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MPC Gram
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Covering the entire World of Military Numismatics
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Series 003-Number 595, Monday, April 15, 2002

T man on Eisenhower's Staff

submitted and annotated by Fred Schwan

Bernard Bernstein served on General Eisenhower's staff
representing Treasury matters. These included exchange
rates, issuance of money, and other things of great
interest to us.
  Fortunately, under the direction of the Truman
Library a long oral history was recorded of Mr.
Bernstein. The interview was conducted by Richard
McKinzie. The interview is made available for research
by the library.
  This is the first installment of extracts from this
interview that we will publish here in the Gram. We
hope to include comments which will be included in
square brackets [].

Oral History Interview with BERNARD BERNSTEIN
July 23, 1975
by Richard D. McKinzie

BERNSTEIN: I was a student at the Columbia Law School
from 1927 to 1930. In my first year at the law school
I took, like all the other students that year in the
opening class, the course in contracts. The professor
who taught contracts was Herman Oliphant. He gave me
the only A+ in the class.
After graduation from law school I went to work for a
prominent New York law firm, Taylor, Blanc, Capron and
Marsh, at what happens to have been the highest salary
paid any law clerk in the City of New York at the
time, $3,000 a year. I worked there for a few years.
President Roosevelt and the New Deal, obviously struck
a response in the hearts and minds of young people all
around the country. I read in November 1933 that Henry
Morgenthau had been appointed Under Secretary of the
Treasury and that his General Counsel was Herman
Oliphant who had been his General Counsel at the Farm
Credit Administration. I decided some time in December
1933 to write a letter to Herman Oliphant reminding
him of the favorable relationship he and I had had as
professor and student at Columbia and saying I would
be interested in coming down to work. He invited me to
come down to see him.
I went to Washington and waited in Oliphant's outer
office for quite a while. He was a busy man. As soon
as Oliphant and I began to talk he said that I should
just start working.
  Well, the first couple of years at the Treasury I
worked most of my time on matters relating to gold and
silver. We were calling in all the gold at $20.67 an
ounce. The President in January, 1934 had fixed a
price of $35 for an ounce of gold. A lot of people who
had gold were reluctant to turn it in at $20.67 an
ounce. Similarly people who owned gold clause
obligations did not like the idea of such obligations
being paid off dollar for dollar after the devaluation
of the dollar. Such people wanted $1.69 for every
dollar of their gold clause obligation. The Joint
Resolution of June 5, 1933 made all gold clause
obligations, both public and private obligations,
payable in any U.S. legal tender currency dollar for
dollar.
We had a great deal of work in administering the
various gold control orders and in participating in
litigation that attacked gold controls and the gold
clause resolution. It culminated in a famous group of
cases coming before the United States Supreme Court,
the famous gold clause cases. As a young lawyer I was
given the opportunity of working on the briefs in the
Supreme Court cases. This surely was, up to then, the
high point of my career as a lawyer. I participated in
the development of the Government's strategy in these
cases, in the writing of the briefs and in the
preparation for the oral arguments.
  In 1937, the Japanese sank the American gunboat
called the Panay in the Yangtze River in China. The
President asked the Secretary of the Treasury if he
had some ideas as to what the Government might do.
Secretary Morgenthau talked to Herman Oliphant and
Herman Oliphant talked to Clarence Opper and me.
Clarence and I almost locked ourselves up in Opper's
office. Oliphant was so concerned about possible leaks
that he asked Opper to have the venetian blinds in his
office shut so that nobody could spy on us from the
Washington Hotel across the street. What we produced
at that time, was the first document that ultimately
came to be known as Foreign Funds Control, based on
Section 5(b) of the Trading With the Enemy Act of
1917. We said that the President had the power to
control banking transactions under certain
circumstances. We drafted a document for the President
by which he would impose controls on banking
transactions in which the Japanese had an interest.
