Volume 831, March 22 - March 24, 1945

1 March 22, 1945 9:30 8.0. BRETTON WOODS Present: Mr. D. W. Bell Mr. Gaston Mr. O'Connell Mr. Bernstein Mr. Luxford Mr. White Mr. Feltus Mr. Fussell Mrs. Klotz H.M.JR: Good morning, everybody. The reason I have DIARY asked you here, particularly Dan, is you have got to sit Book 831 with me whether you like it or not from now through ten o'clock, and O'Connell and Gaston, too, is I an leaving March 22, 1945 Saturday, and I want you to know what I have been up to. MR. BELL: Have you been up to something? I an curious. H.M.JR: I figured if you gentlemen set here you would know and could help advise these people on various problems which I have been taking care of. In socie instances you know sbout it, and some you don't, but every appointment that I an going to make today to do anything I want you and Gaston to sit in 80 you will know. You will, please? MR. GASTON: Yes, sir. I understand you were well up to the job yesterday in New York. Mr. Fussell told me you had a very successful meeting. H.M.JR: It WRS very successful, I thought. MR. FELTUS: Didn't you tell them they could use that story on Ruesia? H.M.JR: Yes. Regraded Unclassified 3 2 - 3 - H.M.JR: The Student Prince and everything! I have - 2 - got my spies around, and they said Dan Bell didn't mind if it nos just 8. team of us was had the Student Prince, but there were two hundred. Walter Kiernan came on and said, "The only one I heard told is the story which Secretary Morgenthau told ne Charlie Stewart Bell? was off the record." MR. C. S. HELL: Two hundred out of the Treasury for H.M.JR: No, I thought it went very well. Kaltenborn two hours! There wouldn't have been anybody left but the said, "I hope me are not going to all sit sround here. I messengers in the corridor. have to get away at two-thirty." MR. O'CONNELL: Randolph Burgess was the witness I said, "You don't have to. We don't work like that." yesterday, and in the norning he didn't hurt us at all. So we started right in in the beginning. I am sorry I couldn't He was very good for our side, because he got into a great meet that Italian girl. deal of difficulty in explaining what he thought about the CED report, and he indicated that he thought there was B. MR. FELTUS: Lisa Sergio. pretty good basis for e. compromise based on the CED report. Now, he reads the CED report B. little bit differently from B.E.JR: Everybody said she W55 able. She was Mussolini's the way we read it, I believe. He described that as being secretary, wasn't she? a proposal under which all what we could cail the bed loans were taken out of the Fund and put in the Bank. Ee said, MR. FELTUS: You told se that; I didn't know it. "If that were done, then they would probably have little objection left." MR. D. N. RELL: There was nothing in the paper about that. It was an open meeting. (Mr. White enters the conference.) MR. FELTUS: It was off the record. VR. O'CONNELL: Except they would think it should all be done in one organization instead of two, H.V.JR: Can somebody who was here yesterday teil me what happened on the Hill? In the afternoon he did a little better for their side because the Democrats were not prepared other than MR. O'CONNELL: I guess I can. Brown and Patman, and none of the questions in the after- noon brought him back again to the CED report, 80 he WSS H.K.JR: Are you feeling all right, Joe? again besing his oriticism and objections on the original ABA report, which 18, of course, a horse of 8 slightly MR. O'CONNELL: Yes, fine. different color. He WBS asked in the morning-- H.M.JR: I hear you put your foot down when they wanted H.M.JR: What color? to bring the Rockets into this luncheon today. MR. 0' COUNELL: Slightly different. MR. D. W. BELL: No. H.K.JR: I wasn't quite sure. H.M.JR: That is the story that is going around the Treasury. They wanted to bring the Rockets down from New MR. HERNSTEIN: It was darker. York and you said no. KR. D. W. HELL: I thought the Treasury would be dis- turbed too much. Regraded Unclassified 5 4 . 4 - . 5 - MR. O'CONNELL: lie was asked in the morning how he VR. D. W. PELL: That is unusual, too, isn't it? He would vote if he had to choose between the Bretton Woods is usually against us. proposals and nothing. Their advantage was that it was about the third question asked him by Brown. He had a MR. O'COUNELL: I WSS doubtful about giving then to very difficult time with that question. he squirmed. Brown because I didn't think he knew enough about then. MR. HELL: He didn't answer it, did hey MR. LUXFORD: Better to give them to Brown, because Patmen-- MR. O'CONNELL: Well, he finally did after Patmen continued to press. Wolcott came to his assistance and VR. O'CONNELL: I WES & little doubtful about Brown's said it was an unfair question, and Patmen said, "Why is ability, but he set up there and smoked cigars and talked it unfair?" Patman kept saying, "How would you vote if like an expert. And that NES really the best part of the nothing?" the choice were between the Bretton Woods proposals and hearing. H.M.JR: (To Mrs. Klotz) Tell Gamble his people were Well, he said he would be in favor of emending the supposed to let me know DOW Mr. Woodruff of Coca-Cola bill, of course. stood on Bretton Woods. he is coming over st eleven. Sometime between now and then you call. Patman said, "You have lost that; you have lost all your amendments. The question is yes or no on the bill." (Secretary holds a telephone conversation with He pressed him very hard. And finally, in effect, he sald Congressan Prown, follows:) he would probably hold his nose and vote yes. H.M. JR: That was planted, I suppose, by somebody. He would hold his nose? MR. LUXFORD: Yes. MR. O'CONNELL: He expressed it a little differently in talking to Brown. he talked about taking 8 big glass of orange juice or something of that sort. He sounded as though he were trying to find the most palatable way of taking castor oil. H.V.JR: Congressman Brown wants me. Should I put in 8 call now? VR. LUXFORD: Yes. MR. O'CONNELL: Tie gave Brown about six questions on the CED report. Be was very good. MR. LUXFORD: He has been helping us right along. Regraded Unclassified March 22, 1945 9:45 A. X. 6 - 2 - 7 Operator: Congressman Brown. B:(cont.) you made before our committee. Anytime between HWr: Hello. April 5th, vill give you plenty of latitude, and I personally hope you can go. Paul Brown: Mr. Secretary, this 1 ᵒ Brown of Georgia, HMJr: Well, I'll certainly give it very arrious consideration. HMJr: Yes. Before you talk to me, any I pet word 1n? The League of Women Voters invited se to come down there, too. B: Yes, B: Abus. HW: And tell you how such I appreciate the beto you HXJr: have been giving us. How good an organization Le that in Georgia? Well, I'm going down the line for you. or course, B: Well, they aren't may. That's just sort of a B: value going to have = hard job. The boys -- e group there in Attanta, you know. politions fight cut of 1% I par. HMJr: The boys 407 you were well posterday, Et Course the Bankers -- they're going to get every- Vell, you ande E algit good withere. RF. Georgtory, body there. This fellow has been B: what I called you about. MacFedden, who 1s suppetary receptary About 30 years of the Georgia Bankers Aprociation. HMJr: Arth. HMJri Oh, you. B: And this brother-in-low lase been cresident = counle B: He wants you to - corn and make " indian 100/- of years, end they my they're going to have every bank recresentivein Georgia besides other business time before VII leave here. people. HKJr: Abuh. HMJr: Anuh. B: And he choned = yesterday and m10 that be von writing you, and that he'd have everything from E: You'll certainly have a swell crowd, and they Are Georgia. I emecially vent 70 13 C° 0917 for very appreciative prople. The Lengue of Yomen, the reason that my brother-in-law 11 the Pr *Ident confidentally, are pet nort of local poople. of the Banker's Arsociation, David H. Arnold. "RJrt I Yes, I'll talk It over with - HMJr: David H. Arnold. Arnold. B: Yes know they eight invite of this, you know, Yesh, Be's by visate brother. in the seeting. B: HMJr: Amin. Vall, Its terribly nice to know that you are HXJr: I .... wanted by bankers anywhere. 51 And they'll have all the backets -- you'll have the best crowé you over had in your life. They B: Shat's right. I think It would be B good stroke, like you cown there nne they ant you to and on one they have some aighty good people there Bretton Woode. Well, I'll give very --- HXJr: Ahuh. I'd written some time 680 the fine presentation B: Dood benife In Georgia, and I think it will be very B: helpful to our bill. Regraded Unclassified - 3 9 - 6 - HMJr: I'll give 1: very arricus consideration. B: All right. Let 31 know then as anon ne you can. H.M.JR: That is what you boys have been needling me on. HKJr: : certainly vill. B: MR. GASTON: Before April 5, be said. A11 right. Thank you very much. Bye. VR. LUXFORD: From what you said, me don't need to. We have got them in our pockets. MR. HERNSTEIN: I am not 80 sure this isn't 8 good time to get the whole setup solidly behind us. MR. LUXFORD: Not through the bankers. H.N.JR: Let's let the thing pass for the minute, but you remind me, Mrs. Klotz. I will think about it. Personally, if I am going to do something else again, I will seriously consider Feltus' suggestion of going to Chicago to address the radio commentators of that aree. In going to the radio commentators-I give you credit for that whether you deserve it or not. It is a good idea. It NOS your idea. I take credit for the breakfast with the publishers, but you (Feltus) CED have this one, and this WB # good. You are my lisison fellow. MR. LUXFORD: Sure. H.M.JR: John S. Knight, owner of the Chicago Daily liews has written n. half-page editorial that in favorable to Bretton Woods. Have you people seen it? MR. LUXFORD: They have a man up there. Is he the owner? MR. GASTON: Yes, he is the new owner of the Chicago Daily liens, and also owns the Akron-Beacon Journal, the Miani Herald, and the Detroit Free Press. H.M.JR: He used some of the arguments I used here. He comes out--do you want to use this? MR. LUXFORD: Yes, we will write letters to all of them, Mr. Secretary. (Secretary hands Mr. Luxford editorial by John S. Knight on Bretton Woods.) Regraded Inclassifiod PRECISION TRADE MARK MICROSTAT/ V. & PAR. OFF. MICROFILM ROLL NO. 10 11 8 - 7 - MR. REHNSTEIN: I would like to mention a thing on H.K.JR: I mould like that editorial back. I would that. Mr. Burgess was 8. little bit less than fair when like to show it to the President. discussing what the bankers have done. He gave the im- pression that in 1928 if the New York bankers had had MR. PERNSTRIN: May I offer some comment on yesterday, their way, credit would have been tightened long ago. especially since It involves the Chicago Daily News? There wouldn't have been this finsco with the stock market. He never mentioned the bank of which Mr. Mitchell WAS the H.V.JR: I will have to stop In three minutes. head having left a meeting of the Board of the Federal Reserve Pankers in New York and announced be didn' t agree MR. RENNSTEIN: T wesn't et the morning meeting, but with what the Federal Reserve Pank of New York THE doing, I was there in the afternoon. I heard what Joe mentioned and his bank would lend money just as he thought the market about the very effective testimony. But the reporter for sould need it. the Chicago Daily News, Lahey, grabed hold of ne as coon as I got there 151 the afternoon, and he cave the view that H.W.JR: Via anybody bring that out? while there may have been something helpful to us in the morning's testimony, there was B. rooù deal that was hurtful MR. REINSTEIN: lobody. But I talked to Mr. Roberts to us, particularly the insistence of Burgess that you after the meeting and said I thought it use peculiar for didn't have these enoices that the people were urging, the Mr. Burgess to my that, choice of not taking it. lie believed that people would take it, and it would work better, and so forth. But In the H.W.JR: liho is he? afternoon he RES devestating, in my opinion, to our side. Be was very reasonable, and mid nice things about the MR. D. W. HELL: George Roberts? Treasury, how good It was to see the Treasury fighting to put so much gold in the Fund, and so forth, but the fact he KR. WHITE: Vice President of the National City Bank. kept reiterating WSS you couldn't stop it from being mis- managed. It mas bound to go wrong as long DE countries I think we had better neet Burgess on the arguments felt they could come in and get whatever money they wanted. n.s mell as what you say. He held himself exceptionally well with the Republicans. He strengthened their doubte, and he gave, what W&E worse from H.E.JR: No, NO have got to--I tried to tell it, and our side, two Democrate an opportunity to ask him questions I repeat over end over again, you have got to discredit in which he strengthened their view that the Fund W&S not these people, the American Bankers. R. useful instrument, that it ought to be done through the Bank. Did anybody sek then about the position the American Penkers took on postal savings? Now, I had the feeling that Burgess with nis ressonable- ness, with his clarity, end with his fairness of patting the MR. LUXFORD: Well, Patman and Outiand both had it. Treasury on the back five or six times did us more harm than anything else we are likely to get. VR. PERMSTRIN: Burgess is coming back with the details as to how he will assend the bills. He will bring in B. I would like to have the unvarnished truth, written statement on how to change the documents. even if it hurts. Did anybody bring out the record of the ABAT Regraded Unclassified 12 13 - 9 - - 10 - H.M.JR: I think they did have that material. MR. O'CONNELL: Oh, yes, they had it. MR. O'CORNELL: Are you going to spend some time later in the day on tax enforcement problems? H.M.JR: Why not give him-- H.K.JR: We will start at ten o'clock. KR. LUXFORD: More important than that, today Leon Fraser is on, and the have a dossier on Leon Froser end BIS VR. D'COMELL: May I come? that I think we ought to go to work on. H.V.JR: You were told to me. H.M.JR: How about the recommendations of Kruger? SR. D'COUNELL: It doesn't nake any difference. MR. LUXFORD: Not Kruger. This makes him en appeaser. M. Mr. Bernetein end T have e prodosal. H.M.JR: Pow about Eroger's being here? IR. WEITE: Did anybody here listen to the Taft-Tobey MR. LUXPORD: I haven't any material on it, Fr. debate last night? Secretary. ER. KLOTZ: It went extremely neil. H.N.JR: : told you-- MR. FELTUS: Tobey nos magnificent. MR. LUXFORD: I EMI comizent, and me are still looking. une. KLOTZ: Tobey NOS marvelous. E.M. The You can call up Morris Ernst, ENG call up about the files, because Eddie Greenbaux set up kind of #: MR. O'CIDELL: These things never mean the same thing decoy and appointed him to act as sort of en arbitrator. to two people. Burgess very dishonest, but be ans very It's in the files of Greenbaum. be was managing director effective. lie is kind of e bully, and be overpowers people, of--whet is that investment company? They were representa- and he nonopolizes the time end gete-- tives for Kruger. H.M.JR: T as going to go to other matters now, if When he свдя back George Harrison tried to get ne to Bell, White, and Mr. Geston would stay. take him 6.5. Under Secretary, and 1 went into his whole record. Be personally use e representative of Kruger in (10) Barnetein, Mr. O'Connell, and It. Pussell this country. You call up Vorrie Emat. leave the conference.) MR. 0'CONNELL: Lee Elgginson? D. VILTUS: The National Foreign Trade Council come out for us. H.M.JR: It 10 Lee Bigginson. Unless somebody has something, I en coing to have to stop nom. E.S.JR: Definitely. Excure me. Luxford, I want that list of CED directors. You might t ell ne who is working on it. WR. LUXFORD These are the ones, actually, on the Research Committee. (Hands Secretary "The Bretton Woods Proposels," prepared by CED.") Regraded Unclassified 14 - 11 - 15 - 12 - H.M.JR: This is what I want: I have been thinking of calling up some of these fellows. Are you going on the Hill this morning? Margaret McBride's program and find out what you want to MR. FELTUS: Can I get back to you today on Mary do on it? MR. LUXFORD: Yes. H.M.JR: Can you get ce people on foreign policy? H.H.JR: Sing. Yes. MR. FELTUS: Foreign trade and this-- H.V.JR: I have got this. I will tell you what I am doing. I am getting new Treasury advisers on finance, and I an going to pick them out of these fellows who are with us. MR. LUXFORD: Gordon Tasson--I don't know how he is going on this, but I talked to him n. long time ago, and he is sort of E. decent fellow. H.K.JR: lie is the very fellow 1 as calling up--I called Chester Davis and ssked Low he was, see? Then I an going to call Chester Devis on the phone and find out where the rest of then stand. MR. LUXFORD: George Whitney vos on the ABA report or the Ben York State Bankers report, 80 1 don know where he stands. H.M.JR: If ve got one Morgan partner, good. MR. D. Yes HELL: I oulcn't be surprised if Leffingmell would be on our side. MR. LUXFORD: Whitney is very sympathetic to our position. H.V.JR: What you can do to save se time 1s, supposing** do you know Chester Davis? MR. FFLTUS: Yes. H.M.JR: Call him up on the phone at the Federal Reserve in St. Louis and cok him which of these nen are definitely with us and which fellows drog their feet, and 1 vant to know & little later on. PRECISION TRADE MARK MICROSTAT/ OFF, MICROFILM ROLL NO. 16 17 - 2 - March 22, 1945 McCloy or somebody sold, "Hell, we were told yesterday by 10:00 a.m. Er. McCloy that-- H.M.JR: By Mr. McCloy? DEINDUSTRIALILATION OF CERVANY VR. COE: VcCloy. Harold ⑉ over to the four-agency Present: Mr. D. T.. Bell meeting with McCloy the day before when you rang, and McCloy Mr. White came into the meeting and said the draft WEB to be with- Kr. Gaston drawn. Is that right? Mr. Glasser Mr. DuBois MR. GLASSER: No, he said that the agencies mere-the Mr. Coe committee v.s.s. to meet and sit around 8. table and try to Mrs. Klotz get an agreement between the various departments. H.V.JR: Will you proceed, Fr. Coe, in your usual MR. COS: Clayton said be didn't have any such condensed Readers Digest manner? understending from Grew; the last he heard Grew was still trying to get the President on this. honever, we then ment MR. COS: Tell, se ned the meeting of the working forward discussing the documents, paragraph by paragraph, committee chairmen and Will Clayton yesterday, and I and agreeing to such changes as constituted--as we will make-- think perhaps the chief thing to say is at the beginning ne devised 8. different document. he said that this group had been called together to get an interpretation of the draft directive of Earch 10. Yesterday's discussion centered chiefly on the Army stuff, the provisions they wanted for B. more flexible allitary McCloy spoke up and said that wasn't his understand- government. State gave in to them on practically every point. ing from you, and that the Aray had this thing which they I made quite a struggle to get c positive statement on de- cut passeges out of, and that is what they manted. centralization agreed to, to go into the document, and I got no support on that at all--sone support from the Army, but will Clayton said be didn't see as there would be any they took the seme line that McCloy did with you, that Stinson difficulty in meeting the Army on tain discussion of their was viewing himself as an administrator in this thing and documents. they could carry out any policy. However, they did prefer the policy of decentralization, I wanted the positive H.V.JR: May I ask who %65 there besides Clayton from statement from 1067 put back in. That was held over. There State? was no decision on that. It took 80 long, end there WBS so zuch arguing about it that ne decided to nove forward MR. COE: They had Matthews end Despres and Riddleberger. to the other subjects. At the end of the time--me met from 51th the consent of the group it WEB decided to have Despres ten-thirty to one o'clook--st ten minutes to one we got on from Riddleberger's Section because of his familiarity with the economic matters for the first time, the statements on the subject. I said, likenise, that in view of what I controls. The State Department directive reads, "You shall understood you had told Crew, we would want to raise in direct, administer, and control the German economy for the connection with this draft any sort of question of policy following purposes? And then it liste them. I took the 8.0 well and have the sene latitude on policy NE they were position that ne would want that language turned around giving the Army on administrative netters, end Clayton or and have it made clear that the responsibility for running Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ OFF. MICROFILM BOLL NO. 10 - 8 - 4 - the Geruan economy belonged to the German people and that, therefore, you wouldn't direct, dainister, or control, KR. GASTON: Clayton, you mean? except for certain specified purposes. However, T said T thought you shouldn't 20 at this thing paragraph by MR. COE: Ee didn't act as if--he not himself ell set paragraph, but wait until the next meeting and have & to oppose that particular doctrine which was one of the thorouch discussion of it. The State Department is using three doctrines in your meno to als, 80 ne didn't act 88 reparations just an we are all using reparations, for the if he had been there. reason of these controls. Joe thought that almost certainly they had sent this At four-thirty four of us sent into E. crafting con- ueuo there, the memo of the draft directive to Winant 88 mittee headed by Rindleberger. Joe and I went for us and soon B.S. the President initialed it, and, therefore, they took care of the language. There we seemed to get into the are in - position--Winant has handed it to the British, and document, or at any rate, it 1e going to come before a now if this thing is repudiated or substantially changed, full committee, 6. modified 1067 statement on decentralisation. they are morrying, "how are they going to explain to Winant tast something they and sent his was finally firs policy B.E.JR: Vias It retisfectory? from the U. S. Government? Be has now been told it has been withdrawn.' MR. COE: It was satisfactory to us, and all the lang- uage that went through the committee was satisfactory to MR. DuBOIS: That is may they insist on calling this us. It didn't concern economic matters, but it was har en interpretation. Department modification of State's position. Wost we were, in effect, doing, is this: MR. COR: During the afternoon session Riddleberger opened up by saying he wanted it made very clear--some H.M.JR: Would you hold your thought # minute? people seemed to think that this document BUS withdrawn, and there seemed to be all kinds of ideas about it. Be VR. COE: Yes. wanted it very clear that what We were engaged in doing was interpreting the basic document. I said I didn't care H.M.JR: Do you think that any of the neuce I sent what name they called it, hut it did nees to me en odd thing over to Grew got down to Clayton? to call e new document which we arrived at nn interpretation when it would consist, be hoped, of striking out & con- VR. COE: He didn't have it with him. If he did, T siderable portion of an old document, and adding some didn't see it. For instance, after I made 5. little speech opposite phrases to it. about not assuming responsibility for running the whole economy, Clayton said something to the effect that he H...JR: There do you E° from here? certainly felt that way. MR. COR: Well, we will taxe up at ten-thirty this "What about it?" asked somebody. morning the basic economic stuff; it comes before 6. full conmittee. Despres spoke up and said, "Well, tast is that old one; that is that fight that nas been going on and on." KR. DuBOIS: In other words, there is only one issue. He wasn't acting very sophisticated et that particular point. I mean, be seemed-- MR. WHITE: I think three of you ought to go. MR. COF: Are you free? What about you? Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. 20 21 - 6 - - 5 - MR. WHITE: If you think it is necessary, I can go, MR. COE: Yes. He is presiding, and Hilldring end but I don't think it is. someone else-- MR. COE: I think it is highly desirable. H.M.JR: You ought to go, Harry. MR. DuBOIS: This is a major issue coming up. MR. WHITE: Yes, I will 20. MR. WHITE: Is it clear that my stand was to be wi th- drawn? MR. COR: The Secretary has precipitated this thing, and they look for-- H.M.JR: That WS my interpretation. H.M.JR: I think you should go. MR. COE: I wouldn't make an issue of it. MR. WHITE: The four of us will CO. H.M.JR: That was my impression. H.M.JR: What happens when Grew comes to see are at KR. WHITE: You can't interpret the Warch 10 document three o'clock today? the way we want it, because it is the strangest kind of interpretation. MR. WHITE: About this? Why shouldn't they postpone It in the light of what he said, because I think we are H.M.JR: Shall I make it an issue? in a better position after we know what Grew said. MR. WRITE: Not unless we fail in getting what we want. MR. DUBOIS: Don't you want to see what happens this morning? H.M.JR: Grew went to the President. KR. WHITE: I think it is better to wait end hear MR. DuBOIS: I would má t, Mr. Secretary, because what Grew says, if he has seen the President. I think, for example, yesterday's meetings were on one point. I think, in effect, ne practically won to 6. major H.N.JR: Why not let Grew come, and see shot happens? extent. MR. DUBOIS: I would wait and see what happens this H.M.JR: I think this: I may be all wrong, but I morning to see if you cancel Grew. think there is nothing ventured--if you want that, I will try to do it. My impression NO / this: B.M.JR: Is there e meating this morning? MR. WHITE: This would be my suggestion, Vr. Secretary, that those three men E° with instructions, and those MR. DuBOIS: At ton-thirty. instructions would be they should try to get there what we want. H.V.JR: All right. H.K.JR: Is Clayton attending these meetings? Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 22 23 - 7 - - 8 - MR. COE: Mr. Secretary, one thing on what is really happening as we debote this stuff, judging by the admini- strative matters, is that you decide to give the Control MR. WHITE: I think--let's see what we can get. If Council in Germany flexibility. For instance, when we pro- what we can get out of this is satisfactory, no can Leave posed that subject to the Control Council, subject to the it in the notes on basic points. decisions of the Control Council, there shall be enough room to do so and so, that tends to 20 through; 80 as you H.V.JR: And if by not withdrawing it the State slap on the policy, the positive policy tends to go out in Department can save face-- favor of saying it is to be decided nt the Control Council. MR. WHITE: We certainly will be more or less adament B.M.JR: That would be natisfactory to ne. in our major position, no matter what happens this morning until ne have had B. chance to talk to you again. lie will MR. COE: But we thought that either win out or talk to you again. MR. DuBOIS: You can 20 even further on this. H.M.JR: You people ought to come in here sround two o'ciock. H.M.JR: I have got to stop now unless you want some- thing clearer, but that would satisfy me, because I would VR. WHITE: Yes. put myself in the hands of the generals, and there would be a Russian general there, an American general, and 6. French MR. DuBOIS: Lubin is pressing for a reparations general. document. Shell I give it to him? MR. VRITE: Not only that, but T taink es they begin H.M.JR: Yes, this operation and begin to see more light in it than they now do-- H.V.JR: Mon, you see what happens. The President said to se, "What do you mean having just that one docu- ment?" I wanted nin to withores the Earch 10 one, and I said, "You just run scross it in long hand. I vi thdraw this and will substitute this new one, and that was quite agreeable to him, but he didn't sotually physically do it, you see? But the impression he left with ne was be wanted this thing withdrawn and something new substi tuted. he didn't give ne any orders, but that is the impression he left with me, that that is what be wanted done. MR. COR: Well, in effect, they are withdrawing It. H.M.JR: Well, if it is there, then--I can't 20 into all the explanations, but if you fellows feel that I actually have to get the President on the thing--but there were other people present, and God knows what they have done between them, you see. Regraded Unclassified PRECISION TRADE MARE MICROSTAT/ MICROFILM ROLL NO. 25 - 2 - March 22, 1945 I told somebody to tell Pedrick to go ahead, and he 10:15 1.8. never got the word. MR. O'CONNELL: You didn't tell me to tell Pedrick INTERNAL REVENUE - TAX EVASION to go shead. Present: Mr. D. W. Bell H.M.JR: I told somebody. Vr. Gaston Fr. O'Connell MR. O'COWNELL: You sent Pedrick's letter back to ze Mr. C. S. Bell with 8. note to speek to you about it, and I tried half & Mr. Trey dozen times. Mr. Schoeneman Kr. Nunan H.M.JR: All you would have had to do was say, "Should Mr. Evans Pedrick to ahead?" Mr. Berkshire Mr. Sherwood MR. O'CONNELL: I thought you manted to talk more Mr. Woolf sbout it. Mrs. Klotz H.M.JR: You never asked ne once about it. T told somebody to no sheed, and Pedrick said he spent ten days H.M.JR: I was in ken York yesterday, and I had the on the thing and be knows-- Collectors see me, and Mr. MeQuillan. It wes arranged by Mr. Nunan. And I frankly an shocked. I don't know what MR. O'CONNELL: I don't think Mr. Pedrick is the fellow the hell is the matter with will your organization that the to go ahead, and I sent the Commissioner a memo in which I Secretary of the Treasury has got to 20 up to New York suggested we proceed along the lines that were indicated and have these people tell him that people are evading in Kr. Pedrick's meno, but it should be done through the and the Collectors eit there on their chairs and Intelligence Unit. taxes, say, "Sure, we know all about it, but we are just Collectors. One of then spoke up, the fellow from Brooklyn, and H.M.JR: The Intelligence Unit sits up there, and I don't know what they do. I can't understand it. No wonder said, "Under the law it is our responsibility, too. Now, J. Edgar Hoover gets places; he has imagination and drive, thing about it. MoQuillan ion't doing 8 thing :bout It. they all know what in coing on, and they are not doing a and he is original. He gets things done; no wonder he is on to our stuff. And I en constantly defending you fellows Where is Woolf? He knows about it, and he just site there. against him, and by God, I am getting pretty sick and tired And they give ne a lot of alibis. They have got too many of it. I mean, the organization is just going to sleep, girls and no place to put thes, and they have got--they told not to recruit people after 6. certain date. I and the people are getting away with nurder up there. have were never had a worse impression. It is just a bunen of Why, the Chairman of our State War Bonds--I think it alibis. Sure, they know people are buying furs and paying was his own doctor--ne wouldn't say--went to the Chase Bank cash. and wanted il bigger safety deposit box because be is taking all his fees in cash. The only fellow up there that had done anything is this fellow in Brooklyn who has gone after Regraded Unclassified 27 26 0 4 - - 3 - cheating that is going on wholesale up in New York, and the responsibility is O'Connell's and yours (Nunen). I this racket of big real estate. Maybe he has told you mean, everybody sits back and says--Pedrick says he can about it. do it, 50 I an going to give Pedrick a chance, and I am telling you to give him 8. chance and back him up. MR. NUMBER: No, he hasn't. They tell me there is a Doctor Rhees up there as H.V.JR: He has found some may--I couldn't quite coordinator. Give him some help and see what Pedrick can understand it--they go out there and pay about thirty do. Nobody else has done anything. He said be can find thousand dollars for real estate worth ten thousand out where the fur costs and jewelry are and who is buying dollars. They have some way of writing it out, Be found them, and all the rest. And I would like to know why some may and got cases in there where people are doing It. somebody hasn't brought it to Charles Bell's attention that They all admit it, and we sit here. There is no excuse, they have stopped recruiting people; they can't get any Joe. This is at least a month old. And I think if the help. My God, you can to up to Congress. Nobody has made Secretary of the Treasury says that this is going on, you any efforts. and Runan should prove to me it isn't. MR. NUMAN: I think kr. Bell had news of it. MR. O'CONNELL: I have no doubt that it is going on. H.M.JR: Did you? H.M.JR: Why not let's do something? MR. C. 5. HELL: Yes. They had their appropriation MR. 0'CONVELL: Tie are prepared to do sometning. reduced in the deficiency bill. The Senate out then one hundred and sixty-five thousand dollars, and hunan sent out H.M.JR: Go shead. Why wit? It is over a nonta azo wires to collectors not to hire any more people because that I raised the question, and Pedrick says he can do it. they dien't have the money to pay them. Now T an going to let Pedrick do it. H.M.JR: You make B. couple cood cases on night clubs, MR. O'CONNELL: What is Pedrick going to do? jewelry, and fur coats and tell Congress what is going on, and you can pet the money. H.M.JR: You find out. Ee wrote us B letter. VR. C. 5. HELL: I think Joe feels now he could have MR. 0'CONNELL: I have got it. gotten money in the Senate had you appealed It. Isn't that true? H.V.JR: I am not going to teil you what be is going to do. Somebody says he can do it, and the other directors MR. SUNAN: I wouldn't be sure of that, I raid we are perfectly willing, they come in their districts. And might have gotten it. The anewer NED it was the best, in for me to have to fues with this thing for thirty days with everybody's mind. We night have been cut further. all the morry I have got--and the only thing Elser Trey can think of is going to Florida and find out about 6 few thou- MR. C. 5. HELL::They have cut everyone. sand dollar bills. The organization stinks! It absolutely stinks! H.M.JR: I have got nothing to show VcKeilar that this thing is going on. Everybody tells ne this thing is Now, I an teiling you that something is going to going on; everybody has the money; they are paying cash right happen, and I haven't got the time, but I hope in the whole Internal Revenue organization somebody can find out about the PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 28 29 - E - - 6 - and left for everything, and I go up there--and these Fr. Trey, and Nunan, and I have & meno which I had prepared fellows are sincere fellows. They said, "Mr. Morgenthau, after talking to those people, suggesting we set up a group if you say you want us to do it, we will do it." One of special agents in key cities and operate through the of them said, "Under the law it is our responsibility that Federal Reserve Banks, who will get information and give us we collect. O.K., we will do It." Pedrick is raring to information on occasion for Foreign Funds purposes as to go. Be says he can find out where it is. He sald all he big cash exchanges, and that ne expand from that and have has to do is go to the legitimate people and they will tell 6. group of people in each of the key cities starting in hin uno the people are that are cutting corners. Now, he New York, and some of the big ones who would have one found out that they go to 8. saleman. The salesman responsibility that is divorced from their routine work doesn't sell them the fur coats, say, in Jaeckel's, but he to approach this problem from the currency transaction puts the fellow in direct touch with the manufacturer. And angle, whether through banks, business houses, their stock the manufacturer sells it to this customer all for cash, exchanges, or whatever you went. That is 8 result of a and the saleman in Jaeckel's knows it, and It doesn't go whole series of discussions we have bad here. Whether or through Jaeckel's books at all. not it will work ne don't know, but we think it is well worth trying, and we are prepared to present it to you, and Now, I started this thing on the liquor business that is what I thought the Commissioner told you yesterday. down in Florida, and we did it, and we found out how the wholeselers were doing it, but I would like somebody to H.M.JR: You try that in Chicago, will you please? come and any to me it would start from within the organiza- Buck up Pedrick and help nin through tois Coordinator of tion. There is enough of life and brains and originality his district. that they do the thing, and it is like everything else. Kr. Kaiser can build shinyards. They can find 8 way to cross MR. SUNAN: Rhees is nead of the Alcohol Tax Unit. e bridge. You can always find E. way If there is enough rute and courage around # place to do e thing, and I an telling MR. GASTON: He in the Coordinator of the Enforcement you now it is only E question of time before 20018 other Agencies. It is properly, Elmer, en Intelligence Unit organization will do It. Congress will know about It, and inquiry, isn't it? they can crack down, and 1 have not to take it on the chin. And I an not going to take it! MR. IREY: Yes. Non, it is right there. The sent thirty or forty men MR. GASTON: And that is the reason why they couldn't down to Florida, and when I started that, they sald you work with Pedrick and get help and get some deputy collectors couldn't do it. we found the wholesslers; no found houses to help them and revenue agents from Krigbaun and Allen all a round the country. Some place in the organization and nake 8 real project of it. T. think it ought to be under there must be somebody that bes nome originality and B the Intelligence Unit. little courage who will go up and find out how this thing is done. Pedrick says he is willing to do it. MR. NURIAN: I think Vr. Teston is right. I don't think Pedrick can do it by himself. MR. 0'CONNELL: May T say something? H.V.JR: He can, but I want to give Pedrick a chance. H.M.JR: T say give his E chance. Sure. MR. NUMAN: We will give him everything he wants in MR. CONNELL: Well, it lan't as though no one around New York, here WBO doing anything or trying to do anything about it. be have had ail kinds of discussions with Er. Gaston, Regraded Unclassified RECISION TRADE MARK MICROSTAT/ PAT, OFF. MICROFILM ROLL NO. 30 31 - 7 - - 8 - B.M.JR: And when you no up there Saturday, you P. MR. NUMBE: Yes. and spend scole time. MR. C. S. BELL: You might run into some of the same KR. NUNAD: Saturday when I 20 up I will set the whole cases. thing up with Pedrick, Requilian, Rhees, and anybody else he wants. H.M.JR: All right. MR. NUNAN: I want McQuillan to assign E couple of H.M.JR: And if you want to try your way, try it in Chicago. men to this plan Joe O'Connell has laid out. P.M.JR: You get some good cases, and I know you can MR. O'CONNELL: I would like to try half a dozen towns. get the money if you show what in going on on this whole H.V.JR: Try one first. question. They say there isn't a single person in New York who knows that we pay for information; and if that law isn't MR. C. 5. HELL: They are getting that information right, let's get it on the basis that Custom's hasit. in New York. MR. O'CONNELL: The law is perfectly all right. MR. O'CONNELL: To give you an example of nome of the things we get, the Federal Reserve Bank rave us . report H.I.JR: You have got to wait tmo yéars. the other day on the owner of Longchamps Restaurant who de- MR. O'CONNELL: You don't have to; that is a matter posited five hundred and forty-one thousand, five hundred dollars in four New York henks between March 8 and 13 this of regulation. year. That is about on current and not material as I could imagine. It in conowhet comparable to the four hundred MR. NUNAN: Custom's reward is better than ours, there- thousand dollar bills deposited in n. bank quite a while is no question about it. ago. The Federal Reserve Bank gives us that type of Infor- MR. O'CONNELL: If it is based on the percentage of recovery, mation. The stock exchange never got It for revenue purposes; they got it as a matter of Foreign Funes Control work, the according to the law, then we would be worse off because we couldn't determine the amount of reward until after we stock exchange in lien York. And Schren is equally concerned about cash transactions, n. nd it would be simple to maxe had collected. similar arrangements with then to get this sort of information H.M.JR: If I an arong, you fellows come in and tell to be used by whatever group is set up to do this job. me so, but I keep getting it, and getting it, and your three collectors said yesterday I was right, but they said H.N.JR: If they don't conflict, it is all right with nobody had said anything to them. me. MR. NUNAN: Mr. Secretary, if they know the law is being MR. O'CONNELL: They are entirely consistent. violated, I shouldn't think anybody would have to say H.M.JR: Will they supplement each other? anything to them. H.K.JR: I agree, but ReQuillan is not doing anything MR. NUNAN: Yes. about it. H.M.JR: Are you satisfied? Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 33 32 - 9 - - 10 - MR. GASTON: FHI has ten times as many nen as we have MR. WOOLF: He is not doing anything about it, not and they have nothing to do. pretending to. He has got 8 lot of alibis. Ee is full of alibis. MR. IREY: None of them have gone in the Army. They were all deferred. H.K.JR: Go shead. H.V.JR: I don't get the feeling Secret Service MR. WOOLF: Vr. Secretary, I ASS going to say that you is too busy in New York. have seen some of the bad things, but on the other hand, they have done 8. good job in New York in connection with MR. GASTON: They have gotten plenty of tax cases certain cases over there. We have gotten reports from up there, but they can't-- McQuillan in which he has slown B. number of cases where taxes have been collected in the last few years, and which MR. O'CONNELL: They can't handle tax cases, anyway. probably are as great as any they have had, You have gotten the bad side, and not some of the good side, MR. GASTON: Some of these people can be dragged in on certain phases of this thing. Rhees' Alcohol Tax nen H.M.JR: All right, I have tried to be fair for eleven can be used. years. Tell me the good side. But the fact remains that sooner or later somebody is going to get hold of this. MR. IRRY: Tie have dragged them into situations that They are going to put a mart reporter on this thing and have developed in Procurement, robbed the service in order find out what the situation is, somebody who is 6 good to take care of that. citizen. Mayor LaGuardia may pick it up any day. I try to sense these tnings before they come. 1 have been taiking H.N.JR: You have fifteen men on Procurement they about this thing for a month. Nom, If I were McQuillan, I tell me. would raise hell and get men and money, and the fact that be hasn't gotten them--he said, "I haven't got the men." MR. IREY: Fifteen in liem York City? I told these collectors to write to you and tell their troubles about space and men and put the heat on you. That H.W.JR: Yes, fifteen men. Have you said enough? Enforcement. is what I would do if I were up there in charge of Law VR. O'CONNELL: I would like to say one thing on the manpower business. The theory of themes I had written MR. TREY: It is B. question of type of men, The type NOS we ought to adopt what would be an invocation. We of men you have got to have for this are not available; they ought to take people off their work even if we might sacri- are in the Army. We have lost ninety-four of the best men fice what they are working on, say, 1941 cases. The thought to the Army, and we can't go out in the streets to find that of this was to try to get current striking cases and press type of man. publicity and try to get people to get more of an ices in the back of their heads that somebody is looking over their H.M.JR: Are you trying to get some of then reassigned shoulders when they are thinking of not paying Income taxes. to you? H.M.JR: You get some striking cases, and we can go MR. IREY: Yes, I had conferences with generale in up on the Hill and see the Senators. They would love to the Mar Department and I haven't been able to get to first get some more in New York. They would love it. base. We are working on one case with 8 Secret Service man. Regraded Unclassified TRADE MICROSTAT/ PAT. OFF. MICROFILM SOLL NO. RECISION MARK 35 34 - 12 - - 11 - let then complete that, you know, and see how many of those MR. GASTON: The decided to suggest to Kr. Nunan-- farmers and their hired men are filing income taxes. Just and we asked the Department of Justice to permit us to take pick B route out of Elmira, Rochester, Syracuse, or any cases on this short form tax report direct to the District place, see? Will you do that for me? Attorney, which is what we are not able to do, you know. I don t know whether you know it or not, but that is one MR. NUNAN: Yes. of the biggest handicaps to enforcement; all this stuff has come around through channels and goes through our H.V.JR: And I would like to know what proportion-- legal staff and then her to E° over to the Tex Division I hear particularly that the hired men of the farmers-- et Justice, and they decide whether any prosecution should practically none of then file income taxes. If you will be made. get It--you see, we haven't got enough men--I would appreciate that, but get a good story, and scare 6. lot of people, and H.V.JR: They say a case has been resting here since like somebody mid, unless you are looking over their January. shoulder they get away with murder. They are just thumbing their noses strthe Government. ER. GASTON: That we are proposing is in minor cases where we can show people have been doing each transactions MR. TREY: I honestly think that the thing Rr. Gaston and partimularlycases on that form where they are misrepresent- mentioned is one of the most important things; it will accon- ing the number of dependents-and there are a great many of plish what you want to do. those cases--that me can take that kind of case and soure of the other minor cases direct to the District Attorney H.N.JR: There are enough people in this room WILD ought without going to Justice at all, just the same at you take to be ahle to find a my to do it. I will sign any letter, 8. narcotics case to his. or I will cell anybody up. I will go to see anybody that needs any help. H.E.JR: Now, gentlemen, prove that I an wrong, Nothing would please ae more. Where in this memo? fr. GASTON: The important phase of this thing is publicity--scare people. MR. O'CONNELL: Right here. (Hands Secretary uero dated March 21, 1945.) B.F.JR: You find 5. couple good cases where a company bought e fur nost for the wife of one of the members of H.M.JR: Don't say you tried to give it to De five or the board of directors, or something like that, or 6. dianond six times. bracelet, 65 I en told they are doing, end you will get all the money you want from Congress, but you have got to have MR. O'CONNELL: I wanted to talk to you about it. 5 couple good cases. H.M.JR: One other thing, I am supposed to stop and Incidentally, this one feilow you sent up there-they see the press. tell se he in Erickson the gambler, and he is getting twenty-six hundred e. year. Somewhere around Syracuse or some place like that have somebody go out and just cover one RFD section--I don't MR. WOOLF: That is one of those names we sent. care where, but a complete RFD route--and interview every farmer and every hired man on that route. I would like to E.M.JR: How many names did you send up? know what proportion--just pick any route out of--I say Syracuse or Chester--I don't care, but pick a route and Regraded Unclassified 37 30 - 13 - March 22, 1945 10:25 s.m. MR. TREY: One hundred and fifty. PRE-PRESS H.M. The One in Erickson, a very famous gambler. Present: Mr. D. W. Bell Mr. Gaston MR. THEY: He is an old New Orleans can who WSS con- Mr. White nected with Huey Long. Mr. Fussell Mr. Shaeffer H.V. JR: The only income he snowed was twenty-six Mrs. Klotz hundred dollars. Miss Chauncey MR. TREY: We want to check. H.M.JR: What's cooking? MR. GASTON: The purpose in going to Miami visa to scatter word all through the country, and I think it will MR.SHAEFFER: Maturities. There is a little bit have that effect. of resentment about the gold story that Lowell Thomas had on the air last night, and there might be & question H.M.JR: Joe has got to watch Bretton Woods. It is on Sylvia Porter's article on Boothby. almost E full-time job, see? And be bas got to watch my taxes and match the Hill. Now, the Office of the Secretary (Mr. Fussell enters conference.) in supposed to take care of you. I am oine to see what you can do. H.M.JR: I don know who gave her that. MR. MINAN: les, sir. (Mr. White enters conference.) B.M.J.: Juli And your coilectors up there would like to MR. SHAEFFER: She dug most of it up herself. do it. They would like to do it. I don't care shother it is Pedrick or not, but I would give him E chance. He said MR. GASTON: It is in the records, and anybody can he could do it. look at the clippings and get a story about Boothby. I didn't see her story, did you? KR. NUNAR: Yes, sir. MR. WHITE: Yes. MR. GASTON: Is it available to anybody that wants it? MR. WHITE: No. I don't know--she's got some of that stuff, but I never knew the fellow had been in trouble over there. I have it in the office. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ 156. M. 5. PAT. OFF. MICROFILM ROLL NO. 38 - 2 - H.M.JR: She was alert. MR. FUSSELL: Mr. Secretary, they are kind of worked up about that Aussian story. Wouldn't it be a good idea if you opened that subject yourself? MR. WHITE: Was It on the air? MR. FUSSELL: Yes. H.M.JR: How would you handle it? MR. FUSSELL: I would simply tell the circumstances, I think, that it was all off the record and-- H.M.JR: No it wasn't. I told them they could use it. = MR. FUSSELL: No, up until that point, and then they overpowered you and you let them have it. MR. WHITE: I think it might be said in answer that rather It came up in connection with-- H.M.JR: Why not tell them the truth? I met with some radio commentators up there, a group of them. I have press conferences, why can't I meet with radio people? That was what's-his-name that told the story. MR. FUSSELL: They claim they knew the story before and they had been turned down. H.M.JR: Well, let's see. All right, I was overpowered. (Laughter) If I relied on these people for Bretton Woods, I wouldn't get anywhere. Regraded LIni March 22, 1945 11:12 A.M. 39 - 2 - 40 0 HMJr: Hello. HMJr: If you please Operator: Mr. MoOloy 1a out of the office and won't be back V: until after lunch. Listen, how 1s your grandchild? I know the grandchild's mother. HMJr: Well, 1s his secretary ---- HMJr: Oh, the grandehild is wonderful and DO 1s Martha. Operator: Yes, Miss Verner is here. %: Well, that's good. Is she staying out there now for a while? HMJr: Well. HMJri Operator: Go ahond, She's going to stay for a while, yes, She doesn't want to move too often. I think the will come to HMJr: Hello. us when ve get up to the form. V: Miss Well, I can't blane her for not coming back here Werner: Good morning. pretty soon, because It 1e going to get too varn. HMJr: HMJr: Yell, she and the baby are wonderful. How are your V: Oh, fine. V: Very well. HNJ:: Marths 1s too. HMJr: Where's your boss? V: Very good. W: Well, be vist off to e meeting and by von't be back for swhile. HMJr: Thanks for inquiring. HMJr: Is be over at the White Mouse? ; All right. Goodbye. V: No, sir. Re's going there eventually, but be's HMJr: Goodbye. not there now. HNJr: Well, the reason I called -- he sent to a message through Xr. White that he vos gring to the Vidte House. W: That's right at 12:30. HXJr: on. W: Yes. HMJr: I see. V: Do you vant to talk to his before that? I'm not sure I can get in touch with him, but I'll try to find him. HMJr: See If you can. W: All right, sir. March 22, 1945 12:28 P.M. 41 - 2 - 42 HMJrt I told them to send you a copy of my press conference. Mr. Ted HMJr: (cont.) tonorrow norning. Gamble: Fine. G: Fine, fine, either one will be satisfactory. HMJr: I spent a half an hour talking about War Bonds. HMJr: Well, I think from your standpoint 6:30 would be G: Well, that's good. better. HMJr: And I think I did you some good. G : Yell, I night nek you one question while I have you on the phone. Would you object to giving G: Well, I'm glad to hear that. us -- giving Levy 15 sinutes tomorrow to make a couple of short transcriptions? HMJr: How long are you in town? HMJr: Yes. I don't think I could. G: I'm here until timorrow morning. G: I tell you what we vent then for. We want one HMJr: When do you leave in the morning? for a closed circuit broadcast to our millions of volunteers G: I leave on the plane around 10 o'clock. HMJr: Tonorrow? HMJr: To go to Richmond. 