Some old ones.

Bronco spotted in the parking lot the other day.  Clearly rebuilt, but nicely done.  Note the roll cage.  I've always thought that these are one of the nicest looking Jeep sized vehicles.   This generation of Bronco's was produced from 1966 to 1977.

 

Older, probably early 60s, International 4x4 truck.  Probably a 1/2 ton.  This Binder is for sale.

I'm not great on cars once they get into the 70s, but I think this is a rebuilt, or at least repainted, Firebird.

1949 Chevrolet. This period saw the transition from 1930s styles to those of the 1950s.

Monday, February 2, 1942. Things Chinese

Franklin Roosevelt asked Congress to loan $500,000,000 to Nationalist China.

US poster for China relief.  This is obviously an idealized poster, but its interesting in that the family is shown in typical Chinese dress for the time, with the Nationalist soldier pretty accurately shown with a export pattern contract M98 Mauser and attired in German inspired clothing, including the feldmutze adopted by the Nationalist Chinese Army.

This doesn't seem surprising now, but in retrospect, Nationalist China's road to being an ally of the United States was a circuitous one.  The Nationalist had been a Soviet client since 1921 and remained one even after the Communist were removed from the Kuomintang, the event that brought about the Chinese Civil War.  Indeed, while the Soviets also supported the Chinese Communist Party, it operated to force the CCP to make accommodations to the Kuomintang even while the two were fighting against each other.  Moscow's hand was so heavy that it can be argued that Stalin essentially prevented a Communist takeover of China before 1949 through its actions.  A pre-war effort by the Japanese to secure a treaty with the USSR that went beyond being a mere non-aggression pact had included, as part of its conditions, that the Soviets quit supplying the Nationalist, which the Soviets refused.

Soviet volunteer aviators with the Nationalist Chinese.  Soviet aircrews fought with the Nationalist until the German invasion of the USSR, making their volunteer effort earlier than the American one.

Indeed, the Soviets not only supplied aid and material to the Chinese Nationalist, they supplied a group of volunteer aviators.  The US AVG came about only after the Soviet effort concluded.  The Soviets, therefore, aided the Nationalist in real terms longer, and in some ways, more concretely, than the US did, right up until the late 1930s when the US became very interested in Japanese aggression in China.

Soviet I-16 fighter in Nationalist Chinese use.  This aircraft was a popular fighter of the 1930s and saw service early in World War Two, by which time it was obsolete.

At the same time, Nationalist China received significant support from Nazi Germany as well.

Poster symbolizing German and Nationalist Chinese military cooperation, and also demonstrating the very close appearance of their respective uniforms.  The German pattern helmets used by the Chinese were of the late M35 pattern, making them a more modern pattern, for example, than that usually shown worn by the Finns, who retained the old M16s until later patterns were supplied to them during World War Two.

German aid to the Chinese Nationalist military dated back to Weimar Germany, and China had been one of the outlet nations which allowed the Weimar government to basically bypass restrictions on the size of the German officer corps. This continued on into the 1930s with it going so far as to see one of Chiang Kai Shek's children, an adopted son, receive German military training, while another saw an education in the USSR, showing the nature of the relationship between the two countries and the Nationalist.

Chiang Wei-kuo.

The Germans pulled towards the Japanese in the late 1930s, although that relationship was not anywhere near as seamless or trusting as sometimes supposed, and was more than a little cynical on the German side (it was much less cynical on the Japanese side).  As this occurred the Germans began to slowly abandon the Chinese, although not before the Chinese Nationalist Army was essentially equipped in a fashion that distantly mirrored the German Army's to a significant extent.  The Nationalist Chinese fought the Second World War principally armed with German infantry weapons, and they even acquired a handful of tanks from the Germans before Japanese protests caused the supply of such things to cease.

Chinese soldier guarding American P-40s.  He's armed with a contract German M98 Mauser and  his uniform, sans footgear, is basically German in pattern.

The United States, in contrast, had never actually been a major military supplier to anyone prior to World War Two and only stepped into that role with China very late, indeed basically at the same time it started to supply the British in the Second World War. 

It should be noted that in spite of all of this aid, from all of these various sources, and in spite of the fact that the Nationalist Chinese fought much better than they have been credited as doing, massive corruption existed within the Nationalist Chinese ranks which enormously depleted their effectiveness.  Vast amounts of aid were wasted or subject to corrupt diversion and the plight of the Chinese enlisted man a bad one, which accounted for a massive desertion rate.

The US can be regarded as having been naive throughout this period in regard to China in every fashion.  The Nationalist Chinese fought much harder than they're credited with against the Japanese, as noted, but the Nationalist were not in a position to expel them and their own internal corruption hindered their effectiveness.  Chiang clashed with his American advisor's views, although he was always extremely polite to them even though he knew that some, such as Gen. Stilwell, held him in contempt.  The long history of his political movement demonstrates that it was one of complicated political beliefs which in fact included some sympathy to the very hard left, but the government was not a democratic one during Chiang's control of it, something he attributed to wartime and civil war conditions.

Wartime pro British Nationalist card.

During the war the US military mission to China would become significant, but wartime conditions also meant that the OSS mission was more than a little sympathetic to the Chinese Communists and, in fact, included members who were Communist themselves.  The rapid collapse of the Chinese Nationalist, who had held out throughout the 1930s, raised questions that have still never really been fully answered about how that came about, but it is clear that the Truman administration simply had no real sympathy for the Nationalist and had grown tired of them.  Here too, the US failed to appreciate China and where things were heading, once the Nationalist had lost the favor of their final patron, the United States.  Chiang, for his part, partially attributed his 1949 defeat to the corruption that has always existed in his movement, and he diligently worked to eliminate it once he was exiled to Taiwan.

Oddly, Chiang Kai Shek has undergone a bit of a rehabilitation in Communist China in recent years, with some scholarly articles reassessing his leadership favorably.  It's hard to know what to make of this.

