The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
DIARY Book 309 September 26 - 30, 1940 -ABook Page American Friends Service Committee See War Conditions: France Appointments and Resignations Cottrell, Mr.: Auditor in Bureau of Internal Revenue assigned to assist Congressmen and Senators on income tax returns; second extension asked 309 9/26/40 a) FDR recommends extension for six months 48 264 Argentina See Latin America -BBatavia See War Conditions: 011 Bomb Sights (Sperry) See War Conditions Brazil See Latin America Business Conditions Haas memorandum on situation for week ending 9/28/40.. -CCanada See War Conditions: Airplanes China See War Conditions Cottrell, Mr. (Auditor, Bureau of Internal Revenue) See Appointments and Resignations -DDutch East Indies See War Conditions: Oil (Netherlands) --France See Latin America: Argentina See also War Conditions: Foreign Funds Control: France (American Friends Service Committee reports) Friends Service Committee, American See War Conditions: France -GGermany See War Conditions Gold See War Conditions 353 -Book Page Internal Revenue, Bureau of Cottrell, Mr.: Auditor assigned to assist Senators and Congressmen on income tax returns; second extension asked - 9/26/40 a) FDR recommends extension for six months 309 48 264 -LLatin America Argentina: Canned beef to be distributed through International Red Cross at Geneva to French prisoners of war in Germany discussed by Treasury group 9/26/40 4 a) Discussion by Berle, HMJr, and Cochran 29,34 9/26/40 b) Conference; present: HMJr, Argentine Ambassador, Bell, White, and Cochran 9/26/40 51 Monetary and Exchange Conference: Possible agenda for discussions - 9/27/40 a) HMJr and White discuss - 9/28/40 b) American Embassy, Buenos Aires, reports on actual desires of Argentine Government 9/29/40 209 281 319 Balance of Payments with United States: Memorandum from American Embassy, Buenos Aires - 9/27/40 Brazil: Economic situation discussed by Pierson (Export-Import Bank) and Duggan (State Department) 9/28/40. 236 284 Layton, Sir Walter See War Conditions: United Kingdom -MMartinique See War Conditions: Foreign Funds Control (France) Military Planning See War Conditions Morgenthau, Robert Congressman Treadway and HMJr discuss award of Scholarship Memorial Cup at Amherst - 9/26/40 -NNetherlands See War Conditions: Oil 91 -0Book Page 011 See War Conditions -PPetroleum See War Conditions: Oil -QQuakers (American Friends Service Committee) See War Conditions: France -Shell 011 Company See War Conditions: Oil Ship Movements See War Conditions Sperry Bomb Sight See War Conditions: Bomb Sight (Sperry) Sweden See War Conditions: Airplanes ----- Tax Research, Division of Report on projects during September 1940, 309 333 - UU.S.S.R. See War Conditions: Foreign Funds Control: Gold United Kingdom See War Conditions: Military Planning; United Kingdom -VWar Conditions Airplanes: Canadian training plan: Success described to Purvis by Howe in face of Bullitt's conversation with HMJr - 9/26/40 113 a) HMJr tells Purvis of conversation with Bullitt b) Memoranda on plan 150 301,303,305 - W - (Continued) Book Page 309 117 War Conditions (Continued) Airplanes (Continued): Deliveries on 1-for-1 basis until July 1, 1941, discussed by HMJr, Patterson, Knudsen, and Young - 9/26/40 a) 50-50 basis in existence at present discussed by Knudsen and HMJr 123 b) Stimson and HMJr discuss 127 PBY-5's: All production to be turned over to British until July 1, 1941 - 9/27/40 164 a) Knox and HMJr discuss. b) Knudsen and HMJr discuss 203 205 Progress reports as of September 16, 1940, and September 18, 1940, 171 Sweden: Planes on order from Republic Aircraft 9/30/40. 370 Bomb Sights (Sperry): To be delivered to British "with all refinements" - 9/27/40 164 Conference with representatives of Sperry Corporation, Army, Navy, and British Purchasing Commission - 9/28/40 298 China: Burma Highway: Recent development in traffic 9/26/40 69 Exchange market resume - 9/26/40, etc 89,246, 291,366 Export Control: Exports of petroleum products, scrap iron, and scrap steel from United States to Japan, Russia, Spain, and Great Britain, as shown by departure permits granted for week ending 9/28/40 280 Foreign Funds Control: France: International Red Cross at Geneva project to obtain food supplies from South America for French prisoners of war in Germany discussed by Treasury group - 9/26/40. a) Discussion by Berle, HMJr. and Cochran 9/26/40. 4 29,34 b) Conference: present: HMJr. Argentine Ambassador, Bell, White, and Cochran 9/26/40 Fifty planes at Martinique must be turned over before Hull will act on funds from South American French Legations - 9/26/40 a) Discussion by Berle, Cochran, HMJr - 9/26/40 Hoover (Federal Bureau of Investigation) to be asked to conference in an attempt to build up greater cooperation on information concerning Russian, Italian, and German expenditures - 9/26/40 U.S.S.R.: Transactions with Chase National Bank 9/26/40 51 5 29,34 44 88 - W - (Continued) War Conditions (Continued) France: Refugee situation as reported by American Friends Service Committee - 9/30/40. Germany: Economic and financial arrangements of Book Page 309 395 occupying forces with institutions in occupied countries: Report from American Embassy, Berlin - 9/27/40. 210 Gold: Study of British gold resources from standpoint of war finance: Advisory Commission, Council of National Defense, asks Federal Reserve Bank of New York for information: Treasury asks that any information given be approved since Federal Reserve acquires it as fiscal agent for United States - 9/26/40 Soviet Production: White memorandum - 9/27/40 2,8 226 Military Planning: Tentative Lessons from the Recent Active Campaign in Europe (War Department bulletins): "French Artillery, Anti-Tank and Anti-Aircraft Weapons" - 9/26/40 "Notes on German Tactics and Training Methods" - 9/27/40 "Notes on River Crossing by German Armored and Motorized Units" - 9/30/40 German air attacks on England, etc. - 9/26/40 Reports from London transmitted by Lothian 9/26/40, etc 56 230 341,344 100 132,138,143, 307,313 Oil: Luboils: Memorandum given to Agnew by HMJr 9/26/40 a) Discussion by Agnew, Marris, HMJr, White, and Cochran - 9/26/40 b) HMJr and Crane (Standard oil) discuss situation: HMJr suggests that oil situation be considered part of whole picture by British Treasury from point of view of dollar exchange - 9/26/40 c) Copy sent to FDR Batavia: Report on production from American Consul General - 9/27/40 French plan (proposed) to obtain U.S. supplies of petroleum - 9/30/40 "Naval Estimate of Japanese Oil Stocks" - report of Shell Oil, London, expert - 9/27/40. 10 13 36 193 252 380 201 Netherlands Indies: Report on requests from Japanese - 9/30/40 Purchasing Mission: 390 HMJr tells Purvis lack of coordination of information concerning means through Purvis direct to HMJr is embarrassing - 9/26/40 a) FDR asks that British General Staff should assemble needs and report each week 102 Back of 192 - W - (Continued) Book Page 309 254 War Conditions (Continued) Ship Movements: United States Maritime Commission approves chartering of seven boats for voyages to foreign ports - 9/27/40. SS PANAMANIAN discussed by Gaston, Harris, and HMJr - 9/27/40 256,273,378 United Kingdom: Layton, Sir Walter: Resume' of career - 9/26/40. Discussion at 9:30 conference - 9/26/40.. FDR tells Layton he should see no one without clearing through Purvis - 9/27/40.. War Department Military Intelligence Division bulletins: See War Conditions: Military Planning 9 45 166 1 TREASURY DEPARTMENT Washington Press Service No. 22-18 FOR IMMEDIATE RELEASE Thursday, September 26, 1940. Secretary of the Treasury Morgenthau announced today that the subscription books for the current offering of 2 percent Treasury Bonds of 1953-55 will close at the close of business Friday, September 27, 1940. This offering is open only to the holders of Treasury Notes of Series C-1940, maturing December 15, 1940. Subscriptions addressed to a Federal Reserve Bank or Branch, or to the Treasury Department, and placed in the mail before 12 o'clock midnight, Friday, September 27, will b. considered as having been entered before the close of the subscription books. Announcement of the amount of subscriptions and their division among the several Federal Reserve Districts will be made later. -000- 2 September 26, 1940 12:00 a.m. RE GENERAL PROBLEMS Present: Mr. Bell H.M.Jr: What have you got? Cochren: I just wanted to ask you two questions. The first one was that Archie telephoned me yesterday and hoped that you could put in Mr. White Mr. Cochran A word to Jesse Jones about a loan to Universal. H.M.Jr: I did. Cochran: From the statement in the press I couldn't tell whether it was that way. H.M.Jr: I cen't either, but I did do that over two days ago. Cochran: Then the other matter that I have is Rosell, who 10 one of the men who writes these letters that we get from the Federal Reserve Bank in New York, told me yesterday about a letter which was received, and I just had the text of it written un. Of course, Knoke realized when he was talking to Rosell that much of that information they got as our fiscal agent and they said they had some data they should put together and some gold sales and so on and I said, "Don't send that, Bell: it would have to clear with us, and I talked make any reply and refer it to us. That is what I said. Cochren: And Rosell said he wouldn't know anyone at with Dan and Harry as to whether they should 3 -2all, but he said he did know this man who was working with you (White) and said this man was working with Berle, he understood. H.M.Jr: Bell: Just tell him to refer them to us. It isn't necessary for me to call up Henderson or anything like that, just let it come in. H.M.Jr: Let it come in? Cochran: But the data they had already prepared up there. Shall I ask the Fed to send such data to us? H.M.Jr: Oh, yes. White: They should send us anything they have in any H.M.Jr: Definitely, but nothing to the Council. No, it has been referred here except that Cochran: case. John Stonleigh called me from Secretary Hull's office and said they had a cable from London confirming all this Dakar business, that they had withdrawn and they had found it too tough to go ahead, and they had a cablegram from Dakar late last night saying that firing from the naval forces had continued all day shelling the town. No Americans in the colony of six were hurt, but a number of natives and Europeans were, and they were evacuating a lot from the H.M.Jr: interior and the shore batteries had returned the fire very heavily. One thing I would like you to do, I would like you to do it just as soon as possible, there may be - I am checking up - are there any messages in the State Department that have come in since the first of September from Kennedy to the President giving lists of war materials that the English want? Cochran: All right. H.M.Jr: From Kennedy to the President or from Kennedy 4 3- to Hull. I mean, are there any cables. I would like to have copies of it. There is Cochran: a blind spot somewhere that I am not getting. From the first of September down to date, has Kennedy sent requests to the President or has Churchill, via Kennedy, sent any requests or Beaverbrook sent any requests, saying that they need planes or guns or rifles? Now, if there are those, I ought to get them and have them, but I would like very much to be brought up to date if they have them. I will ask Stoneleigh, because that 18 the only place that would have them. H.M.Jr: Just let me catch up here a minute. It will just take me two or three minutes to read this and get up to date. Some of it I won't read and you tell me about it. Bell: White: Everybody gets behind on this stuff. We had three hours last night. Cochran: Alphand just phoned from New York on this H.M.Jr: Cochran: French matter again. I told him you wouldn't be ready for a couple of days. He asked particularly about that meat business. Did you tell the boys about that? I am getting all that together. You see, you (White) weren't at the meeting yesterday. White: No. Were you? Cochran: Yes, I was. I mean, they want to get a million and a half dollars from here to pay to Argentina for canned beef to be distributed through the International Red Cross at Geneva to French prisoners of war in Germany, and they have written the State Department, too, and Mr. Berle spoke to the Secretary. H.M.Jr: But Berle didn't know about the 31 million 5 which we cleared, and which the French were holding up, 80 I sent that over to him and he didn't know about that, you see, and I have asked Merle to put the two things together and I am going to bring them up at Cabinet. White: He may make a bargain. H.M.Jr: I am putting the two together and Berle didn't know and Berle didn't know that the President told Hull that he wouldn't do anything for money for South American French Legations until he got the 50 planes, and Berle didn't know that. Cochran: Madagascar, graphite for Madagascar. That has been taken care of. H.M.Jr: All right. Belgian Embassy? Cochran: We are just giving more generous treatment to the Belgian Congo. They wanted the same status as ours, but the State Department wouldn't give it to them. H.M.Jr: Swiss banking corporation? Cochran: He is quite unhappy over that suit which has been brought. There 18 nothing we can do about it. H.M.Jr: Chinese contracts, Lochhead, powder. Bell: That is the Chinese powder. Cochran: Phil Young is working on that. H.M.Jr: Now, this thing about Norman Arnold -- Cochran: That is when he was talking about Pinedo. He said if we would do something for Pinedo, he thought he was pro-American and 80 on, but I mentioned it at the tail end that J. Crain thought that Pinedo was the one most instrumental in working out all these 6 -5bilateral agreements and 80 on. Arnold thought that Irigoyen's wings had been clipped. That is the term he used. Cochran: Do you want to tell J. Crain anything? He phoned yesterday. H.M.Jr: Tell him that I am seeing Agnew this afternoon Cochran: I will tell him. H.M.Jr: Will you? Cochran: Yes, sir. H.M.Jr: In order to keep it all going, supposing you be here at 2:45 also. That man in the British and I hope to have something for him. Embassy called. Cochran: That just tied in with some information we had. That all goes to that Japanese agent here. That I have given to these two men who worked on it, Kamarck and Klaus. H.M.Jr: Well, take that up tomorrow and Mr. Berle 18 tickled to death that I am doing this, because it 18 one of the things that bothers them, and he hopes somebody will do it. He 18 just tickled to death. Cochran: Yes. H.M.Jr: I put all the action ones at the bottom. Lochhead, Export-Import, tungsten. Now, that -- Cochran: We have already spoken about that. He was coming down today. H.M.Jr: Here is the other Crain thing, Standard 011. At least I'm up to date on that. White: I have one thing. H.M.Jr: Please. 7 -6White: I am having two men - one and a half, spare time, going over foreign ownership of American corporations. Then we are going to take American ownership of foreign. I wonder if I have your permission, 1f the SEC could lend us a man for a couple of weeks. H.M.Jr: Let's do it formally and let me write a letter White: Would you do that? H.M.Jr: You write it and I will sign it. We will do it White: The thing is growing more and more important. H.M.Jr: Dan? It is a great day. Bell: Wonderful. H.M.Jr: Somewhere. White: Will we get a chance to talk to you on China at all? H.M.Jr: It 18 a bad day on China for me. White: Will you be here tomorrow? H.M.Jr: Oh yes. Cochran: Pinsent called up and said, "Is this loan, to Frank. formally so that we don't do what these other departments do to me all the time. funds, being made available to the Chinese Stabilization Fund?" White: Maybe I can take it up with him. H.M.Jr: If you are lucky. All right. Cochran: They have some more cables in on Argentine business at the State Department. 8 ADVISORY COMMISSION TO THE COUNCIL OF NATIONAL DEFENSE Federal Reserve Building September 5, 1940 Mr. Rosell Federal Reserve Bank New York, N. Y. Dear Mr. Rosell: I understand you have been studying British policy and operations in connection with the use of British gold resources. I am hoping to include in a study of British war finance the extent of the use of gold and foreign exchange for the payment of war supplies and your data on the use of gold would be extremely useful to me. I would appreciate your. sending me a copy of anything you may have written or telling me in what manner I can arrive at the proper figures. With many thanks, I am. Very truly yours, (signed) James S. Earley The Advisory Commission to the Council of National Defense 1424 E Street - Room 420 Washington, D. C. JSE:STA Rec'd. by telephone from Mr. Rosell, Federal Reserve Bank of New York, 11 a.m., Sept. 26, 1940.) - emk 9 TREASURY DEPARTMENT INTER-OFFICE COMMUNICATION DATE September 26, 1940 TO Secretary Morgenthau FROM Mr. White Subject: Sir Walter Layton Sir Walter Layton is an economist, publicist, and City man, and has represented the U.K. Government as an economist on numerous international economic committees and conferences. In politics he is a Liberal. Born in 1884, he started his career as a member of the economics staff of the University of Cambridge, where in 1912 he wrote "An Introduction to the Study of Prices," a college textbook which is neither original nor profound, and is now outdated. During the Great War he served the U.K. Government in various capacities, visiting the United States in 1917 on the Balfour Mission. After the War he plunged into economic journalism and publishing, being associated 1 th the group of Liberal newspapers, comprising the News-Chronicle, the Evening Star, and the Economist, which is largely owned by the Cadbury family. He was editor and publisher of the Economist from 1922 to 1938, and is now a member of its Board of Directors. He has been Chairman of the News-Chronicle Ltd. since 1930, and of the Star Newspaper Company Ltd. since 1937. These newspapers are Liberal (with a capital L). Both the News Chronicle and the Evening Star are large business enterprises. Therefore, as the Chairman of the Board of Directors of these papers, Sir Walter is a prominent business man. H1s other business interests include directorships in the National Mutual Assurance Society and the National Iron and Steel Manufacturers. Mr. Gordon, Sir Walter's present assistant, has specialized in the economics of the iron and steel industry. given me Sir andrew agnew Sept 26.1940 10 pent to plats LUBOILS war many 9/27/40 Thousands of Tons Peace-time Consumption incl.substi- Estimated war-time Industrial Consumption Per Annum tutes (1938) rmany tria echoslovakia Indigenous Production incl. substitutes 48 23 130 600 52 4 27 32 nmark 26 12 - 21 10 - rway lland 54 25 66 37 - 272 160 31 1,064 852 554 116 70 ) ) 8 8 45 53 12 10 25 - lgium & rance taly & Tripolitania lbania arried Forward on Page 2. - 1,180 for Axis Yar Effort 391 ) 510 ) azig & German Poland ssian Poland Luxembourg Surplus or SHORTAGE - 922 - 15 569 37 129 278 70 15 353 11 -2- LUBOILS Thousands of Tons Peace-time Consumption incl. substi- Estimated war-time Industrial Consumption Per Annum tutes (1938) Brought Forward Surplus or SHORTAGE for Axis Var Efforts 353 5 - Finland 18 Sweden 64 Estonia incl. substitutes 569 922 1,180 Indigenous Production 5 35 35 - 2 2 4 Latvia Lithuania Switzerland 2 2 4 4 / 1 15 20 15 - 22 15 - Hungary Jugoslavia 16 10 Roumania 23 15 10 To 100 - Bulgaria 15 85 6 6 8 - Greece 8 8 9 Turkey 8 TOTAL 1,380 8 1,044 - 669 RUSSIAN SURPLUS FOR GERMANY 8 375 100 275 On the basis of this estimate, which allows for a rationed consumption even in neutral countries, there is a shortage of supply over industrial demand of 275,000 tons per annum before allowing anything for service consumption of Italy and Germany. 3.8.1940 Revised 21.9.40 12 It will be remembered that one of the reasons for the rather sudden introduction by the U.S.G. of export license regulations covering certain petroleum products in July was the desire of the U.S.O. to stop the large shipments on order by Japan for aviation spirits, reported to exceed 1,000,000 barrels. It is, therefore, of interest to see how the same suppliers, who previously had the orders, have been able to overcome the difficulties of the licensing regulations. 2. The U.S. regulations provided that gasoline which, with the addition of 3 c.c's of lead or less, would come up to 87 octane rating would have to be licensed and it was indicated that no licenses would be given for such spirits for Japan. 3. We have on record precise details of over 400,000 barrels of high grade gasolines which have left U.S.A. ports since August 1st. Some of these which, in fact, reached 92 octane without any lead, were loaded on the Gulf Coast before August 1st but did not leave the Pacific Coast until after August 1st. The others, however, are of a quality which will reach 86 or even 86 octane rating with the addition of 3 c.c's of lead and, therefore, technically do not come within the licensing provisions. Obviously, however, this is aviation gasoline, and the embargo is therefore only theoretical. We are informed that licenses were applied for and granted for these shipments. We are also informed that a shipment of over 600,000 barrels has been approved and that many freight bookings are made for early shipment, it being stated that the Japanese are insisting upon delivery by October 15th. 4. It is also of interest to note that the American regulations provided that licenses would be required for shipments of material from which more than 3% of such aviation gasoline can be obtained by commercial distillation. Such licenses are being refused for "doctored crudes" but appear to be issued freely for natural crudes which fall within this definition. September 26th, 1940 13 September 26, 1940 2:45 p.m. RE BRITISH PURCHASING PROGRAM Present: Sir Andrew Agnew Mr. Marris Mr. White Mr. Cochran Agnew: I have brought you a document here which I think will be very interesting. It is an estimate, as far as I can make out, of the consumption in war time of lubricating oils consumption in peace time and the estimated throughout Europe, excluding Spain and Portugal, which are under a separate sub- division at the present time. I think it is a rather important document, because to my mind it is the first commodity which will make itself felt in war plans of the invader countries if the blockade can be made effective. I can tell you in a word what the picture amounts to. Excluding service requirements, that 18, for Army and Navy and Air Force all together, forgetting about them and also forgetting about stocks at the outbreak of war, taking only an indigenous supply and putting against that war time industrial consumption over the whole period, over the whole of Europe excluding Spain and Portugal, allowing a 100 thousand tons to come in from Russia, which is all that Russia could supply, we will get to the position where there is a shortage of 275,000 tons in a year, and no service requirements met except out of stock, 80 it seems to me that that is a situation which is one that is the most vulnerable H.M.Jr: thing that I can lay my finger on. That is very interesting. 14 -2Agnew: H.M.Jr: I felt it 80 important that as soon as I had that survey made out, I sent a dispatch to London giving the result of it 80 that they could take the necessary action on their side and I am bringing you that statement, sir, in the hope that you will assist. Well, let me get off my chest what I have. Jay Crane, who is President of Standard 011 of New Jersey and formerly of the Federal Reserve -- Agnew: I know. H.M.Jr: And whom I believe you visited with, 18 very much upset because, as I get it, you have asked him from now on on his sales to England Agnew: to take half in sterling. No, what I said to him is this: I saw both H.M.Jr: That 18 the export company? Agnew: No, John Brown 18 the Socony Vacuum and Crane's Farish and John Brown -- company is Farish, and I said to them, "The people in England have told me that they are going to be short of funds. Is there any way that you can help? The problem is yours and I can't suggest anything at all, and I don't H.M.Jr: intend to suggest anything." Well, he felt - now, you (Cochran) check me, because you talked with him afterward for a long time. Didn't he feel it was a definite Cochran: Agnew: request? Am I right or wrong? He thought they were going to be obliged it wasn't one half, as I recall it now, but there would be no assurance that the sterling which they were obtaining would be converted, that they would have to use sterling in resident accounts, which could only be used in the Kingdom or at most in the sterling area. We didn't go into any of those details at all. I pointed out to him that we only had 15 -380 many dollars, and if this war goes on for a long time, we won't have enough dollars to go around. Now, if there 18 any way they could help us and still do nothing against the neutrality acts and the laws of their own country, we would be very glad indeed, but, of course, they don't want to do it. H.M.Jr: Well, my memory is pretty good, and as I say, if there is a misunderstanding, I think the sooner you get in touch with him the better, because he put it this way to me. He said, "What are we going to do? It is either that Agnew: or we lose the business to the English companies." H1s directors have told him of my conversation H.M.Jr: situation, but it is not what I said. Well, I was just going to say, if you could and he, like the very practical man he is, has gone and interpreted the root of the whole get in touch with Jay Crane, because frankly he has upset me, because I took this as a signal that you people were running out of money. Agnew: Well, we are. H.M.Jr: Well -- Agnew: There is no secret about that. H.M.Jr: Agnew: H.M.Jr: All right, that 18 part of my job, to know it in time; and if you could see Crane himself not Farish, but Crane, because you know Crane looks after foreign exchange. That is his responsibility. I will make a point of it. I don't know Farish. I do know Crane. He handled the foreign exchange for the Federal Reserve, but I think if you could see him because he has been calling me and I was waiting to see you before I answered him. Now, I am not interested in Standard Oil's 16 4- business, but I am interested in the dollar Agnew: exchange situation of the Empire. Would you like me to leave that exchange thing alone? I am dealing with it only on the oil proposition. I am not thinking of anything else. H.M.Jr: Yes - I mean, if you would just - well, Crane is - am I exaggerating when I say he is very nervous about this thing, very much worried? Cochran: He is very much worried. H.M.Jr: And he has got me worried. Agnew: oh, well, we will have to undo that, if we H.M.Jr: can. So I think if you could get in touch with him and whatever the situation 18, let's know it. Agnew: H.M.Jr: Well, I can tell you exactly what it 18. Ag I gather, it will be 50 million dollars a year. Cochran: 50 million with the United Kingdon. H.M.Jr: Agnew: And that is a tidy sum, and I just would like to know from the exchange thing where we stand on that, because I don't believe that England would move just on one front. If they are going to move on that front - well, the sooner I know it, the better. I can explain it to you in a very few words. H.M.Jr: Please. Agnew: As I say, I have been talking oil and oil only, nothing else. Now, the Government and the Treasury in London are trying to save dollars. And they say, "Now, here is a private business going on for which we have to find dollars. If we can save some of those 17 -5dollars, we will be able to use those dollars in another direction." In other words, whatever dollars we can save on oil, we will be able to use on the purchase of munitions and what not. There 18 nothing to be arrived at as to what we could do in oil or 80 far as I know there 18 no overall figure. At any rate, it is no part of my duty to assess any overall figure on any composite date, any date when the dollars will have finished. I am merely trying to save a penny where I can. H.M.Jr: Agnew: H.M.Jr: That is perfectly all right, but you see I have a whole sheet here which is furnished me by the English Treasury. Now, I have got the whole picture. Including oil? Including everything. We don't distinguish as between oil or steel or lumber. We have a net position each month on the UK picture, which I got with the help of Sir Frederick Phillips, and I get the information from him, and we run this net position 80 I know on the first of September what your position 18. I only know it through the courtesy of the British Treasury. Now, oil is such a big piece of that - I am not interested in oil, I am interested in foreign exchange and the dollars, the net position, because there is hardly a day when the War or Navy or the Council of National Defense doesn't say, "Are you sure if we give them this contract they can pay for it?" Agnew: I keep saying yea, so if I am wrong, everybody is going to jump on me with hobnailed boots. Of course, I have got no information to even suggest that you are wrong, but my line of action was to try to make it more certain that you were right, because as I understood it, you have got two main figures. One is the amount of dollars that Great Britain is possessed of, and the other main figure is 18 -6the amount of dollar expenditures that H.M.Jr: Great Britain is proposing to go in for. And the third figure, what she actually did Agnew: Quite. If I, by some persuasive power or spend during the month. otherwise, am able to get the Standard 011 Company to put some more dollars into that -- Agnew: That is all right, but from your standpoint, I would say that would be fine, but from my standpoint it was just a red light and it has me worried, and Mr. Crane said to me, "What shall I do about it?" He comes to me, you see, and says, "What shall I do about it?" I will get hold of Crane and tell him. H.M.Jr: Would you? H.M.Jr: Agnew: Yes. I put it to him that way. I said, "If you can find some way of helping us, I hope you will let me know." It was left in this way, that whenever they were ready to talk to me, they would send me a message to Washington and I would go up to New York. H.M.Jr: They were waiting to hear from me. Agnew: I see. I will get hold of Crane straight away. H.M.Jr: I was waiting to see you. Agnew: I see. H.M.Jr: Agnew: But you get it and it is important. Oh, I will do it this afternoon. H.M.Jr: Because that thing, you know, spreads like wildfire, and with all these contracts pending and Purvis trying to make