0: That's right. We want to make the record before G: Richmond. Yes. And I'm back tomorrow night and you gnt away. I'll be here Saturday. HMJr: Well, I could de It much better Saturday morning. HMJr: Oh. I've got an impossible day. G: Seturday Le perfect. G: Yes. HMJr: I'll speak to Fits now. HMJr: After you've read the press conference, would you call not 0: Fine.. G: Yes, sir. HEJP: I can do 11 Saturday If the stuff 1. ready -- HMJri I've got two things, I have to go to the White 0: And the other 1s to Lounch the Treasury Salute House. The Earl of ---- whatever they-- the programs. They both will be short -- they both Governor-General of Canada is coming in at 4:00. will be very easy. We have stready prepared the text on thes. G: Yes. HNJr: Yell, has anybody over here seen them? HMJr: Are you going to that Press Club Dinner tonight? 0: Vell, ve've just --- I have it and was going to bring it to the meeting this morning. I sent It G: No, I am not. over to Gaston. HMJr: Well, you read this thing and then give me a ring, and we'll get together either today, or maybe 8:30 HNJp: Send it to Fussell. 0: Fussell. Fine, I'll have our boys.-- HNJr: And, I'll give Levy time Saturday. PRECISION TRADE MARK MICROSTAT/ ass. PAT. OFF. MICROFILM ROLL NO. 44 March 22, 1945 0: Fine. Thank you very such. 12:30 p.m. HMJr: Thank you, str. DEINDUSTHIALIZATION OF GERMANY G: All right, Present: Mr. White Mr. DuBois Mr. Glasser Mr. Coe Krs. Klotz H.M.JR: I can't begin to overemphasize the secretive- ness of this thing, but Mr. McCloy was kind enough to stop in on his way to the White House and he had this meeting with Will Clayton. They had the meeting but they definitely excluded us. They had prepared a paper in answer to the Treasury document which he says is wholly unfair to the Treasury. He said to Clayton, "Don't you think the Treasury should be here when this thing is being discussed, and furthermore, don't you think the Treasury should be over at the White House when this meeting is taking place?" Clayton said, "You are absolutely right,' and left the room. He evidently talked to Grew and came back and said it was set up so that we shouldn't be there. ne said in this document should be strong centralization in order to maintain peace in Germany, and he said, 'Don't you think it should be the minimum possible?" lie said he tried his best. lie said he made his position clear, that he masn't interested in the economic thing, but as a private citizen he did all he possibly could. The White House told him to bring Lt. Colonel Boettiger with him of the Publicity Section, so he will be there to present his case. Mr. WHITE: At twelve-thirty? H.M.JR: At twelve-thirty, and I would be--but as I say, I have a ninety-five percent assurance the President will once more read my document before he sees these people, so I will be there. Two of my documents right now are on his desk, and they will be brought to his attention to refresh his memory. Regraded Unclassified TRADE MARK MICROSTAT/ PAT. OFF. MICROFILM ROLL NO. PRECISION 46 - 2 - . 3 - MR. WHITE: Did this meeting grow out of Grew's MR. WHITE: That's true, but I was questioning his request to see the President? philosophy. H.M.JR: Yes, In part, and I can only guess. I H.M.JR: I don't think he wants to go quite ao far as we do in deindustrialization. don't know, but you can put two and two together, I should think the fact that Boettiger is there, as to MR. WHITE: He has made that clear. who arranged the meeting. What? MR. WHITE: You can find the name Boettiger sone- H.M.JR: He doesn't believe in a peace for Germany. He doesn't think it would work. He doesn't want the where along the line. Army commanders to have the job of running these areas. H.K.J&t Yes. So I said, "It's strange,' and he It lsn't feasible. I don't think in either case he goes said it was a peculiar may to run 8. grocery store. I quite so far, but he goes quite a ways down the road with said, 'It is strange that a Lt. Colonel in & publicity us. He is against Leon Henderson; he is against section can take an interest in the economic future of Boettiger's philosophy, which is one and the same thing, Germany with you as Assistant Secretary of War being 80-- told by the Secretary of har that you can't." I said, "Goddammit! You are interested in the future of your MR. WHITE: I suppose he will call you back after children. Go ahead and talk up over there." lie said, the meeting? "I will." I said, "All right. Aren't you interested in a future for your children? Make your position plain H.M.JR: He will, or he will drop in. It is very and then talk." He said, "I'll talk. decent of him. But you fellows have to protect me on this thing. MR. WHITE: What impression did you get about the way McCloy really feels? MR. WHITE: I think you have done everything that is humanly possible. H.M.JR: I think he is trying terribly hard to be square with m. H.M.JR: I can't do anything more, and I have made sure personally, as an errand boy, that it is on the MR. WHITE: I think that's true. President's desk, and he is going to be told to read that thing before he sees these people, and I, in a way, would just as leave have that document there to speak for me H.M.JR: The fellow didn't just have to drop in. I have never caught him telling an untruth. I don't with the President than to get into an argument withthem. believe--if he told Clayton we should be there, it's true, because he knows 1 could check up, and I think he honestly MRS. KLOTZ: It's just as well that you got them there. feels--he said again and again he has fought German busi- ness men all his life. Ee said, "You have got to bring goods into Germany in order to control prices." He told H.M.JR: I thought 1 would let those documents talk that to Clayton, and he said, "Are we going to import goods for me. They are good documents. There are two documents into Germany?" Now, I think this, Harry, and I can always there, the one to the President and the one to Stettinius. be wrong, but certainly he has given every indication of But the cards are stacked against us because here is McCloy being on the level with me. He honestly is for the minimum. taking the position that he manttalk on the economic front. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. - 4 - - 5 - Boettiger is making this 6. cause. His personal prestige most likely is at stake. The stuff has already gone to H.K.JR: What's-his-name told him, "I don't think Winant telling him that-- the American public is going to like this course." The American public will never know it until it is a mess. MR. WHITE: There is one big thing entirely The thing that I think he is absolutely convinced of is irrespective of what does happen and that is events. it isn't up to the United States Army to try to maintain They are going to find after they are in there that they the German economy, see? are not going to be able to-- MR. WHITE: We have done 8 job on him and I think H.K.JRt There are two things. McCloy said, "I you are right. I think he is & little frightened of told then that Grew must tell the President that he has the attempt and that-- to tell this to the Secretary of the Treasury face to face, whatever his decision 1s." I said, "Yes." Can MR. GLASSER: He feels quite strongly there. you imagine him sending for me to tell it to me? But, he tried his best to get me in there. MR. 00E: I think that the result of it anyway is bound to be for the President to tell them to redo the MR. 00E: And Clayton checked with Grew who said document, because War has objections. it was set up the other way? H.M.JR: Oh, McCloy said he was very well pleased H.M.Jh: de said he left the room and must have with the way the thing was going along yesterday. talked with Grew,and he came back and said it couldn't be done. (Mr. Du Bois enters conference.) MR. WHITE: There might be another interpretation, H.M.JR: He was very well pleased. He said he was Mr. Secretary, and that is that the President knows very well satisfied. He said he didn't mant White there. your views. The President himself is sympathetic with your views and he wants to give the other side a hearing, I can't stress too much the extreme secrecy of and therefore he doesn't want a debate. what I have just told you. H.M.JR: That isn't the way it happened. MR. WHITE: Well, I think you couldn't possibly do any more. MR. WHITE: No? H.M.Jk: I can't do any more than I have done, Harry. H.M.JR: No. Somebody told him, "Don't have Morgenthau here, he only excites you," which I didn't MR. WHITE: No, you couldn't possibly, and the fight do the other day. I didn't excite him at all. They is not lost. Even If they win,it is not lost. There is don't want me there. My God! They had Boettiger there a long stretch between their making this directive and to be on the spot to keep me from making my case. the result, and they will change the orders and the administration policy, not once but twenty times. It MR. WHITE: Well, you don't have to be there in will be much like the original OEM was here in Washington. person. Your documents and ideas will be there. That's the way it will be, only worse. Regraded Unclassified 49 50 - 6 - - 7 - H.M.JR: They will take this up on the European Advisory Committee opposite the Russians. H.M.JR: Fraser's. MR. 00E: State said yesterday in the person of MR. WHITE: I don't know. We will get 6. complete kiddleberger that they didn't intend to take this draft report. directive up at the European Advisory Committee. They weren't going to take it up anywhere. It was to be MR. DuBOIS: I might mention on the reparations for the guidance of proper American officials. They thing we went over it in detail and Lubin agrees on weren't going to issue It to our Commander in Germany. almost every point. He plans to take it up with the President before taking it up with State. H.M.JR: Why do they send it over in such a hurry to Winant? MR. WHITE: How can they have a centralised policy if only America knows about it? MR. COE: That's what he said. H.M.JR: They used the argument that they have to have all four Commanders treat Germany the same way in all gress. MR. WHITE: That's the purpose of Leon Henderson's trip. You have to have that similar-- MR. DuBOIS: McCloy and Lutin are seeing him? H.M.JR: Also Boettiger. MR. DuBOIS: Lubin told ne that. H.M.JR: I'll see you fellows a little later. You tell Joe. MR. WHITE: You might be interested in a brief comment on this morning's testimony. Fraser is not as good as Burgess. He is a good influence. lie made & number of extreme statements which will be possible to demonstrate. H.M.JR: Did you fellows bring in BIS's letters? MR. WHITE: What? Regraded Unclassified March 22, 1945 2:49 P.M. 51 - 2 - 52 HMJr: Hello. Cooretor: Mr. Grew G:(cont.) bit of work. I'll get at it 8.6 soon as possible, HMJr: H-llo. and then I'll let you know. It will be helpful to have a talk. Mr. Joseph Grav: Hello, Mr. Secretary. HMJr: Well, I'm going away Saturday evening. HMJr: Now are your G: Friday or Saturday? G:- How are your HMJr: Saturday. HMJr: O.K. 0: Saturday evening. O: Just back? HMJr: Yes, 10 -- HMJ:: Just back this norning. 0: : think we can have it certainly before then. 0: Vall, in regards to the German matter. I've gone HMJr: I should hope so. very fully Into the paper you gave no. Gt Yep. All right I'll get in touch with you then. HWr: Yeah, HMJr: Thank you. 0: On n good many of the points, I think VP are not so for spart. The President sent for " this G: All right. morning. HMJr: Goodbye. RMr: Yes, 0: And I had . very 10mg talk with him. As a result of that talk I'm BOY drafting E reviewt paper which I think 10 going to be good to be used to bring our Ideas together. I think it good deal of :s 1» going to be E question of spelling things out -- that 10, nors definite than they have been spelled out. HMJr: I see. 0: Anyway, I don't think there to any good in my coming up to see you until : get that paper in order. HVJr: All right. 0: I'd like to postpone 11, If I may, and then I'll let you know in due scurre. HWrt When so you think :: vill be? 0: Well, I don't know. It 1ª going to take outte a RECISION MICROSTAT/ MICROFILM March 22, 1945 2:55 P.M. - 2 - 54 HMJr: Hello. 53 T: Yes, Grace HWr: And seld that be had gotten If message that be vas Tully: Hello, Mr. Secretary. to bring -- that he VII # to be accompanied by John. MMJri Good afternoon. 7: on. 7: Nov are you nowt HMr: Look -- DO 07 suspicions -- HMJr: (Laughs) I: You, you were right there. (Taughe) 7: Chooo HMJrt Not by General Hilldring but by John. HMr: D1d be set e chance to read that paper? 7: Abult, yes, 7: I took this in to his, and give then to his just MMJr: Well, anyway -- almost RE soon At you left. 7: Voll, about this - RWr: Wonderful. HNJr: I'm going to 154 If I con find out how they are T: So the has all the beckground there. going to redreft it. HKJr: Pine. T: Yesh, well, : tragine you and Mc01ay probably can talk stort 11. T: So I'm sure he 016 read it, because if they vere going = discuss it, I'm sure he wanted to be filled HEW: Yesh, I think Mc01cy has bien stmply svell about it. in on 11, and T nimo found the copy of the directive which T gave his too, Di Vell, you'll get . fill-in them on visit happened. HWr: Good. THE Thenk you. T: Grey von supposed to come over here at three, and Goodbye, Nr. Transtary. he just phoned and said he had a long talk with the HIGHT President, and the President has gode into great Goodbye. detail on what he wanted. T: Yes, HMJr: And now he var going to redraft It and It would take a lot of time. T: I eee. HMJr: So ovidently the President mist have gone into great detail. When : got bank here -- this :* Just for you. T: Yes, sir. BWr: McCloy dropped in on his way over there. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM SOLL NO. Marcia The 1945 3:00 P.M. 55 56 0 Re: Vita det of pendle. Then that's at 7:45 Operator: Mr. Mother, not probably last hour the I'd by from. è estatrices Hollo. Tech. John NeCloyt Hollo. X:: you. It started the statement 199 0.10 1111 of gode. HWH June NUM Net Yes, Mar That 1: visit be sete many elemente BWr: I ean 1+11 ---- in that Mar Yes, Vill, THE desk, Xet that the stt. MMr: + Yes *: # then he MM with Mat NW:: TOWN = Mr: The = TAT - 100 he be Met Yes, > to 5 : necessary HIJr: And not ae a of of Xe: Y . That 15, Hilliping vented. HWr: - : Date Not You. THE sitt MWr: want to No: Les VIA Test. TWN 7 Incon't Es: The about importe and Contral CIVIL Tesh. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ PAI. ON. MICROFILM ROLL NO. Co 58 Ko:(cent) exports, and the President things about 218 0 care, Be thought you vould have to E° in and take E look and experiences in Granty -- Loy. The les went from that into - an was: - for with 12 There Yorh. the ware minotog ::. No: Die -- 2012 shout - -- THE Then there vos - 1st of proverention, hut I don't HNJP: think enything are an the (Irt of 11 than just not I'v) Net Yes, 25% TW: Inc. EW: That's ate 1dea. %: No: That's if Than Grey 2016, the : think W are prostically on G velue closs. We think didn't 1 that, 1% other with the in A that Nr. Stestinius - you. HW: 1044 RW: % God. Mos : He: And 7 Product only, they, zon, = CLOSS - Then a the might hindelf. - as 1116, 400, you neva the you March 10th paper?" in to cupetion." TWIS Yes, HMJ: Date - 1 No: Are loss = - the March 10ther" "No", THE sell, "co, - have : = revrittin." No: Yes, a 10/2e: 00, aferful. : "In Yess. Then Hr. Capton yold, = vinter ventrer vouse 1a revrite Redult - better try of 112" Mr. TV: 2000, - to -: Rx only, 7, exte, "This :- the 74245 vag at 1> State Department affile webs, AP President." ASI or "I think HW: : nots at the 200 MIT: with the Rx setd, Wall, Int se - and 11 TATED Mt," YOUR about F11 Full nich Xet He Addres : don't Page - No: ASE them - additional end N° 11th, end It VIII# No: Clayers at et point that Open decided tatas the thought he mould - better 0000-1 lite specintment with you, Bromite tion If MATE - for 1160's know just where be or stood. Yeah. THE Yeah. No: I: President #: 1160's Est :: 114 excidn't EXT sugetive and redrest Regraded Unclassified - 6 - 59 - 5 - 60 HMr: It vess't? Me:(cont) something that vould he out table in the lingt of that conversation. But the general tone that Mot It wen't mentioned at all. There VIII some --- the Prestdent took me definitely one in which he the State Department people sald, "Well, now in the didn't agree with the strong emphasis upon centrol- light of the reparations that were determined on ization that runs throughout March 10th. at Yalta, there vould have to be some modification of our heretofore existing policy In relation to HMJr: Wonderful. economic control." No: That there would be, he recognized, some degree of central control and he VII ready to approve that. HMJr: Some degree of central control? No: Yes, and then Clayton seld, *Well, there will be no disagreement about that. We'll accept The Angle views on that DD far BY zones and their control counselors are concerned." That's about the story. HNJr: Well, : think we ford about 100%. Me: : vould think no, I would think 80. HKJr: Because the only thing de anotioned VISA about centrol control-was the thing that : told his. Mo: Teah, yesh. HKJr: And : VISE just repeating that you f-llows told 37. HWrt Not Yeah, yeah. Re anto, General Hilldring 2016, ***17, If you 6º In - the Generals - the first thing they would do vould be to 107, *Well Now are we every to run the postal service?" No: Yes, HAJr: And I told that story to the President. At the time : told It to his, be argued 6 little bit vith me, and said well, I don't know whether you vant # universal postal service all over Germany. S-7 No: Yes. HMJr: So : sold, well, I'm just telling you vist the Ang would do if you did nothing but leave thea with 1067. Me: Yes. HMJr: Vale 1067 mentioned? No: 1067 wasn't mentioned. MICROSTAT/ MICROFILM BOLL NO. RECISION TRADE MARK 1-A SI 2-A 62 HM Jr: M: He merely nodded his head on that. He just said, I don't think that Grew was too good in this thing. "Well, maybe so." "Of course, we did agree to Mc: reparations," he said, and then he came back to the No, but he didn't know much about it. formula to the extent necessary to accomplish the EM Jr: objectives of our occupation. I think that he No, and be was taking the old State Department position. would say that probably you had to - you should He tried to get the President to okay March 10th. put something into 1067 that is not in there now. Mo: Re kept coming back to this public service business. Ob, yes, he tried to get him to okay March 10th, but the President didn't do it. HM Jr: Well, if he did, it is my fault, but on the other HM Jr: hand, that's what you people Well, that's wonderful. Mo: Mo: Well, that's right, and I don't mind . we can modify But that WBS I think . well, I think he just wanted to 1067 without killing it, and I think it night be maintain that position, that's all - but not because desirable to do that, and I think that when we get he really felt or knew very much about it, but that around the table, and Riddleberger and the others was the line he had been given to sustain, and he are there that we're still going to have some fights. tried to do it. But I believe these fellows - the State Department HM Jr: went away quite chastened over this business. Who tried to do it? Me: Grew. HM Jr: But I mean I leaned over backwards trying to represent the Army's viewpoint. HM Jr: Oh. Mc: But it seens to the he hit right on the nose. When Mo: we got through and were out there, Clayton said to But Grew S&W that he wasn't on the line with the me in the hall - he said, "I want you to understand President on that. that I came into this thing cold with only the HM Jr: education that I got from my own people, and I Well, I'm - I'm a new nan. an beginning to see now things that I didn't see Mo: before, and I am quite ready to say that I am convinced Yes, that W&S pretty good. now that March 10, 85 it was drawn up, in It mistake." HM Jr: Isn't that something? I'm & new man. Now let me sak you this- If I have Clayton do you think you should be there or not? HM Jr: That's something. I think I am going to try to get Me: hold of Clayton for lunch tomorrow. I don't think it's necessary. I would just as soon, but I think you can do a good bit. I think that Clayton No: Yes, I think that la the desirable thing to do because has an Idea that there is an irreconcilable difference. he's a sensible fellow, and he's the one who is going I think he has the idea in mind that what you are to guide this thing. And I don't believe that you are advocating is fundamentally an elimination of all going to have any difficulty with him. German industry, and he thinks that is fundenentally antagonistic to the position that he as & business man or sensible nan if he were running it would follow. But I think that he doesn't really understand your position, and I think it would be very helpful if you talked to him. Regraded Unclassified RECISION MARK MICROFILM ROLL 64 63 3-A 4-A HM Jr: Well, the only reason I besitated was because you EM Jr: Hadn't he seen It before? sort of drilled it into ne that you didn't want it to seem that War and Treasury aren't Me: No, he hadn't seen it before. He didn't even glance at it at the meeting because as soon as he saw how Mo: Uh huh. it was stated, he immediately caught that up so as to protect the President. HM Jr: I'll talk to him and EM Jr: Well, that was good. I wonder If the President had by Mo: But on this basis, can't we really get together and papers with him. have a uniform policy? I believe We are pretty Me: I think be did. I think they were on the table. close to it, and I would like to do it 80 that We can clear away the underbrush which he thinks is pretty HM Jr: But you don't know whether he referred to them? much impossible now. Re think's there is en unsolvable issue. Me: No, he didn't speak of then at all. And I think the whole idea was to have a new set-up & new FM Jr: Yes, well I think I can be helpful. thing, and to see If the State Department, with Mo: Yes, I think you could be helpful in that, and I think the guidance he gave this morning, couldn't come back with B relatively short document which would It La primarily betmeen you and him on that. state the case. I would rather gather that the President is trying to take the view that was HM Jr: Let ge ask you - how WILS your assistant? more towards control than you would go, but not fundamentally - but a long way off from the tone Me: Nell, he was all right? that the State Department was taking. HM Jr: Did he open his mouth? HM In Well, I don't think that we are spart at all because the control that you people explained to de would take Mc: Practically not at all. He didn't say hardly 8 word. place when General Eisenhomer wont there - you would have to have e telegraph system, (?). HM Jr: Well Me: And when It was attempted to get the President to Me: Yes, that's right. approve that particular paper - HM Jr: But that's 8. long way from saying how many grans of food and what price and all the rest of the stuff. HM Jr: March 10th? I mean it La one thing to have communications and a railroad, and it is something else to have an OPA. Mo : No, the new one - the new one. Mo: Now he talked again about the rationing, and be said, HM Jr: Yes. "Well, now, are you sure that you are going to need Mo: He stuck up and said, "Well, all I think this does, rationing? Mr. President, is to state the issue between the State HM Jr: Who said that? and the Treasury Department, and I don't think you ought to be asked to approve something which is fundamentally that issue, and I don't think it is in the right form. And I think he was right on that, too. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. 