Volume 839, April 19 - April 24, 1945

RECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. INDEX TO BOOK 839 OF DIARY Book Page - A - Acheson, Dean HWr thanks for cooperation - 4/21/45 839 119 Aiken, Senator George D. (Vermont) Post-War Planning: Bretton Woods 17 Alien Property Custodian: to be returned to Treasury under Foreign Fundo Control - discussed in group meeting 4/20/45 9 DIARY - B - Book 839 April 20-24, 1945 Barry, Congressean William (New York) Post-War Planning: Bretton Woods 100 f., 231 Baruch, Bernard Post-War Planning: Bretton Woods 149 f. Germany 105 f.,108,1 49f Reparations 217 ff. Bennett, Sterndale (United Kingdom Foreign Office) China 336 ff. Burgess, Randolph Post-War Planning: Bretton Voods 225 f. Business Conditions Haas memo on situation, week ending 4/21/45 - 4/23/45 194 ff. - C - Chase national Bank Foreign Funds Control 239 f. Chicago Herald-American Robert Venderpoel, financial editor, thanked for editorial of 4/17 praising HWr's financing of war 133 f. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. Book Page C . (continued) - y - (continued) Book Page China Financing, Government (continued) T.V. Soongasks Truman for more gold exports to China - 9:30 group discussion 4/20/45 839 5 fr. 7th War Bond Drive (continued) Resume by Coe of recent developments in anticipation Letter to radio advertisers, advertising agencies, of discussions with Soong - 4/20/45 40 radio networks and stations 4/20/45 839 33 Chinese Government misuse of U.S. financial help; Hass neso: "Government Security Market and Fricing of 7th War Loan Issues" - 4/21/45 135 ff. Chinese Impose on U.S. in charges for Army ex- penses; hold up tin exports to U.S. Treasury letter on behind-the-scenes news to go to b) O.K. Yui, Minister of Finance, writes Mar 4/3/45 all 48 chairmen: HWr to group 4/24/45 244 asking U.S. Cooperation (sent with Adler) 47 H/Jr reply 4/20/45 Foreign Funds Control Sale of $200 million U.S. dollar savings certificates Chase Mational Bank case - O'Connell-HMr discussion and bonds in China -- Coe nemo 4/21/45 139 ff. 239 ff. a) Sold without consulting U.S. Treasury, probably Gould, 4/24/45 Florence: Resume of case and connection with to benefit top Chinese officials; Coe shows Banque Charles {cloaking German asseta) by Coe and Schmidt 4/20/45 48 evidence. Coe to see Patterson (War) and Clayton (State), to get Tuck, D. Pinckney: License granted for purchase of house near Geneva, Switzerland 4/20/45 37 plan for Japan's defeat and opinion on China's re- quest for gold - 4/21/45 108,115,118 a) Coe's report 4/23/45 on conference with Patterson, Collado (for Clayton), and General Clastead: 189 ff. - G - Military plan calls for 20-30% of supplies for U.S. Army from China. In spite of abuses, War Dept. wants trucks and textiles sent to China; Germany State wants @US50 million in gold sent to China. See Post-War Planning: Germany Tinent talks to Sterndale Bennett in London re possible Gold cache with 3196 million discovered in salt help to stem Chinese inflation - Winant cable 4/24/45 336 f. nines - D.W. Bell memo to HiJr 4/20/45 56 Destruction in German cities described to HWr by Correspondence Mrs. Forbush's mail report 4/20/45 76 WeCloy - HIJr tells group 4/21/45 105 Gould, Florence 48 Foreign Funds Control Dailey, Donald A. Roosevelt, Franklin D., Condolences 31 f. Grafton, Sanuel Post-Tar Planning: Germany 75 E . - H - Eisenhower, General Dwight D. Post-War Planning: Germany 105, 250 ff. Hartman, Joel S. Roosevelt, Franklin D., Condolences 25 ff. - F - Hull, Congressman Herlin (Wisconsin) Post-War Planning: Bretton Toods 102 Financing, Government Tax exempt securities owned by Government: HWr asks - I - Bell about replacing with 7th War Loan long 2j's 4/20/45 1 a) Bell-HMr conference 4/21/45 120 ff. Independent Bankers Ammociation 4.3. Flacek, President of Country Bank Division, wants 7th War Bond Drive Iwo Jime poster to be presented to President Truman appointment with Hair - Luxford memo 4/24/45 335 16 a) Marines who carried flag come to Treasury to be India presented to Truman 4/20/45 FEA can't give india mure funds 9 19 Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. Book Page Book Page - M - (continued) - J - Wonnet, Jean Discouraged after FDR's death; wants HMJr to come to France in May to boost morale 839 107 Japan Winant talks to Sterndale Bennett in London re "peace feelers" from Japan - "inant cable 4/24/45 839 336 f. Morgenthau, Henry, Jr. New York Times ungazine article by - written by Henry Murphy - enthusiastically approved by HMJr 4/20/45 12 - E - V-E Day broadeest draft ok*d by H&Jr 4/24/45 306 Kirk, A. (0.3. Ambessador to italy) 334 - N - Roosevelt, Franklin D., Condolences - L - Nethan, Robert R. HMr congratulates on appointment as Deputy Director for Recenversation - 4/21/45 131 Leffingwell, H.C. 28 r. Netherlands Hoosevelt, Franklin D., Condolences Lend-Lease 152 Lend-Lease New York Times Netherlands Lend-Lease agreement, like Belgian, given Dutch by INTr article for 12 State Department 4/20/45 - Con meno 4/21/45 152 a) $242 million schedule, excluding long-lasting - P - articles b) for Holland proper, got East indies Patman, Congressman Wright - 14 . Post-War Planning: Bretton Moods 16 r. Pepper Committee on Small Business McCloy, John J. (Assistant Secretary of (ar) Post-Uar Planning: Bretton Woods 2 105, 247 rf., Post-War Planning: Germany 333 Perkins, Frances (Secretary of Labor) Describes grief in Europe following FOR's death 107 HWr conversation re Mrs. Morgenthau 4/24/45 220 H/Jr tells McCloy of FDR's trust In him; tells Treasury group of his cooperative attitude 4/21/45 107 Philippines State Department cable 4/23/45 re political and economic workings of liberation 211 f. Mexico Government wants to re-establish stabilization loan ending in June 1945 - White in group meeting 4/20/45 9 Post-War Planning Bretton Woods Vilitary Reports 99 Small Business - Pepper Committee: Coe to work on 4/20/45 184 f. suggestions on how mall businessman can get 4/21/45 187 more export business - White neno 4/20/45 2 4/22/45 222 a) H/Jr to read own statement instead of White 4/20 14 f. 4/23/45 344 b) Text of HWr statement 58-68 4/24/45 Regraded Unclassified RECISION TRADE MARK MICROSTAT/ PAT. ON. MICROFILM ROLL NO. Book Page Book Page - P - (continued) - P - (continued) Post-War Planning (continued) Post-War Planning (continued) Germany (continued) Coe memo: suggested changes in revised drafts of Bretton Woods (continued) March 23 directive - 4/21/45 839 145 ff. Congressman Wright Petnan nako HMJr to see Fred Clayton asks H&Jr 4/23/45 whether Crowley can Florence, president of a Texas bank 839 16 f. attend meeting re March 23 directive - IDWr: HWr to compliment Senator Alken (Vermont) on OK 192 Senate speech 17 Clayton-HMJr conversation 4/23/45 reported by Truman decides not to appear now in news reel . HMr: We0loy, Clayton and HIJT to neet 4/24/45 Connelly nemo to HMr 4/20/45 55 on 1067 revision 193 Group meeting 4/21/45 a) Cleyton-HMIr conversation 4/24/45 re meet- n) Hannegan tells HWr Congressman Barry ing 213 f. (New York) will vote for Bretton Woods 100 r. Revised 1067 - text 318 b) Congressman Hull (Wisconsin) will vote e) Changes proposed by Treasury 317 for it - Crowley tells HMr 102 Meeting held 4/24/45 on revision of 1067. Present: c) Luxford and 0'Connell are talking to Wol- D.W. Boll, Glasser, Coo, HWr (Treasury); cott, who is trying to work out compromise McCloy, Hilldring, Major Gross (War); Clayton, with bankers. HAJT says he will see bankers Despres, Riddleberger (State) Crowley, Fowler next 102 (FEA): Downey (Navy), Lieut. Bankroft. 247-300 Baruch-HMr conversation 4/21/45: Beruch would a) HMr aska whether the directive shouldn't postpone vote till after British elections: be sent directly to Eisenhower to take up apparently not keen on Bretton Woods 149 Γ. with Allied Control Council, Instead of White memo 4/21/45 giving his views on proposed first being submitted by Vinant to European compromise. Luxfore to handle Bretton foods Advisory Council 250 ff. in his absence 153 rr. b) Discussion on deletion of permission to post- Burgess should submit his recommendations before pone arrest of Nazia 256 ff. Treasury submite its changes, HiJr tells group New version of paragraph 265 4/24/45 225 r. e) Clause banning discrimination because of Congressman Barry tello Americans United delega- rank discussed 267 rr. tion he will vote for Bretton Woods - group d) Denazification YS. economic efficiency dis- mtg. 4/24/45 231 cussed 273 fr. Feltus neno 4/24/45 giving proposed public rela- e) Setting up courts to review accused Nazis tions program 308 discussed 279 fr. Redrafted 287 Germany f) Inflation control discussed 293 ff. Samuel Grafton booklet "Let Germany Earn the el Yowler naks that FEA points be considered Peace" with outline of Morgenthau plan 75 In rewriting of March 23 document 297 fr. Group meeting 4/21/45: Keeting of Treasury group 4/24/45 to discuss a) McCloy conversations with Generals Eisenhower finance man to send to Germany: A.H. Williams, and Bedell Smith in Germany reported to group president of Wharton School of Business (Univer- by HMJr 105 bity of Fennsylvania) suggested 301 ff. b) Baruch attitude toward Germany right, HMr. DuBois memo 4/24/45 on weak vs. strong Germany in tells staff: stronger for decentralization re Russia 330 since returning from Europe 105 f., 108 McCloy-HMJr conversation re Germany summarized 333 Summary of Baruch-HMr conversation 4/21: British undecided whether to build up Cermany against Russia. Baruch vitally interested in German future. Byrnes for strong Germany, Baruch says 149 f. HMJr asks Truman to discuss economic future of Germany on HWr's return from Florida, 4/21/45 144 Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. Book Page - P - (continued) Book Page - P - (continued) Procurement Division Pehle weekly report, week ending 3/24/45 839 73 ff. Post-War Planning (continued) Reparations Puleston, Captain V.D. (USN) HWr tells Stettinius he prefere consultation with Roosevelt, Franklin D., Condolences 23 f. Clayton Instead of Grow 4/20/45 839 3 Progress of discussions with State discussed in group meeting 4/20/45 11 - R - Frank Walker going abroad in charge of reparations, Clayton tells H&Tr 4/24/45 214 Baruch-HMr conversation 4/24/45 217 ff. Reparations Salter to head British delegation, President tells See Post-War Planning: Reparations Lubin - Treasury group meeting 4/24/45 232 Roosevelt, Franklin D.: Condolences 4/20/45 San Francisco Conference Geneviève Tabuis (Pour La Victoire) 21 f. White tells HMJr 4/21/45 he wants to stay 2 or 3 Captain T.D. Puleston (USN) 23 r. weeks 110 r. Hartman, Joel S. 25 ff. White memo on his part in conference: proposed R.C. Leffinwell 28 f. formation of Economic and Social Council - Donald A. Dailey (Rochester, N.Y., Postmaster) 31 f. 4/21/45 161 f. ét Klrk (U.S. Ambessador to Italy) 334 a) Memos sent by State Department 4/16/45 ap- proved by Executive Committee on Economic Memorial services in St. Paul's described by McCloy: Foreign Policy: 163 rf. Churchill weeps 107 1) "Social and Economic Objectives of General Grief in France general. International Organization" 2) "Cutline of Proposed Relationships between Ross, Charles International Trade Organization and Gen- Congratulated by HWr on appointment 88 press secretary eral International Organization" to President Truman 4/21/45 130 Surplus Property Transfer to Conserce Department completed 4/20/45 17 - 3 - a) HMJr counends Pehle b) White says publicity unsatisfactory c) Surplus Property news letter recounting transfer 315 Smith, arold d) Obstructive attitude of Harold Smith, Director Post-War Planning: Surplus Property transfer 44 f. of Budget 44 Γ. e) C.S. Bell to serve as adviser in transfer - HWr Snyder, John W. nemo 4/20/46 69 owr congratulates as Federal Loan Administrator 4/20/45 35 f) HWr ferewell letter to Surplus Property employ- ees 4/24/45 313 Boong, T.V. Pehle weekly report - week ending 3/24/45 71. ff. China 5 ff., 140 Γ. Taxation State Department Blough meno on planned off-the-record talks with Stettinius still engry about FDR's withdrawal of March 10 executives and newspaper editors - 4/21/45 128 directive, HMJr thinks - 4/20/45 3 H&Jr aska Frank Coe 4/21/45 to get plan from State and war Departments on how to defent Japan 108 Press Relations Fussell semo 4/20/45 suggesting press "seminars" on book- Dee also Post-War Planning: Germany ground material 52 f. Surplus Property see <ost-War Planning: Surplus Property Regraded Unclassified PRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. Book Page Book Page - Y - (continued) War Refugee Board (continued) Tabuis, Geneviève: Roosevelt, Franklin D., Condolences 839 21 r. General (continued) - Cables: Trobe 4/20/45 re Red Cross food percels 839 94 Tax Enforcement O'Connell memo 4/20/45 to HWr: districts to inter- Probe asks 4/20/45 for search service for Central change weekly reports; situation at Atlanta OK 70 Committee of Polish Jewn in Marsaw 95 a) H/Jr says reports aren't good; asks V'Connell Armour 4/20/45 re unused quota numbers 96 to "put the heat on." Suggests check on farm- Trobe 4/20/45 re sailing of British steamer from 112 f. Lisbon for Tangier 97 ers for income tax payment Leavitt to Trobe re budgets 98 Schwartz 4/21/45 ro funds for Italian operations. 178 Tax-exempt Securities Linder report 4/21/45 to Leavitt on operations in See Financing, Government Belgium, Greece, and Poland 180 f. Trobe 4/23/45: Saly Mayer requests information re Treasury Department Activities to be discussed by Truman and HIGHT reviewed Leavitt's relations with various U.S. relief by Treasury group 4/20/45 4 r. agencies 207 Trobe 4/23/45 re Saly Mayer and Vand Hatzala appro- printion 212A Truman, President Harry S. Treasury Department, duties of, reviewed in meno for Schwartz 4/24/45 re funds 339 4 Resnik 4/24/45 re JDC rellef work In liborated President Memo re withholding of President's Income tax sent Bologna (Italy) 341 175 Reanik 4/24/45 re movements of personnel in Wedi- Trunan 4/21/45 Krock article In New York Times praising Trusan's terranean area 342 186 first week Balkans - cables Schwartz 4/21/45 re funds for Yugoslav relief 177 - y - Troutman 4/21/45 no relief supplies for Sofia 183 Schwartz 4/24/45 re funds for Greece 343 306 Sweden V-E Day - Hair brondcast for 5,000 Danish and norwegian Jews arrive in Sweden 4/18/45 from German concentration camps, due Vinson, Fred Blough unable to reach Vinson about taxes as 197r to Bernadotte's negotiations (President Swedish promised - Blough meno 4/21/45 174 Red Cross) - Hodel como 4/21/45 151 See Book 837, P. 173. a) YRB parcela in Goteburg exhausted Cables: Johnson 4/21/45 re finances and Larch operations - 7 - in Horway 176 orld Jewish Congress aska Storch whether food supplies can be sent to liberated at Bergen Belsen 209 Mar Refugee Board TRB 4/24 to U.S. Legation in Stockholm re dis- appearance of Reoul Wallenberg, Swedish General 0'Dwyer report for period 3/26/45 - 4/7/45 84 ff. attaché in Budapest, Hungary 338 Hodel-Pehle-HMJr conference 4/21/45 on Model leave of absence - 9 days to Los Angeles with 0'Dwyer 124 ff. Switzerland a) Settled by Pehle 4/24/45 243 69 Jewish refugees from Czechoslovekia arrive in Switzerland 4/19/45 - liodel memo 4/21/45 151 Cables: Harrison cable 4/20/45 re Armenian detainees in Cables: 91 McClelland 4/20 re evacuation of Jewish Bergen Enerson Germany (Intergovernmental Committee) 4/20/45 re Belsen refugees from Switzerland to North British Government's approval of his proposals Africa 93 of 2/16/45 on Spain and Portugal 92 WRB 4/23/45 to Bern for American Christian Com- mittee te relief to individuals 208 Regraded Unclassified RECISION TRADE MARK MICROSTAT/ REG. U.S. PAT. OFF. MICROFILM ROLL NO. Book Page Following - = - (continued) 4/20/45 War Refugee Board (continued) Turkey - - cables: Packer 4/23/45 from Ankara re departure of Dan Bell SS. Drottingholm from Istanbul 4/21/45 ....... 839 210 Secretary Morgenthau Washington Post HNJr thanks Europe Meyer (publisher) for editorials on Bretton Voods and 7th War Loan - 4/21/45 ..... 127 I wish that between now and Saturday you would Williams, A.H. (President Wharton School, Univ. of Pa.) Post-War Planning: Germany 301 r. talk to me about how many tax exempts the government owns. Winant, John G. (U.S. Ambassador to United Kingdon) China, Japan 336 f. I an thinking about selling some more of them, and replacing Wolcott, Congressman Jesse P. (Banking and Currency them in the Seventh War Loan with the long 2-1/2s. Please Committee) Post-War Planning: Bretton Toods 102 be sure to talk to no sbout it. tone. Regraded Unclassified Assistant Secretary of the Treasury Date ARTA 20 19 45 TO: Secretary Morgenthau This is to remind you that you told Senator Pepper, in reply to his request, that the Treasury would be glad to work on suggestions as to how the small businessman could get more export business. I've asked Coe to take care of this. H.D.W. Mr. White Room 3434 RECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. April 20, 1945 I told Stettinius after Cabinet that I wanted to talk to him and he asked me what I had on my mind. I told him that I felt things weren't going very well on reparations, and that I felt that Grow just represented the old line tradition in the State Department. I told him that Clayton was fine, so he said that he would have Clayton come over to see me. I have the feeling that Stettinius is the kind of man who carries grudges a long ways. He still hasn't gotten over that cable that was sent while he WAS in England telling him not to take up financial matters, and I think what is burning him up now is that after the President signed that March 10th memorandum it had to be withdrawn and replaced with 8 new one. #=@@@@@@@@@@@ RECISION TRADE MARK MICROSTAT MICROFILM BOLL NO. 4 5 = 2 - April 20, 1945 8:45 s.m. The main thing I asked you people to come in so early for is because I an seeing President Truman at nine-thirty. I an seeing him on this thing (indicating). If you can't GROUP hear no, Harry, why don't you bring your chair up? Present: Mr. D. W. Bell MR. WHITE: I haven't seen the final document, but I Mr. O'Connell en a little of the opinion, Mr. Secretary, that a much Mr. White shorter one is appropriate, because it looks a little too Mr. Gamble much as though we are trying to impress him with all the Mr. Blough Treasury activities. And I thought if A shorter one could Mr. Pehle be used, which should include just the problems you would Mr. Luxford like to take up with him, I think it would be a little Mr. lians more appropriate and a little more effective. Mr. DuBois Mr. C. S. Bell MR. C. S. BELL: Dan has seen the short one. Mr. Fussell Mr. Coe H.M.JR: Let no just TO over this, because he may ask Mr. Feltus some questions. Tax stuff--that I understand is perfect, Mr. Bartelt Isn't it? Mrs. Klotz IR. BLOUGH: Sure. H.M.JR: Did you get your memo, H.M.JR: Law enforcement, I understand. China--Soong-- MR. C. S. BELL: Yes. There is a very short one with IR. N.ITE: 1 want to talk to you about that; it is a bit of glanour in it which onlts Customs, Secret Service, important. and makes no mention of some of the financing operations. If you wanted to RO a little further, there is a second H.M.JR: Do you want an appointment? set that brings in those other activities. I think possibly you will like the shorter form, and we can get it on three MR. WRITE: On that? Soong has seen him, and I would pages. very nuch like to see you before nine-thirty. H.K.JR: Good morning, everybody. Mrs. Morgenthau H.M.JR: Shall I give him an appointment for tomorrow is better; otherwise I wouldn't be here. that was the morning? word they used? They thought she had B. spasm instead of another attack. All indications last night, electro- MR. WHITE: You decide that after I talk to you. I cardiograph, blood pressure, and all sequed to Indicate don't think so, but I want to talk to you in some detail a spasu, and there was no damage to the tissue otherwise. about it. Those things usually show up within twenty-four hours, so I thought I would come up for forty-eight hours and H.M.JR: Is that so? then go back again. MR. WHITE: It wouldn't take long, five or ten minutes. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. . 3 - 7 - 4 - H.M.JR: Well, what about gold? I mean, he will ask me and say, "What about it?" MR. WHITE: I don't think you will be in a position to discuss it intelligently with the President. If, 18. WHITE: Chinese rold-- after Soong has discussed it with him--I don't think the President will be satisfied with just a no answer. 1 H.M.JR: President Trunan will say, "Shall we or don't know, but I think you will have to go into it in shall we not let them have cold?" more detail, and I believe--mouldn't you agree, Frank-- that it is the most important thing that is likely to MR. WITE: I went to talk to you today. come up? H.M.JR: by dear fellow, I have from now until MR. COE: Yes, I think another thing, though--they nine-fifteen. say they are going to do all these things in China. They will only do it if we pay them gold. They'll cut the MR. WHITE: It will only take five minutes; it is Army to three and one-half million if we pay them gold. important. E.V.JR: They'll cut the Army? H.M.JR: What is the answer? MR. WHITE: The own Army. 12. VITE: No. H.M.JR: Why should they out them down? H.M.JRt The answer is no. MR. COE: To save on the budget and have better MR. MITS: No will need five minutes to discuss it. troops, and so forth. The Generalissimo says he will do that if we pay them more gold. H.K.JR: Try two minutes. Go ahend. MR. LUXPORD: From what I have heard, I agree with VR. WHITE: Well, Soon- is here, and Leon Henderson Harry. This is one of the most important things. is here primarily to ret 13 much rold as possible. The story that they have appeara to be a very defensible one MR. L.W. BELL: These items, Mr. Secretary, that you that they are moing to re-establish, order reforms in want to point out to the President are something you want China, but that is not the real reason in either Soon-'s to discuss with him very carefully in the future and aind or the Generalissimo's mind. I don't know what is before he takes any action on them. in Henderson's mind. He now is adviser to the Chinese Government at a very faney salary. MR. WHITE: That is right. H.K.JR: How much? MR. D.W. BELL: And that he ought to get 8. complete story because Soong has already seen him. MR. WITE: I don't know how much, but name your own figure, and you won't be far from It. and the political H.M.JR: That is & good point. ramifications are the nost important things, Mr. Secretary, 1 think, that are on the docket. MR. WHITE: That is the point. Not only has Soong seen him, but Leon Henderson la seeing everybody in town, H.M.JR: Yes, but I nm coing over the maner and-- The Secretary of War, Navy, Commerce, Nelson, and Crowley. H.M.JR: lie hasn't seen Mrs. Klots or me. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. 9 - 6 - - 5 - MR. WHITE: The same thing there-they are here now. MR. WHITE: lie wants to. They have just arrived with a group to give us all the factual data. MRS. KLOT&: Thank you, Harry. H.M.JR: was Pleven here? MR. FARLE: Lie is earning his salary. MR. WRITE: Pleven is coming this neek, and he is going to see you, but their Treasury man came here with H.M.Jk: Well, where does that leave Tom Corcoran? the answers to the questions that we had asked him before the negotiations. hear MR. from WHITE: him, too. I wouldn't be surprised but me will H.M.JR: Did he bring any cognac with him? H.W.JR: well, I think Dan Bell made a good MR. 008: He brought Monnet instead. In other words, I should handle these as at sort of suggestion. red flag-- KR. D.W. BEIL: This is a stimulant. discuss with him. MR. D.M. BELL: This is an agenda that you want to H.M.JR: Jean-- take the short one, H.M.JR: Have you got a copy with you? I will Mh. WHITE: There is a nass of discussions on that, and that is something else you will want to talk to the WR. C.S. BELL: Yes. President about later. R.E.JR: I see. British, MR. WHITE: for example. That would be particularly true about the MR. *HITE: and if you want to go down the list there-- H.M.JR: "hat about the British coming in? H.M.JR: That is what I an doing. Mexico. (Mr. C. S. Bell leaves the conference temporarily) MR. WHITE: Mexico, you will remember, wanted to re- establish their stabilization loan which ends in June, and MR. WRITE: I think you can give him a brief statement that is, too, something you may want to take up with them of how you left it with the British authorities and that later. financial will assistance with you. That is another thing they are coming here right after V-E Day to discuss H.M.JR: India. you want to talk to him about. MR. WHITE: Indian silver. asked for fifteen minutes. H.M.JR: I think that is the best approach. I only H.M.JR: Enemy assets. France-- MR. WE: There in one more development on Indian silver. FEA is running out of money and can't give then enough to hold them over. H.M.JR: what about having the Alien Property Custodian back in the Treasury, in with Foreign Funds? Would you like to have it? Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 10 - 7 - MR. COE: I think the answer is no. - 8 - H.M.JR: You don't know. MR. PENLE: I doubt whether Treasury would want MR. LUXFORD: They were a sickly green. it. I doubt it. MR. LUXFORD: You just not rid of one of those dirty H.M.JR: After we were up an hour I had hyman eating a pickle. jobs, Mr. Secretary. MR. PEHLE: Unless the Treasury is awfully free to (Discussion off the record.) handle the thing, there will be all kinds of complications MR. COE: The rest of the German stuff is going com- like Colonel Johnson of the General Dyestuffs Corporation, and you ought to be awfully free to snuff all that out. Unless paratively well. you are, I think It would be pretty bad at this moment. H.M.JR: How are the directives coming along on the H.M.JR: That is the interpretation of 1067, but the reparations is lousy, huh? peace plans? MR. WHITE: Well, there may be a serious development MR. COE: State's opinion-according to the latest with regard to reparations, and you not a nemo, didn't you! word, they are trying to bring Clayton back. MR. DuBOIS: There was a meeting Monday at which (Secretary holds a telephone conversation with Clayton completely changed his position on the whole Colonel Adams) thing. Be showed his true colors all right. H.M.JR: Just to break the tension a ainute, I took these two doctors down from Bew York, one a famous heart MR. WHITE: I am getting in touch with McCloy to specialist and the other the family doctor, so when we got settle what's going to be a najor issue. lie has just un about ten thousand feet I said, "You know, I don't know come back. whether you want oxygen or not. So Doctor Levy takes his pulse, and Doctor Hyman quickly takes his, and I said, H.M.JR: All right, that is a very good memo, Charles. "Who is going to do Morgenthau?" (Laughter) Each one grabbed I compliment you. his own pulse, you know, so quick, and as a matter of fact, as you go up,your pulse speeda up. But they were very nice. MR. C.S. BELL: Dan has been over it. You are in If you had seen Hyman, you would have thought so. agreement with it, aren't you, Dan? MR. FELTUS: The only doctor I ever saw uns completely Mis. D.W. BELL: Yes, for the purpose you are going to use it. It is not very complete as a report, but as green-skinned. an agenda, it is perfect. H.M.JR: lie walked in the plane, and I said, "Meet Mr. Veltus." "Not the Mr. Feltus,' he said. "I have been H.M.JR: Non, I would like to say this. (Signs memo looking after your wife for weeks. She is & very nice lady." to the President, dated April 20, 1945.) Luxford is the cruelest person you ever saw. If you had seen him laugh at Feltus and Bernstein. They mot paler and Where is Fussell? paler. MR. FUSSELL: Here. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ REG. U.S. PAT. OFF. MICROFILM ROLL NO. 7-1 - 10 12 E.M.JR: It's & good job. lie has taken some of the 13 material from some of the speeches I made on the trip to - 9 - Los Angeles, and incorporated a lot of the stuff I used before. It is put together beautifully. H.M.JR: This memo that you sent me--this article Mr. WHITE: Was that Henry Murphy? for the New York Times of its kind is the best thing that has ever been given me by far. VR. HAAS: Yes. MR. FUSSELL: Mr. Murphy did it. MR. WHITE: Try him on the next speech. I don't think he has had much chance to do any of your speeches, H.M.JR: It is superb. Well, I want to see it. Did has he, George? he do that entirely himself? MR. HAAS: Henry is not looking for any-- MR. HAAS: lie had the first draft written by somebody on his staff, and 1 went over it and made some changes, so Mr. D.W. BELL: Leave hin alone. it was primarily his. H.M.JR: He said, "Do I have to turn the clook back H.M.JR: It's a superb job. I have two little ten years, but it is--1 mean, get a thing like that that" suggestions. I never like to speak of soldiers as is well put together--I recognize speeches I made in Los "our boys. I put in "our men, and I put in one other Angeles and-- word, 'good," and under my name if they sould put--say this article by henry Morgenthau Jr., end I would like MR. HAAS: The AF of L speech. to have it "donated to the New York Times. I don't want to say I don't want any compensation. Just say H.M.JK: But the way it's put together, it's a donated to the New York Times. beautiful job. Now, let me just talk to my sister-in-law a minute. MRS. KLOTZ: They know that. I am planning to go back there tomorrow afternoon. MR. WHITE: They won't use that phrase. Joan is down there non. You will be interested, and I haven't told you this--just to digress--that Joan did a H.M.JR: Why not? paper for graduation about the embargo of England and France against Spain during the Revolution, and she got MR. D.W.BELL: They certainly wouldn't leave that the first A Vassar had given in two or three years. I in there. talked to her history teacher, and he said it was worth an M.A., and she went to the original debate in the MR. WHITE: There must be some other phrase that Parliament and all that for her source. They have that will meet the same purpose. at Vassar. It is very interesting. MR. FELTUS: They have their own formula. I don't MR. WHITE: Is she looking for a job? know what it is, but they are not going to use it. H.M.JR: No, she'll continue school in the fall. H.M.JR: Fussell, see what you can do. Does that appear on the 13th? MR. WHITE: She's going to continue in history? MR. GAMBLE: In the magazine section of the week of H.M.JR: No, physicians and surgeons course, but I the 13th. thought 1 would bring it down anyway. I thought you would be Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. F-3 F-4 - 11 - 15 - 12 - interested in reading it. It's interesting. It is in MR. O'CONNELL: They start on time with Rayburn. the Vassar Library. They have the original debate that took place in the French Parliament. I don't quite agree with you on that, Harry. MR. WHITE: They have a good library at Vassar. MRS. KLOTZ: I didn't get that. H.M.JR: In the ten minutes we have left--I find MR. O'CONNELL: 1 don't quite agree with Harry. I President Truman runs on time--are you all set? don't think there will be the difficulty with Harry reading your statement this morning that Clayton got ICK. GAMHLE: I'll double check before we go. into the other day reading Stettinius' statement, because everyone knows when it was decided harry would read your H.K.JR: Where are those two men? statement it was because you were not in a position to be there. The fact that you are temporarily in town for a day MR. GAMBLE: They are due here now. 1 will see doesn't nake it necessary for you to go in there this if they are here. (Rr. Gamble leaves conference temporarily.) morning if you want to go somewhere else. (The Secretary holds a telephone conversation H.M.JR: I'll come up the minute i get through over with Mrs. Josten.) there. I will go from Mrs. Acosevelt to Speaker Mayburn's room and from there to Senator Pepper. MR. WHITE: Mr. Secretary, I an supposed to go up to the Senator Pepper Committee to read your statement. Now, MR. WHITE: I'll tell Senator Pepper that you have that was all right, you weren't here, but with your being just arrived and that you want to appear, and that you here, I think that wouldn't take much of your time or might be 8. little late. much out of you if you go up and read your own statement. We can postpone it until eleven o'clock if necessary, H.V.JR: I would like White, Luxford, and Bernstein to 8° because if they hear you are in town, and after all the with no. fuss they have made about postponing their time for you, and then to have me go up to read it, I kind of think it MR. WHITE: Unfortunately, Luxford and Bernstein would be-- ought to be at the hearing of the banking and Currency Committee. H.M.Jk: Well-- H.M.JR: Can you go with ne from one to the other? MR. WHITE: If you could get through about half past MR. WHITE: Yes. ten-- H.M.JR: I hoped to join you fellows at the Speaker's H.M.Jk: That's sufficient. this morning. MR. WHITE: Thank you. MR. O'CONNELL: Ten-thirty. H.M.JR: You're welcome. H.M.JR: If I have fifteen minutes with Mrs. hoosevelt, I think I can go up there. They never start on time. MR. WHITE: Hearings on Banking and Currency are still on. I was on yesterday morning and yesterday after- noon. This morning O'Neal and several others are going on. Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ PAI. OFF. MICROFILM ROLL NO. F-5 F-6 16 - 14 - 17 - la - (Mr. Gamble reenters conference.) MR. LUXFORD: Fred Florence. H.M.Jk: where are your boys? H.M.JR: I know him. MR. GAMBLE: They are all here. The third one came MR. LUXFORD: He thinks he has an idea on Bretton yesterday from Iwo Jima. The Indian is here, and they have woods that may be able to swing the bankers, and he would like to talk to you Tuesday or Wednesday of next added him to the party. week, if that's possible. H.M.JR: Have you got the picture? H.M.JR: Wednesday would be all right, at three MR. GANDLE: The picture is here. Do you want to o'clock. see it? MR. WHITE: Could you call Senator Aiken? he has (Mr. Gamble leaves the conference temporarily.) made a wonderful speech about Bretton woods and is making another tonight. Re's & Republican from Vermont. MR. WHITE: If you are going to see Mr. HeCloy, I would get in touch with him, because you can handle that H.V.JR: Sure. problem with him better than we can outside, and if you MR. WHITE: Compliment him on the speech he made on can get an understanding with him in your discussions-- the Floor of the Senate. (Vr. Gamble reenters the conference and shows the Secretary the poster for the Seventh war Loan.) H.M.JR: When you go back dictate a little memo and give it to Mrs. Klots. H.M.JR: Who fraued It? MR. WHITE: I'd do it before he speaks tonight. MR. GAMBLE: we framed it. It's more likely to be put up in the White House if it is framed. H.N.JR: I'll do it. Where does Surplus Property stand now? H.W.Jk: Well, why don't I try to see if I can get Mr. McCloy over here tomorrow morning? M. PEHLE: The Executive Order is on the President's MR. WHITE: Fine, and give us a few minutes either desk, lan't it, Charles? later this afternoon or tomorrow morning. Vk. C.S. BELL: It was since last night. We followed H.W.JR: what else? it up,and at five o'clock it was still in the basket. MR. PEHLE: The whole thing has gone nuch more MR. LUXFORD: Mr. Secretary, Wright Patman stopped us yesterday and asked whether or not you would be willing smoothly than we hoped. to see Fred Florence, who is President of the second biggest bank in Southwest Texas. H.M.Jk: I want to say in front of the nine-thirty staff who are present that I have been delighted at what John Pehle has done. He has done better or as well H.M.JR: Who? as anybody else could have done. It's wholly up to him whether he wants to stay or not, but I hope he will come back to me, and 1 want to say it in front of the nine- Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. F-7 F-8 19 - 16 - 15 - thirty group. MR. C.S. BELL: Harry, they didn't get the press release out at the white House. It was difficult to MR. PEHLE: 1 am going to. Thank you, Mr. Secretary. do a whole lot with it. I talked to Mr. Wallace yesterday and he asked ne to come over, and I said I wouldn't. I sent you a neno on that, MR. WHITE: As long as it is going to be done but as far as that is concerned, I think the shift will sometime in the future-- be made pretty well. H.M.R: Would you people like to meet these three MR. WHITE: Mr. Secretary, I don't believe the fellows and see what they look like? publicity is satisfactory. That's my own impression. I think it should be made clear in the papers that (Pfc. Gagnon, Pfo. Hayes, and P.M. 2/c Bradley this was done at your request and initiation. There enter the conference.) were some passing remarks. H.M.JR: I thought you people would like H.M.JR: AS we say up in Minnesota, "A 'yob' has to neet the gentlemen around Treasury, good or bad, been done. It won't be done for 8. couple of days. and 1 think if we could start over and go right out this elevator, we could all go down together. MR. PEHLE: On the whole it is pretty good 80 far, and they should improve the publicity. Go out that door and I will join you and ne will all go over and see the President. MR. C.S. BELL: Some of it is very good, this one in particular, (indicating clippings). (Pfc. Gagnon, Pfc. Hayes, and P.M. 2/c Bradley leave the conference.) H.M.JR: Yes, but I think-- H.M.JR: Is this & public hearing of Truman's? MR. WHITE: before today, I didn't think the job was satisfactory. MR. WHITE: Yes. H.V.JR: In a sense it is much better to have VRS. KLOT2: Pepper, you mean. nothing that you know of than to have them say-- H.M.JR: Oh, yes. MR. PEHLE: The talk vas that "allace got something, but there was very little talk that the Treasury is being MR. LUXFORD: They are likely to have a lot of guest stripped. I saw none of that, Harry. Senators on it, too. Any Senator that wants to come in and be a guest can do so. MR. WHITE: No, I didn't either. H.M.JR: Feltus, supposing you go up and take Mrs. MR. PEHLE: I think we were lucky, myself. Klotz with you and be up there at eleven o'clock. H.M.JR: Lucky? M. WHITE: Where do we see you next? MR. PEHLE: I know the work that was done, I did some myself. But, nevertheless, it could have gone wrong. Regraded Unclassified F-9 20 - 17 - ( H.M.JR: I'll meet you at Rayburn's office as near ten-thirty as I can. MR. WHITE: They particularly want you to speak yourself. H.M.Ja: You will have to have my speech. MR. WHITE: We'll have it. $ ( PRECISION TRADE MARK MICROSTAT REG. e. s. PAT. OM, MICROFILM ROLL NO. April 30, 1945. Pay dear Nadane Taboutor It vas noos Mal of you to vrite with DO much feeling wes of the death of President It is, ne you my, a tragedy for America and for the vortd, and Pro. Mongenthsu et I also - producte your unterstanding of our ours personal loss. Thenk you also for your word of - port for the program and principles which our great President exemplified. I have received the 0017 of *Pour is Victoire" videh you vere 00 good no to send no and thank you for 11. 1 also expreciate vhat you sald of my om service to the Adminio- tration. vith renoved appreciation of your letter, $ Mineerely, (Signed) H. Morgenthau, Jr. Nadane Conserve Taboute, Mrector and Publisher, Four la Victoire, 855 Firth Avenue, New York 17. New Tork. GEF/dbe Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ No. e. PAT. OFF. MICROFILM ROLL NO. pourla VICTOiRE TOUS ... SAMEDIS " C11. ABOHNEMENTS: I AN M.M. * MOIS 12.90 DIRECTIONS GENERITVE TABOUIS . FRED 4. REDACTEUR IN CHEFI MICHEL FOREIS JOURNAL FRANÇAIS D'AMÉRIQUE 535 FIFTH AVENUE NEW YORK 17 PHONE MURRAT HILL 3-6208-09 April 17, 1945 The Honorable Henry Morgenthan, Jr. Secretary of the Treasury Washington, D. C. Dear Mr. Morgesthau, I tried to at in touch with you and Hrs. Morgenthau since the death of President Roosevelt because I knew how in- mensurable is your sorrow and I myself wills in such despair that I felt that my only possibility of consolation and hope for the future could come from seeing you who have been one of the great builders of the Roosevelt New Deal for America and for the world. = These for words are to tell you how deeply I have been thinking of you and Mrs. Norgestham: and also that, although I feel great despair, I consider it By duty and the duty toward my life-long work to continue more than ever before to defend and support the wonderful world policy of the President both here in my paper *Pour la Victoire* and in the two Paris papers, "L'Aurore" and *Thult et Jour of which I have been foreign correspondent since the liberation of France. A my of hope came to DE this norning when I sur is the Times that 11 was believed you would accept to continue working for all of us throughout the world, as you have been doing. I an going to pray that this Le so. Please convey to Mrs. Morgenthan my kindest thoughts and believe se to be, dear It. Morgenthan, Faithfully, Jeweirew Geneviève Telong Tabouis Director and Publicher € RECISION TRADE MARK MICROSTAT REG. g. 1. PAI, OFF, MICROFILM ROLL NO. April 10, 1945. my less Pulestons Thank you for your vam expression of sympathing in the coath of President I appreciate your spesidne with 00 ruch understanding of - over close with Mo during there difficult var years. It has Inteed been an Instring partot on which to look heet. 1 approciate your having written no, and your expression of symethy. Sincerely, (Signed) H. Morgenthasi, Ja. = Captain V, D. Puleston, U.S.N. (not.), 3434 Releast load, N.V., Weshington n. 2. C. GEF/dbs Regraded Unclassified PRECISION TRADE MARK MICROSTAT MICROFILM SOLL NO. 25 April no, 1945. CAPT W o PULESTON. U.S. N. (Ret) 2434 BELMONT ROAD N. W. WASHINGTON e. D c. 17 April, 1945 Tear 112. Martnent Dear Mr. Morganthau: Thank you for your letter of personal Ny year in the Treasury Department sympathy in the death of the President, and revealed to no your deep devotion and loyalty to our late President and Commander-in-Chief. I know better than mont for sending a any of your son's letter. : oan what & personal loss his death is to you. In the depth of your grief, you can recall with sombre pleasure and pro- vell interstand your pride in Mo service to found matisfaction the fact that your loyal services helped him to carry the immense burdens of his great office, Me country. Me expression of devotion to the especially in 1939 and 1940, when you assisted his in that most difficult of undertaking, giving prospt assistance to nemory of President Receivelt is Indeed . Grest Britain. fine one. Sincerely, Sincerely, (Signed) H. Morgenthau, Jr. The Honorable Henry Morgesthau, Jr., Department of the Treasury, Fifteenth Street and Pennsylvania Avenue, Mashington, D.C. Pr. Joel s. 33-16 157th Street, Flushing, Long Island, New Tork, GEF/dbs Regraded Unclassified 33-16 157TH STREET FLUSHING LONG ISLAND my Bear Lui. Morganthaw- when you see your dear, dear friend, me. Roosevelt, I though son as a copy of the better from our may bring a tiny might of added comport. at 17 he voluntrared ant b Harvard University to join the army air Fores and was Radio Operator and a search mission for a lost plane over the atlantic accass when a out in announced the President's passing Mrs. Hartman and 9 send our deepest sympathy to you and your in your great personal sincerely, loos. Jost N. Hartman april, 17ᵗʰ, 1945 RECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. Dear Dad, 25 I'm sorry I miss ed you at Easie's todny - I wanted very much to speak to you. April 20, 1945. The President's death brought to an end the career of n. man, the like of which we'll probably never 800 in this generation or century again. An I hear and sce all the tributes being paid him, I just wonder whether the American people are as willing to do justice to a man's work 18 they claim they are. The irony of having to die to be appre- cisted will never be fittingly explained to no. Dear Mr. Leffingvell: During the last compaign I thought many times about that Sunday in 1941 when the Jape hit us. Iwondered then Thank you very much for your letter of April 18. if the American people would remember how they felt on that What you said of the President's death is indeed true. day. the foresight to prepare us na much as he had. When 1944 I know I thanked God that at least one man had had The loss to & terrific one to the country, and those of - who vere personally acquainted with Me experienced came - people forgot and not until now, as he lay dead, was 6 shattering blov. his real greatness realized and extolled. It 10 good of you to say visit you de of By own work I only hope and pray that in these past [ew days as Secretary, and to express such confidence in the the supplications of a nation and a. world were heard over future. I also appreciate your connent on the interview that "last barrier" and he at last could hear our thanks and with Harry D. White, and I an glad you felt that you could know the real, the deeper feeling we all had for him. The both approach the subject on which you disagree in a frank wonderful things that he did for us n.s. a nation and therefore and objective manner. indirectly the entire world, can never be forgotten. We're fighting now for the things he worked for mont - peace and Ve have been very much concerned by Mrs. Norgenthau's security. illness, but I an glad to say that she has improved considerably in the last day or two. I feel that she 1s No man in the service of his country has given more in very good bands, but of course I -- anxious for her to than Franklin Roosevelt . his life was the last contribution reach the point where she may return home for her con- he could possibly have given. We must now prove to him and to valescence. our consciences that we are worthy - worthy to have had such a man as he work for our futures. Vith thanks açain for your letter, and cordial personal regards, I've grown up under the tutelage of the times - certainly his enlightened policies have had their effect on ne and will in the future do much to mold my thoughts. Sincerely, Needless to say countless others of the young people today will be influenced in the name way. (Signed) H. Morgenthau, Jr. Let's hope we are worthy of his faith in us. Love, Arthur 4 15 45 Mr. R. 0. Leffingvell, 33 Vall Street, New Tork 8, New York. amr/dive Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ REG.U.S.FAT.OFF, MICROFILM ROLL NO. 2. 23 Wall Street the reception for the opening of the Seventh New Yerk 8 War Loan effort, of Mrs. Norgenthau's illness; RC.LEFFINOWELL April 18, 1945 and greatly relieved to hear from Assistant Dear Mr. Secretary: Secretary White that she 18 better. President Roosevelt's death I did enjoy our talk with Mr. White has been A grent shock to all of us. Hie very much. He in persuasive and interesting, loss is irreparable. I felt his death deeply and his knowledge and understanding of the myself. : had known him 0 long time and had problem are profound. I wish I could say I not only high admiration but sincere affec- agree with him. Though I cannot say that, I tion for him. I know what his death must was much impressed by No comprehension of cean to you his close friend and I send you the problem and by his full and frank dis- cussion of it. ay heartfelt sympathy. I have been greatly relieved With very high regard, I sm, my to read in the papers that you are to continue dear Mr. Secretary, as Secretary of the Treasury. Your adminis- Parthfully yours tration has been very successful. You have carried the appalling load of war finance The Honorable manfully and nell. The job 1a heing well The Secretary of the Treasury Washington, D. C. done. I was distressed to hear, at Regraded RECISION TRADE MARK MICROSTAT/ a MICROFILM ROLL NO. OFFICE OF THE POSTMASTER ROCHESTER 3. NEW YORK DONALD A. DAILEY, Apr. 18 April 30, 1945. POSTMAGES 19 45 Hon. Henry Morgenthau, Jr., Dear Mrs. mileys Secretary of the Treasury Washington, D. C. 10 use good. of you to valte - - you as - April 18, expressing your owe great tty dear Mr. Secretary: - of less to the death of President Recesvelt, and extenting your be- I know how keenly you must feel over - of the online of the close association which 1 have enjoyed caráne the 1 years. the passing of President Roosevelt as one This onne, - you ony. - a terrifto personal Mev, and 14 is an even nore timele less to who has been so closely associated with the country. Year vord of sympother to much him during the past several years as you appreciated. Sincerely, have. Hie death must fill your heart with sorrow and I sympathise with you. (Signed) H. Morgenthau, Jr. I feel it has been a. privilege for no to have known the President as long as I No. Donald A. Delley, had and to know I was one of the great Postemotor, lochecter 3, Yes Tork. aray of citizens in this country whom he considered a friend. We will all miss him a lot. It is too bad he couldn't have liv- ed 6. few more years to see the fruits of his labors. Sincerely yours, GEF/dbs DAD:LRR Donald A. Dailey Regraded Unclassified PRECISION TRADE MARK MICROSTAT REG. U. 1. PAT. OFF. MICROFILM ROLL NO. April 20, 1945 April 20, 1945 To All Racio Advertisers, Advertising Agencies, Radio Networks and Madio Otations: To All Racio Advertisers, Advertising Agencies, Radio Networks end Radio ntations: In the Deventh Ver Loss ve will need your cooperation more than ever before. with a 7 billion dollar quota for individuals, 4 billions in Series E In the leventh Ver Loon ve will need your bonde alone, the Treasury in undertaking the greatest cooperation more then over before. Vith a 7 billion financing operation in history. dollar quota for individuals, 4 billions in Series x bonie alone, the Treasury 1ª undertaking the greatest The next few months vill be crucial to the financing operation in history. whole American var effort. The good news from Europe may breed dangerous overconfidence in our people The next few months vill be eruelal to the and encourage e spirit of let-down and relaxation. whole American var effort. The good neve from Europe Such a resction vould imperil such that has been may breed dangerous overconfidance in our people accomplished in the past, and leave us in no position and *ncourage e. spirit of let-down and relaxation. to deal with the tramendous problems of the present luch a resetion would imporil such that has been and the future. accomplished in the past, and leave un in no position to deal with the tranendous problems of the present It is vitally important, therefore, that the and the future. Seventh ver Loss be (Iven all ocasible support. It is the most significant vaj in which Americans on the It 18 vitally important, therefore, that the homefront can excress their determination to see the Seventh *** Loan be /Iven all possible support. It var through to ultimate victory. in the nost significant vay in which Americans on the hosefront ean excrass their determination to ... the The generosity of advertisers, their agencies var through to ultimate victory. and broadcasters in allocating redio advertising time to previous var loan drives ennourages us to hope The generosity of advertisers, their agencies that you will 20 all-out for a Mightier 7th! and brondensters in allocating redio advertising time to previous var loan drives encourages us to hope Sincerely, that you will 20 all-out for . Michtier 7th: Sincerely, /2/ Heary Perpenthau, Jr. /n/ Henry Morgenthau, Jr. Typed 4/19/45 Mageriag Typed 4/19/45 Magering Regraded Unclassified RECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. 12 25 April 30, 1945. Denur Mr. Inviors It vas with mach pleasure that I learned of your amointant - Federal Loan Administrator, and I vent to congretulate you upon being the President's choice for this important office. I shall hope to see you soon and look forward to our association se you bake up the duties of the post. If there to any way in which By office en be of service to you, I hope you s vill not healtate to call upon - VIth cerdial regurds and best vishes, Sincerely, (Signed) H. Morganthe is Nonorable John ", layder, Federal Lean Administrator, Washington, 2, 0. GEF/dbs Regraded Unclassified RECISION TRADE MARK MICROSTAT REG. U. 5. PAT. OFF. MICROFILM ROLL NO. The New York Times. APR 2 1945 PHDERAL LOAN HEAD SNYDER APPOINTED artilery major; Emplas was a field artillery captain. While Mr. Bayder was executive LOAN AGENCY HEAD vice president of the Defense Plants Corporation. Government- financed factories and other war production mechanisma sprang up Truman Names an Old Friend, all over the country, at an aggre- gate cost of from $5,000,000,000 to St. Louis Banker-Nomines $8,000,000,000. Illa knowledge of the Reconstruction Finance Corpo- Praised by Jesse Jones ration and Ra aubeidiaries . - garded as . great asset. Govern- mest lending agencies taken from By LEWIS WOOD the Commerce Department by the - THE - these - George bill but retained under the WASHINGTON, April IT direction of the Lean Administre- ser include the RFC and aubaidi- President Truman in his first ap- aries such as the Defense Planta pointment since taking the math Corporations, Metals Reserve Com- of office. today nominated John pany and Rubber Reserve Com- W, Bayder, Vice President of the pany. Each is autonomous and First National Bank or BL Louis, controlled by . board of directors, as Federal Loan Administrator. but responsibility for coordinating Mr. Enyder, one of the new and supervising their administra- tion and policies le lodged with the President's most intimate friends Less Administrator. since the First World War, was Executive Vice President and EM- rector of the Defense Plante Corp- oration, and assistant to the direc- tora of the Reconstruction Finance Corporation from 1940 to Jan. 1. 