more contracts every day, if the word goes out that England is running short of dollars -- 19 -7Agnew: Well, Purvis knows about it. H.M.Jr: I told him about it this morning. Agnew: Yes, but he knew about it before that, because I told him myeelf, but perhaps you could give me some advice. Would you advise me to just leave that alone from the oil point of view? H.M.Jr: I think I would let the British Treasury handle that as a whole matter, as long as you are asking me. Agnew: H.M.Jr: I think that is good advice. As long as you are asking me, I think I would let them handle it as a whole. Agnew: As foreign exchange, not as commodities? H.M.Jr: I think 80, if you don't mind, as long as you ask me. Agnew: on no. H.M.Jr: I certainly think the British Treasury should handle it as the whole picture rather than say the oil or the steel people or somebody else. Agnew: I understand that the Continent people started in the same direction some time ago, but were not successful. H.M.Jr: If they did, it didn't get anywhere with me. As long as you are asking me, I think it is something that the British Treasury ought to take as their responsibility. Agnew: As foreign exchange? H.M.Jr: Yes, and -- Marris: As part of the general picture. As a part of the general picture. H.M.Jr: 20 -8Agnew: Thank you very much. H.M.Jr: That is something that is bothering them and it 1e important enough so that Phillips or somebody ought to hop on the plane and come over and see me again. Agnew: I will get hold of Crane and tell him to leave the thing alone, and when I am up in New York I will tell him he can leave it alone altogether and I will advise London that the thing had better be done as a whole, and not by commodities. H.M.Jr: I think from every standpoint it would be better, don't you, Merle? Cochran: I do. Agnew: There is a little memorandum I made there H.M.Jr: I will have this looked into. Agnew: I expect you (Cochran) know all about it. H.M.Jr: White: that 18 not quite so important. I made the little note about it. I am not sure we do, but, Harry, will you take that? Yes, I will. There is one other item that I mentioned. I told them our Naval Intelligence informed ue about the 74,000,000 barrel estimate which they had. We have examined the basis of it and I was going to discuss it with him in detail. Offhand, Sir Andrew feels that it is an impossible figure. Agnew: We can check on that H.M.Jr: We get back to that thing again. If you (White) could only find the fellow who did that -- White: Well, we now have the basis and they have got at it in a way in which there is just one 21 -9- H.M.Jr: figure that we don't agree on at all, which is impossible to find the facts on, and we can talk with him and see what his estimate 18, if you like, but we would have to talk with him personally to see why he -Why don't you get hold of him if possible and put him up against Sir Andrew? White: I will first show Sir Andrew what the difference is and see what his reaction is to it. H.M.Jr: That is right, because it is terribly important. I would like to clear it up. We have heard of Agnew: White: this figure before, all coming from the same place, out of the Navy. They arrived at it as a basis of computation, not that they have got any - their naval attache gives a figure closer to ours, their own naval attache. H.M.Jr: Agnew: For heaven's eake, let's get it and let me bring it to Colonel Knox' attention, because as a newspaper publisher, he likes to have his figures accurate. While doing that, Dr. White, I was wondering if there was anything further that we could do on the German supply. White: We don't have any information. Of course, it would be helpful if you had any information about the synthetic plants that were destroyed. It is 80 crucial in respect to what you have just given us. Agnew: I have been trying. I have wired London for H.M.Jr: Ig the octane position of the shot down planes Agnew: No change. it, but you can understand it is difficult information to get, very difficult. about the same? 22 - 10 During the last day or two, I met here in Washington and again today, Mr. de Montague, a Frenchman, who is over here in connection with oil. I expect you know all about it. H.M.Jr: Not a thing. Agnew: He wants to persuade the United States Government to allow exports of oil to occupied and unoccupied France. White: We have a cable about it. Agnew: I met him in the Shoreham as I left today. H.M.Jr: I don't suppose he has got any chance. White: We have a long cable on the subject which just came in. H.M.Jr: White: Is anybody interested in seeing that he gets it? No one that I know of. Agnew: He is one of a party -- White: Other than Germany. H.M.Jr: I would say he had one chance in ten. Agnew: I am sorry to think that he has that. H.M.Jr: Well, I am afraid we are human. White: They have got Germany's permission to get H.M.Jr: No, he has got one chance in ten, but I this oil. will keep my ears open. Agnew: There is a mission, a party of them. H.M.Jr: De Montague? Agnew: De Montague 18 the Frenchman. 23 - 11 H.M.Jr: That is a new one to me. Marris: He is attractive. Well, he was an attractive fellow, but he is Agnew: completely shot. He is under duress. He was sent by the Germane, and I should think that the Germane have got his family or something of that sort. I knew him in the days gone White: by and he has completely gone to pieces. Do you happen to know who he is contacting Agnew: Do you mean in the Government departments? White: I mean in the State Department or the Army here? and Navy. Agnew: H.M.Jr: Agnew: I believe it is the State Department, but I don't know. We could mention it to Berle when he comes over in the morning. And I hear from the same - in connection with the same source, that there is a lady here, Madame de Chambrun, who is LaSalle's daughter and some of the party informed me that she 18 an extremely intelligent and clever lady. H.M.Jr: Agnew: That 18 right. That she is actively and strongly pro-Nazi, and she is pulling her perfume poison everywhere she can. H.M.Jr: You would be interested to know that the President of the United States sent word to Mrs. - we were talking to the French Ambassador. We realized that the woman was the wife of the military naval attache, but if she knew what was good for her, the President of the United States suggested she keep her mouth shut, even though she was LaSalle's daughter. 24 - 12 Agnew: And even though she 18 beautiful? H.M.Jr: That I don't think the President knew, but he did send her that message, 80 it had reached him. On the other hand, I met a very charming French lady yesterday who is intelligent. She is not particularly beautiful, but she is charming and that 18 Madame Pleven. Have you met her? Marrie: Oh yes. H.M.Jr: She is lovely, isn't she? Marris: Oh yes. H.M.Jr: She is a lovely woman. Marris: That 18 a different story. H.M.Jr: Oh, quite. You know what her husband is doing, don't you? Marris: H.M.Jr: I know what he was doing, I don't know what he is doing now. He is the fellow in Africa who is stirring up all the people to get them to -- Agnew: In French Cameroons? H.M.Jr: Yes. He is the fellow down there. His father was a Colonial Officer. He is down there doing all of that thing, stirring them up. She is a lovely person, she and this Madame Tabouis. Agnew: She is a very attractive woman. H.M.Jr: These two women, both of them are the kind of Agnew: H.M.Jr: people I like to think the French are. Exactly. I met the other woman. She is really attractive. Those are the two kinds I like to think they all are. 25 - 13 Agnew: The other thing, air, I don't know whether you advise me - we keep hearing that the United States are proposing to set up a Petroleum Department. H.M.Jr: Agnew: H.M.Jr: That 18 news. I wish it was true. Or something of that sort. No. I recommended it. You might be interested to know that I recommended that Mr. Ickes be given that job, Harold Ickes, Secretary of Interior. There would be none better. He has All of our domestic oil reserves and if he was given the whole thing, it would be perfect. Agnew: H.M.Jr: Agnew: But 80 far there is nothing? I haven't been able to get it across. The other thing is, I am wondering if it 1s a good plan for me to ask you if I can go home shortly. H.M.Jr: I think it 18 a better time now than it was, yes. Agnew: So that if I can see things a little bit clearer, then 1f you will llow me to say goodbye to you a little later on. H.M.Jr: Please. Agnew: Thank you very much. 26 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE September 26, 1940 Secretary Morgenthau ROM Mr. Cochran STRICTLY CONFIDENTIAL Since our 12:00 meeting, I have talked with Secretary Hull's office. I have een advised that no cablegrams have been received from the Embassy at London uring September, either for the President or for the Secretary of State, making by recommendations, or transmitting any messages from the British Government, in gard to British requirements for planes, munitions etc. part 27 PLAIN AS London Dated September 26, 1940 Rec'd 9:25 a.m. Secretary of State, Washington. 3230, September 36. FOR TREASURY FROM BUTTERWORTH. It is of more than passing interest that two days after Keynes' speech on the British financial position after a year of war (my 3201, September 25) Stamp, who is still nominally the adviser to the Government on economic coordination, though his func- tions have been largely usurped since the advent of the Churchill Government, made a speech in connection with the special war savings WEEK, indicating that the figures of voluntary savings are impressive but, neverthrless, the point of inflation is close round the corner. HE added that the totals of savings though good lost their impressiveness when compared with the total additional resources now available in the increased pay roll of the nation. He went on to point out that in rejecting automatic or compulsory saving the advocates of voluntary saving 28 AS-2- No.3230, Sept. 26, from London. saving had assumed a great rEsponsibility--that of achieving the required result unaided, for it was perilous to fall short. This Bame point was emphasized many months ago by Robbins and reported in despatch No.5188 of May 4, 1940. Commenting upon the position in the early part of the war Stamp stated: "WE made the mistake of thinking that because WE actually could SECURE things on pre-war habits by SOME means or other it was a point of national prestige concerning our shipping and our financial strength to do BO. WE might have started rationing and restriction Earlier but for this pride. If KENNEDY ALC 29 September 26, 1940 10:25 a.m. H.M.Jr: Hello. Adolf Berle: Hello. H.M.Jr: Hello, Adolf. B: Oh, Henry, I'm sorry to bother you but there are two things that are going to come along here both from the French Embassy, who are perpetual suitors at your door and likewise at ours. The first presents a problem of some difficulty. They want us to release $1,500,000 to buy canned stuff and food in the Argentine - ship it to occupied France for use in the prison camp. I sent along the preliminary request, which came from Alphand, to Chamberlain and a copy to you, and had yesterday afternoon the formal request from the French Ambassador. It'e a difficult question to answer. Of course, it solves a good many things. It takes care of some Argentine purchases which probably would help their exchange. It is theoretically administered by the International Red Cross in Geneva and I suppose our people could stay on board of it and I suppose those poor devils in the prison camps actually do need the food. H.M.Jr: B: It hasn't come yet. Did you say you sent it to Chamberlain? I've - well, the formal request came in as I say yesterday afternoon - sent along over to you, which will probably get to you during the day. Another letter, which you probably have in your pile and will get through some time or other, is the copy of the preliminary request from Alphand that I sent to you and I sent a copy to Chamberlain because I thought that he might at least know what was going on here against the time when you called him in. H.M.Jr: Yeah. B: I may say that, while we haven't been through the mill yet, I'm rather favorable to the 30 -2relief request for prison camps because, for one thing, we have the responsibility as you know for a good many of those French prisoners under our French interest arrange- ment. In the second place, I think we'd probably have some control. H.M.Jr: B: Some what? Some control, I mean, I think that our people probably could actually visit those camps and see that the stuff was getting there. H.M.Jr: And the beef would come from the Argentine. B: The meat would come from the Argentine. H.M.Jr: Well, now do you know that we approved a transfer of $3 million of French funds to the Argentine for payment to the Argentine and the French have not released it? B: H.M.Jr: B: H.M.Jr: I don't know that, no. Well, now, I'll get that story to you through Merle Cochran. Right. He has that and the Argentine Ambaesador just left here a minute ago and we approved that last week, but the French won't release that. I think you ought to put the two-and-two together. B: Well, I think that's distinctly a point. Of course, that's a qualification on this other thing. H.M.Jr: Well, it's also for food to be bought in the Argentine and the French have not released that. I'll get Merle to give you that. Would you prefer it verbally or in a memo? B: Well, either way you like. It doesn't matter because if he telephones, I'11 make the memo, otherwise 31 -3H.M.Jr: B: I'11 have him get you a memo over there. Right. Now the other question is the perennial question of whether - they are still crying for some more money for their Consulates and H.M.Jr: B: What? I say, the French are still crying for some money to pay for their Consulates and Legations in South America. H.M.Jr: B: Well, that's in your shop 100%. Well, as I'd understood it - that's what I wanted to ask. As I understood it, the thing was taken up at Cabinet meeting and the President authorized for this country and was not so happy about anything else. H.M.Jr: No. B: And that was the way it was left. H.M.Jr: No. B: Are you content that way? H.M.Jr: No, no. You've got it wrong. That was the first time. The second time it was brought up, the President told Cordell to use this as a basis for negotiation to get the planes out of Martinique. B: Yeah. Well, that we have not yet been able to do. H.M.Jr: But that was - one week elapsed between those two, and pending that he said to do nothing, but the matter is entirely in the lap of Cordell Hull. B: All right. That's fine. Well, then I've got that straight. H.M.Jr: Yeah. B: I'm obliged to you. 32 4 H.M.Jr: What else? B: All right. H.M.Jr: Well, wait a minute - wait a minute. Did you get my message about tomorrow morning? B: H.M.Jr: No, I haven't got it yet. I've asked J. Edgar Hoover to come here at 10:15. I sent a message to you would you come at 10 and sit with the Treasury people for 15 minutes, the purpose being - I'm thoroughly dissatisfied the way we're getting the information on funds going to German, Italian and Russian Embassies. Hello? B: Yes. H.M.Jr: Hoover has got the investigative force, he's not getting what we need, and I wanted you to sit on my side of the table for 15 minutes when I'll show you what we have and then what we want. B: I'll do that with great pleasure. H.M.Jr: And of course the whole question is the funds and then the next question is the question of propaganda. B: Sure. H.M.Jr: And I know you're interested in this and it's perfectly disgraceful the way the thing has been messed up. B: Well, as you know, I've been worried about that for a long time even to the point of wondering whether we ought not to block all funds merely for the privilege of looking at them. I'll be there at 10 o clock. H.M.Jr: If you could come and then, for instance, say sit on my side, and then I have suggestions to make to Hoover what we need and, by God, he's got to get it or else. B: Well, there certainly is no adequate knowledge of how those funds go. There ought to be 33 -5something that matches up with the information which the banks undoubtedly have and the ultimate destination of those funds. H.M.Jr: Well, he gives us what he gets and it's just it's just childish and for us to sit here and let all these funds flow there and have no idea of what disposition is made of them B: H.M.Jr: Well, I think that's entirely right. And I'm getting in on it purely from the standpoint of the banks, but I also could let my imagination work. B: (Laughs). It sometimes is a useful and dangerous faculty. H.M.Jr: Right. B: All right. Good-bye. 34 If September 26, 1940 10:40 a.m. Merle Cochran: Hello. Yes, Mr. Secretary. H.M.Jr: Berle just talked to me, and the Argentinians want us to release $1 million - no, the French want us to release $1à million to the Argentinians to buy beef in Argentine for the prisoners in Germany. Fine business. C: Yes. H.M.Jr: Now, Berle was not familiar with this $31 million deal which we had cleared, and please give him a formal memorandum on it. C: H.M.Jr: All right. So that the two things - he didn't seem to know about the other - I don't know why. C: I see. Well, did he recommend anything on this $1à million? H.M.Jr: He recommends that we do it. C: I see. That was up yesterday in our Committee. H.M.Jr: C: Well, I didn't know that, but I wouldn't do that - I want both the pieces of the whole Argentinian picture put together for me so I can bring it up in Cabinet and the whole French thing as the French thing affects them, you see. In other words, I won't do anything until Cabinet tonorrow, but if you could have it all together. He didn't give you a reply on the diplomatic expenditures, did he? I was talking with Atherton yesterday on that. H.M.Jr: C: No. He didn't know that the President had told Mr. Hull to negotiate with Martinique to get a release on the planes. oh, is that so? 35 -2H.M.Jr: He didn't know about it. C: Because Atherton was calling me about it yesterday and I said, well, it's up to you people and he said he'd speak to Berle again. H.M.Jr: He did not know; I told Berle; Berle only knew about it the first time. He didn't know that the President told Hull to get those 50 planes. Now he knows it. C: H.M.Jr: I see. My God Almighty! I mean, it's - I don't know how they work. C: H.M.Jr: Not much coordination, that's a certainty. But put the two things together - whatever business we have with the Argentine and the French and get it in a joint memorandum so I can bring it up at Cabinet. C: All right, sir, I'11 attend to it. H.M.Jr: And I think it would be a nice thing if we could - I got it, I would send it over to Mr. Hull in advance, you see, with a little note and say I'm going to bring it up in Cabinet. C: All right. So that's for your meeting tomorrow. H.M.Jr: Right. C: I'11 get it up today. H.M.Jri Thank you. C: All right, sir. 36 September 26, 1940 3:18 p.m. H.M.Jr: Hello. Operator: Mr. Crane. Jay Crane: Hello, Mr. Secretary. H.M.Jr: Jay, Sir Frederick Agnew just left here and I told him that I was very much disturbed from the standpoint of the whole picture, oh, it looked as though they didn't have the dollars to go around C: Yeah. H.M.Jr: and that I just didn't understand it and 60 he said he wanted to ask my advice and, boiling the conversation down, did I think that this was something that he should keep out of. So I said definitely that this was something for the British Treasury to do - taking a look at the whole situation, not from one commodity, and that if it got around that they were running short of dollars they might have difficulty getting contracts signed for munitions. And so he said, well, he'd take my advice and he's going to drop the matter and refer the whole thing to the British Treasury, and he's going to see you in New York. C: Oh, he is. H.M.Jr: Yes. I asked him to. C: Yeah. H.M.Jr: But for the time being the matter is killed, until I hear from the British Treasury on the whole picture. C: You want them to be on the whole picture. H.M.Jr: No, I don't want oil to get a piece of it any more than on steel, but if the British Treasury haven't got enough dollars, why then I want them to tell me about it. 37 -2C: Yeah. H.M.Jr: And I don't want it to come through on oil. C: You want the whole picture. H.M.Jr: The whole picture. C: Yeah. H.M.Jr: So Agnew said that he was just trying to other words he was being a little Scotch and that he thought you were over-alarmed, that he was just sounding things out. Well, 80 he's withdrawing the whole thing. make the thing go a little bit further, in C: He is? H.M.Jr: Yeah. C: H.M.Jr: C: H.M.Jr: Well, that's fine. Well, then he's going to come in and see us here. He's going to see you personally, and so for the time being the thing is dead, until the British try to rearrange it themselves. Yeah. How did he take that - all right? Well, he asked my advice, and that was my advice. He said thank you, and he realized he had made a mistake. But he said two or three times he thought you took it too seriously. C: H.M.Jr: Yeah. Well, that's fine. The conversation was very, very pleasant; there were no feelings. C: Yeah. Well, he's an awfully nice fellow. H.M.Jr: Yes, he is. But that's that, and if it's raised again let me know. C: Yeah, I will. Now, if I may, I'll let you know after I've talked with him, if there's anything comes up. 38 -3H.M.Jr: Right. C: We'll see what he has to say. H.M.Jr: Yeah. While I've got you on your phone, ask your people how they are getting along with that - the negotiations with the Dutch East Indies. H.M.Jr: Yeah. I'11 get the last word on that. Will you? Get the last word on it and I'd C: Yeah, O. K. H.M.Jr: Thank you. C: Thanks very much. C: like to know. 39 GRAY JT BERLIN Dated September 26, 1940 Rec'd 3:42 p.m. Secretary of State, as ington. 414C, September 26, 4 pain. Referring my 2171, June 28, 1 p.m. German authorities again report no information available regarding Leroy-Beaulisu, KIRK TFV 40 September 26, 1940 9:30 a.m. GROUP MEETING Present: Mr. Bell Mr. Thompson Mr. Young Mr. Graves Mr. Foley Mr. Schwarz Mr. White Mr. Haas Mr. Gaston Mr. Cochran Mrs. Klotz H.M.Jr: Cochran: H.M.Jr: Now, would you glance through these things, please, Merle, and pick out of these the things I should do before I see the Argentinian? We will just make him wait. Yes, sir. Herbert, one of the things that I was thinking about during the night, are these people in Coast Guard still down there on ship movements? Gaston: Yes. H.M.Jr: Don't you think we could move that whole thing Gaston: back over to Coast Guard? It has gotten to be very routine, hasn't it? It is quite routine. The only problems we have are shipping to the Orient and Spanish ships and Esthonian and Latvian and 80 on. I work with him almost exclusively by telephone. H.M.Jr: You do? Gaston: Yes. H.M.Jr: Then give orders to move the thing over to 41 51 -2become an integral part of Coast Guard, if that 1s agreeable to you. I mean, it was all right while it was difficult. Gaston: We have made it a part of the Coast Guard organization. It was just a matter of physical moving. H.M.Jr: You are tying up a lot of important offices downstairs, and I think they are less important. The really important men - they could, you know, let it get down to one important office. Gaston: We can get them out of there in a day or two. It 18 just a matter of moving teletype con- nections. H.M.Jr: I think as of Monday I would rave it over in Coast Guard and release some of those men like Commander - what is his name? Who would be the one man you would want to watch it? Gaston: Derby could handle it. He 18 handling the Captains of the Ports, but he can have help enough to handle it. We can handle it now mainly by warrant officers. We don't need these - a warrant officer setup could handle it entirely. We just released one man, a commissioned officer, the other day. H.M.Jr: Now, what I thought I would do 18 this: In connection with this work of trying to find out how much German and Russian and Italian Gaston: H.M.Jr: expenses are, I had a few minutes' talk with Klaus. He saye we really have nothing. That 18 true. So I thought I would invite J. Edgar Hoover to come over and talk to me and explain to him what I wanted and then have you here and have Klaus here and tell him what we need, and then ask him whether Klaue couldn't work with somebody he designated to really get the stuff. 42 -3 Gaston: We had a call from the State Department, Collado, here a couple of days ago. They were interested in these figures and wanted to know if anybody 18 getting them. We told them it wasn't our responsibility. H.M.Jr: What figures? Gaston: On the foreign balances, primarily German and -What is Collado working on that for? H.M.Jr: Gaston: H.M.Jr: Well, somebody in the State Department apparently asked him to find out. I suppose the State Department has an interest in it, too, but the thing is sort of falling between two or three organizations. Nobody is really handling the subject. Nobody 18 doing a comprehensive job on it. Well, I am going to ask, if Mr. Hoover is in town, to have him come over tomorrow. I want to tell him what I have in mind, see. You be here. Gaston: White: Yes. Would you like to have Harry -No, I was wondering before you have that if you would like to have a little report of what we have up to date. H.M.Jr: We will do that from 10 to 10:15. White: We will bring together what we have, because we have had a man working on it. Gaston: Can I get together with you today, Harry, on tha t? White: Yes, make it late, before I come in tomorrow, say. H.M.Jr: Well, why don't you fellows bring me up to date at 10 tomorrow, and then I will see Mr. Hoover at 10:15? I think I had better talk to him and put Sam in touch with him and he might want to use Sam, but from what 43 4- Sam tells me, he says it is just a joke, that he doesn't get the information. White: Our man reported on a different group of materials, from which he was working on, similarly that it was most inadequate, that their approach was very partial and very inadequate and very superficial. H.M.Jr: I don't want to dig up the information, but I want to tell Mr. Hoover what I want and then let him do it. White: I think we will be able to give you that at 10 Gaston: They take certain specific cases and chase them all around over the map, but nobody is surveying H.M.Jr: tomorrow, what are the areas which are not appropriately covered. the whole thing from a statistical point of view. When we talk at 10 I want Merle to sit in on this, because you (Cochran) have been seeing these fellows, and Bell, will you be in 80 that you know what I am doing in case I should be sick or something, see, 80 sit in with me, but Merle has been seeing these people, haven't you? Cochran: Yes. H.M.Jr: But from two minutes I had with Sam Klaue, it 18 just a joke, and nobody knows how much money these agencies are spending for propaganda purposes or anything else. It is the most superficial thing. The responsibility is Hoover's, and I want to tell him about it, and then get him busy. Cochran: White: On that Collado matter, I don't know whether he spoke with Mr. Gaston also, but he spoke with me once and I told him we were doing certain things and to not start any new investigation on their part. Isn't that a matter that Mr. Berle was very interested in at one time? 44 -5H.M.Jr: Gaston: It is like all of these things. When you get into them, they are sloppy, the thing isn't tied up. Mr. Hoover sends over a stack of stuff of the various bills that he runs down, and it is just meaningless. But it is his reeponsibility, but if I talk to him privately, I think I can get results, but I want to show him that the thing is just a joke. I don't know that it is entirely his responsibility. I think the investigation probably might be his, but it is not necessari ly espionage. I think there is a State and Treasury angle to it. H.M.Jr: Is there? Gaston: I think 80. White: I was wondering why you might not have Mr. Berle or his representative here, because they undoubtedly were very interested in it formerly. In fact, that was one of Berle's chief interests in the imposition of funds when he wanted control over the expenditures for propaganda purposes in Latin America. H.M.Jr: Suppose I have Berle here at 10 and let him sit in? White: I think so, because he thinks we are getting more information by foreign exchange control than we have hitherto made an attempt to get by virtue of the activities of the FBI. H.M.Jr: Are we all together? Gaston: Yes. H.M.Jr: Bell, you sit in, see. All right. You had better sit in, too, Harold. You're a pretty good detective. We will get you in on this thing if you are not too busy. I don't Bell: H.M.Jr: know what you are doing, but sit in on it, anyway, and you might sit in today and find out what goes on. 45 -6White: I will -- H.M.Jr: Get in on it today, and I may ask you to kind of father this thing. Where were we? Gaston: We weren't anywhere. You hadn't started. H.M.Jr: I just thought I would take up these things. Herbert? While I am at it, I'm just warning you (Young) at 11:15 Purvis is coming, and I am going to unload heavy. Either he or the Embasey has just given me partial information. If that is the way they can treat me, they can take the whole stuff and run it themselves. I am not going to be treated that way by the English Government. If they don't want to tell me what they are doing in this country, they can have the whole thing. It is a lovely time for me to withdraw, and I am just going to tell him that. I can not go forward tomorrow and make this big fight tomorrow when I only get half the stuff. If the Embassy doesn't tell Purvis and doesn't tell me - I have given them a year and a half of the best of my life, and if they don't want to keep me informed, they can take it and let the Embassy and Mr. Purvis go on their own way, but this would be a beautiful time for me to withdraw and I am going to tell him so. The stuff that General Strong told me last night, I am not getting the information, and over in England if they want to have four people doing the same thing, that is their business, but they can't treat me this way. I am not going to be treated that way. Do you know Walter Layton? He 18 an Economist. White: He is a what? H.M.Jr: Did you know that he 1s supposed to be England's leading Economist? White: He 16 an Economist, but far from their leading Economist. 