
of signalling and other
operational uses on rail-
ways, etc.
(f) typewriters for use in
Government offices and
ordnance factories.
(g) miscellaneous engineering items.
4. Tobacco
$3,000,000
Required for incorporation
with Indian tobacco in the
manufacture of cigarettes and
pipe tobacco for the armed
forces.
5. Food for Indian $3,000,000
The Indian canteen services
Canteon
operate solely to meet the
Services
need of the Allied armies
within the borders of India.
The canteen service is under
the control of the Cuarter-
master General in India.
7.11 canteen stores are issued
by the canteen services in
accordance with a basic scale
determined by the military
authorities. Distribution is
effected only through install-
ations under the control of the
Quartermaster General in India.
6. Locomotives
$30,000,000
Referred back by U.S. War
and wagons
Department for inclusion in
non-munitions programme -
see para. 35 above. Comprises
60 brond gauge locomotives,
128 metre gauge locomotives,
6,000 broad gauge wagons and
1,717 metre gauge wagons.
GR.ND TOTAL
$84,000,000
Regraded Unclassified
130
CORRIGENDA TO *BRITISH REQUIREMENTS DURING FIRST YEAR OF STAGE II'
Page 23:
For the table and second foot-note substitute the
following:-
Food
1368
1064
011
956**
353**
Shipping
1062
877
Raw Materials
444
222
Miscellaneous Goods
042
013
3872
2529
The estimate in the 1944-1945 appropriation was made on
a gross basis. As it has been recently decided to omit
from Lend-Lease and Reciprocal A1d respectively oil of
U.S. origin retransferred to the U.S. Forces (in certain
areas, see under 011 in Supplement) the estimate for
Stage II is made on a net basis, The comparative gross
figure for Stage II would be .62.
Page 28,29: The entire section after the werds "it should be
noted" at the beginning of the third sentence of the
first paragraph is superseded by the note on oil at
the beginning of this Supplement.
Page 30, Para.3, line 1: For "$990 read "$877"
Page 31, Item 6, Column 2:For "300,000" read "199,000"
Item 14,Column 2:For "6,240" read "N11".
Total, Column 2: For "992,960"read "876,720".
Foot-note:
Superseded.
See paragraph on Shipping in Supplement.
Pages 35-43:See Supplement to Chapter 3
Pages 44-47:See Amplification of Material in Chapter 4.
Annex A
Page 14a
Dollar payments to third countries in 1945 are there
estimated at $225 millions. Further enquiry into the basis of this
estimate was invited, since it was not easy to see how so large
a total could be built up. It now appears that certain items have
been included originally payable in terms of dollars but sub-
sequently recoverable also in terms of dollars, thus causing no
Regraded Unclassified
131
net dollar burden. We are now informed that the correct net
figure should be $167 millions. Of this, $118 millions consists
of payments to the Caribbean and Central America for sugar and oil;
and apart from certain small sundry items, the balance is
substantially represented by reimbursements to Canada for U.S.
dollar payments incurred on our behalf through Canadian agencies,
Regraded Unclassified
10/30/44
TOP SECRET
COPY NO.
132
AMPLIFICATION OF MATERIAL IN CHAPTER 4
LEND-LEASE REQUIREMENTS OF AUSTRALIA, NEW ZEALAND AND INDIA
1.
As explained in para. 1 of Chapter 4 of the document
relating to British Requirements in the First Year of Stage II,
the programmes submitted by the United Kingdom include
supplies required from the United States by Australia, New
Zealand and India in the field of munitions (except aircraft
and aircraft components), oil and shipping. The following
notes by the Australian, New Zealand and Indian supply
representatives in Washington explain the need of their
respective countries for food, raw materials and civilian
goods under Lend-Lease in Stage II and itemise these
requirements in greater detail. Where the figures given
below differ from those in the earlier document, the previous
estimates should be disregarded.
AUSTRALIA
The Australian War Effort
2.
The Australian war effort is likely to have to
continue at the maximum degree of intensity for a longer period
than that of most other members of the United Nations. At
the earliest possible time Australian forces were engaged
in the Mediterranean area and supplies of all kinds were
being sent to that and other theatres of war. When Singapore
fell, Australia was short of men and munitions, because
everything possible had been sent abroad to the actual fields
of action. American forces and American supplies filled the
gap and became the basis for the counter-offensive. The
remnants of the Australian Navy and some of Australia's
experienced jungle troops are now in the Phillipines.
3.
The Australian war effort has strained her resources
and manpower to an extent which is hard to measure, because
much of it is in the production of ordinary foods and farm
supplies. But the austerity of civilian life in Australia
has become very pronounced.
4.
Every possible fighting man has been used. Seven
out of every ten males between the ages of 18 and 35 have
Regraded Unclassified
133
served in the fighting forces. From a total population of about
7t millions, 891,000 males were enlisted and 80,000 have
become casualties. The numbers engaged in fighting and
essential industries exceed the prewar total of the working
population by 170,000 and comprise 71% of the total population
between the ages of 15 and 60.
Reciprocal Aid
5.
Comparisons with other countries are not really
practicable even if they were desirable. It may be of interest
to note that one fifth of the total war expenditure in
Australia is for reciprocal aid to the U.S.A. forces. The
dollar value of this aid, so far as it can be measured at all,
is of course incomplete. But to the end of June 1944, the
value was estimated at a total of $570 millions. The dollar
measure understates the Australian contribution in terms of
manpower and of real effort, because the rate of exchange
which must be used to convert Australian currency into dollar
values does not correspond to real values.
6.
Reciprocal Aid to the U.S.A. forces commenced long
before there was any formal agreement on the subject. It
commenced with food sent to Bataan. The Australian people
have given unstintingly and have gone without normal
necessities in co-operation with their Government in the
provision of requirements for the American forces. The needs
of these forces have been given a high priority in Australian
production and have indeed required many adjustments of the
Australian production programmes.
Lend-Lease Requirements in 1945.
7.
The attached figures are estimates of Lend-Lease
requirements for delivery in Australia during the calendar
year 1945. They divide the programme into categories which
include "non-munitions" items. But it must be emphasized
that the so-called non-munitions programme is very largely
made up of military requirements, direct or indirect. For
instance, the food requirements are largely for the use of the
armed forces; the timber is required almost entirely for
war purposes, inasmuch as general building construction has
Regraded Unclassified
134
been rigorously controlled; the synthetic rubber is needed
for the manufacture of military and essential war service
vehicles; agricultural implements are needed for the Food
Programme designed to meet the requirements of the armed
forces and United Kingdom needs, and so one could go on through
each item on the list. These are cited by way of example.
8.
It may be observed that the non-munitions require-
ments for 1945 (exclusive of Petroleum and Shipping Freights
included in the United Kingdom programme) total $102 millions.
By way of comparison, expenditure in Australia upon non-
munitions items provided under Reciprocal Aid has been at
the rate of $360 millions per annum. It is submitted that
continuance of a substantial measure of Lend-Lease, without
continual scaling down on questions of eligibility, civilian
end-use, etc., is necessary to enable the maintenance of a
reasonably balanced economy.
Australia's Need for some Relief of War Strain
9.
As prospects are at present, there is in sight no
relief for Australia of her present war strain until the war
in the Pacific is ended. Indeed as operations in that vast
area are accelerated the strain could become so intense as to
pass the limits of tolerance, having regard to the five years
already suffered. There are no prospects of converting war
production to peace production, nor any diversions of effort
such as are contemplated elsewhere. This prospect has now
become serious in view of the almost desperate shortage of
housing and of other elementary necessities of normal civil
life. In our transport and our farm and industrial equipment,
the wear and tear of the war effort has reached far beyond
normal limits of tolerance.
10.
There is an expectation that some general
relaxation of effort on a substantial scale, both in the
United States and in the United Kingdom, is to follow the end
of the war in Europe. Since Australia will remain in the area
of hostilities, it is most unlikely that comparable relaxations
or demobilisations from the war effort will be possible for
Regraded Unclassified
135
her. For this reason, Australia considers it reasonable that
such steps as are practicable shall be taken to allow her such
relief as is possible, and she hopes that, in consideration
of the present problems, this aspect will not be overlooked.
11.
The Australian Agencies in Washington stand ready
to furnish any further information which may be required, to
supply further substantiation on any point which may be in
doubt and to represent the Australian case in any manner which
may be deemed to be desirable or helpful.
Regraded Unclassified
136
LEND-LEASE REQUIREMENTS OF AUSTRALIA IN STAGE II
NON-MUNITIONS BREAKDOWN
EXCLUDING PETROLEUM AND SHIPPING FREIGHTS
(all figures in millions of dollars)
Description
Value
Remarks
(a) Food
Tobacco - Leaf
3.1
Military requirements
only. An additional
$81 millions required
for civilian purposes.
Tobacco - Native Twist
.9
Used for payment of native
porters in forward
battle areas,
Canned Fish - Salmon
1,4
For requirement of armed
- Pilchards
.6
forces only. Civilian
use prohibited
Seeds - Vegetable
.6
Australian food programme
for allied forces.
Sausage casings
.1
Australian food programme
- artificial
for allied forces.
Coca Cola Concentrate
& misc.
.3
Coca Cola Concentrate in
amount of $275,000
7.0
entirely for U.S. Forces.
-
(b) Raw Materials
Tinplate
14.0
95% for use in canning
programme for allied
forces
Metals - Carbon Steel
1.2
Various industrial
- Alloy Steel
1.0
purposes directly
- Non-Ferrous
.8
connected with munitions
programme.
Timber - Soft Wood
2.4
Military and war product-
- Hard wood
1.4
ion and construction.
- Plywood
.2
Civilian construction
prohibited,
Pulp & Paper - Woodpulp
2.0
To augment Australian
- Fine Paper
3.5
production which is in-
- Wrapping
adequate for war
Paper
1.8
purposes -- paper usage
- Sanitary &
all under strict and
Tissue
1,0
rigid control.
- All Other
Paper
.7
Raw Cotton incl. Linters
- Raw
2.8
Military textiles,
- Linters
.2
surgical dressings etc.
Synthetic Rubber - GRS
6.0
Largely for use in
military tire programmes-
supply under instruct-
ions of Combined Boards.
Regraded Unclassified
137
Description
Value
Remarks
(b) Raw Materials (Cont'd)
Carried forward
39.0
Chemicals - Phosphate
Rock
2.1
Required in connection
with food programme.
- Insecticides
1,8
Required in connection
with food programme.
- Sulphur
.5
Required in munitions
programme.
- Photographic
.6
Required for indirect
military uses.
- Alcohols
.6
Industrial alcohols
required for munitions
programme
- Chrome
.6
For tanning and textile
industry - producing
direct military recuire-
monts.
- Miscellaneous
1.8
Miscellaneous
- Abrasive Grains
.6
General war production
usage.
- Carbon Black
1.2
Tire programme,
- Plastics
1.5
General war production
usage.
- Miscellaneous
.7 51.0
(c) End Products
Automotive - Vehicles
7.0
Essential civilian war-
- Spares
2.5
time transport and
agricultural transport-
civilian gasoline
rationing extromely
rigid.
- Stationary
Engines
.5
Required for incorporat-
1on in mobile welding
sets, pumping units,
etc. required by armed
forces.
Argricultural Implements
- Tractors
5.5
Required for food
- Spares
1.1
programme.
- Miscellaneous
2,4
Coal Mining Machinery
(Underground)
.5
Bearings
in
Required for maintenance
of armed services'
equipment performed by
civilians. An addition-
al $1,000,000 required
for general industrial
purposes related
directly to the war
effort.
Medical Supplies
For use in Australian
- X-Ray
.8
hospitals at the service
- Surgical
.3
of Allied forces.
- Drugs
1,1
- Proprietary
,2
- Miscellaneous
.6
Regraded Unclassified
138
Description
Value
Remarks
(c) End Products (Cont'd)
Carried forward
23.0
Textiles - Belting Duck
.5
General industrial war
production use.
- Cotton Tyre Cord 4.6
Military tyre programme
- Rayon Tyre Cord 2.1
Military tyre programme
- Rayon Tyre
Fabric
2.8
Military tyre programme
Silver-Bullion/Coinage
5.0
Returnable in kind under
special agreement.
Miscellaneous - Film
.2
Entertainment of armed
forces.
- Photographic .2
Entertainment of armed
forces.
- Business
Machines
.5
To be used directly by
armed forces.
- Hand Tools 2.0
General war production
use.
- Elec.
Equipment 1.9
General war production
use.
- Industrial
Eqpt.
1.2
General war production
use.
44.0
GRAND TOTAL $102.0
Regraded Unclassified
139
NEW ZEALAND
The New Zoaland War Effort.
12,
New Tealand approaches Stage II after over five years
of war - five years of unromitting and undeviating endeavour to
apply the full manpower and the full economy of the Dominion
to the common end.
13.
During the period when it was necessary to prepare
against the possibility of actual invasion 190,000 men of a
total of 355,000 of military age (18 to 45 years) were taken
into the armed forces. Stronuous and successful efforts were
made to meet this diminution of productive power and by the
extension of working hours over a wide field of industry, by
substantial overtime, by the compulsory recruitment of large
numbers of women into industry, by compulsory limitation of
the production of unessential goods, and by compulsory
diversion of labour from unessential to essential industries
it was possible on the whole to maintain production and in
most fields to increase it.
14.
The fighting record of New Zealand during the
war has, it is felt, been fully worthy of the Dominion.
More than 100,000 men, the equivalent of one in every 3t mon
of military age in the total population, have been despatched
abroad to the fighting fronts in Europe and in the Pacific,
and the casualties have been grievous. The total Now
Zealand casualties up to the middle of this year have
exceeded 30,000 - the equivalent of 1 in 55 of the total
population of the country, or one in every three and a half
of those despatched abroad. These figures will bear the
closest comparison with those of any other allied combatant.
15.
While the actual combatant functions of the Dominion
in Stage II have yet finally to be decided in cooperation
with the United States and the United Kingdom and while there
will no doubt be some necessary adjustment between the
proportions of the Now Zealand population ongaged in a
combatant capacity and those engaged in the equally essential
functions of war production services, it is nevertheless clear
that the total war effort of New Zealand in Stage II will be
no less than in Stage I.
Regraded Unclassified
140
16,
Clearly, the capacity of Now Zoaland to continue her
contribution to the total war effort of the Allies must depend
to a substantial extent upon the Dominion's being provided in
turn with the supplies necessary to maintain its people at a
minimum standard of health and well-boing, as well as for the
production of those New Zealand commodities which are specifi-
cally required for war purposes.
New Zoaland's Special Economic Position.
17.
During the war years Now Zealand has become
progressively impoverishod. This is due partly to the fact
that her basic industry is farming and that heavy industry
is not developed, but it is also due to New Zealand's substantial
contribution to the war in mandower, to the lack of maintonance
of equipment usually imported, and to New Zeoland's individual
oconomic position.
18.
New Zoaland's farm lands have suffered particularly
because of fortiliser deficiency and also because of lack of
maintenance. Now Zoaland's farm production is falling because
of these factors and in successive yoars it is likoly to fall
further because annual maintenance, so necessary in New Zealand,
has not boen carried out. Labour has boon directed rather into
increasing production than into maintaining the land, Now
Zealand's railways have not been adequately maintained: the
road-beds, the bridges and viaducts, signalling apparatus,
locomotives, rolling stock, and workshops machinery are all
below standard, and a substantial proportion of it has
deteriorated to the stage of obsolescence. New Zealand's roads
also have deteriorated because of lack of upkeep due to shortage
of manpower and to lack of earth-moving machinery. In this
respect it should be noted that New Zealand's earth-moving
machinery is required for all types of developmental and public
works and a substantial proportion of it was sent to Malaya, to
the Middle East, and to the Pacific Islands. New Zealand's
power industry has also suffored because of lack of normal
maintenance; for example, the hydro-electric system has been
able to maintain only 2/5ths of its normal annual necessary
maintenance. Factorios in New Zealand have been operating for
much longor hours than formerly and in many cases have not
Regraded Unclassified
141
received normal replacements of equipment. Many machines over
a wide sector of New Zealand's economy are completely obsolescent.
New Zealand's timber stocks have been rapidly depleted because
of the vast building programmo necessary for New Zealand's
defence, for United States troops and for buildings in the
South Pacific and other war areas. Some of this capital loss
is irreplaceable.
19.
Not only did New Zoaland enter the war with depleted
stocks, much below normal requirements, but during the war the
Dominion has been living on a hand to mouth basis, consuming
its industrial capital. Unlike other countries which are in a
position to replace worn out equipment to EL large extent from
their own enhanced industrial and skilled labour capacity and
from basic materials within the country itself, Now Zealand
must continuo for e. long time to como to be a specialised
agricultural country unable to provide herself with machinery
and other equipment from hor own resourcos.
Effects on Civilian Economy of Rationing and Austority
Programmes and Manpower Shortages.
20.
Now Zealand is predominantly an agricultural and
pastoral country with manufacturing industries capable of
catering for only a small porition of local requirements. The
impact of the war with shipping difficulties and losses,
coupled with production shortages overseas, had a most
immediate effect on the availability of practically all consumer
goods in New Zealand except locally produced foodstuffs. The
only action possible was the quick and immediate imposition
of a very strict rationing system.
21.
All cotton and woollen textiles were severely
rationed; these included not only wearing apparel, but house-
hold linen, such as blankets, sheets, towels, etc. Imported
foodstuffs such as tea and sugar were rationed and the require-
ments of the United Kingdom, and Reciprocal Aid to the United
States, lod to the subsequent rationing of meat, butter and
cream. Many articles were prohibited from importation to
conserve shipping space and some items, while not rationed,
virtually disappoared from the market; such items are canned
fish, citrus fruit, canned fruit, eggs, pork and bacon.
Gasoline was severoly rationed and the present-day allowance
Regraded Unclassified
142
is 1 gallon a month for small cars and not more than 2 gallons
a month, irrespective of the size of the car.
22,
As one contribution to the war effort New Zealand
voluntarily imposed controls, generally more rigid than in most
countries not actually in the front line of battle. Manpower
was brought under most rigid control; both men and women were
directed under Manpower regulations into specific jobs in
essential industry and those already in such industries were
frozen in their jobs. It is expected that these controls will
romain in force until after the defeat of Japan.
23.
The guiding principle was the desire of the whole
country to devote all its energies to the waging of war and
to the production of essential war materials with particular
onphasis on New Zealand's role in the production of foodstuffs
for the Armed Services, for the United Kingdom, and for United
States forces in the South Pacific. The standard of living has
been drastically cut to provide for increased production for
these purposes.
Reciprocal Aid to the U.S. Forcos.
24.
Thore is no need to elaborate on New Bealand's
Reciprocal Aid contribution to the U.S. Up to April 30th, 1944,
the following foodstuffs had been delivered:
Lbs.
Butter
26,098,439
Choose
8,043,615
Bacon and Ham
27,269,438
Meat, fresh
131,109,717
Meat, canned
42,945,982
Milk, evaporated
18,242,168
Sugar
40,265,729
Tea
595,525
Vegetables, canned
13,169,559
Potatoes
48,049,741
Other fresh vegetables
45,283,694
Apples, frosh
18,457,010
Regraded Unclassified
143
25.
In addition to the above are camps, hospitals,
landing barges, mine sweepers and other ships, footwear,
uniforms, and countless other items. The estimated value for
1944 is 1 N.Z. 24 millions ($78 millions) equivalent to some
20% of New Zealand's total war expenditure. In Stage II New
Zealand expects that it will be necessary to maintain the
present level of Reciprocal Aid; in fact, programmes already
submitted by United States Services are at least one-tenth
larger than for the current year.
Requirements and Justifications in Stage II.
26.
The principal items required during Stage II (other
than petroleum and shipping) are as follows (all figures in
dollars) :-
Raw Materials
Steel
3,500,000
Tinplate
2,000,000
5,500,000
Phosphates
240,000
Sulphur
760,000
Miscellaneous
fertilizer and
chemicals
450,000
Naval stores 250,000
Miscellaneous
Raw
Materials
250,000
1,950,000
7,450,000
Tobacco
1,250,000
Manufactured Items
Trucks
1,000,000
Automotive
Parts
1,000,000
Agricultural
Implements
including
Tractors
3,000,000
Hand Tools 700,000
Miscellaneous
Items
375,000
6,075,000
GRAND TOTAL
$14,775,000
27..
Dealing with each item in turn, the following will
indicate its relationship and essentiality to the war effort:-
Regraded Unclassifie
144
Steel ($3,500,000) This requirement consists not only of needs
for direct munitions and war production but also for the
maintenance of New Zealand's economy on a basis to continue
maximum war production. While these end uses might seem to be
"normal civilian", in the case of New Zealand the general
civilian economy has been short for such a long period that a
failure in supply now can result only in a diminution of the
war effort. New Zealand has no steel industry.
Tinplate ($2,000,000). This is needed for the packing of
foodstuffs for supply to American and other military forces
overseas, to the United Kingdom, and to a very limited extent
to New Zealand of those articles which can be packed only in
tinplate containers. Full details are available to show that
the use of timplate is strictly controlled - certainly to an
extent no less strict than with the other United Nations.
Phosphates ($240,000) and Sulphur ($760,000). These items
are required for the manufacture of phosphatic fertilisers.
These are essential for the maintenance of food production in
New Zealand. Information has already been transmitted through
the appropriate channels to the effect that the land in New
Zealand is suffering serious deficiencies through the shortage
of fertilizer over a number of years. It has been agreed that
food production is vital to the war effort and increased out-
put in the Dominion is directly related to the availability
of phosphatic fertilizer. An overwhelming proportion of
production is for export for war purposes and the small
residual is itself fundamental to the maintenance of the
civilian population which is in turn vital to the maintenance
of all production, The high percentage of export is shown in
the following cases:-
Butter
81% of production exported.
Lamb
96% of production exported.
Cheese
98% of production exported.
Miscellaneous Fertilizer and Chemicals ($450,000) Naval Stores
(Resin, etc.) ($250,000) Miscellaneous Raw Materials ($250,000).
Directly or indirectly the supply of these materials is vital,
particularly to the maintenance of food production - fertilizer
for the land, materials for sheep dip, weed-killer, insecticides,
etc.
Regraded Unclassified
145
Tobacco ($1,250,000). This requirement is calculated to cover
only the proportional requirements of military forces, prisoner
of war shipments, and other supplies related to military needs.
Without question, tobacco is necessary to maintain the morale
of the fighting forces,
Trucks ($1,000,000) Automotive Parts ($1,000,000). It is
obvious that a factor essential to the maintenance of the war
effort, the shipment of foodstuffs, and the movement of raw
materials and military goods, etc., is transport. All transport
is strictly controlled. Gasoline is rationed on a strict
basis as previously outlined. These transport needs are vital
and any "civilian" proportion is itself necessary to the
functioning of the whole effort.
Agricultural Implements ($3,000,000). The necessity for these
is obvious and the role of foodstuffs as a war factor has been
referred to above.
Hand Tools ($700,000), Miscellaneous Manufactured Items ($375,000)
It is apparent that the general industrial war effort of New
Zealand needs maintenance attention in the form of miscellaneous
hand tools, equipment, etc., in a situation aggravated by a
long period of shortage of manpower for maintenance purposes,
lack of importation of capital equipment, and over-working of
existing plant. In many cases, since the equipment must go
into stock for call as needed, it is impossible to pre-
identify war uses, but, nevertheless, essentiality remains.
Petroleum and Shipping.
28.
This submission does not cover our requirements
under the heading of Petroleum and Shipping since these
categories are being discussed in a global sense in the United
Kingdom presentation. The requirements under these headings,
however, are at least of equal importance to New Zealand as
those categories of goods dealt with in this submission. It
is requested, therefore, that no action be taken to disturb
present policy relating to petroleum or shipping.
Regraded Unclassified
146
Diversions
29,
It is submitted that particular consideration
should be accorded to New Zealand owing to the special position
in which New Zealand was placed at the outbreak of the
Japanese war. Materials imported (not manufactured in New
Zealand) for essential national purposes were placed at the
disposal of the Armed Services. For example, tractors were
withdrawn from maintenance of roads, forestry operations, etc:,
and despatched to the Pacific Islands to construct aerodromes.
Stocks of materials that would normally have been used for
maintenance of industry were utilized for emergency construction
of military camps, hospitals, and other facilities for the
large number of American forces that arrived at short notice
in New Zealand, In this connection, it will no doubt be
borne in mind that while a large proportion of New Zealand's
Reciprocal Aid has necessarily taken the form of consumable
goods the Lend-Lease assistance it has received has been
predominantly non-consumable goods used for the most part
solely for war purposes.
30.
A limited quantity of Lend-Lease goods already in
New Zealand is not now required for its original purpose but
is urgently needed in New Zealand for essential civilian
requirements including, for example, rural housing, necessary
for the continued production of foodstuffs, and an expeditious
procedure is necessary in regard to the diversion to essential
civilian use of goods originally supplied through Lend-Lease
for other purposes.
Civilian Proportions.
31.
There has been an increasing tendency to exclude
proportions of requirements because they are "civilian", even
though these requirements have been endorsed both by the
Foreign Economic Mission and the representative of Comsopac
in New Zealand as being necessary to the Dominion's war effort.
The war effort of New Zealand is the maximum the country can
undertake. This war effort is dependent on the maintenance
of a minimum economy and thus these "civilian" requirements are
Regraded Unclassified
147
just as essential as direct military materials. It is
submitted, therefore, that this form of differentiation with
a view to the exclusion of "civilian" proportions should be
discontinued because failing the supply of these goods the
New Zealand war effort must decline. This situation is
peculiarly applicable to New Zealand because of the
specialisation of its economy, its dependence on imports,
the mixed nature of its war production, its distance from
supply sources, and thus the necessity for the holding of
advance stocks, the comparative lack of direct military
manufactures and the long-maintained drain on civilian
facilities. For these reasons it is submitted that the
maintenance of essential civilian activity is itself essential
to a continued and sustained war effort and that no distinc-
tion should properly be drawn for Lend-Lease purposes.
Final Observations
32.
It is desired to emphasise that the predominant
purpose of the New Zealand Government in expressing these
views on Lend-Lease in Stage II, so far as it applies to
New Zealand, is to enable the Dominion to continue in the
future the policy adopted in the past of endeavouring to
carry out to its fullest capacity any war measure it is
requested to undertake.
Regraded Unclassified
148
INDIA
33.
The attached statement gives a more detailed breakdown
of the non-munitions requirements of India during Stage II
(1945).
34.
In putting forward this statement it is desired to
emphasise (a) that India has received comparatively little
Lend Lease aid for her non-military needs, and (b) that her
military needs are not confined to munitions. For example, steel
supplied on Lend Lease is mainly for military requirements; and
this is more or loss true of the remainder of the programme of
Lend Lease requirements in the non-munitions field.
35.
The difficulty of distinguishing between strictly
militory and general requirements is well illustrated by the
application for locomotives and freight cars on Lend Lease
specified below. This was originally included in the military
requirements, but has been referred back by the U.S. "ar
Department for inclusion in the non-minitions programme. From
the strictly military point of view, if the U.S. supplies are
treated as marginal to the corresponding orders for
locomotives from the U.K. and Canada already under contract,
they are not considered of the first order of priority. The
freight wagons, on the other hand, are considered by the
British and Indian military authorities as indispensible for
war purposes, and will probably have to be purchased for
cash in the United States if the application for supply on
Lend Lease is not agreed. Quite apart, however, from the views
of the military authorities, this rolling stock is unquestionably
of the highest significance for the maintenance of the Indian
civilian population in conditions where they are able to put
forth their best efforts for the war. The recent famine in
Bengal was greatly aggravated by lack of rolling stock. Bengal
is always a deficiency food area, and the loss of rice from
Burma has greatly increased the transport problem. The
following is an extract from a telegram just received from the
Government of India:-
"The decisions of Quebec are serious in their effect on
Regraded Unclassified
149
port capacity and transport facilities in India. The
satisfaction of the additional military requirements will
put a strain mainly on the railways, which will necessitate
a reduction of civilian traffic of from 8 to 12%. At the
peak of the military movement, not only passenger traffic
but also industrial production, military works services and
possibly food, will have to be curtailed for a considerable
time. This strain can be considerably relieved by the
provision of more coastal shipping and by expediting the
delivery of railway rolling stock from the United States".
& refusal to supply the additional rolling stock will be
taking the responsibility of allowing no margin to meet such
contingencies as food difficulties or famine in any part of
India. It would be impossible for the U.K. to produce the
locomotives and wagons by the time that they will be needed,
because manufacture could not commence until at lenst six
months after it could be put in hand in the United States.
36.
The estimates given in the statement below were
framed prior to the decisions reached at the Quebec Conference.
The increased burden which will be placed on India as a result of
the Cuebec decisions is not yet ascertainable. Present indications
are, however, that the additional burden will be substantial.
The effect of any such increase on the already strained
resources of India is giving very sorious anxiety to the
Government of India, who have recently submitted representations
to the United Kingdom Government in the matter.
37.
India's war effort has been all-embracing. The best
available statistics suggest that necrly a quarter of the n
national income of British India is being absorbed by the war
effort in the form of direct military expenditure in India,
the production of militory stores end net exports of raw
meterials for use elsewhere. Disbursements in India for
defence purposes are in fact seventeen times the pre-war figure,
which itself was high in relation to the resources of the country.
38.
This contribution must not be judged by direct comparison
with the corresponding figures for highly industrialised economies,
Regraded Unclassified
150
with comfortable standards of living, where a substantial
margin existed on which, in emergency, drafts could be made.
It has been wrung from a country where, though there are a few
very high incomes, the great majority are so near the very
border-line of subsistence that the average income comes down
to the equivalent of about $40 a year. Nowhere, except perhaps
in China, has the human cost of the war behind the lines been
higher. The large numbers who have perished from famine and
disease are only the most outstanding and measurable illustration
of this.
39.
In the view of the Government of India the peak of
national effort has been reached: honce their enxiety as to the
effect on the national economy of any further burden arising from
the Quebec decisions. Substantial and increased aid from
outside is essential to maintain India's war effort and her in-
ternal economy.
Regraded Unclassified
151
INDIAN REQUIREMENTS UNDER LEND LPASE IN STAGE II
(excluding military requirements, 011 and shipping)
REQUIREMENTS
REM.RKS
1. Steel
$23,000,000
Includes -
(a) wire rope for collieries,
shipping operations, rail-
ways, harbours, etc.;
(b) mill rolls for steel rolling
mills;
(c) boiler tubes, rails, wheels,
tyres and axles etc. for
railways;
(d) timplete fro foods and med-
icines for the armed forces;
(e) bolts and nuts for use in
munitions production, ship
repair, construction of
rolling stock, military
vehicles, army bridges, docks
etc.