1942. For three years previously he was manager of the BL Louis agency of the RFC John W. Sayder Bucceeding Fred M. Vinam, ne- - Pross centify made War Mobiliser, Mr. Bayder, if confirmed by the Ben- ate. will be administrative head of the governmental loss agency whose have already made authorizations of $60,000,000 It le understood that President Truman urged the late Premident Reservelt the werks sgo to make Mr. Boyder Loan Administrator, and that Jesse Jones, who for many years guided the loss agen- cirs, also had made the serve rec- commendation, "President Truman could net have made . better appointment," said Mr. Janes today Rome speculation had Mr. Any- der sixted for the Treasury port- Tolls, Not President Truman as an- nouncement gone. has saw assured Secretary Miegenthau of continu- ing "indefinitely." The nominer has much the same background - has President Tri- man. He vas born almost forty- sins years ago in Jonesboro, Ark. The Reyders game . large reception for the Trumana when Mr. Truman was insugurated " Vice President. En January, 1944, when Miss Mar- garet Truman aponsored the Mis- souri, the Saydent accompanied the Trumare to the reremony, In the first World War the two men were batteries - the same division, The President was PRECISION TRADE MARK MICROSTATI MICROFILM ROLL NO. LEGATION OF THE 25 UNITED STATES OF AMERICA APR 2 1945 Cairo, Egypt, April 3, 1945 AIR MAIL My dear Mr. Minister: PERSONAL I an writing in response to your letter Dear Mr. Secretary: of April 3, 1945, concerning your proposed purchase I an writing in the hope that you will be kind of a house near Geneva, Switzerland. enough to assist my wife and myself in connection Representatives in liew York of Foreign to us both. with a matter which 1s of great personal interest Funds Control have consulted with Mr. Alexis Coudert We are at present negotiating for the purchase of a house near Geneva, Switzerland and the master is in the hands of my wife's lawyer who is Alexis concerning the matter, and I an happy to inform you Coudert, 2 Rector Street, New York City. The house in question is the property of a certain Baron that the necessary Treasury license was issued to Emeric de Pflugl, a former well known Austrian dip- of Nations and who later, after the Anschluss, re- lomat who was for years associated with the League Coudert Brothers on April 19, 1945. signed from his country's service and became a Many thanks for your kind wishes, and may naturalized Swiss citizen. He now resides in America with his wife who is American born. I extend By regards to you and Mrs. Tuck. Baron de Pflugl, for reasons which Mr. Coudert can explain, desires . partial payment for the Sincerely yours, property to be made in Swima france and it is there- fore necessary for us to apply for a license from the Treasury for that purpose. Mr. Coudert will (Signed) H. Morgenthau, JA. done so by the time this letter reaches you. He shortly apply for a license, if he has not already Secretary of the Treasury will explain at the same time why a payment in Swiss with france is necessary and can also furnish the Treasury to any pertinent details it may require with regard the proposed transaction. Honorable S. Pinkney Tuck, favorable consideration to our application for a We would be most grateful if you would give The American Minister, Cairo, Egypt. Treasury license as the acquisition of the Geneva property The Honorable Henry Morgenthau, Jr., Secretary of Treasury, Washington, D. C. CPSeits:mbw 4-19-45 Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. AIR MAIL -2- property means a great deal to us both. I had spent many happy years there when my father was still alive and Katherine, whose father was a Swise citizen, is as anxious as I an to have a. home in Switzerland after my retirement from the Service. We so often look back on those peaceful days of 1938 spent at Antibes when we came to know you and your family. I hope that all goes well with your sons. My older boy is a Corporal in the Marines. We were fortunate to have been able to leave Germany a year ago after & long period of internment and we are now greatly enjoying our stay in Egypt. I may have told you that my father lived in this country for twenty-six years when he was the American repre- sentative in the Mixed Courts. Please convey our kindest regards to Mrs. Morgenthau. Anything that you feel you can do to help us in connection with our application for a Treasury license would be deeply appreciated. Yours sincerely 3. Pinkmey TOON, luck American Minister, Cairo, Egypt. Regraded Unclassified RECISION TRADE MARK MICROSTAT PAT. MICROFILM ROLL NO. TREASURY DEPARTMENT INTER OFFICE COMMUNICATION - 2 - DATE April 1945 The Chinese follow the practice of padding the bill, although we have always been most generous to them. Thus in terms of prices in the United States, the approximately $375 million TO Secretary Morgenthau (For information) which has already been paid to the Chinese Government for U. S. Army expenditures in China obtained no more than $175 FROM Mr. Coe FC million of goods and services. The difference can be con- sidered an American contribution to China in compensation for Subject: China the burden placed on the Chinese economy by the presence and activities of American troops. ment. mary Treasury's recent experience with the Chinges Govern- sum- Dr. T. of V. Soong, you may be interested in the following with In connection with discussions which you may have Sale by Chinese Government of $200 million of U. S. dollar savings certificates and bonds. ment fun not only tries to get as much es possible from us, whether The record clearly indicates that the Chinese Govern- One of the uses which the Chinese have made of the funds tifiable or not, but continues to misuse the financial advenced under the $500 million financial aid agreement was assistance which has been given. Moreover, there is consid- the issue of $100 million of U. 3. dollar savings certificates have erable evidence that top officials of the Chinese Government and $100 million of U. S. dollar bonds. The certificates and 8500 enriched themselves from funds granted to China under the bonds vere sold at much lower rates than prevailed in the black million financial aid agreement. market and the purchasers of these certificates and bonds ob- tained U. S. dollare at anywhere from one-half to one-fifth of Gold sales in China. what they should have caid for them. At present these certi- ficates and bonds can be sold for more than 15 times their The matter in which the Chinese h ve shown the greatest original purchase price. Under the guise of an anti-inflationary reasure the Government has permitted hoarders, speculators China. recent months is the export of as much gold as possible to nterest and concern in their dealings with the Treasury in militarists and "insiders" to reap illicit fortunès in foreign $500 which remains on the books of the Treasury under the million They would like to withdraw $180 million of the $240 exchange. For example, from the information available to us, there 18 little doubt that persons and organizations intimately million financial aid agreesent to purchase gold to be connected with Dr. T. V. Soong and Dr. H. H. Kung have pur- gold which has already been purchased end exported. exported for sale to China in addition to the 607 million of chased millions of dollars of these certificates and bonds. Tu Yueh-seng, the notorious underworld gengster leader, has gold is being sold at inexcusably low prices to speculators This been among the largest purchasers, while Dr. Wei Tao-ming, and hoarders. koreover, it has provided the Government with present Ambassedor to the United States, has purchased more an easy way to avoid taking effective measures to retard than $100,000 of these U. 3. dollar securities. We have done inflation. Instead, the Government sells precious national our best to control the use of the proceeds of these secu- assets which could be put to excellent use in the post-ver rities through the Treasury's Foreign Funds Control administra- reconstruction of China. tion. U. S. Army expenditures in China. Expenditure of $60 million on bank notes. The 0. S. Army pays its own way - and at exorbitant The Chinese are now requesting that ve permit the with- prices - for everything it obtains in China, excent food and drawal of $60 million of the $340 million which still remains lodging of U. 3. troops. Nevertheless, the Chinese not only on the books of the Treasury under the $500 million financial make us ray heavy taxes but also repeatedly try to get us to aid agreement to be used for the manufacture of bank notes. pay for things which are solely for their benefit or for According to information received from the Chinese, these bank which they have promised to pay. In the current negotiations notes are in small denominations which are practically useless for the settlement of U. 3. Army expenditures in China during in the present inflationary situation. They are only distin- V. the last quarter of 1944 the Chinese figure of the amount of guished by the fact that they vill have on them the portrait S. Army expenditures for which the Chinese ought to be of the Generalissimo instead of the traditional portrait mbursed is about 33 percent more than the U. S. Army figure. re- of Dr. Sun Yet-sen. The Chinese, of course, have other funds /ith which to pay for the manufacture of such bank notes. Regraded Unclassified - 3 - - 4 - Chinese hold up tin exports to United States. Import of textiles into China. China has been providing the United States with tin, a The Chinese have asked the Treasury to support its re- such needed strategic commodity. At the request of the Chinese, quest for large scale imports of textiles, arguing that they the Treasury has allowed payment for the tin to be made in gold. will be used for anti-inflationary purposes. The Chinese have The Chinese, however, have argued that this gold must be sent been told repeatedly of the very tight position of textiles to China in order to maintain tin production and tin exports to in the United States. Moreover, they know the urgent need to the United States have been allowed to decline. Nevertheless, conserve transport facilities into China, whether over the the Bank of China admits that it has in China stockpiles of "hump" or on the newly opened Burea road. It is safe to say tin which it is keeping as collateral against an intra-govern- that, as in the case of gold sales, the enti-inflationary mental loan made to the Chinese tin procurement agency, the effects of the sale of süch textiles would be very small. National Resources Commission. Thus, the Chinese could be Moreover, the Chinese Government has done very little, if exporting more tin to the United States if they 80 desired. anything, to encourage domestic textile production. Thus, while one-third of the cotton spindles in Free China have Requested $16 million Export-Import Bank loan. censed operations because of a shortage of rew cotton result- ing from erroneous government policy and inefficient and cor- The Export-Import Bank has been requested to grant a $16 rupt administration, large amounts of raw cotton are being million loan to a private Chinese chemical firm. The Chinese smuggled out of Free Chine into occupied China. Für thermore, Government has nearly $1 billion of deposits, U. 3. Government large quentities of cotton textiles in Free China are being securities, and credits on the books of the Treasury which hoarded, while the Government fails to take effective anti- could be used to finance imports from the United States of the hoarding measures. kind for which an Export-Import Bank loan is being requested. Moreover, it is admitted that the proceeds of the Export-Import Bank loan could hardly be used until after the war. Neverthe- less, the Chinese Government does all possible to encourage the Export-Import Bank to grant immediately this $16 million credit. $75 million lend-lease trucking project. Arrangements are now being carried through for the lend- leasing of a large number of trucks to China. Moreover, the lend-lease funds will be used to pay the salaries of American personnel who will train Chinese personnel to take over the driving and maintenarce of the trucks. The cost of this pro- ject is about $75 million. In addition, the Chinese attempted to get the United States to pay U. 3. dollars for the Chinese national currency which will be needed to pay the salaries of Chinese employed in driving these Chinese trucks and to con- struct and maintain garages and repair shops for these Chinese trucks. These local currency needs which the Chinese can meet merely by printing more bank notes might have cost us up to $20 or $30 million. The Chinese undertook to meet these local currency needs only after ve took a firm position against providing U. S. dollars for such purposes. RECISION TRADE MARK MICROSTAT REG. 5. PAT. OFF, MICROFILM BOLL NO. ) TREASURY DEPARTMENT - 2 - INTER OFFICE COMMUNICATION the know" at that time. In place of this, Mr. Smith's people DATEAPRIL 20, 1945 TO Secretary Morgenthau were sent out as though on an "under-cover" job. Mr. Scott FROM Charles S. Bell of Budget called our Mr. Parsons in Procurement to inquire of him what he knew of the matter, and the Department's Budget RE: HAROLD SMITH AND THE SURPLUS PROPERTY TRANSFER Officer, Schoeneman, was approached by Mr. Broadbent of Budget along similar lines. They made no effort to contact Mr. Smith's participation in this transaction is an this office. excellent illustration of why the Budget has gone down in I learned later from Mr. Gladieux, Secretary wallace's the estimation of certain members of Congress and high assistant, that Mr. Smith talked with Secretary Wallace and Government officials. urged him not to go through with the transfer. I strongly As per your instructions, after making the early negotia- suspect that Mr. Smith's objections came, for the most part, tions with the agency heads primarily concerned with this from the fact that he has other ideas as to the location of transfer, I called Director Smith in the afternoon on Tuesday, the Procurement Division proper and had been given to under- April 17, and failing to reach him, left a very complete stand that the Procurement Division would move with Surplus story with his secretary and 8. request that he call me for further details. (At this time it was indefinite that the Property. entire Procurement Division would go over to Commerce or remain in Treasury, and the whole matter was being handled along very confidential lines.) Not only did Mr. Smith himself fail to call me, but what is more, no member of the Budget staff made any effort to keep abreast of the deal or get accurate information from me or John Pehle, the only two men in Treasury actually "in Inclassified RECISION TRADE MARK MICROSTAT ass. U. s. PAT. ON. MICROFILM ROLL NO. 12" > APR 20 1945 Dear Mr. Minister: I wish to thank you for your letter of April 3rd and for the personal mensage and regards you vere kind enough to send through Mr. Adler. As you know, the cause of Sino-American friendship has ever been close to my heart, and I as happy to find myself in full agree- $ sent with you on the need for maintaining close financial and economic cooperation and for strengthening the traditional ties be- tween our two countries. Please rest assured that ve shall continue to do all, ve can to attain both these objectives. Sincerely yours. (Signed) H. Morgenthaw, 26. Honorable 0. K. Yui, Kinister of Finance, Chungking. China. SA/efe 4/18/45 Regraded Unclassified TRADE MARK MICROSTAT/ MICROFILM ROLL NO. April 3rd, 1945. My dear Mr. Mormathan, I avail mynelf of the opportunity of Mr. Adler's return to Washington to extend to you my greatings and deep approcia- tion of the conperation that you have kindly given us. An total Allied victory is drawing near, our task time even proved to be more difficult end the need for closer collabora- tion between the United States and China has become more urgent then ever. $ It in my sincere wish that the traditional friendship between our countries be Further solidified through closer connomic cooperation and I trust we con rely on your good offices toward its attainment. Yours sincerely, Ohser O. K. Yui Kinister of Zinnnce Honorable Henry Morgnathou, Jr., Secretary of the Treasury, United States Government, Washington, D.C. RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 18 TREASURY DEPARTMENT - 2 INTER OFFICE COMMUNICATION DATE April 20, 1945 she ever gave any Important information to Allied intelligence or disclosed her relations with the Cormans. TO Secretary Morgentism 5) Her recent claims that she participated in the FROM Frank Coe and Orvis A. Schmidt Banque Charles to save Er. Gould from deportation is in direct variance with the explanation which she gave to the FOR YOUR INFORMATION 0.3.8. in October 1844 to the effect that her only interest As you know, In January we designated Florence Gould in the Banque was to create a refuge for American money during the war. 4 Special Blocked National on the basis of her partici- pation, with certein Cerman and French interests, in the establishment of the Janque Charles for the purpose of cloaking collaborationist and Cercen assets. fas We thought you would be interested in the following F.C. secret intelligence information concerning pro. Gould which was recently received from our Embassy at Puris, and which confirms our suspicions of Mrs. Gould's collaboration with the Hamis: 1) Her participation in the Banque Charles was an outgrowth of her many close and confessed relations during the occupation with notorious French collaborators and with Germans (including the Gestapo), of whose official connections she was fully smare. 2) There is evidence that the Germans regunded her on an informer to the Costapo. 3) Ludwig Vogel, engineer of the Focke-Wulf Aircraft Company, now held as e prisoner in Paris, took Florence Gould to Germany on several occasions under a false name and with- out identification papers. She we permitted to visit on airoraft factory at Friedrichshafen. 4) Mrs. Gould claims that she bed social relations with Cermans in order to obtain their protection against being sent to a concentration camp because of her services to Allied intelligence. According to her own admission, however, she was not in contact with Allied intelligence services until December 1943, whereas most of her relations with the Germans began before that date. Moreover, there is no evidence that Regraded Unclassified TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATEADT. 20, 1945 TO Secretary Morgenthau FROM Mr. White YDW My wife informs me: The Bible (Job 31:35) contains this statement: "Oh, that I had one to hear m. Lo, here is my signature. Let the Almighty answer me. And that I had that indictment which mine adversary hath written." A footnote in our version of the Bible refers to the fact that the word "indictment" probably means "book". $ Mrs. White believes that the interpretation of the above phrase 18 something like the follow- ing: People know I (Job) have been righteous and if my enemies who are claiming the contrary had written 8. book containing their unfair criticisms I (Job) could display that book and their unfair criticisms 80 that the people would know how unjust those criticisms were -- or something like that. I believe that must have been the phrase to which the President referred. Though it doesn't seem to fit well, I suspect it's what the President had in mind. TREASURY DEPARTMENT 52 INTER OFFICE COMMUNICATION DATE April 20, 1945 TO Secretary Morgenthau FROM Subject: Press seninare 51 Recently the Foreign Funds Control people held & half-hour press Mrs./ Rots conference dealing with a press release which had been put out for use the following day. The discussion was nearly all anbeckground material asso does NOT require immediate attention. rather than as spot news, but it attracted a number of correspondente WATAT, it might interest Secretary, at some early who do not normally visit the Treasury and held their attention. when be aight have time his hands, either while This led no to believe that there is a field for seminar type con- or in Florida. would it be to put it Cerences, on subjects which of current interest, or approaching the news his package AS "say time" erial, or how do you hendle stage, but are not yet ready for spot nous treatment. of this nature? I canvassed several Treasury people, including White, Tasa and Lynch, 23F. M fussell and also a few reporters, and found them enthusiastic for the idea. : also found some Treasury people, outside of those dealing with such sub- jects, who said they would appreciate 42 opportunity to hear beckground explanations of such subjects as Brotton Moods, taxes, etc. Hane said his shop would be able to put on immediately a discussion Mr. Fuscell of Covernment borrowing -- substantially the sune olide illustrated lecture being given Seventh War Loan groups -- subject to Ted Camble's ap- proval. White said Le believed some discussions of taxes and of the postwar European economic situation could be arranged -- the latter probably broken down into a number of discussions. - 2 - Max Hall of AP [incidentally the martest of the reporters covering the Treasury) was enthusiastic over the 1dea and suggested such subjects, rather more complex and less imediately newsworthy, us a detailed ex- planation of the Daily Statement, methods by which public debt was calou- lated, etc. : think the advantages to the Treasury would be two: 1. Botter press relations. 2. Better informed reporters and consequently better re- porting. I do not imagine that all the reporters would actually be as Ireen about the 1dea as Fall, who is out to get Misself all the education he can, where- ever he is working. But they would be stirred, by competition, to pay shall attention, and whatever they loarned would be all to the good. The conferences would have to be planned curefully, to avoid impinging upon spot come fields, It would be By 1dea to make then all background af- fairs, lecture-discussions followed by a question end undwer period. It would probably follow that some questions on policy nutters, relating to the subject discussed in the seminar, would greet you at the nert pross conference, but you would be ready for it and the broadening of the field of questions at your press conference would also be advantageous, it seesa to no. Now as to how the subject night be brouched: I suggest that at your next press conference you night say that the 1dea of seninare, on newsworthy subjects, or subjects that will soon be in the news, has been suggested to you, and that you would like to see what the re- porters think about it. If there 1s a favorable response from those present you night suggest that they contact as with their suggestions as to subjects they would like covered. Then we could put one of the seniners on almost RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. - 2 - - 3 Vax Hall of AP (incidentally the martest of the reporters covering immediately (Friday at 11 a.m. probably will be the best time) and judge the Treasury) was enthusiastic over the 1deu and suggested such subjects, from the result whether it is worth continuing. rather more complex and less imediately newsworthy, as # detailed ex- planation of the Daily Statement, methods by which public debt was calcu- lated, etc. I think the advantages to the Treasury would be two 1. Botter press relations. 2. Better informed reporters and consequently better 20- porting. I do not imagine that all the reporters would actually be as Ireen about the 1den as Hall, who is out to get himself all the education he can, where- over be is working. That they would be stirred, by competition, to pay some attention, and whatever they learned would be all to the good. The conferences would have to be planned mirefully, to svoid impinging upon spot news fields, It would be By 1den to nake then all background af- fairs, lecture-discussions followed by = question and unswer period. It would probably follow that some questions on policy matters, relating to the subject discussed in the seninar, would greet you at the next press conference, but you would be ready for it and the broadening of the field of questions at your press conference would also be advantageous, it seens to no. Yow as to how the subject night be broacheds I suggest that at your next press conference you night say that the 1des of seninars, on newsworthy subjects, or subjecta that will soon be in the news, has been suggested to you, and that you would like to === what the re- porters think about it. If there 10 a favorable response from those present you night suggest that they contact no with their suggestions as to subjects they would like covered. Then ve could put one of the seninare on almost Regraded Uncl ssified fores to THE WHITE HOUSE WASHINGTON 4/21/95- April 20, 1945. MEMORANDUM FOR THE SECRETARY OF THE TREASURY: After consultation with the Presi- dent's Secretary in charge of press rela- tions, it is felt that the President should not at this time appear in news reels to advocate the Bretton Woods proposal or any other single or individual legislative pro- posal, especially when such proposal is before the Congress for action. We do wish to be helpful. We know you are familiar with the statement the President made at his first press confer- ence with regard to the Bretton Woods proposals. It is suggested that if & silent motion picture of the President 18 made a part of your proposed film and you would use the sense of the President's statements at his press conference, this question might be solved. An off-stage voice could be used for sound when the President's picture 1e on the screen, and in this way it would be possible for you to include the President's endorsement as part of the motion picture Paramount is to pro- duce for you. MATTHEW J. CONNELLY Secretary to the President. MICROSTAT/ MICROFILM ROLL NO. RECISION TRADE MARK 57 4/20/45 Secretary's statement before Jenator repper's Committee on Small business. Subject: bretton Woods. THE UNDER SECRETARY OF THE TREASURY WASHINGTON 58 April 20, 1945 TOP SECRET Statement of Secretary Morgenthau TO THE SECRETARY: Prosperity for this country is essentially a problem I just received a report through the of finding markets to match the miraculous producing power War Department of an inventory of the currency and gold discovered in the salt mine at Merkers. There was a small amount of Norwegian kroner, of our factories and farms. We can keep our people gain- French france, Belgian france, lire, kuna (Croat) and koruny (Czech). There were also 2,760,000, 000 fully employed at high wages If we can find buyers for reichsmarks, There are about 3,000 bags (at about 81 pounde per bag) of gold coin and 4,100 the food and fibers, for the cars and refrigerators, that bags (at 55 pounds per bag) of gold bullion. Considering the gold coin on a straight bullion we can produce. basis, the total value is about 8196 million. Our primary dependence must always be on the home market. We have in this country the greatest concentra- DWB tion of consuming power in all the world. The 135 million American people buy most of the world's production of automobiles, refrigerators, and radios. These are the goods typical of American production. These are the goods that are symbolic of the high American standard of living. But we must not overlook the importance of foreign TOP SECRET markets. During the 1920's, one-tenth of our agricultural PORTICTORY BUY and industrial output was sold abroad. Our exports declined WAR drastically from 1929 to 1932. And even after recovery had gone quite far, our exports in 1938 were only half what they had been ten years earlier. Our exports may seem to be only a small part of our Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ REG.U.S.FAT.OFF. MICROFILM ROLL NO. 60 - 2 - - 3 = total production. They are, nevertheless, vital. They apples, 11 percent of our wheat, 11 percent of our lard, mean a good deal in factory payrolls and farm income. and 11 percent of our hops. They mean the difference between prosperity and depres- It is clear enough what these exports of industrial sion for both agriculture and industry. and farm products mean to business and labor and to When we think in terms of perticular industries and agriculture throughout the country. of particular farm products we can see what foreign markets Your interest in an expansion of foreign trade for really mean to business, to labor, and to agriculture. small business coincides with one of the principal objec- I cite examples from only a few industries. In 1938, tives of the program drawn up at the Bretton Woods Con- our exports accounted for 27 percent of our production of ference last summer, and now pending before this Congress. aircraft and parts, 22 percent of our office machinery and All of the 44 nations perticipating in that con- appliances, 18 percent of our printing and book-binding ference recognized that a large volume of foreign trade machinery, 17 percent of our farm machinery and appliances, is essential to the realization of the United Nations' 15 percent of our pharmaceuticals, 14 percent of our in- hopes for a prosperous and peaceful world. We in this dustrial machinery, 14 percent of our automobiles and country have a special stake in this program since we, trucks, 12 percent of our radio equipment, and 11 percent more than most countries, must carry on a large volume of our refined oil products. of trade abroad in order to assure full utilization of It is no less true that export markets are essential our manpower and productive facilities at home. to our agriculture. In 1938, our exports accounted for In order to achieve these overall objectives--in- 30 percent of our production of tobacco, 28 percent of creased world trade and capacity production at home--we our cotton, 19 percent of our rice, 13 percent of our must set in motion the machinery to restore to the devastated countries their producing and consuming Regraded Unclassified RECISION TRADE MARK MICROSTAT/ PAT. OFF. MICROFILM ROLL NO. - 4 - - 5 - power and to further the development of greater production ness firms should be able to sell abroad as well as at and greater consumption in the more backward areas of the home, particularly if some of the uncertainties can be world, inhabited by perhaps half the world's population. removed from international currency transactions. We must provide an environment of stable and orderly ex- But let me repeat, the best market for all types of change practices--free from the currency warfare and the small business has always been, and will continue to be, restrictions of the 1930's--in which international trade our own domestic market. In a prosperous America, every can flourish. year should witness a new crop of promising small entre- In considering the significance of foreign trade to preneurs, and those already established should have ample small business, it will be helpful to divide the subject opportunity to expand. into two broad segments. I will not attempt to go into the details and There are industries that will perticipate only in- mechanics of the Bretton Woods proposals at this time. directly in an expansion of foreign trade. In this group These Agreements are now being considered by the House are the majority of the service industries, such as Committee and will soon be considered by the Senate laundries, dry cleaners, garages, repair shops, hotels, Committee on Banking and Currency. The important thing and retail outlets of every description. Their well- for us to consider at this time is the significance of being is linked to foreign trade to the extent that an the Bretton Woods proposals to American foreign trade expanding foreign trade 1s indispensable to an expand- in general and to small business in particular. ing American economy. The Bretton Woods proposals, by stabilizing rates Then, there are industries engaged in manufacturing, of exchange, by maintaining freedom in exchange trans- transportation and commerce where small business can actions, by preventing competitive depreciation of share directly in the increased trade. Our small busi- foreign currencies, and encouraging the revival of Regraded Unclassified RECISION TRADE MARK MICROSTAT/ REG. PAT. OFF, MICROFILM ROLL NO. - 7 - - 6 - of currencies in terms of one another were subject to con- private international investment, will go a long way-- stant yet unpredictable change. Unless the trader had the indeed, farther than we have ever gone before--toward means and the ability to hedge, his normal business profits creating an environment in which small business will not might be wiped out overnight by fluctuations in exchange only prosper, but will help to preserve our democratic rates. institutions. The Bretton Woods proposals, when adopted, will pro- In the past, small business has not played a vide all of the essential elements of stability. They prominent role in this country's foreign trade, and that will require all countries to define their currencies in for two principal reasons. First, the small businessman terms of gold, and to maintain their exchange values has not been conscious of the importance of finding stable within one percent of that parity. They will markets abroad. The cost of maintaining a sales force also hasten the removal of all artifical barriers for the export market has been too burdensome for the against the making of payments across international small business man. It 18 necessary to find better and boundary lines, and encourage a revival and an expansion more economical ways of selling abroad the products of of private international investment for reconstruction small business. and development purposes. The small businessman has always been confronted Once stability of exchange rates is achieved, with the discouraging complexities of fluctuating ex- American investments abroad will have as their counter- change rates. He does not as a rule understand the part an immediate and direct foreign demand for workings of the foreign market, nor 1s he able to employ American goods. Many of these demands, could be filled specialists who do. In general, a successful foreign by little business--indeed, must be, if a big increase trader has had to be something of a dealer in foreign in business is to come our way. currencies. This has been necessary because the values Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. - 8 - - 9 - AS I have said, inadequate marketing facilities or course, this doesn't mean that small business 18 have been one factor in reducing the small businessmen's entirely out of the export market. Some firms have share in our foreign trade. A large corporation pro- foreign customers who buy directly from them. Export ducing automobiles or electrical equipment has an export houses in this country are on the look-out for department in this country; it has sales agents abroad; specialties they can sell abroad. And in some cases, and it may have a financial department equipped to handle a group of small business firms cooperate in forming credit and exchange problems. Such a corporation is con- an export company to handle jointly their various scious of the fact that the sale of $20 million or $100 products. This practice, in my opinion, should be million of its output to foreign buyers means the dif- encouraged. ference between profits and losses in its annual state- But the fact remains that small business does not ment of earnings. And it is willing to spend the money export enough. Partly this is because our aggregate to get these sales. foreign trade has been so small. And very largely it The small businessman is not in so fortunate posi- is because present export marketing facilities are not tion. Perhaps he could sell $100,000 worth of his suited to the needs of small business. This is a products abroad. But ne can't afford to set up an export problem to which your committee will want to give department. He couldn't possibly keep agents abroad to serious consideration. look for foreign orders. He hasn't the facilities for While 1 have been primarily concerned in this dis- granting credit to the customers that come to him. And cussion with the question of export markets, I want to ne can't overcome the handicap of restrictions and make clear my view that our imports are an equally fluctuations of foreign currencies. important part of the foreign trade problem. Imports Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 68 - 10 - - 11 - are necessary to provide raw materials for our industries, The Bretton Woods program will provide the necessary fertilizers for our farms, consumer goods for the public. setting for a large expansion in our foreign trade. Without imports, production would be handicapped and our Small business should share in these new foreign markets. standard of living would be lowered. Your committee will want to explore ways of bringing We must not forget that imports are part of the small producers and foreign buyers together. business of being paid for our exports. When countries stop buying our exports, it is because they haven't enough dollar exchange. When we import from them, they get the means to pay for our goods. That 18 why I believe that to secure the greatest benefit from foreign markets, the level of international trade must be raised throughout the world. If I have gone a little beyond the topic that you expected me to cover, it is because 1 am convinced that the future welfare of the United States is intimately associated with the survival and the expansion of small business. When hostilities cease' and war production tapers off, we must find markets for our greatly in- creased productive power, we must keep up employment. Little business, in my opinion, is one of the most promising areas for an expansion in post war employment. Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ REG. o. PAT. OFF, MICROFILM ROLL NO. Charles Bell April 20, 1945. Secretary Morgenthau I want you to participate in making the decisions affecting the transfer of the surplus property program to Commerce. You know what Cliff Mack will need in order to run his shop efficiently, and you also know what sort of commitment we have made to Secretary Wallace. I want to protect Mack's program, but at the same time give Wallace an active organization. You can serve & as something of an arbitrator on questions arising among John Pahle, Cliff Mack, and the Commerce people. Keep me advised on the personnel and administrative angles. Liga Hmgh. to Regraded Unclassified TREASURY DEPARTMENT TREASURY DEPARTMENT INTER OFFICE COMMUNICATION M INTER OFFICE COMMUNICATION DATE Date Secretary Morgenthau April 20, 1945 APR 20 1945 TO TO Secretary Morgenthau FROM J. W. Pehle FROM O'Connell Regarding your memorandum of today on the current The following is a summary of significant developments tax drive: in the Surplus Property and Procurement offices for the week ending March 24, 1945: 1. The Commissioner and I agree that your surges- tion for the interchange of weekly reports between the various districts is a splendid one and it will be Surplus Property: placed into effect at once. We continued to work with the Surplus Property Board in 2. As to the April 10 rebort from Sanders, Acting drafting regulations and forms to be issued by the Board to Special Agent in Charge, Atlanta District, which impressed you unfavorably, our investigation reveals implement the priorities to Federal, state and local govern- that this unfavorable impression probably arose from ments envisioned by the Surplus Property Act. Work is artless expression rather than from spiritless effort continuing also within our own organization to develop or lack of cooperation on Mr. Sanders' part. IF. Sanders programs, procedures and relationships that will facilitate is acting in the place of Mr. Palmer, who la the regular operations under the Board's proposed regulations. Special Acent in Charge at Atlanta. Mr. Palmer is of such outstanding ability, and his district under his direction reflects such a splendid record, that he was Instructions were prepared for the regional offices with detailed to assist lb. Woolf in the direction of the respect to the new synchronized spot sales method for the dis- entire drive and the coordination of the activities of posal of construction machinery and farm equipment, which will the various districts. Since the April 10 report, be put into operation on a nation-wide basis on April 19. Mr. Palmer has visited the Atlanta district, surveyed activities there, and assisted Mr. Sanders in establish- This plan 1s designed to maintain a constant flow of surplus ing the procedure for intensive conduct of the drive. farm and construction machinery and equipment to the public Mr. Palmer reports that Mr. Sanders is keenly interested through normal trade channels and combines the most desirable in the drive and is satisfactorily organizing his dis- features of the formal bid and auction sales methods. The trict. I believe a reading of the April 18 report of plan has the approval of the Surplus Property Board. Mr. Sanders will not reflect the same spirit which impressed you in the earlier report of April 10. Mr. Palmer will return from Atlanta tomorrow, at which The Army Air Forces have indicated that they will request time we can get further information. that we sell 44,000 yards or nylon cloth, heretofore declared surplus by the Army, to certain firms for use in the manufac- ture of carburetors for Air Forces. We have formally requested the Food and Drug Administra- tion to cooperate with us in the examination and classification of surplus pharmaceuticals and medicinals, and similar property, RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. - 3 - - 2 - 72 73 in order to facilitate their orderly disposal. The Attorney General approved, under Section 20 of the C Surplus Property Act, our proposed sale of approximately We have submitted to the Surplus Property Board the ques- 23,400,000 Carlisle first-aid dressings. The sale was there- tion whether disposal agencies should accept from the War upon consummated, the total proceeds thereof exceeding Department surplus reverse Lend-Lease materials in view of an $220,000. Effective liaison with the Department of Justice arrangement between the United States and the supplying nation, has been established and conferences are being held frequently whereby the proceeds of the sale of such property are to be in order that we may become acquainted with the Anti-Trust turned over to the supplying nation. Acts. Notwithstanding our formal submission of the matter, the The Army has declared as surplus 12,000 additional blitz Board has not, as yet, expressed its views with respect to ex- cans. Approximately 11,000 yards of canvas duck and 1900 port policy, but in the meantime, work 1s going forward within mattresses were transferred to the Maritime Commission. our organization in order that we may have a better understand- ing of the issues involved. Procurement: A sales program for cut film and photographic paper is be- ing formulated. Arrangements are being made for our Boston and Total purchases for the week amounted to $26,889,524.02, Denver regional offices to consult with representatives of farm including $26,300,000 for Lend-Lease (schedule attached) and cooperatives to ascertain their needs for farm equipment. $589,524.02 for regular purchases. Work is continuing the development of & procedure for Unusual requisitions for the week included 14-250 KW turbo the selection of an advertising agency. Progress is being made generators with controlling switchgear for Russia; 4,441,800 in the preparation of a publicity guide to be issued to the yards of sheeting for Algeria, Morocco and Tunisia and 20 regional offices in order to secure some uniformity in publicity cranes with swinging boom and spare parts for France. practices and procedures. Unusual purchases for the week included 67,200 pounds of A survey has been made of surplus X-ray equipment on hand. aluminum covered paper for Russia; 55 Anti-typhus units for It appears that only comparatively small amounts of such equip- UNRRA and 194,964,348 pounds of GRS synthetic rubber for the ment have as yet been declared and that the demands of insti- United Kingdom and Russia. tutes having priorities under the Act will leave no such equip- ment for commercial sales. The Office of Scientific Research Total Lend-Lease carloadings for the week amounted to and Development indicates that it will soon declare a large 3,595 cars. number of scientific instruments to us and to the Defense Plant Corporation, which they would like to see sold to educational The Price Adjustment Board disposed of five 1942, two institutions, hospitals and similar organizations. Although the 1943 and one 1944 cases, recovering excessive profits in the bulk of this material will be declared to the Defense Plant amount of $165,000. Corporation, the Office of Scientific Research and Development is of the view that both groups of property should be sold to- Work is continuing in the preparation for the hearings on gether and we indicated our willingness to cooperate with the he Potomac Electric Power Company's proposed allocations of Defense Plant Corporation in the development of a program for rate reduction. The Federal Works Agency, the Department of the sale of such property. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. - 4 - Justice and this office, have agreed upon the strategy to be LEND-LEASE followed. TREASURY DEPARTMENT, PROCUREMENT DIVISION STATEMENT OF ALLOCATIONS, OBLIGATIONS (PURCHASES) AND At the request of the Bureau of the Mint the Procurement DELIVERIES TO FOREIGN GOVERNMENTS AT U. S. PORTS Division is participating in negotiations looking forward to AS OF MARCH 24, 1945 the settlement of claims arising from the termination of the (In Millions of Dollars) American Nickeloid Company contract for the manufacture of Administrative Miscellaneous & war one-cent pieces. The Company has asked that the settle- Total U.K. Russia China Expenses Undistributed ment include an allowance for anticipated profits. If an agreement is reached, the General Accounting Office will be Allocations $6020.4 $2628.1 $2457.4 $172.9 $18.6 $743.4 consulted before actual payment is made. (6014.3) (2625.0) (2457.4) (172.9) (18.6) (737.4) Requisitions not $ 115.5 $ 26.0 $ 23.6 $ .4 - S 65.5 Administration: Cleared by W.P.B. ( 115.1) ( 22.5) ( 42.4) ( .5) - ( 49.7) The Toledo Medical Depot is expected to be transferred Requisitions $ 140.0 $ 20.7 $ 19.0 $ 1.1 - $ 93.2 from the War Department to Treasury on or about April 15, but in Purchase ( 167.7) ( 19.4) ( 27.3) ( 1.6) - (119.4) not later than May 1. Obligations $4784.2 $2100.7 $2113.5 $105.2 $17.4 $447.4 0 The overall personnel situation is beginning to show an (Purchases) (4757.9) (2094.5) (2099.3) (105.1) (17.3) (441.7) improvement. Deliveries to Foreign $3707.2 $1882.9 $1591.6 S 30.4 - $202.3 We are working with the Bureau of Accounts and the Gen- (3085.5) (1631.1) (1366.3) ( 26.4) - Governments at U. S. ( 61.7) eral Accounting Office on plans to simplify certain accounting Ports= forms and procedures with a view toward reducing our operating costs. =Deliveries to foreign governments at U. S. Ports do not include the tonnage that is either in storage, "in-transit" storage, or in the port area for which actual Plans for the transfer of the state of North Carolina from the Washington region to the Atlanta region have been completed. receipts have not been received from the foreign governments. Note: Figures in parentheses are those shown on report of March 17, 1945. Regraded Unclassified PRECISION 4/20/45 75 LET GERMANY EARN THE PEACE Including an outline of THE MORGENTHAU PLAN and comment upon it by SAMUEL GRAFTON MICROSTAT R$9. u. 5. PAT. OFF. MICROFILM BOLL NO. RECISION TRADE MARK 75 FOREWORD Once again, at in Abraham Lincoln's day, the time approaches when a is necessary for "the government of the people, for the people, and by the people to dictate price tergis to those who have tried, unsuccessfully, to caise * to "perish from the earth." The phrase, "givernment of the people," states a basic truck, It is for - the people, who constitute the government of the United States, to my whether Germany shall have a. hand" or "Mit" peace. We will my it with our voter, VP will my it by - by our discussions with our fellow chinos. This, our decision, will by the shout, important, move - we will or have the opportunity to male. A wise decision will delay, if not provid, another with in out time: As unwise one will suintly shorten the time hiven the posible close of World War II and the opening of World War III, purhaps, eyes, provide the cause for World War If to continue indeffutely. WHAT KIND Because only 45 informéd people can make wise decisions, the New York Post Syndale is presenting in this book several plan which have boen suggested for formulating the peace with Germuny. OF PEACE The most controversial official plan for deuling with Germany was 00 September 24, 1946, by Henry Morgenthau, Secretary of the Treasury of the United Suin. Briefly, this plan proposed that Germany be SHALL WE convented into * prodominantly agricultural country by internationalizing the Ruhr, bealt of her heavy industry, and distributing to other nations, as reparations, the machinery of her war plants. MAKE WITH This plan has been suragely attacked, and as warmly defended, accued- ing to the point of view on TWO basic questions: (1) la this plan. likely or GERMANY? unidely to grevent the rapid economic rehabilitation of Europe generally, and (2) will the slower rate of economic rehabilization, which this plan would bring to the ance now known 45 Germany, help or hinder the recon- struction of Europe. Quite naturally, the author and his supporters believe in the negative side of both of these questions. by Samuel Grafton Mr. Samuel Grafton, columnist, author, and commentator, loss pre- senord, in two separate series of column ankles, the most imeresting and thought proviking plan, offered by any unoticul source, except, perhaps, the equally controverial Vanittart plan. Mr. Grafton's views have been gaining wider reception in Europe and Aus, a well at in this country, This book originally appeared in revial form in the because of the simplicity of the course of action be proposes. He suggests that the moid undul attitude toward the Germane " one of letting them NEW YORK POST accept full responsibility for their uwn future in the working out of # peace Copyright 1943 by New York Post and Samuel Grafton plan, or . serio of peace plana, acceptable to us. Whether - takes the Gen change five years or filly years LO this does nbt disturb, in any way, the busic soundoes of the idea: because, in the meantime, the United Nations will be in corerol under amitica terms. The New York Post has recommended very serious consideration for both the Grafton glan and the Morgenthau plan. In some form, each can be useful within the (ramework of the other. Non: A being Singraphy of Mr. Sumul Grahm appears - the - back - of this book. Regraded Unclassified 75 CONTENTS FOREWORD INSIDE FRONT COVER SECTION 1. "What Kind of Peace Shall We Make with Germany? PAGE 5 SECTION 2. "What Shall We Do With Germans?" PAGE 13 SECTION 3. "The Morgenthau Plan", by Sylvia F. Porter PAGE 27 SECTION 4. "New York Post Morgenthau Plan Editorial" PAGE 35 BIOGRAPHICAL Sketch of Samuel Grafton INSIDE BACK COVER RECISION TRADE MARK MICROSTATI MICROFILM ROLL NO. 75 What Kind of Peace Shall We Make With Germany? CHAPTER ONE We're Fresh Out of Peace Treaties There is, actually, no reason why - should sign a peace treaty with Germany for ten, fifteen or even twenty years after the defeat of Hitler. Most of the legal and constitutional difficulties barring prompt use of American force to prevent future German aggression simply evaporate if we substitute the idea of a. long armistice for that of a formal peace. It seems to me that the best way to make sure this was really ends is not to end à. If, then, Germany should violate any of the armistice provisions, mili- tary force could promptly be brought into play against ber. No new dec- laration of war would be needed. It will be the same war. Let's Let the War Go On Let the war, as a legal concept, simply go on indefinitely, in the form of an armistice. It would be a war in which there was no shooting, and that will, after all, be pleasanter than the last peace, which was so often inter- rupted by the sound of firearms. There is no reason why every war must promptly be followed by a formal peace treaty. That is merely an assump tion which we have all accepted and swallowed without much examination. A peace treaty is an extermely valuable document to a defeated nation. It sets it up in business again. We gave Germany a peace creaty out of hand, last time, she promptly proceeded to spit upon it; she bent all her energies to skilltul violation of it. This time, let us make her use her might and guile for a generation merely to obtain for benelf what she so despised on the previous occasion. Make Germany Work for Peace in effect, let us make Germany, too, like every other nation on each, work for peace. Before the long armistice were over, Germany would have come to value peace, formal peace, as deeply as any nation has ever valued it, and once she had obtained that long-delayed and precious legal instro- ment, she would cherish if with a wholly new appreciation of is beauties. 75 What Kind of Peace Shall We Make With Germany? The long armistice would be self-enforcing, to & considerable measure, for any German who violated in terms, and thereby further postponed the CHAPTER TWO consummation of peace, would draw upon himelf the attention of the entire German nation. No bero be, this time, but a marplot, who prolongs the was. Don't Call It Peace To German queries as to when we propose to make a final peice, our answer might well be: "Take your time, pal. No hurry. Make a somewhat The best defense against future German aggression is simply to continue better Germany, and we shall see what we shall NO." I confess that I relish the present war, after the shooting ends; to continue it in the form of an - certain touch of diabelism as well as of democracy in a acheme of things indefinite armistice, without concern as to whether it lasts ten, fifeen, or which would place upon Germany the burden of solving the German even twenty years. problem. It seems fairly clear that we must throw out of our current thinking the perspective of * formal and final peace tresty with the German nation; The Long Armistice discussion of such a treaty is like discussion of a marriage contract with a A long amistice, in place of A formal peace treaty, would profoundly boy who has still to be born, to go to school, and to grow up. alter the dynamics of the relationship between Germany and the rest of the Shooting Stops, but War Goes On world. There could be no German revisionist movement, because there would be nothing to revise; Germany could hardly beg for a peace treaty, The concept of a permanent armistice merely puts into legal form what and denounce it, at the same time. Instead of à Germany trying to see how has been the actual fact of the relationship between Germany and the rest far she could & without provoking I declaration of war, NE would have a of the world for the last thirty years. For nine of those thirty years, or almost Germany trying to discover what she must do to end the war. one-third of the period, Germany has been engaged in active, shooting war Meanwhile, the Allies would emain, in truth, Allin, for Germany's with most of the rest of the world. For six additional years, 1933 to 1939, unconditional surrender would merely mean the end of shooting, not the she has manifested a malignant and unconcealed hostility toward other end of the was. The war would continue in the form of an armistice. That, nations. For fifteen of these thirty years, therefore, the relationship between in point of fact, is what actually happened last time, only we did not know Germany and the world has bem one of war, or incipient war. The proposal it was an armistice. This time we would know, and we would realistically for a permanent armistice is a proposal that we rop calling such a state of call it that. This was would end only when a Germany had at last evolved affairs peace, and that we all it what it is. which was fit to make peace, and could be trusted to make peace. And can it The thought is, that the best we have to offer Germany is an aemistice, really end before that day? until à new Germany arises, with which the world can safely conclude a formal peace. The anner to the threat that Germany may immediately begin to plan a new war is that we will not let her out of this one. The shooting stops, but the war goes on. Under such an arrangement, Germany would not be inclined to make little experiments in hostility, DO see how far she could go without provok- ing a declazation of war, for the existing declarations of war would remain in effect, and German violations would be put down as routine by Allied feld commanders. 