On this same day, and on the same topic, more or less, Joseph Stilwell was designated Chief of Staff to Supreme Commander, China Theatre, which meant he was Chief of Staff to Chiang.

Stilwell didn't get along with Chiang and was outraged by Chinese corruption and military inefficiency, both of which were very real as noted.  He became more vociferous about his views as the war went on, and was ultimately partially recalled because of this.  He referred to Chiang as peanut, and his views might be best illustrated, in part, by this poem he authored.

I have waited long for vengeance,
At last I've had my chance.
I've looked the Peanut in the eye
And kicked him in the pants.

The old harpoon was ready
With aim and timing true,
I sank it to the handle,
And stung him through and through.

The little bastard shivered,
And lost the power of speech.
His face turned green and quivered
As he struggled not to screech.

For all my weary battles,
For all my hours of woe,
At last I've had my innings
And laid the Peanut low.

I know I've still to suffer,
And run a weary race,
But oh! the blessed pleasure!
I've wrecked the Peanut's face.

Also on this day, as Sarah Sundin's blog reports:

February 2, 1942: : US 808th Engineer Aviation Battalion arrives in Melbourne to build airfields near Darwin, Australia. Allied ships begin withdrawal from Singapore to East Indies.

At this time, there was a real fear that the Japanese would land on Australia.

On the Eastern Front, the Germans were forced to supply the troops surrounded at Kholm by air.

Life Magazine featured a P-47 on its cover, a stunning thing to realize in that in 1942 the common American fighter was the over matched P-40.  The P-47 would go on to be one of the great convoy escort aircraft of the war and obtain a reputation as a terrific ground support aircraft.  The plane had made its first flight in 1941 and had not yet gone into service, but the fact that it was at this stage meant that the US had already leaped an entire aircraft generation ahead of any other combatant in the war.

Wednesday, January 7, 1942. The biggest budget up to then.

 

President Roosevelt sent is budget message to Congress.  It stated:

To the Congress: 

I am submitting herewith the Budget of the United States for the fiscal year ending June 30, 1943. It is the budget of a Nation at war in a world at war. 

In practical terms the Budget meets the challenge of the Axis powers. We must provide the funds to man and equip our fighting forces. We must provide the funds for the organization of our resources. We must provide the funds to continue our role as the Arsenal of Democracy. 

Powerful enemies must be outfought and outproduced. Victory depends on the courage, skill, and devotion of the men in the American, British, Russian, Chinese, and Dutch forces, and of the others who join hands with us in the fight for freedom. But victory also depends upon efforts behind the lines—in the mines, in the shops, on the farms. 

We cannot outfight our enemies unless, at the same time, we outproduce our enemies. It is not enough to turn out just a few more planes, a few more tanks, a few more guns, a few more ships, than can be turned out by our enemies. We must outproduce them overwhelmingly, so that there can be no question of our ability to provide a crushing superiority of equipment in any theater of the world war. 

And we shall succeed. A system of free enterprise is more effective than an "order" of concentration camps. The struggle for liberty first made us a Nation. The vitality, strength, and adaptability of a social order built on freedom and individual responsibility will again triumph. 

THE WAR PROGRAM 

Our present war program was preceded by a defense effort which began as we emerged from the long depression. During the past eighteen months we laid the foundation for a huge armament program. At the same time industry provided ample consumers' goods for a rapidly growing number of workers. Hundreds of thousands of new homes were constructed; the production of consumers' durable goods broke all records. The industrial plant and equipment of the country were overhauled and expanded. 

Adjustment to a war program can now be made with greater speed and less hardship. The country is better stocked with durable goods. Our factories are better equipped to carry the new production load. The larger national income facilitates financing the war effort. 

There are still unused resources for agricultural and industrial production. These must be drawn into the national effort. Shortages, however, have developed in skilled labor, raw materials, machines, and shipping. Under the expanding war program, more and more productive capacity must be shifted from peacetime to wartime work. 

Last year fiscal policy was used to shift the economy into high gear. Today it is an instrument for transforming our peace economy into a war economy. This transformation must be completed with minimum friction and maximum speed. The fiscal measures which I outline in this message are essential elements in the Nation's war program. 

WAR APPROPRIATIONS. 

This is a war budget. The details of a war program are, of course, in constant flux. Its magnitude and composition depend on events at the battlefronts of the world, on naval engagements at sea, and on new developments in mechanized warfare. Moreover, war plans are military secrets. 

Under these circumstances I cannot hereafter present details of future war appropriations. However, total appropriations and expenditures will be published so that the public may know the fiscal situation and the progress of the Nation's effort. 

The defense program, including appropriations, contract authorizations, recommendations, and commitments of Government corporations, was 29 billion dollars on January 3, 1941. During the last twelve months 46 billion dollars have been added to the program. Of this total of 75 billion dollars there remains 24 billion dollars for future obligation. 

In this Budget I make an initial request for a war appropriation of 13.6 billion dollars for the fiscal year 1943. Large supplemental requests will be made as we move toward the maximum use of productive capacity. Nothing short of a maximum will suffice. I cannot predict ultimate costs because I cannot predict the changing fortunes of war. I can only say that we are determined to pay whatever price we must to preserve our way of life. 

WAR EXPENDITURES. 

Total war expenditures are now running at a rate of 2 billion dollars a month and may surpass 5 billion dollars a month during the fiscal year 1943. As against probable budgetary war expenditures of 24 billion dollars for the current fiscal year, our present objective calls for war expenditures of nearly 53 billion dollars for the fiscal year 1943. And in addition, net outlays of Government corporations for war purposes are estimated at about 2 and 3 billion dollars for the current and the next fiscal year, respectively. 

These huge expenditures for ships, planes, and other war equipment will require prompt conversion of a large portion of our industrial establishment to war production. These estimates reflect our determination to devote at least one-half of our national production to the war effort. 

The agencies responsible for the administration of this vast program must make certain that every dollar is speedily converted into a maximum of war effort. We are determined to hold waste to a minimum. 

