Board of Economic Warfare

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 and was abolished by Executive Order 9361, July 15 1943, and the functions were transferred to the newly created Office of Economic Warfare, OEM, which 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.

Dr. Maurice Parmalee

The first Chief Economist of the BEW 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,

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

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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,

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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.

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Dr. Parmalee felt that,

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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.

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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, volley ball and other games. These facts were brought to Vice President Wallace's attention by Chairman Martin Dies of HUAC and Dr. Parmalee was eased out of BEW, but moved into another New Deal bureau.

Feud with Hull

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. Wallace was convinced that the Latin American rubber supply could be increased if living standards of that region's rubber workers were raised to reduce the incidence of chronic malnutrition and malaria. He attempted to force negotiated contracts to provide for improvements to the Latin American infrastructure, with the United States funding half the cost of these programs. Wallace's acquisition of executive authority had been unpopular with the rank and file in Congress, and most members supported Hull, a former senator, in his attacks on the BEW and its chairman.

The BEW controversy climaxed in February 1943, when Wallace tried to place the purchasing authority of the Reconstruction Finance Corporation (RFC) under the BEW's jurisdiction. Commerce Secretary Jesse Jones denounced Wallace's action. When Wallace retaliated by accusing Jones of delaying shipments of quinine to marines dying of malaria, the imbroglio became too hot for Roosevelt to ignore. The embattled vice president wrote to the president, asking for either complete vindication for his actions in the matter or relief of his duties as chairman of the BEW. Roosevelt responded on July 15 1943, by dissolving the BEW and reconstituting its function under a new Foreign Economic Administration, headed by Leo Crowley, a known supporter of Jones.

Soviet espionage

The below list are all Americans who worked for the Board of Economic Warfare who where secretly members of the CPUSA and had covert liaison with Soviet intelligence during their employment.

• Greg Silvermaster
• Joseph Milton Bernstein
• T.A. Bisson
• Frank Coe
• Jack Fahy
• Charles Flato
• Jane Foster
• Michael Greenberg
• Mary Jane Keeney
• Allen Rosenberg
• Nathaniel Weyl