Warsaw, 10 August, 1919.

My dear Mr. President:

In compliance with your request to submit to you in writing the suggestions I made to you last evening, I desire to state that the interest of President Wilson and the citizenry of the United States was not only to investigate the various occurrences during and after the occupation of some of the cities in your country as well as the alleged persecutions of the Jews, but also to ascertain the entire matter so objectively, impartially, and disinterestedly, as to enable the commission correctly to diagnose the difficulties and suggest a remedy.

Although our investigations are by no means completed, I have discovered that some of the main causes of your troubles are the inevitable results of conditions that your country has gradually drifted into, and are due to the fact that the release of the various sections of your country from them, to the objectionable rule by foreign potentates, came so suddenly that it found them unprepared to face and successfully grapple with the complicated problems resulting therefrom.

Poland, having at last had all her dreams realized, her ambitions more than gratified, finds herself economically prostrate on her back, yet too proud to ask for outside assistance. Her splendid pride has at all times to be considered by anyone who wishes to be of any use to the country. I feel that Poland possesses great resiliency, and has much latent potentiality, and all she requires is to be given some confidence in herself, and to be shown how to “help herself.” The new, proud Polish republic not only requires personal liberty, but as much freedom as possible from obligations to others for the exercise of the same. I firmly believe that when she is enabled to do this, she will ungrudgingly grant to her minorities the same privilege.

I am anxious to show Poland how she can rise from her prostrate position and discover that she has adequate strength, with very little propping, to start a brisk walk toward the goal she is aiming for—self-reliant, successful independence. It has occurred to me that if in her earliest steps she will permit her good friends, the other members of the League of Nations, to assist her with tender sympathy and unselfish, fraternal feeling, that she will be astonished at the rapidity of her progress. You need to have proclaimed for your government, your people, and the world, that your associates believe in you and want you to become a strong country, and are anxious to have you promptly develop that strength, for reasons too obvious to mention.

It has occurred to me that what you require is a proper currency system, and sufficient funds to enable you to secure adequate raw material and fuel that will justify your factories in starting off at full speed and not having to fear an early suspension of their activities. And you will have to establish some institution that will restore confidence in your population who, as I am reliably informed, are at present hiding, and therefore not using, a substantial part of your liquid financial resources.

A corporation should be organized with $150,000,000 capital, the right to subscribe should be divided, one-third to Poland, one-third to the United States, and one-third to England, France, Italy, etc. The stock should be paid in in instalments, particularly as to those shares subscribed for by Polish capital, as it is desirable that the Poles be given sufficient time so as to secure personally the benefits of the tremendous rise in the value of your marks which would result from the creation of this company. For this purpose I suggest five or six instalments, extending over a year or longer. The sum of $50,000 or $60,000 should be spent for publicity for subscriptions in all of your newspapers, and great stress should be laid on the fact that the mass of your people is to receive the preference in the allotment of stock. A systematic campaign something like our Liberty Loan campaigns, should be organized so as to create the proper sentiment in the country, to encourage rivalry between your various large cities, and rouse the patriotism of all your citizens. Care should be taken in the constitution of these committees so as to make them platforms for the promotion of better feeling amongst your people. All subscriptions of $100 or less should be allotted in full. This would satisfy your population that it was to be a genuine Polish people’s institution.

After a dividend of six per cent. is paid on the stock, the balance of the profits should be divided equally between the stockholders and the State. The profits paid to the State to be in lieu of all taxes. This would work both ways: it would satisfy the people that the State is to have its share, and it would satisfy the investors that they could not be subjected, in any possible changed form of government of Poland, to excessive taxation.

The establishment of such a corporation would at once create a large permanent credit for Poland. This corporation could assume the responsibility of contracts for large quantities of cotton, wool and produce, ships, and all necessary requirements for Poland’s resumption of activities.

Branches of the corporation should be established in all the large cities. I believe from conversations I have had with representative men in Wilno that they would subscribe largely to the stock, because I told them that although America would very likely be willing to participate in the creation of a large central institution for Poland with its headquarters at Warsaw and branches in the larger cities, it would certainly not be interested in a local institution in Wilno. It has occurred to me that cities like Wilno, Lemberg, Cracow and Lodz, etc., would vie with each other in subscribing to this institution if they were told that the capital allotted to their district would depend upon their subscriptions. It would be safe to say to them that there would be two dollars of foreign capital for every dollar that they would subscribe.

It seems highly important that England be interested in this corporation, because if the United States suggests its organization we must promptly assure all other countries, including the neutrals during the recent war, that America expects no commercial advantage over any other country in Poland.

I deem it very desirable that the stock owned by foreigners should contain a provision that the Polish Government, or a syndicate of which they would approve, would have the right at any time to buy the stock from the owners at from $125 to $150 per share. This would serve a double purpose: it would do away with any desire on the part of the Poles to have control of the institution from the very start, because they would know that at any time they could secure the same, and it would enable them to feel that this important concern could be made entirely Polish whenever their strength justified it; and the foreign owners would, on the other hand, feel that they would receive a proper compensation for their risk, and they would have rendered a fine service, not only to Poland, but to the entire world in accelerating the development of Poland’s economic strength.

I have carefully canvassed the available material in the United States for the president of this institution, and suggest to you that we secure Secretary of the Interior, Franklin K. Lane. There are few men in the United States that more deservedly possess the admiration and approval of all Americans. He is a man who is entirely free from any financial alliances, and therefore cannot be criticized on that score. Incidentally, it would be of the greatest service to your government to have one of the greatest experts in the science of government accessible to your cabinet and functionaries. As you no doubt remember, he has not only successfully administered that great Department of the Interior, but also was member and chairman of the Interstate Commerce Commission of the United States. He was selected by President Wilson as one of the commissioners that was sent to Mexico, and for other commissions. I have every reason to feel that President Wilson, although reluctantly, would consent to Secretary Lane’s responding to this call.

I think that the mere announcement of the contemplation of such an institution will electrify your people, and will replace the present pessimism with an optimism that will astound all of us.

If you and your associates in the government of Poland approve of the suggestion, our commission is ready and anxious to help you and such representatives of England, France, Italy, and other countries as you may invite to join us, promptly to work out the details and make this thought a living thing.

With kindest personal regards,
Yours very truly,
Henry Morgenthau.

Hon. Ignace Paderewski,
President of the Council of Ministers, Warsaw.