55 46 -7H.M.Jr: Give me a memorandum on it, because from what General Strong tells me, for them to send a man over at this time is just outrageous, to send him over as a great man on production. White: I will give you a little write-up. H.M.Jr: General Strong asked him a very simple question White: as to what their productive capacity was, and he treated General Strong as though he was a schoolboy with a very limited education. To send him over here at this time - 1f they have to do it for political reasons, unload a man like that on us, it is outrageous. Well, he is not an incompetent, but he is far from their best. H.M.Jr: Would you pick him as a man to come over here White: Not unless there are some political reasons H.M.Jr: I believe during the World War he was secretary and tell us -- for it. to Lloyd George. If they are doing this to placate Lloyd George, I am not going to get mixed up in it. Cochran: Since then his work has been principally economic. He was editor of the Economist and the British have used him on some international conferences as their representative. White: He is more of a publicist. Well, he is coming over here - am I right, Phil - as a great authority on production H.M.Jr: and machine tools and what not. Young: No, I don't think that is correct. I don't think they ever set him up to be a production man. H.M.Jr: Wait a minute, don't - please. General Strong said that and General Strong saw him over there. He is the man to tell us what England can do 47 -8- and what they can expect us to do. Young: White: H.M.Jr: Young: H.M.Jr: Well, that might be. He may have been doing that in the last year. That is what they told him in England and that is what he told General Strong. That was not Purvis' point of view on it, however. Well, that is what they got right at the top, that he was coming here and this was England's needs and they are going to tell the United States to produce. Well, he couldn't get him off to a worse start and certainly with me well, for three hours, I never spent a more interesting evening or got more information. He certainly put all of his cards on the table, and Strong wants to help the English, but the best way I know to help them would be putting Walter Layton on the boat and send him back again. I mean at this time to do things the way they are doing it, I am not going to I mean, to treat Strong the way they have and to treat me this way - I mean, they just can't do it and I'm not going to let them do it. If any body wants to see a beautiful layout, let them have Thompson take them downstairs to what he has done. He has done one of the nicest jobs. And whoever helped you, I wish you would tell them. White: Layout on what? H.M.Jr: Foreign funds. Have you (Bell) been down? Bell: Yes. H.M.Jr: Do people, outsiders, get in there? Would it be any harm in putting it on the door that this 18 the French door and -- Thompson: I think that would be nice, because people 48 -9who come in are taken by messengers into the rooms. Professor Chamberlain asked that we fix a per diem to cover his railroad expenses. I have one other matter here. We have in the Income Tax Bureau an Auditor by the name of Cottrell, who has spent much of his time in helping Senators and Congressmen prepare income tax returns. He was up for retirement a year ago and Speaker Bankhead spoke to the President and the President told you to arrange for an extension. Now he wants another extension, and Mrs. Norton informed me yesterday that Sam Rayburn wished you to be advised he would like an extension granted. H.M.Jr: How old is the man? Thompson: He is 71 now. Mr. Helvering will not recommend H.M.Jr: It may be good to have a new man go up there it. and look at the Congressional income tax returns. Thompson: They do have another man up there who can do better work than this man. H.M.Jr: A new man, is he, to look at Sam Rayburn's returns and everybody elses? Bell: Here is kind of a closing nctice for tomorrow night. We got 150 million yesterday, which is very good for the first day. H.M.Jr: Bell: I thought we had a swell press. I was amazed at all that stump speech political stuff, claptrap that I gave them, that they ran it. Federal Housing wants to call about a million 300 thousand of their debentures for payment January 1st. H.M.Jr: I had one good laugh today, anyway. I was talking to Dr. Harry White on the telephone 49 - 10 and I said, "What did T. V. Soong have to tell you?" He told me about the scheme that they had worked out, how they fixed this and that, but at the end it would come out of the Stabilization Fund. I said, "That is very interesting. Dr. White said, "Would you like to have me dress it up for you today?" I said, "That is just the trouble; by the time you get through dressing it up, I won't recognize it." White: It was an unfortunate expression. H.M.Jr: It was youre. White: I know. Bell: The market went up pretty fast yesterday, and Ransom called me late last night and wanted to know what your feelings would be on them selling a few of their securities, while this issue was open. H.M.Jr: What did you tell him? Bell: I told him I would talk to you about it this morning. H.M.Jr: You tell Ronald Ransom to sit still and do nothing and be a good boy until Saturday. Bell: They are afraid it will go up -- H.M.Jr: Okay. Tell Ronald Ransom I am sending that message as one Democrat to another. I hope that Georgia is in the right column - he is the right kind of a Georgia Democrat. You can talk to him and tell him what you think he should know, but tell him to do nothing until Satuday. Bell: That is all I have. H.M.Jr: Now, who is sitting in with me on Argentine? Before you see him, let me mention something. The State Department called up -- White: 50 - 11 - Are you (Bell) in on this? H.M.Jr: Excuse me. Bell: I haven't been. I saw him Saturday, as Harry said, at dress rehearsal. Well, you had better. You and White and Cochran. All right? H.M.Jr: White: H.M.Jr: May I tell you this before you see him, because -Oh, you are staying. The rest of you are excused. 51 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE September 26, 1940 TO Secretary Morgenthau FROM Mr. Cochran STRICTLY CONFIDENTIAL At 10:00 this morning the Secretary received the Argentine Ambassador, by appointment. Messrs Bell, White and Cochran were present. The Ambassador stated that he desired to discuss the matter of the Argentine Government sending a representative to Washington for the purpose of having conversations with Secretary Morgenthau. The Ambassador stated that it was contemplated that the Governor of the Central Bank of Argentina, Mr. Prebitch, should make the trip, provided this would not require a protracted absence from Argentina. The Ambassador inquired whether the coming elections in the United States would be a possible cause of delay in negotiations or would make the period from October 10 to the end of the month unpropitious. The Secretary stated that as far as he was concerned the negotiations could be undertaken without any reference to our elections. Whenever Mr. Prebitch or any other representative from the Argentine might arrive the Secretary would be glad to expedite negotiations. The Ambassador stated that it would help very much if the Secretary could provide him with an agenda suggesting the subjects which the Treasury Department would desire to discuss during the visit of the Argentine representative to Washington. That is, the Ambassador wanted to provide this representative with sufficient information to let the latter know the probably scope of the conversa- tions, and come accordingly prepared. The Secretary promised that an agenda would be ready by this coming Saturday. The Ambassador desires to telephone this to Mr. Prebitch on Saturday noon, since the latter will presumably be flying to Rio de Janeiro next week with Minister of Finance Pinedo. If Prebitch is to come on here he will fly directly from Rio. In discussing the working out of an agenda, the Secretary mentioned specifically one point which he wished included therein. He asked that the Argentine representative come with information in hand as to British investments in Argentina. He was also interested in the Canadian investments in Argentina. During the visit, the Ambassador mentioned that he had received this morning A reply to the message which he had sent to Argentina at the request of the Treasury seeking additional data to support an application for a license for the payment of certain amount of dollars from French account in the United States to Argentina for the settlement of a balance due from France to Argentina on account of products purchased in the latter country. The cablegram had not been completely decoded when the Ambassador came to the Department, so the Ambassador promised to deliver it to Mr. Cochran this afternoon. At 4:15 the Argentine Ambassador handed to Mr. Cochran the attached memorandum. Incidentally, the Ambassador mentioned that shortly after his return from the Treasury to his Embassy this forenoon, one of the press associations telephoned him 52 - to learn what his conversation had been about at the Treasury. This correspondent intimated that he understood from the Secretary's press conference that the subject of foreign exchange had been discussed. I read to the Ambassador the Dow Jones report of the Secretary's press conference, which did not mention the Ambassador or Argentina. I also called Mr. Schwarz while the Ambassador was here. Mr. Schwarz stated that one of the correspondents had been aware that the Ambassador was here and had raised the question of his visit during the conference. The Secretary had admitted that the Argentine Ambassador had called, but referred his inquirers to the Ambassador for any comments upon the visit. I told this to the Ambassador who informed me that his reply to the press had been that he is calling frequently at the Treasury to discuss our common problems, including blocked funds. He has given no intimation of the coming visit of an Argentine representative. He knows that this cannot be kept secret indefinitely, but hopes to reach with us the basis of proper press communique before the representative arrives and before any other information is given to the press about the coming visit. B m.g. a 53 0PY Embajada de la publica Argentina MEMORANDUM The Argentine Ambassador presents his compliments to the Honorable Secretary of the United States Treasury and has pleasure in answering the points of the Memorandum Re: NY 49001 of September 12th, 1940: 1. Date of Accord? -November 23rd, 1939. 2. Does the use of the word "balance" imply that this is the final payment? -It is not the final payment of the account. It is the amount in French france which, in accordance with the Accord, the Argentine is entitled to receive in dollars. 3. Details of Accord as to payment in dollars? -The Accord stipulates that: a) The interchange with France is transacted in French francs, through the medium of a Special Account opened in the Bank of France in the name of the Banco Central. b) The suns exceeding 500,000,000 French francs in favor of the Banco Central shall be converted into dollars immediately upon exceeding the said sum. c) If the Argentine exports to France during a semester should not reach the sum of 1,500,000,000 French francs, the 54 -limit of 500,000,000 convertible into dollars, as set down in point (b), shall be deducted proportionally the following semester. 4. Over what period of time have exports under reference been sent to France? -First semester of 1940. Argentine exports to France reached the sum of 1.071.000.000 French france and to ascertain the balance not convertible into dollars it must be reduced to 357,000,000 French france the second semester. As the balance of the account of the Banco Central in the Bank of France amounted to 522,000,000 French francs in favor of the Banco Central, the difference of 165,000,000 French france is due to conversion into dollars, the equivalent being USS 3,701,411.29. 5. Nature of exports? a) Are they of Argentine origin? b) If re-exports, where did they originate? -It relates exclusively to Argentine products of our regular exports. There are no re-exports. 6. Have all shipments been made? a) Date of latest shipment? -All the shipments concerning the sum of 1,071,000,000 French francs of the exports of the first semester have been made. The last shipment was made on the 15th. of June 1940. Honorable Mr. Henry Morgenthau, Jr., Secretary of the United States Treasury, Washington, D. C. Washington, September 26th, 1940. 55 RESTRICTED G-2/2657-220 M.I.D., W.D. September 26, 1940. SITUATION REPORT No. 204 12:00 M. This military situation report is issued by the Military Intelligence Division, General Staff. In view of the occasional inclusion of political information and of opinion it is classified as Restricted. I. Western Theater of War. 1. No ground operations. 2. Air Force Operations. In daylight of the 25th the German Air Force operated extensively over southern England and in force in the Bristol area. There they claim to have bombed the aircraft factory at Filton. Raiders were over the London area all night. The Royal Air Force conducted night raids against the "Invasion Ports", railway yards in Belgium, Holland and Germany and against Berlin. The alert in the German capital lasted five hours. II. Mediterranean and African Theaters of War. 1. No ground operations reported from Egypt. The British-"Free French" force has withdrawn from before Dakar. 2. Incomplete information indicates the continuance of heavy British air attacks on Tobruk and widespread sporadic activity by both sides throughout the theater. Gibraltar was bombed again, presumably by French planes. III. Far East. Sporadic fighting continues between French and Japanese in Indo-China, concurrently with negotiations concerning the official and peaceful entry of the Japanese into the colony. Haiphong was bombed this morning. French colonial officials are increasingly, but perhaps temporarily, defeatist. RESTRICTED 56 CONFIDENTIAL SPECIAL BULLETIN MILITARY INTELLIGENCE DIVISION, No. 17 G-2/2657-231 WAR DEPARTMENT, Washington, September 26, 1940. NOTICE The information contained in this series of bulletins will be restricted to items from official sources which are reasonably confirmed. This document is being given an approved distribution, and no additional copies are available in the Military Intelligence Division. For provisions governing its repro- duction see Letter TAG 321.19 M.I.D. (8-16-40) M-B-M. FRENCH ARTILLERY, ANTITANK, AND ANTIAIRCRAFT WEAPONS SOURCE The information contained in this bulletin came from an official British summary of French equipment, dated July 25, 1940. Great importance was attached to the summary since, as a result of the defeat of the French Army, it was expected that the equipment might be used by the Axis powers against the British. CONTENTS 1. PARTICULARS OF ARTILLERY AND ANTITANK WEAPONS 2. ANTIAIRCRAFT ARTILLERY a. Notes on Fire Control Instruments b. Particulars of Guns CONFIDENTIAL -1- 57 CONFIDENTIAL I. PARTICULARS OF FRENCH ARTILLERY AND ANTITANK WEAPONS Serial Cali- Nomenclature Type ber Muzzle Weight Maximum Range in in Cali- Velocity in Feet of Shell in Pounds Yards bors Per Sec- Length of Bore Eleva- Depres- tion sion Traverse Rifling Weight in No. of Twist Action 6°10' 1,050 15a. Remarks Grooves and 1. 2. 3. Anti- 25 - Semi- (.985") Automatic Model tank 30° at 400 yds. 60 - plate 1934 Gun at normal at 100 yds. 25 mm. SeniAutomatic Model Anti- 1935 Gun 37 mm. 37 - Semi- Infan. (1.45*) Automatic 25 m. (.965*) 64 3,000 50 3,000 17 1,200 .70 11,200 15° 5° 60° 12 This is a shortened 25 - model 1934 used on armored cars. tank 1.23 Most accurate range for this gun is said to be 1,100 to 2,600 try 1,300 yds. Gun 4. 37 - 37 - Rapid (1.45") Fire Model 1916 Anti- 21 1,970 0.86 17° 80 34° 12 6° 240 lbs. tank 37 - 37 - Semi- Tank (1.45") Automatic Model Gun The original weapon, with mustle velocity of 1,300 f.s. was issued as an Infantry Gun 5. Penetration 40 - plate at 25 - support gun. 21 1,970 20° 1.1 16° 30' 1918 and Model 1918, Modified 12 6° 158 lbs. The modified model is used on the Renault Hotehkiss and F.C.M. tanks. These guns fire the same ammunition as the 37 mm. Rapid Fire Model 1916. 1937 General Notes: (1) With the exception of the 25 - the 37 - and the newer 47 - antitank guns, and the new 75 m. entitank-field gun, the French employed most entirely artillery weapons developed before and during the World War. Other exceptions were the 1050 1935B and the 1050 19348 howitzers. In some of the remaining equipment, carriages had been modified. (2) For antitank guns, the French used solid shot almost exclusively. The 37 mm. and 47 - modern equipments fired solid armor-piercing shot with ballistic cap, as did the 75 - gun. The 25 - Hotchkiss antitank gun fired solid shot with and without tracer, but it was intended to use in the future only armor-piercing shot with tracer. CONFIDENTIAL -2- 58 CONFIDENTIAL I. PARTICULARS OF FRENCH ARTILLERY AND ANTITANK WEAPONS (Continued) Serial Cali- Nomenolature Type ber Length of Bore in Calibers Muszle Velocity in Feet Per Sec- Weight Eleva- Maximum of Shell Range in in Pounds Yards tion Depression Tra- Rifling Weight verse Remarks in No. of Twist action Grooves ond 6. 37 (1.45") 37 - Semi- Tank Automatic Model 1938 Gun 30 2,300 1.54 200 170 10 12 70 690 lbs. This weapon was intended to replace the armament of the Rensult Hotohkiss and F.C.M. (Forges at Chantiers de la Mediferrannee) tanks. Penetra- tion: 40 - at 400 yds. at normal 30 - at 400 yda at 30°. 7. 37 - 37 Casemate Mod- Anti- (1.45") el 1934 tank 50 2,680 1.98 250 150 430 12 7° 1,100 lbs. Gun A cartridge, enabling an armor- piercing shot with ballistic oap weighing 1.98 lbs. to be fired, was believed to be under develop- ment. 8. 47 - 47 Naval Model Anti- (1.85") 1902 tank 2,260 4.4 2,800 3.8 Mounted as an antitank weapon in fortified positions. Gun 9. 10. 47 - 47 Casemate Anti- (1.85") Model 1934 tank This model with deepened rifling was mounted in fortifications. Gun Marked with an "A" on breeching. 47 (1.85") 47 Casemate Anti- Model 1934 tank 50 50 2,260 10° 10° 4.4 15° 150 450 45° 2,200 lbs. 2,200 lbs. Gun Employed only in fortifications. It is known as the 47 "with nondeepened rifling' and it in beloved was being modified to use the same ammunition as Serial 9 above. 11. 47 - 47 - de Char. Tank (1.85*) Model 1935 Gun 27.6 2,160 20° 3.56 CONFIDENTIAL -3- 150 750 lbs. Chief turret armament on the Char B and Souma tanks. 59 CONFIDENTIAL I. PARTICULARS OF FRENCH ARTILLERY AND ANTITANK WEAPONS (Continued) Serial Cali- Nomenolature Type Length of Bore ber in Calibers Mussle Weight Maximum Eleva- Depres Velocity of Shell Range in tion sion in Feet in Pounds Yards Rifling Traverse Remarks in No. of Per Seo- Weight Twist Action Grooves ond 12. 47 - 47 - Model Anti- (1.85") 1937 tank id Shot Gun Capped). 50 3.8 (Sol- 2,800 5,500 130 16° 2,310 lbs. 68° Penetration: 60 m. at 30° at 600 yds.: 80 - at 15° at 200 yds. This gun is believed to be used for antitank defense in fortifications on a twin mounting as well as on normal wheel mountings. 13. 47 - 47 - Model Anti- (1.85*) 1939 tank 3.8(Solid Shot Gun Capped) 50 2,800 5,500 150 Penetration as for Serial 12. 45° 5° Pneumatic tired wheels. on when 360° on 3-Armed Mounting 14. 65 - 65 - Model Mount- (2.56") 1906 ain 16 8.75 1,080 7,000 35° 10° 6° 24 7° 900 lbs. This gun fires both shrapnel and high explosive shell. It can be carried in 4 packloads of 230 lbs. Gun each. 15. 75 - 75 Model 1919 Mount- (2.95") Model 1928 ain 13.4 1,310 14 30.5 2,050 12.5 9,600 40 10° 14,000 180 11° 10° 24 8° 1,540 lbs. Fires both shrapnel and high 1.25 tons The range quoted is with new streamlined shell. The maximum 1918 explosive. Carried in 7 loads. Gun 16. 75 - 75 - Model Field (2.95*) 1897 Gun (Steel Ballistic Cap 6° 24 7° high explosive high range shell explosive with is Model 11,400 yds range with shraphel is 7,700 1938 yds. Shel CONFIDENTIAL -4- 60 CONFIDENTIAL I. PARTICULARS OF FRENCH ARTILLERY AND ANTITANK WEAPONS (Continued) Serial Cali- Nomenolature Type ber Maximum Eleva- of Shell Range in tion in Pounds Yards Length Mussle Weight of Bore in Cali- Velocity in Feet bers Per Sec- Depression Traverse Rifling Weight Remarks in No. of Twist Action Grooves and 17. 75 (2.95") 75 Model 1897, Field Modified 1933 Gun 30.5 2,050 1.5 tons 12.5 14,000 14 (Steel This gun fires the same ammunition as the Model 1897, and the same tic Cap Shell, piece mounted on a modernized 45° 5° 55° 24 7° Ballis- remarks apply. It is the same carriage. Solid armor-piercing shot weighing 14.1 pounds is employed for antitank use. 1938) 18. 75 - 14 (Ar- 300° Heavier tank mor. on 3- than the Field Piero- Armed 75 Model Gun ing Mount- 1897/35 to fulfil both antitank Solid ing Field Gun at Serial and normal field gun roles. Shot) when used as 17. Anti- (2.95") 2,100 Prototype completed successful trials in March, 1940. An entirely new model by Bourges Antitank Gun 19. 75 (2.95") Long Tank High Explo- (Armor- Gun sive Piercing 30° 14 Solid Solid Armor- Shot 10° Used as mobile artillery. Mounted in hull of the Somua tank, arnored on a 40 - basis and capable of a road speed of 18.7 m.p.h. 32 of these equipments 12° exist. Piercing Shot, 1,940 f.e. 20. Mounted in standard Somue tank. Short 75 m. (2.95") Tank Gun 21. 105 (4.14") 1050 1935B (Manufactured by Bourges) Howit- 11 1,450 34.5 11,200 50° 6° 53° 32 8° 1.6 tons The carriage is believed to be the same as the 75 Model 1897, Modified 1933. The accuracy of this piece is said to be excellent. zer The letter "C" stands for "court" (short) and indicates a length of less than 20 calibers. CONFIDENTIAL -5- 61 CONFIDENTIAL I. PARTICULARS OF FFENCH ARTILLERY AND ANTITANK WEAPONS (Continued) Seri Cali- al ber Nomenolature Type Length Muzzle Weight Maximum of Bore Velocity in Feet of Shell Range in in Calibers in Pounds Eleva- tion Depression Traverse Yards Rifling in No. of Per Sec- Weight Twist Remarks Action Grooves and 22. 105 - 105C 19348 Howit- (4.14") (Manufactured ser 15 1,525 34.5 11,200 50° 6° 39° 1.7 8° 32 tons by Schneider) 23. 105 m. (4.14") 105M Model 1919 and Model 1928 Mount- 12 1,150 26.5 8,500 43° 0° 9° 32 120 Considered a more robust equipment than Serial 21. .75 ain tons Howitser 24. 105 - 105L. 1913 Gun 22 1,800 55.2 (4.14") 25. 26. 27. 13,400 370 0° 60 40 2.3 7° tons 10' 105 - 105L 19368 (4.14") (Manufactured by Schneider) 120 - 120L Model (4.72") 1878 145 mm. 145 Model 1916 Gun Gun Gun 37.5 20.4 42 (5.71") 2,410 1,920 2,570 35 41 74 18,900 43° 30 13,800 38 19,700 0° 50 3.4 00 36 6° 00 42 360° 7° for motor traction. tons An old gun which may not be in use at the present time. 4 12.5 tons 50 13 Mounted on rubber tired wheels tons on Turn- The life of this piece is 3,000 rounds. It is then bored out to 155 - when it becomes known as 155L Model 1916. Table 155c 1917 (6.1") 29. 155 - Howit- 11.2 82 155L Model 1918 Gun 12,500 420 0° 6° 48 3.5 7° Life: 8,000 rounds. tons 20 (6.1") 30. 1,480 zer 1,980 82 15,200 40° 5° 6° 48 Life: 6,000 rounds. 7° tons 155 - 155L Model 1877 (6.1") 1914 Gun 20 1,990 82 15,500 40° 5° 5° 48 7° Life: 6,000 rounds. 6 155 m. 5 26. tons The letter "L" stands for "long" and indicates a length of more than 20 calibers. CONFIDENTIAL 62 CONFIDENTIAL I. PARTICULARS OF FRENCH ARTILLERY AND ANTITANK WEAPONS (Continued) Seri Cali- al ber Nomenclature Type Maximum Length Muzzle Weight of Bore Velocity of Shell Range in In Feet Per Sec- in Pounds Yards in Cali bers Eleva- Depres- tion sion Tra- Rifling Weight verse Remarks in No. of Twist Action Grooves ond 31. 155 - 155 1.1877 Gun 20.45 1,690 95.4 13,900 30° 0° 60° 48 7° 6.5 tons Life: 6,000 rounds. 8.75 tons Life: 4,000 rounds. on (6.1") platform 32. 33. 155 - 155L Model (6.1") 1917 155 - 155 Grand (6.1") Gun 24 2,180 95 19,000 400 5° 45° 48 7° Gun 29.8 2,380 95 21,300 35° 0° 60° 48 6° 11.2 tons Puissance Filloux (Long-Range Filloux Gun) A new design, the long-range Filloux gun adapted for high speed, is believed to have been adopted and may have been in production. The carriage is modified to give a maximum elevation of 39° and an average speed of 19 m.p.h. when towed by tractor. Its life is about 4,000 rounds. 34. 155 mm. (6.1") 155L Model Gun 37.8 2,590 95 6° 38 22,000 48 5035' 50 12.5 tons This is the 145 Model 1916 rebored. 360° 1916 on TurnTable 35. 36. 164 mm. 164 mm. Model Rail- (6.46") 1893, Modified way 1896 Gun 194 - 194 - Model Rail- (7.65") 70/93 way 2,540 110 19,600 400 3600 50 45 23.7 2,100 184 19,900 400 3600 38 Gun CONFIDENTIAL -7- 60 tons This is a naval gun on a allway mounting. 7° 65 tons 63 CONFIDENTIAL I. PARTICULARS OF FRENCH ARTILLERY AND ANTITANZ WEAPONS (Continued) Seri Cali- al her Nomenolature Type Length of Bore in Calibers Muzzle Weight Maximum Velocity in Feet of Shell Range in in Pounds Yards Elevation Traverso Rifling in No. of Per Sec- Weight Twist Remarks Action Grooves ond 37. 194 (7.65*) 194 Long-Range Gun 29.8 2,300 187 20,700 37° 360° LB 6° Filloux Gun 30 tons This equipment is mounted on a St. Chamond tracked carriage. In transport there are 2 tracked vehicles; the first carries a gasoline-electric generator set and the ammunition, while the second carries the gun. 39. 40. 220 - 2200 Model Howit- (8.66") 1916 zor 220 - 220L Model Gun (8.66") 1917 240 - 2L0 Model Rail- (9.45") 1884 way 1,360 221 12,200 650 27.8 2,500 226.8 25,000 37° 21 2,020 350 20,600 21 1,970 307 18,900 7 38. 7.8 tons Life: 6,000 rounds. 92 100 21° 92 7° 22 tons 38° 360° 72 7° 90 tons The gun carriage is mounted on two 3-axle bogies. 35° 14° 50 tone This is a coast defense gun mounted 6° Gun 41. 240 - 240 Model (9.45") 1903. Rapid fire Truck Mounted Gun or on a truck. Very few now exist. 280 Believed to be replaced by 220L. Rotating Base 42. 240 - 240 Model Howit- (9.45*) 1917 zer 21 2,100 352 20,500 CONFIDENTIAL -8- 38° 10° 84 6° 31 tons A platform-mounted gun which can be transported on 2 vehicles, tractor drawn. 64 CONFIDENTIAL I. PARTICULARS OF FRENCH ARTILLERY AND ANTITANK WEAPONS (Continued) Serial Cali- Nomenolature Type Length of Bore ber Muscle in Cali- Velocity in Feet bers Per Sec. aximum Eleva- of Shell Range in tion in Pounds Yards Weight Rifling Traverso Weight in No. of Twist Remarks Action Grooves ond 43. 240 - 240 Model 1893. Rail- (9.45") Modified 1896 way 30.83 2,760 357 26,000 35°, Gun Across Track Rail- Along Track 360° 72 140 tons Mounted on carriage with two 6-axle bogies. 160 tons This gun is worked on a curved track 80 to 100 motors radius. Some have been rebored to 265 - 16.25 tons This gun is also mounted on a 29°, 4h. 274 (10.8") 274 Model 1887 and Model 1917 2,580 45 522 26,300 82 5° 40 way Gun 45. 260 - 280 - Mortar zor (11") 46. 265 - Howit- 285 Model 1917 (11.2") Rail- 20° 1,370 LLCO 12,000 60° 38 2,420 595 29,400 40° 82 5° 160 tons This is the 274 - gun rebored. It is used on a curved track. 2,600 770 30,000 38° 90 40 182 tons Mounted on two 6-axle bogies. 30 4° 182 tons 2,820 693 37,000 38° 90 30 Mounted on same carriage as Model 1893, Modified 1896. 9.4 way tracked carriage similar to that of the 194 long-range Filloux gun (Serial 37). The weight of the vehicle equipment is 28 tons. Gun 47. 305 - 305 Model 1893, Rail. (12*) Modified 1896 way Gun 48. 305 - 305 Model 1906, Rail- Modified 1910 way Gun CONFIDENTIAL -9- 65 CONFIDENTIAL I. PARTICULARS OF FRENCH ARTILLERY AND ANTITANK WEAPONS (Continued) Serial Cali- Nomenolature Type ber Length Muzzle Weight Maximum of Bore Velocity in Feet of Shell Range in in Pounds Yards in Calibers Eleva- tion Traverse Rifling in No. of Per Sec- Weight Twist Remarks Action Grooves ond 49. 50. 320 m. (12.6") 320 - Rail- 320 Model 1870, Modified 1884 way and Model 1893 Gun 320 Model 1917 (12.6*) Rail- 30 2,100 850 23,600 40° 64 7° 163 tons Mounted on two 5-axle bogies. 35 2,260 850 29,200 40° 64 7° 178 tons Mounted on two 5-axle bog S. 26.5 1,900 1,020 20,000 40° 102 7° 187 tons Mounted on two 6-axle bogies. 35 2,420 1,020 29,400 40° 102 5° 187 tons Mounted on two 6-axle bogies. 43 2,860 980 36,400 37° 102 6° 270 tons Gun platform carried at each and by double 4-axle bagies. Length: 110 ft. 28.5 1,885 1,560 24,600 40° 112 7° 250 tons Each end of gun platform carried on double 4-axle bogies. 16 1,475 3,630 15,900 60° 168 7° 253 tons Gun platform carried at each and on double 4-axle bogies. All electric operation. way Gun 51. 340 - 340 Model 1884 (13.4") Railway Gun 52. 340 - 340 Model 1893 (13.4") Railway Gun 53. 340 - 340 Model 1912 (13.4") Railway Gun 54. 370 (14.6") 370 Model 1875, Modified 1879 Railway Gun 55. 520 (20.5") 520 Model 1918 Railway Howit. zor CONFIDENTIAL -10- CONFIDENTIAL 66 2. ANTIAIRCRAFT ARTILLERY a. Notes on Fire Control Instruments (1) General: French antiaircraft control equipment does not appear to be as comprehensive and up-to-date as that of the other great powers, and little recent equipment seems to have been produced. (2) Predictors: Very little information is available with regard to the types and the theory upon which the French based their calculations. A Brock predictor was produced shortly after the last war, but it is not known whether it is still in use or whether there was a later model. It is known that a type of predictor with electrical transmission was used, but technical details are not available. (3) Receiver Dials: These were on the vertical scale type as opposed to the circular scale type with the "follow the pointer" system which is in use in Great Britain. Coincidence was maintained by means of a mechanical pointer. (4) Fuze Setter: These were used on all heavy types of antiaircraft guns, but whether the predicted fuze was transmitted electrically or verbally from the command post is not known. (5) Height Finders: Two main types are known to have been in use; both were based on the coincidence system. These types were: (a) The Levallois No. 9 Mark 1, 5 meter base; (b) The S. O. M., 4 meter base. Transmission from the height-finder to the predictor appears to have been verbal. (6) Searchlights: The most recent known type was the 150 cm. 1939 model made by Messrs. Barbier, Banard, Turenne. (7) Sound Locators: Various types, principally models made by Messrs. Barbier, Banard, Turenne, were in use, CONFIDENTIAL -11- 67 CONFIDENTIAL II. B. PARTICULARS OF FRENCH ANTIAIRCRAFT GUNS Serial Type of Length Mussle Antiair- in Cali- Velocity oraft Gun bers in Feet Per Sec- Maximum Maximum Range in Vertical Yards Range in Effective Ceiling in Feet Feet 20 m. (.79") 70 1 20 - 2720 Weight. Weight Maker and of Pro- Rate of in in Year jeotile with High Fire in Action in Explosive Shells R.P.M. Pounds and 5,500 12,200 3260 Practical Use of Tracer Weight 7,000 .55 Tracer 140 7,000 .363 Tracer 140 Draft Oerlikon Hotchkiss 770 lbs. 2 (.79) 25 - Hotohkies 2950 7,850 16,400 10,000 .55 Tracer 120 1.2 tons 81 9,900 20,000 13,000 1.98 Tracer 2950 3960 2650 100 48 lbs. lbs. 60 2520 8,400 16,400 12,500 2.16 Tracer 60 2750 12,400 16,300 14,000 2.2 3 (.99") 37 - 4 (1.45") 37 - 100 5 40 - Tracer 80 4234 lbs. (1.54") Schneider 1938 1925 4234 1bs. Bofore 1936 Schneider 75 - 1926 7 (2.95*) 75 - 44 2460 15,200 29,500 22,000 14.3 No Tracer 8 (2.95") 9 75 - 49 2620 16,000 32,500 25,000 20 No 14.3 Tracer (2.95") CONFIDENTIAL .12= 20 Considerable use was made of these small caliber weapons. Hotchkiss 3157 lbs. (1.45") 6 Remarks 2.75 3.47 tone tons 2.7 3.5 tons tons Schneider 1932 Schneider 1935 The 75 was the chief heavy antiaircraft gun. All models are believed to have been based upon the 75 - field gun and mounted upon various types of antiaircraft platform 68 CONFIDENTIAL II. B. PARTICULARS OF FRENCH ANTIAIRCRAFT GUES (Continued) Serial Maximum Length Mussle Maximum Antiair- in Cali- Range in Vertical craft Gun bers Velocity in Feet Yards Range in Type of Effective Ceiling in Feet of Pro- jeotile in Feet Per Sec- Weight Use of Tracer with High Explosive Practica) Rate of Weight Weight in in Fire in Action Remarks Maker and Year Draft R.P.M. Shells Founds and Schneider 10 75 - 1939 (2.95") 11 75 - 90 - 40 2280 14,600 31,000 18,600 38,250 20,000 No 14.3 15-20 Tracer 2.4 3.5 tons tons 5.7 7.7 tons Puteaux 105 - are believed to have been 42 2675 27,000 24.8 No 15 tons Tracer gun and mounted upon arious types of antiairoraft platforms. Schneider 1939 There my also have been in existence some Before 80 - (3.12 in.) anti- (3.55") 13 antiaircraft gun. All models based upon the 75 - field (2.95") 12 The 75 was the ohiof heavy 45 2950 19,800 36,000 30,000 No 35 Tracer (4.14") CONFIDENTIAL -13- 10-15 6.5 tons Schneider 1926 aircraft equipments. 