7 MICROSTAT/ PAT. MICROFILM BOLL NO. RECISION TRADE MARK 75 What Kind of Peace Shall We Make With Germany? The Permanent Armistice The purpose of this procedure would be to allow time for the emer- CHAPTER THREE gence of a Germany which shall be thoroughly sick of war, and anxiously desirous of stable prace. When such a Germany does arise, the signing of a formal peace treaty with her will then be only a reduction to writing of a Let Us Wait for the Facts astisfactory state of affairs already achieved; instead of the expression of a pious hope, The time for a formal peace treaty would arrive naturally, in The proposal for a long armistice with Germany, rather than a peace due course, and when it came, the treaty itself would be a. mere formality, treaty, an armistice of even ten, fifteen or twenty years' duration, would allow for . certain wholesome flexibility in the world's relationship with rather than - hysterical, a prioei, whipping together of gadgets and Germany. We could make an initial attempt to set up à sound economic incantations. base for the German nation; if that failed, we could revise the plan, or Germany has patiently taught the world that its normal relationship adopt another, without the bewildered and awful feeling that the sacred with it is one of the was. The policy of a permanent armistice would be a terms of . sacred treaty had been violated, and that the peace had been a sign that we have learned that Imson, and accept it. It can be an amiable failure. armistice, if Germany proves amiable. But the continued existence of . formal state of war would teach Germany that peace must be worked for; No More Midnight Inspirations that Germany cannot hope, continually and automatically, to receive peace, The worse of a formal peace treaty is that it attempts, without experi- each time, ALL a reward for having waged war. ment, and in advance of the facts, to solve all problema. But once the formal treaty is written, it becomes our only basket, and all our up are in it; it Through War to Peace develops a mystic value of ins own; and we have to defend it, even after we have lost confidence in it. The great question in German politics will then be how to get out of A tresty is the basic law of the land, but it is a form of law not subject the war, how to transform the long armistice into a peace; and it will be a to amendment, except by ruch hysterical processes as led to the grudging salutary change to compel Germans to debete the question of how to make Dawes and Young plan revisiona of last time. The policy of an indefinité a peace, enther than how to break one. We may then legitimately hope that armistice would give the world time to make several tries at the economic the new heroes of German politica will be men who will come forward with re-establishment of Germany, when, finally, a condition of stability had been reached, the writing of a peace treaty would be merely the making of plans for a general reconcilistion with the world. a transcription from reality. Whatever plan had proved practical would It will be sees that this appeoach is profoundly democratic, in that it become the basic plan of the final, formal peace. actually leaves the question of Germany's future to the Germans, And who The policy of a long armistice would allow 15 to try out several alternate will say that a generation of formal, declared war with a real peace at in pesce plans," if necessary, and that is substantially better than committing end will not be wholesomer far than our previous experience with a genera. outselves, a priori, and forever, to the midnight inspirations of some per- vous and haggard conference. tion of false peace, and war at its end? Call It an Armistice We have been frightening ourselves for years with our own talk about the horrid danger of "losing the peace"; but we have made most of these difficulties for ourselves, by setting + the doctrine that we must have a formal treaty at the outset: that we have only one chance to make a good peace, one solemn and awful throw of the dice. But we cannot "lose the Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 75 What Kipd of Peace Shall We Make With Germany? peace" if we continue the war, in the form of an armistice of unlimited duration. CHAPTER FOUR The policy of a long armistice would keep - here in America, on our toes to maintain the peace, it would not have the effect of lalling us into that long sleep into which formal peace treaties have - way of walting our Peace First, and Then the Treaty unimaginative and idealistic republic. I use the word "ideslistic" in its wont meaning, of course, to expens our wonderful faith in formalities and The policy of a long armistice with Germany, an armistice of decades, gadgets and in the surface appearances of things. if necessary, rather than a formal peace treaty, would compel both sides to A formal peace treaty would be the isolacionists" one-way ticket out of Europe; not the beginning of - chapter of international collaboration, but approach the postwar problem with - beightened sense of realism. There the end of one. are certainly men in Germany today who are only waiting for the peace We do tell ourselves that, even after the peace treaty, we shall have to treaty to be written, so that they can make political livings for themselves watch Germany closely, we shall have to keep her from building munitions forever after by denouncing it. We do not know the names of this new cast of war, we shall have to supervise her international conduct and tendencies. of characters, but that they will appear is certain; give them a formal, final This necessity for close supervision, these dark stigmata of suspicion and distrust, are not the characteristics of a. peace, they are the characteristics of peace treaty, and you give them clireers, careers of revisionism and an armistice. Let us all it an armintice. We shall be more likely to do what denunciation. we should, if we call things what they are The Next German Hero Let Us Wait for the Facts Surely we know enough about the easy demagogy of revisionist politics Thus, though the shooting stops, the war continues, and as against to be certain that the first German who denounces the sew treaty, the Junkerdom's restless passion for planning the next war, le us oppose marning after it is written, will become a national hero. democratic stubboenness in refusing to terminate this one. If a new Hitler To present the Germans with a blank, instead; to offer them only the should appear in Germany, he could be handled di routine by Allied field communders, without need for a special blessing by Senator Berton K. barren nothingness of . permanent armistice, an empty space which they Wheeler. Contrariwise, if, under these pressures, a Germany emerges in 4. must all in with their own ideas, if they have any, is the only procedure comparatively short time which can be trusted to keep the peace, we can which can compel the Germans to come to grips with the ultimate question shorten these perspectives. of their relationship with the world. But let - wait, this time, for the facts. Though that should take twenty Versilles made it rather too easy for the sinister figures in German years, it would not be too long. Let - move into the house of peace when politics; they did not have no try to salve Germany's problems, it was enough the house is built, and tested; in a not, as last time, make a migpie's next for ourselves among the bluepeints. to be against Versilles, and to shoot in the streets those Germans who had found themselves compelled to sign it. A Winter Among the Commas We must proceed this time under a schedule of operations which makes the formal peace treaty a remote objective, to be achieved only after Germany shall have thrust forward men and movements fit to make a treaty, so that when treatytime finally comes, the entire German nation will be eager for it, and so that the unknown German stateuran of the future 10 11 RECISION TRADE MARK MICROSTAT/ Mo. u. 1. PAT. OHF. MICROFILM ROLL NO. 75 What Kind of Peace Shall We Make With Germany? who finally succeeds in establishing . treaty relationship with the rest of the world will be the true German national hero, one for whom the Ger- mans will build statues, and after whom they will name streets. We have our own supply of Congressional demagogues, too, who have long promised themselves . party when the peace treaty is presented to them, & wonderful winter of reveley amid the commas and semicologs. There are Americans, 500, who will find it pleasanter and essier to base their careets on attacking a document, rather than on solving the problems of the real world. The policy of . more-or-less permanent armistice, instead, during which we can actually try out our peace plans for Germany, rather than risk WHAT everything on writing one plan in advance, like - prophecy, will enforce a higher realism upon such men. SHALL WE Peace First, and Then the Treaty We can thus gain experience in living with successive German gov- DO WITH emments and movements, and, when, finally, a condition of stability has been attained, that will be the peace, It will only be necessary to write down GERMANS? on paper what has been proved in practice. The policy of the long armistice would permit os to avoid armchair philosophizing, a peiori ressoning, and also, meaningless harshness toward the conquered; it would enable us to draw . line between punishment and reconstruction, handling each sep- by Samuel Grafton arately, and avoiding the messed and againated tangle of the two which customarily makes up a peace treaty. Let us not, this time, cry: "Peace! Peace" until we know we have peace This time let there be peace first, and then the treaty, rather than the treaty liest, and then the wir. 12 13 RECISION TRADE MARK MICROSTAT MICROFILM 75 What Shall We Do With Germans? CHAPTER ONE The Final Battle of The War It seems to me we are going to run into serious trouble if we depend on "truls" after the war to rid the world of axis leaders, great and small. What will keep us going until the job is done? A spirit of revenge? But the revenge motive (as Somenet Maugham once brilliantly pointed out) is 40 anachronism in western life. The lust for revenge is no longer 4 respectable emotion among us; our writers haven't dared use it as - motive in fiction or drama for decades. The last great revenge play was "Hamlet," and it took Hamlet five acts to make up his mind, and then be bungled it. Must We Have Trials? = Louis Nizer's book, "What to Do With Germany," proposes trials of axis leaders and axis criminals; and yes the most persuasive section of this fine book is that which shows how completely we failed to go through with our proposed trials after the last war. Mr. Nizer outlines a more eficient system of courts and judges this time. But even be, a sound legal scholar, draws the line at depending on trials for the 5,000 top Nam. He ado that they be executed out of hand, as a. condition of the armistice. We have a tendency to slide into legalistic arguments about the "trials" of axis war leaden. These are arguments about the form of things. We must not forget the content of our problem, more important than the form, The content of our problem is that we must break the political power of the axis leaden and subleaders forever. Make It . War Aim Our problem is not to try them, not to judge them, but to smash them; to smash them as a condition of our own survival, now and after the war. The very concept of à trial shows the we suspend judgment. Or, if we do not suspend judgment, we are insincere in talking of trials, for a trial is a suspension of judgment. I do not want to ser the leading elements in axis 15 75 What Shall We Do With Germans? countries tried as criminals; I want to see them destroyed as enemin. Their destruction, political or physical (eicher will do), should not be - separate, post-war issue; it should be encompassed as an act of war, 45 a CHAPTER TWO part of the war, as a condition of bringing the war to an end. I don't know whether we are entitled to sit in judgment on our fellow- How To Lose In The Last Round creatures or not, but I de know we are entitled to light our mortal enemies. The perminent exile, or imprisonment, of at least 100,000 members of If we set up a system of courts Bür try axis war leaders, great and small, the leading circles in Germany, and equivalent numbers in Japan and Italy, these leaders will, of course, become prisoners immediately the armistice should be one of our was ama, - unchangrable war sim, not subject to begina, They will be subject to the mercies of these courts. But they will trial. This would be . clean and bonest act of war, in line with the morality also be entitled to the protection of these courts. of was, which is the destruction of the enemy by force. Oddly enough, therefore, the first administrative result of any system of "trials" for axis leaders will be to save their lives, Our courts, however The War's Last Battle constituted, will have to insist that their dignity and onderly routine be This would seem to DE far more honest than to try to invent courts, and respected. Revolution against fascists will become contempt of court. to write statutes, after the offenses complained of. In line with this view, I do not care whether Hitler is considered a criminal or not; I know be is . The Day Will Pass military objective. There in no way out of this dilemma if we insist upon "trials" for the These exiles should be ordered as a simple act of military government, one hundred thousand or to leading members of the Nazi apparatus, Our the removal of dangerous persons, A guard should be set up over them, soldiers, storming into Germany for the destruction of fasciam, will find wherever they are sent. No doubt many Poin, for instance, would be will- thrust upon them the final, ironic function of becoming & police squad to ing to establish ruch a uniformed guard as an honorary, life-time service. protect the fasciat leaders from harm. We should dismantle the fascise political apparatus as unemotionally and We know that moments of deep, popular excitement, when the politi- as automatically as we propose to dismantle the fascist armies and was cal imaginations of men are really stirred, when they are really mady to plants. There seems to me no room or need for trial procedure in any of make fundamental changes, are rase and brief; perhaps a day in a. century. these areas. A system of "trials" for axis leaders will make revolution illegal on the Perhaps the Germans themaelves, knowing this to be one of our war only day on which it could possibly happen. The moment will pass. The aims, might oblige us by rising and disposing of the 100,000 before we cold routine of ordinary Mondays and Thursdays will succeed. The passage arrived. Well and good, those Germans who did our work would show of a year will save half of the one hundred thousand leading Naria from themselves to be on our side. But this job must be done, either as an act of punishment; the passage of two years will save almost all of them. revolution or an act of war; 4d part of the war, as that which gives meaning The very essence of the "trial" plan is its postponement of the critical to the war. This will be, in effect, the final battle of the war, and ve cannot decision; and every criminal lawyer knows the enormous value of post- separate it from the was without losing it. ponement. There Is a Compromise The only possible compromise, therefore, between our own desire for order, and the desire of the plain people of Europe to be tid of their fascists, 16 17 75 What Shall We Do With Germans? is to make the immediate and perminent exile of 100,000 members of the leading circles in Germany one of our war aims; an act of war, I part of CHAPTER THREE the war, a condition for beinging the war to an end. It may be asked why I suggest instant and automatic exile, instead of trial and potential deach sentences. That is because I am not impressed by Only History Can Teach The Germans our ravings and fumings, I do not believe we ever shall, or even can, methodically kill 100,000 human beings in time of peace. I ask that we If I were asked to become il tescher in the German schools after the stick to the possible, and do it, rather than reach for the impossible, war, I would insist on using "Mein Kampf as # text-book. 1 would make and fail. the little Germans in my class memorize the entire volume, page by page. I ask that we dismantle fasciam systematically, by socially tolerable I know they would hate me, as . foreign teacher imposed upon them by and socially permissible means, rather than give ourselves the luxury of force, and so 1 would try to make them hate "Mein Kampf," too. 1 would dreaming up all manner of horrid, violent ends for fascism, only to come make them sick of it, as well as of me. out of our own emotional stew refreshed, purged, and ready to let it pass I exaggerate, I spoof, yet this seems to me at least as practical as any without orally doing anything. other scheme for "educating the Germans" I have come across. Who are the golden minds among us, screne, poised, with all problems solved, ready An Inseparable Part of the War to do the educating? Shall we tell the Germans how capital and labor ought I know that the fascists of Germany will be much more borrified by a to deal with each other? But we are still in the process of solving that one proposal for cool and methodical exile, as a condition of the armistice, for ourselves. We haven't found an answer for home use yet, let alone for than by all the bloodthiesty demands for "trials," "justice," the gallows, etc. export. The military governor of an occupied acea in entitled summarily to remove dangerous persons from regions under his control, and who will No Answers for Export say that a trial is necessary to establish that I known fascist functionary in We are still in à great, frightful rage with each other over NO old - a dangerous person? A more act of identification will suffice. American problem as state-federal relationships, yet many of us do not I also suggest that time will pass for us, 100, while it passes for the doubt that we are quite ready to go across and tell the Germans how to live. prople of Europe, - the spectacular "trials" of the fascists are awaited. What shall we teach the Germans about "democracy"? Shall we teach them There will be demands here for an end to occupation, for bringing the to believe in collective bargaining and the closed shop? But our own minds boys back home. Time will sharpen our desire to get out of the mess by any are not yet made up on these points, and one can imagine the Congressional means at all, preferably an easy one. We can avoid this danger only by uprosr that would follow any such attempt to indoctrinate Germany. making the destruction of the fascist system the final battle of the war, an Shall we teach the Germans that every man and woman ought to be inseparable part of the war allowed to vote, or that there should be a system of poll-taxes? Either choice will lead to # frantic argument back here at home. The German pupils will listen while their American teachers quarrel. Let's Stick to the Possible Once again I ak that in our approach to the Germans, we stick to the possible, and realize it, rather than reach for the impossible, and fail. 18 19 75 What Shall We Do With Germans? A new way of life does not start in the schools; schools merely reflect whichever way of life already exists. We Americans are not democratic because we have democratic schools; we have democratic schools because CHAPTER FOUR we are democratic. Schools pum up the answers which society has resched. But society nut liest reach the answers, of and by itself. The "Hard" Way or The "Soft" We are already putting the Germans through one important educational experience, by beating them. We are already teaching them a great lesson, Let us start with the question of whether we are at war with the German the lesson of the failure of fascism. That in truly how a society learns. I people, or only with their leaders. The question answers itself. We are at suggest that in our approach to the German people, we build os this begin- war with whomever is at war with us. This if a little German jungfzes is ning. I suggest that we address the German people in the following terms. stuffing machinegun belts for Hitler, we are at war with her, even if she is "Germans" We are going to exile many thousands of your leaders. We only 17, even if she is All cute as apple pie, and even if she has never had #. are going to occupy Germany, We are going to dissolve your state; you are political idea in her life. not to have army, navy, munitions factories, or foreign policy. As for the I go further: There may be # German worker, polishing artillery shells, rest, we my this to you: who secretly hates fascism; who in his heart of hearts, loves democracy and prays every night for Hitler's downfall. Are we at war with him? The They Must Solve Us answer is obviously, yes, This is not # Chekhow war. We are not interested "We do not love you, we do not hate you. You are caught in a certain in a. people's secret thoughts, but in the work of their bands, If their hands historical predicament. Very well, then, get out of it, as best you can. It is help Hitler, they are our enemies, though their hearts be breaking. not our problem. It is your problem. Try to solve your problem. We prom- Shall We Be Soft or Hard? ise you nothing. Run your schools as you please. If you pick unsuitable Now, it has been suggested that . "soft" attitude toward the Germans teachers; very well, you will pay the penalty, the occupation will be may encourage them so make a revolution; that is, if we promise to feed prolonged. them after the war, to let them run their own affairs, if we guarantee their "It is your problem, we cannot solve it for you, we do not intend 00 independence, they may be stimed to an sprining. This is the "bait" theory, try. Your past mistakes have placed you in # predicament, out of which, it which holds that revolutions are obtained the way mice are trapped, with # to happens, you on emerge only by convincing us and persuading us that bit of cheese. Actually, the "soft" attitude only relieves the pressure on the you an be trusted. You are not our problem, for we intend to make our- German people. selves safe against you, whatever happens. But we are your problem. You If we are going to be amiable, anyway, after our victory, then the Ger- must solve a. mars may safely continue to brood about life and polish artillery shells. "Very well, then, solve us. It is you who must answer the hard ques- Oddly enough, the mechanical adoption of # "hard" attinude has much tions, not we It is a matter of indifference to us whether you succeed in the name effect. If conditions are going to be intolerable after the war, if answering them, or not. le is up to you, whether you care to face the ulti- we are going to kill, sterilize, partition, etc.: then, again, there is no reason mates at last and whether you care to think your way through your for the Germans to act. If the matter is out of their bands, then it is out of predicament." their hands, and that in that. Let the Germans Solve It All our specific plans, therefore, from partitioning Germany to teach- 20 21 75 What Shall We Do With Germans? ing in the German schools, are a little silly, because they relieve the German people of the necessity of making a choice. If it doesn't matter what they CHAPTER FIVE do, then it doesn't matter what they do, and there is no need for them to do anything. Not "Hard" Not "Soft," But Democratic Our planning, hard, soft and medium race, merely cushions the Ger- mans against reality, and encourages them in their inertness. We are forever Our attitude toward the Germana should not be that WE propose to "filling in the future" for the Germans. We break our heads over such solve their problems, but that we have no solutions and intend to leave questions as "Are there any good Germans? Are the Germans # sick people? them unsolved. Are they incurable? Can they be re-educated? Who shall teach in their This may sem heartless, but it is also honest. For, in actual fact, we schools?" have no solutions. We have . solution only for our DWN problem, which is No Way to Teach to smesh the fascist power. Our solution of our own problem will seces- sarily leave all manner of loose ends dangling. Where shall Germany sell But it is the Germans who must be made to break their heads over her goods? Who shall nin whatever governing functions we leave to the these questions. It is precisely by straining against these problems, by Germans? Who shall teach in the German schools? It seems like a formless struggling with them, that the Germans will re-educate chemselves, if at and uncomfortable future for Germany, it is prickly with questions. all. We cannot reform the Germans by answering these questions for them, But we are not in the tying-up-lome-ends business: we are in the any more than we on teach à child algebra by doing its problems for it. smash-fascism business. Let us say frankly that we know the answer only So, our first step in solving the German problem is to make the German to our own problem, which is to make ourselves sife. people face it, to give them a sense of the blankness of their own futures, To leave the Germans thus, naked on the side of the mood, facing to convince them that their futures are not "filled in," but empty, beyond reality, facing ultimate responsibility for their UNIS futures; this should be the merest police surveillance, that if they want something more than that, our attitude, our only attitude toward them For there is no educational they had better, in their loneliness, and faced by our indifference, go to process we could devise for them which would be half so rich as to compel work on the problem. them to all in, for themselves, the empty spaces of the unknown future that What should our "attitude" be toward the mass of the Germas people? gapes before them. It should be that we have no attitude. If they want un to distinguish good If we NT up * complicated plan for the Germans, complete down to Germans from bad Germans, they had better find some way of establishing democratic indoctrination in the kindergartera, then we give the German the distinction themaches. something to fight we give them, in effect, a rallying point; we give them slegans. The new German leaders will then not have to have plans of their own, it will be enough to be against our plan. For this and other reasons, I would give the Germans no plan at all, beyond the metest police surveil- lunce, I would give them a round, ripe nothing, and bid them fill it in. Perhaps, under these challenging pressures, it will occur to them that they had better convince us that there are two kinds of Germans, "good" and "bed" If so, it is their problem to make us believe that. It is not up to us to disentangle one kind of German from another; is is up to the Germans 23 22 75 What Shall We Do With Germans? to disentangle therroelves, possibly by making a revolution before the war ends. le is not the United Nations' job to solve all German problems; it is up CHAPTER SIX to the Germans to solve the United Nations problem. Let us say the war ends, and they have made no revolution. Very well, we continue our same challenging attitude. (It is one of its merits that it is The Danger of The Unfinished War equally serviceable for war or peace) We occupy Germany, concentrating on our military safety, That is our problem, and we will solve it. The Ger- During war we think of the top German fasciats as deadly enemies who must be destroyed. What reason, if any, exists for changing this attitude mans will have shown 4 certain incapacity by not removing their own top fascist Indership. We accept this German demonstration of incapacity. We the moment peace actives? dissolve Germun state organs, and ME police the German nation. Must we, on that day, stop thinking of German fascists as deadly enemies to be destroyed, and begin to think of them only as criminals to No, not the German nation; for it is no longer a nation; we police the German land. If the Germans want a nation, it is up to them to invest one be tried? Or perhaps not even as criminals, but only as indicted men, What about foreign trade? What about schools? If these questions presumed innocent until proves guilty? = pinch, let the Germans meet, let then talk, let them sit in their rooms and The only difference the coming of the armistice should make is that it ought to give us the right to substitute methods of peace for methods of stare at reality; let them make offers. It is not up to us to specify the size of the postage stamps in Utopia. it is for the Germans to grapple with the war in carrying out our policy. But our policy must remain the same, the future, if they wast . future. Should they choose to play silly games, to destruction of the fascist power. flaunt nationalist flags, as they did last time, we shall take appropriate No Solution Short of Exile measures to prove to them that such exercises an not solving their problem. That is why I see no solution short of the instant and automatic exile, We do not know whether the Germans can find solutions. But let us be without trial, of, say, the 100,000 top Nazi functionaries. That alone can bonest. We do not know whether we can find them, either. If our attitude be the logical culmination of the war, to be carried out as the final battle forces the Germans to realize the meaningfulness of their actions or nos- of the war. action, tow and after the war, ve shall have made a contribution; we shall The great danger is that we may tend to make too sharp a differentiation have forced the Germans back into the community of men seeking their way. between the period of wat and the period of prace. Our high political It will be sees that this approach is neither "hard" nor "soft." It is policy should be a. continuing policy, equally valid for war and peace. The profoundly democratic, in the service that it concedes that what people da in chief diference between was and peace should be the difference in methods important, that their decisions and actions really matter. We avoid the used for carrying out our policy. Naturally, methods change when the about postulate that we know the answers armistice arrives, but policy itself need not change and should not change. Why Let It Become Another War? It will be strange and wavering conduct on out part to light a. desperate war for the purpose of destroying fascism, and then, the moment ve win the war, change over to another purpose entirely, that of putting fascists on trial for horrible, condemnable, but still only collateral offenses, called atrocities. But the most atrocious fascists have probably committed no physical atrocities. 24 25 75 What Shall We Do With Germans? How, then, shall we handle Julius Streicher, publisher of the infamous and pornographic "Der Stoermer," which has poisoned the minds of a generation? Under the blearily legalistic "trial" system, the went we could probably do to Streicher would be to deny him second-class mailing privileges. The proposal that we stage "trials," no matter how well-meaning, is # proposal that we shall not do what we are at war to do, the moment # becomes possible to do it. Let us keep our sights up. This is not a was about atrocities, though atrocities have been committed during the war. It is not a war about the Hague Conventions, though the Hague Conventions have been violated. It is a war about fasciam. If the coming of the armistice changes our pur pose, then it will not be an armistice, but a subtle and concealed defeat. THE s They Will See the Trains Leave Let us keep our sights sp: It is our job to dismantle the Name Party as MORGENTHAU unemotionally and methodically as we propose to dismantle Name arms factories. PLAN This is our task, by methods of war so long as the Germans prefer war, by methods of peace when they time of fighting. The task remains, through war and peace. We are liberators, not judges. We are liberators, not school teachers for the children of Germany. We are liberators, and unless we by Sylvia F. Parter liberate, unless we physically remove the fancist bureaucracy to a place of exile, all our schemes for democratic schools and democratic trulley can and democratic porridge for the new Germany will be window-dressing to hide a failure. But if we do remove the fascist buresucracy, without trial, on mere identification, then all these subordinate problema instantly become more manageable. It will not seem nearly so hard then to teach the German children that fascium does not work. They will actually have learned that lesson before they come to school. They will have seen the trains leave, carrying the fancista and fascism to the border and oblivion. 26 27 The Morgenthau Plan CHAPTER ONE Why They Fight The Morgenthau Plan Powerful forces both in the U.S. and Britain are inspiring the opposi- tion to the so-called Morgenthau plan for reducing postwar Germany to - predominantly agricultural ration-for the simple reason that they ware a. strong industrial Germany to offset the "threat" of a strong industrial Restia. And although these groups in both countries are making 40 intense effort no ridicule the proposal and have * shoved aside as grotesque and impracticable, informed Washington sources revealed today that the Treasury's scheme in "still very much alive." It has not been repudiated by the President, as was reported this past weekend. The Men Against It Os the contrary, there's A good chance that at least the main outlines of the Morgenthau plan will form the basis of our official policy toward Germany. The story behind the first garbled lesks on the Treasury's proposal and the suspiciously sudden storm of opposition which followed reaches deep into the pachs of "power politics." Dr's not just a question of an inter-cabinet argument on the best method to make sure Germany will be unable to wage another was in 15 or 25 years. Involved are the groups here and in England who fear Rumia, Once this key point in international politics is recognized, the pre- mature disclosure of the Treasury plan, which imperilled its position, and the violence of the criticiam are explained. The misleading stories about the Morgenthau plan published to date have almost obliterated the fundamental issue involved This, as authoritative sources per it, is one of viewpoint: (1) Shall we restore Germany to full industrial strength as soon all possible so that there shall be a balance of power in Europe and try to out the risk of war by maintaining controls over strategic industries? (2) Or shall we turn Germany in the direction of an agricultural economy and make another German war extremely difficult if not impossible? 29 The Morgenthau Plan The dominant groups in British government and industrial circles favor the first viewpoint. Remia's stand has not bem disclosed officially, but it is reported she CHAPTER TWO definitely will light any plan for rebuilding Germany on the same industrial basis. Here the split imolves the Treasury Dept. on one side and subordinate Rebuild Europe Without a Strong Reich groups in the War Dept. and State Dept. on the other, Secretary Hull is believed to be much more favorable to the Morgen- No matter how rigid we make our industrial inspection of Gennany in thau plan than his subordinates, led by James C. Dusn. the first postwar era, all common sense warns ui that in 10, 15 or 25 years, Churchill is said to less somewhat more toward the scheme than his our bitterness will die down and the initial Allied controls will be chipped subordinates, led by Foreign Minister Eden. away-which is a basic reason for Secretary Morgenthau's insistence that Germany's industrial might be slashed to à minimum from the beginning. Facts About the Morgenthau Plan The so-called Morgenthau plan starts out with the one fundamental objective of NO directing Germany's economy after the war that she never Here, for the first time, are accurate details of the Treasury's proposal: again will be able to threaten world peace. (1) Germany would be divided into two major parts, the north and Thus, the proposals emphasize the need for turning Germany into à the south, and each would function as a "urparate unit." The south would predominantly agricultural nation, for permanently eliminating potrotial be tied in with Austria and be made a self-sufficient whole through elimina- warmaking industries. Then, long-range inspection systems and outside tion of tariff barriers and creation of a customs union. The north and south controls won't be essential. would be divided by tariff barriers. Other schemes for dealing with Germany also may have that as a prime (2) All armament industries and potential war-essential plants would goal but they aim too at maintaining the balance of power in Europe and be eliminated and stripped. Machinery from heavy industry factories would be removed and given to devantated rutions. at creating à powerful Germany to offset the "threst" of a powerful Runsia. This, the plans worked out by subordinates is the Wat and State (1) There would be no cash reparations, therefore. Depts. itress the need for returning Germany to a strong industrial position (4) The Ruhe Valley would be internationalized and operated by . three-power commission. The Ruhr coal mines would be shut down is soon as possible. temporarily. (5) Imports of capital into Germany would be controlled and per- Basic Differences industries. mitted only for the purpose of developing agriculture or light civilian Although this may be over-simplification, it highlights a fundamental difference in viewpoint. (6) The Saar, à major industrial area, would go to France. Parts of And 44 Treasury experts see the argument, the Morgenthau approach Silesia and East Prussia would go to Poland. rather than the other is the realistic one. "The idea that we can maintain (7) The big German estates would be out into small farms. controls indefinitely over a developing industrial state is naive," one This is the fong-range economic policy. authority remarked. The danger of another war will not be in the next 10 years, when we may have strong controls. It will come after that, when we have helped rebuild Germany and when, in the natural course of things, our inspection system will be less complete." Reich Importance a "Myth" One of the hanbest criticisms of the Morgenthau plan has bern that it would undermine the economy not only of Germany but also of all Europe 30 31 75 The Morgenthau Plan because of the Continent's dependence on an industrialized Germiny for supplier and for purchasing power, This, informed Washington sources said today, "is a myth which has CHAPTER THREE been carefully natured by the Nazis." The dismemberment of Germany's heavy industrial plant and its trans- der to nearby lands devastated by the Nazis admittedly would lower the Wouldn't Uproot 30 Million Germans standard of living in Germany, but at the name time, it would help raise the standards of other countries. The persistent report that the Treasury's plan for turning postwar Belgium, Holland, France, Poland, Carchoilovakia, for instance, would Germany into a predominantly agricultural nation would necessitate the benefit tremendously from the receipt of new industries. The machinery deportation or emigration of 30,000,000 Germans is plain, downright and factories would give employment to millions, would swell payeolls poppycock-and there's not à line in the so-called Morgenthau plan that and create desperately needed buying power. even suggests this revolutionary move. 11 Instead of going to Gennany for industrial supplies, these nations No informed source gives this "scare numor" the slightest credence, a would find them within their OWD borders. check disclosed today. It originated out of the fint, garbled leaks on the Morgenthan pro- Not a Needed Market posals. And its constant repetition by presurrably emponsible columnists As for Germany as an essential buying market, that too cannot be is imperilling the whole public debate on what to do with Germany after backed up by fact. in 1938, for example, when Germuny was buying large the war. amounts of goods from other Europein nations to prepare for war, she was Here's the true story 00 that numer and on the German unemployment not of vital importance to any country. situation after the war. Only , per cent of the United Kingdom's exports, only 7 per cent of During the early, secret conderences on the Morgenthau plan, one of France's sales were to Germany. Not one country sent more than 15 per Secretary Stimon's off-hand comments was that "it would turn the clock cent of its exports to this nation. back to 1870." To be even more realistic about it, Germany won't have much money At that time, be continued, Germany's population was roughly 40,000,- to buy goods after this war, unless we turn right around and hand it over 000, compared with an estimated 70,000,000 after this war. to her. And what would happen, be asked, to "the extra 30,000,000"? His question was answered in detail by Treasury experts, who pointed A Higher European Standard out that Germany even now was virtually self-sefficient in most foods, that she would be more so when her population concentrated on agriculture, For a while, at least, the Treasury's plan formees a lower standard of and that, therefore, there would be 50 need for largescale emigration. living for the Germana but they would not starve by any means. Germany Stimson is said to have accepted the answer. But out of his first remark even now is a great agricultural country, virtually self-rufficient in dairy grew an unerly baseless numor. products, mest, grain, etc. What's more, AD examination of the facts indicates unemployment will What's more, Treasury officials see nothing wrong with a lower stand- be substantially smaller than advocates of a "soft peace" say. and for the Germans. "They asked for it," was the comment of one source. For instance, 8,000,000 to 9,000,000 foreign workers now in the Reich Simultaneously, though, the proposal sime at a more industrially will return to their homelands as soon as possible. balanced Continent. By the war's end. it is estimated that 5,000,000 to 6,000,000 Germans will have been killed or seriously wounded. Another 1,000,000 to 3,000,000 German prisoners of the Russians probably will be kept in Russia to help Soviet cities. That accounts for from 14,000,000 to 18,000,000 Germans. And, in addition, millions will find jobs rebuilding their homes. "Of course, Germany will have 45 unemployment problem during the 32 35 PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 75 The Morgenthau Plan initial transition period," informed sources state, "for millions will be demobilized and more will be released from admament planes, "But the major paint is that All agricultural Germiny can support its population." New York Post Editorial on Closing of Mines The Morgenthau Plan Another oft-repesced criticism of the Morgenthau plan involves closing September 27, 1944 of the Ruhr mines for # while. This, it in said, is unnecessarily banh and would deprive Europe of essential supplies. Let's Hear More Again, experts hint the purpose of this objection is "to throw a smoke- = acreen." If the mines anno't closed temposarily, the Allin will be forced to One excellent test of any plan for settling the German question is ask Germans back to operate them, A/t. obviously dangerous concession. whether it is likely to prevent the Germans from starting another war as As for supplies, authorities here are amused that England is not nushing soon as they recover from this one to the support of this suggestion, at least, for Britain's mines as med the Secretary Morgenthau has worked out . plan with that test in mind, problem. demand and this move would help her solve her own employment but the result is shocking to some people. The cry that Morgenthau wants Many other criticisms seem to fade away under serious scratiny. For "hard" peace has gone up. Some people serm to believe the a "seft" instance, a great cry has been raised about the difficulty of "moving indus- peace would straighten out the Germans. trial plants to other countries." Actually, what Morgenthau urges is neither a "hed" peace, in the But that wouldn't be hard. The important things are the machines, which can be relocated emily, The buildings aren't essential, vengeful serve, nor a "soft" peace, in a forgiving one, but - realistic peace. Another shout has gone up over the "value of German industrial la beief, the Secretary proposes this: that Germany be converted into inventiveness to the world." a predominantly agricultural country by internationalizing the Ruhr, heart That's a shocking admission of weakness among the Allies which is of her heavy industry, distributing as reparations to the countries she has not backed by fact in any way, located the machinery of Germany's war plants, and giving Silesia and East As vas shown in yesterday's atticle, the argument that industrial Ger- Prussia to Poland. many is essential to all Europe's economy is just as baseless. No sensible person even attempts to demand that the Morgenthau plan Morgenthau is convinced that if Germany remains an industrial nation be accepted 100 per cent. The Treasury itself recognizes compromise on after the was she will rebuild her heavy industry, now in the process of such major pointi 4d the division of Germany into northers and southern destruction, and be ready for war in another ten or twenty years. regions and on such minor points as the temporary closing of the Ruhr mines will be necessary. It Makes Sense The entire scheme and its background have been distorted by the pre- advantage. mature leak and those who fear the program are using this to their own But if she is forced to work out her destiny as a. largely agricultural nation, Morgenthan ressons, it would take her two to three generations to Dut the basic issue remains just this: prepare again for wat-even if Allied commissions and amies of occupa- What shall we do with Germany to make sure that never again will she be able to threaten world peace? tion are withdrawn much sooner than we hope they will be. Secretaries Hull and Stimson, who, with Morgerthau, are members of a special Cabinet committee appointed by the President to work out plans for postwar Germany, are reported to be opposed to Morgenthau's plan. We think the plan makes a good deal of sense, and we are particularly H 35 Regra PRECISION TRADE MARK MICROSTAT/ ESG. L.M. OFF. MICROFILM ROLL NO. 75 The Morgenthau Plan Samuel Grafton When - Ballot No ByM, - - - New Yish he and - Issuing paperwork - the - pleased that it in smoking out Hull and Stimmon. Perhage, if there in enough debate of Morgenthau's properals, all government officials charged with planning Germany's postwar existence will take the public into their confidence. SAMUEL GRAFTON pm bis MAIL in the newspaper business as the We earnestly hope that Morgenthau's plan is causing the State Dept. to reconsider the wisdom of policies in respect to France, Spain and place where many newspaperment end up-writing editorials. Italy, and also the quality of en recent appointments-especially that of From there on è was but . nep towards becoming that national one-mail Robert Murphy, as political adviser to General Eisenhower in Germany. newspaper, the conductor of the column known ai IN Bather be Right." It seems obvious that any German plan finally adopted will depend in his newspaper column, which originated in the New York Post, upon the men carrying out policy on the some. $ whicher for had been brought from Philadriphia as an editorial writer, Mr. A Bad History Grafton has acored sich many "ints" that a becomes imposible to give . Hull is said to favor stem measures for Germany, but not Morgenthau's detailed list in the short space available. particular set of measures. However, the State Dept., as now constituted, He was, for example, one of the first and most comistent of the cal- may prove incapable of carrying out . sound German policy, What on we mainably expect from the department in view of its unnists DE instit that the Government place an embargo on the sale of "tough" policy with de Gaulle, its "soft" policy with Franco, its compro- scrup inin and used so Japan. AS told, be wrote more this seventy separate mises with Badoglio and the House of Savoy? columns on this subject prior to Pearl Harbor. His famous line, The We like the Morgenthau plan because it recognizes that the Germans Armal of Democracy Is The Filling Station of Fascish," was one of the cannot be trusted No run heavy industry. They have twice made it their classics of that compaign. arsenal for a world war. We believe the Allies should adopt this idea as a basic principle, and make all other pluses of a German settlement-politi- He was smong the Sext, if not the first American writer, - use the please cal, territorial, it. "Sucond Front." The phone was coined in the beginning of his campaign Also, we think that the grandchildren of Nam soldiers would not want the get America to do sommhing specific poward griting under way with the to conquer the world if the value of peace were at once made clear to the Germans. Samuel Grafton has proposed a plan consistent with Morgen- war for Democracy. Here again he scored with a phrase that west winging than's, under which the Germans would learn to cherish peace. across the country, "If Policies Were Planes, Democracy Would Fly." Grafton has urged that we sign no treaty with Germany, granting her He was the first se consive the idea of The Ports for Relagion," the instead * long armistice. After she had proved to the world she is building plan under which the United States and other governments of she world her future peacefully and democratically, she would be restored to the family of nations through . formal peace treaty. opened their borden as temporary havena to homeless refugees, giving Let's protect ourselves against Germany and then make her show us them an opportunity for a. breathing spell from the terrora of war. that we can trust her. la addition to his work as #. columsis for the New York Post and they. edit other orwapers throughout the country, Mr. Crediton his found time to write two successful books, "All Out For Democracy," and "An American Disry." He has also done à great deal of work as # radio un- mentator and has Instared and traveled from COME to court. 36 Regraded Unclass RECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. MEMORANDUM FOR THE SECRETARY. - 2 - April 20, 1945. Memorandum for the Secretary. April 20, 1945. Mail Report There were a few suggestions regarding disposal of of several countries, and control of foreign funds. questions about German currency, the defaulted bonds The death of President Roosevelt overshadowed everything else in the mail received during the past week. Communications took every form from the Nazi gold hoard, but this had about disappeared printed cards to cablegrams, and offered many suggestions, but all with the same objective -- to honor fittingly a great man. Letters came in every mail urging that the Seventh Drive be n. memorial to him, and many asked that his picture be used on one from the mail by the end of Gatabart the week. or more denominations of the "E" Series to be offered during the Drive. Special bonds for school children, with his picture, were also suggested, and there was continuing recommendation for bonds of smaller denominations than any yet issued -- these to be especially commemorative of President Roosevelt's interest in "the little man". There WBS a great deal of pressure for coins or paper currency, varying from a Roosevelt 5g piece to & $25 bill. The most popular, however, WSS the idea that & dime be minted with the head of Roosevelt on one side and a symbol of Warm Springs on the other. More ambitious plans included trust funds, shrines, and even international unions. Aside from these, there were many letters from persons who said nothing about specific memorials, but simply expressed their heartfelt grief over the passing of the President. Tax mil, though slightly increased, brought in no new comments or ideas, and the rest of the bond mail was along the same lines as that we have received earlier. There were a few seattered sug- gestions following the lead of a radio commentator that the Seventh Drive be dedicated to Mr. Trunan as an expression of confidence and support. Military successes in Europe brought an increased number of Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. - 2 - General Comments Joseph W. Walter, Atlantic City, N. J. I an just a teen-aged boy in the Atlantic City Public Schools, Michael Stern, Kelso, Washington. According and I would like to know if it would be possible to to reports in the Press and on the radio, U. S. Army have our former President Roosevelt's picture put on troops have taken as a prize of war, German gold a. new American bill of about eight dollars. I think reserve funds of approximately $100,000,000. I here- we should, in remembrance of our beloved former with announce my claims on this taken treasure, the President. If It is possible, I would like to know amount of which I reserve the right to specify later If you would send me one of the first off the Press, on. I have lived all my life In Berlin, Germany, as and I would send you the money for it right away. a citizen of Austria. When the Nazis conquered Austria in 1938, I was foroibly deprived of my Austrian citizenship and robbed. * ti * Now as an American citizen I am sure that legal and moral con- siderations will make American legislators see the justice and righteousness of my claim. I herewith urge the Honorable Secretary of the Treasury to con- sider my claim as a first step to become reimbursed for my losses out of this captured German treasure. C. M. Wynne, Export Managers Club of Chicago, Chicago, Illinois. The members of our Club, by referendum, have voted over 12 to 1 in favor of the Bretton Woods Agreements, involving participation by the United States in both the International Monetary Fund and the International Bank for Reconstruction and Development." € I thought you would be Interested in learning of this action on the part of our Club, especially in view of the fact that It is based on 6. vote of the membership, and not simply that of our Board of Directors, as has been the case by 8. number of organizations who have opposed the Bretton Woods proposals. Richard Rucier, Philadelphia, Pennsylvania. I would like to congratulate you on the wonderful job you are doing as head of the Treasury Department. I am only fourteen but I still appreciate the job you are doing. Keep up your good work. Regraded Unclassified RECISION TRADE MARK MICROSTAT 110. PAT. OFF. MICROFILM ROLL NO. 3 - - 4 - Favorable Comments on Bonds Wn. Gintel, Manaroneck, N. Y. As we Americans bow our heads in mourning for the loss of our great leader, we should also remember that it is our duty George Burns and Gracie Allen, Hollywood, California. to carry out his policy of a United America for (Telegram) We respectfully suggest that the Seventh complete victory. It is in his memory that I suggest War Loan be designated the Franklin D. Roosevelt we set aside one day during the 7th War Bond Drive Memorial War Loan. 8.8 F.D.R. Day and call upon all Americans to support what our great leader so willingly gave his last full Max Goldberg, Chicago, Ill. (Telegram) May I suggest measure of strength. that you consider very carefully the possibility of designating one of the series of the 7th war Loan to be known as "Franklin D. Roosevelt Memorial Bond" Mrs. Dolly Hill Brown, Wichita Falls, Texas. I am to bear no interest, or very little interest due in one of the million common people that have lost a ten or twenty years. I believe the citizens will friend in the death of our President, Franklin D. honor our past President by their subscription to Roosevelt. Would it be out of line to ask if a day ten billion dollars of Roosevelt Memorial Bonds as n. or week be set aside to honor the President by buying mark of esteem and admiration for our beloved Chief more bonds to show our faith in the country he loved who gave his health and life so that our nation can and died for? survive. If you agree with no, I would like the privilege of being the first one to subscribe $2,000 toward the Roosevelt Memorial Bond in recognition of Henry J. Faber, New York City. The 7th War Loan Drive my two sons in service, one who is in France and the is the first chance the American people have to give other in Iron. the new and honorable President Truman a vote of confidence. o If we expect that President Truman Joseph Costa, Bronx, N. Y. in this the hour of at is to become the grest lender of democracy our late Nation stricken numb with grief at the untimely President Roosevelt has so deservedly been credited passing of our beloved President, It has occurred to with, and if he is to grow to be the symbol of freedom me that there must be millions of people throughout for the world, If he is expected to speak for the these U. S., humble, everyday people like myself, American people at future conferences, he must get an who, although their hearts are filled with sorrow overwhelming endorsement by the public. # . 9 To my will not be able to find an outlet to express their opinion, this can be displayed best by the average grief. These people are asking of the man in the street, American by lending more money to the Government than "Want can we do? Who will show us how to prove our in previous War Loan Drives. # # loyalty and devotion to the man who now lies sleeping his last sleep?" " # " What better way could to find than to dedicate the 7th War Loan Drive to his memory, make it the Franklin Delano Roosevelt Memorial Drive, Thus we will serve notice to the world at large that in Death as well ns in Life, the ideals for which he strived will live on and be brought to a swift and complete realization. Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. - 6 - - 5 - Unfavorable Comments on Bonds Mrs. John F. Coulon, Johnny Coulon Products Co., Chicago, Illinois. 