THE CIVIL FUNCTIONS OF GOVERNMENT 

In a true sense, there are no longer non-defense expenditures. It is a part of our war effort to maintain civilian services which are essential to the basic needs of human life. In the same way it is necessary in wartime to conserve our natural resources and keep in repair our national plant. We cannot afford waste or destruction, for we must continue to think of the good of future generations of Americans. For example, we must maintain fire protection in our forests; and we must maintain control over destructive floods. In the preparation of the present Budget, expenditures not directly related to the war have been reduced to a minimum or reoriented to the war program. 

We all know that the war will bring hardships and require adjustment. Assisting those who suffer in the process of transformation and taxing those who benefit from the war are integral parts of our national program. 

It is estimated that expenditures for the major Federal assistance programs- farm aid, work relief, youth aid—can be reduced by 600 million dollars from the previous to the current fiscal year, and again by 860 million dollars from the current to the next fiscal year. These programs will require 1.4 billion dollars during the fiscal year 1943, about one-half of the expenditures for these purposes during the fiscal year 1941. 

Improved economic conditions during the current year have made possible the execution of economic and social programs with smaller funds than were originally estimated. By using methods of administrative budget control, 415 million dollars of appropriations for civil purposes have been placed in reserves. 

Excluding debt charges and grants under the Social Security law, total expenditures for other than direct war purposes have been reduced by slightly more than 1 billion dollars in the next fiscal year. 

Agricultural aid. I propose to include contract authorizations in the Budget to assure the farmer a parity return on his 1942 crop, largely payable in the fiscal year 1944. I do not suggest a definite appropriation at this time because developments of farm income and farm prices are too uncertain. Agricultural incomes and prices have increased and we hope to limit the price rise of the products actually bought by the farmer. But if price developments should turn against the farmer, an appropriation will be needed to carry out the parity objective of the Agricultural Adjustment Act. 

The remaining expenditures for the agricultural program are being brought into accord with the war effort. Food is an essential war material. I propose to continue the soil conservation and use program on a moderately reduced scale. Acreage control by cooperative efforts of farmer and Government was inaugurated in a period of overproduction in almost all lines of farming. Then its major objective was the curtailment of production to halt a catastrophic decline in farm prices. At present, although there is still excess production in some types of farming, serious shortages prevail in other types. The present program is designed to facilitate a balanced increase in production and to aid in controlling prices. 

Work projects. The average number of W.P.A. workers was two million in the fiscal year 1940, the year before the defense program started; the average has been cut to one million this year. With increasing employment a further considerable reduction will be possible. I believe it will be necessary to make some provision for work relief during the next year. I estimate tentatively that 465 million dollars will be needed for W.P.A., but I shall submit a specific request later in the year. Workers of certain types and in certain regions of the country probably will not all be absorbed by war industries. It is better to provide useful work for the unemployed on public projects than to lose their productive power through idleness. Wherever feasible they will be employed on war projects. 

Material shortages are creating the problem of "priority unemployment." I hope the workers affected will be reemployed by expanding war industries before their unemployment compensation ceases. Some of the workers affected will not, however, be eligible for such compensation and may be in need of assistance. 

Rather than rely on relief a determined effort should be made to speed up reemployment in defense plants. I have, therefore, instructed the. Office of Production Management to join the procurement agencies in an effort to place contracts with those industries forced to cut their peacetime production. The ingenuity of American management has already adapted some industries to war production. Standardization and substitution are doing their part in maintaining production. Ever-increasing use of subcontracts, pooling of industrial resources, and wider distribution of contracts are of paramount importance for making the fullest use of our resources. The newly nationalized Employment Service will greatly help unemployed workers in obtaining employment. 

Aids to youth. Under war conditions there is need and opportunity for youth to serve in many ways. It is therefore possible to make a considerable reduction in the programs of the Civilian Conservation Corps and the National Youth Administration. The youth, too, will be aided by the United States Employment Service in finding employment opportunities.

Although I am estimating 100 million dollars for these two agencies, excluding 50 million dollars for defense training, it is probable that the total amount will not be needed. I am postponing until next spring presentation to the Congress of specific recommendations as to youth aid. 

Public works program. The public works program is being fully adjusted to the war effort. The general program of 578 million dollars includes those projects necessary for increasing production of hydroelectric power, for flood control, and for river and harbor work related to military needs. Federal aid for highways will be expended only for construction essential for strategic purposes. Other highway projects will be deferred until the postwar period. For all other Federal construction I am restricting expenditures to those active projects which cannot be discontinued without endangering the structural work now in progress.

Civil departments and agencies. The work of the civil departments and agencies is undergoing thorough reorientation. Established agencies will be used to the greatest possible extent for defense services. Many agencies have already made such readjustment. All civil activities of the Government are being focused on the war program. 

Federal grants and debt service. A few categories of civil expenditures show an increase. Under existing legislation Federal grants to match the appropriations for public assistance made by the individual States will increase by 73 million dollars. I favor an amendment to the Social Security Act which would modify matching grants to accord with the needs of the various States. Such legislation would probably not affect expenditures substantially during the next fiscal year. 

Because of heavy Federal borrowing, interest charges are expected to increase by 139 million dollars in the current fiscal year, and by another 500 million dollars in the fiscal year 1943. Debt service is, of course, affected by war spending. 

COORDINATION OF FISCAL POLICIES. 

The fiscal policy of the Federal Government, especially with respect to public works, is being reinforced by that of State and local governments. Executive committees of the Council of State Governments and the Governors' Conference have issued excellent suggestions for harmonizing various aspects of State and local fiscal policy with national objectives. These governments are readjusting many of their services so as to expedite the war program. Many are making flexible plans for the postwar readjustment and some are accumulating financial reserves for that purpose. The larger the scale of our war effort, the more important it becomes to provide a reservoir of postwar work by business and by Federal, State, and local governments. 

FINANCING THE WAR 

Determination, skill, and materiel are three great necessities for victory. Methods of financing may impair or strengthen these essentials. Sound fiscal policies are those which will help win the war. A fair distribution of the war burden is necessary for national unity. A balanced financial program will stimulate the productivity of the Nation and assure maximum output of war equipment. 

