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162 June 26, 1941 My dear Mr. President: I am enclosing herewith the most recent report showing deliveries of airplanes, by purchasers and by types of planes. This covers the period January 1, 1940, to June 21, 1941. Yours sincerely, (Signed) E. Borgenthes, ⑉ The President, The White House. By Messenger 35 3 163 June 26, 1941 My dear Mr. President: I am enclosing herewith the most recent report showing deliveries of airplanes, by purchasers and by types of planes. This covers the period January 1, 1940, to June 21, 1941. Yours sincerely, (Signed) n. Morgeather, ⑉ The President, The White House. By Messenger 164 June 26, 1941 My dear Mr. President: I am enclosing herewith the most recent report showing deliveries of airplanes, by purchasers and by types of planes. This covers the period January 1, 1940, to June 21, 1941. Yours sincerely, (Signed) H. Morgeather, m The President, The White House. By Messanger 165 Treasury Department Division of Monetary Research Date 19 To: From: Delivered by hand to Mr. White by Sir Frederick. b/n 166 Memorandum on New Cash Expenditures by B.A.C. 1. The day to day progress of the air programme is accompanied by a series of unforeseen and largely unforeseeable demands for services entailing almost invariably immediate commitment to cash liabilities against U.K. Government funds if the programme is to advance as it should do. 2. These demands fall into a number of categories (a) Supply of parts to meet urgent cabled demands from the various theatres of war for items without which airplanes are grounded. In spite of every precaution to provide a full range of spares, these demands cannot be avoided. (b) Supply of parts and/or labour costs to repair minor damages sustained during delivery from plants to points of departure from the North American continent. In some cases parts can be diverted from existing contracts but not always. (c) Materialization of existing contingent liabilities, e.g. we have been confronted by a shortage of Allison engines accompanied by some acceleration of the airplane delivery programme, the joint effect of which has made it necessary to store airplanes pending receipt of engines. (d) Demands from U.K. for services in England of contractors personnel. (e) Modification to design (see Paragraph 4 below). 3. The above list,-of which practical examples other than for category (e) appear in the attached list of contractual commitments forced, by reasons of urgency or in some cases at least by rejection of Lease-Lend requisition, upon us since April 12th-is by no means exhaustive. 4. Category (e) is dealt with separately since the problem has peculiar features. The necessity for modifications arises from a number of causes, but primarily from ever-changing needs of particular situations arising from operational requirements of the Air Force. The cost ranges in value from a few cents per airplane to some thousands of dollars. Consequently, the liability of a contract may vary from a relatively small modifications sum to a very large sum. In general, it is possible to foresee the large to the smaller but it is almost impossible to give any notice with regard in the ones. For example, it may be found that a particular type of bolt 167 -24. continued in the fuselage structure sheers under the rigorous conditions of service in the field, in spite of the fact that it has been subjected to all known tests prior to approval of the design. In order that the difficulty when reported may be remedied without delay, it is necessary for a spot decision to be given to replace the bolt with another type of bolt of greater strength as soon as it can be procured. So far as the larger modifications are concerned, they are often divisible into two parts (a) those involving a supply of equipment, e.g. a new type of wireless set, and (b) those involving alterations to the structure or fitments of the airplanes, e.g. a new type of fitting for the new wireless set referred to at (a). It has been our practice since March the 11th, to requisition equipment such as that at (a) under Lease Lend, but the work involved at (b) has been regarded as necessarily our liability since it involves amendment to the B.A.C. contract covering work which is ultimately indistinguishable from any other part of the structure of the airplane. The advice that such work could be covered under Lease Lend is being followed up, but we have had one case, i.e. the Sperry Gyroscope Company, where the contractor has refused to consider giving effect to any alterations to the supplies he is making for us unless we put through the necessary amendment to the contract and bear the costs ourselves. 