69 No. 124 AMERICAN CONSULATE Yunnanfu, China, September 26, 1940 SUBJECT: Recent Developments in Traffic Over the Burma Highway. The Honorable The Secretary of State, Washington. Sir: I have the honor to summarize herein for the Department's information recent developments with respect to traffic over the Burma highway as they have appeared to this office during the past two months, since the enforcement of the Burma embargo on exports of certain classes of goods to China. In the first place, it should be noted that despite the British contention that the road would be impassable in any case during most of the three month period of the embargo provided for in the Anglo-Japanese agreement, the highway has been continously in use at all times since July 18. On only one occasion has there been the slightest interruption of through traffic, which occurred on August 21, 1940, when heavy rains in the western part of the Province caused a landslide and washout near Paoshan ( ). According to reports, this required about a week to repair. The capacity of the road for truck traffic is believed to be potentially much greater than was predicted a year ago. The local agent of the Standard-Vacuum Oil Company, who had eighteen months experience at Dong Dang on the Nanning highway, visited Lashio just prior to the signing of the Anglo-Japanese agreement to institute the embargo and returned to Yunnanfu by motor car, making the trip from the border at Wanting ( ) in three days. He estimated the capacity of the road at about 20,000 tons monthly in intensive use, which is of course a truch larger volume of traffic than any yet achieved on this route. In this connection it may be pointed out that a number of eight and ten ton truck trailers have been successfully used for the past three months on the section of the highway from Paoshan to Yunnanfu. If the embargo should be lifted at the expiration of its term it is quite possible that the estimated maximum might soon be achieved, In operation the embargo on exports of gasoline from Burma to China has not had the severely restrictive effect on motor trans- portation that might have been expected. As noted in my Despatch No. 70 -2- No. 109 to the Department*, stocks of gasoline held by government agencies in China have been quite sufficient to enable them to carry on their normal transportation activities between Yunnanfu and the Burma border, which have accordingly continued. In addition, there are many Burma-registered trucks operating on this route which have been permitted by the Burma Government to take sufficient gasoline for a round trip to Yunnanfu and return. The number of such trucks is now estimated by a competent local observer at about 600, of which 200 are said to belong to the Southwest Transportation Company. The chief restrictive factor is the requirement of 3,000 rupees bond for the return of each truck within 30 days. Many Chinese merchants are said to be registering trucks in Burma for operation on the highway, and the number of trucks available on this route is steadily increasing. The Burma Government is reported to have liberalized the gasoline allowance considerably in recent weeks, and a report has just reached the Consulate to the effect that gasoline allowances will shortly be granted at the rate of 8 miles per gallon for destinations in China as far away as Chungking. This latter report has not been confirmed, but it is known that the recent liberalization of gasoline allowances will make available in most cases a small surplus of fuel for disposal in China. Another point to be noticed is that the shuttling of trucks across the frontier and transfer of fueld and cargo to other trucks for further transportation is apparently permitted. This is a factor of some significance when it is realized that there are a large number of diesel trucks in China, and that diesel fuel is not on the embargo list. Thus a gasoline-powered truck may take on a cargo of diesel fuel at Lashio and enough gasoline for the round trip to Yunnanfu and back; at Wanting, or some other point on the Chinese side of the border, it transfers its cargo and fuel to a diesel truck and returns to Lashio. But when the transfer has been made, the gasoline becomes the cargo and the diesel oil becomes the fuel, and thus it is possible to lay down a quantity of gasoline in China limited only by the number of diesel trucks available. Although no confirmation can be obtained, one estimate has it that 30,000 gallons of gasoline daily can be imported into China in this manner. It should further be noted that the Chinese Government has removed all restrictions on the importation and sale of gasoline (formerly under strict control), and appears to be actively encouraging snuggling. A "black market" for gasoline, which has long existed in Yunnanfu, has now come into the open and it is possible to buy fairly large quantities of gasoline, of course at a very high prices. One American contact of the Consulate reports that he was recently approached by a Chinese with an offer to sell 400,000 gallons. The ruling price in the "black market" (as it is still known) is said to be NC$33.00 per gallon, the equivalent of US$1.32 per gallon at rates of exchange now prevailing in Yunnanfu, *August 2, 1940, "Interview with Official of Southwest Transportation Company". Still 71 Still another point to be noted with reference to the motor fuel problem is the fact that the Southwest Transportation Company is reported to be installing in a number of its trucks special carburators designed for the consumption of alcohol. The local General Motors service man, who was sent out from Detroit more than a year ago, is supervising the change-over; he states that General Motors recently has developed a special carburetor for alcohol-consumption which will enable the trucks to operate as efficiently on straight alcohol as on gasoline. This of course has not yet been demonstrated in China; and the high cost of alcohol itself may not make the change really worth-while. As for the availability of motor trucks, it may be remarked that the steadily increasing number of vehicles in regular operation on the Burma highway represents a growing reserve on which the Chinese can draw both for the transportation of government stores inward and for the outward shipment of exports. The Ministry of Communications has been granted authority to commandeer motor vehicles in Yunnan, and according to reports is regularly exercising this right, taking a fixed pro- portion (one half) of all privately-owned trucks which cross the border into Yunnan. This releases both government-owned trucks and government fuel stocks for use else- where. Finally, it may be noted that the Burma highway is now vulnerable to Japanese air attack for practically its whole length. With bases in Indochina the Japanese can attack the western end of the road from Wanting to Paoshan, along which section large dumps of government stores are known to exist. Add to this the fact that there are a number of important bridges which might conceivably be destroyed (e.g. the bridges over the Salween and Mekong Rivers), and the future of the Burma highway as an important supply route appears somewhat doubtful even if the AngloJapanese agreement regarding the shipment of war materials is not renewed upon expiration. However, in view of the inability of the Japanese to hamper seriously by mere air bombardment transportation on the Nanning road, which was only about one hundred or one hundred and fifty miles from their bases, it is not believed that air bombardment alone can result in serious losses for the Chinese unless large storage dumps should be destroyed. Nevertheless, the Chinese are believed to be already seeking alternative routes. The Consulate has heard reports of construction work on a cut-off route to Szechwan ) and striking north to branching off from the Burma highway at Siangyun ( Heichang ( ) in Sikang. In August it was reported that importation of gasoline and other prohibited goods from India by way of Sadiya (in Assam) was under consideration; according to the local agent of the Standard-Vacuum 011 Company his organization was then seriously considering a trial shipment by this route. Dr. Joseph F. Rock, an American scientist who is thoroughly familiar with the whole region along the Yunnan, Indian, Burmese and Tibetan borders, states that in his opinion ) would be ( the construction of a highway from Sadiya northeast to Atuntze feasible; a caravan route already exists. Summary Contrary to the British statement that the Burma highway would in any case be unusable during the rainy summer season, traffic on the road has been interrupted only once, and then for a short while, since July 18, 1940. The number of trucks in use on the highway has steadily increased, since this is the one remaining route from the outside world to free China; the capacity of the highway is believed 72 than previously estimated. The policy to Burma-registered of the Burma be much greater liberal gasoline allowances not only foatered in non-prohibited goods into China has but has also made hauling commercial traffic by this route, quantitiesit government trucks to the granting negligible increasing small but nevertheless not required for of the possible into to import China in excess of the quantity actually goods. The use of gasoline the strictly commercial, non-prohibited accumulation of hauling in China has facilitated the embargo list. diesel as diesel fuel is not on imported trucks of gasoline, the gradual the number of commercially operated the trucks Chinese on Government route The increasing reserve of motor trucks on which and outward. The provides a growing transportation facilities, both inward one-half of can rely for of Communications is reported to be commandeering Burna. all Ministry the privately-owned trucks entering Yunnan from acquisition of air bases in Indochina attacks for practically makes the Burma highway is not believed likely to result in The recent This, vulnerable however, to their air by unless the an Japanese its whole length. of the Chinese transport facilities serious suffer important hampering should be destroyed, but the Chinese would dumps undoubtedly along the bridge material losses should any of the storage however, already great Yunnan be hit. The Chinese are, lessen the road in western to prepare alternative routes attack. in order to beginning vulnerability of their supply lines to Respectfully yours, Troy L. Perkins, American Consul. In sextuplicate to the Department, original and one copy by air mail. Copy to Embassy, Chungking. Copy to Embassy, Peiping. Copy to Commercial Attache. Copy to Consulate General, Shanghai. Copy to Consulate, Rangoon. 879 SCB:Epy A true copy of the signed original COPY ) 73 CONFIDENTIAL SPECIAL BULLETIN MILITARY INTELLIGENCE DIVISION No. 18 G-2/2657-231 Washington, September 26, 1940 WAR DEPARTMENT NOTICE The information contained in this series of bulletins will be restricted to items from official sources which are reasonably confirmed. This document is being given an approved dis- tribution, and no additional copies are available in the Military Intelligence Division. For pro- visions governing its reproduction see Letter TAG 321.19 M.I.D. (8-16-40) M-B-M. MISCELLANEOUS FRENCH EQUIPMENT SOURCE Information in this bulletin is from an official British summary of French equipment, dated July 25, 1940. Other French equipment from the same source has been summarized as follows: French Tanks and Armored Cars, SPECIAL BULLETIN NO. 12; French Defense Against Tanks, TENTATIVE LESSONS BULLETIN NO. 33; French Artillery, Antitank and Antiaircraft Weapons, SPECIAL BULLETIN NO. 17. CONTENTS 1. MORTARS 2. MACHILE PISTOLS AND SUB-MACHINE GUNS 3. RIFLES, AUTOMATIC RIFLES, AND PISTOLS 4. MACHINE GUNS 5. BRIDGING 6. ANTITANK OBSTACLES 7. EXPLOSIVES, FUSES, AND DETONATORS 8. MINES, TRAPS, AND ALARM SIGNAL DEVICES 9. FLAME THROWERS 10. ELECTRICAL AND MECHANICAL 11. FRENCH CHEMICAL WARFARE CONFIDENTIAL 74 CONFIDENTIAL 1. MORTARS The following are particulars of the mortars in use with the French Army: a. Brandt Mortar 27/31 Caliber: 81 mm. (3.19") Type of mounting: Bipod and base plate Method of firing: Percussion Weight of barrel: 20 kg. (44 lbs.) Weight of base plate: 22 kg. (48.5 lbs.) Weight of bipod or tripod: 18 kg. (39.6 lbs.) Maximum range: 3016 meters (3298 yds.) Minimum range: 20 meters (22 yds.) Maximum rate of fire: 30 to 35 r.p.m. Practical rate of fire: 18 r.p.m. Angle of fire: 40° to 850 Weight of complete bomb: Standard, 3.2 kg. (7.05 lbs.), High Explosive, 6.4 kg. (14.2 lbs.) Weight of explosive charge: Standard, 46 kg. (1 lb.), High Explosive, 1.9 kg. (4.2 lbs.) Propellant: Ballistite cartridge Transport: 3 man load or 2 pack horses with ammunition The ammunition for this mortar would probably be interchangeable with that of the German mortar of the same caliber. b. Brandt 120 mm Mortar Caliber: 120 mm. (4.72") Total weight: 780 kg. (1720 lbs.) Maximum range: 7312 meters (7926 yds.) Danger area of burst of high explosive bomb: Equivalent to 6" shell Maximum rate of fire: 6 r.p.m. Practical rate of fire: r.p.m. Weight of complete bomb: 16.3 kg. (35.9 lbs.) Weight of explosive charge: 4.275 kg. (9.4 lbs.) Propellant: Ballistite cartridge Transport: Small tractor, 2 horses, or 6 men C. Grenade-Thrower M.37 Caliber: 50 mm. (2") Type of mounting: Base plate and bipod Method of firing: Percussion CONFIDENTIAL -2- 75 CONFIDENTIAL Total weight: 3.3 kg. (7.3 lbs.) Minimum range: 500 meters (547 yds.) Minimum range: 70 meters (77 7 yds.) Maximum rate of fire: 20 r.p.m. Practical rate of fire: 15 r.p.m. Angle of fire: Fixed at 45° Weight of complete bomb: .45 kg.(.99 1b,) Propellant: Cartridge (probably 12-bore ballistite) Details of bomb: High explosive, cast iron body, short delay fuse. Smoke, N.3.C. type Transport: One man load. A special breach-loading pattern of tie 50 mm. mortar is used in casemates. With a lengthened barrel, it has an increased range. d. M.35 Brandt Caliber: 60 mm. (2.4") Type of mounting: Bipod and base-plate Method of firing: Percussion Total weight: 17.2 kg. (37.9 lbs.) Maximum range: 1005 meters (1099 yds.) Maximum rate of fire: 30 r.p.m. Practical rate of fire: 18 r.p.m. Angle of fire: 45° to 83° Weight of complete bomb: 1.36 kg. (3 lbs.) Transport: One man load; one horse load of mortar and 48 bombs Other details: Normal crew of 3 men 2. MACHINE PISTOLS AND SUB-MACHINE GUNS The following types are known to have been in use in the French Army, probably in limited numbers: a. Mas 1935 Model Machine Pistol Caliber: 7.65 mm. (.3") Length overall: 63 cm. (24.8 in.) Total weight: 2.9 kg. (6.4 lbs.) Type of ammunition feed: Box magazine Magazine or belt capacity: 32 rounds Maximum rate of fire: 700 r.p.m. Sights: Graded for ranges of 100 and 200 meters (109 and 218 yds.) Maximum effective range: 200 m. (218 yds.) Cooling: Air CONFIDENTIAL -3- 76 CONFIDENTIAL Type of ammunition: 7.65 L. (long) Constructed for rapid fire only. b. Thompson Sub-Machine Gun Caliber: 11.25 mm. (.44") Length overall: With butt, 80 cm. (31.5") Without butt, 58 cm. (22.8") Weight without magazine or butt: 3.8 kg. 8.4 lbs.) Weight without magazine with butt: 4.5 kg. (9.9 lbs.) Type of ammunition feed: Box or drum type magazines Magazine or belt capacity: Box, 20 rounds Drum, 50 rounds. Maximum rate of fire: 900 r.p.m. Method of operation: Gas Cooling: Air Will fire single shots or rapid fire. It should be noted that this weapon is of larger caliber than the other French and German machine pistols and submachine guns. C. Schmeisser Machine Pistol Caliber: 9 mm. (.35") Weight: 4.1 kg. (9 lbs.) Length: 81 cm. (31.9") Magazine Capacity: Box, 32 rounds Maximum effective range: 200 meters (218 yds.) Maximum rate of fire: 50 r.p.m. Sights: Graduated to 1,000 meters (1093 yds.) Type of ammunition: Same as the Erma machine pistol (next paragraph) Single shots can be fired if desired. d. Erma Machine Pistol Caliber: 9 mm. (.35") Weight: 4.1 kg. (9 lbs.) Length: 89 cm. (35") Magazine capacity: 30 rounds Maximum rate of fire: 500 r.p.m. Sights: Graduated from 50 to 100 meters (55 to 109 yds.) This weapon will fire single shots or bursts. The Schmeisser and Erma pistols are to all intents and purposes identical with the German weapons of the same name. CONFIDENTIAL 77 ?IDENTIAL 3. RIFLES, AUTOMATIC RIFLES, AND PISTOLS a. Rifle, Lebel Model 86-93 Caliber: 8 mm. (.31") Weight: 3.76 kg. (8 lbs. 5 oz.) Range: 959 m. (1048 yds.) Ammunition: Type 1886 D. Muzzle velocity: 670 m.s. (2198 f.s.) b. Rifle, Lebel Model 16 Caliber: 8 mm. (.31") Weight: 4.2 kg (9.3 lbs.) Range: 1306 meters (1428 yds.) Muzzle velocity: 701 m.s. (2300 f.s.) Ammunition: Type 1886 D. C. Rifle, Lebel Model 07 - 15 M. 34 Caliber: 7.5 mm. (.3") Weight: 3.7 kg. (8.2 lbs.) Range: 1080 meters (1181 yds.) Ammunition: Model 1929 C. Muzzle velocity: 820 m.s. (2690 f.s.) d. Rifle, Model 1936 (This rifle had been issued, so far as known, to only a few units. Its details were "confidential" but it is known to be similar to the Lebel rifle (c) although somewhat lighter. It used clips of 5 rounds, 7.5 mm. ammunition. Total length about 110 cm. or 43.3 in. G-2.) e. 1936 Model Repeating Rifle with Folding Butt This weapon, intended for use by parachute troops and ski troops, is in general principle the same as the 1936 Model rifle. It is shorter, however, and the butt, made of a light alloy, is hollowed out and can be folded back on to the barrel casing. Its characteristics are as follows: Caliber: 7.5 mm. (.3") Total length: 89 cm. (35") Length with butt folded: 62 cm. (24.4") f. Mas Automatic Rifle Caliber: 7.5 mm. (.3") CONFIDENTIAL -5- 78 CONFIDENTIAL Weight without bayonet: 3.9 kg. (8.6 lbs.) Total length without bayonet: 1.06 meters (41.7") Magazine capacity: 6 cartridges Practical rate of fire: 30 r.p.m. Ammunition: 1929 C model g. Pistols and Revolvers The service revolver is the 6-chambered 1892 pattern weapon which has a caliber of 8 mm. (.31") and weighs 1 1b. 13 OZ. Several patterns of automatic pistol were in service, including the Star, Ruby, and Colt. They were all 7.65 (.3") caliber. They use Browning ammunition. 4. MACHINE GUNS a. Chatellerault M 24/29 Light Machine Gun Caliber: 7.5 m. (.3") Length of barrel: 49.4 cm. (19.4") Weight of weapon: With mounting, 9.3 kg. (205 lbs.) Without mounting, 8.5 kg. (18.7 lbs.) Type of ammunition feed: Box type magazine Magazine or belt capacity: 25 rounds Maximum rate of fire: 600 r.p.m. Practical rate of fire: 400 r.p.m. Method of operation: Gas Sights: Radial backsight and adjustable foresight Maximum range: 4,000 meters (4374 ycs.) Effective range: 731 meters (799 yds.) Muzzle velocity: 820 m.s. (2690 f.s.) Type of mounting: Bipod and butt-stand Cooling: Air Type of ammunition: Rimless model 1929 C Transport: One man load Can be used on an antiaircraft mounting with special ring sight. b. M.A.C. Light Machine Gun Caliber: 7.5 mm. (.3") Total weight: 14.2 kg. (31.3 lbs.) Maximum rate of fire: 930 r.p.m. Practical rate of fire: 370 r.p.m. Method of operation: Gas Maximum range: 5200 meters (5687 yds.) Muzzle velocity: 700 m.s. (2297 f.s.) Type of mounting: Tripod Model 1916 CONFIDENTIAL 79 CONFIDENTIAL Cooling: Air Penetration: 9 mm. armor at 00 at 200 meters 9 mm. armor at 30° at 100 meters Under trial in April, 1940. C. Hotchkiss M.14 Machine Gun Caliber: 8 mm. (.31") Total weight: 51 kg. (112.4 lbs.) Weight of mounting: 24 kg. (52.9 lbs.) Weight of weapon without mounting: 27 kg. (59.6 lbs.) Type of ammunition feed: Strip or metal belt Magazine or belt capacity: Strip of 24 cartridges or belt of 251 cartridges Maximum rate of fire: 450 r.p.m. Practical rate of fire: 200 to 250 r.p.m. Method of operation: Gas Maximum range: 4500 meters (4921 yds.) Effective range: Direct, 2400 meters (2625 yds.) Indirect, 3500 meters (3828 yds.) Muzzle velocity: 700 m.s. (2297 f.s.) Type of mounting: Tripod Cooling: Air Type of ammunition: Model 1932 d. Hotchkiss 13.2 mm. Machine Gun Caliber: 13.2 mm. (.52") Weight of weapon: 200 kg. (440.9 lbs.) Maximum rate of fire: 500 r.p.m. Practical rate of fire: 180 to 250 r.p.m. Maximum range: Horizontal, 7000 meters (7655 yds.) Vertical, 3000 meters (3281 yds.) Muzzle velocity: 800 m.s. (2624 f.s.) Penetration: 20 mm. of armor at 500 yds., 15 mm. of armor at 1100 yds. The 13.2 mm. Hotchkiss is primarily an antiaircraft weapon but it can also be used for antitank purposes. 5. BRIDGING a. Girder Bridges The French regarded the launching of girder and stock span bridges as an operation to be undertaken in back areas, and not under assault conditions. The principal semi-permanent girder bridges used by the French are given in the following table: CONFIDENTIAL -7- -80 CONFIDENTIAL Span Load Width of (Meters) (Tons) Track (Meters) Pigeaud 50 44 Road Bridge Type A. Road Bridge Type B. 11 Ton Track Bridge 25 25 35 35 7 11 Type Remarks Developed during the last war 3 2.9 Designed for cross- ing canal and river locks; only the prototype of this bridge had been constructed in March, 1940 b. Ponton Equipment 1. A variety of types of pontons and ponton equipment was used by the French Army, the principal type being what was known as the Modele 1935 equipment. This includes open Duralumin pontons 9 x 1.8 X 9 meters deep, flat bottomed and of square section. Roadbearers are of steel 4 meters and 2 meters long rigidly connected between bays and rafts by fishplates and thus forming, in effect, continuous beams. The roadway is 2.88 meters in the clear between ribands and is laid with timber chesses similar to those used by the British. The load capacity depends on the spacing of pontons.. Provided the speed of the current does not exceed about 6 knots, the rating is as follows: Ponton Spacing (Centers) (Meters) Load (Tons) 8 6 13 4 18 2 2 (reinforced superstructure) 20.5 The equipment also includes trestles similar to those used by the British, the load capacity being 20.5 tons and the distance between piers 5.5 meters. A train load of this equipment would take about 120 meters of 18-ton bridge, including a proportion of trestle piers. The same amount of equipment could be carried on eighty 5-ton trucks. CONFIDENTIAL -8- 81 CONFIDENTIAL 2. Other ponton equipment used in the French Army is described as follows: a. The Modele 1901-1935 is similar to, but superseded by, the 1935 equipment described above. The pontons are round bottomed and slightly smaller. In consequence, the load capacity is less, the ratings corresponding to those above being 6, 11 and 16 tons. The superstructure and trestles are the same as for the 1935 equipment. b. F.C.M. Equipment is a heavier type of equipment taking up to 23 tons in bridge and 21 tons in rafts. The pontons are larger than the 1935 type, and the principal roadbearers are of the girder type. Trestles form part of the equipment and are interchangeable with the 1935 type. C. The New Cavalry Bridge consists of open Duralumin pontons slightly smaller than those of the 1935 equipment with standard 1935 roadbearers and paved decking laid single for light Infantry and double for heavy bridge. A 4-boat raft will take 13-ton tanks and a raft of the same span with three boats, 9 tons. A continuous bridge of either type can be made. d. The 14-ton Tank Raft had been approved but was not in production in March, 1940. The boats are special, square-ended, open Duralumin pontons on which the roadway is laid, with use made of normal heavy bridge superstructure. Access to the raft is obtained by special ramps 5.5 meters long, carried on two brackets clamping to the main transoms at either end, and lifted by standard boat davits and winches mounted at the bow and stern of the pontoons. C. Light Assault Bridges and Boats The French had a folding boat known as the Veyry Model, 1930, which could be used as a single boat ferry, in rafts, or made up into a light Infantry bridge of 1 ton maximum capacity. In addition to the Veyry Bridge, there were two types of wooden boats or punts, one made out of scantlings and sawed timber found on the site, and the other made up on the site from sets of planking prepared ready for assembly beforehand. Either type of boat could be made up into a bridge, the gunwales being strengthened for this purpose; they could both be broken up after use and the timber used for other purposes. Another light bridge was made out of Kapok floats and known as the Passerelle D'Infanterie (Infantry foot-bridge). This was designed to take Infantry in file or horsedrawn machine CONFIDENTIAL -9- 82 CONFIDENTIAL gun voiturettes. The French rubber boat is not as good as the German; it takes longer to inflate and can be sunk by one bullet. This type was not very commonly used, a more popular float being the sac Habert. This is a large canvas bag which is filled with straw, grass, brushwood, etc., on the site. It is provided with straps and buckles for assembly into rafts. The load capacity of a raft is calculated on the basis of 880 pounds per sac. d. Propulsion No motor boats were provided in the French Army, but engineer units were issued with a number of well constructed 20 h.p. outboard propulsion units made by the firm of Goiot. They weighed 180 pounds and could be used with any of the standard pontons, wooden assault boats or rafts. 6. ANTITANK OBSTACLES This subject has been fully covered in TENTATIVE LESSONS BULLETIN NO. 33, Paragraph II. E. 7. EXPLOSIVES, FUSES AND DETONATORS a. Explosives 1. Melinite: The effect of Melinite is mainly cutting, but it was used also in mine charges. Melinite burns in free air without exploding. It was supplied in powder or slab form. Melinite is either yellow, grey or brown in color and its uses are similar to those of gun cotton. The factor for cutting charges is 1.5 and for mine charges 1.0. Dry melinite powder can be detonated by the standard detonator or by instantaneous fuse if there is good contact. 2. Cheddites (Chlorates or Perchlorates): These are for use in mine charges (i.e. similar to ammonal). Cheddite explosives are sensitive to shock and catch fire at temperatures over 2500 F. They were not popular with the French. They were issued in the following forms: CONFIDENTIAL -10- 83 CONFIDENTIAL Dimensions (mm.) Cylindrical cartridge containing 100 gr. Cylindrical cartridge containing 135 gr. Total Weight (Grams) 35 dian. X 95 130 35 diam. x 115 160 Slab or petard containing 1 kg. 100 x 50 x 100 Slab or petard containing 10 kg. 170 x 170 x 200 b. Fuses, Detonators, etc. 1. Meche Lente (Safety Fuse): Burns at the rate of 1 meter in l minutes, or 2 feet 54.8 seconds. It burns slightly slower than the British type. 2. Allumeurs (Igniters): Pull, compression, or double action types. 3. Amorce Fulminante (Detonator): Service Detonator No. 1880, similar to and interchangeable with the British type, contains 1.5 grams of mercury fulminate. No. 7 Commercial Detonator contains a mixture of mercury fulminate and powdered melinite. The difference in diameter between the French and British is 0.02 inches. The two types are the same length, and the French pattern will fire the British standard dry gun cotton primer, but is not certain to fire German explosive charges. 4. Cordeau Detonant (Instantaneous Fuse): Burns at 7,000 meters per second; supplied in 50-meter lengths; lead- covered; T.N.T. filling. A second type has a tin covering and a melinite filling. 5. Amorce Electrique (Electric Detonator): Resistance, 1.35 ohms; tolerance, 0.5 ohm. 6. Insulated Cable (Electric): Resistance 22 ohms per kilometer; weight, 16 grams per meter; supplied in 150 to 200 meter lengths on drums. 