With total war expenditures, including net outlays of Government corporations, estimated at 26 billion dollars for the current fiscal year and almost 56 billion dollars for the fiscal year 1943, war finance is a task of tremendous magnitude requiring a concerted program of action. 

RECEIPTS UNDER PRESENT LEGISLATION. 

Total receipts from existing tax legislation will triple under the defense and war programs. They are expected to increase from 6 billion dollars in the fiscal year 1940 to 18 billion dollars in the fiscal year 1943. This increase is due partly to the expansion of economic activities and partly to tax legislation enacted during the last two years. As we approach full use of our resources, further increases in revenue next year must come predominantly from new tax measures rather than from a greater tempo of economic activity. Taxes on incomes, estates, and corporate profits are showing the greatest increase. Yields from employment taxes are increasing half as fast; and the yields from excise taxes are increasing more slowly; customs are falling off. On the whole, our tax system has become more progressive since the defense effort started. 

DEFICITS UNDER PRESENT LAWS. 

The estimate of deficits must be tentative and subject to later revision. The probable net outlay of the Budget and Government corporations, excluding revenues from any new taxes, will be 20.9 billion dollars for the current fiscal year, and 45.4 billion dollars for the fiscal year 1943. Borrowing from trust funds will reduce the amounts which must be raised by taxation and borrowing from the public by about 2 billion dollars in the fiscal year 1942 and 2.8 billion dollars in the fiscal year 1943. 

· In estimating expenditures and receipts, only a moderate rise in prices has been assumed. Since expenditures are affected by rising prices more rapidly than are revenues, a greater price increase would further increase the deficit. 

THE NEED FOR ADDITIONAL TAXES. 

In view of the tremendous deficits, I reemphasize my request of last year that war expenditures be financed as far as possible by taxation. When so many Americans are contributing all their energies and even their lives to the Nation's great task, I am confident that all Americans will be proud to contribute their utmost in taxes. Until this job is done, until this war is won, we will not talk of burdens. 

I believe that 7 billion dollars in additional taxes should be collected during the fiscal year 1943. Under new legislation proposed later in this Message, social security trust funds will increase by 2 billion dollars. Thus new means of financing would provide a total of 9 billion dollars in the fiscal year 1943. 

Specific proposals to accomplish this end will be transmitted in the near future. In this Message I shall limit my recommendations on war finance to the broad outline of a program.

Tax programs too often follow the line of least resistance. The present task definitely requires enactment of a well-balanced program which takes account of revenue requirements, equity, and economic necessities. 

There are those who suggest that the policy of progressive taxation should be abandoned for the duration of the war because these taxes do not curtail consumers' demand. The emergency does require measures of a restrictive nature which impose sacrifices on all of us. But such sacrifices are themselves the most compelling argument for making progressive taxes more effective. The anti-inflationary aspect of taxation should supplement, not supplant, its revenue and equity aspects. 

PROGRESSIVE TAXES. 

Progressive taxes are the backbone of the Federal tax system. In recent years much progress has been made in perfecting income, estate, gift, and profit taxation but numerous loopholes still exist. Because some taxpayers use them to avoid taxes, other taxpayers must pay more. The higher the tax rates the more urgent it becomes to close the loopholes. Exemptions in estate and gift taxation should be lowered. The privileged treatment given certain types of business in corporate income taxation should be reexamined. 

It seems right and just that no further tax-exempt bonds should be issued. We no longer issue United States tax-exempt bonds and it is my personal belief that the income from State, municipal, and authority bonds is taxable under the income-tax amendment to the Constitution. As a matter of equity I recommend legislation to tax all future issues of this character. 

Excessive profits undermine unity and should be recaptured. The fact that a corporation had large profits before the defense program started is no reason to exempt them now. Unreasonable profits are not necessary to obtain maximum production and economical management. Under war conditions the country cannot tolerate undue profits. 

Our tax laws contain various technical inequities and discriminations. With taxes at wartime levels, it is more urgent than ever to eliminate these defects in our tax system. 

ANTI-INFLATIONARY TAXES. 

I stated last year in the Budget Message that extraordinary tax measures may be needed to "aid in avoiding inflationary price rises which may occur when full capacity is approached." The time for such measures has come. A well-balanced tax program must include measures which combat inflation. Such measures should absorb some of the additional purchasing power of consumers and some of the additional funds which accrue to business from increased consumer spending. 

A number of tax measures have been suggested for that purpose, such as income taxes collected at the source, pay-roll taxes, and excise taxes. I urge the Congress to give all these proposals careful consideration. Any tax is better than an uncontrolled price rise. 

Taxes of an anti-inflationary character at excessive rates spell hardship in individual cases and may have undesirable economic repercussions. These can be mitigated by timely adoption of a variety of measures, each involving a moderate rate of taxation. 

Any such tax should be considered an emergency measure. It may help combat inflation; its repeal in a postwar period may help restore an increased flow of consumers' purchasing power. 

Excise taxes. All through the years of the depression I opposed general excise and sales taxes and I am as convinced as ever that they have no permanent place in the Federal tax system. In the face of the present financial and economic situation, however, we may later be compelled to reconsider the temporary necessity of such measures. 

Selective excise taxes are frequently useful for curtailing the demand for consumers' goods, especially luxuries and semiluxuries. They should be utilized when manufacture of the products competes with the war effort. 

Payroll-taxes and the social security program. I oppose the use of pay-roll taxes as a measure of war finance unless the worker is given his full money's worth in increased social security. From the inception of the social security program in 1935 it has been planned to increase the number of persons covered and to provide protection against hazards not initially included. By expanding the program now, we advance the organic development of our social security system and at the same time contribute to the anti-inflationary program. 

I recommend an increase in the coverage of old-age and survivors' insurance, addition of permanent and temporary disability payments and hospitalization payments beyond the present benefit programs, and liberalization and expansion of unemployment compensation in a uniform national system. I suggest that collection of additional contributions be started as soon as possible, to be followed one year later by the operation of the new benefit plans.