5. It is hoped that the foregoing very brief remarks, which do not pretend to give anything more than an outline, will indicate the necessity of our being allowed in certain cases to enter into commitments without man approval. 6. As regards the urgent requirements, it is felt that a practical solution might lie along the lines that a money limit be set for individual cases with an over-riding maximum beyond which the total of such individual cases should not be allowed to go within a specified period. It is sug- gested for consideration that a limit of $10,000 should be imposed for individual cases, with an over-riding maximum for a period of a week of $50,000. It is further suggested that these cases should be reported weekly in arrears to the United States Treasury in bulk. 7. On the particular question of large modifications, that is those falling outside the definition of limit suggested in the preceeding paragraph, if on submission to the United States Treasury it is decided that they can in principle come under Lease Lend, a definite instruction should be issued to the U. S. Army Air Corps Materiel Division or to the Bureau of Aeronautics of the Navy Department that they should cooperate with us in persuading the contractors to proceed on Lease Lend lines. This 00operation will undoubtedly include, in the case of certain contractors, the application of some measure of pressure which can alone be brought to bear by the United States authorities. June 26. 1941 103 LIST OF BAC 65/60 REQUISITIONS APRIL 12th. 1941 to DATE. Requisition Number Value Description of Stores Date 1200 lbs. Magnesium Metal Stocks 65/40/1605 April 16th 1607 12th Bendix Equipment for B-24 Aircraft 1609 14th 4 Generators, 4 Control Boxes for Consolidated LB30A Aircraft 1610 12th 1 set of sample engine, airscrew, and cockpit covers and 6 sets of drawings of covers for Vultee Vanguard I Aircraft 1611 12th same as 65/40/1610 for Liberator II Aircraft 1612 12th same as 65/40/1610 for Chesspeake I Aircraft 1613 12th same as 65/40/1610 for Boeing B176 Aircraft 1615 15th 25 31-inch rubber balloons 1616 15th 5 gallons U.S. Slushing compound to Fuller Spec. 3595 T.L. - 284. 1618 14th 12 Colt cal .50 MG53-2 gun retracting alides 1619 15th 112 Type 236-B gun charging slides 1620 14th 100 Hub Dust L.H. & R.H. Covers 1622 15th 200 Hamilton Stand,Bracket Assemblies 1623 15th 1000 Schraeder Valves complete with 1000 Bendix washer $ 486.00 1,054.42 840.00 unknown unknown unknown unknown 175.00 16.75 186.48 1,066.24 170.00 8,210.00 for Martin Maryland I Aircraft. 722.25 187.25 1627 16th 25 Spark plugs forConsolidated Catalina I 1628 16th 1630 17th 100 Lock Rings for Martin Maryland I Aircraft 1 set of sample engine, airscrew and cockpit covers and 6 sets of drawings of covers for Greenan 28.00 unknown -2at of BAC 65/60 rll 12th. 1941 to DATE quisition Number Description of Stores Date Aluminum Metal from Aluminum Co. of Canada unknown /40/1634 April 22nd 1637 23rd 11 Danforth Navy anchors Mark II 1638 18th 1 Export baxing of P&W engine for shipment overseas as a spare engine 30.00 1639 26th Removal of markings from 131 engine cases 52.90 1641 21st Repacking for export of 9 Curties Engines $ 363.00 225.00 Date April 24th 1643 April 24th Description of Stores II Aircraft off Contract F-294. Necessary repairs to 3 damaged Douglas Savoe unknown Necessary repairs to 1 damaged Hudson If unknown Aircraft delivered off Contract A-446. 1644 April 23rd Radio Equipment from Bendix for installation in Hudson III aircraft as required for training at Debert in Canada. 1646 1647 200.00 per week April 22nd 2 Consolidated areas to be stationed at Bermuda unknown April 24th Extended service of 3 Douglas representatives 480.00 per no. April 23rd 1 Set Electrically-heated undersuit required for 150.00 approx. test in England. 1652 April 24th Almmisus Alley Tubing from Aluminum Co. of Ganada 1657 May 27th Necessary repair to 1 damaged Curtise Propeller 1660 April 26th 14 April 29th 141.76 30 HF 300 Amparex Valves 879.90 25 Housing and Drive Shaft Assembly,2001 Rubber 363.50 Grunnan Martlet II -Reslushing of 3 Pratt & Whitney Engines ammiting installation in aircraft. 805.25 driving, 25 Retainer-rubber for Tomabask aircraft. 