16 October 1940

16 October 1940

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16 October 1940

October 1940

> November

North Africa

Anthony Eden arrives in Egypt

The London milkman, 1940

The photo pushed forward the idea of the stoic British continuing on with their normal lives.

The appearance of German bombers in the skies over London introduced a new weapon of terror and destruction in the arsenal of twentieth-century warfare. This concentrated direct bombing of industrial targets and civilian centers began on 7 September 1940, with heavy raids on London.

It was the beginning of the Blitz – a period of intense bombing of London and other cities in Great Britain that continued until the following May. For the next consecutive 57 days, London was bombed either during the day or night. Fires consumed many portions of the city.

The purpose was to demoralize the population and force the British to come to terms. The Blitz ended on May 11, 1941, when Hitler called off the raids in order to move his bombers east in preparation for Germany’s invasion of Russia.

The above photograph was taken on October 9th after a German aerial raid. Photographers stationed in London were amazed at the total destruction wrought by German bombers yet their pictures were routinely blocked by the censors who were anxious not to cause a panic and also not to let the Germans know exactly where their bombs had hit.

The photographer Fred Morley took the picture of a London milkman deliberately picking his way over the rubble. The only thing is that, in a way, the picture was staged. Morley first found a backdrop of firefighters struggling to contain a fire then he borrowed a milkman’s outfit and a craft of bottles.

He then got his assistant to pose among the ruins of a city street while the firefighters fought in the background. Morley’s thinking was that to circumvent censorship of demoralizing pictures of ruined streets, after more than a month of daily bombings, he should present things as an object lesson in the maxim “Keep calm and carry on”.

The photo pushed forward the idea of the stoic British continuing on with their normal lives. The censors felt the same way and it was published the very next day. The government made a point that daily life will go on as normal as possible, that defiance was picked up and carried through to every single person, not only in London but everywhere that those bombs fell.

Interesting facts:

  • By the end of the Blitz, around 30,000 Londoners would be left dead, with another 50,000 injured.
  • The British government censored the bombing pictures particularly because the British were actively using countermeasures to disrupt the German navigational beams, resulting in Luftwaffe planes regularly bombing the countryside instead of cities for a few months. Publishing results of German bombings in newspapers would alert the Germans that the countermeasures were working.

(Photo credit: Fred Morley / Getty Images. Original title: Delivery After Raid).

With the Labor Unions – On the Picket Line

From Labor Action, Vol. 4 No. 28, 21 October 1940, p.ق
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Boss and Worker Mean Different Things by “Respectability”

Following the sentencing of the racketeer labor-faker, George Scalise, to Sing Sing for a minimum of ten years, the new president of the building service workers international, announced a clean-up in the union. The first step of President McFetridge was to suspend the officers of Local 32-A in New York. This local has jurisdiction in the hotel field. McFetridge asked Mayor La Guardia to appoint a “receiver” for the local. He also appointed an investigating committee to look into, the union’s affairs.

President McFetridge announced that it is his intention to establish “sound, democratic, well-directed, ethical unions . every member’s rights must be recognized and protected . we cannot effectively carry out our purposes, unless, we are a responsible, law-abiding organization with, self-respect and decency.” We subscribe to these sentiments. We believe that unions should be democratic institutions and that the rights of the membership should be recognized and protected. We believe that unions should conduct themselves with self-respect and decency. But in order to be clear on these things we make a few remarks. First, as a step in the direction of cleaning house in the international and establishing democracy was it necessary to ask Mayor La Guardia to intervene? La Guardia is not a trade unionist, is not part of the trade union movement. He is a boss class politician and office-holder and his interests are with the class which he represents. If it is necessary for Local 32-A to have a “receiver”, the appointment should be made by the International executive board of the union or by the Executive Council of the AFL. This is labor’s job and not the function of ruling class politicians.

Next we suggest that just because there are some racketeers in the unions many of whom have been caught and jailed by the capitalist courts/ this is no reason for union leaders to get the jitters and begin leaning over backwards to become “respectable.” What’s respectable to employers, government officials and numerous elements of the “public” might be some tame, non-militant outfit that was always ready to compromise with the bosses and never breathed a word about a picket line. Workers’ can’t afford to accept and practice this kind of respectability, and “decency.”