(f) hoop and strip for baling jute,
cotton etc.
2. Other raw
materials
$13,000,000
Includes -
(a) corbon blacks required for
paint for military and
camouflage purposes; for
cable manufacture; indust-
rial hose, gas masks, army
footwear, etc.
(b) tyre manufacturing meterials
required for menufacture of
military and aircraft tyres.
(c) rayon and nylon used in the
production of U.S
aircraft tyres.
(d) sulphur, mainly required for
production of sulphuric acid
for war industries.
(e) abrasives for the manufacture
of grinding wheels used in
the manufacture of rifles,
machine guns and other
ordnance.
(f) battery materials for use in
two Indian factories whose
output is mainly for
military use.
(g) mosonite for construction of
bodies and radio boxes for
for military vehicles, combat
and cargo vessels, pontoons,
instrument panels for
aircraft, etc.
(h) paper for military and
government use.
(1) timber for construction of
harbour lighters and small
craft and for ship repair
generally.
(j) ferro alloys for use in the
manufacture of mill rolls and
high speed tool steels.
Regraded Unclassified
152
3.
Miscellaneous
$12,000,000
Includes
manufactured
(a) woodworking tools.
goods
(b) metal cutting tools and files
and rasps for the manufacture
and maintenance of equip-
ment in ordnance factories,
shipyards, railway shops, etc.
(c) spares for pneumatic tools
required for use by rail-
way shops, mica mining,
ship repair shops, etc.
(d) farm tractors.
(0) lamp batteries end cells for
flashlights for the armed
forces end for maintenance
of signalling and other
operational uses on rail-
ways, etc.
(f) typewriters for uso in
Government officus and
ordnance factories.
(g) miscellaneous engineering items
4. Tobacco
$3,000,000
Required for incorporation
with Indian tobacco in the
manufacture of cigarettes and
pipe tobacco for the armed
forces.
5. Food for Indian $3,000,000
The Indian canteen services
Canteon
operate solely to meet the
Services
need of the ..llied armies
within the borders of India.
The canteen service is under
the control of the Cuarter-
master General in India.
.11 canteen stores are issued
by the cantoen services in
accordance with a basic scale
determined by the military
authorities. Distribution is
effected only through install-
ations under the control of the
Quertermaster General in India.
6. Locomotives
$30,000,000
Referred back by U.S. War
and wagons
Department for inclusion in
non-munitions programme -
see para. 35 above. Comprises
60 broad gauge locomotives,
128 metre gauge locomotives,
6,000 broad gauge wagons and
1,717 metre gauge wagons.
GRAND TOTAL
$84,000,000
Regraded Unclassified
153
October 30, 1944
My dear Lord Keynes:
Thank you very much for your letter of
October 27th, with which you enclosed a copy
of Section V on finance from the statistical
White Paper which you are preparing.
In accordance with your request, I am
returning this document to you herewith.
Sincerely yours,
The Right Honorable Lord Keynes,
United Kingdom Treasury Delegation,
Willard Hotel,
Washington, D.C.
Regraded Unclassified
154
UNITED KINGDOM TREASURY DELEGATION
BOX 680
BENJAMIN FRANKLIN STATION
WASHINGTON, D. c.
PERENCE
TELEPHONE EXECUTIVE 2020
27th October 1944.
Dear Mr.Secretary,
As I mentioned to you last night, we are preparing a
statistical White Paper publishing a number of statistics not hitherto
available. I enclose for you out of this Section V on finance, which
gives, I fancy, just the figures you want. At the moment this is the
only copy we have in Washington, so I shall be grateful if it is
returned when you have made whatever use of it you want.
I find that speaking from memory I very seriously misled you
as to the magnitude of our war expenditure. You will see that in 1943
our total expenditure amounted to 70 per cent. of our national income,
namely, £5,782 millions out of £8,172 millions. The statistics are not
precisely analysed as between war expenditure proper and other outgoings.
It is not easy to make an exactly accurate analysis from this point of
view. But I do not think you will be far wrong if you put the total of
war expenditure proper at £4,000 millions, or $16 billions. I should
say this is an under-estimate rather than otherwise. Also, these
figures relate to 1943. They will be somewhat, but not very greatly,
increased in 1944. In the first six months of the current financial
year, that is, April to September 1944, our expenditure was running at
the annual rate of £5,900 millions, compared with the figure of £5,782
millions given above for the calendar year 1943. Thus our current war
expenditure
Regraded Unclassified
155
- 2 -
expenditure may be nearer $17 than $16 billions.
Sincerely yours,
Keynes
The Honourable Henry Morgenthau, Jr.
Regraded Unclassified
SECTION V ad FINANCE
76.
Government expenditure has increased from £1,013 millions in 1938
to £5,782 millions in 1943. Almost the whole of this income is accounted
for by war expenditure.
77.
The figures in Table 29 exclude the value of the resources received
Quedity
from the United States and Canada under Lease-Lend and Mutual Aid. This
assistance has been in the form partly of munitions and also partly of
food, raw materials and shipping services which have made it possible to
use more of the man-power of the United Kingdom in the Armed Forces and
the munitions industries.
Central Government expenditure, revenue and borrowing
TABLE 29
£ Millions
Calendar years
Exponditure
Revenue
Deficit covered
by borrowing
1938
1,013
882
130
1939
1,474
975
499
1940
3,340
1,258
2,082
1941
4,626
1,836
2,790
1942
5,110
2,344
2,766
1943
5,782
2,876
2,906
78.
How the Government has been able to finance so large a proportion
of this expenditure out of current resources is scen more clearly by
analysing the growth of the national income since the war and by showing
how it has been re-distributed to secure for the Government for war
purposes both an increased amount and an increased share of the national
income. In addition, the Government has, however, had to draw heavily
on the nation's capital resources to meet its expenditure.
Regraded Unclassified
79.
Thus, of tho total of £5,782 millions of Government expenditure
in 1943:-
50 per cent. was provided by taxation and other Government
revenue
302 per cent. from savings of private persons and businessed
lent to the Government
5½ per cent. from public savings (the surpluses of local
authorities and extra-budgotary funds)
11 por cent. from sales of assets and other disinvestment
abroad
3 per cent. from disinvestment at homo
The proportion from sales of assets and other disinvestment
abroad was higher in the earlier years of the war.
Sources of Government revenue
80.
Almost the whole of the national income accrues initially to
private persons and businesses. The income which the Central Government
dorivos from public property and trading is small. It is mainly by to
taxation of the private income of persons and businesses that the
Government has secured its revenue.
Net national income of the United Kingdom
TABLE 30
C-Milli
Calendar years
Private inoome
Income from public property
Tot
(excluding
trading etc., received by
na
transfer
income
payments),
Central
Local
Government
authorities
1938
4,560
18
26
604
1939
4,927
16
25
4,968
1940
5,896
24
25
5,968
1941
6,817
41
27
6,885
1942
7,500
76
28
7,604
1943
8,075
69
28
8,172
Regraded Unclassified
158
81.
Private persons have been called spos le PC
The standard rate of income tax in 1938/39, - Sex 66.58 a
10/- in the D in 1943, and allowances for exemption from payment
taxes have been reduced. Rates of aur-tax on over. 22,000
have also been increased. Death duties have risen.
Income tax and -tax paid by persons with difforins
incomes and family responsibilities
TABLE 31
Inoome earned
Single Persons
Married couples
Marizéet
with no children
with two children
1938-9
1943-4
1938-9
1943-4
1938-9
rates
rates
rates
rates
rates
rates
£
150
2
18
-
-
350
27
89
9
59
500
57
156
35
126
8
1,000
167
381
145
351
112
3,000
751
1,462
729
1,432
696
1,
10,000
4,134
6,862
4,112
6,832
4, 079
6
82.
Of the aggregate incomes of persons with £250 - 4500 à year 3
pkr
cent. was paid in income tax in 1938, and 142 per cent. in 1942. Out of
incomes between £500 and £1,000 a year, 11 per cent. was paid in income tax
in 1938, and 28 per cent. in 1942. For incomes between £1,000 and £2,000
a year the amount of tax paid was 17 per cent. in 1938 and 39 per cent.
in 1942. The rates of taxes for inoomes above £2,000 were also increased.
Direct taxation of personal incomes in the United Kingdom
TABLE 32
Ranges of incomes
Percentages of aggregate of incomes paid in
inoome tax and sur-tax
1938
1943
Under
£250
0.2
3.0
£250
-
£500
2,9
14.6
£500
-
£1,000
11.1
28.0
£1,000
-
£2,000
17.0
38.7
£2,000
-
£10,000
28.9
51.9
£10,000 and over
50.6
79.4
Regraded
Unclassified
83.
Businessos and corporate bodies have been called upon no less than
private persons to pay increased taxes during the war. Apart from the
increase of income tax, an excess profits tax of 60 por cent was imposed
in 1939 and this was increased to 100 per cent in 1940.
84.
These direct taxes paid by private persons and businesses out of private
incomes to the Central Government rose from 2494 millions in 1938 to £1781
millions in 1943. Sorie of the income tax collected from private persona from
1941 onwards is due for repayment aftor the war; up to the end of 1.943 the
amount repayable totals £305 nillions. Private persons and businesses have
also had to pay contributions under Unemployment and Health Insurance schemes
and contributions and preniums to contributory insurance schemes under the
War Damage Act.
Disposal of private income
TABLE 33
£ millions
Plus
Minus
Calendar
Private incomo
Transfer
Direct taxation and
Private
years
of persons and
payments (1)
contributions paid to
income after
businesses
direct taxation
before tax
and compulsory
(excluding
Central
Extra
contributions
transfer
Government
budgetary
payments)
funds (2)
1938
4,560
478
494
55
4,489
1939
4,927
475
544
55
4,803
1940
5,896
479
729
60
5,586
1941
6,817
509
1,088
142
6,096
1942
7,500
559
1,383
137
6,539
1943
8,075
628
1,781
124
6,798
(1) The transfer payments are pension payments, payments in respect of
unemployment and the relief of poverty, health and other transfer
payments including interest on the national debt and accrued
interest on national savings cortificates.
(2) War Damage Aot contributions and preniums and payments to the
Unemployment and National Health Insurance Funds, otc.
85.
Even after paying increased taxation, private persons and businesses
still had more income available to spend or to save than they had bofore the
war. As already seen from Table 25 in Section IV of this Paper, since 1938
they have bought a smaller quantity, of goods and services, but they have had
to spend a largor sum to obtain them, because of increases in indiroct taxos
and higher prices. Nevertheless, their savings have risen during the war
-46-
Regraded Unclassified
and in 1943 wore fivo tinos what they were in 1938.
Private expondituro and savings
TABLE 34
£ millions
Calonder
Personal
Privato savings
Privato inoono
years
oxpondituro on
including
aftor diroot
curront goods
allowanoo for
taxation
and servicos
accrued taxation
1938
4,138
351
4,489
1939
4,244
559
4,803
1940
4,376
1,210
5,586
1941
4,624
1,472
6,096
1942
4,925
1,614
6,539
1943
5,049
1,749
6,798
86. Indircot taxes. Tho Government have imposodenew and higher rates of
tax on many articlos of consumption which private persons could still buy
during the war. The rate of duty on a pint of boor was 24d. in 1938 and 72d.
in 1943, and thoro have been proportionato increasos in the tax on whiskey
and other spirits. The tax on a packet of twenty cigarettes which sold for
la.ld. before the war, was 52d. in 1938. In 1943 tho duty was 1s.9d. and
the rotail price 2s.4d. Sinco the war a purchase tax has been imposed on
the wholesale value of all "non-utility" goods varying from 16.2/3 per cont
on certain articles of an essential naturo to 100 per cent on luxury
articles, the basic rate boing 33.1/3 per cont.
87. Thoso indirect taxes which are specifically imposed by tho Central
Government on the consumption of privato persons rose from £290 millions in
1938 to £915 millions in 1943, while total indiroot taxation duposo by the
Contral Government rose from £371 millions to £1026 millions. The tax paid
on boor and tobacco was moro than £600 millions in 1943 - not far short of
tho total rovenue from all sources collected by the Central Government in a
single your before the war. Local rates collected by Looal Government
Authorities increased from 2149 nillions in 1938 to £158 millions in 1943.
Regraded-Unclassified
16
Indiroot
and
Rates
collect
TABLE 35
Calondar
Indirect taxes collacted by
Local rates
years
Central Government
collected by
toxpe.end
Local
Local Rates
Authorities
on personal
Other
consumption
1938
290
81
149
520
1939
331
84
158
1940
427
78
161
666
1941
621
86
156
863
1942
783
102
156
may
941
1943
915
111
158
1,184
88.
While, however, the Government has increased the taxes on luxury and
less essential articles, it has, at the same tino, adopted the policy of
making subsidies to keep down the level of prices of food and other essential
goods. The amount expended in subsidies for this purpose was £190 millions
in 1943.
89.
These receipts from indireot taxes nake up the total of the sources
from which the Central Government has oc}leoted rovenue during tho war.
Sources of Central Government revenue
TABLE 36
£ million
Calendar
Incone from
Direct
Indirect taxation
Total
years
public property,
taxation
revenue
trading, eto.
On personal
other
consumption
1938
18
494
290
81
883
1939
16
544
331
84
975
1940
24
729
427
78
1,258
1941
41
1,088
621
86
1,836
1942
76
1,383
783
102
2,344
1943
69
1,781
915
111
2,876
Regraded-Unciassified
of Government borrowings
D.Asit has already been seen from Table 34 the amount of savings of private
persons and businesses has increased from £351 millions in 1938 to £1,749
millions in 1943. It is mainly from this source that the Government has
been able to borrow during the war. Private persons, in spite of hoavy
taxation have saved much more than they did before the war, both absolutely
and relatively to the size of their incomes. Businesses and public bodies
have Also saved moro, mainly by foregoing renowals and repairs and by not
undertaking new capital investment during the war, and diverting the allownnces
neemally put aside for those purposes into Government loans.
n.
Further additional amounts of money have become available by (a)
borrowing the balances on various public funds, such as those of logal
authorities and of extra-budgetary funds; (b) (disinvestment abroad) the
proceeds of the sales of assets overseas and by borrowing storling accumulated
alroady dri London by Empire and foreign countries; (o) (disinvestment at
nome) the net proceeds from the depletion of capital resources in this
country.
Sources of Government borrowings
£ millions
Calcular
Private
Public savings
Not disinvest-
Net disinvest-
Total
savings
(surpluses of
ment at home
ment abroad
Central
local authori-
Government
tios, extra-
borrowings
budgetary funds
and War Claims)
2938
351
29
(- 305) (1)
55
130
1939
559
72
(- 362)
(1)
230
499
1,210
225
(- 119)
(1)
756
2,082
1,472
439
82
797
2,790
1942
1,614
377
140
635
2,766
1,749
327
175
655
2,906
(A)
these years the figures represent private net investment at home
4ml
the
increase in work in progress on Government account held
under
privato finance.
-49-
Regraded Unclassified
92. In order to consorvo thoso resources for essential purposes connocted
with the war and to onable essential loans to be raised as choaply as
possible, capital issues have been controlled. At tho samo time, it has boon
the policy of the Government that banks should not mako advances for the
purposo of cnabling their customers to tako up war loans.
93. Tho following tablo shows that in 1943, among tho various sources of
borrowing, small savings provided just under a quarter of all the amounts
which the Government needed to borrow and public subscriptions to war loans
just over a third.
Government borrowing
(1)
TABLE 38
£ millions
Calendar
Small
War
Floating
Tax
Extra-
Miscell-
Total
years
savings
loans
dobt
Reserve
budgetary
aneous
borrowings
and
(2)
certifi-
funds,
(4)
other
oates
eto.
publio
(3)
issuos
(2)
1938
4.
53
-
179
-
254
-
2
130
1939
62
-
11
280
-
194
-
26
499
1940
466
553
517
-
554
-
8
2,082
1941
602
1,020
903
17
153
95
2,790
1942
600
1,037
478
453
38
162
2,766
1943
719
1,050
1,017
177
(- 62)
5
2,906
(1) The term "borrowings" covers the borrowing of sums to meet Budgetary
deficits, maturing debt, sinking funds and other miscellaneous
licbilities.
(2) Excluding debt hold by Government departments for oxtra-budgotary
funds, etc.
(3) Increase in Government securities held by extra-budgetory funds including
the Exchange Equalisation Account, certain receipts in respoct of war
risks insurance and the War Damage Aot and reduction in the Exchequer
balance.
(4) Including Reconstruction Finance Corporation loan and Canadian Government
interest-free loan,
94.
Although the Government has in this way been able to raise the money
needed for the prosecution of tho war by taxation and by borrowing, the con-
sequencos on the economic structure of the country are far-reaching.
(1) Depreciation of Capital resources. Since the savings of private
persons and businossos have been lant during the war to the Government
they have not beon spont in kooping in repair and up-to-date houses,
-50-
Regraded Unclassified
factories and 'industrial equipment, or in installity
equipment, except in до far an this bas been necessary
for
tion of the war.
(2) War Damage. Apart from tempora.ry repairs, no attempt.
Says
to repair war damage suffered by bombing in the United Kin
so far as this has been urgently necessary to keep going
duotion and communications and to maintain the United Kingdo
operational base.
Insert details of war damage
7
(3) Increase of overseas liabilities. Notwithstanding the generous
received from the United States and Canada, overseas assets to the
of £1065 millions have been sold and the United Kingdom has incurre
liabilities abroad amounting to over £2300 millions during the war.
There
do not inolude losses of overseas assets abroad in Empire countries which
have been destroyed or damaged to deny their use to the enemy. The loss
of these overseas assets has deprived this country of a source of indice
which has, in the past, contributed an essential part of the foreign
exchange needed to pay for imports.
Sales of overseas assets and increase in overseas liabilities.
TABLE 39
£ millions
Net sale of
Increase in
overseas assets
overseas
liabilities
Sept.1939 - Doo.1941
955
765
Jan.1942 - June 1944
110
1,535
TOTAL
1,065
2,300
Central Statistical Office,
Offices of the War Cabinet,
Church House,
Great Smith Street, S.T.1.
-51-*
2ND OCTOBER, 1944-
Regraded Unclassified
165
wmca
INCORPORATED
America's Leading Independent Station
wmca BUILDING, 1657 BROADWAY, NEW YORK CITY CIRCLE 0-2200
NATHAN STRAUS
PRESIDENT
October 30, 1944
Dear Henry:
Your letter expressing appreciation
of the handling of your broadcast gives me a
great deal of pleasure. So far as I am person-
ally concerned, I think you know that I mean it
when I say that any opportunity of being of
some small service to you gives me more satis-
faction than it possibly can give you.
However, for the staff, your letter
will be a big morale-builder. I am having it
posted on the bulletin board where all can read
it.
With every good wish,
As ever,
Hon. Henry Morgenthau, Jr.
2434 Belmont Road
Washington, D. C.
Regraded Unclassified
166
October 28, 1944
Dear Nathan:
I want to thank you for having made
it possible for my talk last night to have
been carried over WMCA.
Please extend to your organization
my appreciation of the excellent manner
in which they handled my broadcast. I
think you have every reason to be proud
of the personnel of WMCA.
Sincerely yours,
(Signed) Henry
Mr. Nathan Straus,
WMCA,
1657 Broadway,
New York 19, New York.
Regraded Unclassified
Draft 167
OF HUMAN RIGHTS
Per Hiji 10/30/94-
I am sure that you will forgive me if I do not discuss
with you tonight the subject of business. As business men
you already know that under the Roosevelt Administration
American business has been enabled to rise from the depths
of a terrible depression. And the President has spoken to
you plainly, fully and unequivocally of his determination
to assure the future of business in this great country
ours.
I prefer to speak tonight of something much less
obvious - but of equal importance to the future well-being
of every American. I want to speak of Franklin D. Roosevelt
- the friend of all Americans regardless of their race,
color or creed, of all Americans whether their ancestors
reached these shores in 1620 or in more recent times. And
I want to speak not as Secretary of the Treasury of the United
States, but as an American whose father was an immigrant and
as an American of the Jewish faith.
The human rights of man and the economic rights of man
go hand in hand. It is essential that they both be realities
and not mere theories if every American is to enjoy our
national heritage. It is of these human rights that I am
going to speak tonight.
I have known Franklin D. Roosevelt, the man, for many,
many years. I also have worked with Franklin D. Roosevelt,
Governor and President, for many, many years. During all
Regraded Unclassified
168
- 2 -
these years he has always stood out in my mind, first and
foremost, as the true friend of his fellow man. I know for
what it is, the great heart of this man and of his determina-
tion at all times to see to it that the downtrodden in America
are accorded their full opportunity to share in our heritage.
I would be less than frank with you if I did not tell
you that I am not as confident that the present leaders of
the Republican party have this same determination to see to
it that every man who walks on this land of ours walks with
dignity.
In this political campaign, those seeking a change in
the administration of the Federal Government rely heavily
upon appeals to segments of the American population who
because of their relatively recent arrival here, or for
other reasons, are specifically distinguishable from the
mass of the population. This election year interest of
the Republican leaders in the Poles, Czechs, Italians,
Yugoslavs, and the Greeks and others who have & justifiable
pride in the language, culture and traditions of the countries
of their origin is familiar to all of us. And we are also
acquainted - in fact only too well acquainted - with the
concern of the Republicans every fourth year in the problems
of the Negro and other groups which unfortunately still
suffer economic and social disabilities.
To some people this trafficking in human values this
perversion of human rights has become an accepted part of
a
political campaign and, 8.5 such, I suppose they have become
Regraded Unclassified
callous to its implications. To me, however, these human
rights, these human values, are far too dear to be made the
chattels of a political campaign. To me this election year
exploitation of the hopes and problems of the downtrodden
adds only to their suffering and despair. These tactics
tend to obscure the important fact that regardless of our
origin, our color and our religion we are all Americans. We
must decide the great issue before us as Americans and not
as members of any particular group.
Never let us forget that as a nation we are very
young - only one hundred and sixty some years old - and
that every one of us living here today in this great land,
save the Indians, came here as immigrants or as the sons
of immigrants; came from other lands to build what has
become the greatest and finest nation on earth. We are a
nation fused from the people of every conceivable country,
every known race, and representing every religion. All of
us have been thrown into the great melting pot of freedom
and all of us have emerged Americans.
There is & saying that is chiselled in marble on a
statue - a statue that truly symbolizes the real essence
of our America of yesterday and today. - the Statue of Liberty.
It reads as follows:
"Give me your tired, your poor, your huddled
masses yearning to breathe free - the wretched
teaming shore) Send thesey the
to not $ Leap
folden
door."
Regraded Unclassified
170
- 4 -
These words cover me as they do Franklin D. Roosevelt,
as they do everyone here tonight or within the range of my
voice.
To the shores of America from its very inception have
flocked fugitives from injustice, oppression and persecuțion.
On the whole they have found here the new way of life which
they sought. But, unfortunately, in the eyes of some - who
strangely enough are themselves fugitives from injustice,
oppression and persecution, or their descendants. in their
eyes there are certain minority groups amongst us who are
not entitled to all the privileges of America.
And it is not only the minority groups who are discrim-
inated against who suffer from such intolerance. The American
way of life is cheapened by the existence of this form of
persecution and when the American way of life is cheapened,
every American whether he be of the minority or not loses by
it.
The issuance of proclamations, the making of pious
statements, attending meetings sponsored by minority groups,
and the making of pretty speeches will never cure the evil.
It takes deeds and not words to make this a land where all
persons regardless of race, color, creed or place of birth
may live in peace, honor and dignity, free from want and
free from fear.
Regraded Unclassified
171
- 5 -
And all America knows that the record of President
Roosevelt on this fundamental issue is written in deeds and
not merely in words. For the first time in American history
the Roosevelt Administration required Government agencies
such as the Public Works Agency, United States Housing
Authority and others to see to it that their contracts
provided against discrimination in employment because of
race or color. The President's famous executive order
establishing the Fair Employment Practice Committee has
been backed by action.
0
Today a million and a half Negroes are in jobs in
war plants, many at lathes and benches where before no
Negroes were allowed to work and they are receiving equal
pay.
In the Philadelphia transit strike in August of this
year, the President did not hesitate to implement the non-
discriminatory orders of the Fair Employment Practice Committee
and the War Manpower Commission. The President, through the
National Labor Relations Board and the War Labor Board, long
ago established the principle for equal pay for equal work
regardless of race, color or creed.
Under the Farm Credit Administration, the Farm Security
Administration and other agricultural agencies tens of thousands
of Negro share-croppers were helped to become farm owners.
Negre-owned businesses have recovered from the days of
depression and are flourishing. Great housing projects
Regraded Unclassified
172
- 6 -
have removed more than 75,000 Negro families from the
slums and into decent homes. The Home Owners Loan
Corporation and the Federal Housing Administration helped
tens of thousands of Negroes to buy their own homes. Negroes
have been given better medical attention and the real opportun-
ity for a good education. This is what I mean by deeds.
This, not words, is what America needs.
Persons of Jewish and Catholic faith, and those whose
ancestors were Poles, Czechs, Germans, Italians and Greeks
have all been given equal opportunities for Government work
and to the extent that it has been within the power of the
Federal Government they have been given equal opportunities
for private work. Persons of every race, color and creed
are in all branches of the Army, including the Air Force
- and they hold every rank from private to general. There
are Negroes in the Navy and I mean fighting men - not merely
mess boys. There are Negro Marines. And for the first
time in our history there is a Negro General.
Now let us examine the record of Governor Dewey on this
issue. On some issues Governor Dewey does not have any
positive record of affirmative misdeeds. It is rather a
record of doing nothing together with a lot of pretty
speeches filled with "me too"s. On this particular issue,
however, Governor Dewey was not cautious enough. He stepped
ant into the sunlight. I will let you judge for yourself
what he really looks like.
Regraded Unclassified
173
- 7 -
On March 29, 1941, Governor Lehman appointed 8. Committee
on Discrimination in Employment, as part of the New York State
Council on Defense. This Committee consisted of twenty-seven
distinguished citizens representing industry, labor, church,
and minority groups. Thereafter the New York Committee
undertook an extensive program to eliminate discriminatory
employment practices in New York. It circularized employers,
visited plants throughout the State, published pamphlets,
conducted hearings, prosecuted some cases in the courts, and
began in earnest to enforce the New York policy against racial
or religious discrimination in employment.
On January 1, 1943, Governor Dewey assumed office. He
at once displayed indifference if not active hostility to the
New York Committee on Discrimination. In May 1943, represent-
atives of the City Wide Citizens Committee of Harlem, composed
of twenty civic organizations interested in racial problems
met with Governor Dewey and urged him to support an adequate
budget for the New York Committee. The budget for the fiscal
year ending June 30, 1943 was then $58,000. Governor Dewey
told these representatives that this small sum spent by the
New York Committee "might just as well have been thrown down
the drain" and that a budget of $10,000 for the next fiscal
year would be ample.
On August 4, 1943, Governor Dewey appointed a new
Committee on Discrimination consisting of twenty-seven
members and placed it under the supervision of his Industrial
Regraded Unclassified
174
- 8
Commissioner. At its first meeting in September 1943, the
Committee decided to draft and seek the enactment of permanent
legislation. On February 23, 1944 the Committee met, approved
the draft of two bills and sent them on to Governor Dewey
urging him to recommend their passage to the New York State
legislature then in session.
On March 8, 1944, the two bills were introduced in the
State Senate without the benefit of even the customary message
from the Governor declaring whether he was for or against
their passage. As day after day passed, the New York Committee
anxiously awaited some public word from Governor Dewey, but
none was forthcoming.
Finally, after public protest, Governor Dewey on March 17,
1944, the day before the legislative session ended, sent a
message to the legislature concerning these bills. The Governor
described them as "well intended" and said that he was "in
accord" with the principles expressed. One would naturally
expect that these remarks would be followed by "I, therefore,
urge the adoption of these two bills to end discrimination
in the great State of New York." But that was not what Dewey
said. What he did say was, and I quote, "I, therefore,
recommend to you honorable bodies the creation of a temporary
state commission to make a study of the entire subject of
discrimination in our state # # 4." It seems incredible,
Regraded Unclassified
175
- 9 -
but this new commission was to be given precisely the
same mandate and functions as the commission which Dewey
himself had created almost twelve months before, which
had finished its task and whose recommendations he had
approved "in principle." In other words, the Governor,
although approving the recommendations of his own committee,
refused to follow them. Instead he abandoned the committee,
its investigation and its bills and called for a new committee,
more investigation and more bills. At first blush there
would seem to be no rational explanation of this
bureaucratic and wasteful duplication of work. But the
answer is simple when we note that the new commission was
asked to report in 1945, after the election.
This maneuver deceived no one. Dewey's scuttling
of the bills drawn by his own Committee after months of
study was roundly denounced by almost every Negro
organization in the State. And eight members of the
Committee resigned in protest of the Governor's action.
I can think of nor more effective commentary on the
Governor's action on this vital question than the burning
statements made by Dr. Channing Tobias, Senior Secretary
of the YMCA, and life-long Republican, upon his resignation
from the Committee. Dr. Tobias said that he had decided to
part company with the man, and I am quoting, "who would play
politics with the bread and butter of the least economically
advantaged people in his state." Dewey, Tobias said, "was
Regraded Unclassified
176
- 10 -
willing to be governed by the counsels of caution as to race
prejudice" in order to obtain the nomination and added "we
cannot trust a man who has shown what he would do in such a
pinch."
John W. Bricker, the Republican Vice Presidential
candidate, has also let the cat out of the bag on this issue.
He has at the same time made clear what Republican candidates
and orators really have in mind when they joyfully repeat that
phrase of their own fabrication "Clear Everything With Sidney."
In a speech in Denver, Colorado, on October 23, Bricker
made & scurrilous attack upon President Roosevelt's humanitarian
action in bringing to an Emergency Refugee Shelter in this
country for the duration of the war 1000 homeless and helpless
men, women and children, all survivors of Nazi brutality and
terror. Bricker concluded his vicious diatribe against these
innocent sufferers with the following words: "I am not saying
that this group was 'cleared with Sidney.' I do not know."
Now why did Bricker see fit to use this phrase
deliberately in such a context? The answer is clear and
it has such ominous implications that it must be understood
by all. These poor and friendly people to whom for 8.
temporary period we are giving no greater comfort or privileges
than we give to Nazi prisoners of war are of many nationalities.