Additional employer and employee contributions will cover increased disbursements over a long period of time. Increased contributions would result in reserves of several billion dollars for postwar contingencies. The present accumulation of these contributions would absorb excess purchasing power. Investment of the additional reserves in bonds of the United States Government would assist in financing the war. 

The existing administrative machinery for collecting pay-roll taxes can function immediately. For this reason Congressional consideration might be given to immediate enactment of this proposal, while other necessary measures are being perfected. 

I estimate that the social security trust funds would be increased through the proposed legislation by 2 billion dollars during the fiscal year 1943. 

FLEXIBILITY IN THE TAX SYSTEM. 

Our fiscal situation makes imperative the greatest possible flexibility in our tax system. The Congress should consider the desirability of tax legislation which makes possible quick adjustment in the timing of tax rates and collections during an emergency period. 

BORROWING AND THE MENACE OF INFLATION. 

The war program requires not only substantially increased taxes but also greatly increased borrowing. After adjusting for additional tax collections and additional accumulation in social security trust funds, borrowing from the public in the current and the next fiscal year would be nearly 19 billion dollars and 34 billion dollars, respectively. 

Much smaller deficits during the fiscal year 1941 were associated with a considerable increase in prices. Part of this increase was a recovery from depression lows. A moderate price rise, accompanied by an adjustment of wage rates, probably facilitated the increase in production and the defense effort. Another part of the price rise, however, was undesirable and must be attributed to the delays in enacting adequate measures of price control. 

With expenditures and deficits multiplied, the threat of inflation will apparently be much greater. There is, however, a significant difference between conditions as they were in the fiscal year 1941 and those prevailing under a full war program. Last year, defense expenditures so stimulated private capital outlays that intensified use of private funds and private credit added to the inflationary pressure created by public spending. 

Under a full war program, however, most of the increase in expenditures will replace private capital outlays rather than add to them. Allocations and priorities, necessitated by shortages of material, are now in operation; they curtail private outlays for consumers' durable goods, private and public construction, expansion and even replacements in non-defense plants and equipment. These drastic curtailments of non-defense expenditures add, therefore, to the private funds available for non-inflationary financing of the Government deficit.

This factor will contribute substantially to financing the tremendous war effort without disruptive price rises and without necessitating a departure from our low-interest-rate policy. The remaining inflationary pressure will be large but manageable. It will be within our power to control it if we adopt a comprehensive program of additional anti-inflationary measures.

A COMPREHENSIVE ANTI-INFLATIONARY PROGRAM. 

The great variety of measures is necessary in order to shift labor, materials, and facilities from the production of civilian articles to the production of weapons and other war supplies. Taxes can aid in speeding these shifts by cutting non-essential civilian spending. Our resources are such that even with the projected huge war expenditures we can maintain a standard of living more than adequate to support the health and productivity of our people. But we must forgo many conveniences and luxuries. 

The system of allocations—rationing on the business level should be extended and made fully effective, especially with relation to inventory control. 

I do not at present propose general consumer ration cards. There are not as yet scarcities in the necessities of life which make such a step imperative. Consumers' rationing has been introduced, however, in specific commodities for which scarcities have developed. We shall profit by this experience if a more general system of rationing ever becomes necessary. 

I appeal for the voluntary cooperation of the consumer in our national effort. Restraint in consumption, especially of scarce products, may make necessary fewer compulsory measures. Hoarding should be encouraged in only one field, that of defense savings bonds. Economies in consumption and the purchase of defense savings bonds will facilitate financing war costs and the shift from a peace to a war economy. 

An integrated program, including direct price controls, a flexible tax policy, allocations, rationing, and credit controls, together with producers' and consumers' cooperation will enable us to finance the war effort without danger of inflation. This is a difficult task. But it must be done and it can be done. 

THE INCREASE IN THE FEDERAL DEBT 

On the basis of tentative Budget estimates, including new taxes, the Federal debt will increase from 43 billion dollars in June, 1940, when the defense program began, to 110 billion dollars three years later. This increase in Federal indebtedness covers also the future capital demands of Government corporations. About 2 billion dollars of this increase will result from the redemption of notes of Government corporations guaranteed by the Federal Government. 

These debt levels require an increase in the annual interest from i billion dollars in 1940 to above 2.5 billion dollars at the end of fiscal year 1943. Such an increase in interest requirements will prevent us for some time after the war from lowering taxes to the extent otherwise possible. The import of this fact will depend greatly on economic conditions in the postwar period. 

Paying 2.5 billion dollars out of an extremely low national income would impose an excessive burden on taxpayers while the same payment out of a 100-billion-dollar national income, after reduction of armament expenditures, may still permit substantial tax reductions in the postwar period. 

If we contract a heavy debt at relatively high prices and must pay service charges in a period of deflated prices, we shall be forced to impose excessive taxes. Our capacity to carry a large debt in a postwar period without undue hardship depends mainly on our ability to maintain a high level of employment and income. 

I am confident that by prompt action we shall control the price development now and that we shall prevent the recurrence of a deep depression in the postwar period. There need be no fiscal barriers to our war effort and to victory.

Japanese armor routed the 11th Indian Division at the Slim River in Malaya.  The division is destroyed, although some units take to the jungle and become guerrillas, one Gurkha remaining in the bush as late as 1949. 

The U.S. Navy issues a warning that German battleships may be off the East Coast.

The Battle of Moscow is regarded of ending on this day, and the Soviets were engaged in a theater wide offensive. They were doing well against the Germans, but in the far north, not so well against the Finns, where the lines were actually relatively static.

Friday, July 1, 1921. Reds in China.

                       

The Communist Party of China, which ultimately would have the blood of millions on its hands, was founded on this day in 1921, or at least claims to have been.  The actual date is somewhat murky, which is natural given the circumstances, but it was right about about this time, perhaps within a few days.