As members of the working class, unions, must establish their own code of “self-respect,” and “decency.” The working class has its own “morals” and “ethics” just as the ruling class has its “morals” and, “ethics.” What is decent for a trade union under certain conditions would be considered very indecent by the boss. When the boss runs scabs into a plant on strike under the protection of the police, the strikers consider it decent, ethical, responsible and self-respecting, to give the scabs some working-class education, even by the use of a little pressure. The bosses however consider such conduct very indecent, irresponsible and unethical.

Them are times, too, when the workers must establish their own legality. There are times when workers can not accept the bosses’ “law.” Workers’ organizations can not always remain passively “law-abiding.” If workers had always been “law-abiding” according to the terms, of ruling class law, there would be no trades unions in the world today. There would be no Wagner Act, no Wages and Hours Act, no Social Security. Wages would be far lower than now and hours would be much longer. Workers have made the gains they, have through the decades because they opposed the ruling class and fought every step of the way. Since nothing fundamental has changed in the relationship of the workers to the bosses, there is no reason for the workers to change from the procedure that has brought them, their victories.

“Energy and Devotion” – But for What Purpose?

Labor, official organ of 15 railway unions, has come to the defense of Sidney Hillman in the dispute going on. over the “informal” statement of the Attorney-General, to the effect that employers must abide by, decisions of the NLRB until those decisions are overruled by the courts. Speaking of the hearing before the notorious Smith Committee of the House, Labor said – “As a member of the Advisory Commission, he (Hillman) has served his country with exceptional energy and devotion. While Smith has been sniping at labor laws, Hillman has been building up national defense.”

We are always glad to see one labor leader come to the defense of another when one of them is attacked by the bosses or their stooges. We too will defend Hillman or any other labor leader against such attacks. But this doesn’t settle the matter.

The praise of Hillman by Labor is somewhat vague and unclear. Hillman “has served his country with exceptional energy and devotion.” What does this mean? As we have observed him, Hillman is serving Franklin D. Roosevelt, his presidential candidacy, and the bosses’ war preparations with “exceptional energy and devotion.” To us this is not the same thing as serving one’s country unless Labor means that the bosses and their government are the country. Labor, of course, being s working class paper does not hold to this view.

There are some workers in the U.S. and we hold that their interests are not being served by Hillman or any other labor man who is promoting the candidacy of Roosevelt or Willkie and their preparations to lead these workers into imperialist war. And that is what Hillman is doing, and he is doing this with “energy and devotion.”

Hillman said to the Smith Committee that his “first responsibility is to help carry out the defense program. I wouldn’t stay on the commission if I felt I impeded defense in any way.”

There’s the rob: Hillman is a leader of workers and he has no business on this alleged defense commission. His first responsibility, as a labor leader, in the present crisis is to be at the head of his union fighting for workers’ rights over against such fellows as Knudsen and Stettinius. If Roosevelt, Knudsen and Stettinius thought Hillman was this kind of person he would never have been appointed to the “Defense” Commission. On this commission he represents Roosevelt and the ruling class, not the working class.

All this came out very vividly when the big shots opened fire on Attorney-General Jackson and, Hillman. Both of them turned and began running like scared boys. Neither of them meant any harm. They had been misunderstood. Hillman agrees that the. workers should not be unreasonable, they must make concessions, nothing must be done to impede defense in any way.

It’s the old story: you can’t run with the hare and the hounds at the same time. You just can’t reconcile the interests of the workers and the interests of the bosses. Lots of labor leaders tried that and failed long before Hillman, Green, Tobin and Hutchinson.

16 October 1940 - History

The hangings were carried out during the early morning hours of October 16, 1946 in a small gymnasium erected in the prison's courtyard. Three gallows filled the room - two to be used alternatively as each condemned man was dispatched and the third to act as a spare. The executions were briskly conducted - the entire procedure lasted just over 3 1/2 hours.

Herman Goering cheated the hangman by swallowing a cyanide capsule and dying in his cell shortly before his scheduled hanging.

Kingsbury Smith was a reporter for the International News Service and was selected as the sole representative of the American press at the executions. Here are some of his observations:

"Von Ribbentrop entered the execution chamber at 1:11 a.m. Nuremberg time. He was stopped immediately inside the door by two Army sergeants who closed in on each side of him and held his arms, while another sergeant who had followed him in removed manacles from his hands and replaced them with a leather strap. It was planned originally to permit the condemned men to walk from their cells to the execution chamber with their hands free, but all were manacled immediately following Goering's suicide. Von Ribbentrop was able to maintain his apparent stoicism to the last. He walked steadily toward the scaffold between his two guards, but he did not answer at first when an officer standing at the foot of the gallows went through the formality of asking his name. When the query was repeated he almost shouted, 'Joachim von Ribbentrop!' and then mounted the steps without any sign of hesitation.