Included, among others, are Poles, Czechs, Yugoslavs, Greeks
and Austrians. Although most are of the Jewish faith, there
are Catholics and Protestants in the group. But, and this is
important, if we are to understand John Bricker's words, they
Regraded Unclassified
177
- 11 -
are all "foreigners." And John Bricker, at least, feels
it necessary to assure the lunatic fringe of the isolationist
group that he will not condemn or restrain their intense
hatred of other Americans whose parents, grandparents or
great grandparents were born in Italy, Poland, Greece or
some other part of Europe.
This, then, is the meaning of "Clear Everything With
Sidney." It is the symbol of the fatal doctrine that there
are some American citizens who have lesser privileges than
others because their ancestors arrived here later than 1620.
Remember this when you next hear a Republican orator gleefully
read the phrase. It 18 not merely an appeal for the votes of
those who hate Jews or Catholics or Italians or Greeks or
Poles. It is an attack upon the basic principle upon which
this nation was founded and has endured.
This fundamental issue of human rights goes even deeper
than I feel I have expressed tonight. Every society has its
underdogs from time to time, for various reasons. Basically
the issue is whether or not those who may become underdogs
atany particular time in the life of this great country shall
be lifted up by the great force of our way of life. And this
does not apply only to those who, because they are in the
minority, are discriminated against on account of race, color,
creed, or place of birth. I believe that the thought I am
trying to convey is best expressed in a letter from & GI Joe
published on October 25 in the Washington Post. This GI Joe
writes as follows:
Regraded Unclassified
178
-12-
"I an not sure in my heart that Thomas Dewey is
for me. Who am I? Just a little guy with no angles,
political or economic. My being in uniform does not
matter in this discussion. My being a citizen does
matter. I have a very clear remembrance of 1928 and
1929 and 1930. And all this gives me no peace when
I contemplate Thomas Dewey.
"I'll grant you that President Roosevelt makes
mistakes, but he has convinced me that he is for me.
I don't mean that I believe that he will pass me
favors out of proportion to my status in the economic
system.
"I do mean that I have come to believe that he
won't let me have my little share of America submitted
to the kind of well-organized shaving with which I
believe Thomas Dewey to be associated."
Regraded Unclassified
179
Prepared by: Mr. Daggit
Mr. Chevraux
Reviewed by: Mr. Murphy
Mise Michener
180
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
CONFIDENTIAL
DATEOCT. 30, 1944
TO
Secretary Morgenthau
FROM
Mr. Murphy Nem
Subject:
The Business Situation,
Week ending October 28, 1944.
Summary
Stock market: Stock prices declined rather sharply at the
beginning of last week but firmed moderately near the end
of the period. In addition to bearish implications in the
persistent failure of stock prices to move above recent
highs, some financial commentators mention new uncertainties
over reconversion problems posed by the possibility that the
war with Japan may be shortened by the smashing naval
victory in the Philippines.
Industrial production: The FRB adjusted index of industrial
production in September declined to 231 from 232 in the
previous month. The slight decline was due largely to a
further moderate decrease in durable goods output, although
output of the aircraft and automobile industries was
maintained at the previous month's levels.
Reconversion: The value of production authorized up to
October 24 under the spot authorization program for
civilian goods production amounts to $203,000,000, of which
$57,000,000 is scheduled for production in the current
quarter. However, less than 15,000 employees will be
engaged during this quarter in the production of the
items authorized. Recent indications point toward some
modification of earlier emphasis on reconversion projects,
due to continuing heavy demand for war goods.
Commodity prices: Price movements have been of an indecisive
nature in recent weeks, with commodity price indexes showing
little net change. Last week the Dow-Jones futures index
and the BLS spot index of 28 basic commodities declined
very slightly.
Food goals: The WFA has decided that a continued high level
of food production is needed in 1945. While surpluses of
some farm commodities are likely to occur when hostilities
cease in Europe, it is considered better to produce too
much food rather than not enough.
Regraded Unclassified
181
- 2 -
Stock prices decline moderately
Persistent failure of industrial stock prices to move
above recent highs, together with the uncertainties generated
by recent political and war developments, caused stock prices
to decline rather sharply on increased trading volume at the
beginning of last week. After the initial decline was checked,
the market later in the week showed further weakness, which
some financial commentators attributed in part to the feeling
that the smashing naval victory in the Philippines may have
considerably shortened the war in the Far East. However
premature, some concern was evidenced over the fact that
reconversion problems would be considerably intensified if
the war in Europe and in the Far East should end at
approximately the same time.
Prices firmed slightly near the end of the week but at
the close on Saturday industrial, railroad and utility stock
averages were between 1 and 2 percent below week-earlier
levels. (See Chart 1.) Meanwhile industrial stock prices
in London, after fluctuating in A very narrow range since
the beginning of the month, moved gradually higher last week.
Industrial output declined very slightly in September
Although Allied gains in Europe created much uncertainty
over possible cut-backs in war production in September, actual
output showed very little decline. The FRB seasonally-adjusted
index of industrial production for the month stood at 231 as
compared with 232 in August and 247 at the war-time peak last
fall.
The slight decline in production in September was
principally due to a further moderate decrease in durable
goods production, although output of the aircraft industry and
of the automobile industry (now diverted to war goods) was
maintained at the previous month's levels. Steel production
showed a moderate decline, while further large declines occurred
in the production of aluminum and magnesium. Aggregate output
of nondurable goods in September showed little change, despite
noticeable gains in the production of shoes and textiles.
Despite the slight decline last month, actual factory
output was still somewhat above the July level when production
was adversely affected by the Independence Day holiday. More-
over, reference to Chart 2 will disclose that output was well
maintained in the face of a 1.3 percent decrease in factory
employment, apparently reflecting greater productivity arising
from increasing experience in war production.
Regraded Unclassifie
182
- 3 -
Although industrial output on the whole appears to have
been well maintained in October, some evidence of slackening
activity is seen in the failure of electric power production
to show the usual seasonal expansion thus far this fall.
Contrary to the usual pattern, electric power production
has shown a fairly steady decline since August, and in the
week ended October 21 was actually about 2 percent under
the previous year's level. The wide gains in electric
power production over year-earlier levels prevailing last
January have gradually narrowed as the year progressed.
(See Chart 3.) A contributing factor in this trend has been
the heavy out-backs in aluminum production--a process in
which electric power consumption is notably heavy.
Freight car supply situation very tight
Freight carloadings in September rose to a new high for
the year but the rise was less than seasonal. Moreover,
estimated ton-miles of freight hauled dropped to the lowest
point since last April and wa.s about 2.5 percent under last
year's level. (See Chart 4.) Despite a slight gain in the
week ended October 21, average loadings in the first three
weeks of October were about 2 percent under the corresponding
period last year.
Failure of carloadings to attain higher levels this fall
has been partly due to a shortage of cars. Earlier this
month an official of the Association of American Railroads
described the car situation as tighter than it has been in
many years, but he expressed the opinion that the situation
would not continue indefinitely or grow worse. The shortage
of box cars has been particularly acute. Demand has been
very heavy as a result of military needs and bumper farm
crops, while the number of box cars is reported to be
10,000 less than a year ago. Among others, grain shippers
in the Northwest and Southwest have been hampered by the
shortage of box cars, while fruit growers in the state of
Washington have been confronted with an acute shortage of
refrigerator cars.
Progress of interim reconversion program
During the week ended October 24, 447 additional
applications to produce civilian goods under the spot
authorization program were submitted to the WPB, and 338
were approved. As a result, total authorizations since
the plan became effective in mid-August were increased to
1,278.
Regraded Unclassified
183
- 4 -
The dollar value of production thus far authorized
under the program amounts to $203,000,000 of which
$57,000,000 is scheduled for the fourth quarter of 1944.
Aggregate employment of plants receiving approvals
approximates 91,000, but less than 15,000 employees will
be engaged in the current quarter in the production of
items authorized.
From the foregoing figures it will be seen that
despite somewhat increased optimism recently over the
progress of the interim reconversion program, employment
and production under this program are still relatively
insignificant. Furthermore, recent press surveys of
producers holding authorizations have revealed considerable
dissatisfaction over materials shortages and price ceilings.
In some instances these difficulties have been so formidable
that no actual production is yet under way.
Continuing war needs slow
reconversion activities
Moreover, continued urgent demand for certain war goods
arising from stiff German resistance in Europe and the Pacific
campaign has tended to temper earlier reconversion enthusiasm.
Thus Maury Maverick, head of the Smaller War Plants Corporation,
upon his return from England recently urged less talk of
reconversion and more concentration on the war, which he
predicted will go on in Europe much longer than most people
here believe.
Early last week it was reported that the WPB had
directed committees considering applications for civilian
goods production to screen requests more rigorously in order
to avoid retarding war production. Likewise the WPB held up a
contemplated order to relax controls on farm machinery
production just before it was to become effective. Finally,
it became known near the end of the week that the War and
Navy Departments had requested the General Electric Company
to cancel scheduled conferences with public utility executives
on post-war planning. The action was taken apparently to avoid
giving any impression that less war production is needed, as
the company was advised that urgent appeals for war supplies
on an increased scale are being received from commanders of
the fighting forces overseas.
Cutbacks in war contracts below expectations
Despite concern over the adverse effects of out-backs
in war contracts, employment dislocations and production
Regraded Unclassified
184
- 5 -
losses thus far have been considerably less than many
observers had expected. The WPB recently indicated that
only 85,000 employees of prime contractors had been dis-
placed by cut-backs since June 15, 1944. The figure would
be considerably larger, of course, if subcontractors
were included. Nevertheless, it is claimed that only a
very small number of cut-backs have had serious repercussions
on employment in the cities involved. In some instances cut-
backs have been over-emphasized, since in reality they were
merely cancellation of future increases or cutting down goals
to levels that could be met.
Cotton textile and leather controls
needed after V-E Day
Cotton textile and leather controls will be continued
after Germany is defeated, WPB Chairman J. A. Krug announced
last week. With these items expected to continue in tight
supply, the filling of consumer needs for essential clothing
and shoes, it was indicated, must be ensured by the use
of WPB's directive powers and allocation controls, even
though controls in most other fields are abolished.
Production of cotton textiles has been declining steadily
since 1942, largely because of manpower shortages. It is
estimated that cotton textile production this year will total
only 9,900 million yards, as compared with 10,700 million in
1943 and 11,200 million in 1942. Military requirements have
been extremely heavy, with allocations for military use in
the fourth quarter of this year amounting to over one-fourth
of the total allocations. Fourth quarter allocations to the
OCR, the claimant agency for civilian needs, came to less than
one-half of the total allocations, and it is estimated that
current supplies for OCR's use are only 70 percent of the
amount available in 1939. While the end of the war in Europe
should alleviate the tight supply situation, military demands
for the Japanese war, together with war relief and export
requirements, will continue to take considerable quantities
of cotton goods.
Civilian inventories of shoes are expected to show
further depletion this year, due to 8. shortage of hides and
skins and to heavy military requirements. While military
requirements are expected to be reduced following Germany's
defeat, world leather supplies available for import have
decreased to the point where some time will be required before
they will be sufficient to meet world demands.
Regraded Unclassified
185
- 6 -
Commodity prices show little net change
Indeterminate price movements have characterized commodity
markets in recent weeks. Last week the Dow-Jones futures index
and the BLS spot index of 28 basic commodities showed very slight
declines, following slight gains in the previous week. (See
Chart 5.) Corn prices dropped below ceilings for the first
time in almost 9 months as shipments of this year's crop began
to be felt in the markets. Prices of cotton and wheat were off
slightly, but steer prices made a small advance.
The BLS general index of wholesale prices in the week
ended October 21 was unchanged from the preceding week. A
decline of nearly 6 percent in scrap steel prices was the
most important development noted in the latest week. The
index now stands at 103.8 percent of the 1926 average, which
is 0.9 percent higher than a year ago and is 38.4 percent above
the pre-war August 1939 average.
Need for continued high level of food
production indicated
A careful appraisal of food requirements indicates the
definite need for B. continued high level of agricultural
production in 1945, President J. B. Hutson of the CCC declared
last week at a meeting of the Association of Land Grant.
Colleges and Universities. From this statement it can be
inferred that the WFA, after some delay, has arrived at a
definite decision on food goals for 1945. Recent fears of
substantial food surpluses when Germany is defeated appears
to have been at least partially dispelled as the result of
the prolonged resistance in Europe.
Mr. Hutson stated that the end of hostilities in Europe
will reduce the demand for certain agricultural commodities,
but total demand next year will be sustained by food require-
ments for our fighting forces in the Pacific and elsewhere,
together with commercial export and domestic demands. He
indicated that it would be far better to produce too much
next year than too little. There has been a substantial
increase in the domestic consumption of agricultural products
both before and during the war, and it has been estimated that
food consumption this year would have been 5 to 10 percent
higher if the demand for all products had been fully met.
Farm production 33 percent above pre-war average
The volume of farm production has made new records each
year since we entered the war, with 1942 and 1943 production
24 and 29 percent, respectively, above the 1935-39 average.
Regraded Unclassified
186
- 7 -
Production this year is expected to rise to 33 percent above
pre-war levels. Among the factors responsible for the increased
production have been: (1) a shift to more intensive crops;
(2) better farming practices, including the use of more
fertilizer and higher yielding varieties; (3) the cumulative
effect of the use of legumes and other conservation measures
in recentyears; and (4) unusually favorable weather.
Weather conditions have accounted for from one-third to
one-half of the increase in crop production. If growing
conditions were only average next year, the same total acreage
could reasonably be expected to result in a volume of crop
production about 10 percent less than this year. The high
levels of livestock production in recent years have been
possible only by the reduction of reserve grain supplies and
to a smaller extent by the importation of grains.
WFA requests switch from sugar to grain in alcohol
production
The WFA has requested the WPB to order industrial alcohol
distillers in the East to switch from the use of invert molasses
to grain, according to press reports. The apparent reason for
the request is the improved outlook for grain supplies, in
contrast to the relative tightness expected in sugar supplies.
Bumper crops of wheat and corn appear fairly certain this year
while grain consumption by livestock in the coming months is
likely to be somewhat lower than a year earlier. On the other
hand, the heavy demands for sugar from liberated areas in
Europe may result in a continued tightness in sugar supplies.
Industrial alcohol distillers oppose the change on the
grounds that it will increase costs and decrease output, and
that sugar supplies will be fully large enough next year to
meet all prospective demands. While it is acknowledged that
sugar supplies at present are particularly tight, this condition
is thought to be only temporary, caused by manpower shortages
at the refineries and the heavy canning demands of this
summer and fall.
Sugar supplies are expected to improve now that the heavy
canning demands are over and the beet crop is being harvested
and refined. Moreover, detailed trade estimates have been
presented, indicating a carryover at the end of 1945 of
from 2, 750 thousand to 3,300 thousand short tons of sugar
or approximately 40 to 48 percent of the fiscal 1944 con-
sumption. (These estimates allow for substantial lend-lease
and relief shipments to Europe but apparently assume a
Regraded Unclassified
187
- 8 -
continuation of rationing in this country.) This year
800,000 tons of sugar were purchased from Cuba in the
form of invert molasses for use in alcohol production.
Department store stocks rise less than seasonally
Stimulated by seasonal influences and gift buying for
members of the armed forces overseas, department store sales
rose sharply in September although the rise was somewhat
less than seasonal. Inroads of heavy sales, goods shortages,
and slightly more cautious buying policies prevented
department store stocks from expanding as much as usual
during the month, and the FRB adjusted index of stocks
dropped 10 points to 160. Stocks at the end of September
stood at the same levels as a year earlier, on a dollar
basis. (See Chart 6.)
After showing wider gains in the first half of the
month, department store sales in the week ended October 21
declined and the gain over year-earlier levels narrowed to
8 percent. The slackening in sales followed the October 16
deadline on shipments of Christmas gifts to the armed
forces overseas.
Regraded Unclassified
Chart 1
188
STOCK PRICES, DOW-JONES AVERAGES
Daily
1944
JUNE
JULY
AUG.
SEPT.
OCT.
NOV.
DEG.
4
II
ID
as
=
.
IS
23
30
6
13
so
E7
3
ID
17
2
-
.
15
22
=
0
If
-
26
3
10
I7
24
DOLLARS
DOLLARS
155
155
30 Industrial Stocks
150
150
145
145
140
140
135
135
130
130
125
125
20 Railroads
44
44
42
42
40
40
38
38
36
36
28
28
15 Utilities
26
26
n/o
24
24
⑉⑉⑉⑇
22
22
20
20
SHARES
Volume of Trading
SHARES
Millions
Millions
2
2
I
I
o
0
4
II
-
:
E
9
IS
ES
so
6
is
20
E7
3
ID
17
24
-
.
a
##
29
5
#
-
26
3
ID
17
24
JUNE
JULY
AUG.
SEPT.
OCT
NOV
DEC
1944
Office of the Secretary of the Treasury
- . - - -
P-144-L-2
Regraded Unclassified
FACTORY EMPLOYMENT AND OUTPUT
1939 . 100, Unadjusted
PERCENT
PERCENT
240
240
220
220
200
200
Manufacturing Output, F.R.B.
180
180
160
160
140
140
Factory Employment, B.L.S.
120
120
100
100
80
80
J M M J S N J M M J S N J IMMJSNJMMJSNJMMJ S N J M M J S N
1939
1940
1941
1942
1943
1944
Chart 2
Office of the Secretary of the Treasury
Division of Research and Statistics
C-537
189
Regraded Unclassified
Chart 3190
ELECTRIC POWER PRODUCTION
KW. HRS.
KW. HRS.
Billions
Billions
4.8
4.8
4.6
4.6
4.4
4.4
1944
4.2
4.2
1943
4.0
4.0
3.8
3.8
3.6
3.6
1942
3.4
3.4
3.2
3.2
3.0
3.0
JAN.
MAR.
MAY
JULY
SEPT.
NOV.
Source: Edison Electric Institute and New York Times
Office of the Secretary of the Treasury
Division of Research and Statistics
C-544
Regraded Unclassified
WHOLESALE COMMODITY PRICES
1943
1944
PERCENT
PERCENT
WEEKLY
1926-100
106
106
105
105
104
104
889 Commodities. B.L.S.
103
103
102
102
28 Basic Commodities. B.L.S.
101
101
100
100
JUNE
AUG
OCT.
DEC
FEB.
APR.
JUNE
AUG.
OCT.
DEC.
1943
1944
SELECTED BASIC COMMODITIES
Percentage Change December 6, 1941 to Oct20 and Oct. 27. 1944
PERCENT
+100
Rosin 102.4%
192
+80
Barley 68.5%
Flazzeed 67.3%
+60
Cam 55.5%
Hoge 457%
+40
Wheel 41.3 %
Steers 337%
Lard 20.8%
Collon 232 %
Butter 18.8%
+20
(Print Cloth 10.3%
Cottonseed 048.7%
Super 7/%
Wool Topo 3.9%
o
Hides 0%
- Tallow -4./%
-20
Oct. 20.
Oct 27.
Dec.6.
1944
1944
1941
Office of the Secretary of the Treasury
P-202
of - and Statistics
Regraded U nclassified
DEPARTMENT STORE SALES AND STOCKS
Dollar Values, 1935-39=100, Adjusted
PERCENT
PERCENT
210
210
200
200
190
190
180
180
170
170
160
160
Sales
150
150
140
140
130
130
120
120
Stocks
110
110
100
100
90
90
80
80
1939
1940
1941
1942
1943
1944
1945
Source Federal Reserve Board
Office of the Secretary of the Treasury
C-430-8
- é - - -
Chart 6193
Regraded Unclassified
194
OCT 30 1944
Dear I á
I an in reseipt of your letter of Osteber 17, 1944 in
which you present some of the difficulties involved in convert-
ing British sterling securities into dollars. AS you know, at
the outbreak of war in 1939 the British Government enasted regula-
tions which were designed to conserve its foreign exchange. 13-
though from time to time the British have allowed certain excep-
tions and administrative relanations with respect to the transfer
of estates due American sitisens, they reserve the right to emamine
each individual application on its nerits and I an afraid I cannot
advise you as to the eriteria they may apply in particular efrour-
You de not specify the nature of the "repected efforts, here
and in Londen" you have made to convert the proceeds of the securities
into American funds but if you feel that your case has not been given
sufficient hearing you night consider presenting 18 in detail to the
Department of State for neh astion as that Department appro-
priate. The State Department's experience in handling applications
of this kind and its facilities through the American Enhasey in
Lenden for direct presentation of the facts to the appropriate
British authorities my prove helpful to your cause.
Ion inquired conserning the practice followed in the transfer
of the proceeds of American estates to the United Kingdom. Our
foreign exchange position bas been such that no have not been
obliged to restrict the conversion of dollar assets into sterling
exchange. is a result, this country has imposed no conditions en
the payment or transfer to England of the distributive shares due
British heire of American estates. It is possible that the American
prestice in this respect has had DORO inflacese en the British is
granting the edministrative concessions referred to above. I regret
to say, however, in reply to your last question that - have no
figures indicating the emounts transmitted to Ingland as the result
of English inhesitancess from estates in this country.
Sincerely yours,
(Signed) H. Morgenthau, Jr.
secretary of the Treasury.
Mr. Arthur itiesemberger,
Avthur Wesenberger & Company,
a
Ben Tosk by New Torks
10/26/44
Regraded Unclassified
195
Oct. 26, 1944
Mr. Bernstein and Mr. Casaday
Secretary Morgenthau
It seems to me that both of you have worked
long enough in the Treasury that you ought to know
by now that I don't ask any special favors for my
friends or relatives, and I take great exception
to this note, particularly the paragraph which
starts out "Leaving aside the question of how close
a friend this man is of the Secretary's
Since when are questions in the Treasury decided
or whether a man is or is not a friend of mine? It
may interest you to know that I have absolutely no
acquaintance with Mr. Wiesenberger, and he is in
no way related to me or my family.
May I repeat that both of you ought to know
enough by now that policy matters are not settled
in the Treasury on the basis of whether or not a
person is a friend or a relative of some one in
the Treasury, and it makes me very angry to receive
this kind of a note from you.
Please let me have a letter to Mr. Wiesenberger
based on the merits of the case.
Copy to Dr. White
Regraded Unclassified
196
TREASURY DEPARTMENT
WASHINGTON
October 26, 1944
Dear Mr. Secretary:
I beg you to accept my sincere apology for using
on an inter-office memorandum in relation to the letter
from Mr. Wiesenberger, the expression - "Leaving aside the
question of how close a friend this man is of the
Secretary's
I do, of course, realize that Treasury
policy is not determined on the basis of personal relation-
ship and can only explain my use of the phrase as due to
thoughtlessness.
I should like to add that neither Mr. Bernstein nor
others who received my draft are responsible for my use
of the offensive expression.
It remains true, however, that in drafting the letter
the question was disregarded and the draft I prepared is
based on the merits of the case as I see them.
Sincerely yours,
L. W. Tuxanaday Casaday.
FORVICTORY
BUY
UNITED
STATES
WAR
BONDS
AND
STAMPS
Regraded Unclassifi
ARTHUR WIESENbERgER & COMPANY
MEMBERS: NEW YORK STOCK EXCHANGE NEW YORK CURB EXCHANGE
61 BROADWAY NEWYORK6
TELEPHONE
WHITEHALL 3-7522
TELETYPE NY1-420
CABLES ARTWIES, NEW YORK
October 17th,
1944
Hon. Henry Morgenthau, Jr.,
Secretary of the Treasury
Washington, D. C.
Dear Mr. Morgenthau:-
We are interested in an
estate which has 8. substantial holding of British
1
securities, which we would like to liquidate and
convert into American funds. These securities are at
present, in London, and were there at the time of the
death of the owner, who was an American citizen. The
principal beneficiary of the estate is the son of the
deceased, an American citizen residing here at the
time of the death of his father.
Despite repeated efforts
here and in London, to convert the proceeds of the
estate into American funds, nothing has been possible
so far, except if we are willing to sell these securi-
ties at a substantial discount in the New York market.
The thought occurred to
me that there are probably numerous instances of
English heirs of American estates receiving the cash
proceeds of any assets which are left to them, at the
established rate of exchange between this country and
England. If that is so, I think it is unfair for
American heirs, particularly those who are inheriting
estates left by Americans in England, if they cannot
withdraw their funds at the standard rate of exchange.
You will probably recall
that prior to the declation of war with Germany,
American heirs were able to obtain the official rate
of exchange on any funds left to them in Germany,
because German heirs were able to obtain American funds
left to them on the same basis.
I would like to ask you
if any figures are available which show the amounts
transmitted to England since the beginning of the war,
as a result of English inheritances in this country.
I em asking for this information, for if there have been
such transfers, American heirs ought to be given the
same privilege.
Regraded Unclassified
Page - 2-
Hon. Henry Morgenthau, Jr.
October 17th,
1944
Had the pleasure of seeing
your father 8. number of times in recent months, and it
is remarkable to find him in such excellent health and
good spirits.
I have recently joined
the Mugwumps and hope our little efforts will prove
helpful.
Kindest regards.
Sincerely,
achen Universing
AW:EYW
Regraded Unclassified
199
October 30, 1944
Dear Ed:
This is to acknowledge receipt of your
letter of October 26th, with which you enclosed
a copy of questions and answers put to you at
the press conference on October 24th relative
to French Funds. Thank you very much for
sending me this information.
Sincerely yours,
H
(Signed) Henry
Honorable Edward R. Stettinius, Jr.,
Under Secretary of State,
Washington, D.C.
Regraded Unclassified
200
THE UNDER SECRETARY OF STATE
WASHINGTON
October 26, 1944
Dear Henry,
As agreed in our conversation at
luncheon today, you will find herewith the
questions and answers put to me at the
press conference on October 24th relative
to French funds.
Faithfully,
En
The Honorable
Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
201
Q. Sir, in connection with the recognition of the Provisional
Government of France, what are the steps now to be taken for
French funds in this country being unfrozen?
A. Mr. Shackford, that is a joint Treasury and State matter
which is under active study and review. There is nothing
I can say to you this morning that would be helpful to you
on that point. Perhaps later on, the Treasury and ourselves
will have something to say on the subject.
Q. Sir, in connection with that same question, do you happen
to have the figures, the approximate amount of funds involved?
A. I think it would be more appropriate to put that question to
the Treasury. It is chiefly a Treasury matter on that.
Q. I wanted to ask, whether we had received whether the State
Department had received any request from the French that their
funds should be unfrozen. Presumably
A. I don't know as a matter of fact, but I would assume that
French officials had been in communication with the Treasury
by this time, asking for an opportunity to discuss that ques-
tion. Of course, we have not had but 24 hours since the action
was taken. I can assure you, however, the whole question is
under active study. Whether it is taking place as a result
of their initiative or our own, I am not quite prepared to say.
Regraded Unclassified
202
25
OCT 30 1944
Dear Mr. Klein:
I wish to thank you for your letter of October 21,
1944, in which you informed me of your recent visit with
Mr. James We Gerard of New York. I was very interested
in Mr. Gerard's views on the German problem, and ap-
presiate your suggestion about Mr. Gerard which will be
carefully considered.
I an also grateful for your kindness in sending me
copies of articles which you published at various times
in the Kansas City Star. You may be sure that they have
been read by us with great interest.
Very truly yours,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury.
Mr. Ernest L., Klein,
3172 North Sheriden Road,
Chicage, Illinois.
ONsen 10-26-44
Regraded Unclassified
ERNEST L. KLEIN
CHICAGO
3172 North Sheridan Road
October 21, 1944
Personal
Dear Vr. Secretary:
I visited in New York recently with my good friend,
James W. Gerard, and we discussed Germany and her
post-war problems. Gerard seems to agree with you
on the subject and your views coincide with those
expressed in my articles on the subject of Germany.
I am enclosing some of my published items which I
trust will be of interest to you.
Gerard always told me about his gleat admiration
for your father and we often discussed that great
statesman. Gerard was the former Ambassador to
Germany, and the thought occurred to me that it
would be very helpful if he would be asked to make
a statement approving your views on Germany. The
anti-administration press has gone out of the way
to misconstrue your remarks about Germany. Gerard
could help to erase a wrong impression which 18 de-
liberately being planted into the minds of people
for some sinister purpose.
I have spent nearly thirty years in the study of
the German problem. I have written articles and
editorials about the menace of pan-Germanism and
Hitlerism many years ago and long before any real
attention was paid to the danger. I know Germany
and Europe. I am fully acquainted with the back-
ground of the German and other European peoples in
regard to historic, economic, cultural, political
and other implications.
Wendell Willkie agreed with my views. I have had
discussions with him and correspondence. Even our
former President, Herbert Hoover, wrote me that he
thought well of my articles, and he made some sug-
gestions to me. I can mention many other prominent
citizens who expressed themselves favorably when
making comments on my articles on Germany and her
post-war problems. I am rather disappointed that
none of these people made public statements in sup-
port of your views on the subject. Lord Vansittart,
who writes me frequently and who proposed & very
severe post-war plan for Germany, was not as much
attacked in the press 8.8 you. In view of that 1t
1s necessary to have some public enlightment. Our
friend, James W. Gerard may have the answers.
With every good wish and kindest personal regards,
I am
Email Very sincerely yours,
The Honorable Henry Morgenthau, Jr.
The Secretary of the Treasury,
Washington, D.C.
THE KANSAS CITY STAR, MONDAY. FEBRUARY 28. 1944.
THE KANSAS CITY STAR
An even greater danger lies in the so-called "Border
Germans," who were and are the main carriers of
German nationalism; their domestic and foreign
Founded Beptember, 1880, by
political Influence La completely Pan-Germanic.
WILLIAM R. NELSON.
One good example of the dangerous Border Ger-
mans are the Sudeten Germans, who occupy the
Tax KANSAR OTTY STAR COMPANY.
territory on the border between Caechoslovakia and
Owner and Publisher.
Germany. The mission assigned to them by the
Nazi regime was to undermine the exemplary demo-
Address All Letters:
cratic state of Czechostovakia ao that it would be an
I'm KANSAS CITY STAR KANSAS CITY 17. Mo.
easy prey to the Nazis, as had been Austria, owing
to the work of the Austrian Nazis. Such groups of
SUBSCRIPTION RATES-Morning ovening and Sunday
Border Germans existed in Eastern Germany. that
(thirteen papers . work) delivered DV a carrier in Kan-
sur City a cente - week 87 cents a munth By mail
is the Polish and Silestan borderlands; in the Baltic
postage prepaid ID Missouri and Kansas so centa .
states; in Alsace and Lorraine; In Luxemburg. Hol-
Week: elsowDere to the United States and United
land; Belgium: Denmark/ They betrayed the coun.