6 6 # Would it be possible to have the 7th Loan changed to "Franklin Delano Roosevelt Wesley A. Taylor, Santa Ans, California. Twice Loan" in tribute to the greatest nan the world has in recent months when I have tried to buy some U. S. ever known? I have been so saddened by the passing Treasury 2 1/2% bonds, I have been informed that of our beloved President that I thought we could do they were not available, and that I would have to nothing that would please him more than to buy more defer my purchase until the next bond drive. I am bonds, so when I am selling them now I ask them to wondering why, when every newspaper and magazine buy in tribute to the late President Roosevelt. I blazes forth in huge type, and every radio blares sold two $500 Bonds to a little man today who felt forth admonitions to "buy War Bonds", I should be this same way. ... confronted with this situation where I must either let my funds lie idle for & time or else buy some type of bond which is not my preference. If there is any good valid reason for this situation, I would be pleased to know what it may be. Mrs. Edward C. Fray, Philadelphia, Pennsylvania. I'm writing to you to see if you can give me any information regarding two twenty-five dollar War Bonds purchased by my son who was killed in France on October 7, 1944. I've written several letters to the New York address, but I have received no answer whatsoever. Will you please see that I get & defi- nite answer to this letter? Regraded Unclassified QUICTORY BUY EXECUTIVE OFFICE OF THE PRESIDENT MAR WAR REFUGEE BOARD WASHINGTON 25. D.C. Report of the War Refugee Board for the period from March 26 to April 7, 1945 OFFICE OF THE EXECUTIVE DIRECTOR SITUATION IN GERMAN-CONTROLLED TERRITORY APR 20 1945 From late reports, it seems clear that the situation of civilian internees in Geruany and Geruan-occupied areas 18 very precarious. Camp populations are being shifted from one area to another, on foot and over long distances, and since thousands of persons are unable to endure the rigors of these forced marches, the number of deaths is increasing. It 18 feared that, as the Germans are faced with mounting difficulties, they will cease all attempts My dear Mr. Secretary: to feed interness who are not useful in their war effort. The rapidity of recent military developmente has the paradoxical I am pleased to send you herewith A. copy effect of rendering problemationl the fullest execution of our feeding and evacuation programs and at the same time redoubling of the report of the War Refugee Board for the period the importance of measures to bring relief to detainees who otherwise may not receive even the minimum quantities of food from March 26 to April 7, 1945. necessary to sustain their lives. Very truly yours, While news reports from Germany indicate that almost all internal telephone and telegraph communications are disrupted, Willeam ODayes so that any general last-minute extermination of large groups of civil detainees may be precluded by lack of centralized 88 control, it 18 feared that the Nazi program for the extermi- William O'Dwyer nation of these people may nevertheless be carried out not Executive Director only by the Nazi hierarchy but by organized or roving bands of terrorists and by individual Geruans. The Board presented this situation to the Department of State with a strong recommendation that serious and immediate consideration be given to the issuance by this Government of n. new warning The Honorable, directed to all groups and individuals in Germany and stating that this Government considers such acts as death caused by The Secretary of the Treasury. starvation and neglect the same no murder in cold blood and punishable as war crimes. Turkish-German Exchange - Reports of Exchangees As 6. result of a recently effected Turkish-German exchange, Enclosure. more than 130 Sephardic Jews claiming Turkish nationality left Lisbon on March 29 en route to Istanbul as n. part of & group of 700 Turkish citizens. It was reported that these refugees, all of whom are without documentation, were released from Bergen Belsen and that there were included in the group 32 women recently transferred from Ravensbrack, 2 from Auschwite, and 5 from Theresienstadt. Regraded PRECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. - 3 - - 2 - cooperation of the American and British Legations with regard According to information furnished by the refugees, large to blockade aspects of replacement, a quantity of Diesel oil numbers of internees have been transferred from camps in Poland was released from Swiss connercial sources for the use of and there were said to be between 45,000 and 50,000 persons the International Red Cross. interned at Bergen Belsen and approximately 50,000 at Ravensbrdok. Of the latter, 5,000 are Jews, for the most part Hungarian. Late reports from Representative McClelland outline plans The group of 155 Spanish Sephardics deported from Athens were of Intercross for parcel distributions. In view of the rapidly reported to be still at Bergen Belsen but were expected to leave worsening condition of detainees in the concentration camps soon for Switzerland. Although there are apparently no basic of Oranienburg, Ravensbrock, and Hamburg-Neuenganne, and in changes since the last reliable reports, conditions in the view of the imminent possibility that the Berlin-Labeck- camps were said to be terrible, and all of the refugees urged Hanburg area, where no trucks are presently available, may that food be sent to the camps. soon be out off, first efforts are being directed to the dispatch of supplies and means of transport to this region. RELIEF AND EVACUATION PROJECTS Five trucks were scheduled to leave Switzerland on April 9 for Labeck to unload supplies at Bergen Belsen en route and Operations from Switzerland then work out of Labeck distributing to concentrations of detainees at Ravensbruck and Hamburg-Neuenganne Board parcels Representatives Mann, McClelland, and Katzki net in Paris shipped from Goteborg. Intercrose is checking on the number to discuss with military authorities certain phases of trans- of Board parcels already at Labeck, and it hopes to be able portation problems incident to the sending of relief parcels to distribute all of such parcels in this area within about to civilian detainees in Germany and German-held territory three weeks time. A shipment of some ten tons of relief and the removal of such detainees to safety in Switzerland. As goods for the women's concentration camp at Ravensbruck 1e a result of these discussions, a number of truck tires and tubes to be carried by a. small convoy of wood-burning trucks which were obtained and arrangements were made for weekly deliveries belong to a Swiss commercial concern and which are expected of gasoline. Representative Katski 18 now in Switzerland to leave soon for Denmark to repatriate Swies citizens there. assisting McClelland in working out the details of the program. Probably the greater part of relief shipments by truck Prior to his departure for Paris, Representative McClelland will be made to the Munich region and areas east and northeast reported from Bern that several large trucks obtained on a of that point which it 10 felt may be accessible for a longer rental basis in Switzerland were to be available soon to trans- period than camps in the northern areas. Deliveries will be port relief supplies to civil detainess in the Buchenwald and nade to camps of Dachau, Landsberg-an-Lech, Flossenburg, and Vienna areas. A smaller number of trucks, obtained commercially Mauthausen near Line, as well ne energency relief distributions by a private organization with Representative McClelland's to evacuated deportees on the roads. Four trucks with a assistance, were expected to leave shortly with relief supplies capacity of 3,200 kilograms each are scheduled to leave on for internees in Bergen Belsen. (It was later reported that April 12 or 13 for Dachau, where they will renain to distribute these trucks left on March 29 for Theresienstadt instead of parcels to a large number of smaller camps in this area Bergen Belsen.) It was indicated that, with tires available, administered from Dachau. Within a few days the balance of more trucks could be rented in Switzerland, and there were approximately 50,000 Board parcels remaining in Switzerland prospects of obtaining additional vehicles from other sources. are expected to be shipped by rail to the new Intercross depot In addition to truck transportation, one railway car carrying at Ravensburg, between the Swies border and Munich. The 1,170 Board parcels and other relief supplies destined for Division of Special Assistance of the International Red Cross Theresienstadt and two care carrying 4,900 Board parcels n.o 10 soon to receive eleven more trucks, which will be used to well as other relief materials for the Vienna area were move these parcels on as rapidly as possible from the depot scheduled to go forward about March 24. to accessible camps near Munich and to the east and northeast. After his return to Bern, Representative McClelland Operations from Sweden informed us that Swise trucks were being equipped with the tires and tubes which had been secured but that the only Representative McClelland was informed by the International trucks available in Switzerland for this purpose were of the Red Cross that two railroad care containing 5,400 Board parcels type that burn Diesel oil instead of gasoline. with the each left Goteborg on March 16 for the women's concentration Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. - 5 - camp at Ravensbrack and that two other care carrying 4,800 Board parcels each left for the Hamburg-Neuengamme concentra- tion camp on March 17. We were advised by our Legation in REPORTS ON SURVIVING JEWS Stockholm that the Intercross delegate at Coteborg has reported shipments of Board parcels totaling 28,800 to According to reports of representatives of a private Hamburg-Neuengamme and 12,800 to Ravensbrück. Representative organization the present Jewish population of Budapest is Olsen has been authorized to make available to the Swedish estimated at approximately 150,000, and thousands are re- Red Cross or the Swedish Y. M. C. A. 40,000 of the parcels appearing from deportation, labor, and concentration camps. Belsen. remaining at Goteborg for delivery to internees at Bergen There are 2,000 Jews still in hiding in Bratislava who are being aided by the International Red Cross representative; the food situation there 1e said to be fairly good. About According to the report of & private organization 1,600 Jews in Zagreb, where the situation in general 16 representative who recently returned to London from Sweden, described 8.8 fairly good, with stocks of clothing and food a Swedish Red Cross official has succeeded in obtaining available, are also being assisted. There remain in Greece from the Germans approval for the establishment near Weimar some 8,500 Jews, approximately 10% of the pre-war Jewish of a special camp for Danish and Norwegian civilian internees, population of that country. or this number, 4,500 are in to be under the protection and administration of the Swedish Athens, including some 1,500 Salonika Jews. Red Cross. The suggestion was made that the Geruans be approached with a proposal for the establishment of similar SPANISH REPUBLICAN REFUGEES camps for Jews, and it was indicated that the Swedish Govern- ment and the Swedish Red Cross are willing to cooperate in We recently learned from our Embassy in Lisbon that the such a plan. situation of Spanish Republican refugees in Portugal has become more precarious. Private agencies have been supporting EVACUATIONS FROM SWITZERLAND these refugees in hiding to prevent their arrest by Portuguese police and deportation to imprisonment and possible execution Recent information from military authorities indicated that in Spain. In recent weeks, however, the hiding places of a the earliest possible date for moving the two groups of number of them have been discovered, resulting in the arrest Bergen Belsen and Theresienstadt refugees from Switzerland and imprisonment of nany of them and in increasing danger to UNRRA camps was April 15. According to a late cable from to the others. In a cable to Ambassador Winant and Mr. Harri- Paris, however, it 18 planned to effect the evacuation of son the Board called the attention of the Intergovernmental these refugees to Philippeville and southern Italy in two Committee to the plight of these refugees and strongly groups and April 30 has been set as the preliminary target recommended that the IGO take over the maintenance of this date for the first half. Arrangements for their transports- group 86 a. part of its over-all program on the Iberian tion from the Swiss border will be nnde by military authorities, Peninsula and that it arrange for the speedy evacuation of who are now arranging feeding and shelter accomodations for the refugees in question to places of safety. the refugees while in France. The United Nations Relief and Rehabilitation Administration has suggested that its Versailles INTERGOVERNIENTAL COMMITTEE mission offer military authorities supplementary medical and welfare personnel for the care of the refugees en route. It was reported by Mr. Harrison, Representative of this Government on the Intergovernmental Committee, that as & A report from Bern informed us that six of the exchangees result of discussions between the French authorities and from Bergen Belsen who had to be hospitalized in Switzerland the Assistant Director of the IGO, the Committee has been have now recovered sufficiently to be able to travel and advised by the French Ministry of Foreign Affairs that the Representative McClelland will endeavor to include them in French Government, having ratified the Convention signed the convoy of refugees to go to Philippeville. It is at Geneva on February 10, 1938, concerning the status of contemplated that the remaining three exchangees who were 111 refugees coming from Germany and having decided to adhere will also be transferred to Philippeville if they are physically to the additional protocol extending the provisions of the able to undertake the journey when the refugees leave Switzer- Convention to refugees coming from Austria, wishes the land. Intergovernmental Conmittee to assume officially within the franework of its general mandate the protection of refugees coming from Germany and Austria. The French Foreign Office further stated that if the Committee accepts Regraded Unclassified RECISION TRADE MARK MICROSTAT/ REG. U.S.PAT. OFF. MICROFILM ROLL NO. - 6 - the official mission, the French Government is prepared to take measures by decree to enable the Committee's representative in Prance to exercise the same powers for the legal and political protection of German and Austrian refugees AS were formerly conferred upon the League High Commissioner in France with respect to the protection of Nansen refugees. Mr. Harrison has been authorized by this Government to vote favorably on acceptance of the proposals of the French Government at the meeting of the Executive Connittee called for April 11 to consider the French Government's invitation. In view of the urgent need for funds to proceed with a number of action programs now in readiness, end as a result of Mr. Harrison's strong recommendation that to avoid further delay this Government contribute to 1945 IGC administrative and operational expenditures in conformity with earlier commitments, appropriate recommendations for this purpose were submitted to the Bureau of the Budget. Mr. Harrison was informed of this notion and advised that every effort 18 being made to secure consideration and final action before the Executive Committee meeting scheduled for April 11. William ODozer William O'Dwyer Executive Director Regraded Unclassified TRADE MARK MICROSTAT/ REG. v. PAT. OFF, MICROFILM BOLL NO. PRECISION 188-1637 PLAIN MPD-1749 Bern Distribution of true London reading only by special Dated April 20, 1945 arrangement. (SECRET =) Dated April 20, 1945 Rec'd 5157 p.m. Rec'd 2,05 p.m. Secretary of State, Secretary of State fashington. Washington 2315, April 20, 8 p.m. FOR YOLD PROM MOCLELLAND 4054, Twentieth Regarding possible relief to armenians in Germany FOLLOWING LESSAGE FROM EMERGON ICRC has now informed us that (Department's 1350 COMICTIVE ON REFUGES LONDON FOR EARL HARRISON AMERICAN ma's 44 April 5) committee possesses no utilizable HOLPRESENTATIVE COMITTEE ON REPUGEES. information whatever concerning arrenden refugees of POIS in Certify. Insurage begins. le have now received approval of British Government to proposals relating to Spain and There are apparently Armendans anong Russian Portugal contained in my memorandum of the 16th February POIS but their namber and location are unknown since 1945. to conditions are attached to the approval but Geruana DATE never - general rule supplied ICHC with hope is expressed first that we should try to persuade data on Soviet PORS. There are similarly doubtless the "panish and Portuguese Governments to congribute to forced lacorers departed from Soviet Undon the cost infolved and second having regard to high cost to Jersian occupied regions out any information concerning of living in Spain and difficult currency problem in their number or whereacouts are also lacking. TCHC Portugal. High priority should be given in due course has never, as you know, undertaken relief programs for to renoval and resettlement of the refugees in the foruse workers in Cermany. Iberian Peninsular. To shall be grateful if you can expedite approval of Government of United States. ends. Any assiy arsenian civil detaines who happens to be in a concentration camp accessible to our - deliveries will benefit from them exactly as do imates of others WINANT nationalities. RX PARRISON JIB Regraded Unclassified PRECISION TRADE MARK MICROSTAT No. PAT. ON. MICROFILM ROLL NO. 84 EX-1588 Bern This telegram nust be paraphrased before being Dated April 20, 1945 PLAIN comunicated to anyone other than a Government Rec'd 11,10 p.m. Lisben Agency. (MESTRICTED) Dated April 30, 1945 Secretary of State, Rec'd 10:25 p.a. Mashington. 2299, April 20, 3 p.m. Secretary of State, WILH FROM MOCLELLAND "ashington, Department's 1205, MR9'S 476, March 24. 834, Twentieth Plans are shaping up satisfactorily now for evacuation special groups of Jevishis refugees from VRB 389 JIX 221 FOR LEAVITT FROM TROMS. Bargen Belson and the Resignatedt from Switzerland to UNITA reception campo in North Africa and perhaps Tour 166, Oottfarb insiste stockpiles evand by Italy. American Red Cross under supervision of Mr. Ehrenhelt Dries authorities are making all preliminary preparation including formation of convays, supplying of International Red Cross who probably took ever steck- railroad care, medical personnel, etc. and nove 18 being coordinatou with SEAW 0-4, 0-5 and UNIVA with whom this piles formally. Congress parcels vere Keecher and turned question was thoroughly discussed in Paris at end of March. ever after Congress negotiations in America and 10cal Parst group of approximately 1100 persons La Congress paid nothing. Certain quantities clothing is schedules leave Geneva on or about May 2 for Mareeille. Second group of similar sise should depart aid-lay. Geteborg's free part belonging to American Red Cross. later. Refugees of all nationalities represented within It say be necessary and a third, Suggest New York negatiaties with American Red Cress If these special groups are being evacuated with exception of Dateh nationals. They are mainly Hungarians, ve could borrew feed and clothing until Joint can get Runandans, Caechs, Tugoslave, Poles and forner Germans from the Resignstadt. autériel to Sweden, mill keep you informed of progress this agrement. BARUCE HAUKISON as KDA LCI PRECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. PLAIN Lisben Dated April 30, 1945 Rec'd 10:12 D.B. RS-1836 Madrid Secretary of State This telegram must be paraphrased before being Date April 20, 1945 Washington communicated to anyone other than a Government Rec'd 9,14 p.m. 833, Twentieth Agency. (RESTRICTED) was 390, JDC 222, FOR LEAVITY FROM TRORE BYCHOWSKI Secretary of State Association Pelish jews In Sweden received cable Mashington dated Nescew twelfth, Necessary help for saved in laber Camps clething, shees, food, tools for tailers, 835, april 20, noon absemakers, joiners, keymakers, Send us liste persons Following non-preference quota numbers alloted for searched Sweden, Ingland, Central Committee of Feltah refuges children for month of March 1945 returned unused. Jews, Fareaw, Secreta 31, Dr. *mil Gettfash Figures represent 25% of block alloted Oppartment's in- attempted contact Femeratein several time but never clusive. received reply. Perhaps you should consider authorizing Derman 4642-47911 Polish 1794-1831; Belgian 262-269; Gettfarb give Bychevaki merey establish search service Netherlands 503-5221 Caschoslovakia 589-603; French for us, Please advise. 529-5481 Hangarian 348;305. BARUCE ARMOUR JT JUS Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 12 MS-1659 Lisbon Distribution of true reading only by special Dated April 20, 1945 arrangement. (Secret #) Rec 'd 3 p.m. Secretary of State, Mashington. 05, April 20, 11 a.m. FOR LEAVITT FROM THOM. Anticipate British steaker will take within few days 253 Tangier's certificate holders. (This is 63 388 JDC 220). 120 average cost passage. Regarding nethod = payment, instructions will follow. BARUCH us Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. CARD TO AMERICAN LISHON, PRO- TFL WAR REFUTES HARD Flease deliver the following nossage to Horold Trobe from V. A+ Inavitt, Aperican Jewish Joint Instribution Comittee, UNITE 700 SCHANTS AMAITTIO information "AT AD ET. OR: THOUGHTS Allit 1. ELIMINATE POLATE HEAT curries INDUST VIEW DONSTANTIAL HALANCE AVAILABLE WICH WILL TAXX SETTRAL NAME STRAIST 2, ELIMINATE EXPIRATION TEW PALANCE LAST THAT WHICH PHIRARLY AID $200,000 provided TICS YEAR di UNDERSTANDING WILL CONSIDER PIOJECTS All AND J. YOUR DIRECTION REQUETION PATRAN APPROPRIA- TIONS secture FURCHASES UNCLEAN viar our REGULAR HONTHLY UNITIANCES you THESE COUNTRIES. ADVISS MIA? - POSSEBLE mexical 5035 HE ITTANCES HELOW 3800,000 APPROVED APRIL as 4D SUILD FUND TO i PLEASE AUTISS HSWANDING POSSIBLE FUTWS. = IMPORTANT % ALL POSSIMILITIES SA INGS CURRENT 70% TOUT INFORMATION VATE INITIAL DEANT VANITA 10,000. insures THE IN LISHON CANIA NO. 175 4:40 palle Anl 20, 1945 RECISION TRADE MARK MICROST NOT TO BE RETRANS:(ITTED SECRET COPY NO. 4 OPTEL NO. 126 Information received up to 10 A.M. 20th April, 1945. NAVAL 1. Mediterraneen. 16th/17th (Night). Coastal forces sonk two, possibly three, ships in convoy in Gulf of Venice, while Yugoslav coastal craft and an H.T.B. sank an F-Lighter and probably an E-boat same area. MTB 697 mined and sunk south of Fiume. 2. Anti-Submarine Operations. 19th. U.S. Destroyer made promising attack on U-boat S.E. Halifax. Aircraft attacked 4 U-boats and an Escort vessel in the Skagerrak when two probably sunk and a third and the Escort vessel damaged. MILITARY 3. Western Front. (Southern fector): 1st French Army and 7th U.S. Army continued make progress with latter capturing Ansback and now engaged clearing Nuremberg where heavy fighting taking place. (Central Sector): Patrols of 3rd U.S. Army have crossed Czeck front- ior East of Hof. 1st U.S. Army has partially cleared Leipzig and also mopped up area between this city and River Mulde. Considerable German forces have also been cut off in Hartz mountains by junction 1st and 9th U.S. Armies near Bernsburg. (Northern Sector): U.K. armour reported on River Elbe at Lauenburg and within 5 miles Harburg while further vest 1st Canadian Corps report southern edge of Zuider Zee between Kampon and Harderwijk clear of enemy. 4. Eastern Front. (Central Sector): Gernans report three days violent fighting East Berlin, admitting fighting now taking place 20 miles west of Oder, while further south they report Russian spoar- heads as having reached River Spree between Cottbus and Bautzen. Russians describe these operations as reconnaissances in force which during last three days have developed into battles siming at the capture and widening of bridgeheads over Oder and Uniose. They state = bridgehead over Oder, vest of Kustrin videned while another made to south over Noisse, S.E. of Cottbus. (Southern Sector): Further advances made in areas S.S. (Bruno?) and North Vienna. 5. Italy On 8th Army Sector U.K. formations have advanced 4 miles along West shore Lake Conacchio and now mopping up Porto Maggiore while East of Bologna British troops have advanced 1 to 2 miles against determined resistance. On 5th Army sector advances of up to 4 miles nade on 16 nile front S.W. Bologna. 6. Burna. (Central Sector): Villages of Singu, Chauk and Sale on Irrawaddy occupied without opposition and much equipment taken. S.E. of this armoured column advancing westunrds from Taungdwingyi now within 3 miles of Irrawaddy while further East another armoured column had advanced 12 miles south Shwemyo. AIR 7. Western Front: 19th Bomber Command Lancasters 47 bombed through cloud railway transformer station at Munich (189 tons) while further escorted Lancasters 33 dropped 204 tons (including six 12,000 pounds) on three batteries Heligoland when some direct hits or near misses obtained. U.E. escorted heavy bombers 589 (outstanding bombers 5 and fighters 5) dropped 1359 tons visually on five railway targets in area Leipzig/Prague/Dresden, inflicting enemy casualties 18:0:5 in combat. railway centres Southern Germany and 105 tons on Dunkirk, while 1847 SHAEF (Air) - Medium bombers 475 dropped 681 tons on thre fighters and fighter bonbers (missing 10) operated all sectors destro, ing 500 M.T. and inflicting enemy casualties 17:0:5 in combat and 81:8:66 on ground. Halifaxes attacked shipping in Skagerrak and Kattogat when hits obtained on two 3,500 ton ships. 8. Mediterraneen. 17th/18th (Night). Liberators dropped 137 tons on communications Porto Maggiore. 18th. Escorted U.S. heavy bombers 473 dropped 974 tons on targets Bologna area. Bombers 371 attacked railway bridges Austria and supported both armies while fighters and fighter bombers 1133 (missing 11) operated battle areas. Regraded Unclassified MICROSTAT/ RDO. u. PAT. OFF. MICROFILM ROLL NO. RECISION TRADE MARK 101 - 2 - April 21, 1945 4:05 p.m. (fr. O'Connell and Mr. Luxford enter the conference.) for Bretton Woods. had with Barry, Barry told hia he would positively vote H.M.JR: Hanneran ans In today, and in the talk he GROUP Present: Dr. D. .. Bell P. Bartelt 12. MITE: Did he any how recent that talk was? Hr. White Dr. Gamble H.M.JR: No, but I couldn't quite understand--you Mr. Hans some, can find out Nonday, He talked some and Joe Nunan talked fr. Blough Mr. Pehle Mr. C. S. Bell H.W.JR: I will see Joe Nunan. P. DuBois Mr. Coe Mr. Fussell is a lawyer. And there is ti man that sounded like Lauchlin, who Mrs. Klotz 12. LUXFORD: President of a bank In lies York. MR. D. de FELL: That is the starm the President one. MR. O'CONNELL: I ne not sure that he is the same approved before he died, and after he died they decided to out this in quotations and nut his name on it. That will be on sale Wednesday (indicating). between to him and Joe Munan Barry unequivocally promised H.N.JR: He represents some bankers, but he said that M. C. S. BELL: I thought you might must to seo the vote for Brotton Woods. flag showing the number of servicemen that have gone to war and those we have lost. No are roinm to hang It un R. O'CONNELL: Good, in the reception room. All the boys have seen it outside. We will keep that up and just change this figure. (Secretary leaves the conference temporarily.) H.M.JR: I see. That is n. lot. I have about twenty- H.M.JR: That was Fred Smith. five minutes. Where is Fussell? Gentlemen, what I would like to say is this: about me you would be glad to cooperate. Draw Mrs. Klots' I told Smith anything he wanted in doing this article Where is White? attention to that. MR. WHITE: Right here. H.M.JR: Let's start on Bretton Woods. This nan Well, anyway, net In touch with Joe Nunan, will you? Hannegan was in here today, and he tells ne that in the MR. O'CONNELL: Yes. talk he had with Barry and-- Regraded Unclassified PRECISION TRADE MARK MICROSTAT MICROFILM BOLL NO. 103 - 4 - 3 - H.M.JR: And net the story straight. But hannegan and it WRS pretty nearly the first point in your memo, said he had n. private talk with this fellow, and between LAPTY, that is, the Council. We didn't discuss anything the two of then It was understood that It we n. deal in detail, but the over-all Council, the CED proposal, and that is about all. What was the other, Luxford? that he would vote for Bretton Noods. MR. LUXFORD: That is all he mentioned. MR. O'CONNELL: Yes. 18. O'COMIELL: Our understanding is we will talk to H.M.JR: 1 don't know any more, but there ass some Wolcott arain when he has n. document from the bankers. we kind of 5. deal. are giving hin nothing. 12. O'COMNELL: O.K. H.V.JR: You are giving him nothing, and I haven't H.W.JR: But no if's, and's and but's. llow, I called arreed to anything. un Full because I hadn't heard from him, and this in the Crowley to follow up on what he had done about Congress- VR. O'CORNELL: Oh, yes. man answer. Ee is out of town, but Crowley had already snoken with Congressman Hull about some amendments. Ur. Rull H.N.JR: Let's understand we keep the bankers--if will 70 along. The Congressan seems reasonably friendly the bankers want to talk with Wolcott and Nolcott wants to make n. deal, then I can find out what It is and me about the matter. according to Crowley, so T think some- can *0 to Spence and talk it over with him. body should call on Convrossion Bull. SR. D. 1. HELL: That is all right with me. M. O'CONNELL: All right. H.V.JR: But I want to be enghatic. Tuesday at the most. And as I understand It for the time H.M.JR: I will be away not more than Monday or IR. LUXFORD: what Wolcott is seeking ultimately to being there will be no talks with the bankers. Do we do is get something he can propose that everybody will understand that? agree to. MIL. NITE: But Mr. D'Connell and Ir. Luxford had # H.V.JR: All right, but I haven't agreed to anything conversation with-- yet. Nothing for the bankers, see? You know, he is our main banker fellow, Mr. Banker Luxford. He sits there, and MR. 0'CONNELL: ,Wolcott-- be will be wearing a vest and spats soon. MR. MIYE: this afternoon. 12. LUXFORD: Don't I look like one? MR. O'CONNELL: lie just came from there. H.M.JR: Shall we associate with him? (Laughter) H.M.JR: Lot's have the facts. MR. LUXFORD: Well, anyway, the nain proponent now-- M. O'CONNELL: Ir. Wolcott is getting from Burgess a 18t. D. #. HELL: I think going through Wolcott is all written statement of the bankers' nosition, at which time right. 1 don't think we ought to be discourteous to the going to talk amin to wolcott, not with the bankers. bankers. After all, we have been discussing the matter we Le are outlined what he understood the bankers' position was, Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 105 - 6 - - 5 - with them, and some place along the line 1 think we ought H.M.JR: How, White, I am coing to have to read your stuff on the plane, see? to sit down with them. but when the time cones it, to see. sit down--1 MR. WHITE: All right. have H.W.JR: reached the Yes, point that 1 want to do (hrs. Klotz enters the conference.) 13. D. W. BELL: That is right. 12. WHITE: The boys have cone back with the latest is other. going H.M.JR: And on, 1 Luxford, But think in the the no thing meantime telks, is just coming while so 1 we alon" an understand away fine. and this each copy of the reparations thing and it is much better than we had honed for, no we won't be in any difficulty on that. H.V.JR: So much happened today that 1 don't know how While White 1: gone we could have--Joe is here and I can ret it all over, but I had a very rood talk with McCloy, and what 1 an saying here is to stay in the room Luxford is here. here, If you please, and that goes for ne as well as the rest of you. I don't want to have some of these people WHITE: 1 sent you n meno. tell you, you know, about so and so--one of your men told MR. H.M.JR: I rend it. Luxford will try to net into me, and I said, "ho, I hope to hear about it tonight." White's shoes. IR. WHITE: You are looking at the right may. (Laughter) SR. LUXFORD: 1 will try, but 1 won't steal thes, H.M.JR: And General Eisenhower and General Bedell Smith were entirely satisfied with the memo of the 23rd, Harry. H.M.JR: But the relationship iss been all pirtit. see. And for three nights he talked to then and told them just what had happened, and he was there one week in MR. If you don't, it 1: because they are too advance of General Clay. lie had a little trouble selling Clay because some of the other boys thought that was a job they micht want, but he did sell them Clay. 1 didn't small. 1/3. 0'COMMELL: There will be no trouble. finish B7 conversation, although we had an hour and a quarter. Needless to say the picture he paints of Germany is even worse than you read about in the papers as to a H.M.JR: Is that all right? complete disormanization. The cities in Germany stand out like so many decayed teeth. He said there was nothing 1R. O'COSNELL: Perfectly. for General Doolittle to do any more, there were no strategic H.W.JR: There is n. perfectly harry relationship tarrets left, just use the planes to transport French prisoners and slave labor from the front to their homes, around here. and the same with the Belgians. That is what General O'CONNELL: Fine. 1 get along fine with Luxford. Doolittle is doing now. They also agreed to keep the Russian liberated people un forward so when a juncture MR. (Laughter) Anybody who Woods isn't from happy was made they could shove them across the Russian line on the representation the Hill on Bretton into the hands of the Russians and not have this terrific the Treasury, group traveling first back and then forward, and save on the food, which nakes sense. Baruch msunbelievably rood. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ PAT, OFF. MICROFILM ROLL NO. - 8 - 7 - mind on account of the fear of Russia, which is more innor- tant, to build Germany un or not the business they might get He net with the for Cabinet, and they naked him about the by deindustrialization. He said England still hasn't crossed German thing, where did he stand on the Morgenthau Plan, that bridge, which makes sense from want we know. He sents and he practically told then Morrenthau was a alsay, and to talk to ne about that. lie said, "They still haven't made on his return he was much stronger for the decentrolization up their minds. He said, "I painted n. beautiful victure of of Germany than when he left. And in the room I nentioned recovery and 1 saw the labor unions, and so forth, and so on," that Clayton had a change of heart after President Roosevelt's and he has the whole story about the sterling debt. Somebody death, and he said, "I will out his heart out if he doesn't surrested they cancel it. ne said Benverbrook struck the table behave himself, and he won't be able to stay around washington and said, "The British will never PO back on their debt." after I net through with him. He either is right on this Not more than once in a century! German thing or he will leave town. The talk with McCloy was good, and the talk with Hanneran this morning was very rood. The talk with Baruch was good. 1R. PENLE: Is this McCloy or Baruch? Monnet's only worry was, could I see Pleven? lie rets in Sunday night, and he la moine to met in contact with Mrs. Klotz. H.M.JR: Baruch. lie said, "I will out his heart out. I told him that if he were only going to be here Monday after- That is all I have not to live for now is to see that noon, I didn't think It would be worth his while, and if it had Germany is deindustrialized and that it's done the right way, anything to do with the sar effort, I would come back. and I non't let anybody ret in my way. and I think be meant it. lie not so emotional he had tears in his eyes. Ee said it had nothing to do with the war effort and it I have never heart R. can talk as strongly DE he did. And could wait. le mave me an Invitation to come to Paris in May he is roing to rive ne stuff next week when he corren down. to talk to the French. lie thought that it would be very good for their norale to carry on the Roosevelt--or whatever you He told President Truman that he le very much bothered onll it--line of thought. He sald it would be very lovely. that they are so slow In moving. "For heaven's sake, make Lie didn't want Pleven to invite ne unless I would say yes or up your mind what you are moing to do," he said. "There no In advance, and I said it would not be convenient, but I is no plan around here. would talk it over without coming to an understanding in advance, and he laughed. de is very discouraged, very down- M. NATE: Has be discussed his viens with the in-the-mouth. lie said surone is absolutely downesst over President since his return? President Roosevelt's death. H.N.JR: Yes, he had 5 long talk with him. McCloy attended the service at St. Paul's and he said that Churchill broke down and cried like a baby. lie said the MR. WHITE: You don't know whether he not any favorable King uns there, too. lie said that he walked down the streets in France and the people would just stop him and talk to him response? about President Roosevelt. They think over there it is just H.M.JR: I couldn't tell, but he said he asked unbellevable. They are sorrowful all over Europe and feel Stettinius to leave the room so he could talk frankly to they have lost their greatest friend. he said the services the President. (Laughter) lie had certain things he santed st St. Paul's were something he will never forget, and 1 think to tell the President very confidentially so he asked that ReCloy feels it very deeply. I was able to tell him that Stettinius to leave the room. Be told ne that, and I don't Just shortly before the President died he had said that since like to think he is kidding no, but he certainly went way he hrd--the President had set McCloy right on France that he, out of his way to convince ne he wants to do everything to Defaulle, and the President had great confidence in McCioy, be helpful. He said the English still haven't nade up their and he felt McCloy had been very loyal to the President. And naturally that pleased McCloy. McCloy wants to work with us, and he wants to not this thing cleaned up. I didn't get much in about Clay because we didn't have time. Regraded Unclassified RECISION TRADE MARK MICROSTAT PAT. OFF. MICROFILM ROLL NO. F-2 - 10 - - # the whole problem is, and La a very much stronger man than Miss DuBOIS: are you going to net rid of Pleven on when we went over, and his brain today was absolutely this German thing? crystal clear, no fuddy duddy business today. It's very encouraging. 1 dion't get down to admiral Leahy. H.W.JR: 1 did, and with Patterson. I have been fairly I don't know where he stands. accurate. It's Patterson--where is Frank Coe? Now listen, Frank. Vn yes, I told Lean Acheson I couldn't see him today MRS. KLOTE: baruch wouldn't miss anything. because I have seen nothing cut fellow travelers on their way to San Francisco. when you go over there what you want H.H.JR: ne was clear today. Non, I an just trying from the war and State Departmenta la a plan to defeat to rive you fellons a little accounting. My advice to Japan. Now, when General bedeneyer was here--I got it Mr. John Pehle is that on the first of May you take 8. from Leahy at lunch today--he give the war Department couple of weeks vacation. Get the stuff out of your at plan on how many Divisions they want; so they had system. vet a little health. You never had a chance Wedemeyer while he was here work that out, according to to recover from your brother and everything. You have Admiral Lenhy. when you go over there what I want from had a bad time. You have done a swell job, so get a the War Department and the State Department, is a plan little rest, a little sunshine, and come back and ne'll to defeat Japan, see, and then after that we will do it work the hell out of you! the way ne did my bootleg story--give then e half a thousand dollars now and give then the other half then ME. PENE: Thank you very much. I'll do it, too. they make good. R.M.JR: I would do that. Mr. COZ: There la Just one part on that, John Carter Vincent, whom 1 mas going with, is in San Francisco, M. PRILE: thank you. H.M.JR: Get somebody else, and ar. cell can call up H.M.JR: There is one fellon over there, an economist the Acting Secretary of State and say te vant to get you have. started on this thing,and President Truman has asked the to please have something on China on his desk. NR. FEELE: Silvermaster. This is economic. There's will Clayton. lie has B.M.JR: 1 have heard good things about him, and we been designated--I' do it myself. may vant him over here. I am sorry if I an talking emphatically, but I an VR. PRILE: lie is needed over there, too. fighting time. H.M.JK: Well, as Joan said, "Morgenthau first." So, MR. WHITE: Does Leahy have any viens on the subject, talk to frank Coe about it. I have a special assignment Ar. Secretary? in mind for him anymay, so don't give him a job until he comes here. I have a special assignment in mind for him. H.M.JR: No, but I got this feeling which is very important, and I will get more of it--I got the feeling B.B.JK: Now, I'll have to read that stuff on the from Baruch that he realizes the importance of being plan. friendly with Russia. I am seeing Baruch next week. Be made a better impression than he has ever made. I MR. WHITE: There is nothing important, nothing that feel he is right on Germany and Aussia and feels what can't wait. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 7-4 - 12 - F-3 112 11 - MR. WHITE: That really is first, but I thought I would put it second so it wouldn't sound so bad. Things are going along very smoothly here on anything I have, H.M.JR: I just thought 4 would give you people a together with Bretton Woods. report. I'll be back--if the teletype system is working-- I want to leave so I can see Mrs. Morgenthau tonight. lie H.K.JR: I an listening. said if I got there by ten--the most I'll be zone is Monday and Tuesday. I wrote a letter to President Truman saying MR. WalTE: And so, If you feel-when you want me that I would like on ay return to talk to him about the 1 can come back within a day. I can fly back, and I economic future of Germany. 8.21 just hoping that you won't want ne for some time. Do you have anything, Charles? H.M.J.: For how long, huh? HOW long? 100. C.S. HELL: I can hold up everything until MR. WHITE: Oh, I don't know, two or three weeks. Wednesday. H.M.JR: You're crazy. He's crazy. I thought you H.M.JR: Do that. who has something they want ne said three days. to sign. MR. NAITE: Three days? MRS. KLOTZ: I do. MR. LUXFORD: It's neeks instead of days. B.M.JK: John, will you help me again a little bit it. this refugee business? H.M.JR: Well, I'll be very honest, narry. Don't misunderstand me. If it's a question of my doing your VR. PEHLE: Yes, I'll watch that. work, I an not going to do it. H.M.JR: Miss Hodel is outside. abe's coming in now. MR. WHITE: I understand that and I hoped you Do you mind staying? wouldn't. It's 8. question of my doing it or Mr. Coe or Mr. Luxford or Mr. O'Connell. I mouldn't like you Mr. PERLE: Not in the least. I'd be delighted to. to do it. I mean, if they are doing satisfactorily, and 1 an sure they are-- H.R.JR: Harry, how long are you going to be gone? H.M.JK: If it's going satisfactorly, but if it means like WHITE: Just as long as I possibly can. (Laughter) 12 I going to pick it up and do it-- MRS. KLOTZ: That's being honest. That's wonderfult an WHITE: I know you will let me stay as long as I can, and when you feel you want me back, I'll be glad Mr. WHITE: Between the telegraph system and telephone to come. and ticker system, I am not hoping too much, but I am going to stay as long as I can for several reasons, Mr. Secretary. S.M.JK: That's fair enough, and I'll give you all I can make very good use of the time there. I am interested the time I can. I don't know why you want to stay so in what is going on. There are some important things going long. on that do affect us, and I'll enjoy being there. VR. D.W. HELL: You should have put that first. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. F-5 - 13 - 113 - 14 - as. WHITE: I an not running that conference. I am more or less an observer. MR. O'CORNELL: I sent you an answer. We are doing that right away. The Commissioner and-- H.M.Jh: 1 know. H.M.JR: A weekly bulletin. AR. WHITE: And there are a number of--zell, never mind. The reports weren't too good, do you agree? Well, we understand. NR. O'CONNELL: Yes, but it's hard to-- the WITH: I won't waste all of my time, just some E.E.JR: There's gold in them ther hills, though, and of it. you know it's two or three weeks since I asked them to check on farmers. You know he told ne while you were gone H.N.JR: I know, you never do. liow, Ted? that they went out on an R.F.D. route and found one-third of the farmers were not paying any income tax, and I HOLD GAMBLE: I have nothing that can't wait. haven't had any more reports. what else is there? I want to break the Mh. O'CONNELL: I didn't even get that--two-thirds? story soon on some of that law enforcement stuff. H.M.JR: In the one route they found one-third of MR. O'CONNELL: Well-- the farmers were not paying any income tax. H.V.Jh: Put some heat on. MR. O'CONNELL: I didn't know that. En. O'CONNELL: We'll do all we can. H.M.JR: Start in South Dakota or somewhere. This fellow-- H.M.JR: Those reports weren't too good. I read them all. MR. O'CONNELL: Bushfield, that's where you should have started. You started in New York. MR. 0'00NNELL: They'll get better. H.M.JR: Well-- H.M.JR: You may need sone new blood there. KR. O'CONNELL: It nas a Republican neighborhood. MH. O'COUNELL: That's pretty hard. New blood is hard to find. H.M.JR: I picked a Republican neighborhood. H.M.JR: What about a blood transfusion or something? 22. WHITE: we couldn't get Mr. Green. When you come Those reports weren't too hot. back you'll have to get him. He is too much of & prima donna. A. O'CONNELL: They were studies. H.M.JR: Harry, don't misunderstand what I said. I H.M.JR: Did you get my suggestion? an -lad you are going. I wish you a good trip and I don't mean a pleasure trip either. Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ REG. U.S. PAT. OFF. MICROFILM ROLL NO. April 21, 1945 2:53 P.M. ) 115 - 15 - HMJr: Hello. MR. WHITE: I want to make it as much a pleasure Mr. Robert Patterson: Hello. trip as 1 can. That's one reason I am going. 4MJrt Bob? E.M.M: And if I go to France in Kay--it's too bad Joe never prote up the report on London. (Laughter) P: Yes, str. MR. NHITE: He has from now to May to do it. HMJr: McCloy --- in the first place, may I thank you for all the things you have done to make Elinor confortable. E.V.JR: Good bye, Harry. P: MR. COE: van you take any more reading matter? These I haven't done half enough. are what I promised on China. HMJr: Yell, vant you have done I'm mont grateful for. H.M.JR: what we want is a plan from har. 1 cien't : Yes, Clad to do it. get Clayton. HMJr: Thank you, Bob. McCloy just called me and Mr. MR. COE: I'll get him. I'll take cure of it. Stimeon and you'd 11k= to --- have you handle this Japanene -- Chinese thing. H.M.JR: Where are rehle and Visa liodel? : All right. He told not McCloy told no. HMJr: Nov what time Monday could Frank Coe - you know Frank Con? P: Yes. HMJr: cose over and sorts bring you un to date on 117 P: Any time Monday. A good time would be eleven o'clock. HMJr: He'll come over nt 11 o'clock Monday. P: I'll be glad to see him. HKJ:: Thank you. Then va can sort of get started. il Then we onn talk about it when you return. HMJr: That's right. P: Thank you, Henry. HMJr: Thank you. P: Good byn. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. - 2 - April 21, 1945 2:57 P. M. HMJri Yeah. Well, I think-- you go over there Monday and ene Patterson with John Carter Vincent. HMJr: Mr. Stinson wants Bob Patterson to handle this thing with China, see? C: Yes. Mr. Coe: Oh, he does? HMJr: and bring his up to date, and talk about 11. HMJr: Yeah. : All right. We'll have the first session with Pei Monday morning. C: Vell, that's good. He 1s a good one. HMJr: Right. HMJr: Yeah, I picked him. You are to En over there at 11 of clock Monday morning and and his. 0: Thank you. C: Go over and --- his at " Monday. HMJr: Yeah. 0: All right. HMJr: And my suggestion to that you take John Carter Vincent with you. 0: And talk over the situation. HMJr: And talk it over with Patterson. C: All right, I'll do that. HMJr: Now, I don't know whether you want to see this fellow Pai before that or not. C: I think perhape -- no, I think we can't very well. EMJr: You think you can't. C: Well we could early Monday morning. HMJr: Why couldn't you see his early Monday morning? C: All right. He hasn't rung. How did you leave him? An I supposed to net in touch with him? HMJr: Well, I would in view of the thing the way it --- 0: All right, all right. Nov when are you coming back? HMJr: Tuesday or Wednesday. C: Tuesday - well, I vo.s making because you wanted to have the preliminaries over by the time you got back. Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. - 2 - April 21, 1945 1150 P.M. HMJr:(cont.) I'd 11ke to talk to you. EMJr: Hello. A: Fine I'd love to do it, Henry. Operator: Mr. Smith vill not be at his office any more this HKJr: Vell, I know what President Truman wants ne to afternoon. Would you like for de to call his do here. I'm all right. He has been very re- residence? assuring as for BE I'm concerned. HMJr: Yes. A: I'm delighted to hear that. Operator: All right. I have Mr. Acheron. HMJr: But what we are going to do on some of these foreign affairs' things bothers Be like hell. HNJr: All right. A: Yes. Operator: Go shend. HMJr: And, you'll be interested -- Mr. Hannegan VRS in HMJr: Hello. Dean? and assured me very confidentially that Berry has promised him that be will vote for Bretton Woods. Mr. Dean Acheson: Yes, Henry. A: Ch, well, that's very good. HMJr: I've been thinking of you but all of these fellow HMJr: Definitely. No if, end, or but-- travelers on their way to San Francisco.. A: Yes. A: Yes. HMr: So that's good. HMJr: Fellow-trevelers. D1d you get that? A: Yes. A: (Laughs) I do. They are not fellow-travelers of mine because I'm going to stay here. HMJr1 Dean, again I can't tell you how much I sppreciate --at Cabinet again I brought un the splendid co- HMJr: Vell, they're not of aind, but they have been operation that you have been giving us . yesterday. dropping in, and I'm leaving this afternoon to 5º to une Elinor. A: Well, that's very kind of you. Ed told ne that you had said that, and I appreciate It very much. A: Yes. HKJr: Vell, I feel it and I wanted President Truman to know HMJr: When I come back I'll n.ek you if ve can't have a it. When I know I'm coning back, I'll have the office meal together, and I'll be back Tuesday or Wednesday. get in touch with you. A: I shall be delighted to do 11. At Fine. I will be at your disposal whenever you vant to see ne. HMJr: You'll be here? HMJr: Thank you so much. A: on, I'll be here. Ed told ne that he had a talk with you after the Cabinet. A: All right, Henry. Give our love to Elinor. HMJr: Yeah. HMJr: I'll do that. Thank you. A: and worked out with you that Will van going to handle certain things directly with you, and I think that will speed things up. HMJr: Well, I hope 80, but I'd just like to have - oh, as one friend to the other off the government payroll Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ Q.U.S.PAT.OFF. MICROFILM BOLL NO. 121 - 2 - April 21, 1945 The two and one-half, '37-'72--that market has been 4:00 p.m. very strong since we announced that the banks could not buy anything in the Seventh War Loan except the one and FINANCING one-half's, no we rave then authority to sell five million, and they have got ten million on each account to sell Present: Mr. D. ... Bell various tax-exempt issues. H.V.JR: Let's tell then this next week that If the MR. BELL: le have twenty-two billion dollars in market is at all strong, I would like them to sell for Government securities in the various trust accounts. postal savings twenty million each. There are about thirty of them in number, and seventeen NR. BELL: Twenty uillion each! They can push that. billion of that is in special and non-marketable operations, They can do that just as the market mets good. two percent special, and four billion six are In marketable securities, and there to about a billion three--these are H.M.JR: Next week if there 1s any opportunity. This the five accounts, and there are about twenty-five others I will rive the cirl. (llands reporter "Pending Authorization," I didn't pick un because they are miscellaneous business, one billion two hundred and sixty-eight million In tax- copy attached.) exempt issues in these three accounts, enn those two, I think, are the only ones that we ought to consider. Anything else? MR. BELL: Hero is something to TO to the President H.P.JR: These two? with his withholding taxes. (liands Secretary "Menorandum to the President, copy attached.) MR. BELL: Yes, because we have the Government life insurance fund a special rate of three and one-half percent H.M.JR: He eught to sign it end send It back. with the understanding they would not sell marketable securities. (Sime meno.) All richt? H.N.JR: Just these two? 18. BELL: Yes, MR. BELL: Yes, those two, and we have that such In marketable securities on the taxable issue. Here is what we have done, sold one hundred and fifty- one million dollars in securities since January 1 from those two accounts. We have sold ninety-one million of taxable and sixty million tax-exeart, which is pretty rood, and the market today, in fact for the week, has been kind of dend. This is what they have not, an authorization to sell five million each in Federal deposits and sevings and two percent bonds '52-'54 taxable, and that cleans up those two. Regraded Unclassified RECISION TRADE MARK MICROSTAT MICROFILM BOLL NO. PENDING AUTHORIZATIONS Issues Postal Savings Fed. Dep. Ins. Corp. 26 Treasury Bonds of 1952-54. $5,000,000 $5,000,000 2-1/2% Treasury Bonds of 1967-72 5,000,000 5,000,000 Various tax-exempt issues. 10,000,000 10,000,000 $20,000,000 $20,000,000 $ Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ 166. U.S. PAT. ON, MICROFILM ROLL NO. & TO MOSTROT: There 1s transmitted herevith for your signature Form Valt Revised, Employee's Withholding Exemption Certifi- case, which should be filed la accordance with the pro- visions of the Individual Income Tax Act of 1944. It would be ampreciated If you vill return the certificate to - when " to completed so that empropriate setion my be taken in connection with the payment of your = salary. The President's salary to paid monthly on the 1nst day of each month by check of the Transurer of the United States, based won n. certificate of settlement Insued by the General Accounting office. JANoodson/se 4/20/45 4/21/45 MICROSTAT MICROFILM ROLL NO. RECISION TRADE MARK - 2 - MISS HOOKL: le have reservations to no by air Sunday Anril 21, 1945 night, but yesterday after he had motten clearance from 4:35 n.m. you for BY absence for six days, he decided that he didn't want to risk the chance of roing out there at the last WAR REFUGEE BOARD minute, and he decided that he would rather use the train reservations which he had, and he wants to have a period Present: Ir. Pehle to rest un and work this thing out with no. Going by train lise Hodel a fen days In advance would nean 1 will be away from the Irs. Elote office nine working days. I have a reservation by plane back. H.H.JR: Hello, Riss Hodel. Talk fast, will you H.V.JR: The point la this: I an tied un doing other clease, on way you want to no, and why the General wants people's work. It la nothing personal, but I 42 not roing you to no? to do it any more. lie telegraphed me asking If he could take you for a week, and I said 705, llow he wants you to VISS HODEL: Ser wants me to PO because the meetines no for two weeks, and If something should hannen down here, are being held by the United Jesish Welfore Funé of Los you don't know what, both you and O'Dwyer are away. I fum Angeles, which supports the JDC and the Pulestine Anneal tired, too, but it doesn't nake sense, Mas Model. I mean, Unit of the refuree service. The JDC people In liew York I don't see way the two of you--you not priority three, are anxious for the General to no because they feel his don't you! presence there, and a sneech from him telling for the first time scue of the work of the war Refuree Board and what the HIGS HOORE: 1 liave priority three coming back, but he JDC did will onable then to raise about two million dollars. not somebody In New York to make reservations noing out They have 5. large mumber of Touns there who are interested for Sunday night, and we checked on it and it in marked in this work and particularly the work of the JDC. The "no priority,' and he und nervous. JDC neonle in jew York and the General, too, seen to feel that in this Informal -roup that will be meeting before the You can net e priority. Charles Bell will large meetings questions will be raised on the work that ret you one. has been done in the past, and the General is very unsure of himself with respect to that. That's why he wants no, 120. KLOTS: T think, from what Mas nodel and told no, because he says I non the only one around here that knows that he doesn't want to "O by air. De la afraid-- about all those things. I know in detail want the JDC has been doine. MISS LOGEL: Testerday afternoon he not nervous about roing at suell = late inte. S.R.JR: Oh. 13. Fails: lie could net rounded. LISS BOOAL: In the last l've days lie has been pretty involved in nolitical stuff Chat la roing on in New York, MISS LODEL: They are building this un so big. and he wants to take the time to actually forget every- thing in New York and really work on this thing and do n. then? rood job for them. 1163 HOOTL: Lay 1 and 2, one night in Los Angeles to I.V.IR: thy can't you go by air? E large Toup, and one night in Hollywood. Regraded Unclassified PRECISION MARK MICROSTAT MICROFILM BOLL NO. 126A 3 - 4 - H.M.JR: You are starting Sunday? MISS HODEL: Tuesday night, if we go by train, and 13. PRILE: We'll settle it, lb. Secretary. You next Sunday night If we go by plane. forget about It. H.M.JR: You decide. It doesn't make sense to me. H.N.JR: To make it. two-day speech he takes Ass Do you want to run the thing two weeks while she is hodel out of here for two weeks. gone? You are leaving on a vacation May 1st. I really shouldn't be bothered about this. 18. PERIE: de can work that out. MISS HODEL: I don't think you should. E.N.J.: It's your responsibility. H.M.JR: You settle it. MISS RODEL: Five thousand Jews, Danish and Norwerlan Joss have just been released Into Sweden. And no e result MR. PERLE: We will settle it. of negotiations with Count Bernndotte, sixty-nine Jewish refurees arrived In Switzerland from Czechoslovakin, and H.M.JR: If, while they are gone, something comes all of the war refuree food parcels stocked In Streden have up I an not going to do it, and they come back and cry none into Cernany. on my shoulder. I'll do It anyway, and 1 don't think it's fair to ne. It's just dama nonsense. T nas very emphatic today because I feel that-- this has nothing to do with you. I know you are not look- MISS HODEL: I didn't nake the request of you, Mr. In- formed to it. Anythine I $67 In no way refers to you, Secretary. I realize-- but I realize you are working for this can and you are In n. rosition where you have to try to clease him. ow, John is H.M.JR: It's dama nonsense, because If somethin Assistant to the Secretar of the Treasury, and I have breaks and goes wrong--I told John to 20 away the first delerated the authority to his. It won't be your decision, of May--I'll be here and I an going to have to do it, and but John La a touch me, end he doesn't care. 1 an not going to do it. This man doesn't zean anything to me. It's dama nonsense. 