1670 April 29th April 30th 30 Type 35-T Eimac radio valves 1675 May 8th 1676 May 1st 5 Condensers from Bendix for Catalina I Aircraft 2500 yds. Electric able off Contract A-5340 1674 unknown 8 Complete sets of radio drawings for Buffalo I and Bermuda 1 aircraft. 1668 852.90 Gramman to furnish 2 service men for assisting with re-assembly of aircraft under Contract R-292. in U. K. for an unspecified period of time. 1650 sizumi April 22nd for indefinite period from Jan. 15, 1941. 1648 Value 144.00 29.87 394.00 Date 65/40/1677 1678 May 1st May 1st 1679 Description of Stores 20 Magnavox 24 Volt Solenoids Value $ 6 Sets maintenance drawings for Browster Buffalo I aircraft. 2 or 3 Service Engineers from Consolidated to work in U. K. for at least 3 months. 1682 1687 1 Set of sample engine, airscrew and ecekpit covers and 6 sets of drawings of covers from Browster Aeronautical Corporation. May 3rd Flight testing of 10 Bell Airacbora Aircraft under Contract A-218. 1689 May 3rd Reglushing and preparation for export of Curtiss Bright Engines. 1690 May 3rd 7 Hammarlund radio receivers and 7 sets of 112.00 87.06 600.00 per no. unknown 13,000.00 12,154.00 826.21 spares. 1691 May 3rd Necessary repair of 1 damaged Allison Engine 1692 May 6th 1300 Fuses for Belgian Breaster Aircraft. 1693 1694 pril 6th May 6th unknown 103.10 Gears, Vacuum pump drive shaft, Assembly Generator 3,494.40 40 Signal Pistols & 40 sets Signal Pistel Cartridges 3,149.00 Drive Shaft,etc. from Allison Div. of General Motors for Lookheed Hudson V Aircraft. 1695 May 7th 25 011 Separators, Type 560 1696 May 7th Storage of Aircraft being sent to New Zealand also "drayage" on the planes. May 7th Necessary service, including fuel and oil, to enable 100 hours flying by B.A.C. personnel on Bell Airscobra aircraft. 250.00 4,967.96 unknown Regulation Number Date 65/40/1701 May 31st Description of Stores Conditional acceptance of Curtiss Kittyheak aircraft off Contract A-3835 loss engines. Storage of airfrance at the Curtiss Bright plant. Flight testing of 1 aircraft out of every twenty. 1702 May 8th 3,300 Blank Gape, 3,300 Mounting Seress, Mounting Sleeves and Mounting Gaskets. 429.00 1703 May 8th Necessary service, including fuel and all, to enable 100 hours flying by B.A.C. personnel in unknown No.American Mustang aircraft. 1705 May 10th Repacking of spares for five different destinations due to emended consignment off Contract F-231. 1706 May 10th 00 B. G. Type L.S. 465 Spark Pluge abo B. G. Type L.S. 489 Spark Pluge 1707 May 10th 30 Western Electric Valves Type WE2588 1708 May 10th 12 Coupling FT No. 181-25 1710 May 14th Inspection of 1 Hudson V Aircraft, damaged in a crash at Montreal, by a duly qualified Lookhood 525.00 1,880.00 247.50 90.00 370.00 Company Inspector. 1711 May 12th 680 Tubes required to be carried in 30 Hadson y 201.49 120 Tubes to be carried is 30 Huisea V Aircraft. 940.51 approx. Excess quantity of 125 sets of nuts, balts, split 325.00 5,023.87 and 20 Liberator II aircraft to be flight delivered to the S.K. 1712 May 12th 1713 May 12th pins,ete. which were intended for reassembling of airplanes which were erated for shipment to the U.K. 1814 May 13th Expenditure to be incurred in connection with use of Floyd Bennett Field airport whilet Montreal is out of commission, an anticipated period of about one month. 1715 May 15th 50 Aero - 25 Eccentric Shafts for Rolls-Royee production 590.50 MAKE 65/40/1719 1720 May 14th May 15th 1721 May 15th 1722 May 15th 1725 May 16th 1726 May 16th 1727 May 16th 1729 1730 May 17th May 17th Description of items 12 Drain Cook, 12 Flexible Drive Shafts for Atfare, from Lookhood Aircraft Corporation. 200 Part No. 1042509-1 Serve 8-32 Receased Head 3 Aerial Booster Pumps for Atfere 1 greame of Mesothorium 2 Arm Potentiometer Flap for Martin Maryland 40 Spark Plug Assembly and Disasseably Wrenches 6380 Rubber-driving for Curties Tomabank Storage of Lookhead Hudson aircraft at Burbank, California and Nashville, Tennessee. 3 Test Meters, Model 666H from Triplett Electrical Instrument Company. 1731 May 19th 8 Hamilton Propellers (second-hand) for Anson and Oxford Prototype Aircraft. 1733 1736 May 17th May 19th 1746 May 20th 1747 May 20th 1749 1752 1753 Reimbursement of Transportation charges of 100 P&M Engines off Contract F-244 to Consolidated. 2 Complete Sets of Seals for Hydraulie System for Harvard II aircraft. 