States Puesensions 40 cente . week: in foreign coun-
tries. as cente a work
tries that offered them protection and livelihood
into the hands of the Nazi regime.
Entered M second class matter at the postoffice la
In their treacherous propaganda these Border
Kansas City Mo., under the Act of March 3. 1879
Germans received material and other aid from Na-
Publication offices, Eighteenth street and Grand
avenue
tional-Socialist Germany, they were in constant
touch with German Reich and state authorities,
PORTAGE FOR BOYOLE Corres-Por a to 14 Dazes. ,
they were trained In Nazi schools and employed by
centa; 16 to 22 pages. a centa; 34 to 25 DREES, 4 centa;
the Third Reich for political, military and economic
su to 34 pages, & centa: 36 to 43 Dages 6 centa: 44 so
49 Dages 1 ceota, 60 to 50 e centa: 00 to 66 DAKE
espionage.
9 centa; ou to 72 pages 10 cente: 74 to 80 pages. 11 cente
Germany treated Its minorities as second-rate
NEMBER OF THE ASSOCIATED Purse
The Associated Press esclusively la entitled to the
peoples. The populations which had been taken
use for reproduction of all news credited to It or not
over in the course of conquests and territory
otherwise creditad ID this paper and also the local
acquired in connection therewith, although they
Dave publisheu berein
All rights of publication of special dispatches are
were awarded Prussian or German Reich citizen-
also reserved.
ship for political and military reasons, were always
treated as foreign and inferior by the original Ger-
During January. 1944, the net paid circulation of
mans, This same treatment was received by the
The Star was as follows:
Evening (daily average)
335,171
former Poles from the Eastern provinces of Poseo,
Morning (daily average)
325.865
Silesia, Western Prussia and parts of East Prussia.
Bunday (average)
335.903
Thousands of former Poles today live in the Rhine-
Weekly Star (average)
357,913
land and Westphalla, having been granted German
citizenship, These Poles do not consider themselves
Germans and if they profess to be such, they do so
HOW TO TREAT GERMANY.
under pressure. Despite the fact that they have
The Border Germans
lived and worked so long in Germany, the native
Germans do not consider them their countrymen
)
Hold Post-War Threat
but treat them culturally, socially and sometimes
economically as Poles, It's a story that is familiar
to the inhabitants of Alsace-Lorraine, who were for
By ERREST L. KLEIN.
the most part treated as French, and to the Crechs,
H
ow can general security be established in a
Danes and natives of the Baltic states.
future world and how can future wars be
The new order which the peace treaty will have
prevented? One way to cover the subject briefly
to establish will face a delicate question in dealing
is to say: Europe, and particularly those states
with the Border Germans, It is hard to imagine
which are in constant danger because of their close
that the Czecha, Poles, Danes, French, or even the
proximity to Greater Germany, must be protected.
Austrians will care to have Border Germans or
In dealing with this question, It Le helpful to examine
"Auslandsdeutsche" or disloyal citizens of German
the means Germany employed to carry out the first
extraction in their territories. One first essential la
phase of the European war up to the subjugation
that minorities of Border Germans and "Auslands-
and occupation of its neighboring countries,
deutsche" be removed from the countries subjugated
Germany had for many years prepared In minute
by Germany, IL is an absolute International neces-
detail for a military war, and she likewise employed
sity, that the Germans should be concentrated as
an effective propagenda with German organizations
much as possible.
and Institutions In foreign countries, These "Aus-
lendadeutsche" (Germans residing in foreign coun-
tries) planned procedures to be followed In the
event of war, or, working under the protection of
their new official citizenship betrayed their adopted
countries.
Germany has always been adept in planting the
so-colled "German spirit" in peaceful foreign coun-
Irles, preparatory to creating unrest for military,
political or economic reasons. For example, call to
mind the resettlement and activity of the German
knights in Poland, and even in the Baltic states.
These feudal lords enforced German customs and
the recognition of German heroes, Large numbers
of Germans were transferred and resettled in Hun-
gary and Rumania. These haughty elements were
never anything but 4. detriment to the general wel-
fare of the community, because they never severed
or wished to sever their relations to Germany. They
were partly responsible for the fact that Germany
was able to win over sume Axis partners, An
example close at hand in Argentina.
Regraded Unclassified
EUROPE'S BANKS BECAME NAZI PAWNS
IN HITLER'S PLAN TO DOMINATE EUROPE
Transitions Necessary to Restrice Fiscal Balance in Invaded and Tributary Nations Pose
a Delicate Problem of Readjustment-All Assets of Continental Financial Institutions
Were Taken Over by Reichsbank Throug a System of Banking Quislings.
Two as the recome of e verife o/
us. Tip explanation was sumple: the German was machine and to de-
an the prohiems
Dr. Hjalmar Schacht, Germany's II-
tray
a
large
part
of
the
expenses
of
of post-war Entige by Ernest L.
nancias grown and Relettabank pres-
this eastly monster. The "Partress
Alrim, en American educaint in
ident, pulled the strangs and the
Europe" as inday a. going financial
German amount and new theing
puppeta wrot through the motions.
and industrial concern, . machine
... Chinage The mu at Mr.
Alter this pattern had been per-
functioning nn - continent-wide
artivies, antired
feesed in Germany proper. H was 12.
arate, with each part being depend-
the arrit n/ stripping the German
panded to fin Germany's dominsion
ent nn all other parta for its ex-
inductrial burone - BURIFY ar a
of ner progidering countries. Exio-
To ummari this interinck-
means or controlling the withing
nomic and military went
network and to tree the insurary
maniver, approved in this 18
name in nind. Even she nations
from the German domina-
The Ster of Orieber 10. The prese
that mete not intended For the time
Un are gigantic problems
ent article the New
being - become Germany's slaves,
on
Totrering
such D Sweden, Spain and Buller-
The economic stabilities of these
land, DD Germany 1 relentiess hand.
BY EXNIST L Kinn,
at least eronomically. Barter agree-
emmitries are Intering The provide
one before Gennany em-
ments were impresed in unslier
resources of the nubjugsted nations
L
instruct - IM was al
eventries without tenefit le Inne
BATH been ruthleary
Agentries who were mily deceived as
Heir suriculture has divined in
missary respond, this
- the terms ⑉ the burter.
seder in nu the needs of the Get-
planners DATE devisid a mas-
The Joi of the inveded countries
man army: the entire national
NY above of consente penefration
was informative WSCSP. however, Just
procetime economies have been
which - not mile 10 - Band in
as their military subjuration had
traken up and diverted into com-
with any military actum, BUI
Bevil carefully prepared by infiltra-
unrea-wide recomies under war
When
was
devices
so
complete
conditions with Berlin in control.
.
not
spirs,
euphemistically
called
This in the situation which will com-
nver the ranquesed pro- tortista, so was the
pie. This plan --- in principle the sinn accomplished. The Belchabenk
frest nan in country after country
Nime non the Name had put uno delegated the great German banking
when our will liberate them.
operation
as
-
M
they
CAME
sa
under ins control is ES-
Hiller predicted in his "last peace
power -
Matrieb tiranches OT agencies in the
ulter speech:
In applications WITHING Ciremany
countries where were in be allocked:
- if " Love -- shall
proper, The plan - to IMPUFE that
les the German army. Priendly na-
alam the done of Eximpe use
- HMBT that is will - humared
the the financial and pow.
live Banks were und for in-
No review the 14
ese willine the Premium
De membre?
en the side of the as long as
Otherwiy be intenda in isarti has
they Germany the
Ihrest into reality.
Name Believed Viu 10 be form
Time will - required to work out
First, they pur "nid party members?
the many transations in
litte Any in
restore the continent 10 . semblance
(IFFYERS) the govern of DOWNE block,
of normal life, There changes must
independent - the
be Unmant about with Low least dite-
Dermany shirts blows micht
includes at nne time. Transitions
have providere - the env-
tran A diclated montinemial war
extiment - the people Insurance of
economy to a tree national proce-
their girlst process Broand
sime FIDDOMY muld time rempla
the look mes MPD M INFO, all the
distocation and paralasta of entire
ad hanks, Insurance compa-
The of
name, hulding and many
this intricate system ciruid emails re-
similar to
MASS in wholesale
real valure levies givernment nunde
lerzer, discorder, and TO-
which hell - material burking but
vost.
Vila quaramized the
Careful planning en war part can
productive el the German
prevent many of these pitfalle. Bui
nating as enginierá and mahilierd
this planning mount begin now We
for and or the Non government
must - reads so take over in . mo-
Wr must rensaler so This commer-
ments notice- Emprovisations will
time that live German PREFERENT had
never do Ehall - sealm win the
give net the sole or en)
war - live and - M on
where world Insurers as
(hr This lame, WE
Graman currentin -- -
cannot attord to permit inflations to
attred Brinsin are widv to
Da SCHACHT,
crime with pro-re as they received
effreise - The IMPACT III The Nam
PINISOM fights
alive Vermittes inemir-five sears
performent over line people
BY making the
purpose Specially Name
ega TM German unflation after
personnel. instructions in
las last was became Line isservincer
se plans at mire, the Name
individualize United them time
of the depressions which chock the
an - - en the pro-
conservent interpretion rentits and
world Central Europe - ton -
pie la the rennomir held than
where ART
a of the globe to be left
the DE
Paid and date needed BY the plan-
to the own sollies We must AMDA It
united - three picents enjoyed
nere in Derlin were Turd
in sniving iss preklems equilably and
Ortinen banks ATP
in invice. The permanence of the
with many distries
Manks has whene of Company
neas prace depends an H.
branines By the EXCEPT citine and
Plane and and mut with the
with from in mairy
German Oode the
Thus, - the desi with milliness of
military --- the PEIP-
Departure unall and large
- comunt var . natural -
manufactures and being vum-
gestive The pederal bank at a given
CHDI M can be valid that the
- with all que came un-
Ammih at -
- most contres - she
Germen economic dependent un five
WOLD quantity mail all as-
INFE I El a E
undered las Reglin. DI was
when replaire then -
mote
that
the
apread informer TO Lake over the
nature
mane
available
Lie
fore
AMPLA nf 18/10 have surrents lb Die Gramen EY.
- bands no - value
name
market
means weges - mass the
A bank of
name
and
timmigh
tim
PRIMPT
-
commer
seren
#
head
ni
German people, pain) of the New
in
of
in
that
The
signature
Bankrapity
impline
country
There
ihr
Greman
de
À iming Drimas benker, known manth and made (in case DATES
(dr use en - emplo wun what in incal-
No. said in - 111 seare slipt He-
HPP
mides
et
sil
their
The
IFF
had
I
is
press
and
hope
of
"lie
colleterat
reverved
or ean get no of the attach
mit their industry and transe -
n. - infane
uniler German domination
for Girmani le do in The Name
R might BE said that eisch - hank
have TAXED eur entry and equati- wircled for the Germane at their
drive them ao undersdacive prema- tunking qualine received favorable
menia These are in services rendered
"HE KANSAS CITY STAR
and the bindi we received in n. No authority var encountered to
change are worth just or much mains leaders für delivering their
Pounded Ordember, 1880 by
paper."
NUTER into libe German
WILLIAM R. NELSON.
This man ⑉ unlice Not nt 1M sconomic Country
financiers, tackets. in- alter PRUNTRY TM dealt with in the
Tm Kinsis CITY Star COMPANY,
surance company directors, Mary sime fashion. All their as-
Ouner and Publisher,
holders and maners K storks and MM were taken ever hv the Recha-
bends The majority of the German bank The Beichsbenk in turn et-
Address AIR Letters:
people had resignt themselves in reesed an empare rempanizations of
Tmr Cmy STAR, Kansas City 17, Ma.
order to protect their holdings, They there occupied countries which left
had nn dier chrice hit manatopicy. their entire finabesal and Industrial
By the umple all of Get- life dependent on Live good will of the
many atv came uniset
PRIDAY. OCTOBER 29. 1047.
the control of the Rechabank No
War conditions only served to terms
wonder, then, that the examal on- Chese Lies closer. Germany exerted
looker was so amazed at the seeming - ata countries
of the solue German na- the deliver all the goods deeded for
Regraded Unclassified
THE K.V.S.AS CITY TIMES. FRIDAY, DECEMBER 3. 1943.
tax of the advided
NAZIS, EXPECTING DEFEAT, RUIN EUROPE
FOI
named, The publichey list
remitter members are
with consumer problems,
To LAY GROUNDWORK OF ANOTHER WAR
Preditor
and
for times mum
D.
and not für
Behind the Slow Retrear With Its Mass Murders and Wholevale Vandalism Survive the
Trobas
University The
Main Objectives nl the Pan-Germanie Plan of World Conquest, With the Time Fac-
Visa
-
for in Germany's Favor-A Quick and Deptructive Victory Imperative for Allies.
nicense
The - -
Los
informationer in
teaming the he propare -
REGIT BE extrain them, In or- albaio, to brabby crantry placts.
tregi
Hold in
NMF # appointing the me-
the
line Moral the star. member
5 an are German manpries the where they sie well (ed and FTFD
the RI Ind
- of three - will as now MP trained for their -
in
income.ing et Nigh
the varial states ETP lineed to APPVF
1,114
#. mit -- provide in the
issue nap. In this consection
- lhe MOI and
triude
U.P. extramination of old or allina
N. éding constitute
The the at inne
True
the - multer of eng
prople as hinderancer
la nd allown,
chan
pur MID by the
and comments et German foods
ene the
A. the Experian stati
New I'vis cuile age.
any be understand.
ins. the time -
BILLER, n is a and efficul?
The municies, nich RE
print
The formitive estails M
Inc.
100% III Phone the hat war enten-
the first of interal AN the avaciat
Passed, Vermiavia,
origin
In inst this will only be
NEW
returnt Germas Organization and
Green and parts of Ravia have
multe with the aid of the Allies,
and
ind millions of their beit men all
moil NR adidas
for Conguest, - End L
Huough the intrudion of the Der-
Kinis, an American enter año
well M young and healthy women
E
apportunes ni
man war injustry and
has hired and statint in Octivery
who Date ben taken frum their
time in the occupied countries
bas
and An conducted an important
In addicion bis the military de-
as process of war ver the
the prese, provi THE them
nuncationation et New activities in
de labor inc was This basi
only
the German envernment
Will
Mia rnundry. Articles fre Mr. Eine
keen plundred and
renerally caused an almost irrepara-
neg Enre - -
DATE Represed previncity -
in births in these cub-
and
the recussing countries
health muntries, This methodiest
Mr.
Provine no unitral European non-
weakrine and distruction was in-
Contral
the form mail pm
BY Faster L Kins
m increased The banks an
unitied by main munders, soch M
n.
/he commission NETE plus-
in Littler, III by means of the ile-
charges
Insure IN Main the vibole
T
ITERE la no douth but that
deced emi, was on with the
the extermisation M the
resulting of entire ritire as in the
little Insural and resource
rase et and Wature. To
dess, which the NAME pro-
termito German this must be mides the many deathe
PaciBe
RESPONDENCE
ETAM rails Inr, ⑉⑉ to -
supervation and dependente, The in concentration and internment
the preparation and
or their commenced sar
c.
01 Tonques, The - im was 14.
/
livens IN Hide At our
trains phinical
mination of all silus WARK provide
Sim
mult -
in the the
and all The who hy
Fd
- Nnn THE are
Bature be - 15% The Pan-
Fan
Remonie - NO .
der des
mire who amang in Cheir "In-
If ... Du Deposit
- entri be
Principal
Interves, (D) for Over
com
mants Nilly
- Circumine BOOK termy that
laste
II to No-1 The sur Name if
-
- All 3VT remained The se (une
ME
bevier chare the FREM
line provide
Cluime
innové - the DEVERSAIRES of Pain
by un
- ... Delive - rep-
of and do to
Germentum remail sint have nin EFFIL
- miss on DES
ning de
and This . füre,
Janan
-
for the ran le nile
if she
al Address heal der.
- the improve
i
at Time the
filmal ni - with
nill
line - Time
Jophn
terms. on Mmi, knd
- being (AFT N/ a
- direct BIT
les Insure Nor
lier -
time accessing no
in the person of the FARTH
BY 44 Chim, maint ---
- artick - the Allin "Tuch
will new OFFICIAL'S cale - the nov
nas h.
im as smil die Charget
This
Uset
and Intersing One order
brywning one - individuals
NAME
N/ the German air Invo halfe Fule
eltre
me), To the 1P mill) nin their
- involves the Rate
Tire
by Italian Aubt and the In-
"NICE BIRDIE."
provide
der international -
resume Westnew et their
- nilles, In el will
income of Nin has ARE --- the (If primmers of
T
⑉ the 1944
file Mis. are unliant N) the One
there surgative Litters, wr-
was. the limiter withouts reproved
Japan,
- - - sheir Pir-
BMTU. - mich all THE
fart and detraise ni the
file German-army in the complex)
their
Wender William is
ed Have - bell
- world PROPUTE Imining
mean Internated to dr.
From
nt identify Thus This
ou live effectivened de
(or the German
workening - - -
- Europe, Youre people be
into
In
Inna Hirough ruch privations and
IF
Kör
YY almod em-
This here na professioni
learne, - Il - manyle
can harder China
FREE main mivision
hire of the reserved in
Time Element not ⑉
INVOICE and estimate men end
fulumine
his material
Grand will New will à
commen The Gremine know and piete
at Hair to the -
needs and materied
and (oir il is -
la Swy pine,
Areq
- De
sun Files - NIF Orders mill
that - PUMPO far the
Temporary,
Trapil that the know they gradent
time transure line
to . the minitum of the
the
FIE have REF
the tart - the more
DD Une V-IN - to IN
shop
EITTE mit the plan onlin the
in und
the uma -
the
onlin
- his The Time
Line the revenue Their on-
that Insure
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for all the Genera war unpube will
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and not - provide
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stief
for requested.
" (pposed time men-
POST discriptions of natired
Min declared
II in DETAILMENT to une what BUT for
€
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Cit Mar the Principal
provided - misré MEN German
De suvid in Europe through Mando
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smith in THE Use purpose . your end distructive victory, PAI . person
linns as the him
REF
of and to time
of information the Noth tale There that the Name resime will fin de- -La order
with the payment
NW ware the Notio Naple PINE Hair who have privent till all turner opportunities New,
wed in Southern atates
Trat. are timedy They hope alquime en their rive - visits les intered « their pu- et milizine Ela methods which any ferend
that
they
via
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at destruring Europe and the freient
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deteat
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nation
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and
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Japani
- no million propár the a
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The
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bring tark the des
having defined Europe
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on a measure remove
per the andy required for the
ported and their children and
Tip criminal method of the Get-
da,
all
reling, but leaving he
Name File the of incression strempthen and supplies the small at
min politica of firre abil est Non-
110
the They do countries of Evinpe
nine Bei in this MM
Series
HIP emmistre meanure
THE with his
The merting of the Albert covern-
n. is Vila en all nec-
of its 09/15 Treat le the
THEY hille Instructions ments - Rusia fur the in
16
madent, -
Intere and , planned Resurning of
the recipied countries of Kumpr
the of Has state e me permit - no mile - me explant
BIRTH
M
- NOW servicement
THE
givention - vire and eni cm.
The German Reich, thrmizo (T)
mine
postant
IMPRINT plan Breause of the pros-
int the same AS
has ONFETION and occupied
limite
in maine M protect and educate
parting ni Runa is Getmant and
making requests
No imprepared Will
a seit healthy which
MM
me
ARE experience extrated in her
a be restr
information and methodiest accuracy
in laren enn Am -
returne fa Dermine
is has villized the war permission.
make
allety would be
plazo have United and
N/M
will,
Bank
alm
ties of their nominies for He ean
in
of
- - in - Unle - -
Lines
new
i
should
- the Interal riming
purpose transporting them in Firt.
placer
note
-
en
?
-
- the Name:
amount
HEAVY INDUSTRY HOLDS THE FINAL KEY
FOR THE POST-WAR CONTROL OF /GERMANY
The Hitler Gangsfers, the Junkers and the Officer Class All Depend on the Big Business
Barons, Says - Writer Who Advances . Plan to Scrap the Imperialist Military Machine
by First Removing to Dynamo,
The author of the Informing are
had a don't motive: pradit and, expe-
and - seriato
title o 49 oño has
and information Non we in the
sem - - with have -
sub the Miller IM
and in studied al ins
went of war. Germana's places lur
backines of The Niss regime and
war WIFE in the making tong before
Biller's party Them our
- of perting and dreidri-
Their interests were librity so have
about not is generated
edited German
la gi surpunished. They -
suppected them
in account for their ever
in me United States
This harkstound in named in an
inture an Allied tributal (SM)
- condicted - important pri-
of the problems of
mun, Ourring
sure of Nasi activi-
por-vir recrgnization of Der-
Nummlet - other et the
mois. Whether if an the Treats
Nin parti,
the FM PAYS country, du present
of em enfair to Germany,
ADD - unresugh losser reconserve-
hand " MI Chnego.
har mar potential, heavy industry,
Limit et the German way of life has
was MR undirturbed. We
BEEN arrumptimed. such Germans
By Eximm L Kumi.
permitted the poung and
who nie fining to be triendly toward
He Germanic idea That
enced German to be
Use democratic ideals must be en-
T
supermants in -ynon-
pitted against (be entrenched in-
- LAP assume leadership nl
- with military might
of heavy industry and the
- German intion. When Germany
insclus For back inio Ger-
Junker charma which have Downshed
not proved her good will texand 1Br
under Imperial Germant and which
world, "ller . long period et proten-
man history, long Lettire Emier and
had been sell twicelly intate try the
use under Allied quinnnce, she may
the time of the naisers. This con-
refuln the consert of nations
armistice,
These problems must nel be wired
reption of world domination through
He-tile to Yes Demortant.
in mevel seasons IT they will nit
three has been fostered and pr.
When the ksaser was colled. lide
to solulactorily asived The que
petuated to the pivotal divisions
personal triends in the war máu-
light of public discussion must direct
of German sixty. Their divisions
tries, with their deep-rooted privi-
the experts and the planner M that
Are represented by the Sanded group
legen. remained to carry un in the
thoughtful situtions et immediate
ITS. known as "the Junkers," the
uld manner. These industrial lead-
(mist-way problems will that the
corps, the members of which
ens WITH hastle to the new German
protection nt proterity.
originate from the Junker familities,
demierary, they escapired sesirit
The reserve efficer corpo, which in-
the new government et communers,
will medemically trainell mrm.
with as Ebert. and Rain.
Imbued in their universities for sen-
FINAL The new democracy and m/1
pretinns with the idea that the Mase
know have le lackle the Von The
of an -nd en shelf: the rush
win. the Krupp un Babire and
beary and the band al
and all the powerful Ort-
Histon complete
man industrialists who had the dm.
German heavy Is the
FAR possible time with the taxini
mint important of the to with
Receive IL - de-
in
The Junkers.
These two group. with their Plint-
come - live ruine of war. IL - 1br
avous and NAMITIME powers, always
prime insur ⑉ the war p-
allowed againet - or
tential 31 the
democratic government. They -
with the foundries, Ma stert,
vented the Offman Republic
them nevil the power plants, sine chem-
ATT becoming a working stirch
koit end tool industries, the
ma-
Browne et their lear of
includes. the
retermic pradjustmente, they bason.
Germen governments in the part
together with all reactionary
late anays devered the heavy in-
in They wrre the al/in
delly because 11 represented the
to discredit the German demutracy
- of realistic arromplishment
in the no of the people: they DIVE
of sirolagical purpose; world
EXIT A . chance: they engineerent
Quantition threah force, In Na
its They created the -if-
targe-wale programs, therefore, the
cumulations that would make at
German giverlienent actually made
vible for - to CHIIP w,
the heavy Industry as arm al gov-
power. When the war to wan, - dusable
Hitler
rame
to
power,
ernement itself. In the - of
developments. the heavy industry
prote
must
be
assured.
To
do
the
which had received trom iss Tie Girman bears and the
ment with abusident privileger in and academic evil et LBP
ordet in sommer IM greath, - in efild magn must for Gift
é postions is FRETS eronomer, page. sur powire justi has
nal and milliary an that the pattern that macht -
This " not wills ihr in dine the le nedes in are 11-
result mai live - Ain- sell trom bombernment, the gmil destruction n has
Del-
the Balken nation and
muved important and vulntrable
---- benught under the
phants will - G/mam The nic-
provide of Generati understand
quality the ID VAPP MI a propried
Tiv el the heavy
nature - plum -
the email committes was effected
Commin
- el MOMANT and
In He batter SETTEMENTS -
ARTIFIL all
the German
many Germen -
managed in relain Commissions mes
Tuch air permission WAT individual
Ilin renaller control partiere The
TM anon michi madily - conversion
allo ⑉ In una provide
smallet contract patients at the out-
of - Germant, only
at of - pervements always be-
gilwing M are berrie THE
invel that Have terms were Jarnrahle
products et permis should
num. When they discovered the
semain. INP Telegrial -
deception they were -
an puert To de ninerally
prement
be - repristion - the
of World Was a The summe -
Times not
reponds « a demonstre Given
to the Date M -
work expires movert thew
Their -
- service to - and
forter Due -- - ----
irrent procedure had No IM adopted
SPART Ene Chest quill INF Address
their (Do inititute nersons ill known
and 0017 them information
The - of Common
- civiled - be
and inflamine in the stret a
nai becomed upon palari
of powerson nations TM
Lorge land grants el re-
implications nd this
united ever given - n.
tax he Deuven
MAIT any received. N
Blue Cirémi The Juneres the
the ane es covernment the
issued - -
endusts - only materiment
povied we National
TW Instruction of German
rennomie gains But besime the in-
MIFIYAN under Hinier, Their
RETURNED of expenses Enr the Ger-
suctime et provideged immunity 100+
man comment Exem when an in-
and abetine National Social-
HE KANSAS CITY STAR
durin or a nation ware of
em and survived with all the 18+
befited privideges The landed gen-
me influmes extrication
try must time be of its tribee
not nil NM. Behind . respectable
nd their land heldangs
Pounded September 1M0. by
- el - 004
under into smaller forms This
WILLIAM R. NELSON.
INFORMATION D in no advicate
dermination une of work
THE If of rialime die
- all manner ni thereis in this
of proprix There inno
Tax CITY STAR CEMPART.
- The desided of Promote -
holdings Date ince BPTW
Par the - being
Owner and Publisher.
- - And it is for the
to the priment of
- THE Americant Indo
1880 III sellern
-- One R-eff Him lbs
will thru
Address All Letters:
- - is the THE KAMMAS CITY BIAR, Kansas Crit IV. Mo.
ALL people of
The wild must to refurned - be
are in with lbr
- IN peterm in in be
evening and annast
Allen
devices prilles
dues - the dispension ni IMP untern papers . delivered by . carrier in
man INSURANCE - - done uses City, R emite - THE IT CHOIS . smith DE
Alima private in-
and the influence shind nm
under Allies reform - the - Derman - postage MEDIAID is Name: - Bansas - -
he On the sixte ed
aboved united Allied control un
- that u is essulated 10 -
The Allier private interests proble
equipable manner
--- The only mmme, levil. Germant
is addition to disposite nt mine
Regraded Unclassified
THE CHICAGO SUN, WEDNESDAY. JULY 12. 1944
Vansittart Warns
Of Appeasement
British Lord Writes
Peace Must Be Won,
There must be no appeasement
with Germany in the final settle-
ment nt the war and "mistakes of
World War T peace" must be
avoided it European civilization
is to survive
This was the message received
X
here vesterday from Lord Robert
Vansittart. foreign diplomatic ad-
11
viser in the House of Lards, and
II
erstwhile chief of Great Britain's
T
Inreign intelligence service, to
Dr. Ernest L. Klein of the Bel-
H.
mont Hotel, author of articles on
the need for a curtailment of the
Junker system.
Writing from his Denham Place
castle, Lord Vansittart said, "I
Ls
hope you will continue in do all
in your power to convince the
public of the United States that
any repetition of the old mistakes
must inevitably lead to a third
German war of aggression which
g1.
in its turn would mean the end
:ill
of Europeant civilization."
BLANK
mon TA THEAT
THE ALLIES MUST FORGE NEW WEAPONS
To DEAL WITH MYTH OF ETERNAL GERMANY
THE the Battefields Will Be - Vain Unless the nined Nations Desire PuniGer-
the Now Are Forming Underground Organization M Oudest the
Per -Bank Force and Esiscation Required be Work Real Reformation
INNE
-
les
the
et
a
at
beining
MIT 0.011 Mark per M de a et the MAIN al Name: -
ind - for No
Europe
will
INS
European
AND
in
is
su
have
amelo
provider
will
receimer
pro-
-
.
AP - - units
MIF
la
the
et
the
M
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M
- arming -
pain
Dermin
price
DI
mind
Be
" No like if
with
"
H
IFF
signatures
-
and the ser - ente
im
è
pressures
of
catimal
priving
From
of de not aire
help
MB
MV
-
during
-
warD
-
the
Name
H
or
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- of - remaining and
have
trability
decrived
for
Any
e:
state
a
Details
some
Mr.
Registr. sure of Mr. pnin
elen Lie et par-
E
Limit Billing
ont - of no
You
the
ID
All
Doman
-
must
in
III
difense provide by Girmets
Wrimit
more
entime
in
Pair
the
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pare
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the
dereit
and
main
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peoples
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The
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No
date
est
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world
MIAIN
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before
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anythers
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a
drog
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não
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fair
des UNIT no
German,
We
resume
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Date
THE
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that
not
abd
has
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the name The The will
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the
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drive in out The payment
great Germin
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We Americant Date mill ENTRY
40 e Drivel Mackets
Graman proper bes par bird months
or sine N in
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of prin and ins the pre-
and
propolar
advisions
in
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can DUE . DELIVE = requirement will in
But " dellare
Its Many materage
if - Union Order - or
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ment insure has being alle
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en 1br was and
equiped. en name provider of für
nice lb - irrms after-
Jostm and the timent with
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nate lefti will them has
limit - readations
Sero - information above.
- an MALKER DO en
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name, del ENTIMES at
provided the orin " are name
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Time shall Dire uni and
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While ni il A in the ane
cash of Germany the (SECT VERY
INVOICE made years
will - ar
en PART, very nearly the
meddline a vihro project sissing
World
bros main provided at last THE
la American maint et the
- the in * peacetal und entern
14 fishting was that
dos INVIDE in Present WI-
the
No
and
Unless -- de the - no nont
the - had no quarrel with the
risio pie
18 represt or no - many his-
Gusun Exit ware lightine
THE Natis
credit at at non this have
DE built and his militarit parts.