The interpreter nodded and the former diplomatic wizard of Nazidom spoke his last words in loud, firm tones: 'My last wish is that Germany realize its entity and that an understanding be reached between the East and the West. I wish peace to the world.'

As the black hood was placed in position on his head, Von Ribbentrop looked straight ahead.

Then the hangman adjusted the rope, pulled the lever, and Von Ribbentrop slipped away to his fate.

Keitel entered the chamber two minutes after the trap had dropped beneath Von Ribbentrop, while the latter still was at the end of his rope. But Von Ribbentrop's body was concealed inside the first scaffold all that could be seen was the taut rope.

Keitel did not appear as tense as Von Ribbentrop. He held his head high while his hands were being tied and walked erect toward the gallows with a military bearing. When asked his name he responded loudly and mounted the gallows as he might have mounted a reviewing stand to take a salute from German armies.

He certainly did not appear to need the help of guards who walked alongside, holding his arms. When he turned around atop the platform he looked over the crowd with the iron-jawed haughtiness of a proud Prussian officer. His last words, uttered in a full, clear voice, were translated as 'I call on God Almighty to have mercy on the German people. More than 2 million German soldiers went to their death for the fatherland before me. I follow now my sons - all for Germany.'

Hans Frank
Hans Frank was next in the parade of death. He was the only one of the condemned to enter the chamber with a smile on his countenance.

Although nervous and swallowing frequently, this man, who was converted to Roman Catholicism after his arrest, gave the appearance of being relieved at the prospect of atoning for his evil deeds.

He answered to his name quietly and when asked for any last statement, he replied in a low voice that was almost a whisper, 'I am thankful for the kind treatment during my captivity and I ask God to accept me with mercy.'

Ninth in the procession of death was Alfred Jodl. With the black coat-collar of his Wehrmacht uniform half turned up at the back as though hurriedly put on, JodI entered the dismal death house with obvious signs of nervousness. He wet his lips constantly and his features were drawn and haggard as he walked, not nearly so steady as Keitel, up the gallows steps. Yet his voice was calm when he uttered his last six words on earth: 'My greetings to you, my Germany.'

At 2:34 a.m. Jodl plunged into the black hole of the scaffold.

The last of the condemned men was executed at 2:38 AM. Although Herman Goering had escaped the hangman's noose, his death had to be officially recognized:

. the gymnasium doors opened again and guards entered carrying Goering's body on a stretcher.

He had succeeded in wrecking plans of the Allied Control Council to have him lead the parade of condemned Nazi chieftains to their death. But the council's representatives were determined that Goering at least would take his place as a dead man beneath the shadow of the scaffold.

The guards carrying the stretcher set it down between the first and second gallows. Goering's big bare feet stuck out from under the bottom end of a khaki-colored United States Army blanket. One blue-silk-clad arm was hanging over the side.

Herman Goering
The colonel in charge of the proceedings ordered the blanket removed so that witnesses and Allied correspondents could see for themselves that Goering was definitely dead. The Army did not want any legend to develop that Goering had managed to escape.

As the blanket came off it revealed Goering clad in black silk pajamas with a blue jacket shirt over them, and this was soaking wet, apparently the result of efforts by prison doctors to revive him.

The face of this twentieth-century freebooting political racketeer was still contorted with the pain of his last agonizing moments and his final gesture of defiance.

They covered him up quickly and this Nazi warlord, who like a character out of the days of the Borgias, had wallowed in blood and beauty, passed behind a canvas curtain into the black pages of history."

The 1940s Arts and Entertainment: Overview

The 1940s began with the end of one crisis and the start of another. American artists and writers in the 1930s had worked hard to understand and expose the problems caused by unemployment, poverty, and industrial life in the Great Depression (1930–39). Realistic artworks were popular in the 1930s, and many artists continued to create them into the 1940s. But as American society changed with the end of the Depression and the coming of World War II (1939–45), the arts began to reflect new concerns. As Americans grew richer, there was less interest in art that campaigned against poverty. Artists began to look away from society and into themselves for inspiration. In Hollywood, many filmmakers abandoned light entertainment to create films that took a dark view of human nature. Painters turned to abstract images, while writers began to experiment with new forms of poetry and prose.