7. Exploders: The Schaffler dynamo exploder was in general use. This is capable of firing detonators through a total resistance of 150 ohms. CONFIDENTIAL -11- 84 CONFIDENTIAL 8. MINES, TRAPS, AND ALARM SIGNAL DEVICES a. Antitank Mine This is in the form of an oblong metal box, painted a neutral color with a corrugated contact lid, and provided with a safety rod. The mines are packed for transport in fours, the fuses being carried separately, 25 to a box. The French were not altogether satisfied with their mine and were experimenting with a mine similar in type to the German Teller, but the matter had not got beyond the experimental stage. b. Mine Bondissante (60 mm. 1939 Model) This is an anti-personnel mine throwing a 60 mm. caliber Infantry mortar shell into the air timed to explode at a height of between two feet and six feet six inches. The height at which the shell bursts depends upon the weight of camouflage material on the contact board; the most effective height is five feet above ground. The mine relies for its effect on fragmentation and can be operated horizontally as well as vertically. When used horizontally, the shell is thrown a distance of seven to eight meters before bursting. The mine is usually operated by means of a trip wire or contact board, buried in the ground and camouflaged. The effect of the explosion is to knock out all personnel standing or lying down within a radius of 10 meters, with the additional probability of serious injury up to 20 meters. C. Mine Bondissante (75/81 mm.) This was produced but has been discontinued in favor of the 60 mm. type. The mine worked on a similar principle, throwing a 75/81 mm. caliber mortar shell into the air. Operation was by the same means as the 60 mm., but the bursting height was in this case determined by a length of wire attached to the bottom of the mine and by the fuse in the nose of the projectile, which was jerked taut when the projectile was thrown into the air, thereby activating the igniter and exploding the shell. d. Petard Coulissant (Sliding Suspended Mine, 1930 Model) This consists of an explosive charge contained in a spherical-ended cylinder hung on a wire stretched double across a road between two supports at a height of not more than four feet nine inches above road level. When a vehicle runs into the wire, the safety pin is automatically extracted and the mine is drawn along the wire until it hits the side of the vehicle. The fuse CONFIDENTIAL -12- 85 CONFIDENTIAL in the mine is of sufficient length to allow the mine to be drawn to the vehicle before exploding, but there is no guarantee that it explodes on impact. The mine weighs about 5 kilograms and contains 3.7 kilograms of melinite. It has been reported that the manufacture of this mine has also been discontinued, but in any case it is not thought that many were in existence. This form of road block should be located as far as possible in blind sections of roads - that is, around corners, over crests, etc. - and should consist of more than one mine, arranged in depth. Dummy wires can be set up to cause delay, since they cannot be distinguished from those carrying a charge. Thus charges should therefore always be concealed. e. Improvised Traps and Alarm Signals French Engineer units were issued various electric contact devices for the operation of booby traps and alarm signals. Devices were divided into three categories: 1. Tell tale (bell, lamp, etc.) alarms. 2. Flares or Very lights. 3. Anti-personnel. The sensitivity of the electric contact devices made it possible for single cotton threads to be used as trip wires and thus Category 1, and possibly also 2, could be operated by enemy personnel without their having any indication that their presence had been betrayed. 9. FLAME THROWERS The French had developed a flame thrower for use from inside a light tank. The range was from fifty to sixty yards, and the duration of one continuous stream was just over sixty seconds. The reservoir contained 130 gallons of fuel and was carried on a trailer. Pressure was generated by means of a 7 h.p. motor which pumped the fuel through a nozzle 18 min. in diameter. Ignition was by means of a spark plug and a pilot jet. It is unlikely that there were any features which would be of particular interest to the Germans. 10. ELECTRICAL AND MECHANICAL a. Field Searchlights CONFIDENTIAL -13- 86 CONFIDENTIAL Two types were issued to Engineer units - Types RFB and PRA, both made by Peugeot. The former has a single lamp, and power at 12 volts is supplied from a 2 h.p. motor generator through storage batteries. The latter has three lamps mounted together from three 6-volt batteries. The range of either type is about 200 meters. b. Power Tools A number of fairly efficient power tools were available for Engineer units in the field. Among the most recently adopted were: 1. The Rexo portable gasoline motor band saw which has an effective cutting width of 65 cm. and a speed in normal soft wood of about 1 cm. per second. This saw is more powerful and smoother working than the corresponding German saw, the Dolmar. 2. Rock picks and percussion rock drills, operated by built-in gasoline engines. These had passed their tests but were probably not available in quantity in June, 1940. They are fairly heavy and cumbersome to operate but have the undoubted advantage of doing away with motor compressor units. 3. The Benoto borer, which consists of a very heavy monkey controlled by a normal pile-driving winch with a grab at the lower end. It is used for placing mine charges or for boring wells down to about 50 feet, the hole being about 30 inches in diameter. This is a commercial standard equipment and most effective. 4. The Barre a Mine Binet, which is a type of road cratering equipment used for camouflet charges. It drives a hole of about 2 inches in diameter. 11. FRENCH CHEMICAL WARFARE Prior to the capitulation a full exchange of views on chemical warfare took place between the French and British Chemical Earfare Staffs. All details of policy, design, production, stocks, and intelligence were freely disclosed, and French Chemical Warfare officers and scientists visited British manufacturing plants and research establishments. In certain cases, specimen equipment was supplied to them. Anti-gas equipment, including masks, eyeshields, anti-gas ointment, etc., was captured from the B.E.F., and it is therefore almost certain that Germany is now in possession of the majority CONFIDENTIAL -14- 87 CONFIDENTIAL of British chemical warfare secrets. Among French stocks, now presumably in German hands, were large quantities of phosgene and toxic smoke generators. The latter were large generators, known as Engin 2.5 which weighed 15 kilograms and contained 4th kilograms of D. M. (diphenylamine chlorarsine). They functioned for about eight minutes and were intended to be used in groups of four, arranged to take over one from another to give a total period of emission of some 30 minutes. The clouds produced have the usual yellow color characteristic of D. M. and under very favorable circumstances might cause at short ranges a minor degree of penetration of the British Mark IV service container and more serious penetration of the civilian duty and general civilian masks if not provided with the Contex. The latest type of service container, the Mark VI, gives complete protection against such clouds, although occasionally a smell of D.M. may be detected in the first few seconds of exposure after the respirator has been adjusted. Another line of research to which the French attached considerable importance and secrecy was poison which might be applied to small shrapnel bullets, miniatures, arrows, etc. The substance known as Zentin on the continent and as Daryl in Great Britain was specially considered. Its chemical name is Carbamyl Choline, and it is used in veterinary practice. A process for coating large lead shot with this substance had been worked out, and although the efficiency of such a device is considered doubtful as the normal toxicity of wounds is unlikely to be appreciably increased thereby, the possibility of its use by an enemy cannot, however, be ruled out. CONFIDENTIAL -15- 88 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE September 26, 1940 Secretary Morgenthau TO FROM Mr. Cochran STRICTLY CONFIDENTIAL Mr. McKeon of the Federal Reserve Bank of New York gave us the following information regarding transactions in the account of the State Bank of the U.S.S.R. maintained with the Chase National Bank. Principal changes in the Account during the period September 19 to September 25, inclusive, were as follows: Date Amount Credited September 19 $ 83,000 September 20 83,000 62,000 Received From Commercial Letter of Paid To $ 89,000 Commercial Letter 238,000 Commercial Letter Credit of Credit Account National City Bank 150,000 Reichabank 130,000 Amtorg Trading Co. 119,000 Stockholms Enskilda Benk, Stockholm September 23 97,000 Skandinavisica Banka, Stockholm September 24 205,000 Sveriges Rikebank, September 25 157,000 Skcandinaviska Banka, Stockholm 105,000 Amtorg Trading Co. September 21 Amount Debited of Credit Account 350,000 Amtorg Trading Co 90,000 Zivnostenska Bank Stockholm AMM. Prague 89 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE September 26, 1940 Secretary Morgenthau Mr. Cochran CONFIDENTIAL The six reporting banks executed the following transactions in registered sterling: £126,000 Sold to commercial concerns Purchased from commercial concerns £ 15,000 Of the sterling sold, £81,000 is being used by a cable company to pay for the leas- ing of wires. The Federal Reserve Bank sold £15,000 in registered sterling to two non- reporting banks. In the open market, sterling was first traded at 4.04-1/2. It subsequently ased in light trading to 4.03-3/4, where it closed. Transactions of the report- ing banks were as follows: £51,000 Sold to commercial concerns Purchased from commercial concerns £ 1,000 The Canadian dollar again gained ground in a thin market, closing at 13-5/8% discount. Yesterday's final rate was 14-3/8% The Cuban peso continued to improve. As against yesterday's discount of 9-5/16%, that currency closed today at 8-1/2%. The other currencies closed as follows: Swiss franc Swedish krona Lira Reichamark Mexican peso .2284 .2384 .0505 .4000 .2020 bid, .2060 offered Argentine peso (free) .2320 Brazilian milreis (free) .0505 We purchased $1,007,000 in gold from the earmarked account of the Bank of the Republic of Uraguay. - 90 -2- CONFIDENTIAL of The Federal Reserve Bank of New York reported that the Central Bank E1 Salvador shipped $161,000 in gold from San Salvador to the Federal, for refining and subsequent earmark for its account. The State Department forwarded to us a cable stating that the following gold shipments would be made from Australia, for sale to the U. S. Mint in San Francisco: $14,803,000 shipped by the Commonwealth Bank of Australia, Sydney, to the Federal Reserve Bank of San Francisco. 141,000 shipped by the Bank of New South Wales, Sydney, to the American Trust Company, San Francisco. $14,944,000 Total Gold in Bombay was priced at the equivalent of $33.93, off 3#. The silver quotation was equivalent to 44.61 up 1/16. In London, the prices fixed for spot and forward silver were again unchanged at 23-7/16d and 23-3/8d respectively. The dollar equivalents were 42.56$ and 42.444. Handy and Harman's settlement price for foreign silver was unchanged at 34-3/44. The Treasury's purchase price for foreign silver was also unchanged at 35$. We made four purchases of silver totaling 575,000 ounces under the Silver Purchase Act. Of this amount, 300,000 ounces represented a sale from inventory, and the remaining 275,000 ounces consisted of new production from foreign countries, for forward delivery. BMK 91 September .26, 1940 10:37 a.m. H.M.Jr: Hello. Operator: Congressman Treadway. H.M.Jr: Hello. Congressman Treadway: Hello, Mr. Secretary, I thought you would be interested in a letter I received from President King of Amherst this morning maybe you've heard of the event. H.M.Jr: T: H.M.Jr: No, I have not. Well, I gave a good many years ago in memory of a son of mine who died a scholarship memorial cup and it's awarded annually to the fraternity group who stands the highest for the previous year, and Dr. King wrote me that it was awarded to Alpha Delta Phi this year and that Bob Morgenthau received it at Chapel in behalf of the Chapter as he was the president of the House for the year. Well, isn't that marvelous. T: (Laughs). H.M.Jr: Nothing could please me more. T: H.M.Jr: - (Laughs). Well, it pleases me very much as an Alpha Delt myself, you see, to have that reward made, and having once or twice referred to your son being there, I thought it wouldn't be out of place to call your attention to it. No, I'm terribly pleased! Bob tells me that T: they have the nicest group this year. Is that so. H.M.Jr: I think he told me they took in 21. T: oh, that's a large number. 92 -2H.M.Jr: T: H.M.Jr: Well, because everybody that they asked accepted and he was particularly pleased because they got all the group that Psi U wanted plus a younger brother of a member who is in Psi U now. In theremarkable. Chapter at the present time. Well, that's and a big fight on trying to get the boy to break his pledge. T: Gracious! H.M.Jr: Because his older brother is now in Psi U. T: Yeah. Did his brother try to engineer it H.M.Jr: T: H.M.Jr: too and have him break it? Moving heaven and earth to try to get the boy to break it. (Laughs). Has the initiation taken place? Not yet, but he said they got everybody they asked and they've got the nicest group they ve ever had. T: Well, I think it's fine that your son is H.M.Jr: Yes. Well, I'm quite proud. T: Yes, indeed. H.M.Jr: Well, it was terribly nice of you and I'll T: I was so pleased myself that I thought I'd - the head of the House. tell his mother. I didn't know but perhaps you might have heard of it, but the letter just came in from the President. Evidently - oh, he said in the letter written, well, I should say perhaps day before yesterday - possibly yesterday - he says, I have awarded this morning in Chapel so that it shows he wrote me immediately after the award was made and mentioned the fact that your son received the cup. 93 -3H.M.Jr: Well, Bob is so modest that he wouldn't T: He wouldn't have told you, eh. H.M.Jr: tell. No. T: Well, start him up a little on it, then. H.M.Jr: Right. Thank you 80 much. T: Not at all. Good-bye. 94 September 26, 1940 2:13 p.m. Congressman John Dingell: Hello, Mr. Morgenthau. H.M.Jr: Yes, sir! D: How are you sir? H.M.Jr: Wonderful. D: Fine. Say, you're a pretty busy man and I certainly don't want to add anything to your burdens, but I've got a very dear friend here, Milton M. Alexander, of Detroit, who is a tax-collecting genius who has a certain proposal that I'd like to present to you to see what you thought of it, and maybe you could give me a few minutes at your pleasure. I mean, we'd be subject to dismissal at your pleasure. H.M.Jr: Does it have to be this week? D: Would it have to be this week? H.M.Jr: Yeah. D: Well, any time to suit your convenience. H.M.Jr: D: Well, the point is, it'd be too late to get into this bill, wouldn't it? Oh, yes. Well, it really isn't in connection with any tax schedule or anything in connection with this tax bill. It's a method of back tax collections. H.M.Jr: Yeah. Well, why don't we say about next Tuesday at 3 o' clock. D: Next Tuesday at 3 o'clock? H.M.Jr: Yes. D: Next Tuesday at 3 'clock will be fine. 95 -2This gentleman - I've known him for a number of years, Mr. Morgenthau, and he has received one of your autographed books, which he cherishes, away back there in '23 and I think it's your book No. 4 entitled, All in a Lifetime. H.M.Jr: That's my father. D: Oh, is that your father? H.M.Jr: Yeah. D: Oh, yeah, the Senior. That's what I thought it was - Dad. That's what I thought it was the Senior not Junior, and he's rather proud of it and, as I say, he's a very dear friend and I think maybe he's got something here and I wouldn't want to pass on it. He wanted to see the President and he wanted to see you and I said, well, I think we're going to have to compromise on seeing Mr. Morgenthau if and when he can see us. H.M.Jr: Well, I'11 be delighted. Next Tuesday. D: Next Tuesday at 3 o'clock. H.M.Jr: Thank you. D: AI1 right. Thank you, sir. Thank you very much. 96 Paraphrase of Code Radiogram Received at the War Department at 3:53 P.M., September 26, 1940 CONFIDENTIAL Peiping, filed 02:00, September 25, 1940. 1. My reasons for believing that the Japanese will attack Kunning from Indo-China, rather than to drive toward Chunging from Ichang, are based upon the fast that the factors favoring the latter drive, 1. e. (a) The desire to make use of the nearby acquired Indo-China base and to satisfy General Ando. (b) The prospect of faulty coordination between Chungking and Kunning, particularly if some of Lung Yun's subordinates can be bribed. Outweigh the disadvantages, 1. 0. (a) Long line of communications over poor mountainous roads, with flank pressure from the Kwangsi forces certain to be not in some degree. (b) The lack of sufficient troops. While the number that can be made available from Canton, Formosa and Hainan is not definitely known, it does not appear to be overly large* by more than do similar considerations with respect to the Ichang-Chungking drive. 2. Factors favoring the Ichang-Chungking drive are: (a) Its success would necessitate the renoval of the Chinese capital from Chungking, which has superior boab shelters, communication and supply facilities, to some place offering CONFIDENTIAL 97 CONFIDENTIAL considerably fever advantages. While unfavorable considerations ares (a) Lack of sufficient Japanese troops,* (b) The presence of Chiang's best troops, backed by good supply channels. MAYER . Nota by 0-2 Best available information indicates that the present disposition of Japanese troops is as follows: Menchuria 22 Divisions Sakhalia 1 Division Kerea 2 Divisions North China 13) Divisions Forman 1 Division Central China 25 Divisions Japan proper sh Divisions South Chinas Canton Area - 2 Divisions Manning Area - Divisions Hainan Island - *) Divisions Distributions Military Aide to the President Secretary of War State Department (3 copieg) Secretary of Treasury Asst. Secretary of War Chief of Staff War Plans Division Office of Naval Intelligence CONFIDENTIAL 98 Paraphrose of Code Radiogram Received at the War Department at 4:47 PeM., September 26, 1940 RESTRICTED Peiping, filed 02:55, September 26, 1940. It is my opinion that the primary objective of the Japanese is to effect an early settlement of the China venture, and that an attack against Nameing from Indo-China is more probable than attack against Chungking from Ichang. The argument with the French in Indo-China will probably be terminated by the addition of a for concessions to the original Nishihara agreement. The airfields sought by the Japanese are probably those at Lacksy, Caobang, Dakiang and Langson. MAYER Note by 0-21 Other sources indicate that the initial air bases will be at Pimbi Thusing, Pin The, Hanoi, and Lacksy. Distributions Military Aide to the President Secretary of War State Department (3 copies) Secretary of Treasury heart. Secretary of War Chief of Staff War Plans Division office of Naval Intelligence RESTRICTED 99 CONFIDENTIAL Paraphrase of Code Cablegram Received at the War Department 9:44 Gomey Sept. 26, 1940 as London, Filed 11:10 Bollo, Sept. 26, 1940 The land mine which the German boubers are now using as a bomb is identical with the magnetic mine, of which you have detailed information. LEE Copies to: Military Aide to the President Secretary of War State Department Secretary of Treasury Asst. Secretary of War Chief of Staff ONI WPD CONFIDENTIAL H 100 CONFIDENTIAL Paraphrase of Code Radiogram Received at the War Department 2:48 Pomes Sept. 26, 1940 London, Filed 14:07, September 26, 1940 1. Twenty-eever essorted German bombers at 11,000 feet made similtaneous attack at dawn September 25 on Bristol aircraft factory killing 60, injuring 150, and seriously affecting production. British losses, four planes and one pilot. German lesses, 18-24 planes, most of which were bambers. Seven German planes damaged. Six British fighters at Plymouth drove off 24 German bombers and 12 fighters, shot down 1-3 bombers, damaged one bomber, and suffered no losses. oil storage at Portland undanaged despite similates diving attacks. Eleenhere German planos patrolled individually. Total scale 280. 2. The few raids of the night of September 25-26 were insignificant except over London, where German planes were active all night. Six large fires started in city had no military importance except for damage to one railroad shed and one oxygen plant. Raids over London directed chiefly at airdrense, three of which were attacked with minor damage and without casualties, and at railroads, which suffered minor interruptions at six places. 3. British attacked six railroad yards, one dockyard and five parts in 116 sorties. Shot down one German bombing plane and sank one ship. Coastal Command escorted 22 convoys and used 96 planes for patrol and photographing. Lost one plane. 4. Germans sank or damaged three British ships; total, 18,800 tens. CONFIDENTIAL 101 CONFIDENTIAL 5. Government assisting with considerable evacuation from East End. Good morale I civilian population. 6. Ten trains engaged in evacuations from Berlin each day according to reliable source. Other evacuation activities reported at Hamburg, Hesse-Hassan, Rhineland, Neuboln, and Spandam. 7. Magnotic parachute mines did major damage night of Sept. 24-25 to Saville Row. 8. Aldershot has not yet suffered a bombing attack. 9. British sustained less of two naval officers, twelve sailors, and one trunter in raid on Gibraltar Sept. 25. Two hundred bombs used by Germans, who lost at least three planos. 10. Two Indstenses, two pursuit groups, and maintenance personnel, all Italian, moving to Germany. 11. Misinformation and overconfidence blamed for failure of operations at Dakar. No new developments in Libya. Invasion situation British Isles no change. LE # Meaning undetermined. Believed to be 2 bombing groups. Copies to: Military Aide to President Secretary of War State Department Secretary of Treasury Asst. Secretary of War Chief of Staff OHI WPD CONFIDENTIAL 102 September 26, 1940 11:15 a.m. RE BRITISH PURCHASING PROGRAM Present: Mr. Purvis Mr. Young Mrs. Klotz H.M.Jr: Arthur, I wanted to have a talk with you. I feel very much let down, and I am going in to this meeting tomorrow at 12:30 which I asked the President to have on the planes and I just don't know what to say in answer to the arguments which the Army are going to give, why should you have any more planes. Now, from here and there I gather that there are a number of memoranda which I know absolutely nothing about, and I just can't work that way. I can't go over and ask the President to please tell me what the British Embassy has informed him and what lists there are that they want. I just can't do it. There are lists which have been given. There was something about a hundred planes they wanted switched around. General Strong told me last night. The lists which have been furnished from Churchill to the President do not coincide with what you have been telling me. Now, I just can't work that way. I don't care how many people get crossed up in England and I don't care how many people are all falling all over each other trying to do the same thing, that is their business. Purvis: That is their business. H.M.Jr: But I can't give what I have given to this thing and not be informed and have you informed so that you can in turn inform me what 18 going on. 103 -2Now, if they want to work through the Embassy, that is their privilege, but then don't take up my time. Purvis: No. H.M.Jr: And the lists - now, for instance, there is some cable that went over the week-end on these rifles which -- Purvis: From Churchill to the President. H.M.Jr: Yes, there was something that went from Churchill Purvis: He rang me on Sunday afternoon. H.M.Jr: There is something went between them. As I to the President on the rifles. say, I can't keep going over to the President and I find - I almost wrote him a note. I said to Phil, "Let's write him a note telling about the rifles," but it would look pretty silly if I were writing to the President and said, "I would like you to know the rifles have gone over the week-end," and he would say, "Why bother me? I did it because I got a message from Mr. Churchill." Purvis: In their anxiety, they are weakening their H.M.Jr: It has got me all upset. Strong is convinced that they can use some additional planes, but not anything like the quantity that I am position. talking about because they haven't got the pilots and won't have them. Now, you and have always told each other the truth. I Purvis: Yes. H.M.Jr: I have been able to be helpful to you. Purvis: That is right, over and over again. H.M.Jr: And just the way I told you originally, forget about the 21 torpedo boats. I told you to 104 -3- Purvis: H.M.Jr: Purvis: H.M.Jr: Purvis: H.M.Jr: drop out of this trying to get additional stuff after the destroyers, because there wouldn't be any, didn't I7 That is right. I got the Ambassador to take that attitude, also. So when I know something, I often strain a point in telling you these things, but at least when I know something, you know it. That is correct. But this thing - now -It isn't heading up. If their training program is such that they are not going to have enough pilots next July to get any additional planes, why have me upset everybody in Washington, when, according to Strong, they can't use any more planes? He says they haven't got the pilots, and when I told him the number - for instance, he has got the figures - these are the figures he gave me, that they keep in the air 600 pursuit ships and 300 bombers and about 87% reserve. Purvis: That is in the air. H.M.Jr: And the number of planes which are - which you are producing is in excess, I get it, of the losses and if you had another thousand planes or another hundred planes today, you haven't got the pilots to put them in, and they would just lie around. Purvis: You see, it is just utterly contrary to what Layton has told me. H.M.Jr: But now mind you, this information is all going to be in the hands of the President today. It 18 all in the hands - was on General Marshall's desk at 8:30 this morning. For me to go to this meeting tomorrow - I would like to fly to California rather than go there, because I am just going to be licked 105 before I start. And when I talked about it, I tried to get it all in my head. It lasted three hours. He threw figures at me as to what Churchill and Beaverbrook have asked for and they just don't jibe with what you told me at all. Now, let me just - what was the thing that they wanted? I was up the stump last night for three hours, but there was something which took precedent over everything else. Let me just think about it. I can't remember it. He told me a story where they wanted 800 tripods for the Navy. He went down with this Admiral and when he got down and named the ships, he found that he couldn't possibly use more than 300, so he says, "Right or wrong I have got the impression that whenever they ask--" Finally the Admiral said, "I guess the 800 should have been a 3. It was a mistake." Then he said, tools, that they just want all the machine tools and that they are putting them in stock for the next two or three years, and they haven't "and I feel it is the same thing about machine got any use for them." Now, the thing that Strong asked for, and he couldn't get, and he has washed his hands of Layton, as a matter of fact - if the rest of them feel about Layton as he does, the best thing you could do is put Layton on the Clare and send him home. Over there he asked Layton, have they got an inventory of their industrial production and their industrial needs, and Layton talked to him, he said, as though he was a schoolboy and a very dumb one at that. Strong is a very important fellow and one of our best, and he said the idea of taking an Economist and having him tell an Army Officer what they do or don't need in the way of weapons, he said it is just silly. Purvis: He comes out from the War Office. I have seen his -- H.M.Jr: I just wanted to tell you. He says you have not got the pilots. He told Beaverbrook on these Flying Fortresses, "Where are you going to get the crews?" 106 -5Purvis: He told that to Beaverbrook? H.M.Jr: Yes. Purvis: And yet Beaverbrook 18 cabling, "What is the matter with you people?" H.M.Jr: He told Beaverbrook, "Now, what 18 the use of your taking them when you haven't got the crews? It takes not months but years to train them. I said, "Well, after all, they have got to make a start some time. N And then the other thing which I didn't know, I put up this big fight on this bomb sight and he tells me that the English bomb sight for night bombing is four times as effective as the one we have. Now again - I mean, it is 80 hard and I take 80 many chances, and I give so much of myself to this thing and to be let down by your Government because they don't keep you informed 80 that you can keep me in- formed, I think it is outrageous. Purvis: As recently as -- H.M.Jr: Purvis: I think it 18 outrageous. If you knew it, you would tell it to me. You bet I would tell it. H.M.Jr: Now, after all, if they had given stuff to Strong and the picture has changed - and he told me this is an accumulation of beatings, you see. Salter ought to have told you, or somebody. Purvis: But he left London before Strong. There is a case where any change in the picture -- H.M.Jr: You don't mean Salter. Purvis: Layton. H.M.Jr: But really I don't know how to go into this meeting tomorrow. Purvis: I can see your position 80 clearly. 