W- in malia that the EXTITY
Mer ou " mini - out
been - HD e = world
the relations at the
was = con and WY
and eu ear were only the
- at the century-
at German and
shall be Inform m Une mêxes of one
Fir administ inst for the M of
word.
-
ethe
died
began
Rest
primary
NIVE I which has men-
the Gorman propir as a
the may main & bester
nit their was and in attendant
world.
and The POP et the were from
the FREE et ibe Program triumph
will anothe them from their
Massiven in INTI
nightmare and come them to abso-
Trust mini Americans on-
time their paint The expensive
imuni FUD the signet
or gen-Ormation Brow here ta
Diet and Health
de
Bad, nieds el Noti-Ind Get-
with The movement
ST
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vps in additional
l'egitories Theorists
ANCOPACY has last mm-
before the Prodic triampli et
mehi-
1871 I: will back mie the
the
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Repitivo
- THE as In restar dat Hit-
understand after the delaire at
en al not recented as
of .
Werld Will There an
to - HIM bear the
Allin signs Cremity a propr-
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ne bet -
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into ene
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at a BM nine
at
Mini the repairá multe applicante et there Indications en Ban- all print vologh
DE
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a
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about
Witheles u in 1954 and Im
- come has Been stated In
rish . Humber the dreams Geup el - ether
Direction Junison and under
leuder, M INSTRUCT et the - une the 4PY
- the elbert corpo in the
= the Brich the for many other má-
Then
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with made Brutsley . - There alle there who -
- - NAB of the wird NAME D U wrong to strength-
frame
Min and Hm m On-
Regraded Unclassifie
person and beacher
entire Administration at imm de let and No arguments tan to
street
name Beland Ideal,
Tales In Dermate No will transfer against that. That wan
enqual
The gemate all M the ghille+
date the Name control of use and that tor exting of that believe
hair
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bender by putring relative Name the dancy of director HOLLS in
im sume - ce IN
pay member into BACT APT per- mai Bith teleng to ansther
MIC by at TEA as on doe with belond E
a
Americant
Their
were
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WILD ME Perhaps ane would have paggerred n una!
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effort?
Tel surely Kansas City in the pager for D
Date for memorialize the achievements par at
Prime Minist
orks!
ID most distinguished citizens.
ep the THE
Peter
all
UNIT regiet
the Rissour
HOW TO TREAT GERMANY?
anclien of hit
The Balken all
all explosive
War Crime Question
the Perlian
E a Missour
will as giving
grapple with
Far From Settled
Vegaster MEM
separately 20
responsibility
later or new
as writing
By EXNEST L.
quality.
Instead 0
T
BE punishment of war criminals la a question
the way out
that bas been allowed to rest too long in The
N the VIMIL
background. It was not sellled At the Marciew con-
e's business
ference, although the decisions reached al
I
Greece, AT
the price of
represented an important atride in the direction
millen Demi
I logal lene,
of willing port-war probicms.
300
for 400 milk
as to people
The plan agreed on at Mcscow provides that the
war criminals are to be sentenced in those countries
A
angnificent
banks the
in which they have committed their primes. Where
German invade
the crimes were not limited geographically, pun-
lent progress.
inhment will be inflicted by an International court
nil Maly, Hiller
usg price in
be changes
The includes particularly the major criminals.
the
Balkan DE
What however, La to be done with those war crim-
at
present u
more prace
Inals, who have committed capital crimes of the
twenty Germa
illing on the
worst kind against their own countrymen in Oer-
paced in the
ouid De just
many Itself, Irrespective of whether they be Jews
ay there are
divoinns in Ita
[HE or 196
or Christians, Germans or non-Germans? Shouldn't
are B the pres
they be punished as well? Shall the many thou-
Rone, and and
sand murderers and despollers of innocent people
VAAI area of
is just nd
and the brutal keepers of the concentration camps
micht Del wors
possibly be
be left unpunished? Shall the blackmallers and
If Yuggilavij
If la so love
thieves be allowed to enjoy their booty? Or shall
And
we leave these criminals to the German courts?
hazardow
and reprisals
Buch procedure would constitute a Aerious error.
Germans both
n " would
The punishment of war criminals must be judged
populat
ent A yes
from an International standpoint, This applica to
en and childre
ere is me
the question of rehabilitation as . whole, and also
David the upper
lo the hundreds of (housands of former German
bold the prine
who, because of Cheir race, religion or political ideas
keep the raily
the result
have lost their nationality, their property and their
consmarch the
( Missourt
families under the Nazi terror, Of late the justified
thitder about
or organic
demand has been expressed that the crimes against
the round the
Jews be considered war crimes, but nothing has B-3
the else; all LE
y through
yet been achieved in this direction.
valient Partier
protection
International regulation of the problem of re-
Charman les
borrowers
habilitation of those persons who formerly lived un
heavy and an
Germany and were damaged, a imperative. Should
mg La concern
WTI as losé
condid the jos
the NMA]
such a group, not being in a polition to form a
But the Anili
government in raile, or appoins representatives who
more that
milline In en
would later have governmental powers, be placed in
General scori
Delaware
a worse position than the people of countries like
sears against
em steld
Austria, for example? Both justice and security de-
laws Art
mand that international interest be directed toward
Please One
these Germans who have no sovereign representa-
Trtl
Lives to enter their personal and property claims.
are In the ID
La period
Askle from the moral effect of such treatment,
guestilla ban
these people would certainly be potential pioneers
Mihillovieh.
uen to be
prejudices
of democratic Ideas In Germany and Europe as a
to the ne
whole. They have served science and culture and
reftain extent
enter ward
have created positive values. To a large extent they
Service. For
the state
have peacefully Identified themselves with the com-
delder nf YI
tries et their choice. They describe help. The same
forces mainté
the facts
fare We were
egainst
consideration should be extended to those who to
this day are suffering in Nam Germany's hell of
WHI or supplie
facts the
ethis from air
consentration camps and ghetter, deprived of all
retained for
lust A
human dignity, all protection and all posibility ni
by Soutine by
making a livelihood, condemned to extermination.
person togethe
wn Mark
It is to hr hoped that there is exacceration in the
nificial and private statistics which list Nazi victims
Cound Mil
(ish them
in the millions, withough IL DA certain that the ne-
erri say,
les the
tual figures of there mardered in the Axts countries
a protion wh
and the excepted muntries are vast. However, we
manders not
0 operate
must bear in mind that many attil are alive and
with Italian
something must be done for them now,
insible 14
which resulte
The question will artice as to whether these victims
eur small
will wish to remain in a new Germany under demm-
alums in FFF
k. Keeps
cratic government. International regulations must
and in return
mall Has
be prepared, AMOUNT them equality and protection,
linte against
irrespective of race, religion and nationality. As
Rewer A
be served
to agreements entered into with official German
midgble chair
law.
government representatives, IL wall be up to inter-
in the
own lave
national justice and policy administration In -
shall THAT 1º.
n sharks
to is that these objustions are fulfilled. 16 pare of
And fureur
resistance or interoper execution, international prin-
the
for
sure and Curre most be employed, This of CCUPIF
and were
1 swere
does not apply only to Jess but also to Christian
francis. The
tormer Germany, statement ecouph and members of
molor. Na
minofities who have livest in Germany or 4412 Bike
bloody, when
is not
there.
Incra deterre
against
Provisions and also be made for thair who devise
ann any on
10 DATE
ID or must leave the countries of uner suffering
infl
The German
ROB
For these individuals a new home and a Des coun-
of W: regi
Der
try where they can puild a new life, must be found.
skill nd
An international agreement must be made, under
extimate
principle, the
which refuge will be given by the various countries,
100 deadir.
noting
accounting to their capacity and other conditions.
wire there, 1
general
FRAGILE BATONS FOR TOSCANINI.
Deadt
per cent
Howard Taubman in Catinel Massine
Large-Hoste
Toscanini's habit of hurling a score to the nog
launched eas
ME Illuine
trampling on R when upert troubled the Name
mans, lest h
miskable,
Vd.
Philharmonic's librariso, Kmil Greinert. for
thank EVPF
obset di that the marstro's first move, when help
recepted after
commis-
his in rehearral. was to grip the before in
and toil upon
02.18 DEI
" il for
The
Paper
Regraded Unclassified
THE KANSAS CITY TIMES, THURSDAY, FEBRUARY 3. 1944.
han in effect would
HOW 70 TREAT GERMANYP
Payne,
- under
the
state
PROSPECT OF GERMAN DEFEAT Is RAISING
because
the
widers
W
hinz vid at
Massion (Mr
MULTITUDE OF PROBLEMS FOR THE ALLIES
political
Cal. Julia
the program
also of Tesa
per incough BY Can-
first centing
se and the
Punishment of War Criminals T. Coby - every Preliminary to Immense Task of Ref-
filers ta red
ormation Administration of Conquered Country Must Be Accompanied by Re-
Be WILE KICH
The BY to -
W any all
- . TAX -
huilding Program to Bring About Any Permanent Organization for Peace.
Mrs. Payment
us If -
daughter in
- -
BY EXPERT DI Kim
- Atti-and nell and them-ar has been Ismited pursenty. tought
begun study!
will -
ANY persitents anended nn FREE understand MID birrid a new use and then scrapted
appeared
-
free rejected
M
Use peace WHEN is un Int- Germany, that Hifter Unimo send his The benchmen revent propres have efiminister try the acmies under et enemy mich nations. dráim- To
enought
R
the Provident himdelf
sideration this war need nur Phil- paid with cively nen Blood for their assos is tremendously difficult and
mile
nm
antr
a
HIMILY
- el There war SP mas number a tire will to be particularly difficult
Service
New and others
to spout united ben- with the
- plus . strutegy of proor ITSUP term dive from nue We stree the point of "admin-
Wd
GOD.
The litting bills anter two main We that ihme meins " - intration" rather than renterced
youjet Pirst, that concerned was . co-operative al- rule." In the - of the
for and justing -
the punishment of Me eriminale T- Name within Genmany, Our ave- compation, the military authorities
mm
Prin
the
Bor this war acc the - er feilure - - the will de- simply insue under martial
.
review
for JVIN
crimes have attended eminal It: cirilization recied that when min- immine when war or part will law, seil as Be army enforces thrm.
bas Brond
Himal with the application M - provided Tie Nari - has tee leen A mile permitient procedure must
line
world
there vill be reluctant obedience.
me
For
VP
response in
NN SAYS:
:
be
esime
of prior. a decent and order the in estab- wast in power for almost vieven years be anriqui 10 laster voluntary co-
sitching, supervaling and operation by the people, In andre to
BY
hite,
1. new Clerinary,
If
me
really
mean
in
procred
with
every step anyone made in Get- athieve this end and la order so
N
many. A generation has grown NEW make negatively transitions from one
centry
an
a American
plan. for the appresentation ann
DETER knew Due Nazi form or rule so another, ane must
of
would
and
punishment el thine OF
Emiques Unless or destrey the know the prople with when one 14
&
mi
must have places mady M par
conseption or life delivery la - dind. The training be
wondered por
THIS operation all the moment 1k-
would - of
the if
maline is presible Wr must as
BOTH EVILS MUST BE DESTROYED.
4d 16
the - when
MIMP nur the Nin crampets
INF inter.
VH has - new
preparent main NAME - in who
is
mmd - that
on do in - - of detral
- Mill
lbs unabed
We hall METTER - That
jug
pro- and -
Hime men will - everyo
to one
with Due SP have netter
für
-
3 for
o - That INF Allin
sech nf
ne sen the
must mil with und on
Our an the
The ni servir MP -
home require m
"V"
on
line
YH, - one - hime
nj life pul el entry
wourd
and
- the ml a -
derve the ⑉
in order le mare IL My sure
he nid. in THE
les
100 ins reharts DUE - - THE
- nen
- den di
the requirement M in in III Name
im and world not
the AND Hadern for Europe an
And
or M (if NO in
Apro will - us 45 the
1111
. Use He
critual prement,
A part to and
the modem
when all the
How For to not
Over have at
we, il - the DIV
Tiere will Two increase areat min-
assed
to And
Hund enter will ortic service OF
any alchari
III their about
goint non con - Min
and of
read
his -
Hart, The --- los life No
him at
- We the presir vum to PRP
In
INS
I
MIN uniturted
m. withing De beild was
. few
West -bail in probled and now
TO Dave to
sule sholl or FEE Uner
new Wie
KHART is more than
sine chmil Le upen 10 -
since 170 THE
une " Bill
trad ter muserd.
PEACE
CULTURE
hardening at
min aun rejuilities
If -- the + son wide in
- off
al
IFR imen to-
might may the millin Dir-
to
hould divide them.
tean The Ha that The pm-
two
heir - and
gar the instruction Non
and
eme- HP (Sirman) sur ⑉ the IF-
All Address
the
cupies unter Gil-
I
about become
sifiction and of
-- as That - who the
un last ni BA hairt - the achieved in : maline of fes muni
ima in
Germen insultion - De assem
ene under can M We are fortunate in having in
thomb Comen
comed -
in - with mier nations - an
report aller
in - this pain mine haldr qualified
lights alimn
Has IN a problem,
shhough and Rest man and winnen who have lived in
Well,
simile
las must . of -
talket --- the
in der and The ------------------------- Massi - General and - ollier foreign ein-
plation
in NNF jumise Buin
shouse previded --- or in - poi-
The - - will -
nas BPW who know the prople
will
you
- of - -
We
- be mill
mist
pive
-
for
lir
dur
will United just - they know
are
the
the
Online
Revi name here will un
America and Americana, The are
training
111
He restit DIE and
for - then - -
- We inio!
provide of e/hirvements and bread
routine
in from He -
" complete From:
Time knowledge and FROM-
anover
dur
West beränd be
TIME are
- - . ENM
sintid be millized. Beit any
winier,
bod
UNIVERSITY the
in and can
Time - P millerable
per shich envirose de of
Bure M want
Nd will - - 318
I : 1 1 1 L
plan - mini.
FATHER and vent
kgm
lu
mens ann - ISN firm
nay
- PRIME for
The theire -
Bir
-
have
F
-
tito
Arie
-
thinks
libile
the -
FURTHY - - - in NPT
have - - name qualified Americant via sill in glove 10 M
winth information
the m APPIL customer
- the - - No
the
der
una
le
!
if
American
dr-
he'll
-
Invir
Mile - W Due
of NA attains
through " Inc. . - - ní AND are
The ann
- -
- - winn
en report mn tame DIE in telino la fail.
remove
store
un PTTN THE - ni
super Are - The as
- Iss system allo
--- a PEN - - pressure
The - and -
keeping alove
was or
what will DE
LAST Graun in -
- - to -
time of United - . -
BRAIN of MM-
The - IN - -
nive MI she (HALF
member of the family of nation nume
-
control -
intil un was - in - -
I
-
use - -
when
-
live
belief
YY - 6 toon
unes una people ands M
nail
" - be supressioned from Choice
0 less for
exhilage - treathery,
co-sperate www. per-
the name
Decisions will have to be mude -
memens milliary -
il expect be established and finding
resulties by which
to her IM emarts examinal and
Experience
flat
to drames,
comm in pul
title
emeshed you
inscretic no in
shall to constituted - - All be su rule, - - millitas gar.
Our therefore, la to ared
- suff the
the judam to In there - and nid, - more workship The rale
out the last rempanis NE Nami -
DE The ams
I removier, them
elto the attactions the the deleme manis of shat shall university be-
no matter shat its die- thinery 4/15
- service -
The places where the the are N em . co-operatte government a
Alier that, We will have MI den trill event
hit what MAI, the
- held must lor determined The the FACE required ample can by
Heler and project the
nine to Rep
for and in
o particularly important from the a
German indo bernm-
matire of
military ruir.
If love without
point of THE
the the of - - and sane
Die
IFIA, Kin
First of War,
busine la
Communit. We will leave in you'r
Bid If name
ET de Use liquid
We mani the la M -
fi will Le providery that ha svold
die 4d chies and carle
Than Civin -
- He -- a
my the Lime the war - vun
distung ans NE produce
privires. winh previded 15-
stable
4am
SUP tren only an
We - proce an early agreement in the programed quienties
Wermar repuire fries
around with
@ LO This mil and
- MY providure. because at want Expedience - all nem -- inrre as is Any from of Drimin government complicated
at the
Ibsee lidate to wan 44 soin - por- un Use lives of No Address disected reserved homest and rest m- DEF cent of
- altro the The tris)- sus premied - name saris with the ser of the world
will the and and
would
varies qualities
era security - their . elements will - miss iss entersly Inm the will miller
uset ni the income up profess The Unioni Nature - name of the pre-
- THE -
CARDIFY the the birthine - el . Service severed to anministrative TMP Name
suppertitie in
S
fell
- world - della at - - un revolved countres - april in the way cas or BY the
i
he
adver the war as
masser the are in sur formations for the entribed reside
- ene
When - to primission - - - if - -
upm mg - the - of - - - -
HILES,
is ASHIMITON
number el the meant
É
-
D Expearo L It
in - al Eusine Times
DO
(iff thailt
Sedition Trial.
the - the and
and have then
- in - in and - intria
- - dibine
WE in - - in Liste Maria
THE et no - po-
Date Provide
need Mom @ - -
Regraded Unclassified
212
G.O.P.
S.Bay
THE MISTAKE AT VERSAILLES 25 YEARS AGO
Anniversary of World War I Pesce Treaty Finds Some People Srill Suffering From
Blindness Which Contributed to Disastrous Failure to Deal Firnly With Germany,
A quarter of a aye -
time on the ling of Prunta, who vin tas vesi to rope will them.
drg-/une 28, 12:5-the Treaty as
used the name of training his gives berause the empathies et large
Versailles már moved Nubsity and
penstugent of troops Inito a fughts groups al de German perputation
effirient striking force. Later DE SFFE - the vide of the inimudy
any persident attention - et
registed them with NW rerruits ernays
that sell Pment of World War 1.
who unilarity trained and then
Hrre
Uven
are
the
reserve
the
the
NAME imporediv - designed in
plant in the reserve white . entire allet
rud MATE. Admittedly the Vo-
the yours, many simes the ariginal the live var The demunitic cir-
services treatly MAEMI made RUN)
mumber et Produce seldien vers
des SEET (no yours. in INVOICE and
mistaker but on MAIF assistring
ready Le and in reminde the
to Elgini the main-
- shart to Napation's defeat and
ground movimatives - the peach
day the one prid reason for the
overthrow,
Jul am with had previously
tragin of Vermittes
Basin THE miss Armin
dominated the firm and atuch
creat in the Group FEE-
THE legion ⑉ by
(Be democration form of
ant. " de discuss - the follow-
the Yerhilles govern, and so after
governornt In that subject 10
mg article to NY American gritte
World War L the Gennan reiche-
registr their michi, the
who has made as estensive andy
wehr trained in atternient of 100.000 Junkers wer : uninolisted under the
acidem, the laying the
Vrossitles treats. IL --- because of
of German allein.
groundevik 1or the romiting. Ger-
the planned and asseculed
BY Extrem L
man entry of millions et sen Karb
mechination of the leaders ni heavy
HERE are some furnent, se-
(the of them BW indestribated with
industry Justice Medical entry,
T
rious minded people-and
the spint of German destiny - rule
end Live pen-Orrmatic intelligentals
this curld and was trained En all
that the Writner require finally
many others who have fallen
the attributes of leadership to a
incrumited
for . Nazi propagende line,
- share in the refulling of the
In their climb to prom. the Junk-
elcher willingly If innocentis-whe
Reich
en and their accomptions not had
tilame the Treaty of Vroalles far
A: the sume time . through
to discredit the work of the Wrimar
this DES war. n. la said that the
and complete of Det-
republic, Intre the German propir
war was forced on Germiny De-
many's resures Im war se CENTRE
learned to approvate this N°F dr-
- of an unreasonable and
on esert the very on of the Allied
sign Tn this end the
shamrful peace. The Reich, so these
commission in Berlin. Il remained
echibite worked shrwugh "agente
people contand sumply tad la free
in the Bluegeint place until the time
inventive" deliberately 10-
tall from each ducides in assure
for execution had me-tal Allied
commind driken, growral strile and
its exidence. They Further
observers should certainly have me
deventeurs among lbs working pop-
that . soft and tentent place will te
tired the great number of oftion
untion Industry md its share in
the only kind which can entire Em
of the imperial German army who
this actieme or deliberrate puttins
any reasonable length et time. while
had terme "cirilan employer of
ma sui of wrk Thus they trought
a harsh DOB will only sow the verds
the not department. They should
stret unexployment
for World Wer III.
have delected must these citim 11-
and penarty. general unread and
Experiences at the lail Isso and
contred all the quelle details when
me-ball years have Isughi us. that
deput.
an
solo
the
butting
and
Lase Versaility treaty aid not foirs of - was merhine ⑉ en
A Agreest
a lesting peace Derkup ii failed IC incredion short time When Ort-
At the mms sune rimm propa-
nut Live prople and the Invoi- main Nevels violand the provide
nice foot advantage of the -
THEY responsible for the pan-GPr- of she Titaly of Versilles, the eral prejures of the insulant coun-
manic dream nf Trulente world - Functioned with previ-ne (Fink of the will paintine the
property, It would have ben tax INTURNEY thus indirating hnm will
drind specify et . Girl
wesk even if a had Deen compliment a had been prepare.
many to the prople of Enaland and
executed-which, incidentally, a
Prim the day that the fini Wirld
the United DMB Surviy - they
near will
war rode), the German
arrived Europe will ED
The Treaty of Versilles -
war
department
mans
II
den
Behine
described Birth to fathere withen II
avent.
in
the
mill-
recomment
a
.
gizantic
lest the power and the influring of BIT purposes in Ugio was . MI- unde. brean, and Ille (BI of the
the Junier group of reactionery sirt of enruge world fooked en indidentiv -
notirmen practically unimebed - Known the country Gremare was in or IM - might
Their
philosophy
was
BYWL
-
in
Black
to
their
-
esemy,
Om-
the spring which intervated the And despite Les presence et munist
scheming and planning that moms - Allied communion in Berlin. no- DI 40 . riever ebros ACO n
in
Be
mb
of
the
traty.
They
Rout
landly and seything in slimp some BC-
scrient,
within
the
Brich
and
tran FOR gal in mind-to re-iniale
tivities
aboved.
Dib Gramany as a fini-rate prom
Go De Work.
Germany had no demiverable the
which would terrorize the wele as
Thue secret the
- it was may - past to
and as time would permit. Then
joung Writiar AMERICACY in
the Welmar require - en insura-
liney wire to take un the untinished
payable way and their underground
sble project The Optmans Idalize
taxis et the old German empire, in
astirities cites followed (he
milliery
Endition,
and
the
perple
enture no exparient leading so
of
the
Ku
Kivs
-
tormed 10 the imairs who premied
eventual world dominstion. even if
Imilated the surcess friends el for is ensie their Instruction with peare
It thent not or more mn an cam'
German demoniary with party int protige was prepared
The processions of 1518 should
wespon they possest on- for a Messiah in ner ar-
have immembered nineleenth
mary, they maint to pentical ulically sivery, that the
sury fustory whird furnished the
murder, of sur on- Pueluer error
presions - so how live
man sistements as and Tin writ waich allerupted Le
nf 100,600 em, approved by the
Ertherger. These understand MUIVE- . full-besried peace with
Alber siver World War 1. would $ menta, sell known III mm) Oriman rullear measures finally realized
united by the milmaristically mind- at the him. were (inn serionsly have il duped mest The (ream
ed powers of Orrmany. Napaleto hampered to the officials or the of the ... The amt
had improved similar any min- Wrimar republise The editorifies trall in Balory.
Regraded Unclassifie
213
OCT 30 1944
Dear Mr. Matthews:
I read your editorial of October 12 under the
title "Are You Bad, Too?" and determined to write
to you, though I have been a little late getting to
it.
I liked the editorial. It is a real contribu-
tion to sane and realistic discussion of what to do
to prevent the Germans from creating another war
machine in a few years after we have finished licking
them again.
It was not by my wish or action that the question
of the treatment to be accorded Germany was dragged
into the arena of public discussion by publication of
a so-called "Morgenthau Plan", nor have I felt at
liberty to correct inaccuracies in the record. But I
think some solid advantages have accrued. Many news-
papers, like the Courier-Express, have been discussing
the matter with sincerity and on a high plane in spite
of the fact that we are in the midst of & National
election campaign.
Naturally I am grateful for anything that is in
the direction of producing a sound democratic result;
and, above all, is in the direction of protecting
America from future wars.
I hope you will regard this letter as purely
personal.
Sincerely,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury.
Mr. Burrows Matthews
Editor, Buffalo Courier-Express
Buffalo, New York
HEG/mah
Regraded Unclassifie
BUFFALO COLRIER EXPRESS - October 12, 1944
ARE YOU BAD, TOO?
Henry Morgenthau is & bad man. He wants us
to be mean to the Germans. He wants - to send
them back to the farms where they wouldn't have
no much opportunity as they have in "the ettica
for their own distinctly national type of Kin, beat-
ing Jews to death and all that sort of Uring.
Lord Vansittart in a bad man. Re wants us to
be mean to the Germans. He\ want us to-fix It
BO that the Germans can'tero on leasure trips
around Europe, carrying torcher and
clube and locking French Greekh and Crechs
and Poles in churches and setting Live churches
afire. He wants us to fix It BO that the Germans
can't enjoy the sport of turning relat bomba loose
on men, women and children in mud-and per-
haps In lands far more distant from Germany.
Cartoonist Roche is a bad man. Be has drawn
a picture on this page reminding de that the Ger-
mane have given Czechoslovakia a couple of new
Lidices.
The Associated Press and Parts Radio are run
by bad men. The former told X member papers
yesterday:
"The Paris Radio said today that Arman 88
(Elite Guard) storm troopers had massacred all
but ten of the 520 inhabitants of the Burgundy
village of Comblanchien, in repassa) (or an Incl-
dent in which the villagera were insident.
"The broadcast, recorded by U government
monitors, said aix German acculers had clashed
one night with some of their comrades, and shots
were fired. The report said 88 men from an
armored train near the village held the inhabitants
responsible, threw incendiary grenades into houses
and machine-gunned those trying to escape the
fires."
You must be pretty bad, yourself, or you
wouldn't be reading all these mean things about
the dear, good Germans.
Regraded Unclassified
215
QCT 30 1944
Dear Mr. Mowrer:
Your editorial of October 17 has been a little late
reaching my desk, but having read it I feel moved to
write to you promptly to express my appreciation.
It is probably unnecessary for me to say that I be-
lieve all of it to be true and I applaud it most heartily.
As you perhaps know I haven't made any statement on
this matter other than & broadcast from London in which
I said I was not in favor of leniency for the Germans,
nor have I felt free to correct inaccuracies in the public
record.
I have been amased, however, by statements carrying
the idea that the newspapers ought not to discuss publicly
alternative means for preventing Germany from building
another war machine lest the Germans get angry at us. I
had supposed they knew already that we were at war with
them and had a rough idea of our objectives; nor had I
seen any signs of their Burrendering in droves" except
where they were trapped and overpowered.
At any rate I thank you sincerely for your contribu-
tion to a sene discussion of this subject - which is really
something in the heart of a Presidential campaign - and I
hope you will regard this letter as strictly personal to
you.
Sincerely,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury.
Mr. Paul Scott Mowrer
Editor, The Chicago News
Chicago, Illinois
HEG/mah
Regraded Unclassifie
CHICAGO NEWS - October 17, 1944
DR. GOEBBELS' PROPAGANDA.
They have them in England, too, Noel
Coward wrote a song for them. The chorus
began, "Don't let's be beastly to the Ger-
mans." Now, in this country, and perhaps
in England, other voices arise, aghast that
anyone should suggest we aren't going to
let the Germans off easy this time. It only
makes them fight harder, they argue. Sec-
retary Morgenthau's suggestion about de-
priving Germany of the heavy industry
prolonged the war for months, they cry.
Goebbels used it at once. He is telling the
Germans we are going to rob, kill or at
least, castrate them. So if we want to
shorten the war, we must reassure them
that by "unconditional surrender," we
don't mean them any harm-well, not
much harm. Then they will quit fighting,
and the war in Europe will be over.
Of course, if Hitler could get suitable
terms from us, he would accept them at
once-terms, that is, which permitted Ger-
many to continue its existence as a great
power and prepare for the next war. We
doubt if even the people who don't want
to be "beastly" to the Germans want that.
What our amateur war psychologists
don't seem to understand is the mentality
of Dr. Goebbels. Even if we were to say
a few kind words to the Germans at this
point, Goebbels would still twist them into
meaning that we intended to rob, kill or
castrate the whole race. Being Germans,
and very guilty, they would believe him,
not us.
In conclusion, we beg leave to disagree
with those who think the Germans in
France surrendered because of the leaflets
we dropped on them, and are fighting
harder now because of Mr. Morgenthau.
The Germans in France surrendered be-
cause they were utterly defeated in one of
history's most brilliant campaigns. The
Germans now fighting us are not those
who surrendered. These Germans are
fighting hard hacause they have been and
still are good soldiers. When we beat them,
they, too, will surrender.
217
OCT 30 1944
Dear Mr. Adams:
I have read with a great deal of interest
and appreciation your editorial of October 11,
entitled "The Morgenthau Plan" and I want to
thank you for it.
As you perhaps know, I have not made any pub-
lic statement on this matter, nor have I been at
liberty to correct errors in the public record,
yet I have not concealed my opinion that in the
peace settlement all available means should be used
to prevent Germany's making war again.
One thing that has greatly encouraged me is
the candor and sincerity with which the newspapers -
with some notable exceptions - have been discussing
this subject. I believe such editorials as yours
will contribute substantially to the formation of
sound public opinion.
I hope you will regard this letter as entirely
personal to you and, for reasons that you will
readily understand, not for publication.
Sincerely,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury.
Mr. Herbert Adams
Editor, Parkersburg News
Parkersburg, West Virginia
HEG/mah
Regraded Unclassifie
PARKERSBURG (WEST VIRGINIA) NEWS - October 11, 1944
The Morgenthau Plan
8.-Splitting of Germany into frag-
ments too small ever to menates the peace
Possibly the Timing of publication of the
of the world: and the toiling at forced la-
Morgenthau plan-the most drastic yet
bor of millions of Germans in labor bat-
proposed for the future of Germany-was
talions to repair the damage they have
a political error.
done and expiate, at least to R degree, the
According to Time magazine one New
horrors they have inflicted upon mankind.