The 1940s were dominated by war. Many artists and writers had been worried about the rise of fascism (a form of government controlled by a dictator and known for oppression of opposing viewpoints) for years. Some even fought against fascists in the Spanish civil war during the 1930s. But the Japanese bombing of the American port of Pearl Harbor in Hawaii on December 7, 1941, forced the whole nation to take notice of international affairs. From then on, campaigns to help the poor lost support as the nation focused on defeating fascism in Europe and Asia during World War II. Once the war was won, America prospered. Instead of looking outward to society, American artists looked inward to the self.

The ideas behind modernism (a self-conscious break with the past and a search for new forms of expression) emerged in Europe in the 1910s, 1920s, and 1930s, finally taking hold in America in the early 1940s. Modernist art moved away from realism and looked for new forms of expression. American painters began exploring cubism, a style of painting in which images are made up of jumbled, square-edged shapes. Surrealism also had its followers this style of art shows everyday objects in unusual settings. By the end of the decade, American art was dominated by abstract expressionism. Abstract expressionist painters tried to express their thoughts and feelings through abstract images.

Like painting, music also turned toward individual expression in the 1940s. In bebop, jazz musicians experimented with rhythm, musical forms, and sounds. The long solos of saxophonist Charlie Parker and trumpeter Miles Davis marked a dramatic shift of focus to the individual musician. A similar change was going on in literature. Writers moved away from political themes to focus on the self. Many were influenced by the French philosophy called existentialism. Existentialists argued that individuals are defined by the decisions they make. This was an optimistic view, in the sense that individuals were free to do as they pleased. But it was also frightening. In an existential world, individuals also have to take the consequences for what they do.

Hollywood dealt with World War II in several ways. Many stars enlisted in the armed forces, while others traveled around the battlefields entertaining the troops. Back at home, war movies showed American soldiers beating an evil enemy. After the war ended, Hollywood was less confident. The U.S. Justice Department challenged the movie studios' monopoly on movie distribution. Anticommunists in government attacked the film industry as subversive and dangerous. Television began to spread, bringing competition for the first time. Filmmakers in Hollywood also began to experiment. A style of films known as film noir showed a dark, violent underside to American life. By the end of the decade, the shadowy noir look dominated the shrinking film industry.

The 1940s were disappointing years for American drama. Only two major voices, playwrights Tennessee Williams and Arthur Miller, emerged during the decade. Drama did not join in the modernist experiment, remaining realistic. But while 1930s theater was often political and forward-looking, 1940s American drama was pessimistic about the future of American society.

Unlike drama, other kinds of American writing developed a great deal during the 1940s. Writers from the so-called "lost generation," such as Ernest Hemingway and F. Scott Fitzgerald, either had died or fallen silent. Works by William Faulkner, an important voice in the 1930s, went out of print in the 1940s. Realist authors such as John Dos Passos kept writing, but a new generation was emerging. Saul Bellow would go on to be one of the most important writers of the century. In 1948, Norman Mailer wrote The Naked and the Dead, which is possibly the finest novel to come out of any war. Truman Capote and Gore Vidal also began their writing careers during the decade. In the 1940s, black writers such as Richard Wright also began to influence mainstream literature.

Found in the Archives

The Olympic Torch Stopped in Hyde Park

Excitement over the present-day Summer Games of the XXX Olympiad reminded us that the famous torch once paid a visit to the FDR Home and Library.

On February 4, 1932, Governor Franklin D. Roosevelt formally opened the III Olympic Winter Games in Lake Placid, NY.

FDR at the opening ceremony for the 1932 Winter Olympics. NPx 55-34.

On February 5, 1980, the Olympic torch relay carried the flame for the XIII Olympic Winter Games through the town of Hyde Park, NY before continuing northward to Lake Placid. The runners paused at FDR’s grave site for a torch lighting ceremony where they lit a 7-foot tall stationary torch commemorating the former Governor and President’s role in opening the 1932 Games, nearly 50 years prior.

Joan Barnum, a Hyde Park resident who coordinated the event, said the flame brought a “message of peace, truth, fraternity and love,” consistent with the Roosevelt legacy. Around 600 people attended the ceremony and observed a minute of silence to honor both the former President and the symbolic lighting. The graveside torch remained lit throughout the 1980 Winter Games.