107 -6H.M.Jr: I can't put up a fight for this stuff. Purvis: My information 18 exactly the reverse. H.M.Jr: If General Marshall says to me, "Morgenthau, have they got the pilote?" I will have to say, "I don't know." If they can't use any more planes, they won't have any more pilots until next spring - he used the figure that the last week in August were 434 - maybe off a couple - planes were produced in that week and he had all the figures as to losses and everything else. From the 15th of August to the 15th of September, the air fight was at its maximum. Purvis: And there were 434 a week produced? H.M.Jr: Total. Young: That is pilots. H.M.Jr: No, planes. And he comes away with a distinct impression that you are producing enough planes to maintain the 900 - I don't know what you call them, that you keep in the air, plus the reserves. See what I mean? Purvis: I see exactly what you mean. H.M.Jr: That you are producing enough. Purvis: Every single -And he also is convinced that they are multiplying by three and four times the needs of everything that they want. He used these mounts or tripods for the pom pom guns, that is what H.M.Jr: it was. They asked for 800 and the maximum counting the ships under construction and counting the 50 destroyers that we have that have none of these, the maximum of these pedestals that you could use were 300. The other thing which they got into a terrible row over was Canada, Beaverbrook told them they 108 -7had 750,000 pounds of gold, including the French gold, and Kennedy got very excited and said they only had a million two. Purvis: 750,000 --- H.M.Jr: I am using pounds, in gold, including the French. How they figure they have the use of the French gold, I don't know, but the figure that Kennedy used is the figure that the Treasury gave me, which is a million - a billion 200 thousand dollars, and the fact that Beaverbrook - Kennedy got very excited and said he exaggerated 300%. But the point I am getting over, this man 18 coming back to exaggerate their resources, multiply their needs by three or four, that the pilot training get any more pilots until next July, so why worry. Now, mind you, this fellow is distinctly sympathetic. program is completely bogged down, that you won't Somebody did ask, or somebody talked about two squadrons of four-engine bombers of 16 each. It is a thing of which I have never heard. They did ask for two squadrons of four-engine bombers of 16 each and then the question came up of the pilots. I mean, they talked in terms which was if they had been talking about the needs of Japan, it would be just as foreign to me. I mean the stuff -- Purvis: The whole thing did not relate to -- H.M.Jr: To what you are telling me, and you have always been 101% with me, a 101. Now, I mean, Arthur, at this stage and at this time, I mean the one person that they ought to take in their confidence 18 you and me, and I can't function like this. I just can't work this way, and here this meeting is scheduled at 12:30 tomorrow and I don't know. Now, you had better get Churchill or Beaverbrook on the telephone. I think you ought to get Churchill himself on the telephone. Purvis: As recently as Sunday, Churchill has personally given me the order of priority on these things. He has dealt with it in the same terms as every cable. Mind you, all the cables I have seen at 109 -8the Embassy, and I have been getting copies of their cables, support exactly the things that you and I have been talking about, but 1f Strong has been given a different picture over there -H.M.Jr: Purvis: H.M.Jr: Purvis: H.M.Jr: But he has. Now, how, for instance, did they get cables to the President cleared through? I don't understand that. I have never known that there was any direct cable. I have always seen the - recently I made rather a point about it at the time one or two got missing, and I found that Mr. Butler there was holding back on me. I got that series of cables and as far as I know, Lothian is giving me everything that is coming. Now, there 18 a message on the 250,000 rifles which got the rifles and pried them loose. There is a message on that, and it must have come through your office. I will make that a point. Now, Lothian, unfortunately, is in New York today at the Fair. He left at 7:00 o'clock this morning and won't be back until midnight tonight. Well, the meeting is scheduled at 12:30 tomorrow. Now, let me give you another thing. Standard 011 of New Jersey over a week or ten days ago and I have been 80 busy I haven't been able to do anything about it - but evidently Mr. Agnew walked into their office or saw them somewhere and informed them that from now on all business with the UK, Standard 011 of New Jersey, Standard today I have heard nothing from Agnew. Purvie: Now, this 18 the only thing you have said that I have something on. I have had on my list for a week with you, Agnew said to me - it must be now 12 days ago - he said to me one day, "What do you think would be the chances of getting UK sterling - the American oil companies to accept sterling?" He said, "Is it legal?" I said, "I don't know. I will get the lawyers' opinion on whether it 18 legal very easily, but I don't know." He says, "Well, I am half inclined to . 011 must accept 50% of sterling. Now, up until 110 -9mention that today." It was the last day, as far as I know, that he saw you, but you may have seen him since then. H.M.Jr: I haven't. Purvis: Then this is the very last day he saw you. He said, "You know, I am half inclined to mention it, because it might have a bearing on our broader picture," and I said, "I think you would be very wise to, but I don't think that should come up in a formal meeting. Why don't you perhaps say something __" H.M.Jr: But this is an ultimatum and, of course, the Standard 011 of New Jersey's reaction is this, that, of course, this is simply a move either to make it impossible for us to do business or 80 that the business will flow to the English companies. It is a freeze-up. I mean, how can they accept 50% of their payments - not their profits, but their payments - in sterling, and J. Crain, who is the Treasurer of Standard 011 of New Jersey and is an old Federal Reserve man - I mean, I have complete confidence in him. When I wanted this foreign funds thing, he gave up everything to come down to help me and he came down here and he simply said, "What are Purvis: H.M.Jr: Purvis: we going to do?" He said, "It is either a question of our giving up our business and losing it or taking half of our payments --" That 18 right, in sterling. In sterling. That undoubtedly is an effort of the Treasury to force the issue wherever it thinks it can with supplies all over the world. As I say, Agnew had & request to know whether the companies here would accept sterling and I said to him, "I think you ought to mention that, even if you mention it off the record." And then he came back to me later in the day. I met him in the corridor. He said, "I didn't get a chance to say that." He said, "If you get a chance, will you?" To my mind it was such an 111 - 10 - H.M.Jr: extravagant idea that, as we have had a rather full agreement, I have never mentioned it to you. Do you know what my answer is? I want you to tell this to Lothian and send it over. In view of that request, I am asking the British Government to send over a man, who, for a better name, I am going to call a liquidator, who will be here, and they will start as a matter of good faith to begin to liquidate some of the American properties which they own in this country, of which they have not sold one dollar, not a dollar, and who also will be familiar with the properties they own in the Argentine, and I don't want him to send a clerk and I don't want to talk to this man they have got in New York, because I might just as well do my business through J. P. Morgan in the first instance. Do you know the man I mean? Purvis: Yes, sir. H.M.Jr: I am not going to work through him, because every suggestion I make he turns down. If I want to work with J. P. Morgan, I will call up J. P. myself. I don't have to do it through this man. That is my reaction. I mean, if that is the way they are going to do, they are going to force the American companies to take half in sterling, then I want a liquidator to come over here to begin to at least as a matter of good faith make an honest effort and to begin to sell some of the very valuable properties which they have interests in in this country, of which, 88 far as I know, they haven't sold one dollar. Purvis: H.M.Jr: Purvis: Yes, sir. Sorry. Well, Arthur, I am too. But I mean, after all, this 18 much healthier that we know what the position is and try to get it straight. H.M.Jr: Sure. Purvis: That is the only thing that can be done. 112 - 11 H.M.Jr: Well Purvis: I have been a little patient myself. H.M.Jr: Well, you have never heard me talk like this before, but here we are in this whole thing, you know, and we have worked this thing up and everything, and then for them to treat you and me like this isn't right. 113 COPY September 26, 1940. Dear Mr. Purvis: In the course of a brief call on Mr. Henry Morgenthau this afternoon, he surprised me very much by saying that U.S. observers in the United Kingdom have reported that the Canadian air train- ing plan is a failure, that it is short of aeroplanes, that its out- put is below schedule; that consequently Britain will be short of pilots; thus it is useless to ship more aeroplanes from U.S.A. This report on our air training plan is the reverse of the real situation, as I have verified by telephone calls to Ottawa this afternoon. The plan is well ahead of schedule, its aeroplane situation is well in hand, recruits are greater in numbers than can be handled, Australian trainees have arrived for advanced training ahead of schedule, and everything about the plan is most satisfactory. Following is the position as given me by telephone from J. S. Duncan, Deputy Minister, in charge of the plan: Schools Now Open Schedule calls for October 1, 1940 32 December 31, 1940 December 31, 1941 48 36 83 73 25 All aerodromes for the full plan (128 in number) will have been completed by November 1, 1940, instead of November 1941, as scheduled. All buildings involved in the plan will also have been completed by the end of this year. Aircraft At September 16, 1940, the schools had 895 aeroplanes, as follows: 409 Elementary trainers 137 Twin-engine trainers 215 Single engine advanced trainers 114 Bombing and gunnery trainers 20 Communication flight trainers 114 -2By July 1, 1941, the schools will have 3,108 aeroplanes, largely from Canadian production, with Jacobs and Manasco engines, as follows for deliveries: 400 planes October 1940 250 planes November 1940 250 planes December 1940 250 planes January 1941 200 planes February 1941 1941 250 planes March 1941 200 planes April 200 planes 1941 May 200 planes 1941 June The plan will ultimately require about 5,000 planes, and production of all has been arranged. While failure of British to furnish planes as promised threatened the success of the plan in its early stages, the de- ficiency was quickly made up by purchase of new and second-hand planes in the U. S., and by greatly enlarged production of training planes in Canada, engined with Jacobs engines. Trained Personnel Canada has now sent to N. K. 3 squadrons complete with ground crews and aeroplanes (instead of 1 squadron as promised) and 300 wireless operators. Between now and January 1, next, we will send in addition from the training plan: 204 pilots 102 observers 232 air gunners By April 1, 1941, these numbers will be increased to: 850 pilots 408 observers 696 air gunners By July 1, 1941, these numbers will be increased to: 1,968 pilots 950 observers 1,550 air gunners 115 3Each subsequent month will make available an increasing number of each type of graduate. The fact that the training plan has been accelerated has made increased demands on the output of the schools for instructors, but in spite of this, the output for overseas will be larger in each month than the schedules call for. I feel that Mr. Morgenthau should have this information, the authenticity of which I have verified, and I will be greatly obliged if you will communicate it to him. I regret that I must write you in long-hand, but no steno is available. Yours truly, (Signed) C. D. Howe C. D. HOWE. Mr. Arthur B. Purvis British Purchasing Commission Washington, D. C. fighters 60 squadem 22 fighters 1320 operative 12 Have to a squader 60 XI 2= 720 maximine fighters in in in me day single engine fighter production in august. was 400 loses at least(spatz) that Cal state atgiven lunchme septby26, 1940. 116 Banbers 56 squadium 16 each 800 traing 20 squadrans for 30 squdram texting of which 9 are at active at one time Coastal command good havy 117 September 26, 1940. MEMORANDUM To: The Secretary From: Mr. Young INFORMAL POLICY COMMITTEE MEETING WEINESDAY, SEPTEMBER 25, 8:30 A.M. Present were: Secretary Morgenthau Assistant Secretary of War, Patterson Mr. Knudsen Philip Young Under Secretary of Navy, Forrestal - absent Secretary Morgenthau opened the meeting by stating that he considered the primary purpose of the committee to be the allocation and coordination of the British program and the Defense program, whereupon, the point was raised as to possible allocation of aircraft deliveries on a one-for-one basis from now until July 1, 1941. Judge Patterson stated that in considering the allocation of any part of the British program it had to be remembered that General Marshall did need a certain amount of basic equipment for training purposes. Mr. Knudsen added that the Army also needed a certain number of pursuit planes for its training program despite the needs of the British. Secretary Morgenthau explained to Mr. Knudsen the conversation which he had had with the President last week on the one- for-one allocation of aircraft delivery. He added that Secretary Knox had said the preceding evening that he was ready to go along and that also Secretary Knox had stated that he might an- ticipate aircraft deliveries for the Navy carriers and release some of the present planes from the Navy carriers to the British as many of them were two or three years old. In fact, Secretary Knox even went so far as to say that he might release 50 percent of those planes on hand. 118 -2Secretary Morgenthau pointed out the British needed trainers and Knudsen replied with the statement that the British did not have more than five hundred on order. The Secretary described in summary form what the attitude of Canada was with respect to the release of training planes. Secretary Morgenthau pointed out the delivery ratios as evidenced by the Consolidated aircraft table and Mr. Knudsen inquired as to whether or not the same machine was being manufactured for both the British and the U. S. Secretary Morgenthau replied that the British would have to take the same type and that additional orders would be placed where necessary to compensate for the diversions. Mr. Knudsen inquired as to whether the U. S. would also receive accelerated deliveries on a one-for-one basis in a situation such as Lockheed, where the entire production seemed to be British. Secretary Morgenthau replied that the U. S. would certainly not get such deliveries as there was no question of fairness involved. Mr. Knudsen said that the Secretary should be given the Order of the Garter, to which the Secretary replied that he would prefer something above the waist1 Secretary Morgenthau inquired as to the number of shifts employed at the Boeing plant and was informed by both Mr. Knudsen and Judge Patterson that that particular company was already up to the ears and operating on three shifts. In looking at the Martin schedule, the Secretary made the statement that half of the B26 orders should go to the British. Judge Patterson pointed out that the British were already getting better than one-for-one on all the important stuff and that this theory would not work if put on a basis of total figures. Secretary Morgenthau cited the Sperry bomb sight as an example of what might be done. Judge Patterson raised the question as to commercial business and pointed out that certainly no capacity in England was being used for the production of commercial planes. With this in mind the group examined the tables for Lockheed and Douglas, but Mr. Knudsen didn't think much of the idea of cutting down on this commercial business. Secretary Morgenthau stated that he wanted to get the British everything that he could to fight with between now and July. Mr. Knudsen pointed out the fact that the tables which 119 -3- were being studied by the group were not up-to-date, inasmuch as the Army and Navy had placed a number of orders recently. Judge Patterson again reiterated the fact that the British were really getting more than one-for-one, if analyzed on a basis of type. The Secretary replied that he was not trying to be fair about it and was considering the one-for-one theory purely on the basis of the monthly delivery schedules from now until July. Judge Patterson insisted that the formula was misleading and should be so clarified that its meaning was clear. Mr. Knudsen interposed the remark that the British would be getting planes on a fifty-fifty basis, just like one horse and one rabbit1 The Secretary stated that he was very anxious to squeeze out an extra one thousand planes and Mr. Knudsen said it was a question as to whether the Army and Navy could get along without them. In any event, it was decided that the matter should be definitely brought up before the President, and the Secretary closed the conference with the statement that because Under Secretary of the Navy, Forrestal, was late, it would cost him five hundred planes. Secretary Morgenthau inquired as to what other problems there were which should be taken up and glanced at a list of items which had been submitted by Philip Young. The Secretary mentioned the certification of tank assembly capacity by the War Department and the Defense Commission and asked Philip Young to explain it. It was pointed out that General Harris of the Ordnance Division was quite agreeable to certifying that assembly capacity for three to four tanks per day was necessary although the Army would probably only need, immedi- ately, capacity for one and a half tanks per day. However, General Harris did not wish to make such a certification unless asked to do so. Judge Patterson stated that he would be glad to take care of the matter and Mr. Knudsen said that he could see no difficulty with such a letter on the part of the Defense Commission. Judge Patterson inquired as to whether it should read as being "desirable for national defense" and Mr. Young stated that it should be "essential to national defense". Secretary Morgenthau raised the question of British machine tool orders and Judge Patterson said that he thought that was a very serious situation. Mr. Young replied, however, that it was definitely making progress and would probably iron out in a few days. oo00oo 120 4- After Judge Patterson and Mr. Knudsen had left, Under Secretary of the Navy, Forrestal, arrived at approximately 9:05 A.M. Secretary Morgenthau explained to him what had transpired, as noted above, and stated how much he had missed Forrestal's support on the one-for-one program. The Secretary also told Forrestal about his conversations with Colonel Knox the evening before, to which Forrestal replied that the Navy was ready to go ahead. The Secretary added that Colonel Stimson was not at all enthusiastic about the idea of the Informal Policy Committee and that it was necessary for him to be interested if it were to be successful. Mr. Forrestal brought up the question as to whether Admiral Stark and General Marshall should be present at the White House Conference, or at these informal committee meetings. The Secretary replied that he emphatically thought they should not be present as they represented the professional end in their individual departments rather than the policy end. Mr. Forrestal was very apologetic about his being late for the conference and made the statement that he had assumed Secretary Knox was going to be present. P.4. 121 MEETING OF INFORMAL POLICY COMMITTEE WEINESDAY, SEPTEMBER 25. 8:30 A.M. BRITISH PURCHASING PROGRAM 1. Delivery of fighting planes to the British on a one-for- one basis in those instances where there is a preponderance of U. S. deliveries between now and July 1, 1941, with the understanding that additional orders would be placed where necessary to account for diversions. 2. Problem of allocating British machine tools between U. S. demands and British export demands. This problem arises principally from the fact that British machine tool orders are maturing rapidly and command machine tool production at the present time. American manufacturers have been voluntarily diverting machine tool orders for Britain to domestic manufacturers because of preference ratings given out by Army and Navy. 3. Need for coordination of British program for Ordnance items with Army and Navy Ordnance programs. British requests for clearance on such items have been held in abeyance pending determi- nation of item standardisation and production capacity allocation. 4. Desire of the British to ship to England not only aircraft engines for frames manufactured in England, but also ad- ditional aircraft engines in sufficient quantity to initiate and maintain a reserve supply of engines in England. 5. Certification by the War Department and the Defense Commission to the RFC as to the amount of Baldwin Locomotive capacity necessary for tank assembly. It is suggested that although the Army had proposed to finance the needs of Baldwin from Army ap- propriations that the RFC do the financing according to the Continental pattern. GENERAL 1. Desirability of placing an embargo on the export of machine tools to the axis powers. At the present time, machine tools may be freely exported in any instance where they are not requisitioned for use in this country. 122 -22. Sweden has applied for an export license for complete plans, drawings and specifications of Republic 2PA and EP1 pursuit planes. Jigs, dies and fixtures for these models are already in Swedish possession in the United States and do not require an export license. Sweden has also asked for an export license for three aircraft engines for Douglas DC3's, as well as spare parts for wing panels and landing gear. 3. Desirability of forcing manufacturers of commercial transport planes to utilize capacity now engaged on commercial business for military purposes. 4. Method to be used for ascertaining the possibilities of increasing production in certain critical and strategic items through the placing of orders for fixed amounts of specific models over a definite period of time. 123 September 26, 1940 9:32 a.m. H.M.Jr: Wm. S. Hello. Knudsen: Yeah. This 18 Knudsen. H.M.Jr: Good morning, Bill. K: How are you? H.M.Jr: Fine. K: Say, I looked over these planes and where- ever they've got orders they are pretty well on a 50-50 basis now. In fact, they are a little over. H.M.Jr: Yeah. H.M.Jr: Now, do you want to take these figures down? Do I want to take them down? K: Yeah. H.M.Jr: Sure. K: There's just a few of them. Take it to K: July 1st, see. H.M.Jr: July 1st. K: To July 1st. Bell -- British, 300 -- U.S., 267 Boeing -- 18 -- U.S., 128 H.M.Jr: Now was that the 4-engine? K: That's Boeing, the CF. H.M.Jr: That's the 4-engine? K: Yes, sir. H.M.Jr: Right. 124 -2Brewster K: Consolidated H.M.Jr: K: H.M.Jr: K: -- British, 561 -- U.S., 190 109 258 Now, that would be the 4-engine, wouldn't it? Yeah, that's these flying boats. Oh, that's flying boats. That's both. That's both flying boats and 4-engine. H.M.Jr: oh, you don't distinguish between them. K: No. They are about the same size, you know in power. H.M.Jr: I see. Curtise-Wright British, 1116 Douglas " Glenn Martin North American 11 Lockheed U.S., 352 960 933 370 320 180 1092 1215 423 " Grummen -- 201 1166 Now they've got two orders more, one with Vought-Sikorsky and one with Vultee for 50 and 77 respectively. These two companies have got American trainers that are not comparable. But on comparable planes, we are back on the basis you spoke about now. H.M.Jr: Well, the only place where they can pick up some is really then in Consolidated and in Boeing. Is that right? That's right. K: .M.Jr: And Brewster And Grumman. You might K: M.Jr K: H.M.Jr: Grumman? Grumman. Grumman, Consolidated and 125 -3K: Boeing, Consolidated and Douglas, I would say. H.M.Jr: Wait a minute. Consolidated, Boeing and Douglas. K: I think that's the only precise plane they are looking for. H.M.Jr: How about Grumman? K: Well, Grumman is this little fighter and H.M.Jr: they haven't got very many of them on order. Well, now, let me just do that once more. That's Consolidated, and Douglas, and Grumman. K: H.M.Jr: K: No. Boeing, Consolidated and Douglas. Yeah. Now that meeting is supposed to be scheduled with the President for tomorrow. The Army said they weren't ready. They asked to postpone it 24 hours. Can I send Mead? H.M.Jr: Well, you come yourself. K: Well, I have to be away tomorrow. H.MJr: Oh, gee! Well, that's too bad. Do you have to be away tomorrow? K: H.M.Jr: Yeah. Is it important that I be here? Do I think so? Yes. I mean, I don't know what your meeting is, but if it's definitely scheduled for tomorrow, I think it's very important. K: H.M.Jr: Uh-huh. What time is it tomorrow? It'11 be in the morning. K: In the morning. H.M.Jr: Yeah. I don't think that Mead would do I mean, with the President - you know. I don't think the President knows him. 126 -4K: H.M.Jr: All Well, I'll try to arrange it so I canright. be here. Supposing I call up General Watson, you see, and tell him that you have a meeting tomorrow but if the meeting was definitely tomorrow, you d postpone it. Is that right? K: Correct. H.M.Jr: Is that right? K: Fine. H.M.Jr: But that you wouldn't want to postpone it unless the meeting was definitely scheduled. I'll do that and I'll let you know. K: Thanks. H.M.Jr: Now, I take it - Ed Foley reported his luncheon K: with you yesterday Well, we agreed - I called up Hitchcock and had him withdraw the request for rulings. H.M.Jr: Is that Curtiss-Wright? K: Yeah. H.M.Jr: Where did that leave you? K: That leaves us here where we'll have to talk H.M.Jr: But as far as the Treasury is concerned K: You are not asked to do anything at the moment. H.M.Jr: Are you satisfied for the moment? K: Yes, sir. H.M.Jr: Entirely? K: Yes, sir. H.M.Jr: Thank you very much. K: Thank you. about the contract proper first. See? 127 September 26, 1940 4:08 p.m. H.M.Jr: Hello. Operator: Stimson. Henry Stimson: Yes. H.M.Jr: Hello. Henry talking. I think you called S: me earlier today. I did. I had a talk with the President this morning and I took up with him the subject that I talked over with you - the regularization of our situation - and he was not at all unfavorable there - but I'm trying to gather in some of the lines. H.M.Jr: Good. S: We had appointed here sometime ago some representatives from the Army and the Navy and the British Purchasing Commission to consult together in regard to aircraft standardization and aircraft delivery schedules. Now I think there ought to be somebody on it from the Treasury. H.M.Jr: S: Good. In other words it's a commission through which ought to come these matters which too often come in other ways from above instead of from below up. H.M.Jr: (Laughs). I see. S: (Laughs). They come from above down and - I mean, they are more apt to get fair discussion first. H.M.Jr: Who is the above - meaning me? S: No, not meaning you. H.M.Jr: S: (Laughs). (Laughs). But giving you a fair guess at who I do mean. 128 -2H.M.Jr: I get you. S: But I think that your people ought to be on it so that you'll be in touch - have your figures. H.M.Jr: S: Good. Now, I also wanted to tell you that I'm having prepared, and I had the first draft of it last night, a study made by the general staff here as to - containing an estimate of the present relation of the United States to the world crisis, and the present, as far as we can forecast them - the conditions of the various munitions which we're having made at different periods of that crisis - what'11 be ready at one time, what'11 be ready at another. H.M.Jr: Yes. S: Unfortunately, they're not all in line - very differently - and some of the ones that we need quickest are the furtherest behind. H.M.Jr: S: Right. Now, I told the President of that - he was interested, and I'm trying to get these different elements of the machine under-way. H.M.Jr: S: Good. catch his mind Another thing was - I did on one thing that I think I discussed with you - I've forgotten whether I did or not, I think I did. H.M.Jr: What's that? S: That is in the deferment program of the long- range Army bombers. H.M.Jr: S: Oh, yes. That, in other words - I called his attention to the fact that if there was to be any deferment in either the B-17 or the B-24, in the 129 -3first place the B-17 was practically blocked out by the fact that the British have no orders in that class whatever that could be preferred. H.M.Jr: Yeah. S: But in regard to the B-24's, if it's to be H.M.Jr: I see. S: done, why it ought to be done only on condition that we get a preferment in regard to certain engines for our B-17's. He didn't know what is the fact, that we have some B-17's which could be ready very quickly if we had engines. You see? H.M.Jr: I see. S: And they'd make a great change in our position, and if they're going to ask us to give them preferment in another class - B-24's - of course it's substantially the same class only an improved element of it - that by giving us counterpoise in the shape of the engines, they could make the deal one which would be fair from every standpoint. You see? H.M.Jr: I'm listening carefully. S: And he took that in. H.M.Jr: Good. S: and jumped at it and said he hadn't known that fact at all that there was that class of B-17's that needed enginee. H.M.Jr: Well, as I understand it, we have an appointment at 12:30 tomorrow. S: Well, now that was my last proposition. I wanted to ask you what that was about. H.M.Jr: S: Well, it's about these For I've been, except for this interview that I had this morning, I've been, so to speak, 130 -4 a darkorstar weeks so. in the horizon for the last two H.M.Jr: S: Well, I'd say it was a rising star even though it was a dark one. (Laughs). I don't know what, I mean, I don't know what brought this up or what it is about, so you can tell me now. H.M.Jr: Well, as I said at lunch, I want to get all the fighting planes that you and the Navy the 1st of July, and we had this meeting Wednesday at my office at 8:30 at the can spare for the English between now and suggestion of Patterson. S: H.M.Jr: I was just lucky - we just called him in here. Patterson knows all about it. Now the meeting was to have been scheduled for today and Patterson asked it to be postponed until tomorrow, and we had an appointment with the President and then he postponed it until 12:30 tomar row because Patterson asked for it, and I take it Patterson reports to you everything that he does over here. S: If you were speaking through a loudspeaker he would be able to answer whether or not that was accurate, but I assume it 18. (Laughs). All right. If he asked you, it's accurate. H.M.Jr: Pardon me? S: If he asked you, I have no doubt it's accurate. Well, you haven't caught me slipping yet. No, I have not and I don't think so. H.M.Jr: S: H.M.Jr: Well, if you ask him about it, he'll tell you. S: H.M.Jr: Well, that's what it's to be. What additional airplanes the Army and Navy - fighting planes - can spare between now and the 1st of July for the English. 131 -5S: What additional airplanes the Army and Navy - fighting planes - can spare between now and the 1st of July for the English. H.M.Jr: Yeah. And as I say, it would have been today if Patterson hadn't called me and asked that it be postponed until tomorrow. S: That's a detail that I didn't mean to raise. H.M.Jr: Well, is he there? S: He's here. H.M.Jr: Is he nodding his head up and down? S: H.M.Jr: S: H.M.Jr: So far he's maintained an attitude of judicial poise which I distrust. Well, tell him to get off the bench. (Laughs). All right. He will, he understands. Thank you. Good-bye. 132 BRITISH EMBASSY, WASHINGTON, D.C. Personal and Secret September 26th, 1940. Dear Mr. Secretary, I enclose herein for your personal and secret information copy of the latest report received from London on the military situation. Believe me, Dear Mr. Secretary, Very sincerely yours, (For the Ambassador) have Bether The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 133 Telegram from London of September 24th, 1940 Naval. A British submarine reports having sunk an enemy merchant vessel of 8000 tons off Gironde on September send. During the last two days 51 ocean going ships have arrived safely in convoy in United Kingdom ports. Cargoes included 18 grain and cereal, 5 of iron and 3 other metals. 