Deal chieftain, a White House intimate,
In discussing peace terms for Germany, let
said: "Even the airing of this plan is going
the harsh peace of Brest-Lifovsk of World
to cost a lot of American lives. It is going
War I be remembered, as an indication of
to stiffen resistance inside Germany. We
what kind of terms the Germans would
have placed a powerful weapon in the
have imposed upon Britain had they won.
hands of Goebbels."
or indeed upon the United States had it
The points of Mr. Morgenthau's plan
been possible for combination of Germany
are as follows:
and Japan to have defeated the United
1.-Removal from Germany of all in-
States through stealth and surprise. No
dustrial machinery which any liberated
country could have expected any mercy,
country wants; oblieration of the rest of
and the record of the conquered small na-
German industry.
tions of Europe proves it.
2.-Permanent closing of all German
In that connection it is Interesting to
mines-if any are left after territorial
read the recent statement of Lord Vansit-
changes.
tart, permanent undersecretary for foreign
3.-Cession of the Saar and other
affairs of Great Britain, a well informed
Rhineland areas to France: cession of the
gentleman who has been right about the
East Prussia to Poland.
Germans from the start, when others were
4.-Breakup of all large land holdings
proclaiming the Munich pact as bringing
into small farms,
"peace in cur time." Lord Vansittart says:
5.-Withholding any economic aid
whatsoever to Germany; no food, clothing
"The first thing to do with the Ger-
or other relief supplies to be furnished to
man people as a whole Is not to trust
the German people; no reconstruction of
them. After the last war we trusted them
railroads or factories within Germany to
to disarm, materially and morally. They
be permitted.
swindled us. We trusted them to try war
6.-Prolonged occupation by Russian,
criminals, They swindled us. And In no
British and American troops, perhaps for a
sphere did they swindle/u more grossly
generation.
than In reparations. Why all these swin-
7Noreparations-since Germany
dies? Because the German people simply
would have nothing to pay them with, and
weren't in the least sorry for what they
would be allowed no way to earn payments
had done: they were only sorry they Bad
in the future.
lost. The swindles were carried out with
To the above seven points we would
popular approval.
add an eighth one:
Regraded Unclassified
as is aisnonest to blame the Treaty
of Versailles for the immediate
tion of the German aggressive spirit.
The treaty was a moderate one and can
be defended clause by clause.
No,
the German people have proved them-
selves utterly untrustworthy and appal-
lingly tenacious of evil. They have fought
two world wars to the bitter end in the
hope of A higher standard of living at the
cost of their neighbors. There is nothing
racial in this: They have been system-
alically miseducated into the stupidity of
cupidity. The Germans are guilty as a
nation and must be treated accordingly,
without sentiment or softness. as an in-
ternational danger, as a menace to man-
kind, until they are completely trans-
formed.
The most blameworthy
classes must disappear altogether: these
are the Junkers and the heavy indus-
trialists. They must simply be expropri-
ated."
Both Mr. Morgenthau and Mr. Vansit-
tart are right. They have the record of all
history to support their plan of a Cartha-
ginian peace, which this newspaper in the
past has frequently urged, The thing about
a Carthaginian peace is that It is the
kind of peace-in all history-which has
proved successful and enduring, The an-
cient Romans, after three wars with Car-
thage, finally ploughed the city under, In-
voked a curse upon n, and it has remained
that way until this very Gay, after a lapse
of more than two thousand years.
The German people have asked for it,
not once, but many times in their Ill-star-
red history. The present war lusts date
back to the rise of the tiny Prussian state,
which participated in the original carving
up of Poland; and which absorbed its
neighbors by force of arms helping to keep
Europe in turmoil for over a hundred
years.
The capacity of the German people to
put their faith in egomaniacs seems Illim-
itable. It dates all the way back to their
so-called "Frederick the Great," and runs
up to the swashbuckling Kaiser of World
War I. to the demoniac Hitler of the pres-
ent struggle.
The world would simply be storing up
more trouble for itself If It again consents
to R soft peace,
Let us be true and faithful to the cause
for which our gallant American boys are
fighting End dying over there. Let us not
toss away the fruits of victory after they
have won it,
Regraded Unclassified
220
Article from Saturday Evening Post of 10/28/
1944 entitled "Here the Nazi Butchers
Wasted Nothing" by Edgar Snow.
221
October 30, 1944
My dear Lady Anderson:
I thought you might be interested in the
almost unbelievable story by Edgar Snow in
this week's Saturday Evening Post, and also in
the very interesting note by the Editors, "This
Is Why There Must Be No Soft Peace". I am
confident you will know the best use to make
of this article.
With warm regards to you and Sir John,
Sincerely yours,
(Signed) H. Morgenthau, Jr.
Lady Ava Anderson,
4 Lord North Street,
Westminster, S.W. 1,
London, England.
Regraded Unclassified
222
Article from Saturday Evening Post of
10/28/44 entitled "Here the Nazi Butchers
Wasted Nothing" by Edgar Snow.
223
October 30, 1944
My dear Lord Cherwell:
I am sending you enclosed herewith a story
by Edgar Snow which appeared in this week's Satur-
day Evening Post.
I thought you might like to take this back
to England with you, and show it to anybody who
may have a question as to how to treat Germany.
Yours sincerely,
(Signed) H. Morgenthau, Jr.
The Right Honorable Lord Cherwell,
United Kingdom Treasury Delegation,
Willard Hotel,
Washington, D.C.
Regraded Unclassified
224
from A. H.S.
MEMORANDUM for: MR. JAMES
Has there been any answer that has gotten by me with
respect to that Morgenthau inquiry and, if not, could
you inquire if any is likely to come through?
A.H.S.
October 30, 1944
Fru
225
53
from E.L. JAMES
MEMORANDUM forMr. Sulzberger
I have asked about this again Let today.
E.
If
t
Oct. 30, 1944
Regraded Unclassified
226
11/30-
WASHINGTON POST A VICTIM OF
BRITISH AND ZIONIST INTRIGUES?
AN OPEN LETTER TO MR. EUGENE MEYER, PUBLISHER
AND EDITOR OF THE WASHINGTON POST FROM
PETER H. BERGSON, CHAIRMAN OF THE HEBREW
COMMITTEE OF NATIONAL LIBERATION.
Regraded Unclassified
WASHINGTON POST A VICTIM OF
BRITISH AND ZIONIST INTRIGUES?
AN OPEN LETTER TO MR. EUGENE MEYER, PUBLISHER
AND EDITOR OF THE WASHINGTON POST FROM
PETER H. BERGSON, CHAIRMAN OF THE HEBREW
COMMITTEE OF NATIONAL LIBERATION.
Published by the
HEBREW COMMITTEE OF NATIONAL LIBERATION
2315 Massachusetts Avenue, Washington 8, D.C.
October, 1944
Regraded Unclassified
FOREWORD
"The reactionary clique of the British Colonial Office is not content to keep the gates
of Palestine mercilessly shut in the faces of our dying brothers in Europe, but is preparing
new plots against our hopes and future, and schemes to enforce the ghetto regime in Pales-
tine forever.
"Most tragic in this deplorable situation is the fact that the Zionist leadership and
October 10, 1944
bureaucrats, as in the past, are ready this time again to give in to the scheming of the
Mr. Zugene Moyer,
British Colonial Office and accept the humiliating defeat, heralding it as a victory. Thus,
Editor and Publisher,
these Zionist defeatists play in Hebrew affairs a similar part to that played by Petain in
THE WASHINGTON POST,
France during and after the French national debacle."
Washington, D.C.
Against these conspiracies the Hebrew Freedom Movement stands and fights.
Dear Sir:
The British Colonial officials and the Zionist defeatists are therefore united in a
Great injustice and incalculable damage have been
campaign of slander and vilification, in order to discredit and thus gag the Hebrew
dommitted in the recent series of stories in your newspaper
Freedom Movement.
on the Hobrew Committee of National Liberation, to the cause
of A martyred people, to the institutions and men attached to
A startling manifestation of this vilification campaign is the series of stories published
this cause, and to those many leading Americans who give it
in the Washington Post, October 3rd to 6th, inclusive. It seems that Mr. Eugene Meyer
their support and assistance.
has agreed to offer his American paper as a platform for British imperalist and Zionist
Tribute to the
This attack upon us was the first disappointing and
defeatist slanders. We are reproducing in full, in the second part of this pamphlet, the
American Press
dismaying experience with an American newspaper during the
first story which appeared on October 3rd. This story is a more or less comprehensive
more than four years of our activities in this country, in
and exhaustive compilation of all the rumors, gossip, insinuations and slanders against us
which period we have been constantly and foremost in the public
uttered or whispered during the last four years by British and Zionist officials.
eye. During these years of Hebrow national disaster and den-
perate fight for the survival of our people, we were deeply
The letter by Mr. Peter H. Bergson, Chairman of the Hebrew Committee of
impressed and gratified by the attitude of the American press
National Liberation, contains a detailed refutation of all these innuendos and also throws
toward the cause of our people and our struggle for survival.
light upon the background and motives of this campaign. It seems that in the meantime
This attitude of the American press more than justified the
Mr. Meyer and his staff on the Post discovered that they were the victims of a British-
fame it has acquired all over the world as being of the high-
est standard and integrity. But you have chosen for your
Zionist conspiracy, and tried not only to retract, but also to make amends.
publication to be an exception.
In this booklet is reproduced also the story that the Washington Post felt itself com-
la the Washington Post
You will probably remember the only conversation [on
nelled to publish on October 8, in the belief that this partial retreat would satisfy the
Jewish paper?
the telephone) I had with you. It was in 1942. At that time
Hebrew Committee of National Liberation and its American friends. The Washington
I asked you to give editorial support to the demand for 8
Past went even further and tried to forget the whole incident- on October 9 it pub-
Hebrew Palestine Army. You denied this support with the excuse
lished Mr. Bergson's condolence message to Mrs. Willkie in a prominent front page
that "the WASHINGTON POST is not a Jewish paper." I remarked
story, among the messages of heads of foreign governments and leading Americans.
that it was true that the WASHINGTON POST is not a Jewish
On October 13th, the Washington Post retracted in a long editorial its most vicious allega-
paper, but that the fact that it has a Joy as A publisher does
not explain why, like a hundred other newspapers in the
tions. Although the tone of the retraction was embarrassed and apologetic, it was far from
United States, probably all owned by non-Jews, it would not
being gracious and magnanimous.
support the Hobrew Army demand aditorially.
Some insinuations still have not been explicitly and squarely withdrawn, and the
Mr. Meyer's als
I cannot recall that at any time your newspaper como
Hebrew Committee insists that the Post repudiate every one of them; the damage done
of omlasion
out for three or four days consecutively with a campaign on
must be repaired. Therefore the Hebrew Committee cannot drop the matter- unless Mr.
any disastrous event occurring to the Hebrew people of Europe
Meyer publishes a detailed retraction with due apologies. Even then, the damage wrought
or to any of the proposed policies of action and solution.
the cause of the Hebrew Freedom Movement will by no means be adequately repaired.
We are servants of a foreign people who came to this country in order to appeal to
the people of America for help in the cause of our freedom. Our ultimate success depends
upon your response. Therefore, in this incident, too, we consider you the highest tribunal,
and since we know the noble traditions of the American people that fostered and upheld
the fight for freedom of every nation whose renvesentatives have come to this country for
help, we do not doubt your pronouncement. What we ask from you is to make your senti-
ment and your pronouncement known.
We did not seek this trouble and we shall be happy to see the incident closed.
Regraded Unclassified
Nothing moved you to such a step. Other American newspapers
2. Already some members or the American Lengue
did come out, but it is true that they are owned mostly by
for a Free Palestine and the Emergency Committee to Save
non-Jews.
the Jewish People of Europe have sent in their resigns-
tions after they received a copy of a reprint of your
Mr. Mayer's de
And now you have stepped into an internal Jewish campaign
publication sent to them by the Zionists.
of commission
of vilification against us, led by Zionist bureaucrats, by
giving this campaign for four consecutive days exceptional
3. In Chicago and elsewhere the Emergency Com-
front-page prominence, implying that the can who is the head of
mittee is in the midst of preparations for a big benefit.
the Hobrew National Liberation Committee and who has devoted his
Very substantial groups who were engaged in the organis-
life to the cause of his people, who has the support of many
ing of these affairs have withdrawn already, after they
American leaders in all walks of life, who deals with govern-
received from the Zionists copies of your stories.
ments concerning the most tragic and desperate problem of our
times, is, in sue total, a crook, who on the torrents of blood
Disconsolate state
I an writing to you without bitterness but with a feeling
of his people raised a million dollars without giving an ac-
of deep sadness for the disconsolate state of my people in
counting of how it was spent. You also implied that hundreds
despair and agony, persecuted by brutal enemies and mistreated,
of good, intelligent, forthright leading Americans were but
misjudged, forgotten and betrayed by those from whom one could
dupes and stooges in the hands of this racketeer. I am very
have expected understanding and support - the free and woulthy
eager to know In what capacity you started this campaign:
Jews in democratic countries.
whether 0.5 a publisher of an American newspaper, or as Eugene
Meyer, the Jew, who has let his American newspaper become a
It is in that state of mind that my friends, representing
tool in the hands of narrowly partisan Zionist bureaucrats
the different American organizations who support us, tried to
and anti-Zionist British officials united in their opposition
bring the incident with your paper to e quick and friendly
to our movement. The fact remains that except for some purely
close. They visited you and left with the impression that the
Jewish papers, not & single American daily but yours has taken
stories in your publication were a result rather of mistakes
the initiative to adopt this point of view of projudiced
of your managing and city editors than of any personal sinister
hostility.
intentions on your part, and that you were willing to right the
wrong by publishing refutations of all the misstatements and
Providing fuel for
You even overlooked the fact that such a campaign of
thus to limit the damage and somehow to repair it. I was very
anti-eculies
vilification against a servant of the Hebrew people will pro-
happy about the reports of these friends of mine - for two
vide excellent fuel for all sorts of anti-semites who will
reasons: First, because we have very important and urgent
delight in your slandering of a Hebrew man and institution, and
tasks to fulfill and matters to attend to: second, because I
that this campaign will also put despair into the hearts of many
wanted to believe that you personally are not involved in this
sincere friends and supporters of the Hobrew cause. But who
nasty affair. Mr. Merlin, the Secretary General of the Hebrew
cares when partisan bias and fanaticism prevail over common
Committee, has sent you a memorandum refuting the charges and
sense and justice?
allegations in your stories, as well as giving a background
story of the history of our activities in the past, and Mr.
Estent of moral and
The Zionist bureaucrats, you realize, are taking full
Smertenko, Executive Vice Chairman of the Emergency Committee,
material damage
advantage of the stories in your publication. They have sent
has prepared a statement ou behalf of the Emergency Committee.
out, to our knowledge, thousands of copies and reprints and
reproductions of your paper's stories, all over the country.
Blas
We also expected as an expression of good will to see a
In a letter from Chicago dated October 5, we are informed, *The
formal retraction in the form of an editorial clarifying and
WASHINGTON POST article is going around Chicago like wild-
explaining the matter and thus bringing the whole incident to
firell!*
8 satisfactory conclusion. To our great amazement, except for
the background story of our activities, none of the material
All this injustice and all this damage was done to our
has been published; no editorial has appeared. Worse than that:
cause, to the Hobrew Committee and to myself. I will give you
your staff tried in the most vicious manner to question the
a for examples which will prove the extent of this moral and
authonticity of the signatures appearing on a telegram signed
financial damage:
by leading officers of the Emergency Committee, protesting
against the stories in your paper, and took the trouble to call
1. At 6 dinner given by no on October 5 in honor
them up wherever they were - in Washington, New York and
of two American statesman who contributed to the creation
Los Angeles - to verify their signatures and statements. After
of the Hobrew Brigade, no less than eleven diplomatic
representatives and American Government officials did not
attend, after they had expressly accepted the invitation.
Regraded Unclassified
the signatories not only acknowledged the contents of the tele-
Personal background
2. The manner in which you reported that my name is
gram, but made statements of their own in the strongest terms,
Hilel Kook insinuates that I accepted an alias for disreputable
you did not find it necessary either to publish the protest
reasons. It is true that my real name is Hilel Kook. I changed
telegram nor did you see fit to publish any of these state-
it years ago, for I did not want to drag into the heat of par-
ments - eloquent expressions of their indignation.
tisan fights a name which is one of the most respected in the
modern history of my people. My late uncle, my father's
I therefore do not see any other possibility than to
brother, was the Chief Rabbi of Palestine and was reputed to
appeal to you once more and for the last time to make a full
be among the greatest Talmudic and Rabbinic authorities of
retraction. I shall attempt in this letter to repudiate all the
our time. My father is a prominent Rabbi at the head of a
misstatements and vicious insinuations that the stories in
Talmudic seminary in Jerusalem.
your newspaper contained. I will ask you in all fairness to
print these refutations contained in my letter as they will
Bidienle-en old trick
3. Your attempt to ridicule our movement by asserting
follow from the next paragraph, and I expect an editorial of
of abuse
that I styled myself a *nuisance diplomat* and that I was
apology to the Hobrew Committee of National Liberation and
most "emphatic when declaring to possess & dynamic person-
myself. I will then consider the incident with you and your
ality,* is an old trick of abuse. By no means do I wish to
publication 83 closed, and will go back to by more important
compare myself in any way to that great French leader, De
and urgent tasks.
Gaulle, though I consider him an inspiring example for all
fighters in the cause of oppressed peoples. However, we all
An Interview that
1. At the press conference I held on October 3, one of
remember how not so long ago be was ridiculed by such phrases
never took place
the newspapermen present was most insulting. Upon asking his
as the "self-styled Joan of Arc", etc. There were a great
name, I learned he was Edward F. van der Veen of the WASHINGTON
many prominent Frenchmen, too, who joined in the campaign
POST. To the amazement of all the journalists present, I told
against De Gaulle. Yet, he cane out the victor. Ridicule and
his that I was very surprised to meet his for the first time
slander did not destroy his.
at this press conference. And even the nan in question seemed
embarrassed when I said, "You were supposed to have inter-
Hebrew Committee
4. Before I go any further, I want to take up your most
viewed no a few days ago and you even quoted me quite profusely
ralsed - funds
vicious insinuation, the question of the funds, of 8 "million
in your story of that interview, though I have never seen nor
dollars raised* and my being *vague as to their use." I regret
even talked to you.*
deeply not being able to report the raising of such a sum.
Believe me, had I done so, I should not be at all vague as
The other signatory to the story about no in your paper.
to my intentions as to how to use it. The deplorable fact,
a Miss Glorin Lubar, had been calling my office for some time
however, is that the Hebrew Committee of National Liberation
recently in an effort to get an interview with me, which she
did not raise a million dollars, nor one hundred thousand
explicitly said was for a "picture story in the Sunday supple-
dollars, nor ten thousand dollars, nor any money at all, ex-
ment of our paper (the WASHINGTON POST).' When I finally came
cept for a few contributions that camo in without any solici-
back from New York some days ago, my secretary called the young
tation. The fact is. that the Hobrew Committee, since its
lady and made an appointment for her. When she arrived, to-
inception in May, has spent only about $30,000, including the
gether with her photographer. she again explained just where
cash payment on the building purchased for our use in
the story would be featured and even mentioned the date that
Washington.
it would be printed - some three or four weeks from the day
of the interview. I saw her for a short while, gave her some
Although it is no one's business where we got this
information, by no means bearing upon the matters quoted in the
$30,000. it is not a secret at all, since we are registered
story which then appeared - not in three or four wooks and not
with the Department of Justice as foreign agents, and all our
in a Sunday supplement - but in two or three days, on the front
financial transactions are submitted to the scrutiny of that
page of your paper. I know that sometimes interviews are min-
Department. Anyone can consult the files of the Department
quoted. However, it is the first time that I have seen an
and receive information as to the friends or institutions
interview published which did not take place at all. I can,
who have donated or loaned us this money.
of course, finish the argument with this. But, since your story
is a part of a general malicious campaign against the Hobrew
American organizations
5. What the POST may have been referring to was prob-
freedom movement, I shall take time to repudiate the untruths,
to whom the
ably the funds collected by the Emergency Committee to Save
half-truths, and malicious inuendos assembled in the story
Hebrew people will
the Jewish People of Europe, of which I as one of eleven co-
in your newspaper.
forever be grateful
chairmen, and possibly the Committee for a Jewish Army of
Stateless and Palestinian Jews of which I was one of the lead-
ing officers during the period of its activity. Both these
Regraded Unclassified
.
organizations have done and are doing a most valuable work
posters and various forms of pamphlets, booklets and letters
for which the Hobrew people will remain eternally grateful.
running into the millions of copies. (Some of then contained
However, these are American organizations. They have a full
full financial reports.) In these messages, always accessible
slate of officers and executive boards consisting of some of
to the largest possible audience, vo not only explained in
the most eminent men in American public life.
the most explicit terms what our program is, but also the de-
velopments and results of our activities. More than that, not
The expenditures, as well 65 the collection of money
only did we constantly report, week in and week out, the prog-
by the above-mentioned organizations has been a matter of
ress of our endeavors, but even our failures. In a dozen lead-
public record, issued in quarterly reports by certified pub-
ing newspapers all over the United States, among them the
lio accountants. To by knowledge, these organizations never
WASHINGTON POST of October 6, 1943, we published a full-page
raised a million dollars nor anything approaching it. These
advertisement under the headline "A Report of Failure*
reports have been distributed to the responsible officers of
The leading paragraphs of this advertisment read as follows:
the organizations end can be had for the asking by anyone
interested in the work done by these organizations, including
*The foremost duty of workers in a humanitarian
the WASHINGTON POST, which has not taken the trouble to got a
cause is to be honest and sincere with themselves as well
single copy of such reports.before publishing these dis-
as with the public. Nothing is more harmful to the cause
proved accusations.
one serves than the normal urge to delude oneself with
glimpses of success or victory; nothing is more danger-
To insinuate, as the POST story does, that there is any
ous than to be satisfied by more words of sympathy and
suspicion attached to the expenditure of the funds collected
pity from high places. No matter how disagreeable it may
by these organizations is to impugn the integrity of all the
be, wa refuse to delude ourselves and we refuse to take
men who are holding responsible executive and administrative
words as a substitute for deeds.
positions on these committees.
*No, we don't cherish any illusions: during the
Under the Impart of
6. The essence of the story contained in the faked inter-
months between the closing session of the Emergency Con-
fascias and ned
view headlined *Bergson Admits Million Dollar Fund Raised,
ference to Save the Jewish People of Europe and today,
Influence
Vague on Its Use* is so vicious and is such a complete con-
nothing has been done by the Allied Governments to stop
tradiction of the facts, that only in these confused times,
the slaughter or to alleviate the torments of five million
and under the impact of Fascist and Nasi influences, could
people.
such 6 distortion be printed in an American newspaper. Not
only did I not raise a million dollars, or any funds at all,
"Two months have elapsed since the experts attending
but any institution I an connected with has the characteristic
the Emergency Conference to Save the Jews of Europe worked
of being explicit and outspoken, in the face of a watchful
out a program that would enable hundreds of thousands of
public opinion and bitter opposition. The novelty of our work
Jews to escape the death sentence passed upon them by
in this country, and any other country where we have worked
Hitler - death by starvation, death in gas chambers,
or are working today, consists in abolishing the old, bank-
death in front of machine-gun squads.
rupt and undignified system of subjecting the Hebrew people
to back-door pleas before subaltern or high government of-
*Two months have passed since this program was pre-
ficials. In abolishing this shameful system we represent the
sented to our President, to Secretary of State Cordell
sentiment of indignation of our people in agony in Europe. We
Hull, to the leaders of both Houses of Congress, to the
abandoned this system of secret bargaining with this or that
Ambassadors of the United Nations."
government official and we brought the whole problem out into
the open. This system of appealing directly to the peoples of
Probably such candor and such square dealings with the
the world, to public opinion, constitutes a revolutionary
public have no precedent, at any rate in so far as any organi-
change in the activities on behalf of our people. This is a
sation dealing with the Hebrew problem is concerned.
great stride forward in the direction of democracy.
Nevertheless, in spite of admitted failure, we did not
In strict accordance with this democratic principle, we
despair but issued a call to the American people to persevere
have dealt openly and squarely with the people of America. We
in its demands for immediate action, and action on behalf of
have introduced and practiced the method of direct messages
governments came. In 8 for months the War Refugee Board was
to millions of people through full-page or large-size adver-
created.
tisements, through local or nationwide radio hook-ups, through
9
Regraded Unclassified
Hamanity's greated
7. The WASHINGTON POST story quotes BY as having admit-
You remember how, before we came to this country, Jowish
bargain
ted that "relief work has been a small part of our work. Our
news, with but a few exceptions, was usually relegated to
major activity is mobilising the understanding of the American
either the obituary pages or the religious pages of the daily
people for no integral and positive solution of the problem of
papers. And if we had confined ourselves to en effort that
the Jewish people in Europe.
achieved only the general effect of gaining the attention and
respect of the American people and government for the Hebrew
If I were to give an interview to the WASHINGTON POST or
people, and had not resulted in the many concrete accomplish-
any other paper, I would speak not only about our educational
ments we have to our credit, I should still consider that the
work of mobilising public opinion, but also about the activities
results have fully justified the small cost involved.
and record of achievements of our representatives and officers
in London, Turkey, Palestine and, lately, in liberated Bulgaria.
A "millenaire"
8. As far as my personal income is concerned, it is no
who is broke
secret either. I receive my salary from the Hebrew Committee
But let us ignore for a moment all these activities om-
of National Liberation. It amounts to $75.00 a week. In my
nating from us all over the world. Lot us ignore the so-celled
bank account at the American Security and Trust Company my
"illegal" immigration into Palestine. Let us even ignore such
balance is about $100. I have no other bank accounts, nor do I
major events 88 the creation first of the Palestine Regiment
have any investments or property. If it would satisfy your
and now of the Jewish Brignde. Lot us ignore for a moment that
curiosity, I would also tell you that my personal residence
that War Refugee Board and the refugee shelters - things we
in New York, where I spend half of my time, consists of half
fought for all the years of our activity in this country -
a room - sharing one room with a colleague in a furnished room-
have something to do with the record of our achievements -
ing house: In Washington I live at the headquarters of the
for after all, we wore the only ones who advocated their estab-
Hebrew Committee. The furniture in my bedroom there consists
lishment, while the Zionist leaders and their front organi-
of a bed, a radio and a chair.
mations came out officially against the formation of the War
Refugee Board: let us ignore for a moment to whom your own
What la accepted -
9. In the "interview" an Innuendo of doubt is cast upon
WASHINGTON POST gave full credit in its editorial of Janu-
matter of course for
my integrity, by referring, indirectly, to my affiliation with
ary 25, 1944, for the creation of the War Refuges Board, in
any other people is
denied to Hebrews
more than one organisation, as if it were a crime for anybody
the words: .. The industrious spadework done by the
to be affiliated with more than one organization. In your
Emergency Committee to Save the Jewish People of Europe had
ill-will you refuse to concede that the Hebrew situation, an
contributed to this prospect, and the Committee is likewise
any other situation dealing with human lives and their mani-
entitled to credit for the President's forehanded move.
fold problems, has many aspects and requires various solutions
to its diverse questions. No American wonders why it is neces-
Well, even ignoring for a moment all these activities, I
sary to have a uso, a Red Cross, an A. F. of L. : why it was nec-
still firmly believe that if the propaganda and advertising
essary before the war to have a WPA and during the war a WPB
in which we have engnged for the last four or five years had
and, with the approach of peace, a whole series of reconver-
cost not the modest sums the organizations have spent, but
sion institutions. Everybody understands that the problems
millions of dollars, it would still be considered the greatest
are many and for each a specific institution must be created.
bargain for the cause of my people as well as of humanity
This also applies to the problems of our people which are
at large.
even more diverse and complicated. or course, the members of
the Hebrew Committee of National Liberation were interested
This "propaganda" and this "advertising" relentlessly
and tried to bring about the formation of instruments for each
appealed to public opinion, aroused it to its responsibilities,
specific purpose.
demanded that the Hobrew people be not forgotten, and insisted
that they have a right to live, to fight and be free. This not
At the same time we have seen to it, and we were definitely
only I but many men and women of good will consider a most
careful, that the purposes of each instrument are not mixed
important service to the cause of a forgotten people.
nor confused, taking into consideration the fact that some
people are willing to support one phase of activities and not
You, Mr. Moyer, are certainly in a position to judge the
another: that some are ready to cooperate and fight from a
impact and effect of this work, not only because you published
purely humenitarian and emergency viewpoint along the lines
our advertisements and not even because you gave editorial
of rescue of the Hebrew people of Europe and are not interested
credit to our achievements, but also as B man who, at the head
in, or are even opposed to, the formation of e Hebrew Army. We
of 8 great paper, constantly tries to influence public opinion.
have marely based our activities on fair play towards the men
10
11
Regraded Unclassified
and women of good will in America who are engaged in this
noble work.
13. In your story it to stated that Mrs. Louis D.
Brandeis has declared the use of her name was *completely
Whose signatures
10. Many paragraphs of the *interview* spoke about the
unauthorized*. This statement was already denied by her in
wases endored?
misuse of names in advertising of messages to the American
the NEW YORK TIMES of June 8, 1944, when a reporter of that
people - namely, that names were used as if they were sponsor-
paper showed her a photostatic copy of the signature under a
ing one or another organization, which in reality they never
membership declaration of the Sponsoring Committee of the
did. Mr. Meyer, again you are in a position to be a good judge.
American League for a Free Palestine.
You published many of these advertisements, some full page
and Some even double spread, because the signatures ran into
We doubt whether Senator Tunnell told you that: "It
the thousands. THE POST is a Washington newspaper and hundreds
appears that they published a statement that I had become
of the signatories are high government officials, Senators
identified with their organization. I don't think that an
and Congressmen who live in Washington. I should like you to
entirely legitimate organization would do this without my con-
tell no whether you received one protest, or one denial,
sent." The American Lengue for a Free Palestine has
from all those thousands of signers published in the adver-
in its possession the Senator's signature under a declara-
tisements in your paper. or course you did not. Otherwise you
tion accepting membership of the League's Sponsoring Commit-
would have called the attention of the officers of the organi-
tee, a photostatic copy of which in enclosed.
zation that placed the ads to that matter. The fact is that
from over five thousand American leaders who, in one way or
14. Again, I have not seen Rabbi Herzog's purported
denial of having anything to do with me or the Hobrew Com-
another, expressed support, endorsement or participated in
mittee of National Liberation. But I have before me a cable
the committees supporting the cause of the Hebrew people, none
received recently one of several communications received
denied their affiliations. Some, maybe a score and a half,
from him - in which he informs me that he gave a statement en-
resigned in the course of the past four years, under terrific
pressure from British Embassy officials, anti-Zionists or
dorsing our support of the Thomas-Somers resolution concerning
the establishment of emergency shelters in Palestine.