The Bizarre History of Women's Clothing Sizes

I n the world of women’s clothing, a 4 is a 2 is a 6. Everything is relative &mdash unless, of course, you’re shopping in Brandy Melville’s teen-“friendly” SoHo store, where the only size is small. (“One-size” reads labels that don’t even bother with the usual “fits all” addendum.)

One of the most infuriating American pastimes occurs within the confines of a dressing room. But where do these seemingly arbitrary sizes come from? Sit down, unbutton your pants and enjoy a condensed briefing on women’s clothing measurements:

“True sizing standards didn’t develop until the 1940’s,” says Lynn Boorady, fashion and textile technology chair and associate professor at Buffalo State University. “Before then sizes for young ladies and children were all based on age &mdash so a size 16 would be for a 16-year-old &mdash and for women it was about bust measurement.”

Suffice it to say, assuming all 13-year-old girls and 36-in.-bust women were created equal proved problematic. “Mostly it was assumed that the women in the house would know how to sew,” Boorady says.

But consumers &mdash and the booming catalog industry, which proliferated as Americans moved to more rural areas &mdash were ready for change. In a 1939 article titled “No Boondoggling,” TIME explored the Department of Agriculture’s effort to standardize women’s clothes, an effort that had been inspired by the fact that U.S. manufacturers guessed it was costing them $10 million a year not to have set sizes. “Each subject &mdash matron, maid, scrubwoman, show girl &mdash will be [measured] in 59 different places,” the article read.

The data of 15,000 women was collected by Ruth O’Brien and William Shelton, and while the project was impressive &mdash “especially considering they didn’t have computers to analyze the data,” Boorady says &mdash it didn’t exactly solve the problem.

“It was flawed for many reasons,” agrees Parsons School of Fashion professor Beth Dincuff Charleston. “They didn’t really get a cross-section of American women&hellip It was smaller than what the national average should be.”

Since the survey was done on a volunteer basis, it was largely made up of women of a lower socioeconomic status who needed the participation fee. It was also primarily white women. And the measurements still primarily relied on bust size, assuming women had an hourglass figure.

Then in the late 1940s, the Mail-Order Association of America, representing catalog businesses including Sears Roebuck, enlisted the help of the National Bureau of Standards (now the National Institute of Standards and Technology) to reanalyze the sizing &mdash often using the measurements of women who had served in the air force, some of the most fit people in the country &mdash creating a 1958 standard that was largely arbitrary. Sizes ranged from 8 to 38 with height indications of tall (T), regular (R), and short (S), and a plus or minus sign when referring to girth.

There was no size zero, let alone the triple zeroes that sometimes are displayed in stores today.

As American girth increased, so did egos. And thus began the practice of vanity sizing. Over the decades, government size guidelines were heeded less and less, items of clothing began getting marked with lower numbers and eventually, in 1983, the Department of Commerce withdrew its commercial women’s clothing size standard altogether. A private organization called ASTM International began publishing its own sizing tables in 1995.

In 1958, for example, a size 8 corresponded with a bust of 31 inches, a waist of 23.5 inches and a hip girth of 32.5 inches. In ASTM&rsquos 2008 standards, a size 8 had increased by five to six inches in each of those three measurements, becoming the rough equivalent of a size 14 or 16 in 1958. We can see size inflation happening over shorter time spans as well a size 2 in the 2011 ASTM standard falls between a 1995 standard size 4 and 6.

That means that ideals are changing too, Boorady adds: “We went from size 16 being a model in the 󈧬s to 12 in the 󈨀s. Marilyn Monroe was a 12 in the 󈨀s, which would now be a size 6.”

Now, stores often size based on their own preferences, which can make for frustrating online shopping experiences &mdash modern-day catalog browsing &mdash unless you already know your exact size.

But are we doomed to a future of sizing confusion? Maybe not. Parsons’ Dincuff Charleston notes that new technologies might be welcoming a new era of customized clothing. “Body measurements are so advanced now &mdash with 3-D scanning, digital changing rooms &mdash I think that people will have options for better fitting clothing,” she says. “And with 3-D printers, maybe you’ll be printing your own clothing.”