8. R.A.F. It is considered that extensive damage was done to shipping and barges in Dutch and channel ports during our night bombing operations on September 22nd-23rd. Now reported 4 aircraft successfully attacked aluminium works near Dreaden and 4 other Failways in Germany. September 23rd 6 Blenheims were despatched on offensive reconnaissance of the channel ports, but 5 could not complete their task. All returned safely. Eight aircraft of Coastal Command attacked Breat harbour. It is thought that a large number of bombs attained the target areas, although results could not be observed. on the night of September 23rd-24th, 186 aircraft were sent out, of which 120 heavy bombers/ 134 bombers went to attack utility services at Berlin. The remaining 66 were given shipping targets in Dutch and channel ports. In addition 6 medium bombers carried out a security patrol over Calais and 9 other aircraft leaflets over Northern France and the channel islands. All the aircraft except 8 returned safely. 3. O.A.F. of 4 serious fires caused during the night of the SEnd-23rd and already reported, 3 were under control yesterday evening. one is still serious and threatens the complete destruction of a factory. At 1 gas works, there was serious damage to three gas-holders, and one flour mill, normally employing 1800 hands, has been practically destroyed and will be out of commission for a long period. Casualties reported during this night in the metropolitan police area were 72 killed and 224 injured. Repair works on Sewers in one London district caused by previous raid was delayed by further damage, and an unexploded mine has temporarily stopped pumping at a station supplying Eltham district with water. September 23rd, enemy activity consisted of 2 main raids. About 200 enemy aircraft operated over Kent and the Themes estuary during the morning. They consisted chiefly of fighters. Our fighters intercepted and destroyed 10 aircraft before they withcrew. In the evening, about 100 enemy aircraft were plotted over East Kent. Bombs were dropped chiefly/ 135 chiefly in Eastbourne and Hastings area. During the night of September 23rd there was again considerable enemy activity in the London area and raids also occurred in East Anglis, the Midlands and Liverpool area of Laneashire. In London, only partial dislocation of suburban lines was caused, and railway damage generally was less than usual. The same applies to damage to factories although Woolwigh Arsenal and a factory at Dagenhem damaged the night before were again hit. Preliminary reports indicate that casualties in London were widespread and rather heavier than of late. No important damage is reported from Liverpool district. Summary of Air Casualties. 4. Destroyed Enemy Probable Damaged. By our fighters: Fighters 11 6 6 1 1 By A.A. fire: Fighters Total nil 11 7 In addition an enemy bomber is reported down near Chobham during the night of September 23rd/24th and a Heinkel aircraft destroyed off Lands' End/ 136 End by coastal command aircraft. British 11 aircraft (8 pilots reported safe) 5. Shipping Casualties During the night of September 25rd/24th 2 E. Boats attacked a northbound convoy off the east coast and fired torpedoes. One small British ship of 500 tone was sunk. 32 of the crew of a British tanker (10,500 tons) have been rescued. It is assumed that this ship, which was in & homeward bound convoy attacked on September 21st, was sunk on this occasion. 6. Middle East Libya. During the night of September 21st/22nd, 4 heavy bombers scored direct hits on a ship and on several warehouses in Benghazi harbour, and on the 22nd 6 Blenheims attacked mechanical transport at Sidi Barrani. 35 Enemy bombers attacked Matruh harbour and station the night of September 22nd/23rd. The station is believed damaged, and 8 other ranks were killed. on September 22nd, an enemy air attack was made on Cyprus for the first time. There was no damage and no essualties. 7. Present situation with regard to the Port of London. The Port of London has never been unusable. Use/ 137 Use of the port has been reduced to vessels of 5000 tons maximum, and vessels must discharge at once and leave the port. within these limitations the port 18 functioning normally and 1s dealing successfully with the present volume of traffic. Railway congestion at the docks is very much eased. Although some warehouses have been destroyed, the equipment and essential services of the docks have sustained little damage. 138 BRITISH EMBASSY, WASHINGTON, D.C. September 26th, 1940 PERSONAL AND SECRET Dear Mr. Secretary, I enclose herein for your personal and secret information a copy of the latest report received from London on the military situation. Believe me, Dear Mr. Secretary, Very sincerely yours, (For the Ambassador) have Buther Many The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D. C. Telegram from London dated September 25th. 139 1. Naval. A British submerine sank a U-boat on September 24th in the East Atlantic; another British submarine attacked and sank a large merchant vessel, escorted by two ex-Horwegian destroyers in the Bay of Biscay the same day. Five German mine-sweepers were reported sweeping 8 British minefield nine miles off Dover the morning of September 24th. Twelve Blenheims sent to attack obtained direct hits on two vessels and a near miss on a third. Enemy fighters intercepted and one of them and also a Blenheim were shot down. Dakar. His Majesty's Ship "Cumberland" has arrived at Bathurst. During the morning and afternoon of September 24th Dakar fort and "Richelieu" were fired on by the capital ships. Visibility was bad and no apparent effect was obtained on either target. Air action against our ships is increasing and French morale remains high. Gibraltar. Gibralter was bombed September 24th by unidentified aircraft; about 150 bombs were dropped, some of which fell ashore and a few in the dockyard. The steam generating plant and Diesel plant were both damaged, but the latter will be repaired shortly. 2. Hilitary. Keypt -2- 140 Egypt. Up to early morning of September 23rd no further enemy forward movement in the cosstal area had been reported. on the evening of September 22nd, a mobile column of our armoured division silenced four enemy batteries without effective enemy retaliation. 3. Royal Air Force. During the night of September 23rd/24tk, at least 85 aircraft dropped their bombs on Berlin and widespread fires and damage was caused in the target areas. The heaviest attacks were made upon two gas works and five power stations, our objectives included railway targets, the B.N.M. and Siemens factories, and air port. Most of the sttacks appeared successful, although the results were not in every case fully observed. Other secondary targets engaged in Germany included locks on the Kiel Canal, docks at Bremen and Hamburg, the Dornier aircraft works, railway targets and aerodromes. Several direct hits were reported by other aircraft detailed to attack shipping in the Channel ports. one further heavy bomber is missing making a total of three. Night of September 24th/25th 122 aircraft were despatched to attack the following targets. A transformer station at Berlin, an electrical works near Frankfurt, barges and shipping in Channel ports, and railway targets in Northwest Germany and Belgium. Some mine- laying sireraft were also despatched, and also some machines of the Fleet Air APR to attack shipping at Brest. 4. German Air Force. Additional reports of night bombing on September 23rd/24th. At an aerodrome one heavy bomber was burnt and another damaged. At an armement works, production is impossible at two shops, but some machinery may be salvaged;/ -3- 141 salvaged; in the other two, production will be resumed in a few days. The latest estimate of casualties in the London area is 140 killed and 350 seriously wounded. During the morning of September 24th two formations of about 300 and 200 enemy aircraft crossed the south east conet. Elements of both raids reached the Thames and East London but did not approach within ten miles of the centre of the City. During the first paid bombs were dropped in the Thames Estuary and notably at Gravesend where training ship "Cornwall" was sunk. During the second raid bombs were dropped indiseriminately over Kent and Sussex. In the afternoon a smaller raid of about 20 attacked Southampton, where 25 persons were killed and 40 injured at an aircraft factory shelter. No serious damage was done to the factory and the affect on production will be slight. About 40 casualties including 28 killed, also occurred at Brighton. weather conditions during the day were unfavourable for fighter action and comparatively few interceptions took place. During the night London was again the main target for enemy bombing which was very widespread. Railways and hospitals appeared to receive most attention, 6 hospitals being hit; damage very slight. Dockland was almost untouched. Fires throughout London area were extensive but are now under control. Other areas visited by enemy bombers were Liverpool, Dundee and the Midlands and South Midlands. some intercuptions were caused to railways in inner and suburban London and serious damage was caused to "The Times" building. Little damage was done at Liverpool and no casualties are reported. One serodrome was bombed and an unexploded mine is reported inside an aircraft factory. 142 5. Summary of air casualties. destroyed probable damaged Enemy by fighters Bombers Fighters Total 4 2 3 6 6 7 a 13 7 British: 5 fighters (3 pilots safe). 6. Shipping Casualties. 2 more British chips totalling 11,000 tons are now considered sunk in enemy attack on convey on September 21st but anamanian tanker mentioned in the summary on the 22nd is safe in herbour, the ship of this nationality sunk being a smaller one of 5,000 tons. One tanker (8,000 tons) not in convey was torpedoed on September 21st. 7. Middle East. Libya. on 22nd our medium bombers attacked Italian concentrations causing fires and explosion and on 25th they attacked Tobruk where bombs fell on buildings and jetty. All our aircraft returned. East Africa. Between 22nd and 25th in attacks made on Italian eneampments and aerodromes in addition to damage caused to buildings 2 enemy fighters and 1 bomber were destroyed on the ground. 143 BRITISH EMBASSY, WASHINGTON, D.C. September 27th, 1940 Personal and Secret Dear Mr. Secretary, I enclose herein for your personal and secret information a copy of the latest report received from London on the military situation. Believe me, Dear Mr. Secretary, Very sincerely yours, have Butha The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D. C. 144 September 27th, 1940 Personal and Secret Dear Mr. Secretary, I enclose herein for your personal and secret information a copy of the latest report received from London on the military situation. Believe me, Dear Mr. Secretary, Very sincerely yours, (SGD) LOTHISN The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D. C. :NB 145 Telegram from London dated September 26th. Naval Our operations at Daker have been discontinued. Previous bombardment of September 25th, one British battleship was hit by a torpedo and another suffered slight damage from shell-fire. Three other warships were slightly damaged. During an air attack on Gibraltar September 25th about 200 bombs were dropped and one naval trawler was sunk. Two naval officers and twelve ratings were killed. Three OF four aircraft are claimed shot down by anti-aircraft fire. British naval forces again attacked sidi Barrani morning of September 25th causing fires and explosions. 2. Royal Air Force. During the night of September 24th - 25th two important factories, one power station and a principal transformer station at Berlin were attacked. with the exception of the last target, direct hits were seen and fires started. The attacks on barges and shipping were generally successful especially at Havre, Boulogne and Calais. Several large fires and station at Havre was hit. Railway targets in Germany and Belgium/ 146 Belgium were also successfully attacked. September 25th an aircraft of coastal command scored a direct hit on one of three small merchant vessels off the Dutch coast and a Blenheim shot down an enemy flying boat near Breat. Night of September 25th - 26th aircraft were despatched against the following targete: three German capital ships at Kiel, two power stations in Berlin, railway targets in northwest Germany and Belgium and dock and shipping in Dutch and Channel ports. All aircraft have returned. 3. German Air Force. Unexploded mine in aircraft factory reported in last summary has been dismantled. September 25th in the morning about 100 aircraft approached Dover. Our fighters were in the air and no interceptions were made . as the enemy turned back towards the French const. At about 11.45 about 50 enemy aircraft approached Bristol where an aircraft factory was bombed and damaged; repair work and accurate assessment of damage are at present hindered by an unexploded bomb; 60 persons are reported killed and 150 wounded; our fighters intercepted and shot down 18 of the formation. Later in the afternoon a formation of 24 bombers escorted by 12 fighters attacked Plymouth; our fighters intercepted and dispersed the raid; no serious casmalties or damage to ships or naval establishments/ 147 establishments were caused. Other seaside towns on south coast were bombed and damage caused to private property and some casualties inflicted. Some machine gunning took place at Brighton. Summary of Air Casualties. Destroyed Enemy by our fighters Bombers Probable 16 Damaged 7 16 4 7 Fighters 4 3 3 Type unknown 2 1 0 4 0 2 26 8 12 By anti-aircraft fire Type unknown Totals British 4 aircraft (2 pilots safe). One bomber missing (yesterday). Night of September 25th - 26th enemy bombing in London was on a similar scale although East End was almost entirely neglected and indiscriminate bombing over the rest of England was more extensive. Some damage was done to house property and small factories but no reports of damage to important factories have been received. There were fewer fires than on previous nights and all were under control by the morning. 148 Shipping Casualties. 4. September 25th British ship "Salaria" (5,800 tons) in convey with a general cargo for Montreal was torpedoed and sunk 1 n the northwestern approaches. Another British ship (6,200 tons) in convoy was torpedoed in the same area but is still afloat; H.M.C.S. "ottawa" has 55 survivors on board. A British warship reports that she has on board 46 additional survivors from the "City of Benares". A French escort vessel has arrived in port towing a British merchant vessel torpedoed in an attack on homeward bound convoy on September 21st. A convoy of 32 shipe has arrived safely in home waters. Cargoes include steel and scrap, pig iron and iron ore, oil, lumber and paper and pulp. Middle East. 5. Enythmea, Between September 21st and our 24th/medium bombers attacked various aerodromes in Erythm At one aerodrome a large petrol fire was started and bombs fell amongat five fighters. on the night of September 23rd - 24th two of our aircraft made dive attacks on enemy yroops in Kassala. Melta, on September 24th 8 Italian fighters of the latest type were intercepted by Hurricane fighters and two Gladiators one enemy fighter was show down and two damaged, one by anti-aircraft fire. 6./ 149 6. Italy. Two groups of Italian fighters, about 54 aircraft, and two wings of bomber aircraft, about 70 aircraft, are leaving Italy for Germany. It seems fairly certain that these units are moving completely with their own maintenance personnel and will operate under German control. 150 September 27, 1940 8:50 a.m. RE BRITISH PURCHASING PROGRAM Present: Mr. Purvis Mr. Young Mrs. Klotz H.M.Jr: Before I forget, I have a suggestion to make, to show you how - you can remember this, this is easy. It will just take me a minute and I don't want to forget it. I want to show you how right I was in the impression, as Phil called it, the "Fifth Columnists. Bill Bullitt was at my house last night for dinner, and he talks very blue, so I said, "What is the matter?" "Well," he says, "the British are running out of pilots." Purvis: H.M.Jr: When Layton saw Knox yesterday afternoon, the first thing he heard was that the people on the other side were running out of pilots. So I said, "Well, look, Bill, have you heard about the Canadian program?" He said, "No." I said, "Between now and the first of January, they are going to deliver 2,000 trained pilots." Do you know Bullitt? He said, "God, it is marvelous! Why didn't somebody tell me that?" Now, Howe is in New York and he must hold a press conference today. Purvis: Howe 18 here. H.M.Jr: Then he must do it here, and tell his story to the press. Purvis: I have got his actual figures. Now, I will condense them for you. H.M.Jr: Not 80 good? 151 2Purvis: H.M.Jr: Purvie: They are not bad. Whatever they are, did you get the same story? I get it everywhere. Purvis: Well, can't C. D. Howe have a press conference? It would be an excellent scheme. H.M.Jr: This morning. Purvie: Yes. I have got to go over to the Hay Adams. I have got Morris Wilson down. I have got them all here, and I don't see anybody who can do H.M.Jr: anything for me except Howe. H.M.Jr: Couldn't he have a -- Purvis: I think it would be a good idea, even on that picture. I would like it if you would - I am sorry to have it - but that is condensed. I have his letter here. H.M.Jr: Canadian training program. What does that mean, "open"? Purvis: That means the number of schools open. H.M.Jr: Three, 48, 83. Purvis: The number by which that is ahead of schedule, not bogged down behind. There are seven schools more than they were suppose to have at that date, twelve more than they were supposed to have at the end of the year, and ten more than they expected by the end of next year. Airdromes will be all completed by November 1st, 1940, which is one year ahead of the original schedule. Buildings all will be completed by the end of November, 1940, and aircraft is available to train, elementary trainers, 137; single engine advanced trainers, 215; bombing and gun trainers, 114; observation flight, communication flight, 20; elementary, 409. The total is 895 planes available for training on September 15 of this year. 3,108 will be available by 152 -3July 1, 1941, resulting in new deliveries of 400 in October of this year, and 200 monthly to March and 200 monthly to June. I tried to condense this for you. H.M.Jr: If they could just say how many come out from Purvie: Well, he hasn't given that. H.M.Jr: Do you want to make a note? Purvis: Yes, that 1s fine. Then by the time the scheme is in full force, they are up to 5,000, 80 by the end of this coming year, they are well in the United States, England, and Canada. advance. H.M.Jr: You mean 5,000 planes? Purvis: 5,000 planes is what is required to do the H.M.Jr: This is planes? Purvie: That is planes, yes. They have their arrange- H.M.Jr: Scheduled full forces December 31, 41, they will have 5,000 planes but you will make a note -- Purvis: Yes, I have got that on the top. Now then, trained personnel, which is the important thing. Already sent to UK, far from being 25,000 they expect to produce in 1942. ments made. behind, three squadrons complete with ground crews and 300 wireless operators 86 against one squadron promised. To be sent in addition by January 1, 1941, 204 pilots, 102 observers, and 122 air guns. Young: Purvie: That is a cumulative total? Yes. Scope of scheme, 25,000 in 1942 of those types, of which you see you get 7 to 8,000 pilote. Now, what I have got to get, of course, is the same thing for the UK, which 18 more difficult to get. 153 4 H.M.Jr: Well, after sleeping on the thing, Arthur, the thing I am - I am sorry I couldn't wait for you last night. Purvis: That is all right. H.M.Jr: But you and I have got to have what I asked for. Purvis: Yes. May I - in order to get operational data of that kind, which is as you can imagine, representing losses, are pretty - I mean, you can imagine it will have to go to the War Cabinet, that request. Do I understand I mean, I didn't compare notes with you (Young) afterward, but from what Young told me the aim here 1s a very important aim from our point of view, if I have understood it correctly. I just noted down what we said, but I understood the object of the request for information 1s first to enable you, as the Administration, to see that we can man additional airplanes before July 1, 1941, and then I want - in case I misunderstood you in any way, a further main aim is to achieve a situation whereby the UK deficiency for fighting purposes in the different groups be currently known with a view to the United States making up such deficiencies where they can to the required UK fighting level out of its resources as losses necessitate, in which way it is felt it may be possible to get away from the present unsatisfactory situation where the UK seems to be asking for releases for planes from the United States without adequate reference to the particular needs for the particular crews. H.M.Jr: You have it right. Let me just put it in my own language. Purvis: Yes. H.M.Jr: What I figure is - I can't make any promises, you see, but if you came in here once a week and instead of you and a half dozen other people trying to go around, say, "This is 154 -5what we need the most.' If you came in and said, "Now look, Mr. Morgenthau, this is for you and for the President. Our situation net as of last week was this figure for arms. We have extraordinary losses in the one, but we gain in the other. Now, we need desperately 50 planes to make up our losses in the Navy. What can you do?" Purvis: Yes. H.M.Jr: Well, then it 18 up to me to go and see if I can get you the particular kind of 50 planes you need, and I don't think it 18 beyond the imagination that if you were very, very short in that particular field we would take some Purvis: right out of our existing planes. Yes, exactly. Yes, I mean -- H.M.Jr: Do you see what I mean? Purvis: It is the sort of thing that counts. After all, if you and I are running the H.M.Jr: business, we take an inventory once a week. If certain merchandise doesn't sell, we don't stock up in it. If we have a big run on something else, we do. All I am suggesting 18, I am not motivated by idle curiosity, but if that - we felt that in a certain place you are getting along and our people might be very, very - let's say, the Army has 200 pilote, advanced training pilots, sitting on the ground with no planes, and you are sitting particularly pretty, say, on the pursuit situation. You might say, "Well, we can forego 50." Purvis: Quite right. H.M.Jr: It would be a two-way - you have 80 many pilots actually finished and trained, waiting, no planes. All right, "We can forego one week's shipment." Purvis: And work it that way as a balancing medium. 155 -6 H.M.Jr: Work it that way. Isn't that sensible? And then instead of saying, "We need this, we need that Now, the first argument, you see, that they throw at us - I want to get on this other thing - you haven't got the pilots, you don't know how to run a four-engine bomber. Well, you either do or you don't. This Colonel Spatz I had lunch with, I asked him this particular question and he said, "Of course they can. Out of that vast number of trained pilots, they can pick enough to man one squadron." Purvis: Yes. H.M.Jr: Of course they can. Now, how many you can man, Purvis: Yes, exactly. I know they have had four-engine machines. I would be very surprised if they couldn't run them. H.M.Jr: So that this thing of doing - of changing this canvas with a brush a foot thick instead of having a very fine, delicate brush, we have got to get down to particulars. And then look what a strong position you are in. But you say, "Look, Morgenthau, these are the figures. We have lost 75 of this thing. We are short. We don't need - we are short in this particular thing, but can't you lend us one month's production of this type?" Purvis: I think the only difficulty I am liable to run up against is the fear of letting information I don't know, but you have enough. as to losses which might be - leak into - unintentionally get into the wrong hands, but that 18 the kind of thing I may find that will frighten them. H.M.Jr: Well, on the other hand, you can't do a job here without it. Purvie: I agree we have got to get information to enable us to give the general picture, but I say, that will be my difficulty. 156 -7H.M.Jr: Purvis: I think this 18 good enough. I still think if Howe would have a press conference - at least, whatever it 1e, it 18 factual. And he has had that verified, actually. I don't know whether you want to read his letter, but he wrote me in his own handwriting last night. That is an excerpt. That is my excerot which I had this morning because I was supposed to give you something concrete. H.M.Jr: That 1 s what I am proposing to do. The way I feel, I have two chances to talk to the this: I understand we are all right on the President. What I was thinking of doing was Navy bombers. You see, the picture is this. The Consolidated are supposed to produce between now and the first of July 164 for the Navy and 79 for you, or a total of 243, so what I am going to ask for is 120 instead of 79, you see. Now, in the case of the B-24, which you have orders for, they are supposed to order 94, of which you were supposed to have gotten 41 and I am going to ask for 47, but it doesn't - that figure - but you wouldn't get one until February. This way you would begin to get some in October. Purvis: In my opinion it is just as important a factor. H.M.Jr: And then they can begin to learn how to use those. Now, the other thing which I was going to ask for, the Army has on order 359 Boeing Flying Fortresses and you have none, of which they were to get 101. Purvis: Of which they were to get 101 by that date. H.M.Jr: Now, what I would like your authority to say is that you are ready to place an order for 100 of these provided that you CAN get 60 of them between now and the first of July. Sounds all right. Purvis: H.M.Jr: And the other 40 within - by October 1st. 157 -8Purvis: Yes. H.M.Jr: Now, I thought if I could get that -- Purvis: That is the new type? H.M.Jr: Definitely. I have recommended against the Purvis: Because that is important in the armor and H.M.Jr: No, this will be the new type, and I wish other. This doesn't -80 forth. somebody in your shop could go out and take a look at it, if they will let you out there, the new Boeing. Let's just see what they call it here. Now, that is - you see, I was going to concentrate on that and not ask for anything else pending what we hear. Purvis: H.M.Jr: Yes, until we see what this develops into in the way of -I mean, what your shortages are, until I get the rest of the picture, because there is no use of going all over the lot. Purvis: H.M.Jr: Purvis: H.M.Jr: And just asking for sacrifices, you mean, irrespective of our needs. Right. Now, the Army has on order the B-17-C, that goes through until March. Then they have a B-17-E which starts in April. That is probably a further improvement. Only 68 of these B-17-C's - well, they were supposed to have gotten 70. If you could get 30 of those, you see, of the B-17-C's, if you could get 30 of those and then get the balance in the 17-E's. Purvie: Yes, that would be excellent. H.M.Jr: Have you talked with Tom Morgan about his bomb sight? 158 -9Purvis: Young: Purvis: No. He said he didn't want to talk about it until he got clearance on the secrecy angle, which 18 about cleared now, he told me yesterday. And by the way, answering your point yesterday about this remark that we have bomb sights four times as accurate, may I say that the answer to that is merely this: It 18 not the question of getting the secrecy item; the thing we are short of is the actual bomb sights. We take a great number of relatively older, stabilized bomb sights, provided they have a stabilizer. It is the shortage of the number rather than the - we also felt we had something very good, as everybody does, but we are actually very short of bomb sights. H.M.Jr: What it gets down to is these flying boats, these two group of four-engine bombers, and the bomb eights. Purvis: Yes. H.M.Jr: Now, do you think before 12:30 you could break this thing down? Purvis: Yes, I could break it down probably now. I will get hold of Howe straight away. H.M.Jr: But you will have him have a press conference this morning? Purvis: I will get right after him on that. H.M.Jr: Now, just a second, please. Oh, I know what I wanted to say. This Colonel Spatz, after much coaxing - I don't know why he was so afraid - the remark was so intelligent - I mean, you would say, "Well, why haven't I thought of this before?" He said he can't understand, and he didn't want his name used, why the English didn't divide up their production so that those planes which they could fly across, they would buy them here and not take the risk of trans-shipping them by boat, and concentrate their orders for 159 - 10 bombers here and concentrate their orders for fighters in England. Purvis: H.M.Jr: It seems just too simple, doesn't it? He said, "I can't understand it, Mr. Morgenthau. The English put their orders for fighters here, then they have the risk of putting them in ships and all the rest of that." Purvis: I think probably the answer would be that, not knowing for certain in regard to what might be done in export - I mean, after all, public feeling has inclined more toward the Allies as the war has gone on, but it might have been possible for it to drift the other way with an export embargo on some particular type, which would absolutely ruin the ones they have on the other side. H.M.Jr: But this thing I am asking for today falls into that category. I am only asking for big ships and ships that could fly across. I am making that point. Purvis: Of course, I mean, if one could ever get to that comfortable situation, it is a very fine idea. H.M.Jr: And you might be thinking of it also in connection with future orders. Now, Phil says that Lockheed called up and says they can take an order for 2,200 more planes. Purvis: Lockheed? H.M.Jr: Yes. Purvie: Did we get permission from the Defense Advisory Board? H.M.Jr: Well, everybody comes back and says your people are crazy about the Lockheed Hudson. Purvie: Yes. We have always had a strong yen for those. 