Zionist bureaucrats. No regret all those who withdrew their
support and are thankful to all of them for whatever they did
"Persina nos grata"
with British
15. From your story it nooms that I and my colleagues
for the cause of our people, to all but one Pierre van Passson,
are disliked in many quarters, and that preminent among those
who not only withdrew but has written a libelous attack against
Importalists: An
Insult or - benor?
who dislike us are some British officials. "The British Gov-
us. For that be will answer in Court, since he is now under a
libel suit.
ernment," it 13 stated in the story, "considers Bergson 'per-
sona non grata'." Probably this was also intended to be part
Why Sension Lanes and
of the campaign to discredit us, but I think that this par-
Congressman Bloom
11. It is true that Senntor Lucas did not like our point
ticular statement is likely to have the opposite effect. You
protested
of view, stated in an advertisement about the failure of the
may be certain that millions of Americans, if only informed
Bermuda Conference, which we called a mockery in the face of
of the true situation of Palestine, would consider the "per-
the total extermination of our brethren in Europe. It is also
sona non grata" epithet a compliment when applied to any
true that Congressman Bloom did not like it. But it is also
Palestinian. Apropos, may it be mentioned that the British
true that the names of these two gentlemen did not appear in
declared, only recently, as "persona non grata" a certain
that advortisement and it is not coincidental that their names
prominent American statesman for having an independent opinion
never appeared among the five thousand-odd American lenders
who have, in one way or another, endorsed the fight for Hebrew
about the situation in another country under British rule -
freedom and survival.
India. And, after all, Americans will not have forgotten the
circumstances of the birth of their own nation.
A seriou of the and
missistements easily
12. I have not seen Senator Wagner's letter in which he
denounced the Hebrew Committee of National Liberation, but I
When thinking back to by activities during these trying
repadited
am enclosing Senator Wagner's insertion in the Congressional
years of catastrophies, aggravations and disappointments,
Record of August 28, 1944, of a speech delivered by Senator
the fact that the British officials considered me as "persona
non grate* will give me solace end fortitude. This does not
Elbert D. Thomas over the CBS on Tuesday, August 8, in which
the latter endorsed these policies of the Hebrew Committee
reflect upon my attitude towards the British people whose
courage and rescurcefulness I admire and in whose midst I had
ideology and methods of activities.
the pleasure of living a few years, and some of whose great
non are true friends of our cause and our fight. The Hebrew
people will forever be indebted to such sen as Lloyd George,
12
18
Regraded Unclassified
Lord Strabolgi, Lord Davies and above all, to our good friend
organizing the evacuation to Palestine of well over 30,000
Colonel Patterson, now residing in this country, as well as
Hebrews from eastern Europe.
to the departed friend of the Hebrew cause, Lord Wedgwood.
"Floteam and Jetsum"
-borred from
The anonymous British gentleman objects to this: "It
When - honorable
16. The "persona non grata" paragraph contains, how-
the Name
leaves wide open an opportunity for 'flotsam and jetsam' and
official lieu
ever, a lie asserting that "the British official dealings with
Namia posing as refugees to enter mandated territory without
him (1.e. me) had been of a military nature* - referring to
first being investignted.' If we were instrumental in saving
my selective service status. The fact, however, is that I was
this "flotsam and jetsam" from Hitler, we are proud of it.
received by Lord Halifax in my capacity BB National Director
No did not seek this country to accept them, nor the country
of the Committee for a Jewish Army. The fact is also that I
of the British gentleman, nor any other country in the world.
had the pleasure of discussing, at least four times, the
No brought them to the country promised to them es their very
Hebrew Army situation with Field Marshal Dill, British non-
own National Home.
ber of the Combined Chiefs of Staff.
As for his allegation that there are Hitler spies among
17. As far as my draft status is concerned: in your
them, this myth has long ago been exploded. The former Colonial
story it is told that "Bergson, who entered this country in
Secretary, Malcolm MacDonald has sought for a long time to
1941 es a citizen of Palestine, is thirty-four.
Shortly
dangle that alleged danger in support of his anti-Mandate
after his arrival he informed the British that he wanted to
regime in Palestine, until, under the relentless questioning
join their Army.* This is not so. I never volunteered to the
of liberal members of Parliament, he had to admit that not 6
British Army shortly after coming to this country. It is true
single Hitler spy has been found among the "illegal" Jewish
that I em thirty-four, and I was once rejected as physically
immigrants.
unfit by the American Army, and now, due to my age, my case
is pending along with many others who are not being inducted.
The la behind
But all this is of secondary importance. The paramount
since they are over thirty.
the completery?
fact, however, is that the story in the Washington Post plays
inadvertently into the hands of the schemers against the rights
Young Beltibers
As for the challenge of the unnamed British official that
and very existence de our people.
who de and
join their army
I join the "Jewish Brignde* now that it has been created - I en
sorry that I cannot give the gentleman that satisfaction.
The reactionary clique of the British Colonial Office
I will remember how the British, in forming the Palestinian
is not content to keep the gates of Palestine mercilessly shut
Regiment, expected this gesture to quiet all further Hebrew
in the face of our dying brothers in Europe, but it is preparing
demands, Now they expect the same of the Jewish Brigade. Our
new blows against our hopes and future, and schemes to enforce
task is as yet unfinished. The anonymous gentleman probably
the ghotte regime in Palestine forever.
considers his work in Washington on behalf of the British
Embassy as more important than to stay in the army. I consider
Most tragic of this deplorable situation is the fact
my work on behalf of the Hobrew people as also more important.
that the Zionist leadership and bureaucrets, as in the past,
Britain today faces a brighter future than my people, and never-
are ready this time to again give in to the scheming of the
theless the dozens of youthful secretaries of the British
British Colonial Office and accept the humiliating defeat,
Embassy are sticking to their posts.
heralding it as a victory. We are sorry that these Zionist
leaders and bureaucrats are defeatists in thir make-up. They
The Illegal Immigration
18. In the story you and the Zionists question the
are not Quislings, but they are Petains.
- was reponsible
fact of whether "wo have been responsible for 40,000 Jewish
for at
But the worst of the lot are the American Zionist
refugees having entered Pelestine illegally from Europe dur-
ing the seven years." You then state that high British officials
lenders. They conducted a vicious and unscrupulous attack.
"made plain that in matters pertaining to legal entry of
No lies have been too great, no rumor too fantastic, no trick
Hobrews into Palestine, the British government deals only
too despicable to be used by those people. Every individual
and directly with the World Zionist Organization.* Now, the
of prominqnes active in our work throughout the country has
question is: who is responsible for the tens of thousands of
been nagged and tormented and abused with the hope that these
Hebrews who were evacuated "illegally" from the danger zones
high pressure tactics would either frighten them into sub-
of Europe to Palestine? The Zionists? Are they too engaged
mission or make the situation so unbearable for them that they
would give up the fight.
in "illegal" activities? To e major part, I tum happy to say,
we and our comrades abroad are responsible for initiating and
The infamy of this action lies not only in the moral tur-
pitude displayed by these malicious libelers, who hold lucra-
tive jobs at exaggerated salaries of $20,000 a year, or more:
it lies not only in the fact that the Jowish Agency, though
15
14
Regraded Unclassified
OCTOBER 3, 1944
Reprint from The Mashington Post of October 3, 1944
registered as 8 foreign agent, i.e., a purely political body,
is getting its budget from charitable (tax-exempt) funds. It
lies in the fact that during the greatest crisis ever faced.
Bergson Admits $1,000,000
by the Hobrew people, Jewish organizations which appeal for
public support and for public funds are wasting nine-tenths
of their time and energy in this vicious effort to destroy
Fund Raised, Vague on Its Use
the only positive and relentless campaign for the rescue of
the tormented Hebrews of Europe. When the history of this dark
ora in written, the record of these organizations will consti-
'For Liberation of Jews'
He emphasized that the British government considers Berg-
tute the most shameful chapter of the book.
son "persona non grata," and made plain that Dritain's only
By Glocia Lubar and Edward F. van der Veen
official dealings with him had been of a "military nature."
Not only did these Zionist leaders sabotage the rescue
Bergson, who entered this country in 1941 as a citizen of
efforts we have made, as mentioned above, but their heaviest
From bis $63,000 residence at 2315 Massachumetts ave. nw.,
Palestine, is 34, single, and has been declared physically fit
responsibility lies in the fact that they completely sue-
formerly the Iranian Embassy, Peter Bergson, self-styled
in both British and American Army medical examinations/
ceeded in confusing the issues of Hobrew national redemption.
"amisance diplomat," boasts bis Hebrew Committee of
Shortly after his arrival, be informed the British be wanted to
They persist in insisting that all the Jews the world over are
National Liberation with Its numerous affiliates has collected
join their army, As Palestine is mandated territory, there cas
one people, one political entity. Thus, on one hand they have
one million dollars "from a generous American people." He
be - British conscription, fighters must volunteer. The Brit-
sown division and strife among the Jewn in this country who
became vague, however, when a Post reporter insisted be tell
ish accepted his offer, per him through the physicals, and told
consider themselves, from & political and national point of
what use has been made of the million dollars.
him to appear for service. Instead, it is said, Bergson sent a
view, as an integral part of the American nation, and, on
"Relitf work has been a small part of sur work," Bergson
letter paying he had decided he should de his fighting In a
the other hand, they have paralyzed any chance of success for
said. "Our major activity is 10 mobilize the understanding
Hebrew army.
the demands of the Hebrew people of Europe and Palestine who
and help of American people for an integral and positive
definitely constitute a distinct ethno-political entity, since
solution of the problems of the Jewish people in Europe."
Classified 1-A
they owe no allegiance to any nation but their own. As is known,
Bergson (his real name is Hillel Kook) is a slight man with
the Bebrew Committee of National Liberation tries to defend
pale-blue eyes, darkish blond hair and a mustache. His voice
Upon receiving this letter, the British turned the matter
and to fight for the interests only of the Hebrews in Europe
cracks or squeaks when he gets excited.
over to the American Selective Service, where be was imme-
distely classified I-A. This classification was affirmed on
and Palestine, and by no means does it speak for the American
He was emplatie when declaring be possessed a "dynamic
appeal by the New York City Board of Appeal and is now
Jews, whom we consider part and parcel of the American nation.
personality." He added that "we have bern responsible for
under advisement by the National Selective Service Board.
40,000 Jewish refugees having entered Palestine illegally from
Bergaon's appeal, it is understood, was based on "indisgensi-
All this confusion surrounding our nation's problems
Europe during the last seven years."
bility."
and its accompanying slander is very tragic. Our struggle
"I and my workers managed to accomplish this feat through
"It is odd," the British official mased, "that . Jewlsh Inigade
against all these forces is a difficult, uphill fight. We are
underground methods," he added.
has now been formed, but Mr. Bergion has not yet enlisted."
sorry that, moved by I don't know what motives, without giving
The American Jewish Conference, headed by Rabbi Abba
us a chance to present our side, you choose to join and spear-
A case concerning Bergson's stay is this country is sow be-
Hillel Silver of Cleveland, and Dr. Stephen S. Wise of New
head the attack on us. In doing Bo you did not simply attack
fore U. S. Immigration authorities.
York, formed under a mandate of 64 reportable Jewish national
a group of young Hobrew men, devoted to their people: you
At the time Bergson first attempted to buy the Tranian
organizations, agrees with Bergson that his groups have -
helped to insure that the Hebrew people remain homeless and
Embassy, be declared he wanted it for a Hebrew Embasty.
doubtedly collected a million or more dollars in (tax-exempt)
defenseless.
This appeal was tirned dewn by the District Zening Beard
contributions from "persons who have mistaken propaganta
on the grounds the proposed "embassy" had not hern recog-
for performance and advertisement for achievement," but join
Already in your follow-up stories after October 3 there
mixed by the U. 5. State Department, District officials state
with British officials in deriding his assertion he has been the
are clear indications, not only of retreat, but also that
Bergion later received permission to buy the property when
means of smuggling 40,000 Jews lato Palestine
you yourself do not believe in the scurrilous allegations
he stated he wanted is as a private residente. Bergson's salary,
contained in the first story. Why then persist in refusing
"The public might be interested in knowing just how much
by his own admission, is $75 # work. Farmerly, be said, it
6. full and square retraction appropriate to the dignity of
has been collected and what disposition was made of the
was $45.
such n. public figure as yourself?
money," the Interim Committee of the Jewish Conference
commented. "To date Bergion has made no such accounting."
No Business Permit
Since you have not found it necessary even to acknowledge
British Disapprove
Investigation by The Post discloses that Bergson neither
the letters, telegrams and statements sent to you by Mr.
"If Bergson has been responsible in any way for aiding
helds - permit to conduct any son of business from this
Samuel Merlin, I feel it by duty to tell you that if this letter
Jewish refugees in their attempts at illegal entry into Pales-
highly restricted residential address nor, under the law, can
does not receive your favorable consideration, I shall be
time, this in certainly looked upon with disfavor by the British
be get code.
compelled to have it given the widest possible circulation,
government," a high British authority here said. "It leaves
The "embassy," castigated by the American Jewish Con-
and also to consider taking other steps to protect the advance-
wide open an opportunity for "Botsam and jetsam' and Narie
ference as a "fraud, - buffoonery, and a comie upera drollery,
ment of our cause and our good name.
posing as refugees to enter mandated territory wishout first
if it were not so tragic," has a telephone swüchboard and
being investigated."
business office on the first floor. Bergion's private office, and
Yours very truly,
This official made plain that in matters pertaining to legal
the offices of his private secretary and clarical force, are on
entry of Bebrews into Palestine, the British government deals
the third floor.
PETER H. BERGSON
only and directly wish the World Zionist Organisation, net in
Zoning officials, informed the residence was being used for
Chairman
any way connected with Bergnon's committees.
business offices, asserted the license and police departments
16
17
Regraded Unclassified
would be interested to know Bergion has been operating .
was "completely unauthorised" Forty-six American rabbis
brainess without an occupancy permit.
also protested against use of their names in literature dis-
De Valers in the interest of Irish freedom During de last was
30,000 Sent to Palestine
Bergnon, who formerly had declared the $63,000 "embasey"
tributed by the American League.
be floated - loan in this country for several million dollars.
was purchased for him by friends, admitted to The Post it
By mains of this loan, the American public contributed to the
"In the course of the next two years, more than 30,000
Senator Robert F. Wagner (D, N. Y.) in an upen letter,
Habrews were landed or the shores of Palantine, cistrary to
was paid for and of funda received for by the Habrew Com-
canse of Irish freedom on & promise that it would be repaid
desounced the Habrew Committee of National Liberation as
the wishes of the British administration Small boats and large
mittee of National Liberation. The second floor, which makes
by . grateful Irish nazion. We are confident that an equally
"an organization which serves no assful purpose and can only
entibuolastic response by the American public will support our
steamers were chartered to ENT these people across the Black
up the Bring quarters, are beautifully furnished
confuse and mislead American public opinion."
Purchased by Fund
work in behalf of the martyred Hebrew people.
5m and the Mediterransa Some of these shipe landed their
Dean Allange, leader of the Liberal Party in New York,
tremais cargues on deserted beaches in Palestine at night;
Despite Bergans's assertion to the soning board that the
announced his resignation as co-chairman el the Emergency
Work Opposed by Some
others salled right into the harbors. In February, 194), the
residence was is be & private dwelling, the deed filed Septem-
Committee to Save the Jewish People of Europe, because he
ss Sakarya brought 2400 persons into Haifs, These were coo-
"It is unfortunate that The Post was misinformed about
her 22, 1944, shows is was purchased by the Hebrew National
did "not approve of its political affiliations"
Ened in an internment camp for over six months. En Jshotin-
Liberation Fund, Inc.
the public activities of the committee and that it relterated
sky, the leader of this expedition and sow - of the members
Pierre van Passion, author, - an active worker with
Organised Jewry points to the continuous change of spon-
the charges of those who have been opposing our work, al-
Bergson, has gone on record with a seathing denouscement
of the Rebrew Committee, was interned along with the Imml-
though these charges have been repeatedly disproved and
sora as published in the many full-page advertisements asking
grants.
for funds. The American Jewish Conference charges names
calling the Emergency Committee a "cruel hoar perpetrated
discredited. One of the most malicious of these accesations
on the American public." Passen accused two of Bergan's
"Upon the outbreak of the war, the Palentinians who con-
are used without permission, and that other so-called spossors
is that the American organizations with which the members
have repudiated the use of their names on grounds they do
organizations of being sponsored by the "Fascier" party in
stitute the Hebrew Committee of National Liberation deter-
of the Habrew Commitree have been associated have MAIL given
Palestine, the Irgus.
a complete accounting of the funds they collected and spent.
mined to organize a Hobrew army that would fight in Allied
not agree with the committees' alleged political affliations
ranks against Hitler. They founded the Committee for a Jew-
with the Irgun, a terrorist party in Palestine which Bergson
Dr. Francis E. McMahon of the University of Chicago, and
14 other officers also announced their resignation from the
"The fact la that every one of these organizations has pub-
ish Army of Stateless and Palestinian Jews in this country.
has publicly praised.
Emergency Committee because of "increasing confusion be-
lished quarterly statements of certified public accountants Indi-
"This, too, was a parely American organization headed by
Senators Scott Lucas (D., EII.), Harry Trumas (D, Mo.),
esting the amount of income and the character of their expen-
some of the most eminent mén in American life, Including
vice presidential candidate, and Senator Albert Chandler (D.
tween objectives of the various committes."
ditures. These have been submitted as a matter of course to
Senators Guy M. Gillette, Arther Capper, James E. Murray
Ky) have announced that advertisements had committed nome
Rabbi Herzog, Chief Rabbi of Palestine, has denied any
the eminent leaders of American life who were members of
and Elbert D. Thomas; Representatives Andrew L Somers,
members of the Senate to a point of view of which they had
ties with the Emergency Committee.
the executive boards of the organizations in question: and,
Louis J. Caparrell, Thomas H. Calles, T. D'Alesandro, Jr.,
no advance knowledge, and that their names were used with-
William Green, president of the American Federation of
forthermore, they have been freely offered to all persons
John D. Dingell and George Grant: Governors Dwight Gris-
out specific permission.
Labor; R. J. Thomas, presidess el the U.A.W., CIO; and
interested in learning about our work,
wold, Robert A. Hurley, R. M. Jeffirm, Heart F. Schrickler,
Mrs. Louis D. Brandeis, wife of the late Supreme Court jus-
Max Zaritsky, president of the United Hatters, Cap and
and Lieurenant Governor Charles Poletti: alan William Green,
ties, has declared use of her name as sponsor of the American
"The alma and purposes of the Hehrew Committee of Na-
Millinery Workers of America, also have decoment the
Philip Murray, President Frank P. Graham, President Ray
League for a Free Palestine, and the Liberation Committee,
tional Liberation, as well as of the American organizations
Hobrew Committee of National Liberation
Lyman Wilbur, Robert R. Nathan, Professor Max Lenser,
which this committee has founded, were incorrectly presented
Professor Reinhold Miebuhr, Professor Constantine
to the American public in a series of articles by The Post.
Hallet Abend, Clare Boothe Luce, Taylor Caldwell, Waldo
OCTOBER 8, 1944
la order to clarify the confusion existing in the minds of
Frank Ben Hesht, Rev Stont, Eddie Cantor, Mrs. John Gm-
many people, he submitted a summary of the character and
ther, John T. O'Rourke, William Allen Whise and Willism
Reprint from The Washington Post of October 8, 1944
activities of these organizations from the time that be and
Zorach
his associates arrived in this country.
Raised $251,630
Bergson's Actions Defended
Seven Formed Committee
"The committee raised $251,630.86 in the course of three
"The Habrew Commitiee of National Liberation was
years of its activity. It established offices in Washington and
Hebrew Committee
Official
formed by Mr. Bergion and six other Palestinians to win
London, as well as in New York, in order to gain the approval
recognition for the Hebrew nation as one of the United
of American and Allied governments for its proposal.
Nations in this war, and as such entitled to representation
"Representative Andrew L Somers introduced a resolation
Replies to Articles in Post
on the War Crimes Commission, the United Nations Relief
in Congress requesting the President to direct the Secretary
and Rehabilitation Administration, and other agencies dealing
of State to petition the government of Great Britain to permit
with postwar reconstruction The committee also recks the
the organization of all-Jewish military units in Palestine.
Pointing out that the Hebrew Committee of National Lib-
working. The impression was given that Mr. Bergson and this
establishment of am independent state in Palestine, where
Public sentiment was mobilized behind this resolation and
eration was formed to win recognition for the Rebrew nation
committee have raised a large sum of money in this country
Rebrews and Arabs will enjoy equal political status, free from
the press throughout the country came credit la editorial support
" one of the United Nations in this war, Samuel Merlin,
fer their use without offering an accounting se their con-
British domination.
of the Army proposal.
sectetary-general of the committee, a Palestinian, has replied
to The Post series of articles relative to the Liberation Com-
tributers, The facts completely contradier this impression.
"The establishment of a Hebrew committee is the culmina-
"In England as well as in the United States a large section
"The Hebrew Committee of National Liberation has made
ties of a serfer of organizational activities on the part of
of Parliament was convinced by this committee of the name
mittes, Peter H. Bergson, its chairman, and in fund-raising
no public appeal for funds at any time whatever, I wast to
these Palestinians, who came to this country in 1939 to get
and feasibility of having 4. Habrew Army as nne of the
American committee.
state emphatically as possible that the only source of income
Allied forces.
American support for measures to alleviate the tragie plight
Mertha stated that the Liberation Committee ted purchased
was the madest NAMES totaling about $5000, commibuted by a
of the Hebrew people
"In English supporters included Lord Strabolgi, who heade
the Bebrew "embury," at 2315 Massachusetts ave, nw, "le
few sympathetic persons and loans amounting to $25,000 given
the sister committee for a Jewish army le London; John D.
order that the Hobrew Nation may be represented in a man-
us to buy the building we occupy, la order that the Hobrew
"At the time of their arrival, the rise of Naxism in the
Mack, M.P., Anrurin Bevan, M.P., Sir Robert Gower, M.P.,
liter appropriate to the dignity of an ancient people."
nation may be represented in the United States in a manner
countries of Central and Easters Europe threatened the liver
Comdr. Offer Locker-Lampoon, M.P., Brig. Gen. W. H.
Ht missing that the Liberation Committee planned to finance
appropriate to the dignity of an anclent people. Of all the
of the Hobrew inhabitants, and the first effort of the Pales-
Grübben, Sie Maurier Bonham Carter, and the Rev. Prof.
in activities through Boating a loan of a million dollars in
members of the Hobrew committee, Mr. Bergaon has been
finias group was to get American aid for their work of trans-
W. O, E Oesterley.
this comitry.
least concerned with financial arrangements. His work has
porting " many Rebrews M possible to Palentise For this
been that of a spokatman and representative of the Habrew
purpose they organized the American Friends of . Jewish
Challenge to British
The statement fullews:
mation.
Palestine The organization raised $33,385 to provide funds
"Recently 63 members of Parliament demanded . question
"The series of articles poblished by The Port in the last
"In order to enable us to push our work with increased
for this work. In order to get permission to and its money
period in which the Government would be challenged on this
fre days have done . grave information to Peter H. Bergion,
tempo and vigor, a Hebrew Liberation Fand has been incorpo-
abroad, this organization was registered with the State De-
issue, The British government compromised by authorizing
chairman of the Hebrew Committee of National Liberation,
rated in the State of New York This ford will sam seck .
partment and submitted monthly reports of collections and
the creation of an exclusively Jewish brigade in the British
and serious Injury to the cause for which this committee is
loan of # million dollars. A similar Action was taken by Eamon
expenditures both in this country and in Earope.
army. This has been declared inadequata by the commission.
18
19
Regraded Unclassified
and efforts are will being made to colarge this brigade into
More Shelters Sought
a fall-ained independent force like that of the Greeks, Net-
"The Emergency Committee is now backing congressional
wegians and Poles.
action on a resolution introduced by Senator Gillette asking the
"The revelation in November, 1942, by our State Depart-
President to establich more emergency refugee shelters in this
ment in official statistics that over one million Hebrews in
country as temporary havens. In connection with this work,
OCTOBER 13, 1944
Europe had been murdered for the Naria in extermination
it recently presented a half million signatures to the President
camps established in Poland and eastern Germany diverted
and Congress, urging this action and also the establishment
the energies of these Palestinians from the army issue to the
of similar relagee shelters in Palestine,
Reprint from The Washington Post October 13, 1944
need of effective action by United Nations governments in
stopping this mais murder.
"In order that the Habrew nation might have adequate
EDITORIAL
" explain any movement which in appealing for public sym-
representation in the councils of the United Nations at a time
"They sent out a call for an Emergency Conference to Save
pathy and patromage. In this connection - find that the
when plans and programs for postwar reconstruction were
the Jewish People of Europe, to which experts in the held
Bergson Group
Hebrew Committee of National Liberation from its head-
being formulated, Mr. Bergson and his associates organized
of international relations, military affairs, transportation, re-
quarters at the Hebrew "embarry" fain't the representative
on May 18, 1944, the Hebrew Committee of National Libera-
lief, no, were Invited. A program of findings and recommen-
A number of good people have protested that the series of
character that in purports to have. It was descurred by the
tion as the spokesman of the Hebrew people of Eastern
dations was formulated as - result of the seven days of de-
Europe and Palestine.
news articles about the Habrew "embany" reflects unfairly
American Zionist Emergency Ceuncil ON June 2 as "a group
liberation by these experts The public interest evinced by .
upon the electosynary work of the mase of the various agro-
of frauds." Epithets aside, the fact is that under the mandats,
countrywide news coverage of the Conference, and favorable
"This committee consists of Palestinians and, as such, is is
cies which are affiliated with the "embassy" through the
the Jewish Agency representa the people of Palestine The
editorial comment encouraged the formation of the Emer-
registered as a foreign agent with the Department of Justice.
person of Mr. Peter Bergson. That was not our intention.
agency is elected as to some of its members by the people
gency Committee to Save the Jewish People of Europe. This
It has, however, the backing of an American organization
One of these bodies, indeed, has been peaised in our editorial
of Palestine, as to the others, they are cominated by Zionlat
again was an American Committee beaded by Louis Brom-
called the American League for a Free Palestine, which was
columns. We refer - the Emergency Commistee to Save the
organizations throughout the world. The Jewish Agency has
field, Ilen Hecht, Dr. Max Lerner, Representative Will Rogers,
established about the same time for the purpose of supporting
Jewish People of Europe. This body, under the active leader-
nothing to do with the Rebrew Committee of National Libera-
Jr. and Madame Sigrid Undset.
the aims and activities of the Hehrew Committee To date
ship of Mr. Bergion, played a great part in developing poblic
tion. From Palestine there is no evidence that the Hebrew
Public Sentiment Program
the American League has raised $16,520.78 in membership
and congressional opinios in support of the Gellette resolu-
Committee is authorizative. Vaadleumi, the Jewish Community
"The emergency committee set about iss task of swakening
does and contributions. Its membership dues are $1 a year.
tion, which resulted in the establishment of the War Refugee
Council, has repudiated IL On May 26, the Jewish Labor
Board by executive order of the President On January 25 are
Organization, a. body on a par with the American Federation
Americas public sentiment to press for effective measures of
"At the recent UNRRA Conference in Mentrest, the
Hebrew Committee and the American League sent a delega-
referred to "the industrious spadework" done by the Ener-
of Labor, cabled from Palestine to Mr. Max Zaritaky, chair-
seving the Hebrew people of Europe It was responsible for
tion urging that the Hebrew nation receive representation on
gency Committee to Save the Jewish People in Europe in
man of the American Jewish Trade Union Committee for
the intraduction of resolations in both Houses el Congress,
the UNRRA Council and membership in the various commis-
connection with presidential action The War Refugee Board,
Palestine, "This group (Dergson's group) must not be allowed
which ultimately resulted in the creation of the War Refugee
Board and the establishment of entrgency refuges shelters b
tees of the touncil and the administration. In request was
as WT have hitherto said, is a very necessary agent in saving
to continue to deceive public opinion, and it is necessary that
you open the eyes of those following is in guod faith but who
the United States and other countries, thus contributing to
formally presented by the Coban delegata, but was later
the Jewish refugees from the Nazi fiends.
are ignorant of the facts."
the mly positive reseue work done since Hitler began his
withdrawn.
There appears, likewise, to be no question about the financ-
At this point one may drop the designation of Hebrew
mass missiders.
Some Proposals Approved
ing of the emergency"and, in point of fact, the other related
Committee and Hobrew "emhansy" and call a the Bergion
"In the course of its 14 months of activity, the emergency
"Nevertheless, . number of the recommendations made by
committees. In this respect our news stories may have given
group. Now the Bergion group started out with a committee.
committee raised about . half million dollars. The last state-
this delegation were acted upon favorably at the Montreal
4 misleading impression, particularly by stating that relief
Ose of the members was Capt. Jeremish Helpern, who lives
ment of its certified public accountant, giving the figures us to
session of UNRRA, the chief of them being the recognition
work constituted a very small part of the work of the com-
in London, Immediately alter the dispatch arrived announcing
June 30, shows that $423,252.68 was collected and spent by
mittess, as if the money had been improperly collected. Some
that the surviving Hshrew people who had previously had the
his name, Captain Helpers insisted that the Traish Chronicle
this committee.
status of Axis nationals would be treated on the same basis
readers may have deduced from this statement that funds
and the New Indra print a retraction. Another director is
"In its educational campaign the committee called upon the
were raised for relief work when in fact the committees stated
as the nationals of the Allied countries.
named Arich Ben Elientr. This gestleman is now under
people to support its work morally as well " financially, and
clearly in their successive appeals that financial aid was needed
defention in Palestine on implemen of being connected with
. generous response was forthcoming.