18 65 66 5-A No: That's the story. RW: Vell, I'm over es much obligas. That claim DE Mc: The President. He said, "Are you sure you're going the plature and I'm VARY happy because I vos in the very acharressing position, you 200, with to need rationing?" Well, Clayton said, "I think John anying that the President agreed with his, you are with the limitation of the food that you are and with as saying they vented March 10th done going to have." So be said, "Well, why not let ver again. nature take its course on that, and see whether we do need to have rationing. Maybe ne do, but let No: Yes, 200. the nan who is on the ground there who sees the HEAR: But nam that the President bas told these that vas situation come to that conclusion." true. HM Jr: Well, be hasn't changed . bit. He hasn't changed. No: He told this supressive 1501 be wanted it rewritten. Mo: And he said, "Mind you - I don't want to tear down IDW: Hell, that's what : told Grow, and I 2014 Grev to anything." And then one interesting thing - he took 50 per the Provident and 203 it confirmed and ne the phrase that was in one of the papers - I think 167. it was March 10th . be took the elimination of German industry", and be said, "I don't want you to eliminate Re: He has, there :s no question about that German industry - not at all." He said, "I want you I's sping to nall Clarton now, till his = vant to to change the character of it, but I don't want you --- Eta, tell Me I want to work with his, and 600 to eliminate it. I'm not for throwing salt into the in on the working of the paper through Clayton. mines and doing all those things. I don't want to destroy industry. I want to have German industry Me: Right. With the Idea of coming to an agreement maintained to the fullest extent necessary to maintain which W can all -- DO which of can Alt proceed. the Germans so that we don't have the burden of taking care of them." And as you aind if I 0/11 Clayton that I've had . talk vith you -- "I think that means 8. very substential degree of No: %0, no, not at #11. preservation of the German people industry, but I an very leery of their exports." HW: Do you and that? HM Jr: That's the President? Not No, not at all, and I'm anxious to 890 visit nis Impression of the conversation vas 41 related to That's the President - yes. He said that If me can sing. Mo: only get them to a point where they really do the HHJrt Right. things for themselves and we try to eliminate the war potential they have, then he would be happy. No: And to DIE if be went avay with an 1dea that vas He said it was a difficult thing to do, but he said different from mine - fundamentally different from he thought we have to feel our way and get experts nine. over there to see what the answer to that really is. EXTr: Yes, John, 1: =: pound silly 13 197 thank you HM Jr: Well, that's 8. little bit different than he ever talked before, but the main thing that John tried to tell him at lunch two days ago about the Henderson plan - Mo: Well, we didn't speak of Henderson - the whole idea was to control them as little as you can. Let the Germans run the thing. You supervise, etc. but nothing else. Regraded Unclassified PRECISION 2B 67 3a 68 O 0 HMJr: (cont) because voin I's treated squarely It is DO HMri(cont) you up. unusual that I have to my thank you. Met It would only take ten sinutes 07 10 to talk to No: Oh, for goodness makes. you shout it. HMJr: Well, 1: has happened so rarely 10 Washington, 80 HNJr: Do you want to neet or at the office? that when IL sen treats the way I'm accustions to be treated in private life, it 1s something university Mo: Suppose I and I to any thank you. HMr: What time do you ---- No: Well, I's very -- you don't need to say that. I hope that I always that Vt always -- No: I leave my office. I leave home at 5:30. HWr: Vell, -- RKJr: I'll be here theorrow morning at the office at quarter to nine. No: Ye are right shout the dann thing and there is TO such intrigue around here that the only var to Me: I'll come right to your office. It ven't take do E thing-- ten ainutes. HMr: Vell --- its . pleasant surprise. HEJP: A quarter to nine tosorrow sorning. Mo: = think we will 2021 out of this thing all right. Me: Fine. Thank you very much. Goodbye. Now, by the way, there's snother thing that I don't vent to talk about over the phone that CASH up there -- a personal affair, but : == vary anxious to telk = you when you 6nt - change. HMJr: What angle 1e that? No: ob, what -- = part in the thing. HKJr: on. No: The President made pose cracks during the time-- during the conversation there that shook = a good Stt, as to what role for vantes BE to play in this business. Marc's an asful lot of back- ground In that and I wanted to talk to you about It before he gets too far down the line on it. HNJr: Vell, I'm leaving time Saturday night. Anytime be- tween now and Saturday night that you want to mkt it. Mo: What are you -- are you busy tontght? HW:: I'm going to that Mater House Correspondent's -- Yet on, you. HMr: T could start carly In the morning. I stute pick Regraded Unclassified MICROSTAT/ MICROFILM BOLL NO. PRECISION TRADE MARK Merch 22, 1945 3:25 P.M. 70 Mr. Joseph Grew: Grey speaking. HMJr: Yes, : Yes. G: That paper will be ready very nurtly nov. : HHJ:: Vill 200 tell nin that? have to = over to the station to seet the visitors coning from Canada, but : : yas with G1 Vill, 200. : Don't know box such he will be will Clayton can take the paper around to you The to talk over THAT to: President maid, vitnin the next half-hour. Would you ear. to bit enjury --- have ate do 117 EXJr: Yes, they 10:7 HKJr: Vell, here's the thing. I's goin to DIVI the I've got Dr. Suares, the Finance Ninister D: Kell, ( diven's know enough about 0.2 four, Hello? that to 111. : suppose the President sale --- for Me : Interest hiserif, don't you think 0: Yes, 10. BW:: Then Its our a: TAX Volte Houre at +130. Pardon? D: Inst's right. Yes, -12. 0: I skid TOT the President this Le for to DO Interesta I oran, If Diayton or I HMJrt And 1: Mr. Claysin = - = :. tried :: Procet What or 2012 Ve dight pit the ( - explants on eachting or other. I con't 0: 5 w'clock? know. ne'll taxe the paper over to you withhell reflect the Views exchessed today Yes, RW: Yesh, 3: At your office? 0: And I think -- HMJr: Yes. HXJ:: Well, LEATE 1: to Clapten 202 an We If: along 0: All right. virginell, That vode DE - 0: All right. 0: I'll un In, - :- 000's - 20 the HNJP: 11 No. colitrary, = 11 - 0° : I'll 516 "In a be they at 5 biolock. EXJr: At : = then. June the de 11 - - with the 0: Yep. St Yap. HW: You've (21 it the Twest HW: Starton and I underwind -ech Street viry -11. 0: Yes, It's , brief progr. I home - 1148 15; I the /Da VILLA 0: All right. Fine. I lone that vill be Naturul. HWH I'd 11k> Mr. Clarton to give - : - The ALL right. Ig. of what codey. Regraded Unclassified March 22, 1945 72 3:29 P. H. 71 - 2 - HMr: Yell, I don't think -- let's make a start anyway. Mr. William 0: 0. K. Clayton: How are you? HKJr: I var going to call you up before Grew called ne HXJr: I'm #11 right. How are your and sitk you if you didn't want to have lunch with 18 tomorrow on this subject. I know ve wont get O: Fine. through in ten minutes. HMJrt Grew just phoned de -- you sound a mile away. HMJr: What have you got on for lunch tomorrow? O: There's something wrong with this chone. Just a C: I'm very surry, I've invited a lot of fellows minute. to the Blair House. HMJr: : can hear you now. HKJr: Oh. O: Can you hear se better? C: Some Russian friends that ve vant to alsow a little HMJr: Yeah, but get some --- I hear you now. attention to. Quess it would be a little diffi- cult. 0: Yes, HKJr: Well, by All conne taxe care of the Russians. HMJr: Can you hear me? C: (inughs) That's what we are trying to do. ( laughs) C: Oh, fine. But could come over almost any other time to- sorrow. But I'll be there at about a quarter to HWr: He rata you would come over at five. four or n little before. O: Oh, five? It wouldn't suit you sooner, Mr. HKJr: I'll look forward.-- Secretary? Ct And we'll talk about It then. HMJr: Well, my trouble is that I've got to be over at the White House at 4:30. Dr. Suarez is HWr: I'll look forward to eveing you, and = told Mr. coming it four. Grew that I's FUT* that you end I could get along all right. O: Oh, I see. O: : think no. HMJr: But -- HWr: Is it agreemble to you If I have Harry White cresent? C: All right. Vell, I can, --- If : could run over there in about 5 minutes -- be there in about five C: oh, certainly. or 10 minutes, I don't think it will take us Long. HMJr: It 109 HMJ: That rulte as. O: By all means. 0: Well, : tell you, I'll be there by 20 sinutes, or st the very latest-- A quarter to four. -- A: your HMJr: Thank you. office. C: Bye. HMJr: Yeah. C: And I don't think it vill take sore than 10 sinutes. 74 March 22, 1945 - 2 - 4:06 P. X. 73 HMJr: But with that exception I can start at 9:30 HNJr: Hello. and work right through the morning -- 20 can Mr. Clayton. Mine W: I see. Well, now, he has this State, Yar, Navy Verner: Yes, sir. meeting at 10:30. HMJr: Miss Warner. HXJr: Mant's that on? V: Yes, sir. 1: Well, that's the seeting they have every Friday HMJr: This --- Vill Clayton 1e here. at 10:30 W: HNJr: Yes, State, Yor, and -- V: HMJr: Navy. Representative of the Secretary. It will And be has been kind enough to bring over be the Under-Secratory --- the document that ve are all Internited In. RMJ:: V: Yes. Oh, let's do something --- they never do anything at those things anyway. HMJr: On Germany. V: Yell, I'll tell him and I'll call you. He von't be back until about 5 o'clock. W: Yes. HMJr: Tell Me Xr. Clayton vante to get this thing through. HMJr: Nov Mr. Clayton is very enrious to get this thing cleaned up. W: Yeah. V: Yes. HIJr: He wants to ett down with us. We're going to eit here. See? HMJr: And he's ready to cancel all of his appointments tomorrow morning, and devote tonorrow morning W: Yes, sir. to this. HMJr: And VP are g:14g to start at 9:30 tonorrow norning. W: Yes, V: Yes, sir. I understand. HMJr: And I'm going to nak Xr. McCloy and General Hildring to do the same thing. Hello? HMJr: And now I tell you --- I could do it a little bit differently. Mr. McCloy wanted to talk to ne per- W: Yeah, -I bear you. I'm just gnoping. socally, you see? HMJr: Well, you grop, and ortah another breath. 5 Yes, str. V: Vell, all right. HMJr: He : be got 5 car? RMJr: Now when I talked to Mr. Mc01ny about menting his V: You, sir. at guarter of nine, I forgot that : had an nepoint- ment from nine to nine-thirty that I have HXJr: I could be --- if be would pick ne us at Wyoming to keep. and Connecticut ( What's the name of the spartment?) 2029 Connecticut. W: Yes. W: All right. HMJr: Out of the Treasury. y: Yes. March 22, 1945 \ 3 - 75 4:57 P.M. 76 0 MMJr: Harry? HMJr: Harry At 20 minutes of nine. Then be can have the Motte: Yes Str. talk on the personal entter that he wants to talk -- May You boys vill have something for BA in the V: morning. On the vay down. = Well, velys just finished talking about it. I HMJr: -On the way down, and could come to my office. thought we vould prepare a one page or tiro page document and in addition to that, the are going V: All right. to try to continue to work on the document that to started to work with ---- until - finish HXJr: And start right In with Mr. Clayton and Gen-ral that. Hildring. MMJr: If you don't mind ay seking a suggestion. You W: All right. sav the tone I took with him, seet HMJr: And then I'll have to excuse mye-lf for . half V: Yeah. But, ENT shir, we'll be =11 right. an hour. EW: Yesh. O.K. What? W: Yes sir. W: They are working on 1: now. HMJr: But Mr. Clayton will be here and NY the to start in, and you bed better have your bose hate HXJr: Katt, 10 they can get it up to the house tonight and General Hildring, otherwise you any late not. I'd Tike to are it. V: All right. Nov, can I call you book about five W: I'll speek 15 them. O'clock? HMJ:-1 Anytime they can end 11 -- up to midnight. HMJr: I'll be her- because ve are g:1ng to do business tomorrow. V: O.Z. By the way, just --- what advice have you got? Ve've pt 15 minutes on the CBS ---- Ye V: Yes, I understand. got 15 sinutes on the CBS breadonet Saturday night at a good hour, quarter of 11 to 11. HMJr: I just wanted to -- (Laughs) -- you --- I'm talking Ve want cose Senstor, and Me thought of trying the grandfather -- very positive. Senstor Berton in light of his attitude the other day. Do you think that Is safe, or W: (laughs) Are you going to be to stem all your 11119 cught ve stick to -- do you have any feelings one very or the other. HMJr: With everybody but the grandchild. REJr: Yell, I've got this memurandum from Luxford. He's W: Yes, I believe that too. 80 virried about the House, I'd try to get cose Republican on the Rouse side. HMJr: She can do no wrong. X: in the House stdet W: That's good. HMJr: I'd try to get Jesse Woldott. HMJr: Size and Marths. N: Oh, be wait --- I know be von't come out and any - W: All right, good enough. I'll call you beek about five c'olock. HMJr: Vell, I'd ask his -- I mean, : got this assorandum from Lorford. HKJr: Thank you. Regraded Unclassified RECISION MICROSTAT MICROFILM ROLL NO. - 77 March 22, 1945 78 5:00 P. M. V: Well, : near It vill be emberroneing If N° maked Woloott because I know he 1.0 going to tell us be hasn't nade his mind up yet. Ve night try Camble, but I know that MA can thist those fellows. However, I'll talk it over. You think 11 ought to Operator: Go ahoad. be comebody from the House. HMJr: Yes, HMJr: I think It In mich nore important to SAVY from the Rouse. Ted Gemble: W: Hello, Mr. Secretary. A11 right. V-11, we'll talk it over. HMJr: Hello, T-d. D.K. at I read the conference. HXJr: Yesh. 0: You noted TM to call you after I'd read it, HMJ-1 That's right. 0: I think It served . good purpose. HXJr: Good. Go sheed. 0: I don't know whether you talked to Xr. Bell or not. H/Jr: No. 0: After the ticker came out, there has been a little rise in the 25 earket. HMJr: I heard that. DE Yes, Now no I told you all mlong, we didn't need to by mushed on it, or didn't need to push you on 11, but I think constime in the next ten days, ve would need to Dave some information on it. I've made some checks to see was our problems would be, eince I read the conference -- your press conference-- because I've had the time to -- HEJP: Look -- G: Yes. HRJ:: Supposing when I get rendy to 6? home you ride home with me. Q: All right, sir. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. 79 - 2 - HMJr: Will you do that? G: I'll be standing by. HKJr: Thank you. G: O.K. RECISION TRADE MARK MICROSTAT/ 110. V. & PAT. OR, MICROFILM BOLL NO. 80 A1 MAR 22 1945 MAR 82 1945 Dear Mr. Crosby: I've just heard a recording which you made Dear Mr. MaHugh: of the new Var Bond song, "Buy, Buy Bonds." Only yesterday I had the pleasure of hearing I want you to know how enthusiastic I all your new War Bond song, "Buy, Buy Bonds," written about the song and about your rendition of it. in collaboration with Mr. Adamson. It is the best war Bond song I have heard in a long, long time; and I know, with your talent I want you to know that I enjoyed it immensely back of it, the song will get a deserved recon- and that 16 in the Treasury are enthusiastic about mendation. it. I hope ve shall be hearing it a good sany times in the coming months shead. This 1e to thank you for all your past Far Bond efforts and to hope that you will Sincerely, continue those efforts for the war Loan coming up in a few weeks. (Signen) H. Morgenthau, Jr. Sincerely, (Signed) H. Morgenthald, Jr. Mr. Jimmy Mollugh 631 North Sierra Drive Beverly Hills, California Mr. Bing Crosby 10500 Camarillo Boulevard Hollywood, California DL: jd DL:jd air thail Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 62 MAN 22 1945 Dear Mr. Adamson: I have just written a little note to your collaborator, Mr. MoHugh, on your new war Bond song, "Buy, Buy Bonds. I heard it yesterday as recorded by Bing Crosby. I'm delighted to be able to tell you that everyone in the Treasury who has heard it Joins with me in agreeing that it is the best War Bond song we have heard for a long, long time. We know that your song will be heard on many programs on behalf of War Bonds, and I AN sure that it will contribute to the success of our war Bond effort. Sincerely, (Signes) H. Morgenthau, Jf. Mr. Harold Mamson Crescent Bay Drive Lagune, California DL: gd RECISION TRADE MARK MICROSTAT no. PAIL OFF. MICROFILM ROLL NO. 54 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION - 2 - DATE March 22, 1945 TO Secretary Morgentham "SEC. 175.8 Indicia for domestic liquor bottles.-- There shall be blown legibly either in the bottom or FROM Mr. Luxford in the body of each liquor bottle the permit number For Action of the manufacturer, the year of manufacture (which shail be indicated by the last two numerals), and a symbol and number assigned by the Commissioner to You wanted no to speak to Dave Karr about Drew Pearson's represent the name of the bottler procuring the same, broadcast last Sunday night relating to liquor bottles. and there snall be blown Legibly on the shoulder of each such bottle the words Federal Law Forbids Sale or Before I speak to Karr 1 think you should consider the Reuse of This Bottle (Underscoring added). following points relating to our Regulations which are troubling no: The important point in this Regulation is that our Regulations still require that each bottle bear the words 1. Commissioner Numan's memorandum points out Federal Law Forbida Sale or Reuse of this Bottle. that We modified our Regulations on August 31, 1943, Accordingly, even though we may have technically modified so as to permit the delivery of liquor bottles for our Regulations to permit the return of bottles under very reuse to the bottler or importer entitled to package onerous conditions, the fact remains that we still require spirits in such bottles. I doubt who ther that assend- the bottle itself to bear words in effect saying it is ment leads to very practical results so far as ordinary against the law to sell or reuse the bottle. I dare say consumers of liquor are involved. You and I, for there may be one person out of a thousand that knows instance, will put up with the inconvenience of anything about the technical amendment of our Regulations, returning beer bottles to the liquor dealer that but we all know that the bottle itself bears the statement sells us beer. I doubt very much whether we would that the Federal Law forbids its sale or rouse. Accordingly, put up with returning the bottles to the brewery but I feel that if there is any merit in Drew Pearson's this is in effect what the Treasury Regulations, as original criticism, that criticism is still valid as amended, require, for they require "delivery to & long 88 Treasury Regulations require an inscription of bottler or importer.' In my opinion, we have inserted that character on all liquor bottles. a technical provision in the Regulations through which certain large consumers of liquor such as hotels and I will be glad to point out to Dave Karr what Commissioner bara might return the bottles to the distillery but I Nunan states regarding the regulations, but I do think in all don't think the Regulation means a thing so far as the fairness and to protect you, I ought to also inform him of the ordinary consumer of liquors is concerned. Therefore, limitations of the action we have taken. Personally, I think I think that a substantial part of Drew Pearson's it would be better if we were to tell Karr that while we had objection is still valid. taken certain neasures before Pearson's broadcast, we are recanvassing the matter to see whether we may not want to take 2. Even assuming the morit of the technical further steps. exception which we nade in our Regulations in August of 1943, I think there is a second serious practical May I have your views on this? objection to saying that Treasury Regulations are not interfering. I call your attention to Section 175.8 of the Regulations which provides as follows: ash Regraded Unclassified MICROSTAT REG. u, s. PAT. ON. MICROFILM ROLL NO. RECISION TRADE MARK BE TREASURY DEPARTMENT TREASURY DEPARTMENT INTER OFFICE COMMUNICATION INTER OFFICE COMMUNICATION DATE DATE March 22, 1945 March 22, 1945 TO Secretary Morgenthau TO Secretary Morgenthau FROM Mr. Luxford FROM Mr. O'Connell For Your Information Representative Hoffman of Michigan, in an extension of remarks in the Congressional Record yesterday (pages 2615- Chairman Spence spoke to no this moming and 2616), referred to a letter which he had received from Mr. Fussell with which was enclosed material from Detroit said he was concerned about what would happen If the Committee were to vote on the Bretton Woods proposals newspapers and others commenting on your Detroit Economic Club address on Bretton Woods. today. He said that in his opinion the Republicans Representative Hoffman said that the principal purpose were going to line up unanimously against the Fund of Bretton Woods is to nake the American taxpayers pay for benefits which will be enjoyed by foreign nations and the and that the Democrats were going to lose Baldwin and Barry from their side. He said if this occurred people of foreign nations. He said that in order to corral the votes of the Detroit industrialists and of the workers the neasure would be defeated by a 14 to 13 vote. in Detroit, "Henry baits his hook with the juicy promise He strongly urged that effective steps be taken that Detroit, if Bretton Woods is adopted, will get en order at once to force Balawin and Barry into line. Be said for a million automobiles in the immediate post-war period it was the responsibility of the Democratic Party to and that hundreds of thousands of jobs will be created. keep its members in line and he wanted us to know He asserted that you might far better have been appealing something ought to be done. for a return to work for the production of war materials, and added: "But his mind apparently was not on the main, I spoke to Joe 0'Connell about it and lie said the vital issue; he was thinking of the future welfare of those who are not Americans. he would speak to Hannegan. ask Bretton Woods should stand or fall on its merits, Rep- resentative Hoffman said, and there is no excuse for a mem- ber of the President's Cabinet traveling around the country spending tax money in propaganda. He added that you should learn what other high administrative officials are learning and today acknowledge, that it is necessary to keep a sound, secure foundation under the American people, under American industry, and that cannot be done if the material for that foundation is shipped abroad, given away. Regraded Unclassified 88 87 87 MAR 22 1945 The Arm York Times Cimes 2quare My dear Mr. DeLacy: March 22, 1945. I was happy to see that you inserted in the Congressional Record for March 13 the excellent pamphlet prepared by the Congress of Industrial Organizations on the Bretton Woods proposals. Dear Mr. Secretary: Thank you for your letter of This pamphlet, together with the March 20th. le have read the report of repeat which Mr. Hurray sent to Congressman the CED with interest in this office and Spence and Senator laguer last week, will have had in type for several days en e01- E° a long way to show labor the stake it torial which has been squeesed out by the has in the Bretton Woods proposals. war news but which - hope to be able to use soon. Sincerely yours, with all best personal viabes, (Signed) H. Morgenthau, Jr. Sincerely yours, Secretary of the Treasury Honorable Hugh DeLacy House of Representatives dr. Eary Morgenthau, Jr., The Secretary of the Treasury, Washington, D. c. RB:00 3/15/45 PRECISION TRADE MARK MICROSTAT REG. U.S. PAT. OFF. MICROFILM ROLL NO. 89 MAR 22 1945 Dear Governor Saymemak: Thank you for sending ne a copy of the speech you made on March 20 before the Illinois Manufacturers Association. I an very grateful to you for the fine work you have been doing in helping to put Bretton Woods across. Sincerely yours, $ (Signed) H. Morgenthau, Jr. Honorable M. S. Saymonak Board of Governors Federal Reserve System Washington, D. C. RB:ec 3/21/45 RECISION TRADE - MICROSTAT MICROFILM WOLL - 12" Last August while in London I had opportunity to study the plans for reconstruction and postwar economic stability of some of MONETAKE AND CREDIT AGREEMENTS the governments in exile--particularly Belgium. The problem Le Entered Into At. Imménize, and its solution, or lack of solution, will affect use It BRETTON 1,0005 is an international problem. The American people want to know, and rightly so, what our Government 1a planning for the postwar era. by M you know, plans are well advanced for the establishment of a food and agricultural organization of the United Nations. The H. 8. SZYNCZAK meeting at Yalta has cleared the path between Dumbarton Onks and San Member, Board of Governors Prancisco. And as the President told the country, on March first of Federal Reserve System, Washington, D. C. this year after his return from Yalta, work to progressing on proposals to strengthen the Trade Agreements Act of 1934, to secure international agreement for the reduction of trade barriers, to control cartéls and to provide for the orderly marketing of world surpluses of certain commodities. Within the past few wooks considerable progress has been made at the Mexico City Conforence in dealing cooperatively with prob- lens of this hemisphere. Delivored before During much of the period between the First and Second World Illinois Manufacturers Association, Chicago, Illinois Wars, one of the greatest obstacles to the orderly exchange of goods March 20, 1945 . 