Symbol of the Chinese Communist Party, appropriately in blood red.

An alien introduction in the first place, the Chinese Communist Party grew out of the May 4th Movement which expressed student discontent with the Versailles Treaty, which had failed to recognize Chinese claims to German colonial holdings on Chinese territory, finding in favor of Japan instead. While Japan was a full belligerent in the war, the failure to assign these territories to China was clearly a violation of Wilson's Fourteen Points and a shocking denial of legitimate Chinese claims in favor of illegitimate Japanese ones.  While the protests were legitimate, they came at a time during which radical Marxism was gaining ground in Europe and those movements spilled over into China.  At nearly the same time, many of the same ideas would begin to get a toehold in Japan, along with concepts of extreme nationalism, such as would take hold in Germany and Italy.  For that matter, the Bolsheviks, even thought they lacked a firm grasp on Russia at the time, was active in promoting Communism in China and had an early foundational role in the CCP by 1919.

Student protest in May 4th Movement.

The same was somewhat true of the Chinese Nationalist Party, the KMT, and early on the CCP ended up being a wing of the KMT. Sun Yat Sen, one of the KMT's founders, was at least somewhat sympathetic to Communism and the KMT early on adopted certain Leninist principals.  Indeed, some proto communist elements have never left the KMT, which remains a significant political party in Taiwan.

The party struggled with the KMT until after World War Two, at which time it defeated the KMT in the Chinese Civil War on the mainland.  The story is a long and complicated one, as is the story of the KMT itself, which we'll perhaps detail elsewhere, as that story has its roots in the era we are focused on. Suffice it to say, the CCP continues to rule China to this day, but on a model that draws some influence from the Leninist NEP.  It can't continue to govern China forever, and while it remains strongly in place, it's long-term prospects are probably shorter than generally suspected.  It has become, in recent years, the most serious military threat to the United States and the first peer level military opponent of the US since the collapse of the Soviet Union.

On the same day the left wing government of Mexico imposed increased tariffs on the export of petroleum products which brought oil production and exploration to a halt.

June 1, 1941. Spreading horror.

On this day in 1941, Crete fell to the Germans in the conclusion of a unique nearly all airborne invasion.  As we've noted elsewhere, the high casualty rate caused the Germans to abandon largescale airborne operations, while its impressive success emphasized airborne operations to the Allies which would later mount gigantic ones.

You can read more about that here:

Today in World War II History—June 1, 1941

On the same day, Nazi Germany banned all Catholic publications.

The Nazi regime was anti Christian in general and had long range plans to force the introduction of a new paganistic German religion to replace the Christian faith.  It was slow to try to force much upon Germans Christians, however, prior to the war as it was clear that Catholics would stoutly oppose it and, to their surprise, Lutherans did as well.  It slowly suppressed Christianity inside of Germany as time went on, with this being a major action against Catholicism.  Outside of Germany, where it was not restrained, it acted much more harshly, particularly in Poland where it violently suppressed the Catholic Church.

This follows an overall pattern that's rarely noted.  In its violent hostility to all religions, it was generally harsher outside of Germany than inside of it, although it was uniformly hostile everywhere.

In contrast, the Second World War saw a pretty open appeal to Christianity in the Allied nations. This would continue on into the Cold War to a degree.

Mass violence against Jews broke out in Baghdad resulting in a large, but undetermined, number of Jewish deaths.  This took place after the collapse of the Iraqi fascist regime but before the prior regime and the British could restore order.  Jews were the victims of an odd belief that they had somehow helped the British defeat the Iraqi fascists.

The British government imposed clothes rationing in the UK on this day in 1941.  It would continue until March, 1949.  The long continuance of rationing would help bring down the Labour government that year.

September 2, 1920. Changing views.

Most of the time when I put a newspaper up here, it's to mark some big or at least interesting century old event.  Every now and then, however it's to comment on something and how it was perceived, which by extension comments on how we perceive things now.

I see around here fairly frequently stickers that say "Welcome to Wyoming--Consider everyone armed".  It's an amusing joke based on the fact that firearms are really common here.  That's been the case as long as I can personally recall, but it also refers to the fact that over the past two decades there's been a real boom in the concealed carry movement.  I've taken a look at that and its history in this old post here:

Packing Heat

Now, by mentioning this here, I don't mean to suggest that I'm opposed to these state laws allowing for concealed carry.  I'm not. But I do want to point out how carrying hasn't always been perceived the way it is now.

In 2020 we can take it for granted that the press is universally liberal, and indeed "progressive", unless we specifically know otherwise about a particular outlet.  In 1920, however, its a little more difficult to tell.  Papers were Democratic or Republican and generally weren't shy about noting it, but they were also pretty slavish followers of social trends, unless they were absolutely bucking them.   All of which makes the headline about Gerald Stack engaging in an act of "Slander" against Wyoming men interesting.

Under the same circumstances today, there aren't very many Wyoming men who would regard his comment as slanderous. Some would find it childish and inaccurate, and some on the political fringes would hold it up as a positive or negative example. But quite a few people would take some secret pride in the thought that everyone in the state was packing.

In 1920, however, Wyoming was seeking to overcome its frontier image even while preserving it. The Cheyenne newspaper knew that his comment wasn't true and pointed it out. Beyond that, they pointed it out as being slanderous. An insult, as it was, to the men of Wyoming.

Apparently it wasn't an insult to women, presumably because women weren't thought to be packing.

In actuality, quite a few people at the time, including quite a few people were packing and the ownership of pocket pistols was common.  Chicago, for its part, didn't have a gun control law addressing handguns until 1981, much later than most people would suppose, and it hasn't been a huge success by any measure.  Having said that, Illinois restricted the carrying of concealed handguns in 1949, following World War Two, at which time, contrary to our general myth, there was widespread national support for banning handguns.  New York City, in contrast, passed a firearms licensing act for concealable handguns in 1911, making the carrying of them without a license a felony.

Again, this isn't an argument for anything.  It's just an interesting look at how we often inaccurately imagine what the past was like.