"We recognize, probably better than anyone eine, how much
in carrying the committee's message to the American people.
the Irgun, or National Military Organization
credit for this record of achievement on the part of a handful
"The Emergency Committee sent representatives and dele-
Nobody can object to any body of men, in this free coum-
We do mus propose to try to trace any tie-up Detween the
of Palestinian foreigners is due to the sympathy and under-
gations in England, Palestine and Turkey. Representative
Hebrew Committee and the terrorísta in Palestine Indeed, the
standing of the American people. If ever there were need for
try of DETA, from prosenting any casme within our laws. All
Will Rogers, je, Bew to London to organize a similar com-
Hebrew Committee senins to have - maridate either from
proof of the democracy and homanitarianism of this great
we have suggested editorially in this connection is that any
mittee in England and to negotiate with Dritish officials con-
the Right or the Left in the political life of Palestine. It is
nation, it is indelibly recorded in the welcome and understand-
agency which is collecting funds from the public should be
cerning the program of the Emergency Committee Ariek Ben
competed to make a public accounting for them That is in
seeking to establish les own tide in Palestine by enlisting the
ing and support we have received here from the day of our
Eliener and Eri Jahntinsky were sent to Palestine and Turkey,
arrival. Whatever may be the result of our efforts, one thing
line with a Post campaign of several years standing. In the
sympathy of the American people with the Jewish sufferers
respectively, the latter going with the authority of the War
is certain: the Hebrew nation will throughout its future to:
case of these associated committees there has been a voles-
from Fascist persecution. The American people are net in-
Refugee Board to and in its task of getting the surviving
tary accounting by certified public accountants, except in the
formed on the polities and internecine feuds among the Jews
intence lock upon the American people as its truest and most
Hebrew people out of the Balkan countries.
themselves in Palestine. They are libewise not informed of
generosa friend."
case of the Hebrew Committee of National Liberation, which
has had $30,000 available to it, $5000 of which was in the form
the manifold Zionist organizations, recognized by the Jewish
of maclicited contributions, the remainder heing a. loan for
Agency, already in existence of which the mase of the Bergion
the purpose of the initial down payment on in beséguarters at
group is a duplicate. Donbtless in this respect the Bergane
the Hebrew "embarry." This committee, however, is regis-
group would contend that the previously established organiza-
tered with the Department of Justice as the agent of a foreign
tions have not been persistent and mergetic enough in prote-
cuting the cause of the refugee Jews. The successful name
principal.
pagining of the Emergency Committee at least to some extent
At the same time The Pust is under obligation to its readers
seems to substantiate this contention
Regraded Unclassified
the British Government, as the mandatory for Palessine, that
that this should be done with the dignity due an ancient and
in is their inescapable moral daty to answer the Hungarian
honorable nation which, in the time of its sovereign existence,
Congressional Record
Government-through the International Red Cross-that every
gave us the greatest book of all, the Bible.
Hebrew will be admitted into Palestine
Dt was more than 2 years ago that I first arged that We
I am, of course, aware of the unfortunate disagreements
recognize the Hobrew nation as one of the United Nations-
EXTENSION OF REMARKS
regarding the political status of Palestine whish listre forced
and . fellow partner in the commos war against Axis tyramy.
of
this land to play such a tragically small and passive part at .
Lei it be made clear that the 3,000,000 Hebrew men, women,
time when its sons and daughters have undergone the greatest
and children who have died in this war have not died in vain
HON. ROBERT F. WAGNER
ordeal of their martyred history.
as useless victimis of German mass murder but that they have
I was happy to learn, therefore, of a proposal made in this
died as bonored carualties in a world struggle for decent
of New York
direction by the Hebrew Committee of National Liberation,
humanity.
In the Senate of the United States
which separates the rescue question from the complexity of
Let MM recognize the surviving 5,000,000 Habrews as a rena-
Monday, August 28 (legislative day of Tuesday, August 15), I9M
the Palestine problem.
sent nation whose benner waves among those of the other
The Hebrew committee proposes that there be established
United Nations
in Palestine emergency rescue shelters-free ports-isto which
Les the Hebrew guerrilla banda who are fighting the enemy
Mr. WAGNER. Mr. President, I ask unanimous consent to
men; the Jews of Ressia are Rossians; but the Jews of
all Hebrews fleeing their German tormentors should be ad-
in Europe and the 30,000 Hebrews in the Palestinian Regiment
have inserted in the Appendix of the Record an address de-
Warsaw and Bucharest, like the Jews of Jerusalem, are-
mitted and kept in a manner similar to the emergency refugee
be given the chance to fight - their own name and whiter
livered over the Columbia Broadcasting System on Tuesday,
what?
shelter which the President has established at Oswrgo, N. Y.
their own banner in . Hebrew Army.
the Bill of August, by the senior Senator from Utah (Mr.
This "what" is the stambling block of all efforts to rescue
At the recent conventions of both the Republican and Demo-
Let us permit their own statesmire and representatives to
Thomas).
the Jews who live under that great question mark. The Axis
cratic Parties, resolutions were passed and planks inserved
participate in the coincila of the United National where their
There being no objection, the address was ordered to be
maintain that they are nationals of the country in which they
interesta are involved, nuch as the United Nations Retief and
in both platforms to the effect that the gates of Palestine
printed in the Record, as follows:
live and that their slaughter is a purely internal affair.
Rehabilitation Administration, the Inter-Governmental Com-
be thrown wide open to all escaping Hebrews. This repre-
Fellow Americans, pressing reconversion measures with
mintee un Refugees, and, above all, on the Inter-Afflied Com-
which the Senate Military Affairs Committee are bay have
The fact, however, is that these people together with those
sents the will of practically the entire American Nation. Cer-
mission on War Crimes in London, for it is against the
prevented me from speaking to you tonight as I originally
of their kinsmen who were fortunate enough to make their
tainly we are all, therefore, for the Immediate establishment
Hebrews that 80 percent of the strocitiés in this war have
way back to Palestine, constitute a nation whose national life
in Palestine of emergency rescue shelters.
planned from the platform of the Second Emergency Con-
been committed
fermer to Save the Jewish People of Europe.
was suspended for 1,800 years and which is now rebora
It in creditable that the Hebrew committee, moved by the
This, these people of Europe and Palestine factually con-
And finally, let their statesmen as representatives of a
This second emergency conference, which ended tonight in
horrible plight of its people, should concentrate all its efforts
stitute the reparcent Hebrew Nation. Consequently, Hobres
people who have loss more than one-third of their population
New York City, had before it-as its name suggests-s most
to obtain the establishment of emergency rescue shelters. Bet
in this war participate in the settlement of the peace and in
important and urgent task, the task of formulating concrete
nationality does not mean Englishmen who practice the
I venture to suggest that is not enough: that the time is
the planning of a better world in which their nation too can
claims and proposals to effectuate the rescue of the several
Jewish religion; it most certainly dões not mean the million
overdue when we of the United Nations must extend to the
live in freedom and with honor, in a world free from the
million Jews surviving in Europe today.
of Americans, commonly referred to as Jews, who are actuali
formented Hebrew people our brotherly hand of solace and
fear of aggression and war,
The fact that a Second Emergency Conference to Save the
Americans of Hebrew descent and of the Jewish religion,
Jewish People of Europe was necessary, following the first
They do not belong to the Hebrew Nation, nor more than
one, held just over a year ago, is sed in itself. For, despite the
President Roosevelt belongs to the Dutch Nation or Mr.
able planning of the first conference and despite the very
Wendell Willkie belongs to the German Nation. They are
active work of the crusading emergency committee to save
Americans first, last, and always. Their ancestors way back,
the Jewish people of Europe during the elapeed year, this
2,000 years ago, were Hebrews:
most tragic problem is atill before - awaiting determined and
Justice Frankfurter, for example, is not a Hebrew. He is as
large-scale action by the governments of the United Nations.
American of Hebrew descent, practicing the Jewish religion,
We all know well enough the magnitude of the disaster
exactly as Justice Murphy is - American of Irish descent,
which has befallen the Jewish people of Europe: nearly 35
practicing the Catholic religion.
We reproduce here a speech by Senator Elbert D. Thomas,
percent of their total have freen murdered. Proportionately
This might be an abstract and academic problem as far as
inserted in the Congressional Record by Senator Robert F.
this would mean 18,000,000 British canualties, 62,000,000 Ras-
Justice Frankfurter and the other millions of Americans of
Wagner. The main purposes for which the Hebrew Committee
sian casualties or 46,000,000 American carualties.
Hebrew descent are concerned. To the Hebrew Nation is
of National Liberation is fighting are clearly formulated in this
The disaster has not come woddenly. It is the enlmination
Europe it is a problem of the gravest orgency and reality.
excellent speech.
of long derades of persecution and confusion in which nothing
Indeed, in is à problem of life and death,
is definite and clear, not even the meaning of the term "Jew."
Now, if we understand the true status of the Hebrew in
This serves to indicate the attitude of outstanding Ameri-
And it la the confusion about their status which has made
Europe we are in a position to take immediate acrion to
cans toward the Hebrew Committee and the movement which
the wholesale murder of the Jews of Europe possible and
check, at last, the continued slaughter of millions more of
it represents.
impoent men, women, and children.
all
has hampered intervention - their behalf.
Up to several werks ago in Hongary, thousands of Rebrews
Curiously enough, the Zionist leaders have never come for
not
I believe, therefore, that it is of the utilizat importance to
the rescue efforts that their position be clarified, at least as to
were daily packed into cattle trains which took them to
ward to refute these aims, nor have they mentioned any appo-
the extermination camps of Poland, The International Red
sition to them.
terminology and defeition.
There are Jews in Russia and there are Jews in England
Cross in Genera has made it knows on the anthority of the
Millions of my fellow Americans are Jews. What is their rela-
Hungaritin Government that all Hobrews in Hungary "hold-
tion to, and what differentiates them from, the Jews of Azia
ing entrance visas to Palestine will receive permission from
Rumania and Hungary or from the Jews of Poland? Spirita-
the authorities to leave for that country."
mit
ally they are all Jrin. But, practically speaking. American
This creates an entirely new situation in which the responsi-
Jews are members of a great and mighty free Nation-the
bility is throws or our shoulders and more particularly,
United States of America; the Jews of England are English-
the shoulders of the British Government.
As an American and " - Christian, I venture to suggest to
Regraded Unclassified
Recognizing the solution of the age-old problem of the Nebrew
people in Europe as one of the objectives of Democracy and as a
preliminary condition to permanent peace in the world, / am in
accord with the general principles and objectives of the American
League for 4 Free Palestine and agree to become 4 member of its
Sponsoring Committee.
Name mrs. Louis. J. Branders
Address 1205 California It
City Washington - S.C
I Forker Berwich - dellar M my annual membership durs
D
(see page 13)
Recognisting the solution of the age-old problem of the Hebrew
people to Europe as one of the objectives of Democracy and as e
protteminary condition to permanent peace in the world, / em in
accord with the general principles and objectives of the American
League for 4 Pree Polestine and agree to become a member of the
Sponsoring Committee.
Janes
J.
Warge
City Address
State Del
(see page 13)
24.
Regraded Unclassified
227
AIRGRAM
American Embasay
Quito, Ecuador
Dated: Oct. 30, 4 p.m., 1944
Despatched: Oct. 30, 6 p.m.
Rec'd: November 6, 6 p.m.
CONFIDENTIAL
Secretary of State,
Washington.
R-493, October 30, 4 p.m., 1944.
Reference is made to the Embassy's despatch
No. 2045 and to the Departments airgram No. A-485
of August 26 and October 25, 1944, respectively.
The Bouadoran Ministry for Foreign Affairs
states tha t it will today cable instructions to its
Consul General in Geneva to request formally of the
Swiss Government that it represent Equadoran interests
in Hungary.
SCOTTEN
711/840.1
COR:nt
Regraded Unclassified
228
JMN-51.6
PLAIN
London
Dated October 30, 1944
Rec'd 10:20 a.m., 31st.
Secretary of State
Washington
9366, thirtieth.
FOLLOWING FOR MARTHA BIEHLE IGC FROM MALIN IGC:
"This is cable number one of new series. Originals
your reports number seven and eight which I read in
copy in Washington arrived here in due course during
my absence. Your reports number nine, ten and eleven
and cables number one and two of new series arrived
October 24. Kullmann replied Tolstoy October 11 with
copy to you. I have also sent you copies of my answer
to Aksin application and Wriggin's report on Csecho-
slovaks in Italy of which you will wish to inform
Csechoslovak Relief Committee and O'Connor of Catholics.
Please tell latter farther report on camp situation
and status of Catholic refugees generally in Italy has
been requested. Heathoots-Smith and Preston have been
here for two weeks and will stay two weeks more. I
have transmitted to former your information on UNRRA
in Italy and to latter that on Yugoslave in Egypt. We
have discussed both matters with Hochler and shall have
additional talks next week. Heathcote-Smith joins us
in approving proposed shift of Joint Distribution Com-
mittes delegates and is standing ready to welcome even
more than three as work expands territorially and funo-
tionally. Heathoote-Smith asks that his very warn
appreciation be expressed for excellent work of Green-
leigh and Perlman. No authorise you in consultation
with Warren to support Jacobson and Resnik requests of
Passport Division and military authorities. We are
repeating this to Wriggins. Emereon and Kullmann have
just left for month in France, Belgium and Switzerland
on suggestion of French Government Whlentin-Smith has
been appointed Resident Representative in Paris where
be will arrange with Emerson and Bullmann for successor
in Algiers. Joint Distribution Committee should be in-
formed for possible use in connection Greenleigh whom
- are
229
- are also telling through Wriggins. Please inform
International Migration Service that Emerson soon survey
materials for Vignat and Ferriere and that we should
11km five additional copies of form and instructions.
Also ask them when they wish payment and whether in
dollars, sterling or Swies france".
GALLMAN
BB
Regraded Unclassified
230
JMM-467
PLAIN
Lisbon
Dated ctober 30, 1944
Rec'd 6:26 a.m., 31st.
Secretary of State
Washington
3301, Thirtieth.
FOR LEAVITT FROM PILPEL JDC 106 WRB 240.
Steamship SALADHIN arrived Istanbul from Costansa
October 28 carrying 547 of whom half from Hungary. Group
proceeding Palestine October 30.
NORWEB
JMS
Miss Chauncey (for the Sec'y) Abrahanson , Akain, Cojun, Drury, DuBois,
Friedman, Gaston, Hodel, Lesser, Marks, Mannon, McCormack, Pehle, Files.
Regraded Unclassified
231
MB-480
PLAIN
Lisbon
Dated October 30, 1944
Rec'd 8:35 a.m., 31st
Secretary of State,
AMT
Washington.
3302, October 30, 1,6p.m.
FOR LEAVITT FROM PILPEL JDC 105 WRB 239
Beckelman advises that Schwartss cables October
16 and 23 were received during Beckelmans absence
from Cesablanca. Beckelman wishes know whether he
should meet Schwartz New York or Lisbon. Kindly advise.
NORWEB
WFS
Miss Chauncey (for the Sec'y) Abrahamson, Aksin, Cohn, Drury, DuBois,
Friedman, Gaston, Hodel, Lesser, Marks, Mannon, McCormack, Pehle, Files.
Regraded Unclassified
232
JMM-461
PLAIN
Lisbon
Dated October 30, 1944
Rec'd 6:19 a.m., 31st
Secretary of State
Washington
3303, Thirtieth.
FOR LEAVITT FROM PILPEL JDC 107 WRB 241.
Saly advises food procurable within Hungary but
funds required for its purchase. Saly requestsvin-
mediate remittance November and extra grant for relief
purposes not only Hungary but elsewhere funds needed.
NORNEB
aus
Mise Chauncey (for the Sec'y) Ahrahamson, Akain, Cohn, Drury, DuBois,
Friedman, Gaston, Hodel, Lesser, Marks, Mannon, McCormack, Pehle, Files.
Regraded Unclassified
233
C
Y
Lisbon
Dated October 30, 1944
Rec'd 7:16 p.m.
Secretary of State,
Washington.
3304, October 30, 6 p.m.
This is WRB 242 JDC 108 FROM PILPEL FOR LEAVITT.
Mayer reports approximately 70,000 Jews placed
in labor camps outside Budapest, ages men 16 to 60
women 16 to 40. Number of women alsmost twice that
of men. Saly suggests Allies again warn Germans
and Hupgarians. Representations already made to
Vatican asking its protest.
Hungarian delegation including Kastner now in
Switzerland, Hungarians's passive in deportations all
arrangements made by Nazis. Kastner reports cremation
factory idle since end August. Death not immediately
imminent.
NORWEB
RR
Regraded Unclassified
234
DCG-449
Stockholm
Distribution of true
reading only by special
Dated October 30, 1944
arrangement. (Secret W)
Rec'd 2:06 a.m.
Secretary of State,
Washington.
4416, October 30, 5 p.m.
Two reports dated October 12 and 22 have now been received
from Willenberg in Budapest. This is our No. 99 for War Refugee
Board.
First report reflected considerable optimism as to local
situation with respect to Jews. While transport of Jews for
construction of defense fortifications had been rather extensive,
it appeared that this program was carried out comparatively humanely.
Jews with Swedish protection were being released from internment
and labor camps and the German Legation had promised that this
group would be given special treatment. Wallenberg's principal
activities included the following.
(a) The moving of Jews with Swedish protection to non-Jewish
homes.
(b) Developing with the Red Cross preliminary plans for
opening a hospital for the Jews.
(c) Setting up quarters in Zagreb, with the assistance of
the Swedish Consul there, for the purchase of needed supplies;
so far 300 pairs of shoes had been purchased.
(a) In collaboration with the Red Cross the international
Red Cross, the Zionist Organization and the Jewish Council,
developing a program of sending parcels to Hungarian Jews in
Germany. This is under way.
(e) Working out a plan for the importation (8) of paper
clothes and old clothing. This was considered urgent.
Regraded Unclassified
235
-2-#4416, October 30, 5 p.m. from Stockholm.
The report of October 22 reported extremely unfavorable develop-
ments. The new government ordered all Jews to labor on defense works
and cancelled all special privileges for any groups previously
exempted. All men between 16 and 60 and women between 16 and 40 were
ordered to labor batallions. All Jews who previously enjoyed one
type of exception or another were ordered to move back into Jewish
quarters within six hours, but this order was partically cancelled
treatment of the Jews by the Gestapo and Hungarian MAFCS became very
severe, and a few thousand were murdered, mostly in labor camps.
The Jewish staff employed by Wallenberg in relief activities
completely disappeared on October 17 together with his staff car.
The next day he went around on a bicycle locating them in hiding
places, bringing them to safer localities, and cerrying them food.
He now has found all but ten. He then worked out with Hungarian
Foreign Minister and is now carrying out program of moving all
this staff to specially protected homes.
Foreign Minister has advised Wallenberg that the 4500 Jews under
Swedish protection can leave Hungary. German Legation informed him
that special group of four or five hundred can get transit visas
through Germany but no instructions from Berlin as to remainder.
This whole question seems very unsettled and Olsen considers it
very dangerous to try to move this group through Germany.
It appears Wallenberg is throwing his full energy into his
task and doing remarkably well considering enormous difficulties.
Olsen thinks official recognition by WRB of Wallenberg's efforts,
which would be forwarded through the Foreign office well justified.
Swedish Government continuing to make extremely strong representations
to Hungarian Government regarding treatment of Jews.
JOHNSON
WSB
Unclassified
236
C
0
Stockholm
Y
Dated October 30, 1944
Rec'd 8:55 p.m.
Secretary of State
Washington
4419, October 30, 7 p.m.
Hollander of Swedish section sends following message
for Kubowitzki of World Jewish Congress. This 1s our No.
97 for War Refugee Board.
Parcels program obtained necessary approvals and cost
of whole quantity of 100 tons will approximate $65,000
Please transfer and initial amount of $25,000 and we
will advise you later if more is necessary. We are not
requesting Buenos Aires branch for any financial assistance
Note for WRB from Olsen. Above is program we parti-
cipated in working out with local mosaic community for
shipment of parcels to internees in concentration camps.
A trial consignment of few thousand packages being shipped
soon and prospects appear very good of satisfactory
delivery.
JOHNSON
WSB
Regraded Unclassified
237
C
0
Stockholm
P
Y
Dated October 30, 1944
Rec'd 9 p.m.
Secretary of State,
Washington.
4423, October 30, 9 p.m.
This message from Margolis to Leavitt of Joint
Distribution Committee is our 95 for WRB and re
Department's 2129 of October 23, 10 p.m.
World Jewish Congress here has arranged for
100,000 kilos foodstuffs to be sent as individual
parcels to the Resienstadt, Bergen Belsen, et cetera.
Has received 8000 names from Zurich congress. Neces-
sary funds requested from congress in New York. Am
in close touch with WRB representative here who is
most helpful and as soon as additional funds for
parcels needed will advise you. He now has balance
of 218,000 !monor of our funds against future needs.
JOHNSON
WSB
Regraded
238
CABLE TO MINISTER HARRISON AND MCCLELLAND, BERN, SWITZERLAND, FROM
WAR REFUGEE BOARD.
Please refer to your No. 7115 of October 26.
Your excellent analysis and suggestions are greatly
appreciated, We here have been giving considerable thought
to action along such lines and for several weeks have been
working on a. project which, if successful, may accomplish some
of the objectives mentioned in your cable.
THIS IS WRB BERN CABLE NO. 249.
3:45 p.m.
October 30, 1944
Regraded Unclassifie
a ORIGINAL TEXT OF TELEGRAM SENT
239
FROM:
Secretary of State, Washington
TO:
American Legation, Bern
DATE:
October 30, 1944
NUMBER:
3702
SECRET
To Minister Harrison and McClelland.
(1) Reference is made to your 6469 of September 29 and 6964 of
October 20.
The following is the substance of a cable received from Amembassy Quito
under date of October 20 in regard to matter discussed in your 6469:
QUOTE The Foreign Office of Ecuador states that it has received no specific
request for the clarification of telegram under reference and is at a loss
to understand the cause of difficulty in interpreting the Ecuadoran con-
sulate's note of May 12, since cable instruction of May 8 seems perfectly
clear. The only communication received by the Foreign Office from the
Consulate at Geneva concerning the protection of individuals in Germany
claiming Ecuadoran nationality was a letter of May 25 requesting INNER
QUOTE some opinions and advice END OF INNER QUOTE. On September 7, the
Foreign Office replied by airmail letter which presumably has not reached
Geneva as yet.
Yesterday the Foreign Office wired the Ecuadoran consulate in Geneva
substantially as follows: Inner QUOTE Repeating instructions issued to
you previously to arrange for government of Switzerland to ask that German
officials respect rights of persons protected by papers and documents of
Ecuador. Take steps to obtain action by Swiss Government at once. In ad-
dition, in this connection, you are asked to contact the American diplomatic
representative END OF INNER QUOTE. UNQUOTE
Department and Board appreciate difficulty pointed out in paragraph 2
of your 6964 and attempts are being made to have Ecuador make & formal request
to be presented by Switzerland in Hungary. It is assumed that Swiss QUOTE
reluctance UNQUOTE reported by you continues notwithstanding your suggestion
that they approach problem in spirit indicated in Department's 2490 of July 21,
item 6. Reference is made in this connection to Department's 3996 of October
13 item three.
(2) 155 sephardic Jews now in Belsenbergen in possession of Spanish
passports are unable to proceed to Spain in view of military situation. It is
suggested that you informally request Swies officials to grant them temporary
admission in Switzerland. Attempts will be made to get Spanish government to
present identical request formally.
This is W&B Bern cable No. 243.
STETTINIUS
ACTING
Miss Chauncey (for the Sec'y) Abrahamson, Ackermann, Akzin, Cohn, Drury,
DuBoie, Friedman, Gaston, Hodel, Lesser, Marks, Marmon, McCormack, Pehle,
Files.
Regraded Unclassified
240
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Legation, Bern
TO:
Secretary of State, Washington
DATED:
October 30, 1944
NUMBER: 7204
CONFIDENTIAL
The first and second paragraphs of Department's message No.
3245 of September 20 (WRB 178) were communicated to German Foreign Office
orally by Swiss Legation, Berlin, according to Swiss note dated October 26.
HARRISON
DCR:GPW
10-31-44
Regraded Unclassified
0
241
0
Ankara
P
Y
Dated October 30, 1944
Rec'd 3:43 p.m.
Secretary of State,
Washington.
2077, October 30, noon,
FOR KATZKI TO PEHLE WAR REFUGEE BOARD
ANKARA 173
The Jewish Agency Istanbul is in receipt of a
telegram via Geneva dated October 25 from the Jewish
Agency representative Krausz in Budapest stating
that exit permits for the first group of 2,000
Palestine certificate holders in Hungary will be secured.
Krauss states that the projected route of travel is
through Switzerland and Portugal. He requests the
aid of the WRB in obtaining the necessary transit
visas. We suggest that you verify Krausz' report
with McClelland in Switzerland. Information re-
ceived in Istanbul concerning the Jews in Hungary
is meager and general, but unconfirmed Turkish
newspaper reports that evacuation of Hungary may be
in contemplation. Future developments may make
advisable renewed inquiryst this time regarding
possibilities for emigration from Hungary.
According to Jewish Agency the 2,000 certificate
holders are still in Budapest and they are in
possession of passports.
STEINHARDT
WTD
Regraded Unclassified
242
Ankara
Dated October 30, 1944
Rec'd. 3:49 p.m.
Secretary of State
Washington
2078, October 30, 1 p.m.
FROM KATZKI TO PENLE WAR REFUGEE BOARD. Ankara's
No. 174.
Reference is made to the Department's and WRB's
circular telegram of October 24 concerning a statement
of Governor Thomas E. Demay on the subject of Poles,
Jews, and other non-German nationals in territories under
Nazi control.
At our request the Office of War Information in
Istanbul has given Governor Dewey's statement general
circulation to all Turkish newspapers through the Turkish
prese service Agence Anatolie and to Ankara radio. The
release appeared in Istanbul newspapers beginning Oc-
tober 28.
We shall advise you in due course of final cover-
age.
STEINHARDT
MRM
Miss Chauncey (for the Sec'y) Abrahamson, Aksin, Cohn, Drury, DuBois,
Friedman, Gaston, Hodel, Lesser, Marks, Mannon, McCormack, Pehle, Files.
Regraded Unclassified
243
o
Ankara
0
P
Dated October 30, 1944
Y
Rec'd 4:51 p.m.
Secretary of State,
Washington.
2079, October 30, 2 p.m.
FROM KATZKI FOR PEHLE WAR REFUGEE BOARD
ANKARA NUMBER 175
The Turkish motor vessel SALAHATTIN arrived in
Istanbul on October 29 carrying 547 passengers pro-
ceeding to Palestine from Rumania. Preliminary in-
formation indicates that the group comprises 409
men, 133 women and 5 children. Refugees from Hungary
who succeeded in entering Rumania make up the
majority of the passengers, including 24 Hungarians
who were liberated from the fourth labor mine at Bor,
Yugoslavia, It is planned that the emigrants pro-
ceed by railroad from Istanbul to Palestine within
the next few days under the general agreement be-
tween the Ambassador and the Turkish Foreign Office.
Hirschmann's reports provide information regarding
the assurances given the Ambassador by the Foreign
Office which we refer to here as the general agree-
ment. The foregoing is for your information.
Additional material will be sent by pouch.
STEINHARDT
WTD
Regraded Unclassified
244
NOT TO BE RE-TRANSMITTED
COPY NO.
11
SECRET
OPTEL No. 352
Information received up to 10 a.m., 30th October, 1944.
1. NAVAL
Convoy of 30 ships from U.K. escorted by ships of the
Home Fleet arrived North Russia without less. One Swordfish lost.
Aircraft from one ef H.M. Fleet Carriers attacked shipping Nor-
wegian Loads between 26th and 28th and sank one LCT, a mine-
sweeper and small tanker and a cargo ship, An A.A. ship, trawler
and U-boat were driven ashore and the U-boat subsequently hit by
rockets and depth charges from Liberators in Aegean 29th, A
Naval party was landed and firmly established on Milo. Aircraft
from one of H.M. Escort Carriers supported landing. One aircraft
lost but pilot rescued.
German Hospital Ship GRADISCA intercepted yesterday and
being taken to Alexandria for examination.
2, MILITARY
WESTERN EUROPE. Good progress along wh le front 21
Army Group, North of Tilburg, Loon-Op-Zand captured and advances
of about three miles made beyond the town to north and west.
Allied troops have cut the Breda-Roosendaal Road and now hold
Etten and Breda. Heavy fighting between Roosendaal and Bergen-Op-
Zoom but Canadians have advanced and captured Moerstraten. On
Zuid Beveland Canadians advancing westwards from the Isthmus have
reached and passed Goes and Gravenpolder and linked up with U.K.
troops in the bridgehead which has been further strengthened and
expanded. In Scheldt pocket our troops are in Cadzand and Zuid-
zande. Total prisoners taken in this sector since first crossing
of Leopold Canel now 7,000. West of Meuse Germans have captured
Meijel and Liesel in fresh counter attacks.
ITALY. Bad weather still hampering all operations.
Slight advance by Eighth Army south of Ravenna.
RUSSIA, In Czechoslovakia Russians have captured
Cop and in Hungary have further advanced slightly west of Satul
Mare.
3. AIR OPERATIONS
WESTERN FRONT. 28th/29th. Bergen - 180 tons; Cologne -
44.
29th. TIRPITZ off Tromso attacked about 8:45 a.m. by
32 Lancasters (1 missing). 171 tons dropped in partial cloud.
One hit (not confirmed) and several near misses claimed. Missing
aircraft reported landed in Sweden,
326 escorted R.A.F. heavy bombers (1 missing) dropped
1567 tons on gun positions and strongpoints Walcheren Island,
Weather generally clear. Good concentrations reported.
102 escorted medium bombers (1 missing) attacked rail-
way bridges Holland. Results fair to good.
1071 fighters and fighter bombers (9 missing) operated
over battle area destroying or damaging 185 road and rail vehicles.
205 escorted medium bombers and 1503 fighters (13
missing) operated against targets in Trier/Strasbourg area, Rail-
way tracks cut in 87 places, 77 locomotives and 517 other vehicles
destroyed or damaged, German casualties 25, 0. 9.
29th/30th. 57 Mosquitoes dropped 63 tons Cologne.
Six bombed Mannheim. 55 sent on Bomber support (1 missing).
MEDITERRANEAN. 28th. 67 fighters and fighter bombers
destroyed or damaged 139 railway and road vehicles in Western Po
V.lley.
Regraded Unclassified