6:30 P.M. and services between countries was the uncertainty and difficulty which surrounded payment for these goods and services. The conference held at Bretton Woods last summer-which I had the privilege of attending-- agreed on far-reaching proposals designed to remove this obstacle and enabling legislation is now before our Congress. FOR RELEASE IN MORNING HERSPAPLES OF MEDNESDAY, MANCH 21, 1945. Regraded Unclass RECISION TRADE MARE MICROSTAT MICROFILM BOLLINO 2" - 5 -'2 - With the outbreak of the First World War, most countries What were the conditions in the two deandes between the varst refused to permit the export of gold and their banks ceused to pay Peace after the Pirst World War was precarious and chaotic. In the out gold to individuals. The gold standard vas abandoned. After political field, many countries experienced revolutions and counter- the war, however, every effort was bent to return to the gold stand- revolutions, or et the losist frequent changes of government. In the and. But it was not always possible and in 'scme cases it Nall not economic field, much industrial plant had to be rebuilt to serve the desirable to return to the old válues for the various monetary units. needs of peace Instead of ver, and overworked firm land had to be England, however, did; sb strong was the desire to return to what reconditioned. People who had gone without through the war years was considered to be normal relations that, in 1925, a pound was de- sorambled for the neager available supplies of consumer goods. Prices clared to be worth 43 much in come of gold as it had been before shot up and we experienced all over the world a postent inflation. the war. But this was too high a'value for the pound, and it proved International exchange was out of joint. Commercial contacts, broken a great strain to maintain that value. Unfortunately, there A was no by the war, were difficult to restore. Exchange could not be found to international machinery under the gold standard under which the rates buy the imports needed for reconstruction and to put national economies could be altered." There was no flexibility. There was rigidity. A back into working order. Monetary disorders spread throughout the change in the par values of currencios was a major operation which had world. Those who could, shifted their funds about looking for a its repercussions on the oconomio nerve structure of world trade. On "sound" ourrency--one that had some stability, the other hand, Fránco did not return to the old value for the franc. It is generally known that before 1914 the value of zost The impact of the war and reconstruction upon the French acopony had currencies had been expressed in terms of so many grains of gold. lifted commodity prices and mado goods much moro expensive in France. Since gold was a comodity accepted the world ever, this vas an easy That 10, it took for more france than before the war to buy the suno means of comparing the relative values of different currencies. For quantity of goods. By the sune token, it took more franci to buy a example, the Prench frane was fixed by law at about one one-hundredth pound storling; the exchange value of the frano fell. Then in 1926, of an ounee of gold. The English pound storling VII fixed by law at the franc was stabilised at approximately 125 france to the pound in- about ene-quartor of an oun oe of gold. Therefore, by simple arithme- stead of 25, as before the war. There was no possibility of returning tie, one pound storling was the as 25 france or one frano vsa one to the old parity, and France WAS realistic in not endouvoring to do twenty-fifth of a pound. Because of this fuct, international trade so, But 4 flight of capital had proceded French stabilization and the could effect the exchange in goods based on a known relation between return flow afterwards aggravated the difficulties of other countries, currencies of various countries, especially England, Regraded Unclassified RECISION une MICROSTAT ------------------------- MICROFILM NO 2" 5 - 4 It appeared necessary to Impose restrictions upon purchases You can imagine, If you do not reoall, how difficult it was and sales of foreign exchange and pon'international trade because the to carry on international comorcial and financial business under these ability of many countries to maintain their purchases abroad had cong changing and uncertain conditions. There was basic uncertainty in to depend on their ability to borrow abroad. Few were able to do 80. values--in prices--in exchange. These conditions wore needlessly AS the end of 1935, virtually all intergovernmental debta--save that protrasted because each country operated on its own. There who no of Finland--and 30 per omt of private bord issues were in default. comprehensive plan for sollaboration end cooperative action to restors At the end of the 20's, the volume of funds available for foreign 6 functioning international monutary system. Small loans were made investment began to dwindley and finally, AS confidence weakened, to some countries to help the stabilize their currencies; but this short-torm funds began to be withdrawn. Dobtor countries could not assistance VAI sporadic and uncoordinated. Each case was treated meet those drains except by shipping gold or using available foreign separately. Toward the end of the 201s it was vainly imagined that exchange. Obviously, there is . limit to this process. There was no normaley had been restored. But the difficulties in the international machinery for international ocoperative action to deal with such a field were even worde in the 30's than in the proceding deende. situation. Each country felt that It'ms "on its own" and bastened All conditions in the 20's had settled down there had begun to clamp on exchange and trade restrictions. Some hoped to stimulate to be a considerable volume of international investment. Part of this their exports by making it chdoper for other countries to buy their was in long-term loans on which the interest and amortisation charges goods. They did this by reducing the price of their currency. They made a heavy sall upon the borrower's foreign exchange resources. Much depresinted. At the came time they tried to reduce their importe. The of It represented short-term londing, partly in the form of deposits in result was a. general falling off in world trade. Exporting countries foreign banks and the purchase of spoculative sccurities, partly the began to suffer from deelining production and increasing unemployment. financing of trade. Large quantities of goods were imported by the Countries whose economica were geared to a high lewel of importe could debtor countries on credit. In many onses, borrowing for exceeded the not find the exchange to pay for their imports. As a. result the value espacity of the country to repay, especially since the funds borrowed of international trade in 1934 was only about one-half as great as it were not used to onlarge the productive resources of the country. In had been in 1929. time somo countries had to pay more for the goods and services they bought, plus not crodit charges, than they received from thei own goods and services abroad--that 1s, their balance of payments we.e said to be "unfavorable". Regraded Unclassified RECISION IRADE MARE MICROSTAT MICROFILM - 2" -6- began systematic study more than three years ago. After many confer- All this added up to the world-wide depression of the 30's ences and discussions, preliminary, highly tentative proposals for an which is still fresh in our memories. At that time I was here in international nonetary institution were presented to the public in Chicage and well do I remember our aituation, for 1 was then City April 1943. A draft for an International Stabilisation Fund was pub- Comptroller. The banks were closed. Tax collection VISA held up by lishod-by the United States Treasury and A draft for an International a reappraisal of real estate. And when we began again to collect Clearing Union was published by Great Britoin. Both proposals were taxes the depression uns upon us and property holders were unable put-forward to mccurage all interested parties to contribute to to pay taxes, People were out of work. Each blaned the other for the solution of the extremely complex problems involved. Both pro- the difficulties. Back of the domestic depression was a world posals were widely studied, compared, dobated and discussed, orally economic situation. and in writing, by individuals, and in small and large groups, here To keep things noving even on A low level, countries began and abroad. As e result of the wide area of agreement that was found to make agreements with others on the basis of "I'll buy more from to exist, a Joint Statement of Exports was published in April 1944. you if you will buy more from ne". Trade WR # forged into bilateral Purther discussion culminated first in n. preliminary meeting of repre- channels. Countries no longer bought in the most advantageous mar- sentatives of many nations in Atlantic City in June and finally in the ket. They bought wherever they could make a doal through the maze July Conforence at Bretton Woods. The Brotton Noods Agrocments, espe- of regulations and restrictions which hampered international exchanges. cially the Fund proposal, are designed to aid in nohieving reasonable There is no need to describe here the dovides--some of them Ingentique stability in the international monetary sphore in order to pake possible and all of them intricate--which were invented in this deadly game of B. revival and expansion of world trade on A multilatoral basis. They economic war. We know now that it almost no destructive to na- are 6 step--and a long step--in the right direction. tional and international well-being as had been the actual hostilities Admittedly the Brotton Woods Agreements are not a panaces of the First World Mar. And it laid the basis for the Second World War. for all the ille of the world. Unless the najor industrial countries, I have taken this eructi time to recall to you the handicaps especially the United States; succeed in maintaining reasonable sta- which confronted ernational trade after the last war because somo bility of employment at high levels there will be very little chance people appoir to have forgotten them, or at lesst their memory has of avoiding the measures of economic warfare employed in the 30's. In dimned. But those who were alert to the dangers of a repotition of effect, these were measures to "export unemployment". By importing as these conditions after this war have devoted time and energy to seek- little as possible and exporting se much as possible, each country the a way to avoid such B. recurrence if possible. Interested individuals Regraded Unclassified RECISION TRACE - MICROSTAT MICROFILM KV NO 12" - B that a project 18 productive and that the borrowing eduntry has a hoped to keep its own people working. There 18 reason to believe that ressonable prospect of repaying the loan, the Bank will see to it that the major countries now are determined by domostic measures to provent the loan Is forthéoning on reasonable terms, This does not imply the wide fluetuations in employment. Feonanie stability and full employ- elimination of private investment but it is unlikely that enough pri- ment in the United States are certainly an accepted aim and purpose. vate capital will be lent to countries in need of reconstruction or But these should be reenforced by a healthy condition of international development without some encouragement, especially immodiately after trado. The acceptance of the Brotton Woods Agreements will contribute the war when conditions will be uncortmin. The Bank will oporate for in a mbstential measure to the ability of countries to maintain employ- the most part either by guaranteeing loans mde by private investors ment at high levels without resorting to attempts to "export unemploy- or by making loons with funda borrowed from private investors. ment" to other countries. The benefits of the International Bank will be many, It will If we are to have a healthy world trade, we need reasonable help members to schieve stable recomics. It will distribute the riske stability in foreign exchange rates, and adequate credit distributed of international lending. Although we may furnish nost of the loons where it will do the most good in rebuilding and developing national which the Bank guarantous, this nowntry's share in meeting the risks sconomies. The Bretton Woods Agreements are technical documents, the involved will be only 85 billion as n. consequence of its subscription product of the exports of lala nations, but they can be surned up simply. to the Bank. If international loans are made through the Bank, the They spell out cooperation in the monetary and oredit fields, and give dangers of imporialistic lending will be avoided. International super- detailed ways in which this cooperation can be achieved. The Agree- vision of foreign louis vill make it difficult for foreign loans to be 5 ments provide for the establishment of two international institutions. used 0.8 an instrument of politionl policy. The conditions which sur- an International Monetary Fund, and an International Bank for Recon- round the Issues of debontures by the Bank insuro that they will be a struction and Development. prime investment accurity since the total of the Bank's loans and The Bank proposal is relatively simple. No serious differ- guarantees my not exceed the amount of its capital, surplus, and re- USUNA of opinion areso in the nogotiation of the Bank agreement, which serves. Only one-fifth of the $9.1 billion subscribed by member govern- has received widespread support and approval. The Bank follows a woll- monts can be used directly for making loans. The rost will remain in known pattern. Its job is to investigate projects for the reconstruc- the form of unpsid subscriptions 0.8 a guarantee fund to meet any losses tion of war-torn areas, and for the development of backward lands for that the Brank may Insur. which long-term international loans are needed. When it is satisfied RECISION IRADE MARE MICROSTAT MICROFILM 2" - 11 - - 10 The International Monetary Fund Agreement deuls with - more The Agreement also eliminates special exchange rates for par- difficult problem than does the Bank. Wider differences of opinion had ticular types of transactions. Germany was the country which developed to be reconciled before the negotiations were concluded. Changes will this device most fully. In the years before the war there were all have to be made in it from experience. There is provision for amendment sorts of reichmarks, representing the receipts from different kinds of and there is. room through interpretation for adjustment to conditions as business with Germany. The non-Gorman owner could not dispose of thono they arise. It ains to prevent & repetition of the chaos which followed freely since the use of each type was limited to a particular purpose the lost war and of the destructive monetary practices of the 30's, both such as to pay tourist expenses in Germany, to buy cortain types of of which 1 have reviewed. It substitutes cooperative international de- goods, and so on, and the value of each kind in terms of other our- cisions and international action for the state of affairs we had in the remoies varied greatly. In this way Germany arbitrarily made it cheaper past when each country made its own decisions and acted alone in what or more expensive to buy particular German goods or to sell particular commodities to Germany, and manipulated this device to obtain . competi- it thought were its cm interests. Under the Fund Agreement each number establishes the gold tive advantage in international trade. value of its currency by agreement dth the Fund. Gold is still the The requirement that the Fund approve necessary changes most widely acceptable maans of international pagment. But this 10 not" (after the are 10$) will also mean groster stability of exchange rates a return to the old gold stundard. Although each country undertakes to in the*long run. Not only will unnecessary changes be eliminated, but maintain the established value of its currency at pur, there 18 naces- necessary changes can be made in an orderly way before the situation is earily provision for altering the parity if it becomes evident that this completely out of hand. If French production costa (wages and other items) for instance, value is too high or too low (because of changed conditions in the country's international position). The Fund will approve only changes happen to rise much above production costs in Encland, French producers that are really necessary, and object to those which are not. This will gradually lose their foreign markets--both in England and in other neans that no country will be able to sell its currency cheaply--that countries-to British producers. French producers will loss even in is, to depreciate its noney in order to secure a competitive advantage their domestic market, as their high cost goods are being increasingly for its exports. We have learned that if this is done, other countries displaced by lower cost goods imported from Britain, If the basic malad- are not likely to stand by idly but will join in the seranble with justment in the cost structure is not the result of a temporary condition, but reflects . fundamental and lasting change, French production will disastrous consequences for all. eventually decrease, unemployment will rise and monetary Nume will Regraded Unclassified RECISION MICROSTAT ------ MICROFILM 2" 12 13 be drained by the deficit in the balance of payments. The French our- Under the Agreement also, all members promise to eliminate ecnoy will tend to fall in value, speculators will rush to buy foreign restrictions on foreign exchange transactions as soon " possible. exchange and, in may cases, the resulting monetery depresistion of or course, during the war, each country must keep strict supervision the Prench frane will be grunter than what WO E really colled for to over its international transmotions. I an not speaking of war-time correct the initial oodt maladjustments. If an appropriate change 10 controls but of the sort of regulations in effect before the war. made in the vilue of the currency relative to the currencies of other Many countries at that time had less foreign exchange than they needed. countries before this train of circumstances 1 Γ out in notion, much That meant that importers in those countries wore rationed as to the confusion and distress will be avoided und the necessary adjustment can amount of foreign exchange they could use, and exporters were required be en orderly one. to turn over their receipts to some governmental agency which par- European currency history between the two wars illustrates celled then out. This arrongement, as we have seen, interfered with this problem in the clearest possible way. As I,said before, in 1925, normal trade, which was shifted into particular channels, and often England went back on the gold standard at the prewar gold/parity, while led to the domination of the economy of one cointry by another for continental countries depreciated their currency to a considerable ex- political ends. tent, The resulting cost disperities between England and other coun- The case of Germany and Hungary illustrates what happened. trice resulted in n. severe and protracted economic depression in Great In preparation for war, Germany vas anxiove to acquire large stocks Britain until the dovaluation of the pound in 1931. As the pound dem of goods, and was willing to pay well for them In German marks. The olined further and further in the following years, production costa in Hungarian Government had subsidized farm output in order to avoid the Europe increased in turms of starling and, in turn, became completely bankruptcy of its farmers when agricultural prices in world markets out of line with British costs. The attempts of the gold block coun- dropped, and the prices of Hungarian wheat and neat were much higher trice to maintain the parity of their currencies in the face of such than Germany would have had to pay elsewhere. But Germany could not buy honry international cost disparities led to intense depression and elsowhere because it did not have the dollars or the pounde or the unemployment and proved futile in the end. Bolgium was the first eoun- posos to do 10. An agreement was signed between Bungary and Germany try to bow to the inovitable. Hor relatively prompt dedision permitted whereby Germany agreed to take Bungarian goods at the high Hungarian her to limit the devaluation of the Belgian frano to only 26 por cent. prices, and sell to Hungary German goods--also at high prices. The France meanwhile resisted to the last, with the result that the devalure transactions were belanced against one another in & "olearing account". tion, when it came, depreciated the French frane by about 60 per centi as compared with the Belgian 28 per cent. Regraded Unclassified RECISION TRADE MARA MICROSTAT MICROFILM NOU 1947 2" - 14- . 15 Each country tried to prevent an unsatisfied debt from piling up in recovery, at best, can be only gradual. On the other hand, unless the clearing account. Under this arrangement both Hungary and a concerted effort 1a made as soon as possible to eliminate such Germany were paying more than they should have for the goods which practices, there Le CRAVO danger that many countries will fall back each imported from the other. Hungary lost its other markets because on them to balance their international transactions after this war, of its high prices and had to concentrate on the Gorman nerkot. They must have an alternative which will make such action unnessssary. Germany began to diotate trade terms to Hungary, to tell However comustly the number countries may desire to live it what sort of goode it must produce if Germany were to tako them. up to their agreements as for AS exchange rates and exchange restric- Then Germany went to war, the Hungarian economy MAS firmly tied to tions are concerned, It will not be easy for them to do 10, To help that of Germany and thus Hungary inevitably became a. purtner of the them, a Pund of almost 09 billion is to be established, nade up of Axis. gold and the of all the countries which are members, This This is the sort of thing WE do not want to have happen Fund will be used to nasist member countries feeed with temporary again. Under the Pund Agreement, numbers undertake to aboridon such belance of payment difficultion mish as night follow IL bad crop or & bilateral clearing arrangements and discriminatory surrency prooticos us give exporters special preniums if they ship goods to countries the NN loss of a harket for n short poriod. Should the deficit prove to be more them temporary, the Fund will continue to five the member assist- currencios of which or purticularly desired. This commitment applies anou only If it takes adequate stops to corrrot the situation. to the abandonment of restrictions on foreign exchange transactions I have skotched briefly the mechanism of the Fund, and indi- on current account, that 10, those arising out of shipments of coods, onted the aims which it 11 hoped it will achieve, Doubtines, you have tourists' expenditures, imigrant remittanees, and the rendering of all honrd and read soma criticism of this plan, and : should like to services. Members are permitted to control espital transactions truch mintion the min point around Which this critician centers. During as money sent for deposit in foreign banks or for use in stock mrint the last twelve or thirteen days I have been attending and closely follow- operations. Real invostment can be insouraged und the speculative ing the hearings on the Brotton Woods proposals in the Denking and movement of Funds limited; this will contribute substantially to Currency Committee of our House of Representatives and feel that the international minetory stability. quest for information concentrates mainly on this point. It is not expected, of course, that the whole body of régue lotions over foreign acchange transactions shell be done any with at once. Only confusion uld result. The patient In very sick, med Regraded Unclassified RECISION TRACE MARA MICROSTAT ⑉66 UH MICROFILM MA. su 2" 17 - 16 Another automatic, control 10 the obligation of all member It has been argued in come quarters that foreign countries countries to repurchase their own currencies from the Fund with gold will abuse their privilege of drawing on the Pand and that the Fund's or foreign exchange. This obligation is so franed AS to require resources will be wasted. The position taken by the critics is that countries adequately supplied with gold and foreign exchange reserves in order to Insure that numbers take advantage of the time during to draw on them at the sance rate that they draw on the Pund. and it which they are drawing on the Fund to correct the untelance in their also requires (with qualifications) countries which are goining gold international position, aid should be given only after special invoice and foreign exchange to use half of the amounts gained to reduce tightion and agreement as to the conditions under which the funds their drafts on the Fund. are to be used. This view misinterprots the very essence and purpose The disoretionary controls are even more important than the of the Fund. automatic controls. The Fund can postpone the beginning of its ex- A whole serios of automatic and discretionary controls 1s change operations until is is satisfied that most nembers are in specifically designed to prevent undrue use of the Fund by any member - sufficiently stable condition to worrant use of the Fund's resources. country and to ensure wise use of the Pund's resources. Purthermore, oneo it has come ended general exchange operations it can Take, for example, the important autonatic controls. Definite postpone transsctions with any individual country which 1a not in a limits are established on the amount of foreign exchange a nember my position to make appropriate use of the Fund's assistance. obtain from the Fund in any single year or as & niximum over a period Oneo the Fund has bégun operations with any member, however, of years unloss special permission de given to exceed those limits. that number can proceed with the essurance that it can como to the Sccondly, member countries must pay a small service charge on all Fund and receive help in neuting payments due for foreign goods and foreign exchange purchased from the Pund. In addition, an annual services without delay. This feature of the Pund proposal lies at charge 10 levied on a. member country using the Fund. This charge inc the very core of the whole agreement. It assures the availability of oreases, the larger the use of the Fund's resources, and the longer the exchange. Since members can confidently expect assistance from the Fund, period over which the resources are used by a number country. Thus, they will be able to undertake to maintain stable exchange rates and to constant pressure is put on a member country to reduce its drawing on eliminate restrictions on foreign exchange transactions. In many cases the Pund, the fact that assistance is forthcoming without delay will prevent temporary disturbances from having serious repercussions on the inter- national position of other countries. If & drop in any single country's VECISION - with MICROSTAT MICROFILM 12" 18 exports leads to defensivo deflationary measures and rostrictions on imports, that country's exchange difficultive will spread to other countries and . vicious circlo of restrictions on trade and deflation will ensue. Should the difficulties of in member country prove to be more than temporary, the Fund, has a very important diseretionary power to ensure that the country does take advantage of the time during which it is drawing on the Fund to put its house in order and corroot its position. The Fund oan stop a member from drawing on the Fund if it is not using its resources in accordance with the purposes of the Pund. The purposes 4d stated in the Agreement make it quite older that the Fund is to be used to help countries nect temporary deficits and to give them time to correct more deep-sented maladjustmehts. Il It is evident to me that the period during which the Fund and the Bank are needed most 18 the imediate postwar period before individual countries bogin to impose now and additional rostrictions on foreign exchange and foreign trade. Prompt catablishment of the Pund and the Bank would also dw member countries confidence which they must have to place their oconomio houses in order with the loast possible delay. It therefore sum to ne that with the knowledge We have of the problems of the 1920's and the 1930's we have agreed at Bretton Woods with competent representatives of other countries on sound oconomie principles to help solve these problems and the solution of these prob- lens is in our interest. Therefore the International Monotary Fund and the International Bank for Reconstruction and Development should, after due and proper consideration, be approved by our Congress. Regraded Unclassified MICROSTAT/ MICROFILM BOLL NO. PRECISION TRADE MARK 110 TREASURY DEPARTMENT Treasury Department Division of Monetary Research INTER OFFICE COMMUNICATION 109 DATE March 22, 1945 Date March 22, 1945 19 To: Secretary Morgenthau (For information) TO Secretary Morgenthan (For information) From: Mr. Coo =( FROM It. Goe FC Subject: Financial situation in Free China Sub Ject: Financial Situation in Pree China In connection with our discussions on gold shipments to China and U. 5. Army 1. The inflation in Proe China is now experiencing a new spurt expenditures, you may be interested in indicating that unlimited sales of gold and other palliative glancing at the attached memor andum giving mossures, such 0.0 changes in the tax system and sonnel a brief summary of the present financial shifts in the Ministry of Pinance, are not able to affect situation in China. materially the current situation. (a) Prices in China are now rising acre sharply than in previous years and there is no sign of their levelling off. The rate of increase is now as high & S 50% por = month in some areas and more than 25% per month in most. (b) Note circulation in February, 1945, amounted to about 088226 billion na compared with 0286 billion in February, 1944, and is increasing at a rate of about 10% per month. (c) U. 3. dollars are now selling in the open market at around 0118560 per V801 un compared with 4. rate of about 0116200 a year 400. Gold la selling in the blook market at 01646,000 por ounce or the equivalent of 0882,300 per ounce at the official rate of exchange, while the Dovernment's official solling price is only 011$20,000 per ounce. The value of the Chinese national dollar in terms of the black market price for gold is about CN01,200 per US$1. 