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How the Fed Managed the Treasury Yield Curve in the 1940s

The coronavirus pandemic has prompted the Federal Reserve to pledge to purchase Treasury securities and agency mortgage-backed securities in the amount needed to support the smooth market functioning and effective transmission of monetary policy to the economy. But some market participants have questioned whether something more might not be required, including possibly some form of direct yield curve control. In the first half of the 1940s the Federal Open Market Committee (FOMC) sought to manage the level and shape of the Treasury yield curve. In this post, we examine what can be learned from the FOMC’s efforts of seventy-five years ago.

Lessons in Yield Management
The FOMC’s efforts offer two lessons in yield curve management:

1. The shape of the yield curve cannot be fixed independently of the volatility of interest rates and debt management policies.

During World War II the FOMC sought to maintain a fixed, positively sloped curve. The policy left long-term bonds with the risk characteristics of short-term debt but a yield more than 200 basis points higher. At the same time, the Treasury pursued a policy of issuing across the curve, from 13-week bills to 25-year bonds. Faced with investor preferences for the higher yielding, but hardly riskier, bonds, the System Open Market Account had to absorb a substantial quantity of bills. A flatter curve and/or a less rigid interest rate policy might have required less aggressive interventions.

2. Large-scale open market operations may be required in the course of refixing, from time to time, the shape of the yield curve.

After 1946, Federal Reserve officials pursued a program of gradual relaxation of the wartime regime, beginning with the elimination of the fixed rate for 13-week bills, continuing with incremental increases in the ceiling rate on 1-year securities, and then moving further out the curve, with the ultimate goal of a free market for all Treasury debt. Following the elimination of the fixed bill rate in 1947, investors began to move their portfolios into shorter-term debt. The result was a massive shift in the composition of the Open Market Account as the Account bought bonds and sold bills to accommodate the changing maturity preferences of private investors.

The Coming of War
World War II began on Friday, September 1, 1939. By mid-1940, Germany had defeated Poland, France, and Belgium, and a British expeditionary force had been forced to withdraw from the continent. In a speech on October 30, President Roosevelt promised Britain “every assistance short of war” and Britain soon began placing orders for large quantities of planes, artillery, tanks, and other heavy weapons, even though it lacked the financial resources to pay. Congress signaled that it would finance whatever Britain required when it passed the Lend-Lease Act in March 1941.

Emanuel Goldenweiser, director of the Division of Research and Statistics at the Federal Reserve Board, recommended to the FOMC in June 1941 that “a definite rate be established for long-term Treasury offerings, with the understanding that it is the policy of the Government not to advance this rate during the emergency.” He suggested 2½ percent and argued that “when the public is assured that the rate will not rise, prospective investors will realize that there is nothing to gain by waiting, and a flow into Government securities of funds that have been and will become available for investment may be confidently expected.” Three months later, Goldenweiser recommended a congruent monetary policy, “a policy under which a pattern of interest rates would be agreed upon from time to time and the System would be pledged to support that pattern for a definite period.”

Financing American Participation in World War II
Active U.S. participation in World War II followed the bombing of Pearl Harbor in December 1941 and ended with the surrender of Germany in April 1945 and Japan four months later. From year-end 1941 to year-end 1945, Treasury indebtedness increased from $58 billion to $276 billion. Marketable debt accounted for 72 percent of the increase war savings bonds and special issues to government trust funds accounted for the balance. The increase in marketable debt included $15 billion of bills, $38 billion of short-term certificates, $17 billion of notes, and $87 billion of conventional bonds.

By mid-1942 the Treasury yield curve was fixed for the duration of the war, anchored at the front end with a ⅜ percent bill rate and at the long end with a 2½ percent long-bond rate. Intermediate yields included ⅞ percent on 1-year issues, 2 percent on 10-year issues, and 2¼ percent on 16-year issues.

Experience with the Fixed Pattern of Rates
Fixing the level of Treasury yields endogenized the size of the System Open Market Account: the Fed had to buy whatever private investors did not want to hold at the fixed rates. As a result, the size of the Account increased from $2.25 billion at the end of 1941 to $24.26 billion at the end of 1945.

Fixing the pattern of Treasury yields endogenized the maturity distribution of publicly held debt. In each market sector, the Fed had to buy whatever private investors did not want to hold and, up to the limits of its holdings, had to sell whatever private investors wanted to buy beyond what the Treasury was issuing.