160 - 11 - It is a question, of course, of making arrangements with the Defense Commission. You see, we are only limited by our orders. H.M.Jr: Have you heard this thing that Phil and Buckley worked out in connection with the Canadiane, which I am 80 very enthusiastic about? Have you told it to him? Young: I haven't told it to him. H.M.Jr: Let me tell him, because I want it pushed. I talked with Howe and he said it was perfect, to get four -Purvis: Oh yes. H.M.Jr: And the 2,000 engines in Canada and then put Purvie: I had already gone after Howe on that immediately after you suggested it last week: You mentioned that to him. H.M.Jr: Yes. Young: That engine goes into American planes. H.M.Jr: What are the ones that the plans are for? Purvie: I have them here, the Lockheed P-38 and the Martin B-26 bombers, and the Lockheed P-38 pursuits. H.M.Jr: Canada wants plans for what? Young: Martin B-26 bomber and the Loc kheed P-38. H.M.Jr: That ought to be simple. Young: Do you want to know what engines they are to it into these two planes that Canada wants. take? H.M.Jr: I thought they were going to concentrate on this 2000 engines. Young: They are. That goes into the Martin - it will 161 - 12 go into both of them, I am sure. H.M.Jr: Purvis: H.M.Jr: Well, make sure. I suppose it is suitable to both types, that is the only thing we would have to make sure, that it actually fits both types. Well, make sure. If they can concentrate on one 2,000 horse engine and build the planes around them, they will be getting somewhere. Purvis: Yes. Young: Right. H.M.Jr: Purvis: Well, I am all right now. Yes. I don't think Howe 18 feeling bad. Do you need that thing we had typed up? Purvis: Yes. Is this going to help you out? No, I have a copy of it, but we can get you H.M.Jr: That would be good. Purvis: I will have a copy of Howe's letter to me giving this information plus the excerpt that I made earlier this morning typed up. H.M.Jr: He will want something - I don't know whether H.M.Jr: typed ones for later in the morning. he will want to give a breakdown, but certainly -Purvis: H.M.Jr: I may be able to get that done before the morning. For the press conference. What are the three squadrons? What does that mean, three squadrone complete with ground crews? Purvis: A squadron takes, I understand, from these figures, 60 squadrone of 22 pilots each, turned into figures of pilots. There are 22 to a fighter squadron and 15 to a bomber equadron. H.M.Jr: But you don't say. You say three squadrons complete with ground crews. 162 - 13 Purvis: That was the only way he knew it. I prodded him on this, but I wanted to give you the only information that he had verified from his own office. H.M.Jr: Purvie: H.M.Jr: Purvis: I wonder 1f this is a fighting squadron or a bombing squadron, because I will be asked that question. What he did say, he said this whole thing meant 6,000 people, because they are ten to one in ground service. The difficulty in getting schools earlier, which, however, disappears suddenly, is that you first train your instructors to instruct. If this is right, then why in heck do you need anything down in Texas? Well, I think the answer, if I may say quite frankly, 18 this: We expect to increase our numbers we keep in the air, cumulatively, progressively, all through the next year and a half. Therefore we want more and more pilots all the time to put more planes in the air. H.M.Jr: Purvis: But otherwise- if they have got this show going, why do they need anything in Texas? It takes a tremendous - we have got one in Australia going, which I am going to get particulars on, Australia and New Zealand has one. Australia is quite big. Now, there is another thing that I haven't dared to give you because I haven't got the complete figures, but in addition to all that, Canada 18 doing under the joint air training program, ehe is opening 12 new schools, entirely for UK, in order to transfer personnel from there, from that part of the country which is rendered useless by the bombing and 80 that is only the joint air training scheme which it was said had bogged down, but apparently I think what we need in Texas, the further stuff in Canada, the acceleration in Australia, is probably due to the effects of the fighting. H.M.Jr: Please ask your people to give you the whole thing. 163 - 14 Purvis: Well, I mean, you can't get everything. If this is all over Washington - if this 18 all over, it 18 a bad show. H.M.Jr: It is a bad show. And you say you got that Purvie: Yes. Young: The Norwegians, too. H.M.Jr: What about the Norwegians? Young: The Norwegiane again. H.M.Jr: How many? Purvis: I would say he has got a very good school outside of Toronto. Young: That is good publicity, even though they don't when you went to Knox, too? turn out so many. Purvis: Well, we will see what we can do with this. I will catch Howe before he gets to the plane. H.M.Jr: And you are going to be here until you get through with me? Purvis: Oh, yes. H.M.Jr: All right, thank you. 164 RE BRITISH PURCHASING PROGRAM September 27, 1940 1:45 p.m. Present: Mr. Young H.M.Jr: Well now, things went fairly well. I am Mr. Buckley Mr. Purvis Mrs Klotz authorized to say that on the PBY-5's, you are going to get every one from now until the first of July. Purvis: H.M.Jr: Purvis: Thank you. That is that. I don't know how you make your arrangements, but that is set. But in telling it to Beaverbrook and he to Churchill, we definitely don't want any publicity on it. I am rather relieved to have you say that, because I got that cable. Can I make that a general application to the rifles as well? H.M.Jr: We don't want any publicity. I would say we wouldn't want any on that, either. Purvis: On either of them? H.M.Jr: Yes. Purvis: I will give them that reply. H.M.Jr: Yes. Now, you can have the Sperry bombsight Young: That is improved? H.M.Jr: Yes, the very best, whatever they have got, and I was amazed to learn that the ones the Army are buying are going on the shelf, and General Marshall said there was no reason why you couldn't have those. with all the refinements. 165 -2Purvis: Yes. H.M.Jr: That is what he said. Purvis: What is that? H.M.Jr: Sperry, that is what he said. The Pratt & Whitney engines to be built by Ford in Canada, yes, and you are to get the two plans of the planes you have asked for, the Martin B-26's and the Lockheed P-38's. Purvis: Thank you. H.M.Jr: Now, when they come down to the Army, it was really tough. I haven't been turned down, but somebody has told Stimson something about being short of so many engines, and while I was there, before we went in, Knudsen went to a telephone and came back and said, "All right, I have gotten them 200 - I have switched with the English. They will take 200 of a certain kind of engines and give us 200 of something else." " Young: H.M.Jr: Just as I went out to lunch. Yes. Well anyway, on this thing, he said that he would be willing to say - but this is not to go across the water - that he would be willing to give you the first six of the Consolidated bombers. Purvis: Those are the B -- H.M.Jr: The B-24's. Purvis: Those are the ones we asked for. H.M.Jr: Well, the first six. He wants to take a look at the engine situation, and between now and 166 -3Tuesday he will talk to us, and I begged him to call a meeting on Tuesday for this purpose. They are very loath to give up any Boeings, very loath, but I think that the chances of at least getting every other one of the Consolidated B-24's, the chances are excellent. I think what they want is - Knudsen said it would be easy. I think he said they were only short 40 or 50 engines for the Army for the Boeings, and if they got those, I think they were going -Young: H.M.Jr: These planes that are already completed? Phil, Mr. Stimson didn't have the facts. I couldn't get it. I don't know what the heck he is talking about. I just don't know. But you three will have to do some late work between now and Tuesday to find out just what it is all about. I couldn't get it. But you haven't been turned down on anything and you did get the thing they asked for so badly. You have got your bombsight and you can go ahead in Canada. Purvis: It is pretty good for one morning. H.M.Jr: One morning? A week! The President - you see, we followed Sir Walter Layton and the President said he told Sir Walter Layton that he should go nowhere and see nobody unless he had Arthur Purvis with him. Purvis: Sir Walter Layton has been duly impressed. I have been trying to suggest it to him for some time, that this is the proper channel. If he goes to the Army, he will see the Army only, whereas if he goes through this channel, he will see them all in due course. 167 -4H.M.Jr: And the President told him everything that I told him this morning about this information that I wanted. Purvis: He told him that, yes. Layton just mentioned H.M.Jr: But as if it was his own idea, right? Purvis: Yes. H.M.Jr: Well, that is all the better. it to me as I came away. Now, if you hear what I am going to dictate, I can't help it. Admiral Stark said - oh, in the first place, a number of people said, "How are they going to pay for this thing?" And Stark said, "Well, all I know is that Ambassador Lothian said they would have reason to begin to worry in the spring of 1941, how they are going to get the money to pay for these contracts. Klotz: That is rich. H.M.Jr: And then you wonder how some of these rumors start. Phil, the thing that was a knockout with these three sheets of paper which I had to give to the President this morning, the fighters and the trainers and the observers. Now, this is the thing we can get away with on a semi-politi- cal basis. After all, he says the trainers are getting low. He says three to one, which is perfectly all right on the fighters, and the rest is about fifty-fifty or something like that. He says, "I think that is perfect. But he said, "Taking it as a rule of thumb, from now on the English will get half of everything. 168 -5But he had these things and he said, "Where were those figures, Henry, that you gave me this morning?" If One mistake I think we are making, Phil, if you don't mind, we don't service Stark and General Marshall. When we send stuff like this, you see, we haven't been sending it to them and I think in the future where we send something to Stimson and the Assistant Secretary and the Undersecretary, we should also send these things to both General Marshall and Admiral Stark. Young: Did they get the others all right? H.M.Jr: What? I didn't circulate that stuff. I only Purvis: Yes. Young: Knudsen didn't question the figures? H.M.Jr: went part way on this stuff. But this Canadian thing should be circulated. In the first place, the meeting opened this way. I asked Knox please to speak first. He said, "The Navy is ready; we can give what Henry wants." So we started off that way. That broke the ice. Then when they kept arguing about the engines and the planes and the Boeings, Knudsen said, "But they are asking for so little." He said, "They are asking for 59 Boeings. He said, "It is so little. He said, "I can take care of the engines. I can take care of the engines, don't worry about that. But they are not asking for anything." He said, "They are asking He worry can take care of the for the so engines, little." I said, "Don't engines." about He said, "I have got the engines. 169 -6Purvis: He paints a perfect picture. Young: I can just see George Mead's face when he says that. H.M.Jr: He said, "I can take care of the engines. (Discussion off the record) There is one thing you ought to have your West Coast man - this Boeing B-17-C, which is the one which is coming along for the next three or four months, has no engine at all in the tail, no gun. Do you want it? Is it worth fighting for? As long as they for some reason or other feel so generous about the Consolidated, why not concentrate on the Consolidated? Purvis: Quite a point. H.M.Jr: Is it worth fighting about? And then do with Consolidated what we are going to do on Buffalo, really help this fellow get production. Purvis: Yes. H.M.Jr: The Buffalo man was in today. He is even going to go above what he has already promised. He is getting ten engines a day. He is going to go above what he has already promised. He may go to nine or ten planes a day. Purvis: Yes. H.M.Jr: Now, if he can do it, why can't Consolidated do it, and if the PBY-5 and the four-engine bomber all come from Consolidated, let's everybody concentrate to help them turn the stuff out and check also on the Boeings. I know they have lots of labor trouble out there. 170 -7They are in a bad labor spot. They are threatened with a strike every day. And if these things that I am telling you have no gun in the tail, maybe you don't want it. Purvis: I have got your point there and I think there is something to it, too. Again, many thanks. H.M.Jr: Right. 171 BOEING AIRCRAFT COMPANY Estimated deliveries 1940 Orders Model and Purchaser Sent. 14 Sept. 15-30 1940 Total estimated 1941 deliveries Oct. Nov. Dec. :Jan. Feb. Mar. Apr. May :June: 13 26 :Deliveries on :present orders estimated to : STRICTLY CONFIDENTIAL :Unfilled: Sept. 15, 1940: be made after -June 30, 1941 July 1, 1941 Flying fortress U. S. Army 359 10 7 10 6 9 16 10 5 112 247 23 265 DB-7B two-engine bomber British 7 16 288 XB-29 two-engine bomber 0 U. S. Army 2 2 X2BB two-engine patrol bomber 0 1 650 7 Total Army, Navy and British 1 U. S. Navy 10 6 9 10 16 10 Office of the Secretary of the Treasury Division of Research and Statistics. 5 20 42 135 515 September 15, 1940. 172 CONSOLIDATED AIRCRAFT CORPORATION Sent. 15-30 Oct. Nov. Dec. :Jan. Feb. :Mar. Arr. May June -June Sent.30. 15.1947 14 1040 :Deliveries on present orders estimated to 1940:be made after deliveries : Model and Purchaser 1941 1945 Orders Sent. Total estimated Estimated deliveries Unfilled: : STRICTLY COMMENTIAL July 1, 104] B-24 tyme four-engine bomber 53 14 If 41 14 24 26 94 17 20 26 24 164 10 12 15 10 79 159 27 27 32 41 34 243 215 32 46 65 60 344 33 3 180 1 286 5 3 3 5 6 10 6 19 16 15 11 9 238 8 g 3 1 458 7 Total PBY-5 tyre 220 23 25 PBCY-2 four-engine Navy bomber 56 7 1 2 1 2 1 U. S. Nevy Total Army. Navy and Briti sh 192 3 14 13 130 5 3 PBY-5 tyre two-enrine Navy bomber 3. S. Navy British** 7 5 3 3 5 3 7 Total B-24 tyre 10 4 British* 53 10 3 U. 3. Army 106 7 751 12 19 18 28 31 407 September 16, 1940. Office of the Secretary of the Treasury, Division of Research and Statistics. British orders of this model are reported as LB-30. British orders of this model are reported 88 28-58E and 28-5AME. . .. 173 DOUGLAS AIRCRAFT COMPANY Model and Purchaser Estimated deliveries :Deliveries on :present orders Orders : deliveries estimated to Sept. Sent. 14, 15-30 Oct. Nov. Dec. :Jan. Feb. :Mar. Anr. : May :June -June Sent. 15, 1940:be made after 1041 30, July 1, 1941 :Unfilled: Total estimated 1941 1940 : STRICTLY CONFIDENTIAL 1940 A-20, A-20A type two-engine attack bomber U. S. Army British* Total A-20. A-20A type SBD-1 scout bomber U. S. Navy 228 8 15 28 49 52 39 8 19 29 45 97 100 34 758 27 55 30 986 35 70 58 42 68 81 84 157 11 27 20 22 35 29 13 228 3 135 502 256 57 135 730 256 57 157 B-23 two-engine bomber 2 British (spares) 2 2 4 2 4 1 U. S. Army 1 6 2 6 3 1 Total B-23 1 XB-19 experimental bomber 1 1 U. S. Army 1 DC-5 two-engine transport 3 U. S. Navy 1 Total Army, Navy and British 1 3 1,153 50 100 81 64 103 110 97 100 Office of the Secretary of the Treasury, Division of Research and Statistics. British orders of this model are reported as DB-7, DB-7A and DB-7B 57 135 897 256 September 16, 1940. . 174 BEECH AIRCRAFT CORP. entranced Feb. Mar. :Apr. May June : :Jan. : Dec. : : : Oct. :Nov. : : : : : 1940 Sept. 15-30 : 14. : Sept. 19.1 1940 : $ Model and Purchaser I 1 Orders : : STRICTLY CONFIDENTIAL Total estimated IDENTIFICATION on deliveries present orders : estimated to 15, 1940:be made after -June 30, 1941: July 1, 1941 Sept. : : frainers 72 U. S. Army (AT-7) 3 8 9 11 10 11 10 10 72 transports U. S. Navy Total Army and Navy (JRB-1) 1 1 Philippine Army (188) 1 5 78 3 3 2 5 3 8 3 9 11 10 Office of the Secretary of the Treasury, Division of Research and Statistics. 11 10 10 78 September 18, 1940. 175 BELL AIRCRAFT CORP. Estimated deliveries Dec. Apr. Feb. Mar. :Jan. : : Nov. : 15-30 : 1940 Oat. May :June Total estimated Deliveries on deliveries Sept. :-June : Sept. : 14, : Sept. 1941 : Model and Purchaser 1940 : : Orders : : Unfilled: STRICTLY CON IDENTIAL 15, 30, :present orders : estimated to 1940:be made after 1941: July 1, 1941 : Airaccire pursuit U. S. Army British . Total Airacobra 92 6 6 450 542 6 4 4 1 1 6 32 60 50 300 150 50 332 210 8 6 6 5 20 30 45 50 50 50 11 26 38 45 50 50 50 Airnouda fighter U. S. Army 4 IFL-1 Fighter U. S. Navy Total Army, Navy and British 547 11 1 6 11 26 38 45 50 Office of the Secretary of the Treasury, Division of Research and Statistics. . British models of this type reported as P-400. 50 50 50 337 210 September 18, 1940. 176 BELLANCA AIRCRAFT CORP. 19.1 1940 : : Sept. : : Sept. Total estimated deliveries Deliveries on :present orders : estimated to 14, 15-30 Oct. :Nov. Dec. :Jan. Feb. :Mar. :Apr. May :June:Sept. 15, 1941: 1940:be after :-June 30. Julymade 1, 1941 1940 : : : : : : : TO-50 Observation 3 1 U. S. Army : Orders : : Model and Purchaser Entimated deliveries Unrilled: STRICTLY CONF FIDENTIAL 1 1 3 September 18, 1940. Office of the Secretary of the Treasury, Division of Research and Statistics. 177 BREWSTER AKRONAUTICAL CORP. Estimated deliveries Nov. Dec. Jan. Feb. Mar. :Apr. Total IDENTIFICATION on estimated deliveries :present orders : estimated to May :June Sept. 15, 1940:be made after June 30. 1941: July 1, 1941 : Total F2A type : British* : U. S. Navy : 122 type fighter Oct. : 1940 Sept. 15-30 : 14. 1940 : Model and Purchaser Sept. 1941 : Orders : : Unfilled: : IDENTIAL 14 153 30 15 204 11 25 43 48 32 33 12 41 40 43 48 32 34 26 357 1 SBA-1 one-engine accut bomber 30 40 23 153 204 30 40 23 357 490 3 2 1 U. S. Navy 340 one-engine dive bomber British 493 1 540 7 38 64 89 70 271 269 Experimental modele 3 1 U. S. Havy Total Army, Navy and British 2 3 1,393 43 40 44 48 33 42 66 office of the Secretary of the Treasury, Division of Research and Statistics. . British refers of this type are reported as model 339-E. 94 129 93 632 761 September 18, 1940. 178 GESSNA AIRCRAFT COMPANY : : : : : : frainers U. 5. Army (AT-8) British (T-50) Total Army and British 33 2 1 180 213 Mar. 1Apr. Dec. :Jan. May June : : 1940 Sept. 15-30 : 14 : Sept. 1940 : : Orders : 1941 1 2 4 4 4 4 6 12 18 24 30 9 16 22 28 34 TOTAL IDeliveries on estimated :present orders deliveries : estimated to Sept. 15, 1940:be made after -June 30. 1941: July 1, 1941 6 33 30 30 150 30 35 36 183 30 5 3 Office of the Secretary of the Treasury, Division of Research and Statistics, 1 Model and Purchaser Erlinated deliveries Unfilled: I STRICTLY CONFIDENTIAL September 18, 1940. 179 CURTISS-WRIGHT, BUFFALO STRICTL CONFIDENTIALUnfilled: Model and Purchaser Orders Sept. 14, P-40 Pursuit 1941 1940 Sept. 15-30 1940 Total estimated Estimated deliveries Oct. Nov. Dec. Jan. Feb. Mar. :Apr. deliveries :June May Sept. 1-June 69 18 530 30 83 126 107 106 48 30 530 British (H-81A) 599 81 101 126 107 106 48 30 599 Total P-40 pursuit 22 21 P-40D Pursuit 350 British (B-87) 380 Total P-40D pursuit 730 P-360 Pursuit British 1 3 22 1 4 60 6 1 210 20 2. 11. 17 Other models U. 8. Navy - experimental U. 8. Navy - acout Total Army, Navy and British 37 146 204 18. 35 51 107 273. 46 72 88 253 477 24 47. 1 5 54 60 5 51 27. 210 1 2 1 3 1 1 1 : 1. Amy - experimental 37 4 0-52 Scout observation 3, Army 24 28 12 12 $80.4 Dive bomber U. S. Navy (via U. S. Aray*) 1941: July 1, 1941 30. 51 U. 8. Army :present orders : estimated to 1940:be made after 15, 69 U. S. Army Deliveries on 360 360 1,975 81 106. 131 113 124 107 126 OFFICE of the Secretary of the Treasury, Division of Research and Statistics. coordance with exchange agreement between U. S. Army and U. S. Navy. 106 128 115 1,137 838 September 18, 1940. 180 CURTISS-WRIGHT, ST. LOUIS : : Oct. :Nov. : : : : : : 1940 Sept. 15-30 : 14, frainers U. S. Army (AT-9) 150 8 1 estimated delivered 3 5 12 16 20 65 Other models U. 5. Army (C-46) on :present orders estimated to Dec. :Jan. :Feb. :Mar. :Apr. May June : Sept. 15, 1940:be made after -June 30. 1941: July 1, 1941 1941 : Sept. 1940 Total : : Orders : : Model and Purchaser Estimated deliveries :Unfilled: : STRICTLY CONFIDENTIAL 85 46 46 1 U. S. Army Total Army (P-249) 1 197 1 3 5 8 office of the Secretary of the Treasury, Division of Research and Statistics. 12 16 20 65 132 September 18, 1940. 181 FAIRCHILD ENGINE AND AIRPLANE CORP. Entimated COLIVERIOS 19.1 : : : : Sept. : Sept. : Total on estimated :present orders deliveries : estimated to 14. 15-30 Oct. :Nov. Dec. :Jan. Feb. :Mar. :Apr. : May :June Sept. 15. 1940:be made after :-June 30. 1941: July 1, 1941 : : 1940 : : Model and Purchaser 1940 : Unfilled: : Orders : : STRICTLY CONFIDENTIAL : : trainers U. 8. Army (PT-19) 281 29 43 43 43 43 40 40 Office of the Secretary of the Treasury, Division of Research and Statistics. 281 September 18, 1940. 182 GLENN L. MARTIN CO. Estimated deliveries Unfilled: 14. Sent. 15-30 1940 Oct. Nov. :Jan. Dec. Feb. Mar. :Apr. : : Sept. :June May deliveries :Deliveries on :present orders estimated to Sept. 15, 1940:be June 30. 1941 : Model and Purchaser : Orders Total estimated 1941 1940 : STRICTLY CONFIDENTIAL made after July 1. 1947 3-26 two-engine bomber 201 14 6 1 U. S. Army 24 26 24 26 26 147 54 PBM-1 two-engine bomber 4 1 26 7 U. S. Navy 12 26 2 4-167-F4 two-engine light bomber 158 15 1 British 39 44 40 19 12 40 50 57 57 57 274 72 104 95 51 83 83 606 158 4-187 two-engine medium bomber 600 1 British 326 XPB2K-1 four-engine bomber 1 1 U. S. Navy E-167-F3 two-engine light bomber 1 1 987 6 1 Total Army, Navy and British 1 Britiah 23 58 Office of the Secretary of the Treasury, , Division of Research and Statistics. 381 September 16, 1940. 183 GRUMMAN AIRCRAFT ENGINEERING GORP. : 1 : U. 8, Navy : JRF-1 utility amphibian 1940 : Total per type fighter 28 384 Total Army, Navy and British 36 37 38 present orders deliveries : estimated to 123 36 14 50 29 16 10 12 12 12 554 15 29 44 46 49 50 53 45 2 3 2 431 36 15 2 50 33 170 12 99 14 285 146 41 12 Experimental models U. 5. Army (XP-50) U. 8. Navy (XTEF-1) U.S. Navy (XFSF-1) nonveries on 15-30 Oct. Nov. Dec. :Jan. Feb. Mar. 1Apr. : May :June -June : Sept.30, 15,1941: 1940:be after Julymade 1, 1941 : British* Total estimated : U. S. Nevy Sept. : M type single seat fighter : 14, 1940 1 Sept. 1941 1 : Orders : $ Model and Purchaser Estimated COLVISM Unfilled: 1 STRICTLY CONFIDENTIAL 24 12 3 1 1 1 2 2 2 1 1 570 1 16 31 47 49 51 53 53 Office of the Secretary of the Treasury, Division of Research and Statistics. . British orders of this type are reported as G-36-A and G-36-B. 45 50 52 447 123 September 18, 1940. 184 LOCKHEED AIRCRAFT CORP. Unfilled: Estimated description 14. 1940 Sept. 15-30 Oct. : Nov. Jan. Dec. Feb. :Mar. :Apr. May :June : Sept. 1941 : Model and Purchaser 1940 : Orders : 1 STRICTLY CONFIDENTIAL Total estimated Deliveries on :present orders deliveries : estimated to Sept. 15, 1940:be made after -June 30, 1941: July 1, 1941 P-38 type two-engine pursuit U. S. Army 79 British* 800 Total P-38 pursuit 879 2 1 8 5 2 1 8 5 20 21 22 5 21 30 75 117 116 364 436 25 42 52 75 117 116 443 436 78 51 50 46 42 30 589 13 36 52 79 414 two-engine reconnai seance bomber British 37 two-engine medium bomber British 589 60 77 82 73 360 2 1 308 Other models U. S. Army (xp-49) U. S. Navy (18) British (commercial) total Army, Navy and British 1 1 2 1 1 2 45 11 1,876 72 8 14 88 101 4 5 87 1 107 95 102 123 Office of the Secretary of the Treasury, Division of Research and Statistics. Briti, sh orders of this type reported as model 322. 172 182 43 2 1,129 747 September 18, 1940. . 185 NORTH AMERICAN AVIATION, INC. Unfilled Estimated deliveries Sept. 1941 : Model and Purchaser 1940 : Orders : I STRICTLY CONFIDENTIAL U. 5. Army U. S. Navy* Deliveries on :present orders deliveries : estimated to Sept. 14 Oct. Nov. Dec. Jan. Mar. Apr. : May June Sept. 15, 1940:be made after 15-30 1940 -June 30g 1941: July 1, 1941 : AT-6 type advanced trainer Total estimated 716 1 10 64 68 6 6 78 88 7 8 98 98 98 98 701 15 30 2 British 1,384 15 87 89 91 93 95 95 95 75 35 770 614 Total AT-6 type 2,130 18 97 159 165 178 191 194 193 173 133 1,501 629 30 1 BT-14 type basic trainer U. S. Army 9 4 4 9 British Total BT-14 type 9 4 13 13 13 B-25 two-engine bomber U. S. Army 184 M-73 pursuit British 384 Experimental models U. S. Army Total Army, Navy and British 1 7 3 13 19 1 5 21 24 24 24 136 48 21 43 55 55 180 204 2 1 2,713 31 98 162 172 193 1 215 237 2 260 Office of the Secretary of the Treasury, Division of Research and Statistics. . Navy orders of this type are reported as SNJ-2. 46 Home British orders of this type are reported as NA-66. 252 212 1,832 861 September 18, 1940. 186 REPUBLIC AVIATION CORP. Unfilled: Orders : 1941 1940 : 1940 1 Sept. 1 Sept. : : I Model and Purchaser Equitated Coliveries I STRICTLY CONFIDENTIAL Total estimated :Doliveries on :present orders deliveries : estimated to 14. 15-30 Oct. :Nov. Dec. :Jan. Feb. :Mar. :Apr. : May :June Sept. 15, 1940:be made after 1-June 30. 1941: July 1, 1941 : : : : : 14 Pursuit U. S. Army 81 1 2 14 1 2 6 3 12 12 15 15 15 81 IP-43 Pursuit U. 5, Army 7-35 Pursuit U. 8, Army 6 14 5 4 8 8 IP-47 Pursuit U. S. Army Total Army 1 1 104 2 4 6 8 7 1 12 16 Office of the Secretary of the Treasury, Division or Research and Statistics. 19 15 15 104 September 18, 1940. 187 RYAN AKRONAUTICAL CORP. Unfilled: Estimated deliveries Deliverior on :present orders Sept. Sept. deliveries : estimated to 14. 15-30 Oct. Nov. Dec. Jan. :Mar. :Apr. : May :June Sept. 15. 1940:be made after 1940 1941 Total estimated : : : : Model and Purchaser 1940 : Orders : : STRICTLY CONFIDENTIAL -June 30. 1941 July 1, 1941 : : frainers U. 8. Army (PT-20A) U. S. Navy (NR-1) total Aray and Navy 110 17 120 230 17 27 27 32 15 18 18 18 18 18 15 120 22 45 45 50 18 18 15 230 7 110 Office of the Secretary of the Treasury, Division of Research and Statistics. September 18, 1940. 188 SPARTAN AIRCRAFT COMPANY 2 : frainers U. S. Navy (NP-1) 201 IDDIVORIOS on estimated :present orders deliveries : estimated to Sept. 15-30 :Nov. :Dec. :Jan. :Feb. :Mar. :Apr. : May June Sept. made after I-June15, 30.1940:be 1941 July 1, 1941 1940 : 14. 1940 Total : Orders : Sept. : 1941 1 : Model and Purchaser Equated 1 STRICTLY CONFIDENTIAL 3 5 10 16 Office of the Secretary of the Treasury, Disinion of Research and Statistics. 19 20 74 127 September 18, 1940. 189 STEARMAN AIRCRAFT Mar. Apr. May :June I Feb. : :Jan. : : Dec. : Nov. : : : : 15-30 Oct. : 1940 Sept. : 14, 1941 1940 : Orders Sept. : Model and Purchaser Estimated : anfilled: : STRICTLY CONFIDENTIAL TOTAL estimated on deliveries Sept. :-June :present orders : estimated to 15, 1940:be made after 30. 1941: July 1, 1941 frainers U. 5. Army Philippine Army Total 527 32 60 45 40 70 80 80 36 14 12 12 539 70 32 60 45 40 70 82 527 12 80 Office of the Secretary of the Treasury, Division of Research and Statistics. 80 36 14 539 September 18, 1940. 190 STINSON AIRCRAFT STRICTLY CONFIDENTIAL Estimated deliveries Sept. 15-30 148 IDeliveries on present orders deliveries : estimated to Oct. Nov. Dec. :Jan. Feb. :Mar. :Apr. : May June Sept. 15, 1940:be made after J-June 30. 1941: July 1, 1941 : : : 0-49 Observation U. S. Army Total estimated : 1940 : 14 : Sent. : Model and Purchaser 1941 1940 : : Orders : 4 5 10 15 15 16 17 18 19 Office of the Secretary of the Treasury, Division of Research and Statistics. 119 29 September 18, 1940. 191 VOUGHT-BIKORSKY AIRCRAFT : : Total Navy and British 5 26 29 41 19 20 23 50 118 1 350 25 : Total scout bomber 1 21 : British (V-156-F) 68 24 46 -June 30. 1941: July 1, 1941 : One-engine acout bomber U. s. Navy (SB2U-3) 232 I U. 8. Navy Deliveries on spresent orders deliveries 1 estimated to Oct. Nov. Dec. Jan. :Feb. :Mar. Apr. : May June Sept. 15, 1940 made after : 0820 type one-engine observation 15-30 1 14, 1940 Sept. : Sept. 1941 : : Orders : 1940 : Model and Purchaser Total estimated Estimated deliveries UNIDED : STRICTLY CONFIDENTIAL 232 45 68 3 7 5 19 20 26 7 26 45 49 67 53 11 12 15 11 12 15 2 56 12 15 2 office of the Secretary of the Treasury, Division of Research and Statistics. 2 50 118 350 September 18, 1940. 192 VULTEE AIRCRAFT, INC. IDENTIAL Estimated deliveries Nov. Dec. Jan. Feb. Mar. :Apr. frainers U. S. Army (BT-13) 773 May : 1940 Oct. 35 65 80 93 105 June 120 135 Total estimated 140 IDDIVORIOS on !present orders deliveries : estimated to Sept. :-June : 14, Sept. 15-30 : Sept. : Model and Purchaser 19.1 1940 , Orders : : Unfilled: : STRICTLY 15, 30, 1940:be made after 1941: July 1, 1941 773 72 Dive Bomber Total Army and British 200 973 1 British 35 65 80 93 105 121 3 135 143 office of the Secretary of the Treasury, Division of Research and Statistics. 10 18 32 168 10 18 805 168 September 18, 1940. 193 SEP 27 1940 MEMORANDUM FOR THE PRESIDENT: Appended is a confidential table sub- mitted to me September 26, 1940 by Sir Andrew Agnew, on the inbricating oil situation in Europe. The conclusion that is arrived at is of considerable interest. It is stated as follows: "on the basis of this estimate, which allows for a rationed consump- tion even in neutral countries, there is a shortage of supply over industrial demand of 275,000 tons per annum before allowing anything for service consumption of Italy and Germany." (Signed) H. Morgenthan, Jr. Attachment HDW:esh 9/26/40 By Messenger 10 to 194 LUBOILS Thousands of Tons Peace-time Consumption Incl.substi- Estimated war-time Industrial Consumption Per Annual tutes (1938) Germany Caechoalovakia 52 Dansig & German Poland 32 Morway 130 600 4 27 26 12 21 10 54 Belgium & Luxenbourg 66 Albania Carried Forward on page 2. - 12 - 10 - 25 - 37 25 37 129 31 272 160 1,064 852 116 70 554 Italy & Tripolitania 45 53 8 8 Holland France stitubes for Axis for Effort 48 23 Renmark incl. sub- Burples or 391 510 Instric Bassian Poland Indigenous Production - - 1,180 - 922 15 569 398 70 15 353 195 -2 LUBOILS Thousands of Tons Peace-time Consumption incl. substi- Estimated war-time Industrial Consumption Per Annum tutes (1938) Brought Forward 1,180 18 Finland 922 5 Indigenous Production incl. substitutes 569 Surplus or Shortage 2 Mar Efforts 353 5 64 Sweden - 35 35 Estonia 4 2 2 Latvia 4 2 2 Lithuania - 4 1 Switzerland 20 15 - Hungary 22 15 - Jugoslavia 16 10 - 23 15 remania 1 15 15 10 100 85 - Bulgaria 8 6 6 - Greece 8 9 8 - Turkey 8 TOTAL 1,380 8 8 1,044 669 RUSSIAN SURPLUS FOR GERMANY 375 100 275 On the basis of this estimate, which allows for a rationed consumption even in neutral countries, there is a shortage of supply over industrial demand of 275,000 tons per annum before allowing anything for service consumption of Italy and Germany. 1940 Revised 21.9.40