2. Central Government expanditures are now averaging about 011835 billion por month as compared with an average monthly expenditure in 1944 of about ON815 billion. Revenue from taxes anount to only about 0005 billion por month or about 15% of total expenditures while receipts from gold sales amount to about 0837 billion por month or about 20% of total expenditures. The remaining deficit of more than 011620 bil- lion per month is financed by note issue. 3. U. S. Anny expenditures are in the neighborhood of bil- 11on por month or about 10/- of total Central Government expenditures. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ PAT. OFF. MICROFILM ROLL NO. 111 112 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE - 2 March 22, 1945 TO Secretary Morgenthau production of reparation goods or for any other FROM purpose, the effect being largely the same insofar 8.8 Mr. DuBois war potential is concerned. You will be interested in the following excerpt "But If, on the other hand, we want to provide fertile economic and political soil for the possible from a speech by Representative Gore before the House growth of separatist or partition sentiment within on March 19, dealing with his personal observations of Germany, then this proposed step, though admittedly the operations of military government in Germany: expedient for the moment, would defeat the purpose. "I think it is of utmost importance that our Should this possibility be thrown overboard before we every nove, not only from the hour of Germany's surrender, even get started? If so, for what? Another Germany as the economic pulsation of Europe?" but in the making of plans right now, should be taken with these primary facts as our guide. There will be times when It will be easior, less costly, and more expedient to improvise. geo "For specific example, there is now under discussion a proposal for a centrulized economic administration of the whole German nation. This proposal is contrary to all of our planning until recently, and arises, at least in part I believe, out of desires for reparations. Undeniably, the German railroad system can be operated more efficiently with a contralized administra- tion at Berlin; the integrated German electrical generation and transmission system can be more efficiently administered by highly centralized methods; the internal waterways system can be more easily controlled by one central authority. After all, that is the way the Mazis have been doing it. There is no doubt but that Germany can produce more goods for reparation with a centralized economic administration of the nation as n. whole. But what price reparations? By that one move we would eliminate any opportunity for the growth of a separatist movement. "If our ain is to rebuild a strong centralized Germany, as quite a few influential citizens of more than one country advocate, then a highly centralized economic administration of the whole German economy would appear to be & logical step in that direction. If our aim is to restore and rebuild German productive capacity, then it would seen logical to 50 manage her economics as to increase Regraded Unclassified 114 OFFICE OF STRATEGIC SERVICES 113 SECRET WASHINGTON, D.C. March 22, 1945 19 March 1945 Lear Bill: Thank you for your letter of earch 19th, enclosing a copy of the Honorable Henry Morgenthau, Jr. saria intelligence weekly no. 20, and Secretary of the Treasury for your letter of -arch 20th, with Treasury Department which you enclosed 6. copy of the study "German liquen During the was and After Dear Henry: I shall read these reports with interest. I an enclosing a copy of one of our Research and Yours sincerely, Analysis Branch reports, entitled Paris Intelligence Weekly (Stamed) 1999 No. 20, which I think you will find interesting. This menorandum deals with (1) political regroup- ing in France; (2) Luneray, & rich Norman farming community; (3) the contact of the French Government with both the Aus- ajor General william J. Donovan, Director, Office of strategic Services, trian underground resistance and the anti-Nazi Austrians in washington, -, C. France; and (4) conditions in Belgium during January. Sincerely yours, William J. Donovan Director Enclosure. SECRET Candyr stamped Confidential Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ us. U. 5. PAT. OFF, MICROFILM ROLL NO. 115 > 116 OFFICE OF STRATEGIC SERVICES CONFIDENTIAL warch 22, 1945 WASHINGTON, D.C. 20 March 1945 76 -2 dear Lieut. rutzell: This will acknowledge receipt of your letter of arch 2200, enclosing Honorable Henry Morgenthau, Jr. a copy of radiotelephone message 200, Secretary of the Treasury from cerne. Thank you for sending this Treasury Department Building to se. 15th & Pennsylvanie Avenue Washington, D. C. lours sincerely, Dear Henry: (Signed) H. Morgenthaw, Jr. I en attaching copy of n. study on "Geruan women uring the unr and After" which I believe you will find of interest. This was prepared by our Research and Analysis Brench. Lieut. a. J. rutzeli, Acting Executive Officer, Sincerely yours, Office of Strategic Services, Washington, D. L. Bill William J. Jonovan Director seen sent the report to Am white CONFIDENTIAL Goodge stamped Compined Regraded Unclassified RECISION TRADE MARK MICROSTAT REG.U.S.FAT.OFF. MICROFILM ROLL NO. RESTRICTED 117 OFFICE OF STRATEGIC SERVICES WASHINGTON, D.C. 22 March 1945 Honorable Henry Morgenthau, Jr. The Secretary of the Treasury Treasury Department Washington, D. C. My dear Mr. Morgenthau: The attached radiotelephone message #289 dated 21 March 1945 was received last night from our representative in Berne. It is forwarded as being of possible interest to you. Sincerely, Putzell, Jr/ Lt. (18), USNR Acting Executive Officer Attachment RESTRICTED Regraded Unclassified RECISION TRADE MARK MICROSTAT 116. U.S. PAT. OFF. MICROFILM ROLL NO. 118 Porgs - OFFICE OF STRATEGIC SERVICES OFFICIAL DISPATCH DATE 21 !lar oir 1948 209 FROM Dorno IND PRIORITY ROUTINE TO DEFERRED DIRECTOR, OFFICE OF STRATEGIC SERVICES DISTRIBUTION (FOR ACTION) (FOR INFORMATION) - RESTRICTED RECEIVED IN PLAIN TEXT RESTRIL OBHIANY A Corman businossmn, who has just arrived from Dorlin, gives the following picturo of the Russian behavior in cooupied German torri- t 100 in the East, The Ruesians are treating the Dermans in the occupied t..ritory co the whole very fairly, The Ruscien policy 1a to let the occupied territory CO on working, loaving It in the condition in which It in found and anying that It must produce the same quantities 08 before. Later, a workers' comittee 1a set up In each plant to 800 which exocu- tives should be got rid of. or those to be discharged, those whose con- duet the otherwise all richt SED civen a pension, end those those conduct was hostile are shot. The Russians recognise the value of engineering por- sonnel. They are following a olcor line. They are shooting the Namio, but are being good to the workers, engineers, and those whom they noed. The German people are ocoporating with the Hussians in the occupied crea up to la cortain point. They fool more then under Lho Hadia. The large oatates are being divided up und civen to the with notico, Low- ever, tiat the fargora Day lave to join . Russian cooporative. The Germans fool that the Mussians are taking G. succoss or their occupation, and there is a rowing foeling that they vill nake o grester success than the English and Anericans vill of theirs. For one things the Russians never bonled workers' quartors, and the Cormanu feel that they connitted less wilful destruction. The Russians do not strafe flecing German civilians but instead seaint them to get out of the districts the Ruseians are about to capture. The Gorman businesseen making the foregoing counent feels that the Americans, with their stand-off policy towords the ordinary Gorman on the one hand, and with the likelihood that they will not shoot many linets, on the other, will probably blunder in their occu- pation nothods, RESTR Regraded Unclassified 118 # 25 MAR 22 1945 Dear Mr. Rockefeller: This will acknowledge your letter of March 15, 1945. The Treasury Le Indeed sorry that Mr. White could not personally attend the Mexico City Conference, but - are very glad to learn that the participation of Dr. Year and it. McMovite in the work of the Conference - helpful. Please accept ay personal congratulations for the of the Conference and the constructive contribution is has sade to the problem of world peace. Sincerely yours, (Signed) H. Morgenthau, Ja. Mr. Nelson A. Hocksfeller, Assistant Secretary of State, Washington 25, D. C. Susers 3/21/45 / PRECISION MICROSTAT MICROFILM 12" STAST SECRETARY or STATE WASHINGTON March 15, 1945 Dear Mr. Secretary! We were very sorry indeed that Harry White could not be with us at the meeting in Mexico City, for under your direction during the past years he has been one of the leaders in developing the inter-American system. However, you were very ably represented by ar. Ness and Mr. Moskovits, both of whom made en important contribution to the deliberations. I think the final results of the Conference were very gratifying and will result in carrying us one step further down the road towards the peace and security of the world. with ware personal regards, Sincerely, Nwn Nelson A. Rockefeller The Honorable 1 The Secretary of the Treasury Washington, D. C. 121 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION AM DATE 3/22/45 TO Secretary Morgenthau (For your information.) FROM Mr. CooF( The financial representative of the London Poles inquired again about printing Polish currency in this country for the Government in exile. After clearing with the State Department, Mr. Zoltowski was told that in view of the pending forma- tion of a new Polish Government and because of the tight situation on printing facilities it vas our view that no arrangement should be made now for the printing of this currency. Mr. Zoltowski replied that he personally vas glad of the decision and he would not press the matter; but he would inform his government of this decision. 00: Mr. D. W. Bell Mr. H. D. White RECISION TRADE MARK MICROSTAT/ REG. s. PAT. OFF. MICROFILM BOLL NO. 122 123 MAR 2 1945 MAR 22 1945 by dear line Charge d'Affairess This is in further reply to your communication of February 2, 1965, relative to the United States Any expenditures in Balgium. My dear Mr. Secretary: Under date of March 12, 1945, the Decretary of Hair ad- This is to acknowledge receipt of the communication vised us that there would be some delay before definitive figures relating to those expenditures can be provided, because the initial from your Department of March 10, 1945 (YMA), relating to reports are just beginning to flow back to the - Department. the first certification covering the period ending December 31, 1964, & draft note prepared by the National Bank of Belgium and the second certification covering Live period ending March 31, 1945 will be available on OF before June 15, 1945. Thereafter, concerning Belgian frosen assets in the United States. the time las necessary to accomplish fomal notification to the Treasury Department will be not less than sixty, and not more than In accordance with your request the receipt of this seventp=five days. The tabulated date, on the baste of which certi- fication will hereafter be rade, will be available for the inspec- draft note as well as its contents will be kept com- tion of your officials at any time after the dates of certification nentioned above, fidential. In view of the previous Treasury request for certification Very truly yours, which would pendt imediate part payment, the Secretary of - recos- nenda that a part payment on account, not in excess of $1,000,000, be effected at once without reference to any specific period of time. (Signed) H. Morgenthau, Jr. be shall, therefore, be clad to receive your instructions as to the method and place of payment of this initial - of $1,000,000. Sincerely yours, The Honorable Signed H. Morgentnau, Jr. The Secretary of State Baron lierve de Cruben, Belgian Charge d'affaires, delo, 1715 - 2 2nd Street, N. Sep Teshington, 2. C. MF:tab 3-1/-45 But thymon THIP Regraded Unclassified RECISION TRADE MARE MICROSTAT No. PAY OFF MICROFILM DOLL NO 2" STATE DER TMENT OF STATE WASHINGTON 9131 CONFIDENTIAL CONFIDENTIAL Marahi 10. NOTE FOR THE EMBASSY OF BELGIUM IN WASHINGTON In reply refer to FMA Upon receipt of cable No. 322 dated October 8 and of the report of September 26, cerial No. 854, concerning The Acting Secretary of State presente his compli- dents to the Honorable the Secretary of the Treasury the lifting of the American Treasury's controls on frozen and encloses herewith two copies of a translation of draft note prepared by the National Bank of Belgium assets in the United States, these communications were a for transmission to the Belgien Embassy in Washington, concerning Belgian frozen assets in the United States, examined thoroughly by the National Bank of Belgium and which was received from the American Embassy at Brussels. The enclosures referred to in the dreft note vere not by the Belginn-Luxembourg Exchange Institute which gave included in the transmission from Brussels. The Embassy states that the National Bank intended to submit the special consideration, in its organization, to the require- draft to the Kinistry of Finance end the Kinistry of Foreign Affairs before forwarding it to Washington, mente of the American Treasury. It 18 recuested that the fact of the receipt of At the same time, the procedure adopted to ensure the the draft note ne well as its contents be kent confi- release of Belgian assets in Great Britain von perfected. dential, This question 18 similar to the one under consideration in the United States. Enclosure: The problem vae, furthermore, the subject of many Translation of a dreft note prepared by the exchanges of views with the Embassy of the United States National Bank of Belgium. in Brussels which followed the establishment and organiza- tion of the Belgian-Luxesbourg Exchange Institute very closely. Ve are assured of the complete support of this Embassy for the carrying into effect of the measures of application which shall be described further on. REVICTORY It would be desirable, in order to ensure a certain BUY uniformity, that similar, if not identical rules, should STAMPS be applied to the unfreering operations carried out in G.L. the United States and in England, insemuch DO perallel negotiations are being pursued with France and Ovitzer- land and will soon be begun with Canada, Portugal and the various ountries of the sterling area. The Regraded Unclassifie RECISION TRADE MARK MICROSTAT REG. U.S. PAIL OFF. MICROFILM ROLL NO. -2- by "transfer" one ould understand here the trans- The *Orvis-Schmidt - Baron de Gruben memorandum, fore of Belgian france to foreign currencies or vice- dated July 6, the note sent to Schmidt on 9/14/1944 and verse, ne well no trani fre into Belgian fronen from the the report No. 854, dated September 26, were used no a Belgian frane account 0.0 Belgian national to the Hel- basis for the organization of the Belgian-Luxembourg clan frano account of A Toreign national or vice-verse. Exchange Institute and for the practical application Am the law permits 18 to do, the Belgian-Luxembourg proposale which follow and which would be desirable for Exchange In/titute has entrusted Its routine management the Embasey in Washington to negotiate with the United to the National Bank which represente the Institute over States Treasury. its own signatures (in certicular, that of Mr. Frêre, Gov- I. EXPOSE OF THE EXISTING ORGANIZATION ernor of the National Bank and President of the Institute, Hereunder, for more clarity, is A description of the end that of Mr. H. Ansisux, Director of the Bank end Nem- Belgian organization in the way of exchange control. ber of the Council of the Institute, - well no the eigna- A. Belgisn-Luxembourg Exchange Institute. turer of the officials of the Foreign Service of the National (Moniteur Belge No. 31 of October 7, 1944, page 406, Bonk of Belgium). (Dee enclosure 4, decision of the ineti- end No. 92 of December 7, 1944 page 1310 and No. 65 of tute ADD enclosure D, copy or the agreement reached between November 10, 1944, page 861) - enclosures" 1, 2 and 3. the Institute and the Bank). It 1a the function of the Institute to define the The Council of the Institute determines the exchange policy of exchange control. For this purpose, it ennots control policy, within the frauevors of the monet-ry policy all the necessary regulations. Its powers are very exten- sive. In the performance of its mission duties, it vill and in articular of the exchange policy Inio down by the take into account not only Belgium's own economic inter- National Bank; the Bans, on the other hand, ensurer the este but will alno see to it that enemy nationals take execution of the decisions of the Institute and applies no part or have any interest in the transactions, the regulations dravn up by the latter. especially ne regards operations with neutral countries. By virtue of on agreement reched between the Pelgian This also applies to Belgian nationale who may AND Luxenbourg Governments (enclosure e) there 10 only one represent enemy interests either directly or indirectly. exchange control for the whole Delgisn-Luxembourg conomie For this purpose, a special section of "trade with Union and the decisione of the Institute rire applicable the enemy* vas created in the Foreign Service of the throughout the Unione' territory. The Grandwinehy Gov- National Bank. This section's duties include everything ernment has taken the necessary sensures for this pur- concerning enemy interests. It is consulted before a poss. transaction of n. commercial or financial nature entail- The Institute, through the National Bank, controls ing e transfer, contemplated with a foreign country, all transactions with foreign countries, whether they are receives the approval of the Institute. of " commercial n-ture or of . urely financial nature. By In the MICROFILM sou NO RECISION TRADE MARK MICROSTAT REG. OIF b. legielation relating to exchange control. In the care of operations relating to international The control in sed un the interests which Institute tride, the Institute operates through delegates of the it, discree-Inv (anclosure 12: Number No. 21 or 0.00 to the riorities Committee (enclosures 7,8,9 and etober 7, 1944, 408) which determines the general 10). rinel - - -n inden by the cent (coclusure 13: honi- For the operations of - financial n° ture the introl tour -1 of October 7, 1944, "1" 424) which defineo in expries at rither by NOTION of sorl regulations - Lere of liection if rinoisles. sind of "generol license* issued in -rticular for the 1- legislation in completed by the decree-1: re- triffic in bins noter belonging to frontler arksen or porioing the declaration of 0.00 NO :Acete abroad (inclosure boston, for the lavue of cheoke to travellers, for the 14: with ar 31 of intober 7. 1944, --- 401). transfer of food nid, etc. or by the incurance of ceneral .1 neale be winted -ut what with this or incividual licenses. legislation 1s singularly strongtoened by the \bligation It 1- pleaned to Issue general licenser -ither for of the Institute to cerve ns a sedius for octaining the operations relating to . e ecific currency = for expende: Free dienosal of arrete abrand. the Congolare frane -, or, for mentions relating to A To reply, n the other hend, to - wertion presented specific =rticle - for experle: sheet Morte - or for by re-ort in. 104 of .estember - the ciarge c-ntrol operations concluded by - precific firs. The in declaration of venete *mply only to residente on In this last once, the issurance of . reneral :leense JP territory. would Le subject to the furnishing of eriodic statements -elylone realding abroad - re not subject - the nas to a right of inspection in the mot if the corre- origin control. rondence and B. counts. nisle are subject to the control established in Finally, individual liceures are necessary for -11 1.40 in the Folony. File exatr.1 remaine in force. operations which die not cuse under the general licenses. 1.10 while cyrtem 1n almendy in operation but >111 For the time being, only individual onn be vider. in scope only no UNITED ctions with foreign countries issued for transfers of capital. orginle, valor 1- nos tue c've only on a very limited -1th respect, in particular, to the relations between rele. the Colony of the Congo and the belginn-luxembourg con- or urroner of information enclosure 13 given the omie nion, an agreement 1a being negotiated. The ex-mine- dara of the org-nization of the 70h.n.e Institute tion of the text of the draft agreement (enclusure 11) -nd of the Rational Bank departmente entructed with the enables one to realize that, although the control receine of this control. Independent in the Citony, it vill neverth=les= be under the supervision of the natitute in order to cosure unity in the excluse control polloy. 2. Legislation Regraded Unclassified RECISION TRADE MARK MICROSTAT NEG. OFF MICROFILM BOLL NO 137 -7- C. Mechanism of the of Belgian assets in England under the control of the Institute (Notional bank) nd The release of assets in England 10 the from being used without the prior agreement of the Intter. result of the Agreement ween His Majenty's Government frocedure time been ndopted according to which: in the United Kingdom the Belgian Government, relat- 1) Belgian nationale requert the Institute (Notion-1 ing to property in the ed Kingdom belonging to persons in writing to release their A : rnto in ngland; resident in Belgium Jure 16) n) The Institute (2-t1 nal *nk): In application personant, the Belginn Office m) verifier time "freem nt between the request for of Management rnd L101 1on 168 accointed by the Govern- release -nd the declar tion nade in application If the ment F-8 Agent responsible for indicating the Helgian neseta decree of votober 6 (soniteur, rge 401, zon enclosure 14); which oon be the subject of a release. b) waser cert-In that the - plicent presente every ⑇4ʳ ren- Le jure, the Belgian Office of Renapement end Liquide- tee from the : oint of view of tride with the enroy: tion has broome the "custodien" of this property, de froto, e) verifies the covers of the errons entitled to Purpose nt it contents itnelf with giving instructions to the hoard leyrl persons ADD verifier the signatures of legal of Trade, English "custodien" which sim-ly transmite them ne vell or of civil (-ign-ture a) placer "ny conditions vision it any Leem -dvinable " on to the depositories. the release if the neget. This condition any consint in Py virtue of the instructions which it has received, the Helgian Office of Management and Liquidation rete requiring the transfer of the arret to FL lelgion LANK e proved by the Institute in shich the erron in question only upon the vermission cnú et the re-uest of the Del- will have en account in for-ign currency or thin the gisn-Luxembourg Johange Institute [Notional Brnk) which equivalent value =broad vill not be in ni- 'Irect jus- issues the -ermits for release. per-ion but in that of the souroved Dank which ulver e in the English system, the accets of the ense natural such greater guarantee from the wint of view of entrol or juristic person remain fro-en until the Institute author- under " A the proveded banke pre/strict suservision. 17er their release; this release is never partial, it affects 3) If it authorizes the release, the institute transuito all the sec-to as the owner of t em 1e surposed to remain the request to the cigien Office of Management FRO 1:01- . A "technical enemy* until the Institute announces that he detion with the instructions recuired by the ence; no longer has this status, after which time the English 4) the belgian uffice cous .niceter the authori- tion to authorities release all his carete. the of True chica transulto it to use dei delt- Fy Thie does not prevent the aceete thue released, of of the appele she in turn releared them; which the Institute has been able to verify the nature a) .he Helgian frice 18 informed of the merition nd through the information at the disposal of the Belgian inDrue the .netitute ...nx) which, in turn, Office of Management nd Liquidation, from remaining informs the cyner of the nineta. The under PRECISION TRADE MARK MICROSTAT OFF. MICROFILM BOLL NO. 12" i... secete releas in neland are free to Le used They are subject to a severe accounting nd statis- for ny ryment in stat Lng a well NP for any urclase tical control [acilitated by the existence of the B-nking of merchandise even for byrort. Commission (decree No. 185 of 7/9/19:5, enclosure 18), the :.0 transford-tion if there conta into # foreign perment arenence of reviewer who reports to the Bank- currency ser then the I'm frine ne 10 subject to the ing Commission end the periodic communication to the receipt of the sink of ngtone and IF monrible in National Bnnk of the *ccounting documents, provided for - otine mly through prior transfer to the recount of by the legislation on the rubject of exchange control. the :-t1 nal B-nk which marrier at the operation itself Furthermore, the Institute requires special periodio If 1: Peese it -dvisable from the nounate -int of view statements, the correctness of which it has verified on n° -1thin the reservors of the economie -olley of the the snot by its own inspectors working in connection with Government, of its own sinctory julicy -nd of the policy the *Venertment of Inspection of Benk Statements* of the of the Council of the ze ange Institute. National B-nk and the revievere of the Brnking Commission. by virtue of the y *greement Letiven Great Approvel onn be granted to these broke which appear brithin nd the relgian-luxeubourg: convie nion on the list drawn up by the Banking Complerion which have (endiusure 17) the transfer of ounde sterling into Bel- denomited the security recuired by the deoree of August 31, , 1% " ner in : Iveys und 1 P officied by 1935 (enclosure 19: brinks the n'mer of which are followed " vist to the recount of the Frink or of + bank by AB asteriek) And ney the dues for the benefit of the reproved by the schence - titute. Institute (enclosure 20). proved uross. The list of ancroved banks is nit drawn um " wort -proved Time are the which the : change Insti- of t.em have not yet neked to be improved. This list 1.1+ Authorized to engine in foreign exchange operations. vill be communicated to the Lubercy-se ein ne it vill may -- Utherired in rticular to :/ve P organent have been completed. each 1-9-nee in foreign currenater -nd to seintoin E. Contactr with the Labricey of the nited t-ter in Lruggels. 