Investors quickly came to appreciate that they faced a positively sloped yield curve in a market where yields were at or near their ceiling levels. An investor could move out the curve to pick up coupon income without taking on more risk and then ride the position down the curve, adding to total return. This strategy of “playing the pattern of rates” led investors to prefer bonds to bills. Their preferences, coupled with the Treasury’s decision to issue in all maturity sectors, forced the Open Market Account to buy unwanted bills and to sell the more attractive bonds. By late 1945 the Account held 75 percent of outstanding bills, but—in spite of heavy bond issuance by the Treasury—fewer bonds than it had held in late 1941.

The essential problem was that the positive slope of the curve was inconsistent with the negligible volatility of rates and the Treasury’s issuance program. In early 1949, Allan Sproul, the president of the Federal Reserve Bank of New York, concluded that “in a supported market in which all obligations might be regarded as demand obligations, a horizontal rate structure would theoretically be required.”

Regaining Control
Following the cessation of hostilities in August 1945, the overarching objective of Federal Reserve officials was regaining control of open market operations. A “cold turkey” approach, abruptly terminating support for the fixed pattern of rates, was never seriously considered. Instead, officials pursued a more measured approach, first terminating the ⅜ percent fixed bill rate, then gradually lifting the caps on yields on coupon-bearing securities, starting with 1-year instruments.

The FOMC terminated the ⅜ percent bill rate on July 3, 1947. Bill yields increased to 66 basis points in July, 75 basis points in August, and 95 basis points by the end of the year. Investors had little incentive to buy 1-year securities at ⅞ percent when bill yields were rising so dramatically and the Treasury was forced to reprice its fall 1-year offerings to 1 percent, and its December offering to 1⅛ percent.

Rising bill rates triggered a reversal of the preference for bonds over bills. In the face of steady selling, bond yields rose from 2.22 percent in June 1947 to 2.39 percent in December and then to 2.45 percent a month later. The Fed sought to cushion the reversal by buying bonds and selling (or running off) bills. In the second half of 1947, the Open Market Account bought $2 billion of bonds while selling or running off $3 billion of bills. In 1948, the Account bought an additional $8 billion of bonds and reduced its bill position by $6 billion.

In late November 1950, facing the prospect of another major war, the Fed, for the first time, sought to free itself from its commitment to keep long-term Treasury yields below 2½ percent. At the same time, Secretary of the Treasury John Snyder and President Truman sought a reaffirmation of the Fed’s commitment to the 2½ percent ceiling.

The impasse continued until mid-February 1951, when Snyder went into the hospital and left Assistant Secretary William McChesney Martin to negotiate what has become known as the “Treasury-Federal Reserve Accord.” Alan Meltzer has observed that the Accord “ended ten years of inflexible [interest] rates” and was “a major achievement for the country.”

  • A more detailed version of this post, with footnotes, appears in Federal Reserve Bank of New York Staff Report no. 913, February 2020.
  • Garbade, Kenneth D. 2012. Birth of a Market: The U.S. Treasury Securities Market from the Great War to the Great Depression, MIT Press, pp. 338-48.
  • Meltzer, Allan. A History of the Federal Reserve, Volume 1: 1913-1961, University of Chicago Press (2003), chapter 7

Kenneth D. Garbade is a senior vice president in the Research and Statistics Group of the Federal Reserve Bank of New York.

Boston Queer History

Wellesley House Party 1940s/Courtesy: The History Project.

Published in Boston Spirit Magazine

What was it like to be queer in 1940s Boston? It’s impossible to fully capture the diverse experiences of LGBT people at any given time, much less a decade as momentous as the 1940s, but by reaching into the archives of The History Project, Boston LGBT archive, we can get a glimpse into the lives of five people who lived in a place and time that is at once familiar and alien.

The South End in the 1940s was a densely populated neighborhood of bars, restaurants, cheap hotels, and rooming houses. Prostitutes mingled with bookies at joints like the Junee Café (“When It’s Thirst, Come Here First”). On Washington Street, you could take in a floor show at the Hoffman Grill, which specialized in the “Finest Italian American food.” In was perfect for anyone who wanted to live anonymously.

Charles Gautreau stands in front of his mirror over the sink in his room in the New York Streets area of the South End. He applies mascara and lipstick, puckering his lips and widening his eyes, he slowly turns into his drag persona, Thelma. Charles shares the room with another man, Peter Seifried, whose drag name is May. They have trouble paying the meager rent and often spend what money they have on drinks and makeup. One time, they got so hungry, they captured a swan in the Public Garden and attempted to cook it in their room until the landlady found out and stopped them, or at least that is how the story went. If life was not easy, it could at least be glamorous with just the right touch of make-up and attitude.