On something completely different, Boy Scouts from Mansfield Ohio returned home after an epic multistate bicycle trip.

Blog Mirror: The Cold War History Blog: Cold War Movie Review: The Third Man

Cold War Movie Review: The Third Man

Flag Day. June 14 (1917 and 2017)

1917 Flag Day Poster noting the 140th anniversary of the adoption of the Stars & Stripes.

It's always on June 14.

The date commemorates the adoption of the Stars and Stripes as the on July 14, 1777 as the national standard.  The day was established as a commemorative day by proclamation of Woodrow Wilson in 1916 and then National Flag Day was proclaimed an official commemoration, but not a national holiday, by Congress in 1949.

 Woodrow Wilson delivering his 1917 Flag Day address.

Wilson used the occasion to deliver a speech:

My Fellow Citizens: We meet to celebrate Flag Day because this flag which we honour and under which we serve is the emblem of our unity, our power, our thought and purpose as a nation. It has no other character than that which we give it from generation to generation. The choices are ours. It floats in majestic silence above the hosts that execute those choices, whether in peace or in war. And yet, though silent, it speaks to us. —speaks to us of the past, * of the men and women who went before us and of the records they wrote upon it. We celebrate the day of its birth; and from its birth until now it has witnessed a great history, has floated on high the symbol of great, events, of a great plan of life worked out by a great people. We are about to carry it into battle, to lift it where it will draw the fire of our enemies. We are about to bid thousands, hundreds of thousands, it may be millions, of our men. the young, the strong, the capable men of the nation, to go forth and die beneath it on fields of blood far away, —for what? For some unaccustomed thing? For something for which it has never sought the fire before? American armies were never before sent across the seas. Why arc they sent now? For some new purpose, for which this great flag has never been carried before, or for some old. familiar, heroic purpose for which it has seen men, its own men, die on every battlefield upon which Americans have borne arms since the Revolution?

These are questions which must be answered. We are Americans. We in our turn serve America, and can serve her with no private purpose. We must use her flag as she has always used it. Wo are accountable at the bar of history and must plead in utter frankness what purpose it is we seek to serve.

It is plain enough how we were forced into the war. The extraordinary insults and aggressions of the Imperial German Government left us no self-respecting choice but to take up arms in defense of our rights as a free people and of our honour as a sovereign government. The military masters of Germany denied us the right to be neutral. They filled our unsuspecting communities with vicious spies and conspirators and sought to corrupt the opinion of our people in their own behalf. When they found that they could not do that, their agents diligently spread sedition amongst us and sought to draw our own citizens from their allegiance, —and some of those agents were men connected with the official Embassy of the German Government itself here in our own capital. They sought by violence to destroy our industries and arrest our commerce. They tried to incite Mexico to take up arms against us and to draw Japan into a hostile alliance with her, —and that, not by indirection, but by direct suggestion from the Foreign Office in Berlin. They impudently denied us the use of the high seas and repeatedly executed their threat that they would send to their death any of our people who ventured to approach the coasts of Europe. And many of our own people were corrupted. Men began to look upon their own neighbours with suspicion and to wonder in their hot resentment and surprise whether there was any community in which hostile intrigue did not lurk. What great nation in such circumstances would not have taken up arms? Much as we had desired peace, it was denied us, and not of our own choice. This flag under which we serve would have been dishonoured had we withheld our hand.

But that is only part of the story. We know now as clearly as we knew before we were ourselves engaged that we are not the enemies of the German people and that they are not our enemies. They did not originate or desire this hideous war or wish that we should be drawn into it; and we are vaguely conscious that we are fighting their cause, as they will some day see it, as well as our own. They are themselves in the grip of the same sinister power that has now at last stretched its ugly talons out and drawn blood from us. The whole world is at war because the whole world is in the grip of that power and is trying out the great battle which shall determine whether it is to be brought under its mastery or fling itself free.

The war was begun by the military masters of Germany, who proved to be also the masters of Austria-Hungary. These men have never regarded nations as peoples, men, women, and children of like blood and frame as themselves, for whom governments existed and in whom governments had their life. They have regarded them merely as serviceable organizations which they could by force or intrigue bend or corrupt to their own purpose. They have regarded the smaller states, in particular, and the peoples who could be overwhelmed by force, as their natural tools and instruments of domination. Their purpose has long been avowed. The statesmen of other nations, to whom that purpose was incredible, paid little attention; regarded what German professors expounded in their classrooms and German writers set forth to the world as the goal of German policy as rather the dream of minds detached from practical affairs, as preposterous private conceptions of German destiny, than as the actual plans of responsible rulers; but the rulers of Germany themselves knew all the while what concrete plans, what well advanced intrigues lay back of what the professors and the writers were saying, and were glad to go forward unmolested, filling the thrones of Balkan states with German princes, putting German officers at the service of Turkey to drill her armies and make interest with her government, developing plans of sedition and rebellion in India and Egypt, setting their fires in Persia. The demands made by Austria upon Servia were a mere single step in a plan which compassed Europe and Asia, from Berlin to Bagdad. They hoped those demands might not arouse Europe, but they meant to press them whether they did or not, for they thought themselves ready for the final issue of arms.

Their plan was to throw a broad belt of German military power and political control across the very centre of Europe and beyond the Mediterranean into the heart of Asia; and Austria-Hungary was to be as much their tool and pawn as Servia or Bulgaria or Turkey or the ponderous states of the East. Austria-Hungary, indeed, was to become part of the central German Empire, absorbed and dominated by the same forces and influences that had originally cemented the German states themselves. The dream had its heart at Berlin. It could have had a heart nowhere else! It rejected the idea of solidarity of race entirely. The choice of peoples played no part in it at all. It contemplated binding together racial and political units which could be kept together only by force, —Czechs, Magyars. Croats, Serbs, Roumanians, Turks, Armenians, —the proud states of Bohemia and Hungary, the stout little commonwealths of the Balkans, the indomitable Turks, the subtile peoples of the East These peoples did not wish to be united. They ardently desired to direct their own affairs, would be satisfied only by undisputed independence. They could be kept quiet only by the presence or the constant threat of armed men. They would live under a common power only by sheer compulsion and await the day of revolution. But the German military statesmen had reckoned with all that and were ready to deal with it in their own way.

