Board of Economic Warfare

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The Office of Administrator of Export Control was established in the United States by Presidential Proclamation 2413, July 2, 1940, to administer export licensing provisions of the act of July 2, 1940 (54 Stat. 714). It was abolished by Presidential Executive Order 8900, September 15, 1941, and its functions were transferred to the Economic Defense Board, which had been established by Presidential Executive Order 8839, July 30, 1941, to develop policies and programs to strengthen U.S. international economic relations. The name was changed to Board of Economic Warfare by Presidential Executive Order 8982, December 17, 1941.


When Roosevelt signed an executive order in April 1942 allowing the BEW to negotiate contracts with foreign governments, Secretary of State Cordell Hull saw it as an attempt to create a second State Department. Much of the BEW's work was in South America and a lot of its purchases there were made to provide those countries with abundance and thus keep them from going over to the Axis Powers.

On June 29, 1943 Vice-President Henry Wallace delivered a public statement accusing Secretary of Commerce, Jesse Jones of "obstructing the war effort." The scandal gave an alarming sense of disunity and blundering incompetence in very high places. Roosevelt was extremely angry [1] and on July 15, 1943, abolished the BEW by Executive Order 9361. Functions were transferred to the newly created Office of Economic Warfare, OEM under its new head, James Byrnes. OEW also assumed control of U.S. Commercial Company, Rubber Development Corporation, Petroleum Reserves Corporation, and Export-Import Bank of Washington from the Reconstruction Finance Corporation. Consolidated into FEA, 1943. The BEW was divided into an Office of Imports, Office of Exports, and Office of War Analysis.

Wallace and Perkins

The Board of Economic Warfare was created to control the export of all materials seeking private export and to look after the procurement of all materials essential to the war effort, except arms and munitions. Vice President Henry A. Wallace was named chairman of the BEW as a member of President Roosevelts' secret "war cabinet". Wallace delegated much of the day-to-day management of the BEW to Milo Perkins, an associate from the Department of Agriculture .

The BEW purchased strategic resources on the world market needed for the war effort and also bought, where necessary, things in order to preclude the enemy from buying them. This was called "preclusive" buying. It issued thousands of export licenses daily. Like many special boards created by President Roosevelt, the BEW came in for its share of interdepartmental bickering, rivalries, and conflicts of authority.

By 1943 the BEW had 200 economic commandos in the market places of the world and around 3,000 in Washington directing their operations. Although it spent $1,200,000,000, no law ever authorized it, and the Senate never confirmed the appointment of Wallace or Perkins. President Roosevelt instructed the Reconstruction Finance Corporation (RFC) to give the BEW whatever funds it asked for. Jesse Jones of the RFC testified before Congress that if either Wallace or Perkins asked for money he had no choice but to give it, and they asked for and got one and a quarter billion dollars.[2]

Dr. Maurice Parmalee

The first Chief Economist of the Board of Economic Warfare was Dr. Maurice Paramlee who was born in Constantinople. Parmalee has authored several books including Farewell to Poverty and Bolshevism, Fascism and the Liberal Democratic State. In this book Dr. Parmalee renders it feasible to introduce a planned social economy in the United States much more rapidly than had been done in the Soviet Union. Dr. Parmalee wrote,

The superficial paraphernalia of capitalism can be dispensed with more quickly than in the Soviet Union.

Parmalee also wrote a book called Nudism in Modern Life. In the book the doctor revealed his interest in a science called Gymnosophy, a cult of ancient Hindu hermit philosophers who went around with little or no clothing. Dr. Parmalee urged widespread nudism,

wherever feasible in office, workshop or factory...Convent and monastery, harem and military barrack, clubs and schools exclusively for each sex will disappear and the sexes will live a more normal and happier life.

Dr. Parmalee felt that,

these gymnosophist nudist colonies furnish excellent opportunities for experiments along socialist lines ... Customary nudity is impossible under existing undemocratic, social and economic and political organization.

There was actually outside of Washington, D.C., the Washington Outdoor Club, composed of a number of government planners and others which had in an isolated glen practiced nudism while playing tennis, volleyball and other games. These facts were brought to Vice President Wallace's attention by Chairman Martin Dies of House Un-American Activities Committee and Dr. Parmalee was eased out of BEW, but moved into another New Deal bureau.[3]

Dr. John Bovingdon

A new chief economist and another nudist,[4] Dr. John Bovingdon, was brought. in,­ Dr. John Bovingdon. In 1931 the police in Los Angeles raided a Communist event Bovingdon was staging. Bovingdon was shaken, went to Russia and got a job in Moscow as a journalist. Upon his return to the United States, The Western Worker, a Communist organ, wrote February 7, 1935: "John Bovingdon...having recently returned from the Soviet Union, will give a lecture ...The affair is being arranged by the Friends of Soviet Russia [5] under whose auspices Bovingdon is touring this country." In January, 1938, he appeared in Long Beach, California, at the town's first "Communist Party celebration on the 14th anniversary of Lenin's death." In 1954 the Subversive Activities Control Board determined the Friends of Soviet Russia was a Subversive organization under the control and direction of the Soviet Union actively seeking the violent overthrow of the United States Government.

The Democratically controlled Un­American Activities Committee gave Wallace a list of 35 Communists in the BEW.

By the fall of 1943 the squabbles between Roosevelt's bureau chiefs became so general as to amount to a scandal. The President issued a decree to them to refrain from airing their differences in public. During the next ten months, behind the scenes, there was a continual row between Vice President Wallace and Reconstruction Finance Corporation head Jesse Jones. On June 29, 1944, Wallace issued a public statement accusing Jones of "obstructing the war effort." Roosevelt issued a directive ending the BEW but creating a wholly new aqlphabet soup agency with a different set of letters. Bovingdon was fired.

The new agency, Office of Economic Warfare (OEM) was headed by Leo T. Crowley. Thereafter the country had to depend on the management of a business man to handle ana business problem—getting strategically scarce materials for the war effort.

Communist infiltration

The BEW was heavily infiltrated by Soviet spies during its existence;[6] the below list are all Americans citizens who worked for the Board of Economic Warfare, where secretly members of the CPUSA, and engaged in espionage activiety to secretly further the interests of a foreign government in wartime during their employment with the United Sates government.


  1. Roosevelt and Hopkins : An Intimate History, Robert E. Sherwood, New York Harper and Brothers, 1948, pgs. 773 - 774 pdf.
  2. Hearings before Joint Committee on Reduction of Non-Essential Federal Expenditures, June 1, 1943.
  3. The Roosevelt Myth, Book 3, Ch. 6, A Boondoggler's Dream, John T. Flynn, Fox and Wilkes, 1948.
  4. Black and White and Red, Jack El-Hai, American Heritage Magazine, May/June 1991 Volume 42, Issue 3.
  5. United States. Subversive Activities Control Board. Reports of the Subversive Activities Control Board. Washington. United States Government Printing Office. 1966. Vol. 1, p. 486-489, 492, 510, 516, 537.
  6. Counterintelligence Reader, Volume 3, Chapter 1, Page 29, National Counterintelligence Center, United States Government.