1 think It's the most childish thine I ever heard of. MR. PEHLE: Leave It to me, I'll settle it. 12. PENE: I'll take care of it. H.M.JR: In order that the fellow can rest--you are the only person left. When is this speech? It is in no any directed at you, but sunnose something breaks, what de I do? I'm carrying the ball. I MISS HODEL: May lst and 2nd. have enouch to do. H.M.JR: It's the craziest thing I have ever heard of. ne's childish. Unless Pehle overrules me, and he has that privilege, you go by air. You have ample time to get priorities 3 and Charles Bell can get them out of the white House. It's ridiculous. Regraded Unclassified PRECISION TRADE MARK MICROSTAT MICROFILM BOLL NO. APR 21 1945 Engane My dear Mr. Weyer: There were two reasons why this morning's issue of The Washington Post appealed to ne especially. One was the editorial on the Seventh War Loan. The other was the editorial on Bretton Roods. both editorials are well written. In each case, the writer knew his subject. And the re- sult, in both cases, will be very helpful. = I appreciate very such the recognition by The Post that monetary, and general economic sta- bility, must be attained If the world is to hope for an ora of peaceful development. And the in- telligent way in which the problem of war finance is presented is In line with the active support The Post has given the Treasury in past Far Loan orives. Please accept my thanks for The Post in the case of both editorials. And will you be so kind as to pass along to the writers -- or writer -- of the two editorials, By appreciation? Sincerely, (sucont) sendy Mr. Eugene Meyer Editor and Publisher The Washington Post Washington, D. C. ElF:ve 4-21-45 Regraded Unclassi - 2 - April 21, 1945 Wednesday, May 16, New York City: Evening meeting with Tex Executive Institute Incorporated, at which perhaps 100 high-ranking corporation officials vill be present. An off-the-record MEMORANDUM FOR THE SECRETARY discussion. Friday, May 18, Buffalo Chamber of Commerce: On- From: Mr. Blough the-record speech at luncheon meeting. There (No action required, but would like you to read) will probably be 400 or nore present at this meeting. In harmony with a policy approved by you and Ae you will observe only the Buffalo meeting Mr. Gaston, I have participated in 8. number of off- involves en on-the-record talk. Mr. Gaston and I the-record conferences with individuals and groups Loth relt that it was very desirable to accept this on the subject of postwer taxation and as planning invitation. I hope to discuss the subject matter to continue this practice. In these discussions, I of this talk with you at your early convenience. go into the ways we are endeavoring to develop a postwar tax program. I also indicate the problems faced aná seck to get factual information and opin- ions bearing on them. My impression 18 that these RoyBlough conferences have been successful and useful from our point of view. The following additional conferences are scheduled: Rednesday, April 25, New York City: Interviews with (inancial noù other editors of the Times, Herald-Tribune, ena the Wall Street Journal. Thursday, April 26, New York City: Luncheon seet- ing with the "New York University Nen in Finance." An off-the-record talk aná discus- sion. Thursday, May 10, Cincinnati, Ohio: Luncheon with representative businessmen and community leaders. An off-the-record discussion. Inclassified RECISION TRADE MARK MICROSTAT/ REG. U, PAT. OFF. MICROFILM BOLL NO. > a teril 21, 1945. APR 21 1945 Dear Debs Dear Charley: It is with pleasure that I nov vrite to Ky heartiest congratulations: But the congratul=te you upon your appointment - Deruty President, and the newspaper sen and women, Mrector for Recemversion. I Imev the aff-tre and the radio and novie people, who serve as contacts between the White House and the public, of that office vill be obly administered under are the ones who really deserve to be congratu- lated, as you nove Inte- your new post. your direction, and I cand you best viales as It is always a matter of personal gratifi- you the to your nev cuties. cation for ne to see & friend of long standing V1th certial personal regards, get the recognition he Speerves. And when that recognition wears for you an opportunity to Sincerely, serve in a new and broader field -- and keeps you in Washington bealdes - I could not ask for (Signed) H. Morgenthau, Jr. more. Meanwhile I hope you have a pleasant time Mr. Robert a. in San Francisco. I know you will do a good Deputy Director for Recomversion, job on your last newspaper assignment for the Office of Veg Nobilisation and Reconvervion, time being -- and thereafter in whatever assign- Veshington, 3. C. ments may be given you. Sincerely, (Stend) Henry Jr. Mr. Charles G. Ross 117 Kennedy Drive Chevy Chase, Maryland EBF:ve 4-21-45 4.02 Regraded Unclassified MICROFILM ROLL NO. \ IMMEDIATE RELEASE APRIL 17, 1945 Frod M. Vinson, Director of War Mobilization and Reconversion, today announced the appointment of Robert R. Nathan as Deputy Inrector for Reconversion. Mr. Nathan was forcerly Chairman of the Tar Production Board's Planning Committee. He left the War Production Board in 1943 to enter the any an a private, and subsequently received a medical = discharge. PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. APR 21 1945 Dear Mr. Vanderpoel: Your column of April 17 is one of the best of your many splendid contributions. I say this, not merely because of the compliments you pay se, which I greatly appreciate, but because you have stated so clearly and succinetly the purpose of the Treasury, both in war financing and in matters of general ROBERT P. VANDERPOEL policy. That, it seems to no, is & type of interpre- tative reporting that is desirable at all times. It is of particular importance now, with the Seventh Far - Loan about to be launched. THE CHECAGO AMERICAN The public deserves to know not only WHAT is being cone in the reala of public finance, and HOW it is being done, but also WIT. And your evident purpose has always been to give this information. I thank you for the kindly references to no, and even more for the effect that your column will have in furthering good relations between the Treasury and the public at large. Sincerely, (Signed) H. Morgenthaw, Jr. Mr. Robert P. Vanderpoel Financial Editor Chicago Herald-American 326 West Madison Street Chicago, Illinois E3F:vw 4-21-45 Regraded Unclassified PRECISION TRADE MARK MICROSTAT REG. U.S. PAT. OFF. MICROFILM BOLL NO. FINANCE Tuesday Tip to Truman. Eye Morgenthau Record By Robert P. Vanderpoel Financial Editor The "hatchet boys" already have been busy. They have been operating on the President's cabines with great gusto, This member and that is to go. but quick. and so forth. Undoubtedly there will be changes. IL is only natural that there should be. But most of the "inside dope" that we have had thus EAT represents either wishful thinking or guessing in an effort to beat the game. For example, we heard one of the poison pen brigade from Washington broadcast that wiy quickly Henry Mor- genthan should be out - brail of the Treasury Department The facts are that this commentator and ethen. have born ARTINE the same thing for van Why have they wanted is an rid of Morrenthan? We suprent because lie has smeked underst in plus tax Inspiteire and и has term much tesis FIRAT in nease federal than The ton. he has misico spen . FINS signature hand upon ability se part Finally, declares reserving financial patier under Secretary have been made in Washington, net distained by Will Buws. Friend of Roosevelt Henry - . rime personal friend of Presklin Reservelt a mo be that he will be glad in give up the andress Treasury job now that his chief bas passed on Box if President Truman ruman the record. - may be MY sure that for will do rember in his priver 5a per- made Mercenthau to remain. What is that precent? The Treasury Department un. der the direction of Merantheu has collected to for the prestest tax revenues in Midory Tax re- eripts last year allone prarhed the supendous sum of $44,000,000 000. This contracts wun . penk el less than $7,000,000.000 enteried in the high year of the World WAT II period. Net entr is this . remarkable achievement in start. fest it. has been accomplisting with the na- jerity of people believing that they cost of World War 1 exceeds have received fair tax greatment MM. Fair, 85 Pct. Admit No One Has Lost Following the taxt March 15 Fullive time has bera period . Owhe pell handed in earh . marrift that trund as prr cent of the propir prantically ne burrr of # regarding their tax - Brié service has tost money on treated victory - "tur." Portune his Principal World massime M signat the same INV We I the American lest mair a starts et corporation En- - their Limited londs anrial statements and mubri planett Under Mor- the adentical -- that the financing their tax treatment had bren rain. of the was has bren readled so This record sien about be chat Mark . estastrophe rannot enough la ETTP the take plant highers decoration for se Brann promits entr this barest his country e time of war but F outline of the arront. bet if H suf- in ne more outstanding than the tirint in make E drit that If Treasury bereewing achievement Henry ders more under his direction. from the retirns the nation will During the tirst there war have fort an admini-trator who years the THEREOF bornowed has and M. well 1137 not 660,000. This mont - and the NY President will be ratsed at the lowns interest rates depaired el an aid who has in humany The seartr saving to handled the birent borrowing the people of this country - and financing john of all time pared with the become will the finest nf,a mailer. PRECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 136 Secretary Morgenthau - 2 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION compares the restricted Sixth War Loan 2-1/2's of 1966-71 with the unrestricted DATE April 21, 1945 2-1/2's of 1967-72, which were issued be- fore Pearl Harbor: TO Secretary Morgenthau April 2 April 20 Change FROM Mr. Hange Subject The Government Security Market and the Pricing of 2-1/2's of 1966-71 101.09 100.31 -.10 the Seventh War Loan Issues 2-1/2's of 1967-72 102.13 103.19 +1.06 In response to your request, this memorandus has been prepared to compare the estimated premiums on the Seventh Note: Decimals are thirty-seconds. War Loan issues now and at the time the maturities were This sharp difference 18 presumably caused announced. The first section analyzes market movements by the fact that, with the elimination of during this period, and the second section takes up the the 2 percent bond from the Seventh War effect of the market changes on the pricing of the Seventh Loan basket, banks have sought to buy the Mar Loan securities. unrestricted 2-1/2 percent issues before the supply in the market runs out. The re- I. Market Movements Since Your Announcement stricted issues, on the other hand, will of the Maturities of the Seventh War Loan Issues again be available in unlimited amounts in the Seventh War Loan. Since your announcement, after the close on April 2, of the naturities of the marketable issues to be offered during the Seventh War Loan, the price behavior of Govern- II. The Pricing of the Seventh ment securities has been mixed. Movements, classified by War Loan Issues maturity areas, fall into four well-defined groupst At the time you placed maturities on the new issues (1) Prices of bonds in the short-term area -- (April 2), we estimated their approximate premiums, based about three years -- have risen only on the then market, as follows: slightly (about 2/32). 1-1/2's of 12/15/50 12/32 (2) Prices of bonds in the intermediate-tera 2-1/4's of 6/15/59-62 19/32 (2 percent) area have advanced on the aver- 2-1/2's of 6/15/67-72 16/32 age about 15/32; and these issues are now selling at all-time highs. Since that time the outstanding issues most closely (3) Prices of the long-term restricted 2-1/2's, approximating the ones to be issued in the Seventh War Loan have changed in price as follows: on the other hand, have declined on the average about 7/32 since the close on April 2. (4) Prices of the unrestricted 2-1/2's have moved up sharply in contrast to the move- ment of the restricted bonds. This is 11- lustrated in the following table which Regraded Unclassified RECISION TRADE MARK MICROSTAT MICROFILM BOLL NO. Secretary Morgenthau - 3 Secretary Morgenthau - 4 1-1/2 percent area: 2-1/2 Percent Issue. The outstanding issue most closely 2's of 9/15/50-52 +13/32 resembling the 2-1/2 percent bond to be issued in the Seventh War Loan declined 10/32. About 4/32 of this decline can be 2-1/4 percent area: explained, however, by the interest "run-off" characteristic 2-1/4's of 9/15/56-59 +18/32 of 2-1/2 percent restricted issues, which WALG allowed for in 2-1/2's of 6/15/62-67 -2/32 the original pricing. Our estimate of the theoretical pre- mium on the new 2-1/2 percent issue, based on the market 2-1/2 percent area: April 2, was 16/32. On the basis of the market yesterday, 2-1/2's of 3/15/66-71 -10/32 we would reduce this estimate to about 10/32. Sunnary. The following table compares the estimated premiums on the Seventh War Loan issues, based on yesterday's 1-1/2 Percent Issue. The first of the issues listed market, with those based on the market inmediately preceding the announcement of naturities: above -- which most closely approximates the 1-1/2 percent bond to be issued in the Seventh War Loan -- has risen 13/32 since April 2. If our estimate of the premium on the new issue were to be increased correspondingly, 1% : Estimated Premiums would be 25/32, based on yesterday's market. Such a high : April 2 T April 20 prospective premium will put quite a strain on the polic- ing mechanism, and it will be desirable to watch develop- 1-1/2's of 12/15/50 12/32 25/32 mente closely. 2-1/4's of 6/15/59-62 19/32 19/32 2-1/2's of 6/15/67-72 16/32 10/32 2-1/4 Percent Issue. The 2-1/4 percent bond to be offered in the Seventh War Loan falls between the two middle issues in the preceding list. It should be noted that the restriction on the outstanding issue which rose 18/32 has less than 18 months still to run; while the re- striction on the outstanding issue which fell 2/32 still has about seven years to run. The new issue will also be re- stricted for about seven years, and it appears a reasonable supposition, therefore, that its behavior, if it had been outstanding, would have more closely approximated that of the outstanding issue with the longer restriction. We would, therefore, retain substantially unchanged our original estimate of the premium on the new issue (19/32). This, of course, a theoretical premium which say partly be "eaten up" by market adjustments as the war loan effective date approaches. This issue, and the 2-1/2's, will be available in unlimited supply, so it will be difficult to maintain a large premium; whereas the 1-1/2's should hold a good sized premium because of the small amount of the issue and the potential large bank demand after the drive. Regraded Unclassified OFF, MICROFILM ROLL NO. RECISION TRADE MARK TREASURY DEPARTMENT INTER OFFICE COMMUNICATION 140 - 2 - DATE for payment to the Bank of China, New York Agency. As might be April 21, 1945 expected, it has been found that most of the leading political TO Secretary Morgenthau figures in China have not purchased certificates in their own names or, at least, have not purchased certificates in their own FROM Mr. Coe you names which have been presented for payment. It was found, however, that a small group of purchasers accounted for the great Subject: Purchases of $200 Million of Chinese U. S. Dollar bulk of the total purchased and that among the largest purchasers Savinge Certificates and Bonds are organizations and individuals intimately connected with some of China's leading political figures. 1. In March, 1942, without prior consultation with the U. S. Treasury, The Chinese announced the sale of $200 million of U. S. 4. An analysis of $43 million of certificates which have dollar savings certificates and bonde by the Chinese Government been presented for payment reveals that 86 individuals or organi- at official rates. During the period of time during which these zations or less than 2 percent of the total purchasers accounted issues were sold the prevailing market rates were from two to five for about $28 million or about 70 percent of the total. These times the official rates. At present these certificates and bonde 86 persons and organizations each purchased $100,000 or more of can be sold for more than 15 times their original purchase price. the certificates. The Treasury has always suspected that top Chinese Government 5. Because of the difficulties involved in the identifica- officers were among the principal beneficiaries of these issues, tion of Chinese names, it has not yet been possible to identify particularly as B. result of the manner in which they were sold. all of the principal purchasers in terms of whos they actually Thus, of the $100 million of certificates a total of $50 million represent. There is attached hereto, however, a. list of prin- was sold between April 1942 and June 1943. During the last few cipal purchasers who have been identified with comments indi- days of July, however, the equivalent of $50 million were sold cating the individual whom they probably represent. of which about $30 million were purchased in Chungking in the last three days of sale. It will be noted that organizations or persons intimately connected with Dr. T. V. Soong purchased $4.4 million of the 2. The history of the sale of the $100 million of 10 year certificates; K. P. Chen, $4.1 million, and H. H. Kung, $1.4 bonds vas, if anything, even more spectacular and more suspicious. million. Moreover, the Ambassador to the United States, Dr. Thus, between April 1942 and October 12, 1943 only about $11 mil- Wei Tao-ming had purchased about $134,000. K. C. L1 about lion or about 1/9 of the bond issue was sold. On October 12, $189,000, and the Minister of Food, Hsu Kan, $124,000. Organi- however, a. leak took place that the government vas about to close zations controlled by Tu Yueh-seng, the notorious undervorld its sale of these bonds and by October 15 - three days later - gangeter leader had purchased more than $400,000 of these certi- the government had sold out the remainder of the $100 million ficates and organizations and individuals intimately connected issue. Both Adler and Friedman were informed by Anbassador Gause with Lung Yung, Governor of Yunnan Province and one of the that he, Ambassador Gauss, had it from a highly reliable source leading militarists of China, had purchased nearly $370,000 that Madaze Chiang Kai-shek and Madame Kung had between them of these certificates. purchased $50 million of these bonds. This story jibes with what we know about the sale of most of the issue in B. period of three days. 3. In the case of the short-term certificates, we have more exact and detailed evidence than in the case of the bonds since about 1/2 of the $100 million have already been presented Regraded Unclassified MICROSTAT MICROFILM ROLL NO. PRECISION MARK - 2 - 142 Chinese purchasers of U. S. dollar SAVINGS Certificates Purchasers Amount Commenta Purchasers Amount Connente Chung Yuan Paper M. - 309,067 Government concern Bank of China a 642,053 Controlled too: T. V. Soong Comercial Bank of China 309,066 Controlled by Tu Tuch-seng - famed leader of Shanghai underworld, confidant of Bang llow 257,697 Vice-President, Universal Trading Corp.: Generalissimo. Chairman of Board, China Assurance Corp. (Suboidiary of Shanghad Countrd. al Bank); Central Trust Company loading stockholder, Comercial Press. India office 177,121 Controlled by Dr. H. H. Kung confident of both E. P. Chen and Chang Chila-ngas and link between the to interists. Dah This Cotton Spinning 561,472 A trading subsidiary of Shanghai Commercial Bank controlled by E. P. Chen, the most Bank of China, Burna Agency 107,081 Controlled by 7. V. Soong noney-making concern of all E. P. interests chiefly deals in salt and other comodities. Bank of Communications 115,024 Controlled by Dr. 1. H. Kung Dah Teh Trading Co. 204,428 Representative of Jariline Natheson in Bank of Centon, San China, Francisco 1,289,841 Private bank cited by T. V. Soong, actively enringed by his brother T.A.Soong. Foh Sing Flour 1111 109,296 Controlled by Twang Chien-bui, C. Taang's Business done university with overneas Chin 10. brother financially linked with K.P. Chen. Central Bank of China 154,533 Controlled by Dr. H. B. Kung this Esin Coment à Co. 103,022 Controlled by K. P. Hu, Seechuan Corp. Change H. C. 113,530 Purhape Chang Hai-chi, President of Shang- Heainan Railway à Co. 128,778 Government concern. chuan Industrial Corp., formarly subsidiary of Shanghai Comercial Bank. Bhanghai Brantan Rad lway Co. 128,778 Government concern. Commercial Bank is controlled by K. P. Chen. Assistant Varager of Central Trust, canager Rung, Rosenend 151,443 Dr. H. H. Dung's eldest daughter. Chao, C. He 451,411 of Tangtae Trading Corporation, a business Running Bank 103,022 Controlled by Governor Lung Yung. confident of the Kung family. Lee Dong Chun 262,498 General manager of Dah-Yeh Trading Corp. Chekiang Industrial 295,427 Controlling interest in the hands of 11 ling, and one of K. P. Chen's chief lieutenants. who is closely associated 4th Chang Tai-ngau and friendly to 1, P. Chen. 11, K. C. 188,779 President of Wab Chang Trading Company. Chisa Automotive Co. 104,258 Controlled by K. P. So, leading (isechuan llao, T. T. 264,984 General larager of Fukien Bank in Kunring; capitalist. one of Gen. Lung Yung's chief licutenants. China Development 690,220 A holding company controlled by T. V. Soong lianyang Uros. Tobacco 171,017 Controlled by T. 7. Soong. China Insurance Co. 349,911 A subsidiary of the Bank of China which in controlled by T. V. Soong. Changhai Comercial Bank 1,088,193 K. P. Chen's bank. China Products Trade Controlled by T. L. Seong Chaci Cotton Spinning 103,022 Controlled by Tu Tueb-seng, Shanghas 280,221 underworld leader. Cid.na Sugar Hefining 154,518 A subsidiary of the Bank of China which La controlled by T. .. Soong. Sun Patrick 103,804 Son of Dr. Sun Fo, Pres. of Legislative Yuan. Chra lisin Chen Bank 149,371 The leading bank of Spediuan landlords and financiers known as Yang brothers to foreigners. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ use. U. PAT. ORI, MICROFILM ROLL NO. 143 - 2 - Purchasers Amount Commits April 21, 1945 Sung Sing Cottom 1811 $ 697,915 Controlled by Tsang Chien-huni, C. Trang's brother, financially tied up with T.P.Chen. Soong, T. he 228,105 One of the Snong brothers, who is closest to T. V. Soong. -2 dear AP. President: Teang, C. 983,890 z. P. Chen's confidential secretary and one of like most trusted lieutenants in the 1,8, 1 leaving tais afternoon to spend a few days with a wife at Daytona. Tung, c. L. 123,627 Vice Chairman of Foreign Trade Commission, On ay return 1 would appreciate an oppor- close to Hau Kan, Minister of Food. tunity to talk with you about the future economic treatment of Germany. Universal Trading 1,332,103 government concern. Wei Tax-ming 133,929 Anbassador to the United States. lours sincerely, Tangtae Trading Corp. 334,823 Controlled by Kung family (Signed) Eenry Morgenthau, 2 - Yu Foong Cotton 5111 126,785 Subsidiary of Bank of Crina controlled by T. V, Soong. Yu Ia Ching 103,022 Former President of Shanghai Chanber of Comerce, close friend of Generalissimo Yu Hwa Comercial 175,138 Dr. Kung's private bank ine President, Yu Hwa Cotton Spinning 370,880 A subsidiary of Bank of China which in controlled by T. V. Soong. The maite house. Regraded Unclassified MICROSTAT/ MICROFILM BOLL NO. RECISION MARK 146 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE 1, LIME In no ovent canil any differentiation be made between or special consideration be accorded to persons arrested, either as to manner of arrest TO Decretary or conditions of detention, soon the basis of FT HDW wealth or political, diplomatic, industrial, or FROM other rank or position. Revised undia of the economic, 2. Economic Directive cirectives on surve conglated. The basic point of difference between Treasury and the - beleting sure objectionnyle povisions other agencies In the economic directive concerns the question e revised (210 directives, at there remain soveral provisions Twell to of the imposition of controls on the Certan economy. State via in the 1. feel se should 00ject to the Clapton Comittee. and other agencies are bent upon requiring our military forces provisions are the following: to exercise widespread controls over the German economy. We have taken the position that this is completely inconsistent 1. Political Treative with the President's Directive and that in general the adminis- tration and responsibility for such controls should be left the last two sentences of Paragraph a (arret of nais to the Germane themselves. and others) now read of follows: For example, the State Department insists upon a provision 12 i. the 11:11 of condit ONLD union you encounter which would result in the imediate imposition by the Commander Germany, you .elieve birst certain persons within of widespread controls over the Geruan economy in order to pre- in these categories should not 0% subjected immediately vent inflation. we oppose this position and are suggesting to this treatment, you soowle report your useds alternative provisions which would name clear (1) that controls 1000 Venextions to the Joint Mels of staff. the of mages, prices, etc., are only to be imposed in exceptional and If elieve 11 desirable, postvone circumstances, and (2) that the question of control of inflation arrest of those WILDE CUDE ou luive aported. in the initial period la to be left entirely to the Germans with the specification that if inflation assumes such proportions The quite objectionable to us. This provision would to Le permit sentence Superson at Los request of the JVS ns to endanger the objectives of occupation, the Counander is to report that fact to Washing toa with his recomendations for suess adultocol) within the categories requires AS to action. persons to remin at 1srge pencing determination in arreated cererve special consideration. - provision in our position regarding control of inflation is based on whether casil, be soused to protool product call personalities the following: CHD the politionl are incustrial 1100 of e, Empolone, ur¿e that the sentence in postion DO celeted. (1) It will be an impossible task for the Aray to control inflation in Dermany and it would be a distinct disservice to in order is that noccial favor is not the the Apay to impose upon it il responsibility which it cannot granted accition of the following non sentence at the Drsover, to persons like wegg anó ven Pages, CO end propose = successfully discharge without reconstructing the German economy. Paragraph 8: Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 118 (2) There lo no evidence that price chan en will seriously interfere with the objectives of allitary occupa- Accordingly, we should urge that the words "or for tion, such as reparations, etc. other purposes 00 deleted from Paragraph 7(a), and that German external assets be held exclusively for reparation (3) The Ceran people have a greater interest in pre- or restitution. venting inflation than 1.0 do; Liney alone can tackle the job, and it should be left entirely to then. If to try to control inflation in Germany it will become the patriotic duty of Germana to sabotage our efforts. 3. Financial Directive (a) Paragraph 6(o) of this cirective also is an inflation control device which is objectionable for the reasons incleated above. This para rach 14.00 the military Communder responsible for assuring he reconstruction of the Cervan tax and fiscal system. we propuse that this paragraph be deleted from the directive. (b) Paragraph 7(a) provides for the seizure of all German external uspets. Under the provision no it now stands, these assets are to be unod Our reparation, restitution, "or for other purposes.' State Department, over our objection, insisted upon the Inclusion of the words "or for other purposes" with a view to assuring that German external assets are used as partial payment for supplies which they say be will inevitably have to send into Dermany. It in our position that this sup- posed financial advantage La completely illusory. The United States already has claims against Certany for war coste, etc., which far exceed any amount we can possibly obtain as reparations out of Germany's external assets. Accordingly, it is nerely self-deception to suggest that there is any financial [ain in using Cerman resources which are already ours by virtue of existing claims to pay for 100.5 to be delivered to Geruany during the control period. ..oreover, the application of German assets to this purpose my well serve to increase the ultimate financial loss of this Government, since the fact that ue apparently would DO receiving partial payment for [0008 furnished would be used as 4.1 argument for giving the Germane additional goods. It would be such better to make clear to Congress that if the furnish goods to Germany we are doing so entirely at our expense. Regraded Unclassified MICROSTAT/ MICROFILM ROLL NO. RECISION TRADE MARK April 21, 1945 150 12:30 p.m. - 2 visit from baruch GRS 9 report which be is going to give the President. I D. d. saruen came to see me at 12:30. ne told me asked whether - could see it, and Le didn't any yes or no. that ne net with the war Cabinet, and that they asked ue's convinced that there should be 6. group of State, aim now LE stood on the morgenti.au Flan, and he said the irensury, har, hav, and red to handle reparations and other similar questions. ne was talking about San nosennan for morgenthau Flan ABS all right, out be was much tougher toan morgenthau. secretary of this group. 1 said That is all right, but I all kind of surprised that oan wants us to open up the German ne tola ae of the argument de ned with Courchill and coal mines." And ne said, "ies, toe) have to." I said, the others about de-industrielizing Germany. According to non about getting it from england?" "Oh," ne said, "I know enruch, Courchill is still doubtful - and the thing that is that la the way you feel, out, menry, you're arong on that." worrying them is nussia. can't make up their minds Le sald, The english can't do it tecause they my even have to get coal from Germany." well, I'm still not con- whether they want a strong vermany to oppose Russia, or whether they don't. de salo Le used the argument with then vinced that that is right, but 1 went along with him on Sam that If you de-innustrielize vermany - look at all the hosenman cecause 1 think that they could do a lot worse. business you'll get. And, of course, that was the argument 1 gather that la want Le la pushing. 1 used, and to the cest of m) memory, 1. told then about It after quebec. 1 gather also that there is a great muddle baruch sale further that ne tried to encourage England amongst the english Cacinet members on reparations, but and the English people looking forward after V-E Day and peruch Lave them a great sales talk on now England could give them more confidence in themselves. 1 again say that recover at the expense of Germany. ..e seemed very sincere, ne certainly seemed to be friendly to me, and 1 suppose the and this time nis mind -no clear. I really believe the nan reason la that this time Le feels that he and 1 are on the means what ne saja. are claimed tast be wants to devote all same track. On, yes, + told nim that my boys nad told ne of his time to solving this verman question. that since President noosevelt's death that Clayton had turned e somersault for the worse on reparations. And the LE sald to me, ", don't see now you can E° attend with old man got fire in nis eyes and said that if Clayton doesn't pretton woods will the reparations question Is settled." behave ninself, ne's going to cut his heart out and drive nim out or washington. out ae wasn't near as positive about It as ne before ae went to angland. LE ala say tala - that the English were worried about the election coming up immediately after Y-E Le also told ne that Jimny Byrnes was for 8. strong Day, that bretton woods might be narmful to them. 30 be vermany - and that де was one of the real advocates working for It benind the scenes. questioned ae very closely sa to now long pretton wooda would take to jass, and 1. said at least another 30 days In the nouse, and then maybe two or three months in toe Jenate. Le sald, "On, that's all right, that's all right." ne said the critish election would be out of the nay. In other words, before he left he wanted to postpone wretton HOOOB until the reparations question was settled, and nom ne's willing to postpone pretton HOOGS until the english election is over. 1 can't help out cose to the conclusion that be can't De very strong for cretton woods, although be sale be uss. ne's always looking for some excuse to postpone it. And the idea that ne should postpone it in order to wait until the election in Grest oritain la over la just damn nonsense to me. ue evidently Regraded Unclassified EXECUTIVE OFFICE OF THE PRESIDENT TREASURY DEPARTMENT WAR REFUGEE BOARD INTER OFFICE COMMUNICATION INTER-OFFICE COMMUNICATION Date April 21 1945 DATE APR 21 1945 TO Secretary Morgenthau 10 Secretary Morgenthau FROM ... Coe F' For your information FROM Miss Hodel Let Dutch lend-lease agreement. The following information has just been received in cables from Stockholm and Bern: On April 20 the State Department handed to the Dutch a proposed lend-lease agreement under section 3(c) of the Lend- 1. 5,000 Danish and Norwegian Jews arrived in lease Act. This agreement and the accompanying papers were Sweden April 18th from Germany. Their re- practically identical to the lend-lease agreement signed by lease from German concentration camps le the Delgians this neek. the result of special negotiations conducted by Count Bernadotte, President of the Swedish As in the Lelgian agreement, the Lutch agreement contains Red Cross. only one schedule. This schedule totals $242,000,000, and does not contain articles having a long production cycle and 2. 69 Jewish refugees arrived in Switzerland April 19th. They came mainly from Bratislava. a long llfe. It will oe understood that such items will not be iven to the Dutok under Section 3(c) but If procured in the 3. The stock of Var Refugee Board parcels in United States must be paid for in cash or through other means Goteburg has been exhausted with the shipment of financias. The schedule noplies only to Retropolitan on April 16th of 140,000 parcels to Lubeck. Letherlands. In a draft letter from the Secretary of State to the Metherlands Ambassador, accompanying the agreements, Hodel reference is uade to the fact that the agreements contemplate reciprocal sié from the betherlands East Indies but that no straight lend-lease la included at the present time for the Retherlands East Indies. At our request, the letter WILE toned down 80 that it would not sound like an Invitation to the Dutch to request a lend-lease program for the Betherlands East Indies imediately after the signing of this agreement. It is assusec that if the negotiations do not result in any substantial departures from the Beigian pattern, the Treasury should not object to the signing of the agreement. RECISION TRADE MARK MICROSTAT MICROFILM BOLL NO. TREASURY DEPARTMENT TREASURY DEPARTMENT 154 INTER OFFICE COMMUNICATION INTER OFFICE COMMUNICATION DATE Apr. 31, LMS DATE April 21, 1945 TO Secretary Morgenthau TO Secretary Morgenthau FROM FROM Ur. White 12. White I as appending below the changes in the bill which in While 1 and good, I mould that you by judgment ne could accept without significant hara to the look to F. Luxford to substitute for be in the responsibility of following through on Bretton functioning of the Fund and Dank and without significant Woods matters. line Feltun inz carge of the public relations aspects of Lretton Hoods, effect nn the chances of adoption of the Agreement by other .r. Dernstein of technical aspects of speecies, selection and preparation of witnesses and countries. drafting of technical letters, etc. it. Connell taken care of arrangements on to 1111. Under Part II - including those Items which we can That's Los we have been operating and I think very readily accept. Under Part II I an Including those that ench of then understands what are Mr responsi- bilities. suggested changes which I think we ought to accept reluctantly Jr. O'Connell and it. Luxford are seeing and only Lf excential to get Wolcott's support. Mr. Wolcott this afternoon (I arranged meeting) to find out what happened et the conference which It is understood, of course, that no changes will be ac- Wolcott had with Burgess. cepted which Involve communents to the Agreement itself. I am appending at memorandum which gives IV detailed views on the proposed compromise. All the changes are those that would be incorporated only In our own legislation and will not modify any of the pro- vislons In the Articles of Agreement. Part I 1. à ден section 10 to be added, entitled "STABILIZATION LOANS BY THE SAME: (this La the substance of recommendations by the CED). "See. 18. If the management of the Bank does not Interpret Its powers under the Articles of Agreement 0.5 authorizing the Lank to make or Regraded Unclassified - 3 - 156 - 2 - general policies established by the Council. Except 0,0 otherwise provided in section 5 of this Act, the guarantee loans for programs of economic and monetary Council is hereby authorized, through the governor reconstruction which may Include long-term stabiliza- and executive director to give or refuse the approval, tion loans, the governor and executive director of consent, or agreement of the United States whenever, the Bank appointed by the United States are hereby under the Articles of Agreement of the Fund or the directed to propose and support an amendment to the Deak, such approval, consent or agreement of the Articles of Agreement for the purpose of explicitly United States 18 required before any act may be authorizing the Bank, after consultation with the done by the Fund or the Bank, respectively. No Fund, to make or guarantee such loans. The Council governor or executive director representing the is hereby authorized and directed to accept such United States shall, without prior consultation emendment on behalf of the United States. with the Council, vote In favor of any waiver of conditions under Article 7, section 4 or in favor 2. Section a is amended to read 8.8 follows: of any declaration of the United States dollar as à scarce currency under Article VII, section 3, of "ONTAINING AND FURNISHING INFORMATION" the Articles of Agreement of the Fund." "Sec. a. So long as the United States is a lart 11 member of the Fund, the President may require at any time, in the manner and under the penalties The suggesto cages below in IV judgment are not neces- provided in Section 5(b) of the Trading with the enemy Act (U.S.C., title 50, App. Sec. S), as enty and they will, to some extent, nake 11 little more dif- amended, the furnishing of any data that may be requested by the Fund under Article 8, Section 5, ficult the adoption of the Agreements of other countries, of the Articles of Agreement of the Fund." particularly Britain. However, I don't think their inclusion 3. Section 4 is usended to read ne follows: would be a declaive factor in Britain's decision or In the "INTERRATIONAL MONETARY AND FIRANCIAL COUNCIL AND REPORTS" decisions of any other countries, and If It is soing to be : "Sec. 4. (a) There is hereby established the cignificant help In winning Wolcott's support, I would not International Monstary and Financial Council (herein- after referred to 15 the Council), consisting of the object to their inclusion. The sentences are somewhat Secretary of the Treasury, 18 Chairman, the Scoretary of State, the Secretary of Commerce, the Chairman of changed from those originally Indicated In Mr. Luxford's the Board of Governors of the Federal Reserve System and the Foreign Beonomic Administrator. The Council draft, but the changes are in my mind Important and I feel shall act under the general direction of the President and in accordance with such policies as the Congress it would Le unite to accept the wording in Luxford's original may prescribe from time to time. draft where it differe from the wording Indicated below. (b) The United States governor and executive director of the Fund and Bank and their alternates I have already discussed these changes with Luxford, Bernstein, shall keep the Council fully informed of their ac- tivities and shall act in a manner consistent with and Brenner. MICROFILM ROLL NO. PRECISION TRADE MARK 157 - 4 - 5 158 1. Add to Section 4: (v) To exercise their full powers and influence "See. 4 (c) The Council and the United States to prevent the use of the rund and the Bank, for relief Governor and their alternates are directed: or for indebtedness arising out of the war; to see that the resources of the Fund are used only to promote ex- (1) To exercise their full powers and influence change stability, to mintain orderly exchange arrange- to secure coordinated pollcies on the part of the Fund ments, and to avoid competitive exchange depreciation; and the Lank and the highest degree of cooperation and to see that the Fund is kept informed of the necessary colleboration at overy point between their respective corrective measures that are being taken by members managements in carrying out the purposes of the /und that use the resources of the Fund; to limit the use and sank. of the resources of the Fund to meeting seasonal, cyclical and emergency needs for foreign exchange for (11) To exercise their full powers and influence current stabilization purposes. to see that the Fund is used only where It can appropri- ately be used for current stabilization operations and (vi) To exercise their full powers and influence that the Bank la used only where it can appropriately to see that when e. General scarcity of a currency is be used for reconstruction and development projecte and developing the report issued by the Fund shall set for programs of economic and monetary reconstruction forth fully the causes of the scarcity and shall con- which may include long-term atabilization loans. tala recommendations designed to bring it to an end; to see that the report recognizes fully the common (111) To exercise their full powers and Influence responsibility of the countries whose holdings of the to develop the basic economic conditions essential to currency are scarce and of the country whose currency sound prosperity, to a growing and balanced international in scarce, and that the recommendations are made not trade and to the establishment and maintenance of stable only to the country whose currency is scarce but to and orderly exchange arrangements; to encours the Fund the country whose holdings of the currency are scarce; to communicate its views to members on economic and to see that prompt corrective measures are taken so monetary conditions and developments which would tend that the scarcity of any currency can be terminated to disturb stable and orderly exchange arrangements; as soon no possible, that the limitations on the trans- to eliminate 12 soon 0.5 conditions permit all forms of actions in n. scarce currency are no more restrictive restrictive and discriminatory currency arrangements than La necessary, and that they are relaxed and removed among members; and to facilitate and encourage In other as rapidly na conditions pormit; and to see that the ways the elimination of discriminatory trade arran ements right of members ahose currency is scarce to make that hamper world trade and other forma of noonomic war- representations on the administration of restrictions fare that disturb harmonious international sconomic on exchange transactions in 6. scarce currency in fully. relations. safeguarded. (iv) To exercise their full powers and Influence (vii) To transmit to the Fresident and the Congress to assure the constructive use of the resources of the a quarterly report on the work of the Council, the opera- Fund and the Bank and to see that they are not used in tions and policies of the Fund and the Bank, and the a manner that imporila the financial integrity of either action of the United States governor and executive institution; to see that the Fund does not undertake or director and their alternates. continue exchange transactions with any member while its basic economic conditions are such 0.5 would lend to use (viii) To transmit to the Congress not later than of the Fund's resources on a scale prejudicial to the two years after the establishment of the Fund and Bank Fund to sustain an untenable exchange rate. a special report on the operations and policies of the Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. 159 - 6 - - 7 - 160 Fund and the Bank, the extent to which they have be supplied through the newly created U. S. Committee which achieved the jurposes for which they are established, recommendations as to how the Fund and the Bank my is being recommended through an amendment which can be be made more effective, and recommendations on any other necessary or desirable changes In the Articles later submitted to the governments after the Fund operates, of Agreement for the Fund end the Bank or in this Act. which would do what we had originally in nind, namely, nake (d) The Council, with the approval of the President, is also directed to coordinate the activities of all one of the members of the executive committee of the Fund a departments and agencies of the United States relating to International nonetary and financial matters to the nonvoting member of the bank executive committee and vice end that they guarantee such lonns. The Council is hereby authorised and directed to accept such amendment versa. on behalf of the United States." If that lan't satisfactory, I would not feel too strongly 2. Add the following section: "NITEDRAL" about having one governor appointed to not on both Fund and "See. 14. The United States Government expressly Bank board of governors, though I think that, too, would not reserves the right to 1thdrew from elther the Fund or be a wise move. the Bank, or both, at any time In accordance with the provisions of Article IV, section 1 of the Articles of Agreement of the Fund and Article TI, section 1 of the Articles of Agreement of the Bank. Notice La hereby given that the acceptance of membership in the Fund and Bank shall not be deemed in any way to morally or legally bind the United States to continue such member- ship If (a) in the opinion of the Government of the United States the policies of either the Fund or Bank are not in accord with the letter or the spirit of the respective Articles of Agreement or the provisions of this Act or (b) If for any other reason the Government of the United States determines It to be in the Interest of the United States to withdraw. D am n. little troubled about the section on withdrawal. It scens to indicate that the United States in not entering this agreement either with confidence or wholeheartedly. Lowever, I do not have any strong objections to it.) I feel rather strongly that it would be a mistake to have one executive director appointed for both Bank and Fund. If more coordination between the Bank and Fund is needed, It can Regraded Unclassified PRECISION TRADE MARK MICROSTAT MICROFILM BOLL NO. 16L TREASURY DEPARTMENT INTER OFFICE COMMUNICATION 182 2 - DATE April 1, 1965 to Secretary Morgenthau If anything of significance comes up which requires = decision, I shall, of course, get in touch with you be- FROM Mr. White fore any decision Le made. While at the Conference I will try to learn thether The Item on the agenán of the San rancisco Conference of there are any unnecessary obstacles to the quick considers- especial Interest to the Treasury la "Arrangemento for Inter- tion by other foreign governments of the Bretton Woods national Economic and Social Cooperation". proposals, In the event Congress adopts the proposals. It la proposed to set up under the General Assembly an How much I will be able to contribute with respect to Meonomic and Social Connoil which shell have for its purpose the matters deslt with at the Conference depends upon the "the oreation of conditions of stability and well Leing which extent to which the Secretary of State or other members of are necessary for penceful and froe relations among nations. the U.S. delegation will mant RV advice, and also on the The organization should facilitate solutions of International extent to which the Conference will 6° Into details of international economic matters. sconomic, social and other humanitarian problems and promote respect for hana rights and fundamental freedoms." LA DOIT of some of the provisions is appended.) There are, I believe, seven Advisors to Scoretary Stettinlus to deal with this aspect of the conference: Borman of Johns Hopkins, John Voster Dulles, Charles Inft of State Department, Mr. Brannan, Assistant Scoretary of Agriculture, Occar Cox, Mr. Waring of Commerce and myself. There are a number of provisions under this general heading, which include the structure and framework of the organization, its functions and powers, and relationships to International economic bodies such 0.5 the International Lonetary Zund and International Bank for Reconstruction and Development. How for the Conference will & toward working out all the details is uncertain. Same of the countries regard the organization, function and powers of the Roonomic and Soolal Council to Le at least no important no any of the other aspects of the Conference, but 1 think the desire of the U.S. delegation will be to postpone consideration of many of the details. Besides the relationship of the Economic and Social Council to the Bretton Woods proposals, the Treasury should have, I bellove, a keen Interest in the organization and powers of the Council as they relate to a lot of other economic matters touched upon In the prelimin- ary provisions. Regraded Unclassified MICROSTAT R$6. U. 5. PAT. OFF. MICROFILM BOLL NO. RECISION TRADE MARK - that THE RECRETARY OF 2b DEPARTMENT OF STATE WASHINGTON In reply refer to L-C April 16. 1945 Department of #tate CONFIDENTIAL BUREAU A-C EFFICER ENCLOSURE TO The Secretary of State presents his compliments to the Honorable the Secretary of the Treasury and transmite here- Letter drafted 4/7/45 ADDRESSED TO with for his information copies of two documents approved by = the Executive Committee on Economic Foreign Policy for con- The Honorable the Secretary of the Treasury sideration of the United States Delegation to the United Nations Conference on International Organization. These doe- usents are (1) "Social and Economic Objectives of the General ECEFP D-58/45 D-59/45 International Organization" (D-58/45) and (2) *Outline of Proposed Relationships between the International Trade Organization and the General International Organization" (D-59/45). Copies of these documents have been transuitted to the United States Delegation. Enclosures: ECEFP D-58/45 ECEFP D-59/45 POLYCTORY BUY &s Regraded Unclassified RECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL ECEFP D-58/45 April 4, 1945 SOCIAL AND ECONOMIC OBJECTIVES OF THE GENERAL international ORGANIZATION EXECUTIVE COMMITTE der ECONOMIC FOREIGN POLICY Chapter IX of the Dunbarton Oaka Proposals pro- Committoo on Spocialized International vides in part as follows: Economic Organizations "Chapter IX - Arrangements for International Economic and Social Cooperation "Section A. Purpose and Relationships. 1. With a view to the creation of conditions of stability SOCIAL AND ECONOMIC OBJECTIVES OF THE GENERAL and well-being which are necessary for peaceful INTERNATIONAL ORGANIZATION and friendly relations among nations, the Organiza- tion should facilitate solutions of international (As approved by the Exocutivo Committoe at economic, social and other humanitarian problems its mooting on April 4, 1945) and promote respect for human rights and fundamental freedoms. Responsibility for the discharge of this function should be vested in the General Assembly and, under the authority of the General Assembly, in an Economic and Social Council." It is the view of the Committee on Specialized Interna- tional Economic Organizations that the foregoing provisions should be elaborated in the Charter of the General Inter- national Organization 80 as to indicate more fully the objectives in the economic and social fielda in respect of which it would be advantageous from the viewpoint of the United States to obtain vide international agreement. The Committee suggests that consideration be given to a statement of objectives along the following lines: Section A. 1/ These objectives should be set forth in the Cherter wherever may be most appropriate. The opening phrases of the following statement might be placed anong the general objectives of the Organization which would prosumably appear in Chapter I of the Charter. The specific objectives listed in the economic and human welfare fields, however, might well appear in the same Chapter of the Charter which deals with the establishment of the Economic and ****** Council. In order that these objectives may be readily nocepted by the other governments no effort should be node to express then in any (reater detoil. CONFIDENTIAL Regraded Unclassified PRECISION TRADE MARK MICROSTAT PAT. OFF. MICROFILM ROLL NO. - 2 . - 3 - - Section A. Purpose and Relationships. 1. \ith for the control of opium and other & view to the creation of conditions of economic dungorous drugo; and for the provon- stability and social well-being which are necessary tion of traffic in womon and childron; for peaceful and friendly relations among nations, and the Organization shall promote the adoption, by all nations, of appropriate messures for the fullost and for the onrichmont of the cultural ondow- most effective development and enhencement of the nont of all nations by incrossing their human and matorial resources of the world, including opportunitios for scientific, oduca- measures tional, and other intellectual achiovement. A. In the Economic Field 2. The Organization, noting in cooporation with spocialized intornational organizations, shell for the maintenance of high levols of facilitate solutions of oconomic, social and other employment and roal incono in egri- humanitorian problems in accordanco with the forogo- culture, industry, and other pursuits ing objectivos. T OL panization sholl, whore and the achievement, under conditions appropriato, initiato negotiations nmong the notions of progrossive economic development, concorned for the croation of any spocialized coo- of improved labor standards, working nomic, social, or other organization or agency for conditions, and social security; the accomplishment of those objectives. for the dovelopment of productivo resources 3. The responsibility of the Organization for the throughout the world, the conservation dischurge of the functions sot forth in this of natural resources and the orderly Section shall be Vested in the Genoral Assombly distribution of essential commodition; and, under the authority of the Gonoral Assembly, in the Economic and Social Council. for the expansion of the production, exchange and consumption of Loods and services, the elimination of ell forms of discriminatory preatment in interna- tional commerce and the roduction of tariffs and other trado borriers; for the dovelopment of orderly and stable exchange rolations and the expansion of productivo international investment; for the dovelopment and mintunance of communications and of transportation and the prosorvation of froudom therein: B. In the Fiold of Human Welfare for the promotion of respect for human rights and fundamentel freedoms; for the protoction end improvement of hoalth, including nutritional standards; and for the promotion of wolfore standards for men, womon, and children; for Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL ECKFP D-59/45 April 4, 1945 OUTLINE 07 PROPOSED RELATIONSHIPS BETWEEN THE INTERNATIONAL TRADE ORGANIZATION AND THE GENERAL INTERNATIONAL ORGANIZATION 62 EXECUTIVE CONSITTEE or ECONOMIC FOREIGN POLICY I Committoo on Spocialized International Economic Organizations Gonoral Franowork Governing the Eatablishment of Relationships Chaptors I, II, V, and IX of the Dumbarton Onica Proposols contein provisions regarding the rosponsibili- ties of the proposed Genoral International Organization in the oconomic und social field. OUTLINE OF PROPOSED RELATIONSHIPS BET EEEN 1. It is provided that the General Assombly and, THE INTERNATIONAL TRADE ORGANIZATION AND under the authority of the General Assembly, the Economic THE GENERAL INTERNATIONAL ORGANIZATION and Social Council would facilitate solutions of intor- national oconomic and social problems" with a view to the (As approved by the Exceutivo Committoc at creation of conditions of atability and well-boing. This its muoting on April 4, 1945) longuago implice that the GIO and more specifically the Genoral Assembly would be responsible for the formulation of policios or programs for notional and international action designed to promoto the fullost end most offue- tivo use of the world's economic resources and to achieve and maintain e high and stable lovel of employment. Vhon the Chartor 10 drawn it any be desiroble to uso this moro spocific langurge rather than the longungo of the present proposal. 