100 unt- -bro d. Everything that procedes, including: the e ntente of proved L'CKP are authorized to dielore of their the enclosures, has been brought to the rttention of the creets in Comeign currencies only for sperati nr, vhich, Embrisay of the United States in trussels no has bren in the 020 if their customer, 11" in their - name if it 1e n Question of operations relating to their ovn the subject of several of vieve vith tue Finen- cial Attaché in brunnels (Rr. J-nes 3- ihart) n° 1th ctivity, - pe covered by general or individual licensee or -re orformed within the from of regulations revresentatives of the United Stater Teensury win crme enseted by the Institute. from London especially for this ursope ( -ecera Aaron They and Patterson, sesistents to Kr. S. T-ylor). A note Regraded Unclassified -RECISION TRADE MARK MICROSTAT us % PAI OFF MICROFILM ROLL 9 12" -11- -10- In all cases in which the transpotion vas not ordered A note vas tra sitted to Mr. J. Swihart (enclosure directly by the belgion Government or by the National Bank 12) setting forth, particular, the mensures taken by of -elgium it in rermitted only by authorization of the the Institute (National Bank) to prevent the enemy from Exch: n/o Institute( in e necessary once through its rep- taking-any part OF having any interest in the transno- resentative in the United States) who suet certify in tions. riting that the tvo requirements listed above under a The term "eneay" is meant here in the general zonse; -nd b have been complied with. it can include certain "blocked nationala" with vison Bel- This system 1a very restrictive, it requires the glum is not at war (Sulgarions, Bungariens, Rumanians, for intervention of the Tychninge Institute (Setional Benk) example) but it 1e obvious that it con not be mp:11ed with- for ench operation and rinks hampering considerably out discrimination to all the neutrals with whom we ourt transmotions nt a ime when na direct trade between Bel- trade without delay such AF the 3wedish, the 3w1so, the gium and the United States 1a being resumed, many payments Portuguese and even the Spaniards. will be ande. All precautions are thaen eo that enyuents made to The situation 1s different from the one which ore- the residents of these countries can in no a benefit valled before the 1ber-tion of the countries of Mestern the enemy or persons nonearing on Line Ulnok lists, but Lurope when, due to ceritime traffic difficultier, Oweden it goes without saying that normal commercial relations had practically no trade with the United States ADD had must be made nossible. only financial settlements to unke. II., RILEASE OF BELGIAN AND 1.UXENBOURG ASSETS IN THE Furthernore, Eveden is a neutral country which trade= UNITED STATES with the enemy, Belgium in AB allied country which 10 fight- A. Van of the General License No. 49 (Swedish exatem). ing agrinet Germany end has as such interest -- the United This method, which is advocated by the United States "tates in orposing any form of direct or indirect >1d to Treasury, consiste in authorizing the disposal of naseta the enruy. One murt not forget in this connection that insofer ne: »11 perott ne are control led by the Lelgian-1 uxembourg a) the transaction in not performed by or for or on >change Institute which exercises strict supervision the instructions of a national of 6. "blooked country* regarding trade with the en my. other than Belgium; It seemn difficult, however, due to the Treasury's b) that the transaction does not affect property in o maistent policy alnoe the beginning of the ver to try which "n blocked country or netional thereof" other than to erounde it to adopt . policy which does not follow Belgium or a Belgian has, or has.had, any interest since the princi len on which it 0.000 its notion. A protical May 10, 1940. In all Regraded Unclassified RECISION TRADE MARK MICROSTAT REG. V PAT. ON. MICROFILM sou NO 36 -12- A practical proposal, toking into account, on the -13- one hand, the policies scopted by the United Staten b) Agente other then those belonging to approved banks. Trensury and inscired on the other hand by the welgiam erganization, vould unpirt in establishing E different These nesete would be subject to the system of eyetem for resets belon DE to on proved bank -nd the "generel license No. 50°; however, this license vould rerate belonging to other errons. be completed by . provision by virtue of which the Treas- n) Asseto of ADDROVED time. ary would authorize, without prior agreement and without it the request of the Relgion-1 useuboury include interference from the Belgion-Luxembourg Exchange Institute, Institute transmitted in A BeCone my COPO by na #11 transfers of neceta Inceets in Account or titles) to oriate representative residing in the United inter, the the account of the National Bank of Belgium or to the Trelsury would issue to AB suproved bank F. general 11- account of an approved Belgian bank - in en American bank. conse covering all existing and future assets of this bonk. Other acts of disposal and in particular transfers This general license would permit: 1) to freely anke all payments vithin the United in favor of residents or non-recognired banke would be States in favor of resident, snother recognized Belgian subject to the regulations ennoted by "general license No. 49". bank or the Noti nal Bank of Belgium; 2) to freely receive any payment made by n recident This system would give all guarantees, as the assets or by enother recognized Belgian bank or br the National held by the suproved Belgian banks would automatically fall, by virtue of the Belgian organization, under the very strict Denk of selgium; 3) to nake any payment on goods to be exported to control of the Belgian-Luxembourg Exchange Institute (Na- tionel Bank). belgium or the Colony: B. Qualifications of the principale. 4) to negotiate on the Aperican Derket any security included in the ansete of the Bank (State funds, shares, The United States Treasury 1e particularly concerned about the qualifications of the principals. Cebentures, etc.) under the price conditions ce in /mer- a) Natural persons: ( joan resident; By transmitting the first disposal order on the 5) to export these name securities to E-lgium. Due to the V-TY strict control of the emproved banks, accounts of a natural person, the Exchange Institute (National Benk) will thus certify that this person 1e the Exchange Institute har eas late DOVER wer the excete "politionlly irreproschable". It will transmit, on the it their disposal and therefore the nited States Trave- other hand, the sample signature of this person, authen- any receiver every guarantee, espect= Ly 18 regards trade tiented by the burgoneter of the commune of his residence with the enemy. b) and certified by the Institute. Une Regraded Unclassified PRECISION TRACE MARK MICROSTAT NG. U.S. PAT. OFF. MICROFILM ROLL NO. 1.2" -14- -10- One must avoid the authentication procedure by the artersors, the risk, receively enred by the United States Consulate which would result in excessive Tregrury, of seeing instructs or by persons who excensen and useless complication. The signatures of the are not "politically irreproschable* who are not Institute vill be authentiested by the, Belgian authorities entitled to recresent the empeniee they vere and transmitted to the American authorities through the molified to bind on any 20, 1940, valid be volded. Belgian Embersy in the United States. C. Irganization b) Legal personal If this recedure and these ricoibler sent with The procedure will be the name, However, the Ineti- the approvel of the United The Treasury it yould be tute will attach an attestation that such or such A ner- advisible to net we 1th ut delny the organization which son 10 qualified, in the eyes of Belgian low, to bind the would remit their application. company. On the occasion of issuing this attestation, the An for - the belgion- uxenbiurg change Institute Institut vill cake sure, by production of the charters, 10 concerned, its services see organized and are Able the appendices to the Moniteur, certified copies of the to correte under the condit one decoribed above. -he deliberations of the Boards, according to the current details of the relations between the Institute -nd the procedure on the subject, of the identity nd qualifica- Treasury vould remain to be determined. tions of the persons empowered to dispose of the assete After m.coreful study, it ACCDA that the best solu- of A company. tion would be to represent the Institute in ashimation The United States Treasury should accept ne suffi- or Ber Tora by - n. delegate sho, on the one here, would cient proof in this respect the attestation furnished by centralize all correspondence cent to or received from the Institute under the signatures binding the latter. the Institute and on the street name yould unint-in -r- In the two cases considered under n) and b) ne many ulnest one cirect cont-et with the nited taten imme- attestations would be furnished PO there are depositary ury, the Federal Reserve Irank of the for% and the Ce on- establishmente interested in the name operation and one it banks. or several separate attestations for the archives of the H10 function valo be to ADO to the execution or the Treasury and of the Institute's delegate in the United transfer orders e provid by the 1 -ttrute, to obtein the States. Decessary licenses and to F tile my difficulties of application which may urise. For each operation which requires its intervention, de would, furthersore. furnish the Institute with the Institute would certify that the two requirements pro- information regarding any question with n'ght be of vided for by the "cenerel license No. 49" and listed above, insreat to it - no in articular regi NAME the policy Are complied with. of the jesseury with respect to e ntril of foreign strets. Furthermore, de yould Regraded Unclassified No. M. PAT. OFF, MICROFILM ROLL NO. RECISION TRADE MARK MICROSTAT 2" -17- -16- The negotintions with the Treesury must therefore He would also report to the Institute any abuses rino bear on Luxembourg neseta and must be carried out which he might note in the use of the "crmite issued by in agreement with the Minister of the Grand Duchy of the latter and would make any suggestion which he night Luxembourg who will receive the necessary instructions deem advisable with A view to anking the transfer mechan- from his Government for this purpose. 1em more flexible. E. Belgion Congo. Nothing in changed in the system nt present in force Fith reenect to the assets of the nationale of For ench transfer request, the Institute would send the Colony. to its delegate, the A roprinte file contrining All the The Bonk of Helgian Congo continuer to exercise its necess ry panera. control over foreign exchange operations concerning the The delegate would enter into direct contact with Colony and no negotiations are necessary In this respect. the sopropriate authoritier and vould nee to the progot Brungels, Jenuary 16, 1945. issurnce of the licenses requested. He would inform the Institute regarding the excou- tion of the transfers requested. The procedure would be similar "nutatis autendis" to the one described above with respect to the relations between the Institute and the Belgian Office of Kannge- ment end Liquidation, for the release of Belgian namets in Great Britein. D. Grand Ducty of Luxembourg. AB Belgium and the Grand Duchy have unified their exchange control, no the Belgiam-Luxemb-urg change Institute in the only one to exercisethis control end an the exchange reserve 1s being used in the common -reat of the tvo countries which form on economic the procedure donted for the release of Fel- should Alno be A >11ed to Luxembourg arects. no "urg bnnke will angenr on the list of banks retitute - and wi 1 be treated like the KA in =11 respects - empecially AR regards the control exercleed by the institute. The Regraded Unclassified 142 MAR 22 1945 by dear Mr. Secretary: I - informed by Assistant Secretary McCloy that In accordance with & conference held at your suggestion in his frice on March 9, 6. recomendation has been forwarded to the Joint Chiefe of Staff favorable to the proposal which I nade in my letter to you on March 5th. I wish to express my appreciation for your prompt and full cooperation in this matter, Sincerely yours, (Signed) H. Morgenthaw, Jr. The Honorable Henry be Stinson, Secretary of War, ISP/efs 3/20/45 SION TRADE MARK MICROSTAT NEG. U. 5. PAT. OFF MICROFILM ROLL NO 12" WAR DEPARTMENT WASHINGTON, D.C. MAR The To Decretary of the Treasury Door Mr. Pain Le to 40 e reseips or your Lister of Farch 5 1945 relative 3 will Registry me's 20- appeaibility for the pleaning uni signistration DE a United States Curria process in the Pullippine Islands. AS your letter e caster up or I RY post well = conference be balu on Vehicle, % at 3:00 in the office or when GROUND - of ar, at wideh representatives 146 ilm an Le Day Dd artient, Interier and Addristration dil ultaid. 27 the above couse with ser approved, dill you the 0.19 from your affice will presents fund no IN delivery. alcountly Therey < Winson Cir. PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 144 MAR 22 1945 Dear Mr. HeCloy: I am glad to receive your letter of March 14, 1945 informing - that the proposal which I made in my letter to Mr. Stimson of Harch 5th has been forwarded with favorable recommendation to the Joint Chiefe of staff. ky nen who attended the meeting held in your office on March 9th informed - of your complete support for By proposal. I need not say how meh I appreciate your full 00-> operation in this matter. Sincerely yours, $ (Signed) M. Morgenthaw, Jr. Honorable John J. NoCloy, Assistant Secretary of War, war Department. ISF/ere 3/20/45 ION TRADE MARK MICROSTAT REG.U.S.PAT.OH MICROFILM ROLL NO I 2" WAR DEPARTMENT OFFICE OF THE ASSISTANT SECRETARY WASHINGTON, D.C. 14 March 1945 The Monorable The Secretary of Treasury Doar Dr. Secretary Tata will supplement Secretary Stineon's letter to you of Varch P. 1945. In accordance with a conference held in my office on March 9, your letter of Sarah 5, has been conwarded to the Joint Chiefa of Staff with a recomendation favorable to your proposal. Sincerely yours, JOHN :. McCLOY Assistant Secretary of Way RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 148 2 147 TREASURY DEPARTMENT In this connection, the Swice Government also declared In INTER OFFICE COMMUNICATION writing that it will "prevent the concealment, disposing of or dissipation of mosets of persons falling under the various block- DATE March 22, 1045 In decrees issued by the Switz Government In the past or which it will enact in the future or the execution of transactions for or TO Secretary enthau on behalf of such persons designed to elude or evodo such con- FROM Orvis 4, Schmidt trols AS are now in effect in Switzerland or hereafter established." 2. Swins Black Markets In Dollars and Other Foreign Report on Recent Maslon to Saltzerland Currencies SAVE Seen aliminated. The Swine, by decree of _arch 3, 1948, have prohibited the You will recall that late In January you permitted 28 to Importation, exportation, and all trading within Switzerland in accompany P. Currie to Suitzerland LE E manber of the American the currency of any foreign country. This measure stope all black delegation which vas to participate, along with delagations from market dealings In dollars, sterling, france, etc. and prevents the British and Frencil Governments, in certain sconomic negotic- Certans from continuing to sell in Switzerland currencies they tions. Because of Treasury representation on the Mission, .r. have taken from occupied countries. Currie decided to paze the implementation NV Switzerland of Boso- Intion VI of Brotton Woods one of the main objectives of the 4. Swiss Stopped Purchasing Gold from Germany for Ordinary negotiations. You will recall that in Resolution VI, forty-four Financial Operations. nations meeting at Bratton Goods called upon the governments of neutral countries to take the steps necessary to provent our The Buies Government has agreed to cease purchasing any more enemies from hiding their funds or disposing of looted proparty coll from Geruany except to provide funds for German diplomatic in neutral countries. expenses In Switzerland, care of German prisoners of war, and pay- sente to the American Red Cross. As a result of this step, pay- I am pleased to be able to report that the following results canto ande by Service to persons in Switzerland, including payments were achieved: to stand-still creditors, will cesse, since the Germans were 80- guiring Unins Frames with which to make euch payments by the sale 1. Switzerland Froze all Geruan Assets. DE gold. On February 16, 1945, the Swins Federal Government Issued n In this connection you will be interested to learn that Mr. decree freezing all assets In Switzerland of Certifient end persons Mober, President of the Swiss Rational Bank, made the observation in Gergun-occupled territory. to te that be supposed Rd did not realize it, but by forcing the Swins Government to ceune purchasing Cold Iron Germany we were ei- Significantly, Harlin, immediately after the Issumee of this fectively billing the bank for International Settlements. He ex- decree, recalled home the economic mission which it had sent to plained that the chief asset of the BIS was a claim against Germany negotiate with the Swiss. and that the only may in which this claim was being liquidated was by Lie use of Cerman gold. 2. Switzerland Agreed to faice Other Freezing Action. 8. Swiss Commitment to Take a. Census of Foreign Assets The Swiss Government agreed to tighten certain already exist- insaculates Swies Banking Secrecy. ent freezing controls and, upon the receipt of instructions from us, to freeze the assets of Japan, Finland, Rumania, and Bulgaria. The Swise Goverment agreed to take = census of all assets The freezing of Finland, Bulgaria, and Rusania WES postponed in held In or through Switzerland by nationals of all countries non order that we might first clear such action with the Russians, Inasuanch as the Russian Government did not participate in the negotiations. It was decided by U.D. to postpone the freezing of Japan for reasons which I will be glad to explain orally. Regraded Unclassified MICROSTAT/ MICROFILM ROLL NO. RECISION TRADE MARK 149 143 - 4 - 3 I think you will elso be interested to loss that the power or hereniter subject to Swins freezing decreas. This canna e of the Treasury Department ie feared and respected in Switzerland census of the assets of all European countries other than Studen, not only within the Goverment but also in Swine (inancial circles. Spain, Portugal, and Turkey. In agreeing to take this census, In this connection, .inister Stuckl, number-two can in the Swiss the Swiss recognise that for the first time In Swinn listory all Foreign Office who in very Influential In Switzerland and played banks, lawyers, holding compation, etc., will be Corceñ to dis- an important behind-the-scener role in the negotiations, asked clone to the Solon Government the names of the true owners of ce specially to convey to you nis best regards and his expression nosete being held through Switzerland. This commitment was of highest esteem. obtained with great difficulty and only because the exploan delegation W&I ainmant. 1 NO preparing a more detailed report on the entire negotia- tions, not only with the Saiss but also with the British and the 6. Foundation Laid for Security States Cooperation in 20st- French, which I shall forward to you in the near future. unr Allied Control of Corren External Anonts. The Swice Government In non comditted not to release Germen blocked assets without first consulting the postner 1111+4 Vilitory Doveroment of Jarmany. Yely recult DRE nonleved to pressing the Sples to not to roles any of Its Treening cos- trols without consulting the government of the blocked country. In addition to Its importance in the Ournan program, the condituent will be very holyful to the postwar financial of the 11)- erated countries. 7. Switzerlend to Assist In Restoration of Looted Property. The Swine Government nade a. personal conditient en Its own behalf and that of the Privoipality of Lichtenstein to prevent the territory of Smitzerland and Lichtenstein [ron bein used "for the disponal, concealment, or reception of Assets unten any have been talan illegally or under dureas during the var" ADD that "every facility will be given to the disponsenced onners to claim in Switcerland and Lichtenstein Mate assets [ound thare." You will be interested to know tuot in return for the fore- To , ave nothing to the Swine. I should like to emphasize that tale aculevement U.S.S. sade possible only because J. Currie TAS milling to throw als roll weight benine this aspect of the negotiations and to take the position that setion by the Swiss in this aphere WHEN a sine que non of any trade agreement between Switzerland end the Allied countries represented. Regraded Inclassified TRADE MARE MICROSTAT RSG. U.S. PAR OR. MICROFILM BOLL NO RECISION EXECUTIVE OFFICE OF THE PRESIDENT WAR REFUGEE BOARD WASHINGTON 25. D.C Report of the War Refugee Board for the Week of March 5 to 10, 1945 ORIO OF THE EXECUTIVE DIRECTOR MAR 22 1945 EVACUATION AND RELIEF OPERATIONS FROM SWITZERLAND Plane developed in consultation with other government agencies and international organizations are proceeding toward the implementation of the broad program approved at the Board meeting on February 20 for relief and resoue operations. Representative MoClelland has been authorized to obtain from any possible sources the necessary transportation equipment, including trucking facilities, gesoline, tires, oil, etc., to My dear Mr. Secretary: be mnde available to the International Red Cross to carry relief to physically unfit unassimilated detainees in enemy I am pleased to send you herewith a copy territory and to evacunte such detainees on return trips to Switzerland. The possibility of also using other trucks, of the report of the War Refugee Board for the week available to Intercross in connection with the delivery of prisoner-of-war relief, for evacuation of such refugees on of March 5 to 10, 1945. return trips from Germany is also being explored. A further contribution to the program 1s the agreement of the United Very truly yours, Nations Relief and Rehabilitation Administration to nake food supplies available, at the request of the Far Refugee Board, to the International Red Cross for the maintenance in Switzerland of refugees who are evacuated from Germany and who are in transit to UNRRA-controlled camps. Representative William 0'Dwyer Kataki, who recently returned from his assignment in Turkey, Executive Director 18 expected to proceed to Switzerland shortly to assist Representative MoClelland in the execution of this project. According to a report from Representative McClelland, it was expected that the President of the International Red Cross The Honorable, would meet this week with German officials for conversations and that discussions would include the question of relief to The Secretary of the Treasury. all categories of Schutzhaeftlinge and prisoners of war and clarification of the question of whether or not the permission recently granted Intercrose by the Germane for the entry of ne many trucks as Intercross wishes for prisoner-of-war relief also includes trucks carrying relief to Schutzhaeftlinge. Enclosure. We were notified by our Embassy in London that our proposal for the shipment of an additional 300,000 three-kilogram parcels of foodstuffe has been approved by the Relief Sub- committee for Blookade authorization provided the International Red Cross will accept the responsibility for distribution of such parcels and that these consignments do not prejudice distribution and transportation of parcels for prisoners of war. Regraded Unclassified TRADE MARK MICROSTAT M.S. F FAIL OFF. RECISION MICROFILM BOLL NO. - 2 - - 3 Dollar Currency Held by Refugees The categories of Schutzhaeftlinge to whom International Red The Treasury Department and the Department of State have Cross relief parcels may be sent comprise Jews of various considered with the Board the problem of the present currency nationalities. McClelland reported that present plans of controls ne they affect refugees who surrender United States Intercross are to deliver parcele, insofar as 18 practically dollar currency upon their entry into Switzerland. In view possible, only to those who are 111 and exhausted. of and solely because of the humanitarian considerations involved, our Legation in Bern was informed that the Treasury According to a report which reached us from a private source, Department 18 prepared, until further notice, to countenance there are now & large number of prisoners of war at There- the purchase by a designated Swise bank, under specified signatadt. conditions, of amounts up to $100 per person per month. The Legation was requested to so inform the Swise unless our EVACUATIONS FROM SWITZERLAND Embassy in London, which has been advised of this decision and requested to cable its comments or agreement to Bern, Representative McClelland informed appropriate military feels that for any reason the proposed procedure is objection- authorities that the refugees to be removed from Swing able in any way. territory at this time include the entire group of 1,672 Rungarian Jewish evacuees from Bergen Belsen and all of the Proposal for Evacuation of Dutch Jews group of 1,210 evacuees from Theresienstadt except some 440 who are of Dutch nationality and who it 18 indicated are to We were recently advised of A proposal which has been remain temporarily in Switzerland pending the decision of submitted to the Dutch Government involving the evacuation the Dutch Government with respect to their ultimate destinn- to Switzerland of 1,500 Dutch Jens now held in German came tion. In view of the readiness of the Bwies to furnish