And they have actually carried the greater part of that amazing plan into execution! Look how things stand. Austria is at their mercy. It has acted, not upon its own initiative or upon the choice of its own people, but at Berlin's dictation ever since the war began. Its people now desire peace, but cannot have it until leave is granted from Berlin. The so-called Central Powers are in fact but a single Power. Servia is at its mercy, should its hands be but for a moment freed. Bulgaria has consented to its will, and Roumania is overrun. The Turkish armies, which Germans trained, are serving Germany, certainly not themselves, and the guns of German warships lying in the harbour at Constantinople remind Turkish statesmen every day that they have no choice but to take their orders from Berlin. From Hamburg to the Persian Gulf the net is spread.

Is it not easy to understand the eagerness for peace that has been manifested from Berlin ever since the snare was set and sprung? Peace. peace, peace has been the talk of her Foreign Office for now a year and more; not peace upon her own initiative, but upon the initiative of the nations over which she now deems herself to hold the advantage. A little of the talk has been public, but most of it has been private. Through all sorts of channels it has come to me, and in all sorts of guises, but never with the terms disclosed which the German Government would be willing to accept. That government has other valuable pawns in its hands besides those I have mentioned. It still holds a valuable part of France, though with slowly relaxing grasp, and practically the whole of Belgium. Its armies press close upon Russia and overrun Poland at their will. It cannot go further; it dare not go back. It wishes to close its bargain before it is too late and it has little left to offer for the pound of flesh it will demand.

The military masters under whom Germany is bleeding see very clearly to what point Fate has brought them. If they fall back or are forced back an inch, their power both abroad and at home will fall to pieces like a house of cards. It is their power at home they are thinking about now more than their power abroad. It is that power which is trembling under their very feet: and deep fear has entered their hearts. They have but one chance to perpetuate their military power or even their controlling political influence. If they can secure peace now with the immense advantages still in their hands which they have up to this point apparently gained, they will have justified themselves before the German people: they will have gained by force what they promised to gain by it: an immense expansion of German power, an immense enlargement of German industrial and commercial opportunities. Their prestige will be secure, and with their prestige their political power. If they fail, their people will thrust them aside; a government accountable to the people themselves will be set op in Germany as it has been in England, in the United States, in France, and in all the great countries of the modern time except. Germany. If they succeed they are safe and Germany and the world are undone: if they fail Germany is saved and the world will be at peace. If they succeed, America will fall within the menace. We and all the rest of the world must remain armed, as they will remain, and must make ready for the next step in their aggression: if they fail, the world may unite for peace and Germany may be of the union.

Do you not now understand the new intrigue, the intrigue for peace, and why the masters of Germany do not hesitate to use any agency that promises to effect their purpose, the deceit of the nations? Their present particular aim is to deceive all those who throughout the world stand for the rights of peoples and the self-government of nations; for they see what immense strength the forces of justice and of liberalism are gathering out of this war. They are employing liberals in their enterprise. They are using men, in Germany and without, as their spokesmen whom they have hitherto despised and oppressed, using them for their own destruction, —socialists, the leaders of labour, the thinkers they have hitherto sought to silence. Get them once succeed and these men, now their tools, will be ground to powder beneath the weight of the great military empire they will have set up; the revolutionists in Russia will be cut off from all succour or cooperation in western Europe and a counter revolution fostered and supported; Germany herself will lose her chance of freedom; and all Europe will arm for the next, the final struggle.

The sinister intrigue is being no less actively conducted in this country than in Russia and in every country in Europe to which the agents and dupes of the Imperial German Government can get access. That government has many spokesmen here, in places high and low. They have learned discretion. They keep within the law. It is opinion they utter now, not sedition. They proclaim the liberal purposes of their masters: declare this a foreign war which can touch America with no danger to either her lands or her institutions; set England at the centre of the stage and talk of her ambition to assert economic dominion throughout the world; appeal to our ancient tradition of isolation in the politics of the nations; and seek to undermine the government with false professions of loyalty to its principles.

But they will make no headway. The false betray themselves always in every accent. It is only friends and partisans of the German Government whom we have already identified who utter these thinly disguised disloyalties. The facts are patent to all the world, and nowhere are they more plainly seen than in the United States, where we are accustomed to deal with facts and not with sophistries; and the great fact that stands out above all the rest is that this is a Peoples' War, a war for freedom and justice and self-government amongst all the nations of the world, a war to make the world safe for the peoples who live upon it and have made it their own, the German people themselves included; and that with us rests the choice to break through all these hypocrisies and patent cheats and masks of brute force and help set the world free, or else stand aside and let it be dominated a long age through by sheer weight, of arms and the arbitrary choices of self-constituted masters, by the nation which can maintain the biggest armies and the most irresistible armaments, —a power to which the world has afforded no parallel and in the face of which political freedom must wither and perish.

For us there is but one choice. We have made it. Woe be to the man or group of men that seeks to stand in our way in this day of high resolution when every principle we hold dearest is to be vindicated and made secure for the salvation of the nations. We are ready to plead at the bar of history, and our flag shall wear a new lustre. Once more we shall make good with our lives and fortunes the great faith to which we were born, and a new glory shall shine in the face of our people.

Not surprisingly, the speech featured the crisis of the hour, World War One, which the US had of course just entered.

It is coincidentally the birthday of the United States Army as well, which was created by Act of Congress on June 14, 1775 in a fashion on that date.  The act actually authorized the enlistment of ten companies riflemen in Continental service for a period of one year.  It seems at the time that expansion of a Continental Army was contemplated at the time and positions associated with it began to appear within days of the June 14 original authorization date.

Related Posts:  June 14 on This Day In Wyoming's History, which features some similar items on this day.