2. The Proposnls nalto it clour a) that the General Assembly of the General International Organization, acting through the Leonomic end Social Council, ia to coordinato the activities of specialized international oconomic and social organizations, which would have responsibilities 0.8 dofined in their respoctive statutes; b) that such coordination is to be schieved through ndvice and consultation (not instruction); and c) that Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. - 3 - 2 - b) The ITO should tronsmit to the Economic and e) that the specific means of establishing Social Council the agendo and documentation for chonnels of ndvico and consultation batwoon the conferences end mustings of the ITO, and should GIO and the spocialized organizations La to be loft afford the Council C. rensonable opportunity to con- to futuro agreements to be concluded botwoon the mont thoroon. GIO and ouch spocialized organization. c) The ITO should transmit to the Gonoral The forogoing points provido the gonoral terms of Assombly and to the Economic and Social Council all reference for working out a draft agreement to ostablish reports, rocommondations, resolutions and droft relationships betwoen the GIO and the proposed Interna- conventions of the ITO, and the Assembly or Council tional Trade Organization. The main purpose of such on should be from to comunt thoroon. agrooment would be to place the GIO in n position to harmonizo the activition of the ITO with those of the GIO d) The ITO should be ontitled to mako recommon- and of other mojor spoci:11zod agencies. It in ansumed that dotions to the General Assembly and the Economic and the agreements to be concluded botwoon the GIO and such Social Council. The Genorol Assombly end the Economic other agencies will, in so for 15 appropriate, bo subston- and Social Council should bo entitled to make rocon- tinlly similar. It will be obvious from what follows that mondations to the ITO with rogard to its nctivition unless all of the important oconomic ngencios Are brought or policica in the light of the functions or powers of into hormonious and close rolations with the GID the whole other spocialized organizations or in the light of framework or coordination would be seriously impoired. the coonomic principles and objectivos of the GIO. Such rocommundations any includo (1) proposcls for II the undortaking by the ITO of n.w nctivities dooling with subjects folling within its constitutional Reciprocel relations botwoon the GIO and the ITO torns of reference; and (2) proposele for joint colluboration by the ITO and other spocialized The agrooment botwoon the GIO and the TTO should mike orgonizations on subjects of joint concorn and on provision for the following relationships: mothods for giving offoct to such collaboration. Reprosontation Procoduro for resolving conflicts of jurisdiction or policy Representatives of the _conomic and Social The ITO should bo authorized to raise with the Council of the CIO should be untitled to participate, Gonorol Assombly or the Economic and Social Council without voto, in the deliborations of the Conforence any question involving E conflict betwoon the policies of the ITO and in other than clood sossions of the and activities of the ITO and those of other spocialized Exocutivo Board of the ITO. Ropresentatives of the organizations 1/ or or the GIO itsolf. The Conoral ITO should be entitled to participato, Ithout vote, Assombly :nd the Leonomic and Social Council should in the deliborations of the General Assombly of the be outhorized to review, on the initistivo of the GIO and in other than closed sessions of the Leonomic ITO, or on the initictivo of any other spocialized and Social Council. organization, or on thoir own initiativo, any conflict betwoon the policios or cotivities of the ITO and Information, Agenda, Reports and Rocommondations thoso of other specialized organizations or of the GIO itsolf, and to meko rocommundations to the spocialized n) The ITO should koop the Economic and Social organizations concorned. If such rocommendations do Council fully informed regording the activities of not rosult in rosolving the conflict, the Gondral the ITO. The Economic and Sociol Council should koop Asscubly should, if necessary end after honring the the ITO fully informed regarding the activities of the GIO which are of concorn to the ITO. organizations b) The It is casum that bofore reforring any such conflict to the GIO the spocialized organizations concorned would have modo offorts to sottlo the matter through their licison orrangements with cnch other. Regraded Unclassified 5 organizations concorned, anko recommendations authority in cortain circumstances to mko recommenda- tions directly to governments. The Dumbarton Ocks Pro- directly to governments. posuls are not cloar on this point. Unile cortain provi- sions such to imply genoral authority to make rocommondations Administrativo matters to governments.1/ under other provisions donling specifi- ing out such orrangements no my bo found procticable The ITO should cooporato with the CIO in work- onlly with the coordination of spociolized organizations the Council would appoor to be rostricted to the ming of for the catablishment of uniform personnel procticos, rocommendations to the spocialized organizations 2/. The procedures and standards of componsation, for intor- Economic and Social Council should clourly bo ompowered changes of steff, and for the standardization and to enko recommondations concorning the work of spocialized controlization of administrativo services. including organizations to the General Assombly, end these rooom- the collection end proporation of statistics. mondations should be ovoilable to governments. To doal with questions not adocuntoly comprohonded within the jurisdiction of any singlo specialized organization or whore time doos not pormit prior consideration by the III General Assembly, the Economic and Social Council should Budgetary Review by the GIO be onpowered to unko its rucommendations directly to governments. It is bolioved that in the Charter of the Under the Dumberton Ooks Proposuls, the Economic and GIO this mattor should bo clorified. Specifically, it Social Council would bo enpowored "to examine the adminis- should bo mndo cloor that the Zeonomic and Social Council trativo budgoto of spocialized organizations or ogencios wild be empowered to anito rocommendations not only to with el view to mking recommendations to the organizations the General Assembly end to the spociolized organizations but also to governments of member statos of the GIO 3/- or agencios concorned." It should bu understood that such rocommundations to This clauso could servo soveral purposes. In the governments should bu limited to recommendations which first place while its edocuncy to gottlo jurisSictional tro clourly in hermony with the brood policios of the disputos is opun to dobeto, it docs roonforco the other GIO 18 developed by the General Assembly. tochniques for coordination not forth in this momorendum. In the socond place, it will provide a useful stimulus to sound uniform occounting end administrativo proctices. Foxt, it will givo on opportunity for bringing togethor at a contral place the total of cach country's prospos- tivo budgotory assossments. Finally, It will give n plat- form for making cloor the necossity for universal financial support of essential organizations. Sinco thoso points are not spolled out in tho Proposals, the ngrooment betwoon the GIO end the ITO Point 1(b). Soction c, Chapter IX, provides that the should make thom cloar in such a way as to facilitate Council my "anke rocommendations, on its own initiative, the advisory function of the GIO. with respect to economic and social mitters." Under points 1(c) and 1(d), Soction C, Chaptor IX, the Council La to coordinate the specialized organizations IV through recommendations to such organizations, and to examino the budgots of specialized organizations with a Possible Elaboration of Dumberton Ouks Proposses view to mking roconmundations to the spocializod organizations. The agreement betwoon the GIO and the ITO outlined clso- If the Economic and Social Council is to discharge whore in this paper would contain an agrood limitation on offectively its functions of coordinating the netivities the outhority of the Economic and Social Council to moke of spocialized organizations, it will nood to have rocommondations directly to governments rugarding the roso- lution of conflicts betwoon specialized organizations. It authority would not be appropriate, howover, to provido for such a limitation in the Charter of the GIO itsolf. PRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. April 21, 1945 MEMORANDUM FOR THE SECRETARY From: Mr. Blough (For your information; no action required) After receiving your mesorandum of April 16 regarding your talk with Fred Vinson, I tried to reach him by telephone but have not succeeded thus far. I have talked with his assistant, Mr. Pritchard, who informs ne that Judge Vinson received the copy of your memorandum to the President on tax develop- ments. It may be that further information at this time on the subject has a low priority for Mr. Vinson considering his other duties. Roy Blough Regraded Unclassified PRECISION TRADE MARK MICROSTAT REG. U. s. PAT. OFF, MICROFILM ROLL NO. COPY 176 Truman 6-21-45 10-147 Stockholm Distribution of true reading only by special Dated April 2, 1945 arrangment. (SECRET w) Rec'd 4:45 p.m. MEMORANDE TO THE PRESIDENT: Secretary of State, There is transmitted borewith for your signature Washington. Form N-4 Revised, Employee's Withholding Exemption Certificate, which should be filed in accordance with the provisions of 1490, April 21, 5 p.m. the Individual Income Tax Act of 1944. THIS IS OUR NUMBER 136 FOR WAR REPUBLICS BOARD IN REPLY TO na 354 (Department's 694, April 18, 2 p.m.) It would be appreciated if you will return the Problem of finance has been discussed with local certificate to no when it Le completed so that appropriate Kerwegian labor group. They receive last 350,000 install- pent from the United States in March and these funds action may be taken in connection with the payment of your will probably be insufficient to carry then through April operations. Cleen promised to maion available "- group salary. seven 5,000 kronar of 198,500 transferred to nin from was confidential funds in Ankara. lowever except for The President's salary is paid monthly on the last day such additional funds as Claen may nake available from his special funds, local group will lack funds for MAY of each month by check of the Treasurer of the United States, operations and still - Olsen $50,000 previously loaned then. based upon . certificate of settlement issued by the General Trannael and Dransen have supplied report covering Accounting Office. March operations in Horway, translations of which are being forwarded by pouch. Daring Harch 1, 135 parcels were sent into Narway through licensing channels, containint approximately 15,000 kilograms of food, 3,310 kilograms of clothing and 300 pairs of shoes. About 9,000 kilo- grame of food and clothing were sent in through under- ground channels, as well at other supplies contributed by Swedish organizations. During March approximately 1,100 Norwegians were brought to Sweden through escape facilities financed in part/by American labor relief. JOHNSON MRM Regraded Unclassified RECISION TRADE MARK MICROSTAT REG. PAT. OFF. MICROFILM BOLL NO. PLAIN PLAIN 178 1,00 1,00 Dated April 21, 1945 Dated April 21, 1945 Rec'd 9:16 a.m. Secretary of State Secretary of State Washington Washington 1020, Anril 21, 11 a.s. TO NOB38 LEAVITT FROM JOSE/E SCHWARTZ NO. 26, 1019, April ai, 11 a.m. You ampropriated for Tugeslavia the eue of $10,000 to MOSES LEAVITT FROM JOSEPH SCHVARTS NO. 25, for the first quarter which apprepriation vsa exceeded In the light of present developments and after full by actual expenditure from here by $5,000. Weild recemmend discussion with Reanik recommend apprepriation $50,000 therefore apprepriation for Tugeslavia for second monthly for northern Italy for three month period begin- which will make total erpenditure for sing Hay 1st. This represents the same rate of expendi- six menths peried $25,000. Funts are being wed to ture that ve maintained in liberated Italy during early provide urgent relief necessities in the form of feed par- menths operation, Important you bear in wind that under cela and financial assistance. Va continuing our efforts agreement UNRRA will net be sparating in the ferward obtain permission for JDC representative preceed Ingeslavia military ureas and while ve hope receive ---- help for at which time more precise budgetary requirements and displaced persons the major responsibility at lease in information will be made available. early phase will fall upon us. Reply urgently to Lisben. KIRK KINK as RR Regraded Unclassified 180 PLAIN Rome Lenden Dated April 21, 1948 Dated April 21, 1945 Rec'd 9:20 a.m. Rec'd 4:35 p.s. Secretary of State, Secretary of State Washington. Washington 4096, April 21, 6 p.m. 1020, Anril 21, 11 a.s. FOR VRD JROM MARN, to HOSES LEAVITT FROM JOSEPH SCHWANTZ NO. 26, Please deliver a paraphrase of the following meange (ree Hareld Linter to M. A, Leavitt of the American Joint Teu appropriated for Tugeslavia the sur of $10,000 Distribution Comittee. for the first quarter which appropriation vas exceeded (MESSAGE ANGINS) Reference Belgium. Afforts being na/in here collect clothing by private arganisations. by actual expenditure from here by $5,000. Vould recea- Small stecks en hand which should be shipped to our committee shertly. General appeal not permitted by govern- mead therefore appropriation for Tugeslavia for second ment. Purchases impossible except used from municipalities from amounts ne longer required for air raid precautions. quarter $15,000 which will maite total expenditure for 100 has cabled Harrison ungine again prespt action your side spereving grant of $280,000 first six seaths 1945 six menths period $25,000. Funds are being used to which British have approved. previde urgent relief necessities in the form of feed par- Gymece. Every assurance from Mente Fiere that ICA cale and financial assistance. Ve centinuing our efforts vill participate extent equivalent $100,000 les Kassa which, bewever, subject approval British Treasury and obtain permission for die representative preceed Tugeslavia formal action ICA Council. Arrangine through Lublin press agency transmit by at which time more precise budgetary requirements and cable to here next days or weeks lists approximately information will be made available, 35,000 survivors Bialysteck, Leev, Lublis, Gredne, cost 760 peunds, of which believe one-half for CBP account. After months negotiation have arranged reimbursement KIRE $400,000 which unspent by Felleh Devernment for purpose ER originally intended. Accerdingly. I have $300,000 and in due course vill arrange transmission. $200,000 THE saining your side hence contact Counseler Regestanki, Pelist Consulate, Hey Terk, who in few days should have received cabled instructions from his government here to reimburse you. Please advise when you have received since I have agreed to make $100,000 available to Pelish lesgue Committee which includes Scherer and Schwartsbert for assistance Polish leve outside Peland provided whole $400,000 received by us and provided Pelish Devernment 1P1 182 #2 4096, April n. 1945, from Lenden PLAIN makes available $200,000 or $300,000 additional for Resoue Remo Committee program which will be subject to approval Pelish Devernment and myself and previded money not be used to Dated April 21, 1945 relieve Pelish Government or JDC of such aid " they nev rendering. (MESSAGE INDS) Rec'd 9:16 a.m. WINANT Secretary of State JT Washington 1019, April 21, 11 a.m. to MOSSS LEAVITT FROM JOSEPH SCHVARTZ NO. 25, In the light of present developments and after full discussiem with Reanik recommend spprepriation $50,000 menthly for northern Italy for three menth period begin- ning May 1st, This represents the same rate of expendi- ture that ve maintained in liberated Italy during early months speration. Important you bear in stat that under agreement UNRA will net be operating in the ferward military areas and while we hope receive ⑉ help for displaced persons the major respensibility at lease is early phase will fall upon us. Reply urgently to Lisben. KINK XR ASB-56 Sofia via Arwy This telegram must be paraphrased beddre being Dated April 21, 1945 condosted to anyone other than a Government Rec'd 2:50 p.s. Agency. (RESTRICTED) Secretary of State, Mashington 215, April 21, noon. I have received the following telegram from Troutman Istanbul, "The Joint Distribution Committee would like to for- ward in care of your sission substantial shipments of relief supplies for distribution by its condittee in F = Sofia. This this neet with your concurrence?" Have replied: "I believe that supplies should be consigned to Dr. Isurcus address Tear Sireon 101 Sofia. The Masion 10 prepared to assist him in whatever way possible." If Department has other views please instruct. BARNES RR 2 . 185 COPY No. Y NOT TO == RETRANSHITTED On fifth Army Front U.S. Troops have pusho: forward against dooronsing rosistance and now somo four milos hort O.T.P. of highway nine wost of Casolocchio while on just const further gains mndo South of Custolnuovo and 3, B. Sarzona. SECRET 6. Purma. Contral Soctor. Our foroos enptured Nagwo OPTEL No. 127 on Irrownddy against slight opposition while further -ast our troops have by-possed ryinmons end are now oporating in nrons 9 mile 3.8. and 12 milos -outh this tom. Information rodoived up to 10 A.M. 21st April 1945. AIR. N..V.L 7. Wostorn Front. 19th/20th. Bombur Commod despatched 1. Beltic. To LUTZON bonbod st Swindomundo on 16th airoraft 194 (without loss) 79 Borlin, 35 .ittstock and 80 now observed by reconnaissance to be down by the storn and Bomber Support and other targots. provably a_round. 20th 3. Bombur Conssand Innenstors 98 (missing ono) bombed oil doppt Hygunaburg (345 tons). 0.3. ascorted 2. llomo antors. 20th/21st. Cno of H.L. Prigntsa annk harvy Somb rs 503 imissing onc) droppol 1743 tons visually at lcast four explosive motorboats in >choldt approaches on 11 rail torgota in -orlin and Rugensburg nro a with mostly when five prisonors unre takon. good results. 38..2P (.1r) Hodium Bombers 560 droppod 940 tons with MILITARY good results on railuay contor and supply dupots whole fight- ore and fightor bombors 2264 (missing 17) operated Northorn 3. Tostorn Front. Southorn Sector. Co 13th and 19th and Contral sooters dostroying somo 1,200 rail and road First French Army continu od its stondy progress in Blnck vohicle and inflicting anomy chaunltics 3.16.14 in combat and Forost nron South of Strasburg while Enst of Prowdonstadt 88:0:111 on ground. it ndvanced 15 milos over-runnin number of places including 20th/21st. - Command dospitation aircraft 117 Tubingon where bridgo over River looker enstured inthot. (outstanding ono, including 81 Borlin. This ndvance Eratuards continued for further 15 miles, toget- hor with Southward thrust of 20 El los from direction of Hallo by Right Corie of Seventh U.S. --rmy now throntons on- 19th Hunvy bomburs 619 droppod 572 tons railway bridges Rattonb FS (25 milos U.S. innabruck) circlo Stuttgart. On 19th Nuramburg talton by Seventh U.S. where both bridges particlly distroyed, 310 tons on railway Regonsburg. army and armoured oloronts pushed 15 miles S.B. In direction vinduet over avisio, 163 tons on railway contros Rosunhoim Contral Soctor. Third U.S. -rry nais sains up to and 113 tona on Alagenfurt Inot onl aircraft 127' imissing 91 operated bettle T.S. 15 milos on wido front botwoon Boyrouth and Pinuon. Further North First U.S. army took Leiprig on 19th and on same day 9. clonrod ***** after honvy house to house fighting. Considere 10th Liberators 27 (missing ono / successfully nitneked docks longkor. ablo progress also boin_ mn..) in elearing ND Hortz rocket where rosistance collapsing. «lso on 19th uncmy not oltad in divisional strongth, supported by a omo 25 thnks, half tracks and solf-propollod guns, in arun N.M. drunstick brought under control. ponotrating nomo 15 milca towards Klotzo before boing Northorn Scotor. Second -Pay troops have cloored South bank of Albo from South Landoburg Mostwards to suburbs of Harbur while other troops out assourg - -Punch sutobahn. South of Intter town resistance stiff and progress alou while further Lost cnomy also resisting strongly against our alvances on Oldonburg and Endon whore acero Benvy counter attacks oncountorol. Other aross. The Rhur rocket now completely climinated na also Gorman rosistance on North a do Gironic Eatuary. 4. Boatorn Front. Contral Soctor. Gurunds admit Russian advance to thin four los Purstonwaldo (3.5. Borlin,. Furth : South Russians roport capture. cortain places noross Sproo S.W. of Cotthus while Gormans state Russinn forces now 15 milos Nost this town. made North of Vionnn. Southorn Soctor. Purther advances 42 to 2. millo 5. Italy. 4ighth any Scotor ... Argents British troops now approsching bridgo ono mile 2.2. Nolinalla while to Nost, Indian and 4.w Zonland troops have advanced ",0. and Enst of Budrio while still further West Polish forces have Modicinn. gained one milo against dotormined resistance lost of Regraded Unclassified U. MICROFILM ROLL NO. TRADE MARK MICROSTAT REG. 5. PAT. OFF. RECISION The New York Times. APR 22 1945 Epasident would permit the pres- his interest in the escurity char- NEW PRESIDENT EASES Nga of the Benetary of State, - - enforcement la that of the R. Mettinius Jr., to be undermined man who above all others misst by the demande that be instantly work with IL WASHINGTON TENSIONS replace the Secretary. For this reason, although he tax given the Ban Francisco delegalise Secretary of State Post a free hand and sought to Impose This demand came from accor no ideas of his own upon them. the admirers of James F. Rymes, who President must of course hold His Firmness, Vigor, Quick Decisions was former Becretary Cordeil self in . position to intervene, with Halfs first choice for the office suggestions of revision or disep- And Drive for Bipartisan Unity when he varated ft. and la also the proval, when the delegates solected choice of a majority of Congress by his predecessor propose any on both sides of the party siste. fundamental change in the draft Lift the Capital's Spirits And it cause from Democratic poll- of Dumberton Oaks. ticlane who would feel better if Refification His Task ennente tron their own racks- PRESS LIKES HIS FRANKNESS Mr. Bymes definitely was from On President Traman will fall their resks-ware next in the the the major burden of getting Benate of Presidential succession. relification for treaties growing The President, is his first week, out of San Francisco, as for the By ARTHUR KROCK disposed of all their speculations later peace treaties and agreements WASHINGTON, April 21-At the end of the first work in and fears for the present. He made Chemselves, And for all these Fea- office the President has accomplished these important things: it as dear as be could that be will sees be remain whilly sloot Be has shown firmness, vigor, promptness of decision, con- retain the Services of all who are from what goes on in the Ameri- is the middle of important can delegation. But his visitors Extence in dealing with difficult problems that are DEW to him. . and very specifically Mr. left him with the belief that be will to achieve the highest possible degree of hipartises unity will Illervene only when be thinks and harmonious relations with Congress, loyalty to policies that Birttinius This does not mejo It absolutely necessary for the suc- were being pursued by Franklin D. Receivelt, and . White House that, when be feela it nacessary con of his policy. stmosphere of typical Americanium and good cheer. and expedient, he will net make Three were - of the revels- many changes And M Andrew times in the first week of the new 1ª has met the representatives of the press, and for the Johnson said on succeeding Airs- Presidmt-casting light upon him time 4 they are his. He has answered their questions with ham iscola, sew and future - & person, as an administrator, amistakable eandor when be thought answers were required. policias must "be left for develop- - . loyal nuccessor and M a world and be has refund to answer the others, but without . trace of ment " the administration pro- statements, The net was calculated evasion. The words the used were groups in all quarters here to be very plain and left - inference that self the greatest man in the world high something must be read into them or aetter no for destiny then Meeting the Problems New must there be minimized And be indicated that instead of andose else, but ⑉ . mas who mosts to de the best be can and That has always been true of sew in this calculation the pleasant using the White House prese com- believes that best will be pretty Presidenta is times of change and White House relations that be has Personce as an instrument of pres- crisis and always will be. Alas, Mr. restored with man who were - sure - Congress he will use IL good. simply ALA . channel of public in- The country Missourian of Mr. Receivelt left . dear chart on war Mr. Rossevelt's black liet because Truman's trending - in manter and foreign policies only: the they opposed certain of his gets formation --- to clarify official great home and post-war prob- and policies, a has been almost acts and and will notify modest and tolerant of the views - are Mr. Truman's to solve ten years, for instance, since Sena- the Benate and House of Repre- of others, But be rather thinks sentatives direct of projects for that Americans are the finant and under policies of his cws. But the the Harry F. Byrd felt welcome all which be sexico legislation ablest people in the world and that President's actions were generally the White House, and in Chose ten country Missourians are typical of taken to meso that be will fallow yours he has rarely been Utere. He has met and talked - the best Americans, the course charted by his predeces- A61 Republican Senator Robert A. Ingly with the chief et sor as clossly and as long - be Twitt of Ohio had not passed united his ADD with Demo- The New Deslers, especially 1 the Untel since President Hertbert eratic and Republican leaders of those who formed what became He sen little doubt 13 the minde Hoover's term expired. Congress He has put success of known NA the "palace guant." were the conference at Bas Francisco anotions lest the President chart at of presons who talked with them omne . highly "conservative" course that be regards the world security and the unity et the mg Three BE Poland and other matiers in non- - they comprehent the mean- tonference and the American dele- ling of the world. With sume labor restion thereto an carryovers from troversy at the 1mp of bis tat et objectives-ar they ware at the redicate they were financial of his Mr. Roosevelt. For this reason he top of Mr. Ronsevelt's when to administion of and close associa- emphaxized that the members et died, tion with members of the Semate the delegation have . free hand whom they regard as "conserva- Erom him to do whatever they "Hemility" Discounted the or even-their most damaing think best at San Francisco, and adjective "reartionary." They as much of is M they can. His The President has done what be could to dissipate any idea that be were disturbed also ever reports visitors concluded that he will, of good about frier brueinnes in . per that the President would awiftly course, watch these declaine close- Interve United from office and - by. since after them he must help petual the of "humilty" de place them with graduates of the make the peace which, subject to apript. anses that WILL done to achool of elective politica. periodic revisions, the fan he diath is many пентрарег and Officiale and other persons - charter will be devised to racto skrtches of his personality restrating on international riler inforce. This being - carly- that work. He has behaved - - and the San Francisco secu- over from Mr. Rocervalt, but Mr. - and - one who thinks MMF may conference were afraid the Truman's complete responsibility Regraded Unclassified 100 - 2 - Copy No. inflicting enemy casualties 6:1:2 in combat and 56:0:32 on ground. NOT TO B. RETRANSKITTD Constol Command Halifares attacked shipping Skagorrak when direct hits obtained on two 3,500 ton C.T.P. ships which left on fire, while Resquitoos 45 thout loss) returning from shipping reconnnissanca off Norway destoryed 9 out of 10 aircraft encountored over Worth Son. SECRET OPTI To. 128 21st/22nd (Night). Bombor Counand aircraft dospitched: 150 (missing 2,, 109 Kiel, 20 Sea Wining and 32 dombor Support and other targota. Information received up to 10 A.M. 22nd April, 1945. 6. Nediterranoan NAVAL 19th/20th (night) Liborators dropped 220 tons in close support Anti-submaring Opentions. Righth Army. 1. 21st. Promising attack made on U-boat off North coast Ireland 20th. U.S. sacorted heavy Bombora 711 (missing 7) dropped 1639 tons railway targota Branner routo, South Austrin and rond by 4th oscort group. Liberator attacked surfaced U-bont off the Skaw with unobserved bridges PO Valley, while tactionl aircraft 1434 (missing 13) operated against railway targots Innsbruck area, communications results. >orth Italy and gove support battle aross. MILITARY. 7. S.E.A.C. 19th. Bombors and Fighters 170 attacked communications 2. Western Front. and army support targots Contral and Southern Burna. Southern Sector: First Fronch Army continued advance Last of Shine and South of Preulenstedt and Intest reports state spearhonds 15 miles from Suise border, while Stuttgart now completely encircled. Central Sector: Third U.S. army troops crossed Czech. border noar Asch. First 0.5. Army has also cleared Leipzig and area between this town and Halle while to North Desenti has been entered and Harz pooket reduced by half. Troops of Einth U.S. Army advance 10 miles down left bank of River albe from Vitton- berge. Northern Sector. Troops of Second British Any meeting fioroo resistance South Hamburg and 3. S. Brezon. Other Ar:as: Both aidos Gironio &stuory now cleared of enemy and F. taken this operation medor 10,000. 3. Zestern Pront Central Sector: Russians now within 15 milos of centro Borlin from NNE and East while further South they have advanced 25 miles lost Cottbus and to with 15 miles of Jresion from N.E. 4. Italy Sighth Army Sector: On right U.K. divis ons made substantial going to reach area 6 miles South /orrara where stubborn German resistance boing encountered. On left good 1P0- cross also made by Indian, New Zoaland and Polish troops Worth of highway 9, with latter reaching contro of Bologno at 0600 hrs. 21st and 2 hours leter linking up withu.S. troopo who had entered city from 3.7. Fifth Army soctor: U.S. and South African troops mado good headway west Bologna where they have crossed highway 9 at many points and have londing elements as for Worth as San Giovenni. (15 milos H.W. Bologna./ AIR state 5. further thotical aircraft 630 (missing 1) operated Southorn Westem Front: 20th. SHASP (Air): additional reports Soctor inflicting onemy casualtion 70:0:102 on ground. 21st. U.S. Escorted hoavy bombors 329 (outstanding Bembers 4, Fightors 6) attacked, using Pathfinder technique, railway contro Runich (260 tona), Ingolatadt (404 tons) and airfield Landsborg (15 tons). SHARP (Air) modium bombers 115 dropped 203 tons railway contro Attnang-Puchoim (S.". Linz) with excellent results, while Fighters and Fightor bombors 1230 (missing 7) oporated all sectors dostroying 290 M.T. and 48 locomotives and Regraded Unclassified RECISION TRADE MARX MICROSTAT/AUPATO MICROFILM ROLL NO. TREASURY DEPARTMENT 2 - 130 INTER OFFICE COMMUNICATION me, General Olmstead sala that the Generalissimo had told DATE April 23, 1945 them that be intended to out the number of troops be pays from their present figure to about 8-1/2 million, but that the TO Generalissimo had not indicated to the Army that he expected Secretary Morgenthau more gold from us or any other favors. FROM Mr. Coe General Olmatead said that the Army and the Chinese were Subject: Conference with Judge Patterson on China concerned about on economic collapse in China. If that occurred they did not know how they could get their local supplies. As you instructed I called on Judge Patterson on Monday, General Olmstesc thought that an anti-inflation program in taking with me Mr. Collado of the State Department, who selected areas might be successful -- the areas to be the will Clayton said would not for him. Judge Patterson called ones that the U.S. Army is to get supplies from. By questions, in General Olmstead who is in charge of supplies for Judge Patterson got the General to indicate that the Army was General Medemeyer and come back in the T. V. Soon; party. minly concerned with the trucks and the textiles which the Chinese were asking, and that the decision on the gold was some- Background thing for Secretary Morgenthau to make. Political Situation 1 told Judge Patterson that the Chinese mere requesting greatly increased shipments of gold, that you had spoken with the President who naked you to carry the ball, and that you Mr. Collado brought out that the Department of State night has replied you would take our notion in consultation with be concerned about the political repercussions, if the Chinese War and State. I gave the background of the loan, to uses failed to pay the gold which they had promised on the certificates the Chinese had cade of it, ,our own sense of responsibility which they are now issuing. (It would take SUSSO million and said that before you decided you wanted to know vist more gold to meet these obligations). the military planned for China. General Inflation Military Plans Judge Patterson and General Olmotead both recognized that Judge Patterson said the military plans were still unsettled. the inflation could not be stopped by any of the measures under General Olestend said, however, that all the military plans discussion, and that it was only n. question of palliative for the next period required us to get from Chinese sources corruption. a considerable proportion -- I judged about 20 to SO percent Abuses of the supplies needed for military operations. This would be the case, until a landing I.B.S nade and a corridor out from I stated that, apart from other issues, the Treasury was the sea to Free China. The outting of this corridor night concerned about the manner in which the loan had been used take anywhere from 12 to 18 months. The military were interested and the restricted number of individuals who had benefited. in the area around their lines of communications, that is, General Olmatead gave a good example: lie said that three largely the Kumming area in Southern China and the route from Chinese and three Americans had conferred for hours and finally there to Chungking. The General sald they lind & program for agreed on the recent increase in the gold price from $0120,000 equipping 36 to 39 Chinese divisions. to $CR35,000 per ounce. The agreed effective date was 48 hours from that time. The next day was a holiday. However, The Chinese had been giving very good cooperation, according during the second day the demand for gold was out of all pro- to the General. Judge Patterson said *Yes, out they do an 0 portion to any recent purchases and a big business was done. awful lot of lying sometimes." In response to a question from One of the principal purchasers was Jeanette Kung. Regraded Unclassified 191 192 . 3 - April 23, 1945 3:30 p.m. Next Meeting Judge Patterson thought that you would be calling or see- ing him on Wednesday about this. Meanwhile, he will talk Conversation with Clayton with Generals Olmstead and Somervell. Conclusion At 3:30 on Monday, Clayton called me and said that ne wanted advice. Leo Crowley is to meet him General Olmstead will try to get more gold sent there, tomorrow, and Leo Crowley WBS sore that ne had been on the grounds that it will somewhat ease the inflation. left out of the March 23 Directive on Germany, and Unless anayed by his subordinates, Judge Patterson will be ne thought - that is, will Clayton thought that inclined to leave the matter up to you, because he thinks Leo blamed Clayton. would It be all right with ne . and 1 said sure. you ought to decide whether a particular financial technique will be helpful. Vollado of the State Department will probably argue that the "arrears" -- US50 million -- should be sent. This latter figure is probably what Soong hopes to get. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM sou NO. April 23, 1945 TREASURY DEPARTMENT 8:15 a.m. INTER OFFICE COMMUNICATION CONFIDENTIAL Conversation with Clayton DATE April 23, 1945 I called up will Clayton this morning and told nim that everything WBS all right, and I'd be home TO Secretar argenthau at midnight. I wanted nim to tie through on the reparations question and revise 1067. On the reparations FROM Mr. Haha ne said be had a document which he had with nin which Subject: The Business Situation ce cad just read and be thought it ABS going to be all Week ending April 21, 1945 right. ne didn't think there was so much of a hurry because he had a memorandum from the President about Summary Lubin, and 1 said that 1 knew that Lubin wasn't to E°, and the rresident is joint to send somebody else. out Outbacks: Sharp outbacks in certain types of aircraft last week I don't think that Le'd do that. 1 don't know what served to focus renewed interest on reconversion problems. was in the memorandum to the rresident. According to the Army Air Forces, the outback in aircraft production during the remainder of the year will amount to then on 1067 said, "Let's get it through while 15 percent on B. weight basis. Effects of the outback on motloy is still here. And be said the would arrange for a the Ford Willow Run plant and on important subcontractors at Detroit are seen in the removal of the Detroit area from the meeting at 10:30 tomorrow morning, and he agreed that it No. 1 "acute labor shortage" classification. was important to get it through. I said, "Did Stettinium tell you that 1 have not been satisfied with the way Reconversion: Following earlier approval of machine tool orders, things have been going, and stettinius asked ne If It further steps were taken by the VPB last week to facilitate was agreentle for ae to work directly with him on economic reconversion of the automobile industry to civilian production, matters and 1 did not have to ⑆ through Grew and work including authorization of substantial expenditures for plant with wrew on political matters. Stettinius badn't said readjustments and rehabilitation of toole and equipment. A recent survey by the NICB discloses that earlier business fears E. word to alm. And as nell, DE said something to Dean over the difficulties involved in cancellation of var contracts Acheson. 1 don't suppose that was too tactful, but I in general has been replaced by a confident attitude. can't understand - Stettinius tells it to Acheson. At least Le must have told Acheson part of my conversation Steel operations: Steel ingot production in March rose to the and didn't tell Clayton. Clayton says he has been on third highest monthly level on record, following the unusually the mill the last five or six days on this Reciprocal severe operating conditions experienced earlier in the winter. Steel operations in April have been hampered by unauthorized Trade thing, and Le is having a hell of e time. ne sounded coal strikes, which curtailed scheduled output last week to morning. very harassed. Anyway we'll get off on that Tuesday 91.9 percent of capacity. Preliminary reports indicate that coal output improved last week, and steel operations during the ourrent week are scheduled at 93.2 percent of capacity. Conmodity prices: The all-commodity wholesale price index in the week ended April 14 rose 0.4 percent to a new vartime peak, 40.7 percent above the pre-war August 1939 level. The BLS index of basic commodity prices showed little change last week, with moderate declines in corn, wheat and steers offsetting a further advance in cotton prices. Stock prices: Stock prices last week advanced to a new high for the year, although trading declined considerably after Monday, when transactions on the New York Exchange reached the highest level since June 16, 1944. Industrial stock prices in London have advanced to a new var time high, and now stand above the highest levels attained in 1929 and 1936. Regraded Unclassified PRECISION TRADE MARK MICROSTAT PAY. ORF. MICROFILM ROLL NO. 1°6 - 2 - 3 - Cutbacks in var orders increase In order to hold down lay-offs at the Murray Corporation, Impending reconversion problems growing out of cutbacks the WHO has authorized the Corporation to change the work week in war orders and lessening military needs in Europe continue at its main plant from a 48-hour week to a 40-hour week. This 10 said to be the first time such action has been taken in a to feature current business discussions. Following recent indications of a slackening in shipbuilding, important out- major Detroit var plant since the automotive industry converted backs in aircraft production were revealed last week. The to war production. output of B-17 Fortresses and B-24 Liberator bombers, among others, 18 to be out sharply in coming months, In this Procedure for handling outback announcements being studied connection, both the Lockheed Aircraft Corporation and the Douglas Aircraft Company believe that their voluntary quit rate Some of the announcements of outbacks in aircraft and other factors will be sufficient to enable them to operate without any actual lay-offs of employees. production last veek were made by individual manufacturers, and the WPB chairman subsequently expressed dissatiefaction with the In the case of the Ford Willow Run plant, however, more handling of the matter. In addition to apparent fears over the adverse affects on var workers, Mr. Krug took exception to serious repercussions are likely. The Army Air Forces have announced plans to terminate production of Liberator bombers at alleged exaggerated reports of cutbacks in var production. He stated that in the future, announcements of outbacks in military this plant not later than August, and the opinion 10 expressed that the plant probably will not be used in other var work after procurement vill be made on a national basie from Washington and that a. committee 18 now considering the procedure to be followed. that date. In addition to the aircraft manufacturers themselves, Recent estimates of outbacks in war production after V-E Day & great number of subcontractors will be affected by the outbacks. have shown considerable variation, but on the whole have tended Douglas Aircraft and Lockheed Aircraft are reported to have to foreshadow sharper outbacks in actual production than earlier notified more than 3,000 subcontractors and materials suppliers of the reductions. anticipated. According to the Army Air Forces, the outback in aircraft Further authorizations granted for automotive reconversion production during the remainder of the year will amount to 15 percent on a weight basis. Production of some planes, such a.e the B-29 Superfortress and others, will be continued in Following earlier approval of the placement of orders for increased quantities, and it 16 indicated that Havy plane $50 millions worth of machine tools and equipment, the WPB last procurement will not decline until the decisive stage in the week approved applications of various automobile manufacturers to spend approximately $35 millions for plant readjustments and war against Japan has been passed. about 840 millions for rehabilitation of tools and equipment needed for civilian car production. An AA-3 priority rating has been granted automobile manufacturers for obtaining machine tools Employment slackening in Detroit area needed to resume civilian production. Moreover, it was reported last week that the VPB 10 preparing an order which will permit The recent cutback in aircraft production appears to have producers of a broad list of consumer durable goods to place contributed importantly to a noticeable easing in the manpower priority-rated orders for machine tools needed for peacetime situation in the Detroit region. The War Manpower Commission production. announced last week that the Detroit area was being transferred at once from a No. 1 "acute labor shortage* classification to a No. 2 olassification. In addition to the sharp outback at the Business fears over contract terminations diminishing Ford Willow Run plant, the Brigge Manufacturing Company, the Hudson Motor Car Company, and the Murray Corporation have begun Another encouraging development of the past week, in to lay off employees due to aircraft outbacks, connection with the post-war outlook, was the revelation of results of a survey by the NICB regarding the difficulties of var contract cancellations. A survey of 150 executives revealed that, in contrast to earlier fears that cancellation of war contracts would result in staggering inventory losses, Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. - 4 - - 5 - business executives in general are now confident that such will companies to operate successfully. Moreover, it 18 asserted not be the case. More than half of the companies that have that with the return to peacetime conditions the companies experienced terminations state that they have had no difficul- no longer will receive the benefits of higher-priced products ties of any kind. An overwhelming majority of the companies which they have manufactured during the war, and which have reported that at least 75 percent of their inventories are pro- served as an offsetting factor against losses in other lines. tected against losses under existing termination practices. It remains to be seen, of course, whether the 150 Construction awards higher in March executives polled adequately reflect the experience of business 8.8 a whole, particularly small business. In this connection the After running at a very low level throughout 1944 and the following remarks of one executive regarding the position of early part of this year, total construction contract awards as small manufacturers in of interest: reported by the F. W.Dodge Corporation improved noticeably in March, Total awards during the month were the highest since "At present many small manufacturers are riding along August 1943, and were 67 percent above the March 1944 level. with large bank balances and do not have the faintest conception (See Chart 2.) of the problems that will face then when termination comes. They are not set up to handle terminations properly; they fail Examination of the detailed figures, however, reveals to realize how rapidly situations will change at that time; and that the increase vas very largely due to a sharp increase in they do not understand that most of their working capital, if Government-owned nonresidential projects. Two large powder not all of it, 10 going to be tied up in inventory which they plants in Indiana were by far the most important items in the month's awards. Residential construction awards, as might be are not prepared to convert into cash." expected in view of building restrictions and naterials shortages, continue at very low levels, with avards in March 24 percent Steel operatore hampered by unauthorized coal strikes below the corresponding month last year and 88 percent below March 1942. Following the production losses suffered in the early part of February due to severe weather conditions, steel ingot production rose sharply in March, and attained the third highest Divergent commodity price trends monthly output on record. Nevertheless output var still 1 percent below year-carlier levels. (See Chart 1.) Moderate price declines for steers, corn, and wheat, offset a further advance in cotton last week, causing the BLS Steel operati in April have been hampered by a shortage basic commodity index to continue within the narrow range of of coking coal arisit ron unauthorized strikes in the coal mines. the previous 5 weeks. (See Chart 3.) As e result of this situation, operations last week were scheduled at only 91.9 percent of capacity. However, preliminary reports The grain futures markets turned down somewhat, following indicate an improvement in coal output last week, and steel their sharp advances of the previous two weeks. Barley futures operations during the ourrent week are scheduled at 93.2 percent on Friday declined 5 cente a bushel, the permissible limit, of capacity. (Refer to Chart 1.) influenced by reports of enlarged importe of Canadian oats, which are likely to reduce the feeding demand for barley. Cotton futures, on the other hand, reached new high levels, Although price ceilings on some basic steel products were with the May delivery at the highest level of any month since raised in January, steel producers contend that further upward revisions are necessary. During the past week, 40 non-integrated the 1927-26 season. steel producers, representing about one-fourth of the wage earners Higher prices for agricultural products put the BLS in the industry, petitioned the OPA for "immediate, equitable and all-commodity index noticeably higher in the week ended April 14, adequate price adjustments in order to prevent further serious financial losses to a great many of the companies. They con- raising it 0.4 percent to a new vartime peak 40.7 percent above tended that products which will be manufactured under peacetime conditions will not, at current prices, enable most of the Regraded Unclassified MICROSTAT/ PART. OFF. MICROFILM ROLL NO. PRECISION TRADE MARK - 7 - - 6 - Action taken to increase meat supplies the pre-war August 1939 level. (Refer to Chart 3.) The rise vas A program to increase the production of neats and to improve led by an increase of 3.9 percent for fresh fruits and vegetables. their distribution, particularly to metropolitan centers, has been Potatoes were sharply higher, and substantial increases occurred announced by the Director of Economic Stabilization. The 10-point in prices of apples and lemone at Chicago. The all-commodity plan involves en increase in subsidies of possibly $27,000,000 & index 18 now 1.6 percent higher than at the same date last year. year, and the addition of 500 agents to the OPA staff for more effective notion against the black market. Car shortage reduces mille' whent supplies Major details of the program include (1) cancellation of a scheduled reduction in the general ceiling and subsidies on live A serious shortage of available whent in all major milling cattle, to encourage feeding, together with an increase in the areas, due to the shortage of freight cars, vas reported to the subsidy spread between the higher and the lower grades of cattle, Mar Food Administration last week by 61 committee of grain men to promote the production of better grades; (2) e special subsidy representing the Lower Lakes milling area. According to this to insure against losses to slaughterers who cen prove that they committee, grain receipts at the unjor markets of Minneapolis, operated profitably in the 1938-41 period; (3) a restriction on Kansas City and Buffalo are running at about 40 percent of form slaughter for onle; (4) & limitation on slaughter in plants daily milling requirements, while mill stocke available to fill not under Federal inspection; (5) increases in maximum prices for the E&D amounted on April 7 to the equivalent of only 18 days Army beef. There will be no increase, however, in general ceiling full running time. Millers expect an extrese pinch to be felt prices on meato. shortly after May 1. The shortage of flour receipts in eastern markets has Stock prices rise to new high begun to affect the consumer, according to press reports. The Northwestern Miller mentions that grocers in New York City have Stock prices advanced sharply at the beginning of last begun to limit sales to 5 pounds per customer, and in nome veek on the largest trading volume since June 16, 1944. Further communities to 2 pounds. moderate advances to new high levels for 1945 occurred on Tuesday end Wednesday, but trading activity declined stendily through To help relieve the shortage of freight cars in the whest Friday. (See Chart 4.) Moderately declining price tendencies regions, the Association of American Railronds has ordered a which developed after mid-week were supplanted by renewed firmness moderate increase in the number of empty boxcers delivered daily on Saturday. At the close of the week the Dow-Jones average of to Chiongo and other middle-western gateways. Furthermore, n 65 stocks vas 3 percent above week-earlier levels. Publication permit system for moving all grains and grain products in western of short interest figures during the week revealed that as of railroad territory 1s expected to be out into effect shortly, April 13 the short interest on the New York Exchange was 159,000 dictated by the need for noving large quantities of wheat and shares below the total of 1,520,000 shares reported as of flour required for feeding the liberated areas of Europe. The Merch 15. Nevertheless the short interest VILE still three times proposed plan would be under the direction of industry committees 0.8 large 0.6 at the time of our entry into the war. to be set up in the major markets. While milling groups in Minneapolis and Kansas City oppose the plan, contending that the The rise in stock prices in the United States continues to permit system would do little to solve the basic problem, the be accompanied by & rise in industrial stock prices at London. ODT reportedly has indicated that the only alternative yould be In fact, at the end of last week the London Financial Times a priority system for movement of army flour and wheat. industrial stock overage stood at the highest level attained since compilation of the average vas begun. Last week's closing average Army purchases of flour have recently been accelerated, 140.2. of 145.4 compared with the 1936 high of 143.5 and the 1929 high of according to trade reports. Estimates in the trade of Army needs during the coming months range from 25 to 33 percent of total mill production, and mills are pessimistic about their ability Recent publication of 1944 average earnings of stocks to meet both civilian and Government requirements in view of the comprising the Dow-Jones industrial stock average revealed that transportation bottleneck. overage earnings last year showed a gain of 3.4 percent over the Regraded Unclassified - 8 - 1943 level. In conparison, the prices of stocks included in the average showed a gain of 6.3 percent in 1944, thus narrowing somewhat the disparity between prices end earnings which had developed since 1939. (See Chart 5.) It will be noted that no a result of the rise in recent months, the Dow-Jones average of industrial stocks now stands about 20 points above the 1944 average. Assuming that earnings thus far in 1945 have shown no great change, this would indicate that the relationship of prices to earnings is now fairly close to that which prevailed on the average before the war. = Chart 1 Chart 2 2°3 STEEL INGOT PRODUCTION TOTAL CONSTRUCTION CONTRACT AWARDS (37 States, F. W. Dodge Corp) PERCENT PERCENT DOLLARS DOLLARS Percent of Capacity 1943 Millions Millions 100 100 1000 1000 1942 9441 800 800 90 90 1945 1940 600 600 80 60 1940 400 400 70 TO 200 200 1945 1944 60 60 o JAN, MAY JUNE JULY AUG SEPT OCT. NOV DEC o FEB MAR APR JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC. NET TONS NET TONS Millions Millions Tonnage 1943 RESIDENTIAL CONSTRUCTION CONTRACTS AWARDED 8 8 DOLLARS DOLLARS Millions Millions 1942 1944 7 200 200 7 1945 1940 150 6 150 6 100 - 100 5 5 1940 50 1944 50 4 4 1945 o JAN FEB MAR APR. o MAY AND JULY AUG. SEPT. OCT NOV DEC 3 3 JAN FEB MAR APR MAY JUNE JULY AUG. SEPT OCT NOV DEC The et - Servey of - Treasury Source American and time! assiste - # - - C-558 Office el the berry of the Treasury C-532-A bue / - - been RECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. Chart 4 205 STOCK PRICES, DOW-JONES AVERAGES Daily WHOLESALE COMMODITY PRICES 1944 1945 Oct - Dec Jos Feb Mar Age If a 1 * - , = . . . a m . . II 1944 1945 DOLLARS DOLLARS PERCENT PERCENT 30 Industrial Stocks WEEKLY 1926.100 160 160 107 107 155 ISS 150 150 106 106 145 145 105 28 Basic Commodities. B.L.S. 105 140 140 54 54 104 104 20 Roilroods 50 50 103 889 Commodities. B.L.S. 103 46 46 102 102 42 42 101 101 30 30 IS Utilities € Chart 28 28 100 100 JAN MAR MAY JULY SEPT NOV. JAN MAR. MAY 1944 1945 26 26 Office of the Secretary elf the Treasury 24 24 - - - - P-156-0 SHARES SHARES Milians - Volume of Trading 2 I I I o o , # . - 3 e D4 , , . . . = # n I . . . Det I Dec. JOS Feb. Mas, Apr 1944 1945 - - - - - Regraded Unclassified RECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. 12 STOCK PRICES AND EARNINGS 30 Industrials Comprising Dow - - Jones Average DOLLARS DOLLARS Per Shore Per Share (Prices) (Eornings) 190 13 180 12 170 II - - IGO Earnings 8 150 9 = 140 8 130 7 120 6 Prices 110 5 100 4 90 3 80 2 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 Source - and Chart 5 Office el the Secretary - The Treasury - of - - - P-286 Regraded Unclassified RECISION TRADE MARK MICROSTAT 466. u. 5. PAT. OFF. MICROFILM BOLL NO. 12" LPR-626 PLAIN Lisbon Dated April 23, 1945 Rec'd 10:20 p.m. Secretary of State, Washington. 859, Twenty-third vous 392 JIX 224 FOR LEAVITT PROM TROHE. = layer received request from Rabbi Joel Teitelbaum Durich for assistance his program of aid to children nany of whom allegedly living in nonJewish hones. Saly advises be prepared assist but wishes losse whether Federation Danulation Jews Nameu Street with whom Teitelbaun associated 18 organisation with which you ready cooperate. Also requests information relative your relations Anerican Bangarian Relief Incorporated whose work Switzerland headed by Francois Homily and with which Saly favorably impressed thus far. Please advise. BARUCH MM Regraded Unclassified 209 278 CARES TO AMERICAN LEGATION, этоскноги, FOR CLESS, PROM THIS WAY REFUGES HOARD CARLE TO AMERICAN LEGATION, BERN, FOR MCCLELLAND, via VAT REPUBLES HARD Please deliver the following message to Hilol Storch, Postbox 7306, Stockholm Please deliver the following левзадн to Dr. Molf Preudenterg, 41 from nurt Crossman of World Jewish Congress, Avenue de Changel, Geneva, from Ieland Hox Rotinson of American Christian June ACCORDING TO JENISH TELERAPHIC AGENCY APRIL 16 CAUP MICHOENHELSKN Connittee for Refugees, Inc.: LINERATED, ANXIOUS LEARS WHETHER YOU ARLS SEND FOOD SUPPLIES TO THE LIBERATED PERSONS TISS. UNQUOTS LUOTS SECOND REJUST TO PROTESTANT UPISCOPAL CHURCH PROM HISHIANN AX, 19, STOP REPEAT CANNOT ASSIST INDIVIDUALS. MUST 40, DONE YOU FOR ALL PROTESTANT CHURCH THOUPS. UNITED TICS IS we STOCKHOLM NO. 361 THIS IS une HEAM CARDS NO. 507 4,30 palla April 23, 1945 4:30 Polla April 23, 1945 Regraded Inclassified MICROFILM ROLL NO. 210 JP-686 Ankara via Any This telegram mast be paraphrased before being Dated April 23, 1945 comminicated to anyone other than a Government Rec'd 9:10 a. 24th Agency. (RESTRICTED) Secretary of State Hashington. 552, April 23, 7 p.m. FOR DEPARTMENT AND WAR REFUGE: BOARD 520 The 55 departed Istentul April 21. According to Swedish Legation here she carried following persons in addition to crew, 311 Dermans from Turkey 50 Oermans taken abound at Port Said 1 Spandard, 2 Portuguase s 51 30.00 - Ivedes. Istanbul newspaper VATAN April 21 repor's ship carried following cargo loaded in Istanbul (in tona): 1200 Chrone 900 raisins 200 enery, 500 Maselmite, 60 peachatonns, 50 liquorice, 2 cigarettes, 60 casings. PACKER EDA RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 211 NASAPIERASE OF TELEGRAM RECEIVED 212 PROM: American Consulate General, Mont In -2- TO: Secretary of State, Eachington Army 10 security an additional 200 to 30 (3009) arry officers DATED: April 23, 1945 (Moceived April 24, 1945) say. Evidently the Commonwealth Government plans the handling NUMBER: 134 of the distribution of Imported goods until private trade has been SECURT reestablished and on the dictribution of domestic goods, to into- A cable is being sent to and Oamona by Secretary grate with procurement. In vier of tendencies in the post toward Confesor, with the approval of TCAU, of which an approximate government operation and control of transportation, trade, et cetera, summary is given na follows: the troné toward government operation 1s disturbing. In order to The granter part of Leyte and Santa Ana district of assist in the roestablishment of civilian economy under whatever Manila has been turned over to the Commonwealth by PCAU, supervision necessary, an association of prome truek and bus and it will turn over other districts tradually finishing operators has requested any nid in securing 500 trucks, either by the first of July probably. On the first of September new or used, with repoir factlities. The arry is in favor of Cownonweelth will take over procurement and the remainder cooperation with the Communicath Dovernment, ,but no could profer of compdities procured by the any vill, except those needed to The transportation reostablished that way. for military purposes, bo turned over to the Commonwealth STEINTORY The aray has secured and 10 shipping trucks for delivery to the Commonwenlth Government, In order to moot the transpor- tation problem. Arrangements have been imde with FSA for handling the procurement program, it is understood. In order topermit taking over the procurenent program by Se tember 1st these should be expedited. It to urged that there be reserved for civilinn goods five ships, totaling about 35,000 tons, and of Philippine registry. Ton liberty ships are needed or =vr about 100,000 tons additional shipping. 4-25-45 200 trucks are en route already and for the use of the Commonwealth Regraded Unclassified MICROSTAT MICROFILM ROLL NO. PRECISION TRADE MARK 212A 00-421 PLAIN Lisbon Dated April 23, 1945 Rec 'd 12:03 p.m. Secretary of State, Washington. 858, Twentythird WILD 391 and JDC 223 FOR LEAVITT FROM TROMS Saly Mayer upset by Taedhatshalah appropriation, feels this constitutes opening second joint office Switserland and expresses lack of confidence in him. Believe important you cable Saly regarding this. BARUCH $ BB Regraded Unclassified RECISION MICROSTAT MICROFILM ROLL NO. - - 2 - April 24, 1945 8:58 A. M. 214 C: Yeah, let's have him. (Laughe) By all means. Now, AS I understand it - what you are prin- Mr. Vill cipally interested in taking up this morning, 18 Cisyton: Hello. the political, military and economic directives under the March 23rd menorandum. HMJr: Henry talking. HMJr: That's right. C: Oh, good morning, Henry. C: And not so much the reparations question. HMJr: Good morning. HMJr: Yell, If ve have any time left over. C: Vant's the news from Mrs. Morgenthau? : Yeah, well, but we'll start on the other. HMJr: Well, she ver definitely better yesterday. HMJr: That's -- oh, definitely. O: Yell, that's fine. C: Yell, I'll bring the whole business, and we'll HMJr: Definitely. work on the colitions, military and economic thing first, and then if ve have any time left over we'll C: I'm eo glad to know it. Henry, I got a phone call get on the other. yesterday, or my secretary 411 from the Navy. HMJri That's what I'd like. Nov have you got n moment? HMJr: Yesh. C: Yes. C: saying that they had heard there van going to be a meeting in your office. HWr: Yhet's happening? You m-1d something about having note from the President on reparations business HMJr: Yes. C: Yes. C: They hadn't heard about tt, no : thought I had better ask down there, and told him that It von HVJr: Vell, can you tell se what's happening? going to be n small meeting C: Yell, I guess you know that Frank Valker 10 going HMJr: Yenh. to be appointed some kind of extraordinary Ambassador, and 1a going there in charge of this thing. Lubin C: no he wouldn't bring an any ceoole with his. 10 going as No assistant. HMJr: Tho's costng? HMJr: Oh. C: Mr. Downey, I guese, will be the man. He usually C: and se a Minister, I think, of some kind. .... 00018 to the meetings here for the Navy. HMJr: Yesh. But Frank Walker 1e going in charge? HMJr: Who 1ª he? An attorney, I suppose. C: Yes. C: He von selected by the Navy to represent them when Dy Gaten couldn't come, and Dy never did come except HMJr: Vell, I knew that Lubin vas going. You know, I told down in his place. I don't know - I guess he 10 -- you that Lubin ver going. The President told me in a he in a very quiet, very nice fellow - he generally secondary copacity. doesn't have anything to say. C: Yes. HMJr: Let's have his. (Laughs) HKJr: But I cidn't know who VAT the No. I man. 0: Beg pardon? HMJr: Let's have him. (Laughs) Regraded Unclassified RECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. 218 - 3 - HMJr: Yeah. Yell, that' gee. You just never know where there fellows stand on these subjects. : Yes, well C: Yeah, that :- right. HMr: Does this interest Frank? HMJr: Yhat? C: I'm --- I'm - I may be talking out of school. C: That's right. HMJr: Vell, look, look, old nan HMJr: Yell, don't vorry, It von't get out of here. C: I's sure you.. : No, I'm sure of that. HMJr: .... things are moving no fast. You remember, I think when I told you -bout Lubin, that von neve HMJ: But, then I'll be looking forward to seeing you. to you. C: Fine. I'll be there at 10:30. C: News to me,yes. (Lnughe) HMJr: And you'll invite the Navy? HMJri And If VP... 0: Yes, Downey 10 coming for the Navy and Leo with C: It's moving no fast that we can't keep each other Fovier le coming for FEA. informed. HWr: Right. Thank you. HMJr: If ve give and take n little bit, I onn promise you - by now you ought to know se, C: Thank you,rir. C: Absolutely, I know that. HMr: But that 1g a surprise. I haven't any Idea on where he stands on that antter. C: I haven't either. I haven't the least 1dea, but he called me up yesterday about 11, and I sent him over last night to his apartment 6. copy of what had been drafted up until now. There's not -- I don't believe there's thorough agreement on It yet, but cractically agreement on it. : just sent him that and told his 11 var in the rough. HWr: Yeah. C: and told him it vot just a preliminary draft, and hadn't yet been agreed up. I sent 1: to him no that he could take a look at it and see just what ve vere thinking. HMJr: Vell, if ve have a meeting on reparations, I senn another meeting, would we invite his to come to 117 C: Vell, I must ank him whether he vante to show himself in that connecty before he gate appointed or not. It would be largely A matter for him, I guess, to decide. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. April 20, 1945 9:25 A. M. - 2 - 217 218 Operator: Go shead. BE Well, yeah, that's what I mean. HMJr: Hello. HMJr: I can't tell you, but I know he has picked somebody to go. Mr. Bernard Barucht Yes, Henry? a: Yeah, well, he's got a different man. HMJr: How are you, Bernie? HXJr: Yesh. B: Yes, Henry, : don't hear you very vell. B: Yeah, well, has he picked him? HMJr: I'm talking no loud ne I can. HMJr: Yeah. B: Vell, where are you, Henry' B: That? HMJr: I'm in the Treasury in Washington. HMJr: Yes, he her. B: How did you find your vife? B: What? HMJr: Well, when I got down there Sunday not no good, HMJr: I understand he has. but yesterday she nicked up and sibe sure A little better. B: San? B: Vell, that's fine. HMJr: No, T 107, I understand be has picked somebody. HMJrt When : left her last night, she vot quite cheerful. B: Well, he told se he was going to --- he told ne he von going to make the change. I told you that. B: Oh, you only left last night? HMJr: Yeah, HMJr: Yes. B: Vell, be's going to move -- he's got to nove also B: Vell, that's you feel more honeful? on the policy committee. HMJr: Definitely, Definitely. HMJr: Yell, I don't --- as for ne I know he harn't noved on that either. B: Yell, that's fine, Henry. That's good neve. B: Vell, he's got to -- he told me he vis going to. HMJr: Are you in New York? HMJri Yeah. 3: Yes. B: or course, be's got to get this San Francisco thing HMJr: Are you coming down? straightened out. He told ne when he got that out of the way he vas going to send for me. B: Well, I'm waiting a call from the President. He said he'd like to nee me about Wednesday or thereafter. HMJr: Well, I want to be --- the purpose of my call 18 And I told hin to give se n. any in advance. to you - one - that things seen to be moving, I don know whether in e good direction or in a HMr: Yell, things are moving kind of foot down here. bad direction. B: Are they sending un that thing? B: I'm sure he's going to tell ne about it. I'm sur- prised he doesn t talk to ne about the man he nominated. HMJr: I don't know about that, but they are moving fant on this reparations business. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 3 - April 24, 1945 1:06 P. M. 220 HMJr: When you come, I sure vant to 140 you. HMr: Hello. B: I don't near you, Henry . Dooretor: Go sheed. HMJrt I vant to be rure an! one you when you come, HMJr: Hello. B: Yell, " soon as I'm notified to DINE I'll t-legraph you. Secretary Perkinst Hello, Henry. HMJr: Fair enough. HMJr: Yes. B: And they cannot make their polloy or to anything without taking in the Treasury more other things.. P: This 1a Frances Perkins. HMJ:: Yeah. HWr: Hello, Frances. B: It would be too absurd, Henry. P: I just wanted to be sure about Elinor. HMJr: Vell, then -- I sean they'll find the Brittsh Treasury HW: Yell, I got back late last night, and she is end ther'll find Keyner over there no big -- life. pretty well. H=1107 P: Pratty well? B: Yeah, well, nov listen. You Leve that -- I I'll butt in at the right time. HMJr: Yes. She's still got several difficult weeks shend of-her. HKJr: And, If I any so world, : think that I've nore than held up the American ind. P: Dear, dear. B: Listen, you're got -- the idea about 1 thoroughly HKJr: I'm not discouraged, but last week she had another controlled Gernany are going to win now surely. estbook. Ye can't loss on that one. P: Oh, denr. Where shall : send her A letter? HMJr: I say, I've - I think I've 2277 than hell up as um end. HMJr: Velch Hospital, 3: Yes, -ir. P: Velch Hospital.. HWr: I don't know what you heard star there vision you ware HMJr: Daytons Beach, Florida. In England... P: A11 right, I'll.... in oh, oh, 11 var good. HKJr: She'd love to hear from you. EW:: but : haven't made thes any Christmas presents. P: Vell, I think about her a great deal. 3: I'll be in touch with you I'm going to ... -- I told you from the beginning that :'- gaing to keep HMJr: Well, go do I. in touch with you. P: It's cretty hard on her. I mean, this thing coming HWr: All right. when it did. Because for her it 1e a bad emotional period B: As soon an I hear anything I'll let you know. When I'm called down, I'll let you know right away. I'll HMJr: Oh, yes, well, 1: case -- couldn't have come worse. telegraph you right avey. Regraded Unclassified PRECISION TRADE MARK MICROSTAT MICROFILM BOLL NO. - 2 - 221 P: No. HMJ=1 She'e been there three weeks, and I'm afraid that she vill be there at least e sinimus of another three weeke. P: If she can make R. little orogress every day.... HMJr: Vell, she to in e good humor. F: Dont's good. HW: She's in good humor. P; That's fine. HMJr: Thank 709.... P: .... giving her oxygen? HWr: Pardon? P: Are they still giving her oxygen? ( = HMJr: She's still in on oxygen tent. P: Yes, HWr: Yes. P: That 1n what 1e n. great confort. HMJr: Yes. P: It gives her great comfort. HMJr: Yes, F: Fine. HMJr: Yell, thank you... PP I think of you too. HKJr: Thank you, Frances. RECISION TRADE MARK PAT. OFF. MICROFILM ROLL NO. NOT TO BE RETRANSMITTED SECRET COPY NO. OPTEL NO. 129 Information received up to 10 A.M. 23rd April, 1945. NAVAL 1. Anti-Submarine Operations. 22nd/23rd (night). Liberator made promising attack on U-boat in Kattegat. 2. Enety attack on Shipping, 22nd, In home bound convoy from Antwerp US merchant ship (7176) mined off Flushing but reached port while a Russian merchant ship (1603) torpedoed and sunk off Kola Inlet. MILITARY 3. Western Front. Southern Sector: First French Army broke through onemy defences East of Black Forest and armour has now reach- ed Swiss frontier to West of Constance and is moving Eastwards along Northern shore of lake. Purther North troops of 7th U.S. Army have also broken through enemy defences and 1 armoured column has reached River Donube in area Ulm while Second thrusting Southwords from Crailsheim has seized bridge neross Denube at Dillikgen. Central Sector: Troops of 3rd U.S. Army made gains up to 20 niles on 40 mile front while unconfirmed report states Weiden taken. Troops of 1st U.S. Army engaged in bitter house to house fighting in Dessau, Northern Poctor: Reported that armour of 9th U.S. Army has linked up with British nirborne troops 10 miles North Salzwedel. 4. Eastern Front. In Borlin ares Russions claim 16 of North Eastern suburbs taken while further South they stated advances made East and North East Dresden with forner reaching to 15 miles from Dresden and latter to within 30 miles "ittenberg (15 miles East Dessou). Southern Sector: In area North Vienna only slight progress reported due West of Broclav. 5. Italy. Eighth Army Sector: On right U.K. troops engaged in hard and fluid fighting South of Po at approaches Forraro and Bondeno while on left Indian, New Zealand and Polish forces mintaining pressure on Enstern flank of Germon salient between 5th and 8th Army. South African troops under command 5th Army on left flank this salient have narrowed neck to some 18 miles. Fifth Army Sector: U.S. arnour hending North now 26 niles N. N.W. Bologna while further West Modeno entered. P.W. on whole front from beginning offensive to present date estimated 25,000. 6. Burna. Centrol Sector: Our troops advancing from the East have reached Irrauaddy 10 miles South Magwo. Further East 1 of our armoured columns reported striking South nov within 1 nile Toungoo having captured mirfields this area. AIR 7. Western Front. 21st/22nd (night). Bomber Command aircraft attacked Kiel (136 tons) with good results, 22nd. Bad weather restricted operations. Bomber Command aircraft 204 (missing 2) attacked targets Bremon (965 tons) mainly through cloud. SHAEF (A: Fighters and Fighter Dombers 650 (missing 3) operated battle areas Constal Connand aircraft obtained hits on one 4,000 ton ship and 07:1 7,000 ton tanker in Skaggerak and Kattogat while 2 vessels left burn the off Norwegian coast. 22nd/23rd (night). Bomber Command despri od aircraft 150 (without loss); 40 Berlin, 11 Kiel, 99 Bomber support 8, Moditerranean. 20th/21st (night). Liberators 56 attacked railway bridge Verona-Parona railway (152 tons) obtaining direct hit: 21st. Escorted heavy bombers 243 (missing fighters 1), dropped 566 tons reilway targets North Itoly and South Austria with good results while Lightnings 150 successfully attacked similar targets. Medium :nd Fighter Bombers and Fighters 753 (missing 6) attacked communicat- ioas North Italy end South Austria also giving support to ground forces. Regraded Inclassified RECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. 203 3 224 - 2 - NR. BLOUGH: My reports have heen pretty brief. April 24, 1945 9:30 s.m. JR: All right, but I em just telling you. I don't know what is going on In texes, but If somebody vante something, It It up to me to zue you fellows, and we will GROUP settle It on time, 100, but please, no sore reports. I have seked for them. Sel Adler nave ne ten pager on Chins, Present: Mr. D. -. Bell but I don't vent to see then stymore. T will be glad to cee fr. Bartelt Sol, but I don't went ale reports. Dr. Gamble IF. C, S. Bell VR. LUXFORD: Joe tays that In the be cldn't send you Er. o Connell that recort ce England, (Laughtor) Mr. Blourh Mr. Luxford 100. KLCT: Don't bring tost up. Mr. Peble Mr. Fussell That NEE one for A/ grandomildren. They were Kr. Bernstein interested. After ill, e child tast can take crange juice Mr. DuBois out of I cup when the is four neeks old wants to know what Mr. Coe 1 did In the summer of 144. So T fust sent you--this Urs. Klote teletype thing is wonderful. T think, I en going to install one right here, and when you write ne things you will have to condense them. H.M.JR: Good mornin- everybody. Where in Luxford? I learned more about what he old-- Let me just tell you neorle something. I have learned T never would have gotten 6. report from Luxford if I hadn't something through this teletype business, and from now on been donn there. I never rould have known what he did I an not going to read the voluminous reports which you Saturday unless I rend rbout It in Drew Penroon's column. all have been sending me about China, Germany, and Belgium (Laughter) and this and that sort of thing. What hanpens is you fellows send ne these damned reports about that high (indicating) Anyway, ! nn going to try to be more helpful on the and when I net through, so what! You take n. thing like importent toings end not fritter my time may with all this revision of 1067 signed by the President on the 23rd this spinnch. of March, and then I begin to not excited about It Sunday and I call a meeting, and ae will 70 somewhere, see? And the job Charler Bell did for the President-- President Trusen, those two pages--that von rood for se How, before I meet with these fellows at ten-thirty, and good for his. heve saked for en appointment to see I went to be brought up to date. Through stuff you have him Shursday, and If there le anything you went the to sent me I an pretty well un to date, but I will try to foll his, let's have it. Let It clear through you. rush the important things through. But there la no sense in sending ne all this voluminous stuff because I an not lion, Gamble net the et the sirport last night, and he going to read it. It is & waste of paper and a waste of started to teil se about pay rell deductions. I said, my time, anditdoesn't accomplish anything, but then we "President Trusan doesn't know anything about pay roll deduc- get something like that or any one of these important tions, to let's have e report. Where do the stend?* things--if you have something on taxes, come and see me, and then have in writing what you want, and we will sit down and go over it. Regraded Unclassified RECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. 225 226 4 - - 3 So, anyway, that is the tay I feel this aorning. I MR. O'CONNELL: It aimt have been spelied out better. have turned over e new lesf, and I will ret started in e minute with you, Coe. They are bringing the Havy In here H.N.JR: On Saturday -e talked--I didn't know that st ten-thirty. after you prepared then you wouldn't give then to him. COT: They have been In or all things. KR. O'CONNELL: You told us that in no uncertain terms Saturday. H.F.Jhr. Will Clayton--it is (000. You 100, they bring in this revision of 1067 for the Amy. You want to N.N.JR: Well, that mort of disturbed me, to I thought know WIE t is going on. The lavy will be here. Weil, what I would make it perfectly plain. I em proposing to do le to et comebody as ay assistant to work exclusively for se and read sll of this stuif, cut VR. LUXFORD: Tell, you use the teletype. out come of it, enalyze It, and bring it to =y attention. That is on administrative responsibility. H.U.JRt It la wonderful. The are going to put one right in the office here. Now, I cent F telegram on tais business of the bankers, nee, end I feel very, very strongly that be should seke IRS. KLOTZ: It is not 8 bad idea. Mr. Burgess put down what he wants before ve put CORD wint we want. B.H.JR: well, does anyhody want to denur about insisting that Burgess file his first and we will have a MR. LUXFORD: : think that is contemplated, Fr. look at It? Secretary. KR. LUAPORD: No. Did you ree Judge Vinson's memo? H.H.JR: Not in your telegram. B.K.JR: Yes, n.z. & result of which I have invited Bell, FR. LIMFORD: I think no. Luxford, O'Connell, Vinson, and Dean Acheson to have lunch with Le Friday to discuss it. I an delighted that Vinson H.E.JR: 10, you put It In. You naid that Wolcott is taking an Interest. asked us to submit curs, and br. Durgess would submit his. VR. LUXFORD: lie le taking & real interest. MA. The lest persgraph indicates tie are waiting until Mr. Wolcott gets the document from .r. H.M.JR: And I would say you wrote 6 very honest report, Burgess and gives that to us, and in the meantine we'll be as usugl, end I gathered you didn't satisfy Vinson. putting down changes. MR. LUXFORD: That is right. ER. LITXFORD: the left it with the understanding that Rolcott would let us know when ne had received the text of N.E.JR: So we will no over it, but you two men--if the bankers' changes, and in the meantime ne will prepare e it in agreeable with Fell, you make it perfectly clear to draft of the changes we are prepared to make on the oasis Wolcott that Mr. Burgess has to put the thing down first. of compromise. We feel that when we go over our changes we That goes back to Vinson's original suggestion, making should confine our concessions-- Surgese any what he wants. E.M.JR: But that 18-- Regraded Unclassified. 228 227 - 6. - - 5 - H.M.JR: So you and Joe look that thing over, and you MR. LUXFORD: How about secles on that? don't have to refer it back to me again. Is that agreeable to you, John? MR. HELL: Saymonak tried to net information resterday, and I didn't feel free to talk to him. VR. PERLE: Entirely. H.M.JR: Shall I have Sceles for lunch Friday, too? 12. C. S. BELL: Schnidt would like to designte Michnel Hoffnan Acting Director of Foreirn Funds during his 13. LUXFORD: Somebody has to keen him informed. absence in Germany. H.V.R: Tell them outside that Eceles in to be H.H.JR: How about that? Invited for lunch Friday, too. (to reporter) 13. PERLE: Very rood. Is there anybody else in town? H.V.JR: All right. Now, I promised -. Coe he could brief no, but I will give you peonle--have you something you want to cloar, You wait a minute. while you are on that. here is 8. Charles? letter from Den Bell on the different people to head up the financial section. I would like to talk to you people MR. C. S. BELL: Yes, 1 thought you curht to know about that. that there have been half a dozen neorle selected to PO to Germany. I have their names: Schulet, Ferolnand, Hollander IR. D. W. HELL: Chester Davis, isn't it? Dreann, Hoss, Zimerman, Rehuncik, and Soruan Devis. H.M.JR: Yes, Chester Davis. Let's have a meeting at H.R.JR: Is this the investigating corpsy four-fifteen this afternoon, Mrs. Klots. ER. C. S. HELL: 10, this in the group--I trink they How, who is to no to Germany to head the finance telephoned when you were cown routh end authorized this section--German finance. How, I want Dan Bell and Charles 1.8 the first contingent. Bell and John Pehle, Coe, and you two fellows, Luxford and DuBois. H.E.JR: This is the investigating-- M. LUXFORD: Four-thirty? MR. D. % HELL: The Schmidt group. E...R: Four-fifteen. You are not interested, are VR. C.S. FELL: All of these people are out of you? Foreign Funds. They are commercial specialists. 13. O'CONNELL: No. E.F.JR: Now that John Penle Le again n. free non I want to put bin end you on e. little committee to pase or: H.M.JR: Who are you representing, E. M. Bernstein? this roup, see, and I understand Schmidt is to clear It. To he? MR. BERNSTEIN: M. Fitzgerald asked me to represent Shite. I don't know why he did, though. 1R. C. S. BELL: Yes. Regraded Unclassif 270 230 - 7 - - 8 - H.N.JR: Good, fine. It is enough to have you here MR. COS: A couple, yes. representing yourself. H.E.JR: Are they working? MR. BERNSTEIN: Thank you. MR. COS: Yes. E.V.R: You are entirely welcome. MR. C. S. BELL: I would like to expand Ted Wilson's IR. PEHLE: Is there a list on that proposal on authority on personnel matters. They are shooting up to finance? us scores of fenfolds, and де can take that over now. H.M.JR: Yes, Irs. Klotz can circulate It between non (Secretary signs letter to Kr. Ted Wilson, dated and four-fifteen. March 5, 1946.) 2. D. W. HELL: I will give you = copy. H.N.JR: That will take it off your shoulders. MR. C. S. BELL: No would like to promote Norman lless. MR. C. S. "ELL: Yes. He is with Vr. Coe. I don't know whether be has spoken to you about that. Here is Mrs. Doyle's report after eighteen months. You might went to read that et econe time. MR. C. S. BELL: No would like to promote him to eight 0 thousand. That is in l'ne with other Assistant Directors H.M.JR: If it is importent, : will read it. If it in Monetary Research. He is an Assistant Director and is isn't importent, I mon't read it. paid less. FR. C. 5. -ELL: Preston Delano did E. suell job on H.M.JR: He goes to San Francisco; T get nothing out the Red Cross contributions, and I will fix up 8. little of it; and you promote him. letter If you went to sign it. MR. LUXFORD: Mr. Secretary, he has been doing a brillient H.M.JR: O.K. job on Bretton Woods. ER. C.S. FELL: lion we are on deferments. Dean Acheson called ne while you were away to say that he had done n. wonderful job with his on the West Coast. H.W.JR: Don't give me any more bookbinders. H.M.JR: On the West Coast? KR. C.S. HELL: This is the group; I have been saving them up. IR. LUXFORD: You see, he went out there with Acheson to sell Bretton Woods. H.W.JR: I will give you some time on that, three- fifteen tomorrow. H.M.JR: Is he under you? wh. C. S. BELL: Fine. That is all for ne. 13. COE: Yes. H.K.JR: Daniel? E.M.JR: Has this policy of upgrading and getting more people got any new people? Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. = 10 - 232 - 9 - NR. DuBOIS: Classer and I net for about eight hours yesterday, including u). to shout trelve o'clock Inst night MR. D. N. HELL: I have nothing important. on reparations, end-- H.N.JR: Wonderful. H.N.JR: Whom did you meet with, just each other? Luxford? MR. DUBOIS: There vos & large group, and, incidentally, you may have gotten rid of Lovett, out you didn't cet rid 19. LUXFORD: Supplementary to what you snid on Barry, a delegation of Americans United went to see him of his Colonel Bushnell, who in doing most of the work, and is being very difficult, We finally die get 6. tentative yesterday, and he told then without any qualifications he was going to support and vote for Bretton woods and was agreement subject to reservations by Sar on é very good docu- going to make that public. ment. If this document could be pushed through before VcCloy leaves, I think 10 can get it accepted. If to have to wait until FeCloy leaves, there may be difficulty. H.M.JR: Congressean Barry. H.1.Jh: Tell, will Clayton wanted to know what was 12. O'COMIELL: B-a-r-r-y. on this morning, and I told him the would concentrate on 1067, and If ne had any time left over we would 20 on to MR. LUXFORD: And he also indicated that the Committee reparations, but I tnink I told you people that there wes by and large--all of them were roing to vote for it. going to be 1 san relected to head reparations. H.M.JR: Well, whatever the deal Lannegan made, it FR. DUPOTS: Yes. is O.K. Did I teil your MR. O'CONNELL: I haven't seen Nunan; I have an appoint- ment with him as soon as I not out of here. lie wasn't in ER. DuBOIS: Yes. yesterday. The President saw Lubin yesterday, and be celled ne H.M.JR: Where was he resterday? over and talked as though he were still going to head the group up, and the President told his Salter is going to 1R. O'CONCELL: In New York. ne came in late yesterday afternoon. head the Pritish end and also rave his # few more points, but certainly-- H.M.JR: Tell him that English week ends are out during H.N.JR: Didn't he tell him? Did you tell him? the war. WR. DuBOIS: of course I uidn't tell his, but he didn't MR. O'CONNELL: His son was ill; he had n. particular tell no either, end he certainly talked 88 though--of course, reason. he say have told him, out he didn't tell ne, and he certainly H.M.JR: He had better still have n. look into his talked ES though he 185 still heading the group up, nos going to be the administrator. week ends. B.N.JR: That part is through. He buttons his collar R. LUXFORD: That is all I have. in the back. I know who the man in. H.M.JR: Joseph? Regraded Unclassified 233 - 11 - 234 - 12 How, what I nm going to try to do is see if I can get clearance tomorrow 50 me can get at him. T don't H.N.JR: 1 didn't tell then anything. Crowley in know where the hell this nan stands, either. I no worried. bringing one nan. Well, who v.o.s here on the original Leave It to me for the next day or two. 1067, you and T? MR. DuBCI': This fellow Salter--I don't know his, ER. COE: And Gineser. hut I gather from Frank end Harold he 1: 5 pretty bad choice, and It Is apparently en attempt by the British to sabotage hereby Plasser? %o, tue didn't attend the meeting in this room. it. H.W.JR: Tell, be Is nn important fellow. NR. COF: Probably White. M. DuBOIS: lie bee rot ti name, but I refher-- H.K.JR: White. Are you coming, Dan? R.E.JR: lie in suart. KR. D, % BILL: Yes, I em coming. I no an observer. MR. COE: lie in getting very old. H.M.JR: Let's leave it to Frank. Cen you handle it? his wife la something. Oh, boy! MR. COR: Yes, tir. NR. COR: Keybe she will 20. 8.8.7%: Do you need any support? E.E.JR: Hell, I hope not. She is what le known 0.2 ER. COF: Support would be rood, but I don't think to. an original cave-dweller In Ressington from the rocial No, you should have e relatively small number. angle--very rich. She couldn't understand when I flem have why I couldn't take bis end fly his to the Berkeniree Do you need technical support? enroute. She in something. MR. COR: No. T think ve are all right. Reil, let's ree. I think before today or tonorrom T hope to have by hands untied EO I can contact this new H.F.JSt Let's nee where ne comé. If me get into reparations, will rend for you, Joe. But I don't think man. you can drive it tonny, because I know that Clayton knows, KR. DUBOIS: The only question on this other, Kr. and I don't talnk he is going to push it. Secretary, mes Chambers told ne VeCloy THE leaving tonight. ER. DUBOIS: If you can't get that, Mr. Secretary, If H.M.JR: Yes. Let's ree how this meeting CORE this you get ReCloy to sign just one document--and that V.G.S morning. The is coultry, Frank, besides you and me? that memo that 1 (ave to harry, and I think he showed it to you-- Just interpreting the first paragraph in this March 23 MR. COE: It depende on what you teld the other directive, It mill get us over n lot of hurdles. departments on how many there will be. H.R.JR: Let's see how much time we have. This new men got a copy of the document on reparations. Clayton sent It to him. ne said he thought it W&B pretty good, and I take it It W&S what you sent to ne. RECISION TRADE MARK MICROSTAT/ REG.U.S.PAT.OFF. MICROFILM BOLL NO. 775 - 14 - 230 - 13 - MR. GARBLE: I won't be here this afternoon. I don't think 101. DuBOIS: Yes, that document has not been changed you ought to send out any press release on a memorial bond. In substance. H.M.JR: Aren't you going to be here? H.H.JR: Clayton sent it to this nan to read last night. MR. GAVBLE: What about Judge Campbell? Do you know him well enough to let him come in alone? MR. DuBOIS: Right. H.V.JR: Judre Campbell? He's an ola pal of mine. He H.M.JR: I want to get clearance to no to work on was District Attorney on the-- this fellow. MR. GANBLE: On Iroe. R. DuBOIS: It doesn't sound very rood, H.M.JR: On Annenberg. Be and I are old friends. H.M.JR: What? VR. LUXFORD: Did he write the rold decision? 12. DuBOIS: It doesn't sound very rood. H.M.JR: I don't know, I an just bewildered. lie may II.V.JR: He and I are very rood friends. He's swell. be wonderful, or he may be terrible. lie la Important. NR. GAVBLE: He is here doing some work for us. MR. COE: Despite any premonitions we may have had, H.W.JR: I know him well enough. Lubin has worked out very well on policy. MR. GAMBLE: It's okay for him to come in alone. I was MR. DuBOIS: He is for it very hard. flying to New York at five o'clock, but I think I ought to take H.N.JR: E. N.? an earlier train on account of the weather. On the Memorial Bond release, Mr. Secretary, we have had several hundred letters. lie MR. BERNSTEIN: I don't have anything. have answered them all. To have sent the policy to the State Committees. H.M.JR: What did Mr. White do yesterday? H.M.JR: Listen, I appoint you and Dan as a Committee to 1R. BERNSTEIN: I think he probably mas still flying. settle it immediately after this. H.K.JR: what did E. E. do? IR. D.V. BELL: We are getting all kinds of letters. IR. BERNSTEIN: I just tore around the day waiting for it to end. H.V.JR: You and Dan settle it. What about this business of makine n. recording and all that? Who are you going to deputize H.M.JR: Walting for Dan? (Laughter) on that Do you want se to make a recording? MR. PENLE: Waiting for it to end. MR. GAVBLE: All I want to know is what day is convenient, Friday or Saturday? It will take an hour. H.M.JR: Is there anything you want to tell ne? H.M.JR: An hour? MR. BERNSTEIN: No, sir. MR. GAMBLE: Mr. Bell has a press release on the MR. GAVBLE: It will probably take a half or three-quarters Roosevelt memorial. of an hour. We'll do it here--bring the newsreels here. H.M.JR: I will do that this afternoon. Regraded Unclassified F-2 F-3 - 15 - - 16 - 238 H.M.JR: Are you familiar with that? H.M.JR: Joan and I don't know how many of you have Vic. RISSELL: Yes. seen the coca cola machine where you put in five cents and a cup of coon cola,ice cold comes out. There is MR. GAMBLE: lie has had all of that. The only part one in the hospital and we play it all day long. I an concerned about is the newsreel shot. MRS. KLOT&: It's not exclusive with coca cola--all soft H.M.JR: It's a newsreel shot? drinks. M. GAMBLE: Yes. That's one of three pieces. H.V.Jk: It's anfully god. Are there nany of those nachines around? H.M.JR: Well, let's say nine o'clock Friday morning. MR. GAMBLE: Thousands. Mis. GAMBLE: Friday morning at nine o'clock. H.W.JR: Are there any in Gamble's theaters? H.M.JR: Fussell, you pick up the pieces. Vic. GAISHLE: Yes. KR. GAMBLE: He has prepared a statement. he has been carrying the ball. We did some work on the state- MR. C.S. BELL: We had one in the Treasury. I ment, but he has carried the ball. don't know if it is still here 02 not. H.M.JR: When V-E Day comes It's all out in the H.M.JR: Eddie? field over the dead body of OHI. Ted is putting three weeks in advance, ahead of everybody else. lie MR. PARTELT: I have nothing, Mr. Secretary. doesn't want it known, though. R.M.JR: All right. Frank, you will have your day MR LUXFORD: Three weeks in advance of what, Mr. in court as soon as these people get out. Secretary? MR. COE: There are two or three other things besides H.M.JR: OMI. the Geruan thing. ak. LUXFORD: I see. H.M.JK: Talk fast. MR. GAMHLE: One minor thing. woodruff is giving a MR. 00E: Patterson is expecting at call from you on birthday party today for Al Steele. I thought you would the China business. like to send a wire. H.M.JR: Is he? H.R.JR: Tell him I wish him luck in his candidacy for walter George for my job. the COE: Evidently you told him you would be in touch with him. MR. GAMBLE: lie've got the right guy. H.M.JR: Is he ready to go to town? RECISION MICROSTAT MICROFILM 7-5 - 18 - 210 - 17 - MR. O'CONNELL: Schachner. MIL. COE: He will support us, but his general is H.M.JR: From SEC? on the other side in line with your new policy. I would like to talk to you about that separately. lie MR. O'CONNELL: This is Bruno Schachner. he has been have a proposition up-- with the D. A.'s office many years. H.M.JR: Can't you do it afterwards? These men will be out of here in four or five minutes. You will M.M.JR: Is he any good? have twenty-five minutes. You can de 5. lot of talking MR. LUXFORD: He tried all of our cases and has in that time. done a good job for us. IS. COE: Yes. a. O'CONNELL:Cahill, who of course is on the other Does that three Forty-five date still stand that side, is trying to do a good job, and is doing a very Ted is running out on? (Laughter) effective job. They are not discussing the merits of the case particularly. They are telling all the good work the whose bank has done in helping to win the war H.M.JR: Yes. and selling bonds. he hasn't talked much about whether JR. FUSSELL: Sometime before the Thursday press they did violate regulations or not. There is one weak conference I would like a few minutes to talk over what spot in our knew it was there--and that is one we are going to say at the Thursday press conference on of our key witnesses is a Chase Bank employee who this black market income tax stuff. admittedly WAS cognizant of the fact they were violating controls and he testified he informed his superiors of the fact. H.M.JR: Have you got anything juicy? lie testified both ways in the trial. MR. FUSSELL: Not juley, but ue have a plan of H.M.Jk: In he the fellow that was in Spain? presentation that will provide enough interest for MR 0' CONNELL: You are thinking of Barr. This them to write about. is a subordinate employee, a lower down fellow, and he H.M.JR: Will fifteen minutes be enouch? testified under direct examination and under pressure that he had known of the fact that they were violating the controls, and he told his superiors, and in cross MR. FUSSELL: Yes. examination, 1 an informed, he took it all back again H.M.JR: Pifteen minutes before press. when Cahill went to work on him. As far as the jury la concerned, we'll get to the jury, 1. think, and from MR. FUSSELL: Could A. O'Connell come in? their point of view the question of creditability and having a good man on our side, I think, very readily H.W.JR: Sure. Are you going to win the Chase case? pointed out the pressures that would innell him to equivocate a little bit since he still works for MR. O'CONNELL: I think so. It's a close case. the Chase Bank, and it's pretty difficult for him to not sort of jump from limb to limb, so to speak. he H.M.JR: Lion is the fellow trying 11? testified before the Grand Jury that he had formed KR. O'CONNELL: He's doing all right. Regraded Unclassified RECISION MICROSTAT/ MICROFILM BOLL NO. 2-7 211 - 20 - 212 - 10 - h.M.Jh: I skipped you. All right. his superiors, and that was the basis on which he was forced under direct examination to adhere to that story M... PEHLE: I have nothing. and on cross-examination he reversed. lie in a pretty poor witness. H.V.JR: I sent you and Charlie a little neno. Have you got it already? It would be nice if I got out a H.K.JR: Isn't the testimony given before n. Grand statement to the employees. Jury ande available to the trial? ID. PERLE: Did you like the statement we wrote? MR. O'CONNELL: The testimony before the leand Jury WAS ande available to us, and It was based on that that B.N.JR: I like the one Wallace got out. we were able to, in a direct examination, force his to say what he said before the Grand Jury, but on cross- ER. PEHLE: We wrote it for him. examination by Cahill he weakened quite a bit. H.M.JR: Why not one for the old man? The fellow-- H.M.JR: The whole case doesn't hang on that, does I am pushing him out. I ought to go ahead of Wallace. it? U.S. PERIE: I think a statement would be good. IR. O'CONNELL: No, but one of the incortant wit- There is one disturbing element. nesses as far as notice to responsible officials of Chase in concerned--it is quite important. Le won't be through Like Joan said, "In all these discussions until--1 think our case will be in today or tomorrow, but who comes first?" 1 said, Morgenthau.' It will be probably a week from today, or more, before the case is all in. The Judge is doing fl rood job. Rifkind, Mine PERLE: Some of the old Treasury employees who we at young fellow who used to be Warner's Secretary, I so told, thought would certainly want to stay in the Treasury have is doing very well. shown a great desire to get out. H.M.JR: Oh, yes, he's the fellow that is so interested a.M.JR: Get out of Procurement and do what? in housing. Wasn't he with Nathan Straus for a while? MR. PERLE: In other words, where there were people VR. O'CONNELL: He use with Warner at the time the in the torder-line area that were any good, even though housing legislation came up. they had no much as ten years in the Treasury, they wanted to go. 13. 0.00 BELL: Keyserling is the Housing boy. H.M.JR: Maybe It's too much. H.M.JR: 1 know Rifkind. MR. PERIS: Too much? VR. O'CONNELL: Rifkind succeeded Reynorling ns Magner's secretary. H.M.JR: Maybe ten years in the Treasury is too much. MRS. KLOTZ: Ten years of Procurement. Inclassified RECISION TRADE MICROSTAT MICROFILM ROLL NO. 243 244 22 - - 21 - - I an hoping we may net a good doal of support for this very limited oportan which the Joint Committee in MR. Date BELL: Too much Procurement. proposing. In other words, the Joint Committee would propose something 8. rood deal less than a lot of folks H.M.JR: Everything else is all right. what did would like, and we are homing to met rood support from you do about Visa Hodel? the outside for the limited program. Things, so far, are quite satisfactory. 10.. PERLE: She's taking the plane and so is O'Dwyer. Fine. H.M.JR: Two weeks to nake a two-day speech. Pussell, in talking with Gamble last night, in the 10.. PEHLE: Yes, I know. I think the real difficulty, future when things of invortance hannen, take this sort Mr. Secretary, was that they were going to write the speech of thing--he has forty-eight chaireen and every one of on the train. or course, I know that's not an approved them have Public Relations men. When something important practice, but-- happens I ant n. bulletin to no out to Gamble's people on behind the scenes news in the Treasury, so these fellows H.M.JR: Anyway, you settled about the plane. You're know how to ovaluate it, see? my boy. All right. VR. PUSSELL: You menn tax matters? MR. BLOUGH: Tell, we spent yesterday in conversation with Stam all day on various tax natters. We have fl report A.M.JR: Anything real innortant. Camble should now prepared for the Joint Committee. The issue isn't in desimate fonebody over there so they no out, These print yet, and me expect the Joint Committee will 70 over fellows in the field are interested in everything the it about the end of this week. KY 10 that they will Treasury does. Everything the Treasury does affectabond take it almost as 1s, although they micht make minor sales, rood or bnd, and these fellows that are out in the changes. They will probably release it. I don't know field, th Chairmen and their Public Relations mon-take why, but I would think they will probably release It this question of the off-the-record press conference I had either Saturday of this week or early next seek, probably about whether I would stay or resign. A thing like that the latter. should have rone to his State Chairmen, see? Also,why we not rid of Surplus Property should no to his people. That's I think at that time you should follow immediately, the best contact we have. Non, that thing may be enlarged the same day, practically the same hour, with a press statement indicating your approval and the part the into 8. sort of Treasury bulletin. It might 70 to sixty-five Collectors of Internal Revenue--Presidential annointees. Treasury has had in this so as to ride right along on I the same publicity. lr. Fussell and I have been talking think every Presidential agrointee in the Treasury ought to about it, and If you anprove, we will work un something. net a bulletin like that, not every week, only when something haroens which needs interpretation. I think it would be very useful. These Collectors are out in the field and they don't H.M.JR: I approve. know. They are all interested. 101. BLOUGH: There is something to be Insued. You lianneran sald three bankers came to him, and each say have seen from my short semo that I 5.11 anking IL rood many little off-the-record talks and interviews and I one said, "Is Morgenthau going to resign?" Hanneran said, Why are you interested?" They said, "I want to know if he an spending tonorrow and Thursday in New York. I an seelng does, because the bond market 1a moing to hell." the editorial people tomorrow and will be having off-the- record conferences with business people Thursday. Regraded Unclassified PRECISION TRADE MICROSTAT MICROFILM ROLL NO. F-11 - 24 - 246 - 23 - I think what we need is just 4. typewritten pare when Mis. GAMBLE: it ought to go before it's announced, something happens here that is of importance 20 that these too. people in the field know that they have become a part of the Treasury family, see? Do you approve, Fussell? B.M.JK: A letter ought to E° out in the future, from time to time, then something happens. we are going MR. FUSSELL: A house openn for the higher-ups In the to take you behind the scenes in the Treasury and give field. you a little talk for background purposes," and explain what background is. H.M.JR: That's right. MR. FUSSELL: Mr. Secretary, in connection with what MR. FUSSELL: You may find that we may be criticized noy just said, If that tax release comes out at a con- for using the har Finance organization for-- venient time during the day, during the week, do you think a background press conference would be a desirable H.V.JR: Let Gamble worry about that. Do you must thing following the release? it, Ted? H.H.Jk: Yes, you work it out; nake a recommendation. MR. GAMBLE: Yes, I know how we can handle that. Roy, I'll be the front and koy will do the talking. IR. LUXFORD: That includes Customs. MR. BLOUGH: Good. H.M.JR: Every responsible Treasury nan in the field, B.M.JR: Non, I cleared you and cleared you. How and all Presidential appointees, see? But ret these about you? fellows we have never used, and It sureada the word. MR. O'CONNELL: I have nothing. MR. LUXFORD: Just their circle of acqualatances-- cover the country. H.V.JR: All right. H.M.JR: Throw a pebble in the pool and look at the (Discussion continued off the record) circle of ripples that no out. There's a -ood idea, straight from Daytons. MR. FUSSELL: I think It's a rood idea, Mr. Secretary, in connection with what-- H.V.JR: I don't want it every week, just when some- thing important comes up. You take this thing he's going to do. Everybody in the United States, every businessman wants to know how this tax thing la roing to "O, Let's net this thing out. Get your mailing list ready, and T think a preliminary letter ourht to no out over my signa- ture explaining what this 1s. Regraded Unclassified PRECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. 248 Carbon copy sent Col. McCarthy by Mr. Coe 5/7 - 2 - I would suggest to you, if it meets your approval, April 24, 1945 that we take the political and military documents first. 10:30 a.m. (Mr. D. W. Bell enters the conference.) 1067 - REVISED MR. CLAYTON: And that Iread it through first and then take it paragraph by paragraph, and comments can be made on Present: Mr. D. N. Bell the suggestions an ne go through it. Mr. Crowley Mr. McCloy (Lt. Bancroft enters the conference.) Gen. Hilldring Mr. Clayton MR. CLAYTON: I think ne may get a better idea of the Mr. Glasser complete story if I read it all first and then we take it Mr. Coe paragraph by paragraph, so that any comments or suggestions Mr. Fowler probably won't be accepted until we go over it from beginning to end. Mr. Downey Major Gross Mr. Despres H.M.JR: You read through the whole thing without any Mr. Riddleberger comments. Lt. Bancroft MR. CLAYTON: If it meets with your approval-- H.M.JR: Let's start. H.M.JR: We'll give you the name courtesy they give MR. CLAYTON: Shall we go ahead? you on the Hill. H.M.JR: If you please. MR. CLAYTON: Idon't know whether that is too good. MR. CLAYTON: Mr. Secretary, the working committee H.M.JR: We will do it better. has produced two or three documents. They have one on the military and political directive on which I think (Mr. Clayton reads "Directive to Commander-in-Chief almost complete agreement has been had. There may be of U. S. Forces of Occupation Regarding the Military Govern- one or two little matters. ment of Germany, draft No. 1.) MR. DESPRES: That's right. MR. CLAYTON: (Rereading dreft) "This directive rescinds JCS 1067 and is issued to you as Commanding General MR. CLAYTON: And there is one on financing which I of the United States forces of occupation in Germany. As don't believe you have fully agreed upon. such you will serve as United States member of the Control Council and will also be responsible for the administration MR. DESPRES: No, we haven't the last one. of military government in the zone or zones assigned to the United States for purposes of occupation and administration. MR. CLAYTON: And there is one on economics which I It outlines the basic policies which will guide you in those think we are pretty nearly in agreement on; there are only two capacities after the termination of the combined command two or three minor matters. of the Supreme Commander, Allied Expeditionary Force. Regraded Unclassified RECISION TRADE MARK MICROSTAT OFF. MICROFILM ROLL NO. 9 so - 3 - - 4 - Supplemental directives will be issued to you by the Joint Chiefs of Staff as may be required.' to accomplish in the whole of Germany, so while he is going to apply It in his zone prior to the agreement in MR. CROWLEY: I wonder this, if they couldn' the Control Council, he is going to try also to sell the men here know, will, where there is a difference of this policy to his three associates in the Control Council. opinion. That is only the general directive, and if we H.W.JR: But it isn't up to the State Department, or could get down into the meat of the thing where there is some difference of viewpoint, I think we would save time, Winant, or the European Advisory Council. It is up to if that is agreeable. Eisenhower to take it up with his three men. MR. COE: I think that would save time all right. GEN. HILLDRING: At the noment It is the business of kr. Winant to sell these policies if we can get then over MR. CLAYTON: It would save & lot of time, and it would there in time in the EAC to his associates on a diplomatic get to the points where there has been-- level. However, once the Control Council is set up, it is my view that you can't have this done in two places, and H.M.JR: Could I just ask you this? At this stage I starting at that moment Mr. Winant or the EAC is going to think it is an excellent suggestion. It isn't quite clear step aside, and thereafter this selling job is going to be to me. As you people know, I have had to be away. "Directive done by Eisenhower in the Control Council. to Commander-in-Chief of U. S. Forces of Occupation Regarding the Military Government of Germany." Do I take it that H.M.JR: Well, now, let's take a little time on that this is a directive to General Eisenhower? and see if there is general agreement, because I think that is terribly important, I mean, where the thing goes from GEN. HILLDRING: That is right, sir. here as to what happens to the European Advisory funcil. libet is that? H.M.JR: And that he will be Commender-in-Chief of the forces of occupation? Is that right? KR. CLAYYON: The General stated It as we understand it. GEN. HILLDRING: Yes, sir. H.M.JR: May I be & little frank amongst ourselves? Well, I can guess. I am not asking for confirmation or denial. H.M.JR: What I don't understand is this: We go ahead It will be a matter of several weeks, I take It, before this with this. Let's say we will come to en agreement, and then Council will be set up, I mean, in Berlin. And doesn't what do we do about the other three commanders? it kind of cross the thing up--I an using a polite word-- to send it first to Winant, who will mess around with the GEN. HILLDRING: He is going to try to sell these to European Advisory Council and may do 8. good job? On the the other three to the greatest extent he can. other hand, he may not be successful, and it goes to General Eisenhower and the water has been muddied. If Eisenhower H.M.JR: And that is General Eisenhower's responsibility? is going to carry the ball, why muddy the water with the European Advisory Council and only have two or three weeks GEN. HILLDRING: Eisenhower is two people. he is our to fuss with this thing? representative in the Control Council in Berlin, and be is in command of the U. S. zone. This is the U. S. policy MR. RIDDLEBERGER: I would like to raise the point that we both with respect to zone and with respect to what we want haven't told Ambassador Winant yet that we will necessarily introduce this directive into the EAC for negotiations. Ne have reserved the right to do it if we consider it desirable, but we don't have to do it. Unclassified PRECISION TRADE MARK MICROSTAT MICROFILM BOLL NO. 252 - 5 - - 6 - H.M.JR: I would just like to raise the point that Now, if the first introduction of the matter is by wouldn't it muddy the water? If General Eisenhower were him with the generals representing the other Governments, told this or that was agreed upon or rejected by the why, I would feel sure they would have to then take it up European Advisory Council, wouldn't it make it more difficult with their Governments. So wouldn't it be better for us for him to act, rather than if he got the thing fresh and to start right off and present it to them? clean and he could go to town on It? H.M.JR: Do you mind if I argue a little with you? MR. RIDDLEBERGER: Under our present arrangements the point of contact with the Soviet Government on questions MR. CLAYTON: No, sir. affecting Germany is the European Advisory Commission pending the establishment of the Control Council. We have H.M.JR: I told this European Advisory Council--and I been urging upon the Russian Government the high desirebility don't think the history has been a very glorious one--but of establishing as quickly as possible the Control Council I think that there is 6. good reason for it from Ambassador for Germany and have requested the Russian Government on no Winant's standpoint--he has really never had a directive, less than three occasions to speed sending their personnel so I think there is a good reason why he hasn't been able to London for the nucleus groups, but so far they haven't sent to function, because from the top down he has never been them. Consequently our negotiating basis is London for told what the policy is. the moment. Now, supposing he gets this thing at the end of the H.M.JR: I am not satisfied, if you don't mind. week. Suppose we get it to him by the end of the week and he begins to work. He isn't going to get anywhere for MR. RIDDLEBERGER: Yes, I am merely explaining what the months. I would think he ought to get it in any case for situation is, that is all. his own guidance at once. General, wouldn't you think so, Committee? regardless of what we night do about the European Advisory H.V.JR: I need the explanation, but if you don't mind my taking a little time, I think it la terribly important. I have seen a little bit of what they have been able and GEN. HILLDRING: This is 8 little along the line I not been able to do, and if it is 8. matter of weeks, I would have been thinking. I would agree with Secretary Morgenthau like to raise the point in consideration whether it might wholeheartedly. If the day after Eisenhower got this document not be wise to rive this document to General Eisenhower so he were ready to begin negotiating with the other generals, he could be studying it, because he is going to have to or if he were going to be in e position to begin such negotia- deal with the Russians, anyway. lie isn't going to deal with tions within a short period of time--I don't know, Mr. Secretary, the diplomats, but he will deal with the Russian Generals. how long it is going to be before the Russians say, "ak., we And if he could start fresh, without the thing being & little will let the Control Council begin functioning. I think if messed up in London--I wonder if his hand wouldn't be turned. no question. knew that we would be in 8. better position to answer your MR. CLAYTON: 4. Secretary, I think there is this point that we have had to consider in connection with that, H.M.JR: I am willing to pass it if I can raise it and that is that if General Eisenhower takes this up with again when Mr. McCloy comes. How will that be? the Soviet, British, and French generals, it will come to them entirely fresh and new, and I an sure that it will be GEN. HILLDRING: Fine. a matter they would have to take up then with their Govern- ments, you see, because this is something that General MR. CLAYTON: All right, sir, fine. I think it is Elsenhower's Government has formulated for him, you see? & good idea. Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ REG.U.S.FAT.OFF. MICROFILM BOLL NO. 254 - 8 . - 7 - H.M.JR: We are on a subject that needs your assis- tance. May I state it? Is it all right? H.M.JR: I still would like to raise it when Mr. McCloy comes. Do you want to say anything, Mr. Crowley? MR. CLAYTON: Yes, dr. MR. CROWLEY: Just this: There would be no hare In H.M.JR: lr. Clayton just read this document, which I Eisenhower using this immediately for the area we are think by and large is an excellent one, and I congratulate going to occupy. the people who prepared it. In the first paragraph I raised this thing, and General Hilldring said he needs 8. little MR. CLAYTON: That is what I thought. help, that if this document, when we agree on it this week, is sent to the European Advisory Commission and they fuss MR. CROWLEY: If we don't use it for the area he is around with this thing and muddy the water 80 that when going to occupy, there may be 8. long delay before you get General Eisenhower gets instructions--and We are agreed on an agreement from the Russians. this--I raised the point whether the European Advisory Commission shouldn't be by-passed and it should go to B.M.JR: I an wholly in accord with you, but if this General Eisenhower for his responsibility to take it up with his is thrown in the European Advisory Council, it is going opposite numbers, the three generals representing the three to make It much more difficult for Eisenhower to function. countries with which they do business so that it is only a matter of weeks and they won't get anywhere. They will just MR. CROWLEY: I wasn't disagreeing with that. What I fuss around over there In London, the European Advisory Com- meant WAS while you are waiting to get an agreement with mission, and make it more difficult for him to function. the Russians Eisenhower should use it in the area. That is the way. Isn't that about the point? H.M.JR: At once? MR. CLATTON: Yes. MR. CROWLEY: At once. MR. McCLOY: Well, as a practical matter, If We handle this the same may as 1067, this will go out as the American H.M.JR: Absolutely. instructions to General Eisenhower, who will put it into effect in the Control Commission actively. I don't mean GEN. HILLDRING: At once--we would send It to him at the Control Commission, I mean the Advisory Commission, EAC. once no matter whether he was negotiating or not. So I don't see why ae couldn't follow the sane practice that we followed with 1067. We know from experience that H.M.JR: You know what I have in my mind, and I should for one reason or another the EAC hasn't been able to function think you would be in agreement with me. expeditiously on these things. I don't believe they are ever going to get around to this document before we move GEN. HILLDRING: Mr. Secretary, I an sorry I can't to the Control Council level, anyway, but rather than by- say anything about the EAC, except this is the thing that pass them and perhaps cause repercussions by doing so, I haunts Eisenhower, and as his local agent, I an suppos ed to bespeak his worries. What disturbs him more than anything would think We would avoid any difficulty by simply following the same procedure me followed with 1067. else is the fact that he is about to enter into a participation in the Government in the whole of Germany without any agreed MR. CLAYTON: Which would be to send this direct to plan. General Eisenhower at once for his guidance in his zone and (Mr. McCloy enters the conference.) also send It to the EAC for consideration by the representatives Regraded Unclassified MICROSTAT at. OFF. MICROFILM sou NO. RECISION TRADE MARK 256 - 10 - - 9 - MR. McCLOY: We will get in more trouble by by-passing of the four powers gathered there to see if they could them. adopt it for the guidance of the-- H.M.JR: All right, you are the doctor. MR. McCLOY: That is exactly what Eisenhower intended to do with 1067, and that is what he is going to do until MR. CLAYTON: We read the document through, as we he gets a new 1067. said. H.M. JR: I am not satisfied yet 88 to what the machinery MR. McCLOY: You read all this while I have been coming is the State Department has in mind to terminate EAC. here? MR. RIDDLEBERGER: Tie have no machinery in mind yet, MR. CLAYTON: The political and military-- Mr. Secretary. I don't know exactly when we can terminate it. Under the Moscow protocol there are surrender terms MR. McCLOY: Yes. and their implementation. However, governments can refer to it any other questions they so desire. To date, they MR. CLAYTON: And that includes paragraph fifteen. It haven't done it. But if the British, for example, were to was read that way so we could save time and could go immediately come in with a proposal that EAC take up this and that ques- to those points where there was any difference and just dis- tion, technically, they can do it under the Moscow protocol. cuss those points. Now, the first one is with reference to paragraph eight of this document, which is the criminal one. H.M.JR: Kr. McCloy, would you be worried if this goes to Eisenhower and EAC that it would make it more difficult The Treasury proposes the following change. They for Eisenhower? would delete from the last sub-paragraph of paragraph eight the sentence which reads, "If you deem it desirable, you MR. McCLOY: No, I don't think they are going to get may postpone the arrest of those cases you have reported." around to it. So it will be understood, I will read the whole paragraph. "If in the light of conditions which you encounter in Germany MR. RIDDLEBERGER: They will never get to it, I don't you believe that certain persons within these categories think. should not be subjected immediately to this treatment, you should report your reasons and recommendations to the Joint MR. McCLOY: I wouldn't worry about it, and I wouldn't Chiefs of Staff." take the other alternative of deliberately by-passing then, because they would be provoked. Now, the Treasury proposes that the next sentence be deleted, "If you deem it desirable, you may postpone the H.M.JR: You are not bothered? arrest of those whose cases you have reported. MR. McCLOY: General, do you agree? GEN. HILLDRING: May I speak on that point? I think that that is the Ear Department's suggestion, that sentence, GEN. HILLDRING: I agree. That is what I was trying and I want to say first that the lar Department doesn't to say when you came in. object at all to the philosophy enunciated above in the paragraph, and I an sure that no soldier will object to H.M.JR: God, I do work hard for the Army, but I don't gathering these fellows up and throwing them in the hoosegow get anywhere. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ PAT. OFF. MICROFILM ROLL NO. 258 - 11 - - 12 - as rapidly as they can get their hands on them. I want GEN. HILLDRING: Turning the underground loose in to call your attention to the fact that some day--we are Germany is 8. delicate issue we have not yet faced. The already getting a larger number of prisoners of war--as have to hold this German Army together, and we can't do many, perhaps, as we can handle as prisoners of war. it by treating the German Army as we do, the fow hundred Certainly there will come 8. time when with five or six thousand prisoners of war that we have gathered together million soldiers of various kinds in uniform we will arrive in this country. Tie can't treat eight or ten million at a point where it will be impossible with the means at Germans 8.8 prisoners of war. We have to use the organization, hand to treat them as prisoners of war. There will be too the German Army to do it. many. It will take the whole aray of occupation to keep these troops packed together. It is inescapable that before Now, there is one point that is going to 06-- now and the hour of total defeat Eisenhower will have to hold together with his own organization some of the military H.M.JR: That doesn't say that there. units. GEN. HILLDRING: What does it say, Mr. Secretary? (Mr. Bell leaves the conference.) H.M.JR: Well, I mean there are 8. lot of words here GEN. HILLDRING: If he doesn't, he is going to that would be an out for anybody to let out the whole precipitate 6. problem for himself which both administratively business. and otherwise will be highly objectionable. I think ne will all agree that we don't want the German Army to demobilize GEN. HILLDRING: Well, sir, I-- itself. We want to demobilize it in accordance with our purposes, and at the same time as decided by us. H.M.JR: If you are talking about demobilization, what you have said is qui te different than what this paragraph Now, if we tell Eisenhower to lock up all of the SS says here; there are a lot of weasel words. They could officers which they have of all SS divisions as soon as he do anything. gets hold of one of those SS divisions, he has under the terms of this document got to immediately arrest all the GEN. HILLDRING: They can't do anything without immediately officers in the division, 80 he has remaining ten thousand notifying us, Er. Secretary. enlisted men that he has no way of controlling. And we say the SS officers should be arrested, you see, MR. McCLOY: And you have got to be perfectly realistic about this thing. There is an enoruous category of people But we think in that instance if we say to Eisenhower here estimated from two to three million that you have got rather than turn these SS enlisted men loose on the world to arrest. You will have displaced persons coming out by around Germany at will, it is better to leave that division the tens of thousands. There are problems in Europe that in charge of some of its officers until he has time to put nobody has any conception of until you are there, and the them under the control of other people. And it is almost idea of imposing on General Eisenhower the rigid restrictions entirely in the field of demobilization of the German Army that he has got to take care of three million more people that we have put this reservation in. Otherwise, we are no matter what his problems are is just improper from the making it impossible for Eisenhower to demobilize the German standpoint of administration. You have given him the tone, Army as we want it demobilized. I want to call your the type of people he must arrest. He isn't going to let attention to the fact that the future underground of Germany the whole kit and kaboodle out. Ee sees the problem. is today manned--constituted in the armedf orces of Germany. (Mr. Bell enters the conference.) Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ PAT. OFF. MICROFILM BOLL NO. 2PD - 13 - . 14 - Ee has got to have what he needs to give him the necessary GEN. HILLDRING: Absolutely. The only thing is, they flexibility to administer properly the most difficult problem are going to arrest them. anybody has been faced with since Calvary. MR. McCLOY: We don't say ne are not going to arrest MR. CLAYTON: There is a lot to be said for that, them, but give the fellow with responsibility some freedom Mr. Secretary. You take, for example, you not only ask to act 88 against putting in jail willy nilly two or three him to arrest all officials, Army, Government, and every- hundred people. In & dministering a country you just can't body who has Nazi leanings, but you say Nazio and Mazi do it. You wouldn't do it in this country. sympathizers holding information and key positions In their commerce, agriculture, and finance. And with all MR. CLAYTON: This says on that that if in the light these other organizations you are going to get there an of conditions which you encounter in Germany you believe enormous army that is going to have to be arrested and put under lock and key or taken care of, supervised in some that certain persons within these categories should not be way. It is going to be a terrific job, I think. subjected immediately, you see, to this treatment, you should report, and so forth. H.M.JR: Look, couldn't this paragraph be rewritten GEN. HILLDRING: It is only the timing we are talking along the lines General Hilldring says in connection with the demobilization of the Army? about. MR. COE: Do you have anything in sind besides soldiers? MR. McCLOY: No, that is only one part of it. MR. McCLOY: Yes, yes. I went into the city of H.M.JR: This thing is an out to give an officer In charge of 8. village not to arrest any ody. Frankfurt the other day, and the fellow in charge of the water system, the only fellow left, was 8. Nazi, and they MR. COE: As 8. matter of fact, the Army doesn't seen didn't know how the pipes led into the city in order to get to be included under this paragraph. at them to repair the place. They got hold of him and used him, and some correspondent came along. They didn't use GEN. HILLDRING: You have got all general staff corps him as an official that issued any orders, but just collared officers, one hundred thousand officers. him and said, "Now, look, I want you to sit in this chair, and I want you to run this water business until we get it 12. GLASSER: The first sentence in B says-- settled." Some correspondent came al ong and said, He is 6. Nazi, and there is a news account of the thing. And MR. McCLOY: Every one of then is to be arrested and a neek later the fellow--after he got the thing located, he they are the ones-- cleared out and they sent him about his business, but that fellow did absolutely right. There were people dying for GEN. HILLDRING: You take every officer in the SS. want of water in Frankfurt, displaced persons, our friends and our own prisoners as well 8.8 the Germans. VR. RIDDLEBERGER: And non-commissioned officer. of course, you have got to be practical about that. GEN. HILLDRING: And non-commissioned officer. And at the end of 8. week or ten days he put in 6. fellow that didn't know anything about the water system, but they VR. COE: Isn't the arrest and incarceration and removal had. the plan and could really operate on that, but he from positions of influence of the SS a pretty major and couldn't have arrested the Nazi immediately. inportant problem there? Regraded Unclassified RECISION TRADE MARK MICROSTAT MICROFILM ROLL NO. 262 - 16 - - 15 - position in industry, connerce, a nd finance in Geruany H.M.JR: Are you through? Would you gentlemen take before you had somebody else to put in his place, I think this paragraph and say, "Report your recommendations or the wheels would all stop. I don't think you would be reasons to the Supreme Commander, whatever it is?" I have able to do anything. in mind Eisenhower and the Joint Chiefs of Staff in this country. Isn't that right? MR. McCLOY: You have got to give Eisenhower also the discretion before he determines that he can arrest three MR. l'oCLOY: That is right. million people when he has got twelve million people. H.M.JR: "Report your reason or recommendation to H.M.JR: All the things you are saying--I don't think General Elsenhower,' period, and then leave out the next it is worded well. sentence. MR. McCLOY: What is wrong? MR. COE: You couldn't do that, because this is to him. This is a directive to Eisenhower. It may be to MR. CROWLEY: I think what the Secretary of the Treasury the Control Council. has in mind is that you may be able to get around this by having this top committee review this thing after they get MR. CLAYTON: You see, Mr. Secretary, this is 8. directive a chance to get in there. If Eisenhower goes in and carries to General Eisenhower. out in general principle what this thing outlines, there is going to be no complaint. But if someone under Eisenhower GEN. HILLDRING: From the JCS to Eisenhower. starts to eliminate this fellow and that fellow and plays favoritiess, that is what I see you object to. You have to MR. McCLOY: And be determines whether these fellows have complete confidence in the fellow that is going to run are to be arrested or not. If he says they shouldn't be this job, because the authority is so vast, as I see it, that arrested after considering conditions in the field brought unless he is the type of person that is going to carry out to him, he is a man of political acumen, character, and and is in sympathy with your directives generally, you are integrity, and he will carry out policy. But if he in in bad shape. And I think from our standpoint that we have his judgment feels he can't do his job properly if he got to be sure that the nan is Eisenhower that takes care arrests all these people willy nilly, he points it out to of our area, that we do 6. good job in our own area, because the Joint Chiefs of Staff, and you give him the discretion you never can get along with your fellow associates if no to suspend the arrest until he gets further word from here, don't do a good job ourselves, and I would--if you can and that seems, with the job such 88 you are giving General rework that language--but I would be satisfied if on that Eisenhower, that if you don't give him that discretion, it particular thing we reserve the right to review with the is almost fantastic. I talked to General Eisenhower about Chiefe of Staff if it is not being carried out, in other this. This came from General Eisenhower, that telegram words, that we might know something about what his policy that I sent. is on relieving these peonle, on deferring, or delaying their arrest as to how he is doing it and what type of GEN. HILLDRING: Yes. person he is, and things like that after he has had 8. chance to operate. MR. CLAYTON: I think that if you take in industry, commerce, and finance, I think from what a good many of us GEN. HILLDRING: In that connection, the report from know about Germany, that if you would go on the basis of SHAEF that came in this week--the leading paragraph is a going in there and immediately a resting and incercerating paragraph from SHAEF which says, "The wisdom of the policy every Nazi or Nazi sympathizer holding an important or key Regraded Unclassified PRECISION TRADE MARE MICROSTAT MICROFILM ROLL NO. 284 - 18 - 213 - 17 - MR. McCLOY: Say that this may be subject to change from time to time, and especially this discretion here in dealing with nor criminals, and that just a note back and of immediate and complete denazification of Germany has forth would take care of that. been demonstrated on the ground; it is 8. wise provision, and we are pursuing it with all vigor." They weren't H.M.JR: If there was a note of communication from sure of this policy over there when we first gave It to this committee them. They weren't sure it was administratively possible, but they have come now to support it as avidly es we did KR. MeCLOY: to the Joint Chiefs of Staff-- in our directive to Eisenhower in 551. I don't think we will have any difficulty with sincere and honest execution H.M.JR: saying this committee would like to be con- of this policy. sulted, that would be agreeable to me. H.M.JR: Could something like this, carrying out what MR. CLAYTON: Would this language do it? This is just Kr. Crowley said, possibly--1 take it that this is a sort of standing committee. I an not sure we can get it legitima- a suggested change in the drafting, "If in the light of tized by the President, but how would this be to frame this conditions which you encounter in Germany you believe that it is not immediately feasible to subject certain persons thing? Here me are, doing the best we can, State, Treasury, liar, FEA, and Navy, and If General Eisenhower should find thin these categories to this treatment, you should that he needs to postpone carrying this out, he would refer report your reasons and recommendations to your Government this to the Joint Chiefs of Staff and the civilian committee through the Joint Chiefs of Staff." for prompt advi the Joint Chiefs of Staff that consult H.M.JR: That is en improvement. with us on that. GEN. BILLDRING: Mr. Secretary, when we say the Joint MR. CLAYTON: "If you believe it desirable, you any Chiefs of Staff in this document, we are giving him the postpone the arrest of those whose cases you have reported." exigency of our Federal Government for whom he imedistely works. When this question comes to the Joint Chiefs of H.K.JR: "Pending hearing from them." Does that clear it up. Staff, they will immediately turn it over to the Inter- departmental Committee. They won't arrive et any-- MR. McCLOY: What I an anxious to do, and what Eisenhower MR. CROWLEY: That is what you want. wants, is to have the right to hold up these arrests pending further determination from the Joint Chiefs of Staff. GEN. HILLDRING: They won't arrive st any decision on H.M.JR: This doesn't say that. this thing. MR. McCLOY: That couldn't be in this directive. MR. COE: Couldn't we say that at the end of this sentence, "Pending determination from the Joint Chiefe of Staff?" H.M.JR: Couldn't there be a note going to the Joint Chiefs of Staff saying, "In case this thing takes place, refer it to us immediately"? GEN. HILLDRING: That is the intention of the language. MR. CROWLEY: I think you can go further than that. I H.M.JR: Then let's say it. think in your note, Jack, you can say-- E.M.JR: That would satisfy ne. Inclassified RECISION TRADE MARK MICROSTAT PAT. ORI, MICROFILM BOLL NO. 208 - 20 - - 19 - MR. DOWNEY: I think we feel that conclusion is satis- MR. CLAYTON: All right, put it right et the end, factory, Kr. Secretary. "Pending determination by the Joint Chiefs of Staff-- H.M.JR: It in 8. tough crowd here. I have never worked MR. DESPRES: by your Government." with overlooked. you fellows, but unless you talk louder, you will be MR. McCLCY: "Pending a decision communicated to you from the Joint Chiefs of Staff." MR. McCLOY: Louder and oftener. MR. CLAYTON: "Pending 8--" H.M.JR: Is that all right with you? And then would somebody draft it? MR. BELL: Does that preclude him from taking any action if he subsequently says they should be arrested? MR. CLAYTON: lie have it here, and-- MR. McCLOY: Then he would no longer think it ERE H.M.JR: It is to go to the Joint Chiefs of Staff that desirable. The basis is wiped out. this committee is to be consulted. H.M.JR: How does it read now? MR. McCLOY: It doesn't do any harn to send communica- tions to the Chairman of this committee and the Joint Chiefs MR. CLAYTON: "If in the light of conditions which you encounter in Germany you believe that it is not imedia- of Staff saying, "If this thing comes up, please consult us." They will consult us, anyway. tely fensible to subject certain persons within these categories to this treatment, you should report your reasons H.K.JR: I would like very much to have the-- and recommendations to your Government through the Joint Chiefs of Staff. If you believe it desirable, you any postpone the GEN. HILLDRING: In the Interdepartmental Committee arrest of those whose cases you have reported, pending B. decision communicated to you by the Joint Chiefs of Staff." all that the Chairman has to do is tell McCarthy to send such a letter. MR. COE: I think no ought to emphasize that it is MR. CLAYTON: We can send a letter then to the War to be through the JCS. Department--to Stimson--and ask If he would do that. H.M.JR: What? H.M.JR: This is the Interdepartmental Committee, isn't it? MR. MeCLOY: That doesn't nake a bit of difference. GEN. BILLDRING: No, because you can't get the Joint MR. WeCLOY: Just a bunch of guys named Joe as far as Chiefs of Seaff to make any political decision; they just I am concerned that are meeting today, just the people interested in this. don't do it. MR. McCLOY: That isn't anything that should be in MR. CROWLEY: Just 8. bunch of fellows who got together. Isn't that it? this paper artistically et least. It should be in a different one. MR. CLAYTON: The next question is that the Treasury asks that the following new sentence be added to the end H.M.JR: Kavy? In this crowd you have got to talk up of peragraph eight. Paragraph eight is the one we have just If you want to be heard. Regraded Unclassified PRECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. 268 - 21 - - 22 - written, and they ask the addition of this sentence, "In no event shall any differentiation be made between or MR. McCLOY: Tie will have inspections. The prisons special consideration be accorded to persons arrested will be run under the military system, end we will have either as to manner of arrest or conditions of detention normal routine inspections. They will see that there are upon the basis of wealth or political diplonatic, indus- no abuses of this sort of thing that is done. I mean, you trial, or other rank or position. won't have any favoritism In running the prisons. There may be 8 ime when you may went to put 8. fellow who has some MR. CROWLEY: In other words, they all go to the scientific information or industrial information in e villa hoosegow together. and give him some cigars. H.K.JR: That would take care of Von Papen. GEN. HILLDRING: I think there should be included in that, certainly this, "Except for intelligence purposes. MR. McCLOY: I wouldn't know about that. They had Von Papen in 8. villa. I didn't see him, but I heard they MR. COE: That amendment would certainly not be out of had him in a villa under guard. They didn't put him down spirit, out of the intention of this, because our intention in the eommon hoosegow. is simply to have it done in e democratic may, which is the way the people would want it done, and we think that the H.M.JR: Why not? tendency will be to discriminate--that was the basis in Italy--unless you say something to them. But if you say MR. McCLOY: That was a determination they made; they something to then, they won't discriminate, if you want to were trying to get some stuff out of him--some information. do it for intelligence purposes. That W&S one reason. They thought they could probably get some information. MR. CROWLEY: You had in mind no discrimination unless there were justifiable circumstances, and intelligence may H.M.JR: We thought this W&S democratic with a smell D. not be all of them. MR. McCLOY: I think you are putting limitations on MR. McCLOY: You may have others. the manner of apprehension on the administrative officer in the field that is unnecessary. You may very well, for H.K.JR: What did they do in Italy? one reason or another, want to trest one prisoner differently from another. MR. COE: In Italy in general they started out with better treatment by rank. The British have that very marked MR. DOWNEY: Doesn't the Geneva Convention have some in their thing all the may through on this defescistification bearing on that, General? and denazification. Unless you go after these main problem people and treat then 88 you intend the generality to be GEN. HILLDRING: I don't think it has. I would think treated, they will get special consideration, and the first not. thing you know, that will degenerate into leaving then in positions of importance. de could put an exception in there, MR. RIDDLEBERGER: Or other rank or position--that is Except for intelligence or other military purposes. very broad. MR. McCLOY: how about diplomatic rank? GEN. HILLDRING: Under the Geneva Convention, putting-- H.M.JR: Why the hell should & diplomat be treated any dif- ferently? Taxe a fellow like Von Papen who is a vicious person-- why should that man get special treatment? He should Regraded Unclassified RECISION TRADE MARK MICROSTAT/ PAT. OFF. MICROFILM BOLL NO. 270 200 - 24 - - 23 - H.W.JR: Why should 6. fellow like Von Papen get get especially harsh treatment, and not especially good treated any differently? treatment. Why should B. diplomat be treated any differently from anybody else? I can't see it. MR. McCLOY: That is something for Eisenhower to deter- mine. I think Von Papen--I have suffered at the hands of MR. CLAYTON: They treat ours differently. It is kind Von Papen, personally, and I know all about his wickedness, of a gentlemen's agreement. and I don want to be in the false position of arguing in favor of a high-class Nazi, but I am thinking about your MR. CROWLEY: Fraternity, if you will. trying to tell 4isenhower how he shall run the prisons. You have got here, number five, "Officials of the police H.M.JR: It is time it is stopped, I think. These holding 8. rank, or equivalent positions of authority, above people are outside the pale. I had three Treasury people that of Lieutenant." That is irrespective of whether he in the Philippines, end two of them died. I couldn't get is a vicious character or not. He gets arrested. It may then any diplomatic status, and why diplomats should come very well be that Eisenhower would want to put that fellow out and Treasury people and others starve to death, I don't in 6. protective custody status rather than an inner dungeon. see it. I don't see why they should get any different treatment than anybody else. H.M.JR: Let's come back to two. MR. CLAYTON: I don't know but what you are right MR. CROWLEY: Why couldn't you do this: "In no event there, Mr. Secretary. shall any differentiation be made or special consideration be accorded?" If you were to change that around and use H.E. JR: It burned me up, but I couldn't get my that same language and say that they shall not be given Treasury people out. And two of these poor fellows died special consideration solely on account of the related of starvation and maltreatment just because they were factors that you mentioned, that would give him the right Treasury people and they weren't diplomats. to use discretion, but wouldn't do it entirely because of those factors. MR. CIAYTON: I am just speaking from the point of view of custom. It seems to me that there is a much broader H.M.JR: That is all right. Let's get it down and principle involved than that, and that is that we should see what it looks like. Do one thing at a time. leave a nigh degree of decision to General Eisenhower, the nan who is in charge of the whole thing and who will have MR. COE: I would propose, "With such exceptions as to deal with conditions as he finds them, which re probably you may find necessary for intelligence or other purposes, going to be altogether different from what no, sitting here you will insure that. in washington today, anticipate they will be. I think they change from day to day, and it seems to ne in all these MR. CLAYTON: I would think that would be all right. matters we ought to leave a good deal of discretion to him. Let him know what our general policies and principles MR. McCLOY: It is all right. All I an talking about are, and then let him carry then out with intelli gence and is giving him some leenay. vigor, which I think he will do. MR. CLAYTON: Is that agreeable, Mr. Secretary? H.M.JR: What sbout Von Papen? Didn't he once negotiate & little something over in this country? H.W.JR: I would like to hear it, please. MR. McCLOY: He certainly did. I would like to get a crack at him. Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM ROLL NO. 272 . 26 - - 25 - MR. CLAYTON: I think it starts out--it would be better MR. McCLOY: I think it is a good document. at the end, wouldn't it, Frank? H.M.JR: May I efer you to page ten, Mr. Clayton, MR. COE: Yes. the top of page ten, "To the extent that military interests are not prejudiced and subject to the provisions of the MR. CLAYTON: Then it would read, "In no event shall three preceding subparagraphs and of paragraph 10, freedom any differentiation be made between or special consideration of speech, press and religious worship will be permitted." be accorded to persons arrested either as to manner of You say, To the extent of military interests, and then "Consistent with military necessity, all religious institu- arrest or condition of detention upon the basis of wealth or political, diplomatic, industriel, or other rank or tions will be respected. position, with such exceptions as in your discretion you MR. CIAYTON: I an sorry, but I have e different draft may deem advisable for intelligence or other purposes." Is that all right? from yours. H.M.JR: It is O.K. with me. MR. McCLOY: What paragraph in that? MR. CLAYTON: If everybody is agreeable, then I think MR. CLAYTON: Seven, or eight? that-- H.M.JR: Nine, D. You first say, "To the extent that H.M.JR: That takes care of the diplomats. (Laughter) military interests are not prejudiced." I can understand that, and then you go on and say, "Consistent with military KR. RIDDLEBERGER: I would like to rise in defense of necessity, all religious institutions will be respected. I would like the soldier to describe to ne what the military the diplomats. As the only professional one here, I would like to say this, that in Germany--you may have had some left necessity is. in the Philippines, but in Germany the Treasury people came MR. McCLOY: You wouldn't requisition it. That is what out, and we stayed behind. I wanted to make that point. I he is really getting at. You will do your best. was engaged in taking care of the interests of the prisoners of war of our allies, the French and British in Berlin, and H.M.JR: Above you say, "To the extent that military you very kindly lent us your assistance--the assistance of interests are not prejudiced." your personnel there until 1940, when you jerked then out from under me, just like that. (Laughter) MR. MeCLOY: That isn't in relation to religious worship, but property--Catholic church property, and things of that H.M.JR: Where were we? kind. It is the general principle we have had everywhere MR. McCLOY: Will was reading. we get to dickering, particularly with the Catholic proper- ties, or other church properties. In Italy it was Catholic, and we like to give the instructions to the field tist so far H.M.JR: We accepted that. 55 they can be consistent with military necessity they don't interfere with that. MR. McCLOY: We finished paragraph eight. MR. CIAYTON: Suppose we say, "All religious property," MR. CLAYTON: That is all. instead of "institutions"? Does that meet your point? H.M.JR: Is that all? Regraded Unclassified 274 - 27 - 28 - H.M.JR: I didn't understand what it meant. Then take then out, and I think you would be better off to spell it out as to your principle that you are going to MR. CLAYTON: They might have to requisition some remove these people, and that certainly after they have gone property, you see. on and energetically removed the top ones-that may be after you have your jails and your courts and everything all H.M.JR: I see. I 185 thinking of interference with cluttered up. When you get down to the second or third religious observance. level, then you may use some discretion in leaving men in to do B. particular thing, because you have to have that know- VR. McCLOY: That is taken care of in the first sentence. ledge, but if you try to spell this thing out now, t emporize with it, I can see that you come out with this thing that MR. RIDDLE BERGER: The reason this says institutions those boys stay in there forever. I think you ought to is because they may not always own the property. spell out your principle, and later on, after you have col- lected together as many of these top people as you can, then H.M.JR: I didn't know what the military necessity if you want to review it in two, three, or four months, or was in relation to worship. something like that, you can review it. But unless you are positive that you are going to eliminate these follows, MR. McCLOY: No, no don't intend-- they will play footy-footy, and be in there a year or ten years from today. They will tire you all out the way they MR. CLAYTON: There is just one question here that will throw rocks in your machinery. bothers me 8 little, and that is closely related to the criminal one, eight; it comes in section six, denazification. H.M.JR: I think what you say is very wise. "All members of the Nazi party who have been more then nominal participants in its activities, all active supporters MR. CIA YTON: Well, you have to recognize this, I think, of Nazian or militarism and all other persons hostile to Mr. Secretary, that the men in important and key positions Allied purposes will be removed and excluded from public in all these activities are Nazis and Nazi sympathizers. office and from positions of importance in quasi-public and Now, supposing you go in there and you have a list of them private enterprises such 8.8 (1) civic, economic and labor and you kick them all out at once, transportation, railroads, organizations, (2) corporations and other organizations in and industries of all kinds before you have satisfactory which the German government or subdivisions have a major people to put in their places, you are likely to effect a financial interest, (3) industry, commerce, agriculture, serious interruption of the economy of the country, which and finance. lie have the same problem there, I think, would react on our occupying forces and on the ability of with respect to an uninterrupted continuation of the economy the people to provide the minimum standard of living. of the country, the necessary economy of the country, the services, and so forth, that we had about putting these H.M.JR: I would like to answer that if I may. I people in jail. If we remove them from these positions think if after each category you immediately put in a before you have somebody else to put in their places, you paragraph saying, "Exceptions" --1 would much rather use may seriously interrupt very essential services and facilities that exception which we argued about, being referred to the for production and transportation, and so forth. Chiefs of Staff--having it at the end than having it over all. MR. CROWLEY: Will, I would think that If you start off with the thought in mind that you are going to leave VR. CLAYTON: So would I, if it is agreenble to you. these fellows there, that the men and the people administering it--it is going to be easier for then to leave the people in MR. CROWLEY: That is right. Regraded Unclassified 276 - 30 . - 29 you are going to have economic chaos in Germany. H.M.JR: Just have it once. MR. COE: That is mitigated by two facts. First, & MR. CROWLEY: You declare your whole policy and then lot of them will run. Second, when we do the fighting, we put in the last paragraph making your exceptions. certainly disrupt it anyway through there. H.M.JR: If some of this doesn't work, you can refer Now, I think with Mr. McCloy that this thing is so it to the Chiefs of Staff and tell his why. deep-rooted that unless you do it--it was at his insistence, his advice, that we put in that last sentence, %o such person MR. CROWLEY: That is right. shall be retained because of administrative necessity, con- venience, or expediency, because it is the overwhelming ten- MR. McCLOY: We are very much interested in this dency to have the officials on the spot, to retain them for particular thing. I would talk, I think, against that a those purposes, and you have to go to the other direction to little until I saw how this thing moved in Italy. I think counteract that. this is 8. good paragraph as it is. We are going to have inefficiency in Germany. There is no question about it. MR. CLAYTON: I agree with that clause. There is going to be great economic inefficiency as 8. result of this policy, but this Nazi policy is very deep-seated. KIL CROWLEY: You wouldn't issue an executive order to You have to take drastic and deep-sested methods to out O.K. this afternoon throwing all these people out. it out, and this will probably not interfere with the case in Frankfurt that we are talking a bout, the temporary situa- VR. CLAYTON: That is what this in practice says. tion where you have got to use this man to get the first train running, then put him In jail and then kick him out. MR. CROWLEY: But administratively you have to do it I have seen it operate in Italy under language not quite as quickly as you can; I assume you are going to give the the same 65 this, but somembat sinilar to this, and I ould men the right of administering it. rather hesitate to see any further loosening of this until we have been in the picture for a while and have dealt with MR. CIAYTON: If this in practice-- this very deep-seated cancer that exists in Germany. KR. McCLOY: It would not in practice preclude the B.M.JR: Well, I remove ay sissy attitude. Frankfurt case I gave. I said, "Of course, you can do that, but get the fellow out as soon as he has shown you where MR. MeCLOY: Well, in 8. sense no are talking against the faucet turns off." ourselves in that, because we are responsible for the administration where the military government exists, and I MR. CROWLEY: The only thing I had in my mind is, while would think we ought to err on the other side in Germany you are dealing with people, if you told a fellow he could because all our experience is that the thing is such more sell the Willard Hotel for nine million dollars or negotiate deep-seated than we had any comprehension of. for nine hundred thousand dollars, inveriably he would make the deal that way and say it is the best he can get. Adminis- MR. CLAYTON: I don't think, Jack, you give enough tratively we know that these fellows are going to have to importance to the absolute necessity of management in these go slow, that there isn't any reason to make it easier for big services and these big industries if you take all the them to go slow. And I think that your language there is key people out, all the know-how people--throw then out all right; and if Eisenhower has the suministration of it, before you have somebody to put in their places, I think Regraded Unclassified RECISION TRADE MARK MICROSTAT/ MICROFILM BOLL NO. - 31 - - 32 - it is going to take him some time before he gets sround to E month, and we would have caught hell in the har Department, certain key places, but nevertheless he has a directive to and so would I. do it as rapidly as he can. MR. McCLOY: That doesn't mean that you cantoollar Now, If we spell it out and make a lot of excuses for this fellow and say, "You tell ne what to do." You can his delaying it, he will be slower in getting it done. do that. MR. CLAYTON: I imagine he is the type of man who will H.V.JR: Do I understand this is acceptable to every- carry out directives like this, which is in very precise body in this room? language, with a good deal of discretion. If he will, then I think it is probably all right, but I do believe that if GEN. HILLDRING: There is one point I would like to this were executed as it reads you will have plenty of raise: The language in paragraph eight, Mr. Clayton, trouble in Germany. If it is satisfactory to the Army, it paragraph seven-A--that has been changed in our draft at is satisfactory to me. my suggestion, and I just didn't get the wording. I would like to get it. MR. McCLOY: Administratively We won't do as good 8 job with this by long odds, but you have got to break the MR. RIDDLEBERCER: I can give it to you, General, if chain somewhere. You have got to get somebody into 8. job you mould like it. quickly who is going to take the place of the Nazi sympathizer, and there is always a second-rate man around. No man, as GEN. BILLDRING: %e want to drop the idea of immediately we all know, is indespensable, and you will find somebody disbanding. down the line, 8. foreman who never did the thing before, but who will perhaps grow with the job. The tendency is so MR. McCLOY: Tie have never tackled the question of strong the other way that I would rather lean over this way. hom rapidly we should disband the German Army. GEN. HILLDRING: I think I. G. Ferben is e good example VR. RI DILEBERGER: "In your zone you will assure that of that. I thanked God at the time that the story came the German armed forces, including para-military organizations out that we had told Eisenhower to clean those fellows out, are promptly demobilized and disbanded in accordance with and under that pressure when the Army went in there and sew policies and procedures set forth in the Instrument of this large plant I think their instincts were to let it alone Inconditional Surrender or in other directives which may for the time; under their strict instructions they noved be issued to you. Prior to disbandment you will arrest and Farben out, but they told a few of them, "You go to your hold all militory personnel who are included under the house and stay there. This is 8. big shop you have turned provisions of paragraph 8." over to us, and we want to talk to you, but they had cleaned them out and taken then out of the establishment. A newspaper GEN. HILLDRING: That is all right. man got hold of I. G. Farben and he said, "I em adviser to the Military Government officer." Well, fortunately he MR. RIDDLEBERGER: That in acceptable. was out of office. He W&S there to help and advise if they n eeded his help and advice, but he was shut up in 8 house MR. McCLOY: There W8 8 this thought they had on the sround the corner where they could get at him if they wanted other side on paragraph eight, but I think it is probably to know where the faucet was. But if you hadn't had that taken care of when you throw out E dragnet and bring all policy to get rid of those Nazis, they would have left these fellows in. You will get some that are not properly that fellow in charge of that plant for 8. week or two, or detained. That paragraph five, for example, says--Eisenhower Regraded Unclassified RECISION TRADE MICROSTAT MICROFILM ROLL NO. 280 - 33 . - 34 - said, "How about setting up a court at which these fellows it on the shoulders of the Army as to what happens next. could make their applications and prove their non-Nazi There never has been any decision 6.5 to how we handle them aspect and character? In the interest of common justice once we round them up. and decency we ought to hear their case, because this is 8. very rough form of justice we are applying here. It is MR. CROWLEY: You wouldn't have any trouble in convict- a thumb rule that isn't in accord with our ordinary instincts." ing n. man that WB 8 a Nazi lender or a man that was 8. high-up In the party. But supposing they went up and picked up a I am inclined to think that there is something in the fellow working on a farm or in 8 store. Would you throw point, but I think that probably ne have taken care of it him in a jug and keep his there indefinitely and say, "Some- in the provision that enables his to make a recommendation one told me that you aré a Nezi?" that? to the Joint Chiefs of Staff. Now, what do you think of MR. McCLOY: No, no, it is all in paragraph eight. Everybody in paragraph eight -- they are the ones we are MR. COE: I think so, yes. talking about. That said, "You will search out, arrest, and hold, pending receipt by you of further instructions that? MR. McCLOY: What do you, State Department, think e bout as to their disposition, Adolph Hitler, his chief Nazi associates, other war criminals and all persons who have participated in planning or carrying out Nazi enterprises MR. DESPRES: As it now reads, I don't think-- involving or resulting in atrocities or war crimes.' That is one section. MR. McCLOY: E:s proposal was a court that would-- this is an arbitrary rule--not attempt to reach 8 rough MR. CROWLEY: That is all the cop does. Let these people appear before a tribunal and take burden approximation of justice to take care of individual cases. H.M.JR: Then, "All persons who, if permitted to remain of proof of showing that they are all right. at large would endanger the accomplishment of your objectives will also be arrested and held in custody. The following MR. CLAYTON: I think that is all right. is a partial list of the categories of persons to be arrested in order to carry out this policy." MR. RI DDLE BERGER: You mean before you arrest them? And then he goes down through eleven different categories, MR. McCLOY: No, his idea was that this would be 8. and they look on the surface 85 If they are bad actors, but means by which they got out of their durance. there are lots of individuals in there that are not bad actors. MR. CROWLEY: You would give them a chance at that? GEN. HILLDRING: They are going to town, Mr. McCloy. They are going to do this town by town and send military MR. McCLOY: There is no provision for that now; you police battalions and detachments of CIC into a town and just detain them. clean that up. Samebody might say, "This fellow who runs the corner store was a 80 and 80 before the war," and the that would be the end of it. MR. CROWLEY: You arrest a fellow and convict him, and K.P.'s will go down and grab him. He professes and says that they are wrong, but he goes into the Black Maria, and off he goes to camp, and there he is. that section; we round these people up and we have just left MR. RIDDLEBERGER: That has always been our problem in MR. CROWLEY: And there is no way of getting hin out? Regraded Unclassified MICROSTAT/ MICROFILM BOLL NO. RECISION TRADE MARK 291 282 - 36 - - 35 - MR. McCLOY: lie have compromised on two to three ail- GEN. HILLDRING: No, there is no way of getting him lion people here. Now, I think it is a good idea to have out. a court, a good sensible thing to do. MR. COE: The President's directive said, "Hold his for trial and punishment. here dealing with it just in broad outline and say that & MR. CLAYTON: Kay I suggest that we insert one paragraph subsequent directive will be formulated and issued to deal GEN. HILLDRING: We haven't any war criminal decisions. with it in detail. Would that be satisfactory? MR. CROWLEY: But Jack, just as an administrative thing you are going to have to set up some machinery for trying MR. McCLOY: Deal with the disposition? smaller people to find out what they are guilty of. the work and the handling of it, end so on. MR. CLAYTON: No, no, with the constitution of it, MR. McCLOY: I was in the town of Eschershausen the other day, and it brings up this question of the rural H.K.JR: Sure. burgomaster. They were fighting down the road 8 thousand yards, and they had the burgonaster up. The company com- mander was a lieutenant who had been designated for civil KR. McCLOY: It is contemplated that a court will be set up to permit application to-- affairs in this combet company, and he hed the burgomaster in before him. There were four displaced persons, three H.M.JR: ...get out. Russians and one Dutchman, who were arguing and testifying in behalf of the burgomaster saying he was a good fellow MR. FOWLER: This is out of our bailiwick, since we are and he WHS kindly and not a Nazi and was all right. Other- wise that burgomaster would have gone into the hoosegow with interested only in economic matters, but once having been a lawyer--don't we consider that 88 8. matter of normal adminis- the rest of the prisoners. That was just a thumb court. There was no regulation that provided for that. That is tration he would go shead and constitute seui- judicial machinery so these people could come in with petitions? Are we here down to the ground. in this group at this stage of the game going to do some- thing in this directive that might tend to inhitit the MR. CROWLEY: Down to a certain level you have wer establishment of a useful judicial process over this. criminal courts, don't you? All you need is something in the lower level. Mk. MoCLOY: Well, may I put it this way: Why do we MR. McCLOY: These are general arrests that bear no in this group order them to arrest all these people? relation to war criminals. of people, and we assume that he is going to make some MR. FOWLER: There is a reason for certain groups MR. CROWLEY: Justice court. mistakes in doing a mass gathering up, but he is going MR. McCLOY: This is a sort of--tnis is an instrument to establish some kind of machinery to sift out the for carrying out a general denazification policy more than mistakes that have been made and rectify that situation. anything else. You are arresting with a dragnet everybody who might be war criminals or might be antagonistic to the correct his mistakes. I don't see why he has to wait on us to, in effect, occupation. MR. CROWLEY: On that basis, if you carried that to the full extent you have to arrest half of Geruany. Regraded Unclassified RECISION TRADE MARK MICROSTAT MICROFILM BOLL NO. 284 293 - 38 - - 37 - because before you can give then e trial, there is going to E.E.JR: We tell him in so many words to arrest every or three million of them. be quite a cooling off period if you are going to have two officer of a certain rank. If that is what we say, shouldn't we at this time tell him that he can set up ameliorating processes? KR, McCLOY: This is meant to catch the big shots, not MR. FOALER: What is more important here, it seems to the little fellows, but in attempting to catch the big me, although this is 8. purely political matter is that some fellows you have roughly defined those, and it is 8 very political policy as to the ultimate disposition and treat- rough rule. Paragraph five I have referred to. I have ment of these people who aren't in the definition of war personally experienced the injustice of persgraph seven. category should be arrived at, and what is more important It says, The leading officials of all ministries and other than the setting up of machinery without policy is the estab- high political officials cown to and including urban and lishment of some policy, and then when you have & policy rural buergermeister and officiale of equivalent rank." you would know better what kind of machinery you want. Maybe There are many rural buergermeisters in Germany today who you might keep them cooled off for six months, generally are not Nazis at all. They have been left there because keeping things pretty well under control. You might make they were good administrators and haven't been touched. different types of policy here, and it seems to ne you have MR. COE: Any suggestion after the first sentence of got e whole area-- B? MR. McCLOY: The policy is stated here, isn't it? We aren't getting into the war criminal business at this time. MR. McCLOY: Eight-B. We say, "All persons who, if We say, "All persons who, if permitted to remain at large permitted to remain at large would endanger the accomplish- would endanger the accomplishment of your objectives will ment of your objectives will also be arrested and held in also be arrested and held in custody. The following is a custody. And I think we should add something like this, partial list of the categories of persons to be arrested "And tried or released through semi-judiciary machinery-- in order to carry out this policy: will establish. through appropriate semi-judiciary machinery which you It may be that these categories we have listed may not fit that policy. GEN. HILLDRING: That doesn't apply--war criminals are included in this? MR. CROWLEY: Well, Jack, I think this is an excellent document. You talk of going in and having a. democratic form A. MR. McCLOY: No, mar criminals are included in paragraph of government in Germany. On the other hand, I don't think any of us feel that the very little people in Germany, with few exceptions, are the ones that led their country into end of eight, "If in the light of conditions which you en- MR. BELL: I would like to nake this suggestion at the this war or made brutal attacks on people, and it would seem to me that if we are going to be consistent with those counter in Germany you determine through such administrative little people, there should be something set up, Jack, to judiciary machinery you set up that certain persons are give those little people a trial. And you wouldn't put them within those categories" --in other words, he sets up the In--take them away from their families and put them In jail machinery to determine whether they have been wrongly and keep them there indefinitely without giving then some arrested, and makes a report to the Joint Chiefs of Staff right of trial. You are going to have a cooling off period based on that recommendation by the judicial machinery. for them, as Joe says, without putting anything in the order, Regraded Unclassified RECISION TRADE MARK MICROSTAT MICROFILM sou NO. 286 205 - 40 - - 39 - MR. CROWLEY: lan't that right? MR. McCLOY: It seems cumbersome. He would send the individual case to the Joint Chiefs of Staff. Then they H.R.Jk: If anybody should ask me, I don't know what wouldn't want to review that record. they want to take the time to try them for. MR. HELL: They would not. Be has to have something MR. BELL: For the records made in the case. to help him determine-- H.V.JR: You have got to satisfy the lawyers. MR. McCLOY: Yes. I think the point is we ought to send--I think your suggestion was 6 pretty good one to MR. McCLOY: We are going to try litler and the Gestapo set up some semi-judicial body to determine whether or not and the SS troops and everybody who has participated in these people that he has gotten through this dragnet do those organizations. This as the general thing will be in fact prejudice or endanger the accomplishment of his sort of set aside with a prior preference for labor bat- objectives. If not, he should release them. talion work. That is about what It comes down to, execute the leaders. MR. CROWLEY: Jack, if you are going to take two or three million people and are going to give them trials and H.N.JR: well, is. Clayton had something there. hold them, what are you going to do with them eventually? Are you going to keep then forever? What you are interested MR. CLAYTON: would this cover it, "All persons, who, in in this thing here is getting at these top fellows and if permitted to remain at large would endanger the accomplish- getting rid of them, and then going down here to the level ment of your objectives?" Would they also be arrested and that you feel stops that Nazi control. You are not interested "held in custody until trial by an appropriate semi-judicial in some little fellow that might have belonged to the Nazi body to be established by you?" It la practically the same Party because someone sold his membership or thought he thing as Frank suggested. would get & better job. You are interested in getting the million or million and a half leaders in the country that H.M.JR: What do you say? you are going to treat as war criminals. MR. COE: I like that. MR. COE: Some you are going to put into labor battelions. MR. CLAYTON: Is that all right, Jack? MR. McCLOY: Probably what we have done is state that all war criminals and all who had participated in the enter- MR. McCLOY: How does that cut across the war criminal prise of the general Nazi domination are to be arrested. That regulations? is the general language. Then we go on and say, "Arrest all these people, and it is a pretty good thumb rule test MR. CLAYTON: It doesn't do it at all, because this is of the important Nazi people, but there will be in those in a category of persons who--you see, war criminals are categories innocent men, not just little fellows. in a different category entirely. This is only for people that he thinks are below the level in crime of war criminals, MR. CROWLEY: Your war criminals and even Hitler get but I would think that they would be dangerous to be left at trials. You are going to give Hitler a trial. Aren't you large. going to give the little fellow who drives a grocery wagon 8 trial? MR. 00E: This is release from the dragnet. MR. McCLOY: I think so. The war criminal idea is MR. CLAYTON: That is what it is. that as we have got it now. Regraded Unclassified 287 - 41 - - 42 - 288 MR. McCLOY: Would you read it again? H.M.JR: Some of these boys may be just as bad or worse than anybody else. Living in the country doesn't purify MR. CLAYTON: Just after "Held in custody," say, them. "Until triel by an appropriate seni-judicial body to be established by you. If that body finds dangerous fellows, MR. CLAYTON: Just report the name back. they will keep them in custody; If he finds them not dangerous, he turns them loose. MR. McCLOY: He has an out there, but it's on the ground that It doesn't turn out to be ridiculous. MR. McCLOY: I think it is all right. What do you think, General? Mine CLAYTON: It seens to DE that in this paragraph eleven-- GEN. HILLDRING: It sounds all right, sir. MR. McCLOY: You are talking about high officials in MR. McCLOY: How about the rural buergermeister? one place, and then you get down to the lowest type of public official. H.M.JR: Don't worry about that buergermeister. H.M.JR: He might be the most vicious. MR. McCLOY: he is the little fellow; he plows in the field. Why don't you leave the urban buergermeister in? V.R. McCLOY: So might a citizen, but not per se, not by reason of his job. H.M.JR: He may have a bunen of bodies he burned right around the corner. E.M.Jk: Well, I didn't put it in, but I hate to begin to make an exception, because you get all the lawyers out, MR. McCLOY: That means you are going to arrest every and all the diplomats out, and all the farmers out. little leader who is 8. farmer. MR. McCLOY: You talk about leading officials and H.M.JR: I don't want the farmers exempt from that. rural buergermeisters. (Laughter) MR. CHARLEY: Henry, I have got to leave. MR. McCLOY: If you arrest that little fellow, it just doesn't make any sense. MR. McCLOY: We haven't begun to fight yet. R.M.JR: I want to talk for myself. MR. CHOWLEY: When are you going into finance and economics? MR. McCLOY: Say urban buergermeister; that takes in H.M.JR: There is one thing. Mr. McCloy intends to provincial towns and places like Nordhausen and and-- leave at eleven tonight, and the one thing ne would like to take up while he is here, as I understand it, is that H.M.JR: If you don't want to distinguish, say buerger- question of inflation. Is that right? meister and let it go at that. Mk. COE: Either economic or financial. MR. CLAYTON: The last paragraph gives discretion on that. VR. CROWLEY: The economics is pretty well agreed to, isn't it, Frank, except the inflationary thing? MR. McCLOY: Yes, but he has to report back to the Joint Chiefs of Staff and everything else on that. Regraded UInclassified 230 283 - 44 - - 43 - MR. CROWLEY: I certainly agree with that, and I think MR. COE: Yes. you ought to nake an analysis of what this thing covers so that he would know it. MR. CLAYTON: We could take that up immediately, the economic part. MR. McCLOY: De is very much interested in this business and spoke to the Secretary of har about it, and he spoke MR. CROWLEY: I have got to ment with the Chiefs of to the Chiefs of Staff about it, too. Staff at half past twelve, but Joe knows it. H.V.JR: I mean, I think we ought to be thinking H.M.JR: Well, let's see, do you ment to meet again that souehow or other when we are in agreement among ourselves tomorrow morning? we ought to ask for a chance to see him and give him a review of this. MR. CLAYTON: You have that food meeting tomorrow morning, Leo. MR. CROWLEY: I think so, too. MR. CROWLEY: Outside of the inflationary thing and H.M.JR: Nine o'clock tomorrow. the economic thing, are we sil right? MR. CROWLEY: Fine. Excuse me. Good by. MR. FOLLER: There is one paragraph me want to propose. (Mr. Crowley leaves the conference.) H.M.JR: What time in your food meeting? MR. CLAYTON: I was just going to say that in this MR. CROWLEY: Tomorrow afternoon. paragraph eleven under eight it now reads that among the categories and persons to be arrested, "Any other person MR. CLAYTON: We could meet in the morning, then. whose name or designation appears on lists to be submitted to you or whose name may be notified to you separately." H.M.JR: What time? That raises in my mind right away on the lists to be sub- mitted by whom and-- MR. CLAYTON: The sooner, the better. MR. MeCLOY: that we have in mind there is the War H.M.JR: Nine o'clock? Crimes Vommission list. MR. CLAYTON: That suits ne all right. MR. CLAYTON: I thought, Jack, if we just say, "Any other person whose name or designation appears on a list MR. CROMLEY: All right. to be submitted to you by appropriate authorities or agencies, or whose name may be 80 notified to you separately." Is that H.M.JR: Just one split second. I don't know how much all right? President Truman knows about what ne are doing. I think tomorrow we ought to let his know about it. Loesn't he MR. McCLOY: Yes, that is all right. I don't know that want to review this? I think we ought to be thinking about you want to have an agency. Really the only way he should it. I think he ought to see the March 23 directive. get lists is through the Joint Chiefs of Staff. MR. CIAYTON: I think he should, too. Unclassified 2"1 292 - 45 . - 46 - MR. CLAYTON: Shall we say that? MR. COE: With 8 wide loophole. MR. McCLOY: Yes, that is what it really means. That H.V.JR: Let's just see a minute. I an all right. is the only communication he gets. There was one objection, which is the thing which kr. MR. CLAYTON: "To be submitted to you by the Joint McCloy raised. This is accepted now, with the rural Chiefs of Staff." buergermeister in? H.M.JR: Yes, and the Government can give it to the MR. CLAYTON: Right. Joint Chiefs of Staff and it will go off to him. H.K.JR: What were the things-- MR. CLAYTON: "Or whose name may be no notified to you separately.' MR. COE: I think the economic thing-- MR. McCLOY: Yes, MR. MeCLOY: I an at considerable disadvantage with the economic situation; I only got a copy of it last night MR. GLASSER: Is the channel always through the Joint late. I only got one; somebody in the War Department had Chiefs of Staff? it. I only read it through half way this morning. It flashed e number of questions in my mind that I think are GEN. HILLDRING: To Eisenhower, always, yes. of some importance. And I would like to give it 8. little more careful study. MR. GLASSER: How about the Reparations Commission in Moscow? Would that be the same channel? H.M. JR: You would like to let it go? GEN. HILLDRING: Until we establish some informal MR. MeCLOY: I would like to read it carefully and arrangement, it includes then. In other words, Eisenhower critically and make up my mind on it. There are 8 number now is the employee of the Combined Chiefs of Staff. He of things that disturb me sbout it, and one of the chief works for them, and nobody else. ones I would like to throw on the desk right now is where this fits in with Reparations Commission. That is a big H.M.JR: Except when President noosevelt told him what subject and 8 very important question of policy has to be he wanted. determined there. GEN. HILLDRING: He does that in the capacity of a MR. CIAYTON: I don't think there is much difficulty soldier. about that fitting in with this reparations document, but there is a very substantial difference in the working group MR. McCLOY: That is right. regarding the matter of inflation and control of inflation. GEN. HILLDRING: lie works exclusively for JCS and gets H.M.JR: Could I have a seventh-inning stretch for all of his orders from them. three minutes to see whether the Treasury is still intact? Would you just stop for three minutes? I have got to see if MR. CLAYTON: Now shall we take up any other documents? my office is still running. MR. MeCLOY: How about ay rural buergermeister? Have (Secretary leaves the conference temporarily.) you talked him out or not? MR. CLAYTON: Now, would you like to go to this inflation question? 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