The Pittsburgh Press (September 18, 1941)
PREPARATIONS FOR LONG WAR ARE INDICATED
Morgenthau reveals U.S. has loaned $10 million to Russians
Washington, Sept. 18 –
President Roosevelt asked Congress today to appropriate $5,985,000,000 to continue Lend-Lease aid to nations battling the Axis through June 30, 1943.
The President’s request indicated preparations for a long war.
He asked that he be left free to provide Lend-Lease aid to any country whose defense he considers vital to this country’s freedom. That was the law governing the present $7 billion Lend-Lease appropriation, most of which has been allocated, and it would permit the U.S. to provide Lend-Lease aid to Russia if it desired. The present system is to provide advance credits to finance Russian war purchases here.
Meanwhile, Secretary of the Treasury Henry Morgenthau Jr. disclosed that the government had advanced $10 million to the Soviet Union more than a month ago to help the Russians meet their current bills for war materials in the United States. He said the loan was an advanced against gold to be shipped by the Russians within 90 days from the date of the armistice.
The President sent to Speaker Sam Rayburn a breakdown of the proposed expenditures compiled by Budget Director Harold D. Smith, as follows:
Ordnance and ordnance stores, supplies, spare parts and materials, including armor and ammunition – $1,190,000,000.
Aircraft and aeronautical material including engines, spare parts and accessories – $685,000,000.
Tanks, armored cars, autos, trucks, etc. – $385,000,000.
Vessels, ships, boats and other watercraft including the hire or other temporary use, equippage, supplies, materials and spare parts – $850,000,000.
Miscellaneous military and naval equipment, supplies and materials – $155,000,000.
Facilities and equipment for production of defense articles, including acquisition of land and maintenance facilities – $375,000,000.
Agricultural, industrial and other commodities and articles – $1,875,000,000.
Repairing, reconditioning, etc., defense articles for foreign countries – $175,000,000.
Necessary services and expenses essential to effectuating the original Lend-Lease Act – $285,000,000.
Administration expenses – $10,000,000.
Mr. Roosevelt informed Congress that of the original $7-billion Lend-Lease appropriation provided six months ago, $6,280,000,000 is:
…now moving through the successive stages of allocation, obligation, production and delivery.
Urges speedy action
The President said:
Additional funds are now needed in order that there be no interruption in flow of aid to those countries whose defense is vital to our own.
I am therefore transmitting a supplemental estimate of appropriation in the amount of $5,985,000,000… I recommend its speedy enactment.
Although under terms of the authorization proposed in the Budget Director’s letter Mr. Roosevelt would have power to extend Lend-lease assistance to Soviet Russia, another clause in Mr. Smith’s letter was apparently directed specifically at communists pr members of any other organization in the United States which might be considered inimical to the national welfare.
Reds ruled out
This provision specified:
No part of any appropriation contained in this act shall be used to pay the salary or wages of any persons who advocartes, or who is a member of an organization that advocates the overthrow of the government of the United States by force or violence.
The same provision specified that any person could clear himself of implication of membership in such an organization simply by swearing an affidavit that he does not advocate nor is a member of an organization that advocates overthrow of the American government by force.
Should a person who is proven a member of such a subversive organization be fund on Lend-Lease payrolls, he would be subject to a $1,000 fine or a year’s imprisonment or both under terms of the proposed statute submitted by the Budget Director.
Generally similar language has been included in most recent defense appropriation bills.
Earlier, Federal Loan Administrator Jesse H. Jones announced that at Mr. Roosevelt’s request the Defense Supplies Corp. had agreed to purchase $100 million worth of war materials from Soviet Russia and to advance her up to $50 million against future delivery.
Vice President Henry A. Wallace called for an “action” program to increase raw materials needed for defense.
The office of export control was transferred to the economic defense board, headed by Mr. Wallace:
…to intensify our policy of eventing shipments to Axis-dominated countries.
Mr. Jone., in announcing the $50-million credit to Russia, said the government had contracts with Amtorg, Soviet trading corporation, to purchase $100 million worth of Russian manganese, chromite, asbestos and platinum. Of these materials, platinum, chromite and manganese are listed as strategic metals which are relatively scarce in this country. The Defense Supplies Corp. will pay up to $50 million ion advance of delivery, the funds to be spent by Russia for supplies bought in this country.
In announcing transfer of the office of export controls, Mr. Wallace said:
The threat of Hitler is such that a business-as-usual attitude is like a foreign army within our borders. Goods and more goods of the kinds essential to our defense effort are what we need most to assure the overthrow of Hitler.
The Supply Priorities and Allocations Board concluded an agreement with Mr. Jones to expand and speed up the production of aluminum and magnesium.
Mr. Jone, pointing out that aluminum production is now about five times greater than before the war, said that an even greater capacity than the 1.5 billion pound annual goal now in effect will be needed. Magnesium production, he said. must be expanded above the present goal of 400 million pounds a year.
Text of letter
Mr. Jones made public this letter to him from the President dated on Sept. 12:
The Russian government needs dollar exchange with which to buy war supplies in the United States; we need many critical and strategic materials produced in Russia, some of which we normally import from that country.
To assist the Russian government in paying for war supplies which it wants to buy in the United States, and which it can get in limited quantities, and to expedite our own national defense program, I would like to arrange through the Reconstruction Finance Corp., or one of its subsidiaries, for the purchase from Amtorg Trading Corp., a United States corporation owned by Russian interests, of manganese, chromite, asbestos, platinum and other articles and materials which we normally import from Russia, up to the value of $100 million for delivery as rapidly as possible, with proper allowances for dislocation of transportation and of their productive facilities, and that advances up to $50 million be made against the purchase price of these critical and strategic materials, to be used by Russia in paying for purchases in this country.