at Theresienstadt and Bergen Belsen. The views of the British trains to carry the refugees to n. French port of embarkation, and United States Governments having been requested concerning their removal from Switzerland can take place as soon as certain aspects of the proposal, a cable was sent to the Enbassy in London informing it of this Government's approval of the maritine transport 18 available. continuation of the negotiations under the conditions and In this connection, the United Nations Relief and Rehabilita- provisions suggested by the Embassy and IEV. tion Administration furnished the Board with information CONDITIONS IN GERMAN CONCENTRATION CAMPS concerning available and potential facilities for the reception and care of refugees and outlined suggestions for improving In response to our recent inquiry ne to whether Schutzhaeftlinge notification and processing procedures. include persons actively engaged in labor in Germany, Repre- sentative MoClelland advised us that the best information REPORT FROM HUNGARY available indicates that most Schutzhaeftlinge who are capable of physical labor are employed by the Nazia at tasks of varying Minister Johnson sent us a summary of a newspaper account of importance to Germany's war effort, although no statistics are Swedish resoue and relief activities in Hungary given by & available as to the numbers actually engaged in essential "war Hungarian Jew who recently escaped to Sweden. Tribute was work" such as the manufacture of munitions or war material. paid to Special Attache Wallenberg, whose courageous and It 18 known, however, that large numbers of Schutshaeftlinge tireless efforts in behalf of Jews were vividly described. literally have been made slaves for the performance of such Demonstrating the real and disregard of his own personal heavy physical labor as building roads, clearing debris, and safety which characterized Wallenberg's pursuit of these digging anti-tank ditches. At Ravensbrack, the women work at activities, it was related that in one instance he defied reconditioning used clothing shipped from extermination camps an armed patrol, which had entered an area where some 5,000 in Poland. Jewish deportees at Theresienstadt sew Germany Jews were quartered in so-called Swedish houses to remove aray uniforms and make heavy wooden cases for machinery, etc., sone of them to labor camps, by informing them that they according to reports of evacuess from that camp who recently were trespassing upon Swedish territory, that they could arrived in Switzerland. Many Schutzhaeftlinge who were not trespase further without first shooting him, and that ovacusted by the Germane from campa in the east are now inactive in terribly crowded assembly camps. Regraded Unclassified RECISION TRADE MARK MICROSTAT MS. M. s. PAT. OFF. MICROFILM ROLL NO. 154 - 4 none of the inhabitants of the area should leave as long as he lived. In another instance, when he was informed that 11 persons holding Swedish passports had been arrested by the Gestspo and loaded on a Vienna-bound labor train, he arrived at the station after the train had departed and followed it until it stopped at a station just short of the German border, where he managed to remove the 11 persons. William 0'Dwyer Executive Director PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. War Bd 155 156 2 PARAPHHASE OF RECEIVED the mattern, 10 permission for delemtes of ICRC to be FROM: American Legation, Bern CONTROL stationed in All major crups for both "Schutzhneftlinge" (SH) TO: Secretary of State, Washington DATED: March 22, 1945 kumat and POWS to supervise personally distributions of rolief. ss laid down one condition which vas that such representatives of NU.. ERI 1727 M ICHC not circulate particularly back and forth to Switzerland CONFIDENTIAL but that they remain in these camps until the end of the war. US URGENT. Since certain numbers of SH are being worked in War Industries, MoClelland sends the following for O'Dwyer, WRB, and the this restriction 18 presunably on the grounds of military Department. security. I refer herewith to the Legation's telegrame of March B On the 21st of March, Burckhardt of ICRC reported to ne and March 21, Nos. 1481 and 1687 respect vely. that the choice of appropriate delegates for these camp posts It has unfortunately not been possible for be to report was being actively pursued by the connittee, and they will be sooner on results of recent discussions with German authorities despatched as rapidly AS possible into Germany. by ICRC President Burckhardt, because of illness. There is willingness on the part of VG to-flow deliveries Burckhardt first met with Kaltenbrunner of BB on March 12 7 of relief of all types by truck or other means of transport to in the Vorarlberg region between Swiss border and Innsbruck. A 3H irvespective of nationality or race. It vas requested by ss personal letter van sent by Himler stating that he VAR prevented that any such relief distribution should be conducted discreetly, by allitary duties from being present and dele dele_nting to Kniten- especially any relief given to marching columns along the roads, brunner full power. in view of difficulties of food supply situation for the Germans On March 13 conversations were continued in Kreuzlingen, themselves. Switzerland, with Kaltenbrunner plus Berber, Director of Foreign With respect to evacuation of SH, :inal detailed authoriza- Politionl Institute of Foreign Ministry, and Windecke of German tion covering specific persons whom ICRC will be permitted to FD, and on March 14 with Berber alone in Zurich. For some evacuate has not been obtained from Berlin as yet, although the months now Berber has been in Switzerland and appears to be one 83 agreed in principle to allow the exit of women, children, of Mibbentrop's special contact men. elderly and 111 people irrespective of religion or race. An The main concession obtained from ss, AS Burckhardt explained Answer the Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 158 157 . - 4 - answer is expected by ICRC by the 26th or 27th of March. under the present chnotic state of Gerunn railronds which are It 1018 suggested bu Burnkhardt of ICRC that, in view of Leing constantly bombed, danger of approaching frint, innates of women's concentration With respect to the question of evacuation of SH in camp of Ravensbrueck be mong the first evacuated. This general nn attempt vas made by Kaltenbrunner to create the camp 1a loonted on the min highway to Neustrelitz approxi ately impression that 55 had really been only an executive organ 70 kilometers north of Berlin and contains at lenst 30,000 throughout the past years of DASS arrests and deportation of omen of principally Hungarian (Jewish), Polish, Norwegian, civilians to Germany from occupied countries and Bis would be Belgian, Crech, Dutch, French, Russian and other nationalities, willing to allow useless SH to leave Germany now that food and 11 is definitely one of the bad camps. and housing situation was growing difficult within Germany. It vas stated by the Germans that transportation fo any It appears that Burckhardt of ICRC is working on some such evacuations would not be supplied by them. Consequently, special scheme for evacuation of French SH who are to be it 10 planned by ICRC to utilize returning POW relief trucks, exchanged for German civilians held by the French (I understand although this vill be n. difficult and inadequate method of mainly Baltic Germans taken in Alsace region by the French). effecting evacuation, especially persons who are 111. It 1a reported that French authorities are prepared to furnish The use by ICRC for of parcel ships returning 100 trucks to carry out this plan. from Lueb.ick o Gotoborg vas not favored by the Germans who As soon n.8 information regarding identity of first groups stated that these waters vero thickly mined and that they did of SH whose evacuation vill be permitted by the Germans is not wish to be held responsible for sinking any ships londed obt ined from ICRC, I will report to WRB promptly. -1th evacuees. In sunning up, War Refugee Board can contribute to this The possibility of sending sanitary blocked train to double relief and evacuation program mont effectively by (1) Revensbrueck from Switzerland if and when final authorization outaining 6.6 many tires and trucks as possible, and (2) organiz- for the evacuation of this camp 10 (iven by the Geruans, 18 ing and placing into operation mechanism for evacuatin: from still bein, discussed with the Swiss authorities by ICRC, Switzerland such BH groups the may ar ive here and who are non- although the Sviss are both reluctant to release such repatriable in Europe for the time being. HARRISON transport equipment and doubt that tryin could get through un er the DC/L:IDB:AN 3-23-45 Regraded Unclassified 159 160 CARLE TO AMERICAN LEGATION, HERN, FOR MOCLELLAND, FROM THE WAR REFUGES BOARD CARLS TO AMERICAN LEGATION, HERN, FOR MOGIELLAND, FROM THE WAR REFUCES BOARD Please deliver the following nessage to (lerhard Riegner, 37 Quai Please deliver the following sessage to Saly Mayer, St. Gallen, Misson, Geneva, from Arieh Tartakower of World Jewish Congress: Switzerland, from M. A+ Lesvitt of American Jewish joint Distribution Committee: QUOTE TOTIS MARCH 8 HAVE APPROACHED DEPARTMENT OF MAR AND QUOTE ADOLPH SCHAAP or PHILADELPHIA HELDER or DP. LOUIS SCHAAP. WAR REFUGES BOARD CONCERNING TRUCIS TOR RELIEF DETAINED LATTERS WIFE JOHANIA SCHAAP AND MOTHER IDA SCHAAP RECENTLY ARRIVED CIVILIANS ALL EFFORTS ARE BEING HADE COMMUNICATING ALSO SNTTESHLAND PRO: ANXIOUS LEARN ADDRESS CAMP so THAT SWEDISH 150 CROSS. UNQUOTE 108 CAS sum THE ASSISTANCE. PLEASE CARLE JS REPORT. UNQUOTE THIS 13 WER REFIN CARLE 100, 474 THIS 15 WRB REDU CARLS NO. 472 5,15 Pelle March 2, 1945 5:15 p.m. March 22, 1945 162 161 CARLY TO AMERICAN LEGATION. 10001, FOR HOOLBILLAND, FROM THE VAR REFUCE CARLE TO AMERICAN EMBASSY, DRUSSELS. FROM THE VAR REFUGES BOARD FOARD Please deliver the following secure to Issac Kubowitski, Please deliver the following to Gerhard Riegner, 37 Qual 7 Due Gaucheret, Prussels, from Arish Tartakover of World Jewish Congress: Vilmon. Genera, from Arieh Tartakower of Vorld Jewish Congress: QUOTE AM INFORMED THAT CONSIDERABLE NUMBER OF JEWISH DEPORTES FROM SALONIKA WERE FOUND IN LIBIRATED ARTA QUOTE INFORMED THAT CERTAIN CATEGORINE FREECH NATIONALS REING OF NETHERLAND PLEASE CARLE INFORMATION COR- REPATRIATED FROM GERMANY 20 FRANCE PLEASE CONVENICATE INTER- REOT TRY SECURE LIST 07 THOSE PERSONS AND INFORMATION RYDCROSS AND JARBLUM TRY HAVE AS MANY JRVS INCLUDED AS POSSIBLE ABOUT THEIR PRESENT SITUATION. unquore CARLE RESULTS. INIQUOTE THIS 15 WRN NEW CARLE NO. 470 5:18 p.s. March 22, 1945 5:18 p.m. March 22, 1945 Regraded Unclassified RECISION TRADE MARK MICROSTATI MICROFILM BOLL NO. 163 164 CABLE 20 AMERICAN LEGATION, STOCKEDLN, 202 CLSSS 2208 VAR REFURE 20ARD CABLE to AMERICAN LEGATION, FOR MODERLLAND, YROK TRE VAR REPUBLE BOARD Please deliver the following manage to Hillel Storch, Postbox Please deliver the following manage to Gerhard Riegner, 37 quit 7306, Stockholm, from Arich Tertelover of World Jewish Congress: Vilson, Geneva, from Kurt 2. Grossna of World Jevish Congress: COTA UNDERSTAND SVADISH REDCHOSS APPROACHED BY INTERREDOROSS CONCERNING ENTING SWEDISH 3047 20 LUMBER FOR EVACUATION QUOTE PLEASE INVESTIGATE WITH NR. STIMBEL, GOLDWURE F.R. 52, CIVILIANS IN NORTHENN ARIAS CERTIFY PLEASE INVEDIATELY ZURICH, VICEREADOUTS WELL! KAID-MAYER AND = FAMILY LAST KNOWN WITH THEN CADES RESULTS. ADDRESS thiggrome THIS 18 WED STOCKNOLK no. 337 THIS to vas nas so, 469 6:18 p.a. bilo 2.8. Herch 20, 1945 Hurch 22, 1945 Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 165 166 CABLE 20 AMERICAN LEGATION, FOR HOCLELLAND, FROM THE VAR REFUGES BOARD CASIS 20 AM ICAN LEGATION, 385, FOR HOCLELLAND, FROM VAR REFUGES BOARD Please deliver the following manage to Issac Sterabuch from Rubute Please deliver the following manage to Gerhard Ringner, 37 qual Kutler and of Yead Habetsale Emergency Committee: Vilson, Genera, from Kurt Grossama of World Jevish Congresst QUOTE SEND HOTES FOOD PARCULS 20 AND OTHER CAMPS THROUGH INTERNATIONAL RED CROSS AND OTHER MEANS. INTERNESS QUOTA PLEATS DO UTHOST HELP FOLLOWING: PROF. DAVID COHAN, HARVING FOR NUNGER IN - USA START 277027 20 RESCUE FORMER HEAD JEVISH COUNCIL HOLLAND AND FAMILY: HORE PHOPLE. CONTACT ISTERNATIONAL RED CROSS AND HOCLELLAND MR. are COMM 2009DER IN HOLLAND AND FAMILY, LAST CONCERNING TRAVEPORTATION EQUIPIENT AND PESSO FOR THE USE OF ADDRESS HANS GOBLER AND FAMILY, KIRGES EXPTY THE RETURNING TO SWITZERLAND 202 EVACUATION INTERNESS. diquore. WORRIND ABOVE 20 REPORT. EVERY errore SHOULD 35 HADE TO STOP EXTERMINATIONS AND TO EVENT NINUTE courses. HAVE YOU ANY INFORMATION CONCERNING 500 CHILDREN BUDAPEST WED ESCRIVED SPANISH TISAS FOR TANGIERS CONTACT INTERNATIONAL RED CROSS. UNQUOTE THIS to vas CABLE NO. 471 This IS VR3 BERN CABLE no. 473 6:13 p.s. 6:15 p.s. 22, 1945 March 22, 1945 Regraded Unclassified PRECISION TRADE MARK MICROSTAT REG. w. PAT. OFF. MICROFILM ROLL NO. 168 107 IL-55 PLAIN PLAIN Bern Derm Dated March 20, 1945 Dated March 23, 1945 Rec'd 11:31 n.a. Hec'd 9:25 a.m., 23rd Secretary of State, Secretary of State, Washington, Washington. 1723, Twenty-secont, 1708, Twenty-secend. FOR vous FROM MCCLELLAND, FOR via FROM HOCLELLAND, Please deliver following message free Trau Adenberg Please deliver fellewing - from Field se to Robinson of American Christian Committee. Charles Joy Uniterian Service Committee, Besten. "Veluntary agencies Switzerland are sow able through "Regarding Pelish Mission agreement in principle intermediary of French Faboury et Jern to buy Twice assured but individual visas still availed from Versay, credite in Trance for relief vork at rate of 3.75 Dvise Pedrichevaki has sent further telegram ungine quick action france per hundred French. Va transmitted from Owise and expects answer within two weeks, Meantime technical and Swedish funds 300,000 French france for refuges preparations preceeding both here and In Paris, Chaplain but these funts insufficient procure monthly Pedrichevaki and his advesors Parts consider recial cam- 700,000 needed by Teureille and Cimade for current refuges pesities delegation unimportant but Polish advisors here expend Itures, Paggest you request exceptional permission agree visden including sea-leve Mission new composed tvo to transmit about $40,000 through our chann=1 described delagations one representing JDC and one other represent- above, Our goods for Trance are shipped through Intercross the Universe under direction Dr. Seeembluth representing which submite shipments to United States Legation for both. Nave added our delegation camable non-levish edminis- approval. Va new need your contribution for refugees in trater nov in charge technicel preparations Paris also non-Jevish Shanghai ⑉ please add $1,000 to your monthly subsidy. physician with medice-secial experience in urban end rural Kindly inform Richard Reseberg, 790 Diverside Drive, districts Peland, Have discussed transit problems with Few Tork City, 22, Arika and children all safe " of Tugeslav representatives France who promise all facilities January 4th. *rike was working in . hespital where including Yugeslev viess and transportation Bart Varsaw she vishes to remain." 22.65 by plane. Lists of missing persons being prepared here end Parts for research Peland -quinment and telren supplies HARRISON being assembled here. Miesion expects take about four tens since all advise must art arrive emply handed, an Urgently need additional funds, can you send about $5,000 note besides full personal equipment, Intend furnish Uniserce delegations with standard instrumentation at Irest ene Peliclinio and several dental cabineta. Principal task our delegation will be study situation needs cencernine neurishment especially infants and children houster clething verking and hygienic conditions marbidity especially malmutrities epidemice tuberculesia also pessibilities selfhelp previding cress section secial and health situation area investigated with recomendations Regraded Unclassified 169 #1708 - a - March 22, from Ders concerning relief action persennel erganization, etc. Rone 170 Supplies for future verk sust come longely from American since pessibilities here increasingly limited. Can you Dated Harch no, 1945 prepare ship directly medicines tenics surgical instruments dental supplies clething above blankete. Our initiative Rec'd 10:30 a.s. for Belish aid has resulted vide public interest 200 being coordinated through bread committee including Secretary of State delegates Twice and International organizations desiring aid Peland including myself secretary of pew committee Veshington Klaie Have furnished and paid by Uniserce special research section for missing persons. liepert of insural meeting in leading newspaper specially mentioned Universe's rele 768, Harch 22, 10 a.s. new committee net designed aboorb separt actions but aerely - overdination center and clearing house creation TO MOSES LEAVITT JDC TROK JOSIDE SCHWARTL. of connittee reported to Versow and approval received dess net effect status sur mission which remains one of 10. Group of 900 refugees departing for Palestine first authorized relief groups avaiting departure for Peland. Regarding liungary have already sent Hungarism Dr. have deposited 12 million live for which ve shall pay Tiber Befmann free France with mission sound est pessibili- Yies and send report seement. Fernerly Befaann vas out $120,000 is Palestine. Tare to Falestine is 14 member of liungarian National Liberation govement in Owitserland, his wife 18 new senter second Furich course pounde for third class massage with children between and will be leter available for verk Hungary." 59.65 three and twelve paying half fare and under 3 gratis, HARRISON Refuges group has paid in 500,000 lire in cash for pay- NJ sent passages and another 500,000 will be probably collect- ed from relatives here. vill furnish you all details as soon as available and will also advise where payment for transport is to be made, THE WF: Regraded Unclassified 171 CABLE a AMERICAN CONSULATE GENERAL, JERUSALE, FROM WAR REPUTES BOARD Please deliver the following cestage to Joint Instribution Condittee Jerusalen from 1/4 A. Leavitt of American Jewish Joint Distribution Commit ttees QUOTE PLEASE ASK SOURSTION INVESTIGATE SITUATION FAMILY LUMA AIRYRAN RESIDING JASIONONKA FOY HIALTSTOK The TUNKONA 4 POLAND AND EXTEND ALL POSSIBLE AID. CAREX US REPORT. INQUOTE s 5,15 p.m. March 22, 1945 RECISION TRADE MARK MICROSTAT/ KNG. u. s. PAT. OFF. MICROFILM ROLL NO. PARAPHRASE OF TELEGRAM RECEIVED 2 173 #1727 - 2 March 32, 1945 PROM: American Legation, 3ern There is willingmess es the part of TO to allow deliveries TO: Secretary of State, Washington of relief of all types by truck or other BANDE of transport to SH irrespective of nationality or race, Is vas requested by IS DATAD: Hardb 22, 1945 that any such relief distribution should be conducted discreetly, especially any relief given to morchine columns along the reads, 1727 in view of difficulties of food supply situation for the Germane themedives, CONFIDENTIAL Vith reenect to evacuation of SR, final detailed authorize- us Urgent. tion severing specific persons whom ICRO will be permitted to evacuate has not been obtained from Berlin " yes, althouch the NeGielland senda the following for D'Ivyer, 133, and the as agreed in principle to allow the exit of women, children, Department. =1derly and ill people irrespective of religion or race, An anover is expected by IGRC by the 25th or 27th of March. I refer herewith to the Legation's telegrame of March 6 and March 21, Now. 1481 and 1687 respectively. It vas supported by Purchardt of ICRC that, in view of danger of approaching front, innates of vomen's concentration It has unfortunately not been possible for -- to report CAND of be asong the first evacuated. This BOODER on results of recent discussions with Terman authorities camp 10 located os the sain highway to Senstrelits approximately 70 kilometers north of Berlin and contains at least 30,000 by ICRO President Purckhards, because of illness. womes of principally Hungarian (Jewish), Follsh, Norwegisn, Purckhardt first net with Keltenbrunner of an on March 12 Delgian, Csech, Dutch, French, Russian and other nationalities, in De Vorarlberg region between Swine border and Innabruck, A and it is definitely one of the bed came, personal letter visit sent by Signlar stating that he vas prevented by silitary duties from being present not delegating to Kalten- It was stated by the Germane that transportation for any such evacuations would not be supplied by them. Consequently, brunner fall power. It 10 planned by ICRC to willine returning 20V relief trucks, On March 13 conversations vere continued in Kreurlingen, although this will be . difficult and instequate method of Switzerland, with Kaltenbrunner plus Berter, Director of Foreign effecting evacuation, especially persons who are 111. Political Institute of Foreign Ministry, and Vindecke of Garman 20, and on March 14 with Perior alone in Burich. For 6018 The use by ICNC for of parcel ships returning months new Berber has been is Switzerlend and appears to be 186 from Lusbeck to Octoborg ves not f-vored by the Vermans who stated that these vaters were thickly mined and that they 414 of Ribbentrop's special contact an. not wich to be helf responsible for sinking any ships loaded The mein concession obtained from ss, as Purchardt explained with STACUSES, the extters, 10 permission for delegates of ICNC to be stationed in all mjor camps for both "Schutshaeftling" (sa) The possibility of sending senitary blocked train to and FOWD to supervise personally distributions of relief. ss Revensbrunck from Owitserland If and when final authorization 1s1d down one condition which VAS that such representatives of for the evacuation of this caso 1s given by the Germans, 1s ICRC not circulate particularly back and forth to Switzerland still being discussed with the Dwise authorities by ICEC, but that they remain in these camps until the end of the VAP, although the Evice are both reluctent to release such Since certain numbers of as are being worked in var Industries, transport equipment and doubt that train could get through this restriction 1ª presumably na the grounds of allitery under the present cheetic state of German reilroads which are being constantly bombed, security. On the 21st of March, Burchards of ICMC reported to - with respect to the question of evacuation of = is that the choice of appropriate delegates for these camp poste general an sttemt vsa sude by Keltenbrunner to create the was being actively pursued by the committee, and they will be impression that SS had really been only an executive organ despatched - repidly as possible into Germany. throughout the pust years of MARE arrests and deportation of civilians to Germany from occupied countries and CS would be villing to allow useless - to leave Germany now that food and housing situation vas growing difficult within Germany. It appears that Purckhartt of ICRO 1 # working on come special scheme for evacuation of Fresch - who are to be exchanged for German civilians held by the French (I understand minly Diatic Germans Regraded Unclassified MICROSTAT NO. u, 1. PAT. OFF. MICROFILM ROLL NO. RECISION TRADE MARK 175 PARAPHRARE OF RECEIVED #1727 - 3 - Harch 2, 1945 PROM: American liaberry, Lendon TO: It mainly Baltic Germans taken in Almaca region by the French). Secretary of State, Washington 100 trucks to carry out this plan. is reported that French authorities are prepared to furnish DATED: March 22, 1945 Claceived Hereb 23) NUMBER: As soon as information recenting Identity of first groups 2965 of an whose evacuation will be permited by the Germans is obtained free 10%C, 1 vill report to was prosptly. CONFIDENTIAL In sunsing us, Var Refuges Board can contribute to this The following massage vsa sent to tockholn for the Legation dauble relief and evacuation progres neet effectively by (1) and Olsen as No. 270 and is repeated to the Department for as, Switzerland such 12 groups who may arrive here and visa are non- the and placing Into speration mechanism for evacuating from obtaining - many tires and trucks " possible, and (2) organis- THA and the Department. Cable March 17, So, 2070 from na, FRA and the Department repatriable In Surope for the time being. recomending an expension in parcel program from Sweden for persons detained is Bergen Belson has been received by the Anbany, It is proposed to ship 200,000 kremor worth of food, 300,000 kromer HARRISON medical supplies and 500,000 zronor clothing. It is set clear to DO/L:120:AN the Fabasay hav much of this will originate in the United States and how much is but it is assumed that at least the feed is an indicenous product of iveden, Furthermore KSV and the Tabanay are not clear as to the relations 1.0. between this proposal and request for 100 tens of feedsturfe which the British Legation No forred to KHW (00 161 of March 4) and 2nc application 7/922 for 15 tone of feedatuffs which the Brittsh Legation also referred, It is stated in the cable from the Department that the distri- button would be handled in the - way " the existing scheme for food parcels. It is understood by the about from references citäd that the Department intends that the narcels would be sent en the responsibility of - reliable independent organization such -- Quedish Tied Cross or Intercross that receipts would be requested and spot checked and that later shipments would depend en early late being distributed satisfactorily. Trea information KM received from British Legation (reporting to the Department in the despatch of March 14, No. 21671) the Labassy understands that the nest customary method of forwarding parcels recently has been by commercial channels 1.a., J Neetbear and A/B Bankampaniet. It is felt by both KSV and KWD as indicated in the imbussy's despatch, that some independent organization such - Swedish Red Cross or Intercross should be prepared to take the responsibility for any scheme to which approval is given. Logation's relief sub-committee 1s prepared to approve further shipments provided this condition can be net and some check en receipts can be mate, Information frem the Department as to whether 11 concure In the opinion that sear reliable Independent body should participate and information from Stockhelm regarding the total amount of further authorizations any requested would be appreciated by XWD before giving final approval. WINANT Regraded Unclassified