Thelma and May liked to promenade up and down Tremont and Washington Streets, looking for men. Sometimes they ventured to the bars in Scollay Square but their bars were Playland and The Empty Barrel on Broadway in Bay Village. One night, a drunk man on Castle Street, asked May for a light. Two nearby undercover police officers jumped out from behind a lamppost and arrested May on suspicion of solicitation. While in jail, she was also charged with armed robbery. May had no involvement in the robbery and after providing an alibi, was released. From then on, she believed the police were out to get her.

During this time, James Lord, aged 20, had just arrived at the Army Specialized Training program at Boston College where he was ordered to study everything related to France: its language, culture, history, and customs. This was not hard duty for an intellectual like Lord. As a young gay man, he was also delighted to explore the pleasures offered by World War II Boston. A friend told him about the bar at the Statler Hotel (now Park Plaza). “The lobby was long and high, expensive and gold-plated, busy with war-time visitors. The friend recommended that Lord book a room and then proceed to the bar and pick someone up. ”It was packed with servicemen, several rows deep, standing along the crescent-shaped bar, too many to count…Crowded tight together, jostling back and forth, not one lady…among them.” When he squeezed into the bar, a sailor turned to Lord and said, “Hey, cutie, you must be new. I could blow you out of the water.”

Jean S. knew she was a lesbian but still she was “very naïve in those days.” She joined the WAC, an auxiliary corps of the Army, and was stationed at Fort Devens. She was then assigned to the Boston Army base and lodged at the Franklin House in the South End, which served as a barracks. “My commanding officer turned every head at the Boston Army base – 5’6”, curly blond hair, cute as can be and a smart cookie. She played around but she had a partner in Georgia.” Jean and her fellow WACS frequented a bar Bernstein’s, a few blocks away. Even though she knew there were other lesbians in the detachment, she did not cruise them or get cruised by them. “You just didn’t at this time. You just wouldn’t make reference to it.”

Preston Claridge, scion of a Mayflower family stood in his Harvard dorm room, knotting his tie. Everyone at the party he was invited to that evening in Wellesley would be gay and he was excited. “I always thought being gay was fun.” His friend Bernard, an older man, gave “tea parties” in which scotch was served to his gay friends and visiting servicemen. “It was there I danced with a beautiful young blond sailor named “Veronica,” because of his Veronica Lake style of hair falling over one eye.”

Claridge later attended a party at the Copley Plaza for sailors from the Baltimore, a ship stationed in Boston Harbor. There were about 40 Marines assigned to the Baltimore and Claridge estimated that between him and his friends, they slept with 90% of them. “”Once they discovered they could get a little cash and free food…they seemed to fall all over themselves to meet us.”

Cruising continued along the paths on Boston Common during the war. Then, as today, encounters did not always turn out well. Headlines in The Midtown Journal, a South End scandal sheet, announced, “Down Maine Man Meets Buddy on Common. Loses Bankroll, Pants, and Confidence.” Another one: “Lonesome Man 23, Beats Friend for $3 In Snatch From Drawer in Room.”

Whatever happened to Thelma, May and the others portrayed here?

Thelma and May’s story was serialized in The Midtown Journal in the early 1940s, by writer and publisher, Frederick E. Shibly. According to Libby Bovier of The History Project, Charles Gatreau (Thelma) later worked as a housekeeper for gay bar owner, Phil Baione. The Midtown Journal’s serialization claims that Peter Seigfried, (May) was accidentally killed in Detroit soon after moving there from the South End. Preston Claridge served as an assistant headmaster at a private school for many years. The late James Lord became an art critic and author and was friends with Gertrude Stein, Alice B. Toklas and Picasso. Jean S. and her partner Louise Y. (names withheld at their request) became successful photographers in Boston. Louise worked at Bachrach Studios and with legendary photographer, Bernice Abbott.

Mt. Pleasant Daily Times (Mount Pleasant, Tex.), Vol. 16, No. 191, Ed. 1 Tuesday, October 15, 1935

Daily newspaper from Mount Pleasant, Texas that includes local, state, and national news along with advertising.

Physical Description

four pages : ill. page 19 x 13 in. Digitized from 35 mm. microfilm.

Creation Information


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