For reasons formulated at the top level of Government,
the President decided not to go forward with issuing
that order.
  Thereafter, for I would say three years to about--in
any event, to April 1940, everytime there was a crisis
in international affairs, generally speaking
precipitated one way or another by Hitler and the
Nazis, I would take out these old documents, redraft
them in terms of the current crisis, and we always
were ready with our written plans as to how to
proceed. Now, if I may, it's at this point that I
would like to read some ideas that I put down on
paper.
Beginning sometime in 1936 or '37, the Secretary of
the Treasury, Henry Morgenthau, Jr., as a result of
his own foresight and sound judgment, as well as his
close personal and official relationships with the
President, began to be increasingly concerned about
the dangers to the democratic nations of the world of
Nazism and aggressions on the part of Germany and
Japan. He was continuously studying and seeking ways
and means of building up the strength of the United
States, of the Western democracies, and of China, and
of weakening the power of Germany and Japan. He
directed his top staff to focus on the problems and to
bring him suggestions and ideas.
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Editorial
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Where's Phil? Many of you must have been wondering
that. No only has the Gram been a no show, but he has
not been working the phones. A careful study of eBay
activity would probably show that their volume is
down. Phil has been banished to phone hell. Somehow
his area is without phone service. He braved the
elements to get to another community to tap out a
message in Morse code to me telling me the above
(well, sort of) and asking me to jump back in the
editor's seat.
By the time that I decoded the message it was
midnight, but I figured that we should get out some
sort of emergency Gram. I tried to copy all of Phil's
fancy formats etc., but could not make it work very
well, so decided against that. We have even cut the
standard material below because there have been
updates while Phil was working on it and it is likely
that by introducing some old copy the situation would
be made worse. We will try to get all of that going
again by tomorrow.
Phil's technical problems are on top of the ones that
Doug has had with the main mailing list at
papermoneyworld.net. Today he seems to have resolved
those problems, so possibly Phil was being punished
for Doug's good fortune!!
Phil has some features and mail all laid out for some
Grams so even in that area I am at a disadvantage but,
it just seemed appropriate that we should have a Gram
on IRS day so here it is.
I must take this opportunity here in the hot seat to
restate that Phil is doing a great job as many of you
have noted here and to me privately.
Yesterday, I started work on some items that I was
going to include in some columns by me. Now I will try
to get some of that ready for an article. I suspect
that I will be publishing the Tuesday Gram too, but am
not sure. As always, send  your stuff in to
MPCGram@Yahoo.com and send it ASAP!!!
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Mail Call
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Dear Esteemed Editor,
I am having a severe case of MPC Gram withdrawal.
Will I be seeing another one in the near future?
Please reply when you have recovered from the MPC Fest
with a complete SITREP.  I am sure you and the
attendees slept very little during your time together,
but we unfortunate Gramsters who could not attend
because of other obligations need to know what
happened at the Fest ASAP.

Howard A. Daniel III

Dear Howard,
Well, this letter is a little old, but in light of the
problems above, it is one of the few letters that I
could find in the "file" to put in the Gram so here it
is. We sure could use a column from you for every Wed
(or pick a day). That would help us avoid that dreaded
Gram withdrawal syndrome that you mentioned.

Steamed Editor
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Staff: publisher and editor:

Fred Schwan - MPCGram@Yahoo.com
assistant editor - Phil Goldstein IWANTMYMPC@aol.com
distribution manager - Brad Peacock bp22@swbell.net
Tuesday columnist Joe Boling - JoeBoling@aol.com
Thurski columnist Larry "Ski" Smulczenski -
ski@prodigy.net
critic: Harold Kroll - HARBONS@aol.com
scholarship coordinator - Marcus Turner
maturner@indy.rr.com
fact checker: Warner Talso
index manager: Ed Beaman
webmaster & technical advisor -- Doug Bell - (Wiz):
doug@papermoneyworld.net
The Boss: Judy Schwan


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