50 Western Electric radio headsets 300 pairs Polaroid Laminations which form part of a request for 2300 pairs of glasses. Remaining 2000 8 10.20 450.00 28,500.00 22.76 uninour 382.80 unknown 35.94 2,135.00 620.32 27.14 550.00 324.60 prs. have been requested under L/L AL/B7-59. May 20th May 21st 10 Part No. 17AT 3D Thermometers 252.00 2 Generators, 2 Generator Control Boxes, 2 FilterBoxes for Wright Whirlwind Enginees. 352.80 4 Pump Fuel Pesco, 4 Pemp Vacuum Peace for Bright Whirlwind Enginee. 507.00 MAKE 65/40/1754 May 21st 1755 May 27th 1756 May 23rd 1766 May 26th 1767 June 12th 1768 1770 1771 May 30th May 27th May 27th Description of Stores Repair of 3 Curtisa Propellers which were damaged in transit by the National Garloading Company. Value $ unknown ( cost to Training of Atfero Pilots by T.W.A. Spare parts for 3 Lockheed Electra Aircraft. Ay 28th 1777 May 27th 1780 May 27th 1787 1788 1792 1799 May 30th May 31st May 31st June 14th 297,000.00 14,927.18 2 Motor-Starters, Accelerating from Colipse 213.40 Fittings for Oxygen cylinders from Parker Appliance Co. 291.79 79,200 gals. "Colas" Bituminous Emilsion for Runways. 16 Resistors, 5 Capacitors from R.O.A. Mfg. Corp. General fund for making payments in respect of movements of Lease-Lend supplies. 1772 be recovered ) 12,434.40 121.20 5,000.00 2 Bulb Angle Stiffeners from Douglas Aircraft Corp. 24 Fuse Hi-Amp Assembly from Littelfuse Inc. 6.20 30.00 1 "Sea-Track® Earth Inductor Compass for 12 Volt operation. 500.00 2 Pamp-Teous Pesso Engine driven, 4 Pump-Fuel Pesso 585.00 Ealipse Type 340-1. 2 Generators- Enlipee Type 314-5 and 2 Control Boxes unknown Service to be performed on 4 see Engines at Halifax. unknown Flight delivery of certain aircraft from Miami,Fla. to unknown west coast of Africa,etc. Agreement between BAG and Atlantic Airways,Ltd. LIST OF BAC 65/40 REQUISITIONS APRIL 12th 1941 to DATE 65/40/1801 Description of Stores Date June 4, 1941 Payment to the account of the Standard 011 Company of New Jersey 65/40/1807 June 3, 1941 $ 555,483.59 Deposit for float for Refresber Course in joint names of the British Air Commission and AeroCenter, Inc. 1808 June 3, 1941 1813 June 5, 1941 1814 June 5, 1941 1825 1826 1827 1828 30.00 60 Grounding Plugs from Parr Electric Corp. 82.80 50 Sets Adaptors, 25 sets Weatherhead Hose and June 5, 1941 1 Gross High Speed L.H. Drills June 9, 1941 12 Fafair Ballrace,spares for Martin Maryland June 10,1941 1 Six inch Straining machine #4 June 10, 1941 1832 1833 3,951.00 369.70 Working Capital for Rolls-Royes to cover orders for 575,000.00 June 10, 1941 2 Signal Generators from General Radio Co. 700.00 June 11,1941 3 Dual Control Sets for Hudsons 320.00 June 14, 1941 1 Bilge Pump, 1 Drain Pump, 1 Wing tip float strut from Consolidated under Contract A-5320 1834 23.28 50 Plug-Cannon and 1000 Breese Coupling Nuts, 900 engine parts,jigs, tools etc. 1831 48.96 110.00 approx. June 9, 1941 June 10,1941 220.58 100 60 amp.Fuses and 100 Renewal Elements from Littel fuse Inc. of which are for Maryland Aircraft 1829 35,000.00 Wiper arms for Air Associates rotary windscreen wiper, each 12 inches long, 2 Spare lengths of rübber Blading for above. 4 other stores from Consolidated 1816 Value June 14, 1941 2 56* Main Gear Tubes, 392.75 . Requisition Number Requisition Number 65/40/1835 Date June 13, 1941 Description of Stores Lookhead Hudson Spares under Contract A-5293 1 Plexiglass Nose, 1 Budder-Lover, 4 Motor Cowl Flap, etc. 1836 June 10, 1941 Value $ 2,961.92 Work to insure the serviceability of the 89 P&W R1830-8304G engines awaiting installation in Martlet II Aircraft. 1839 1838 1839 June 12, 1941 June 12, 1941 June 14, 1941 1 package (500 in a pkg.) Rocker Box Gasket from Pratt & Whitney Co. Payment for Flight Testing set of calibrated instruments on a Bell Airacobra 3,293.00 unknown 556.50 Eolipee Committer Spares, 100 Intermediate Reads, 400 Seres Retainer, 50 Housing and Drive Shaft Assembly, as amend. to Contract E-221 . 1841 June 14, 1941 1 set of sample engine, airscree and cockpit covers and 6 sets of drawings of covers for Vultee Vengeance 1844 June 13, 1941 June 13, 1941 1848 June 14, 1941 111 Capacitor for Harvard Aircraft June 16, 1941 360 Radio Valves of various types for Hudson V 1849 June 16, 1941 1850 June 14, 1941 1,380 Radio Valves, various types as running spares on 60 Hudson V Aircraft June 14, 1981 48.36 38.85 2,216.17 435.71 20 Cuffs for Spare Curtiss Propellers for use on Grumman Martleb II's. On Contract F-731 1853 77.50 12 Plugs and 12 Sockets from American Phenolie Corp. 1847 unknown Affix Air Ministry Serial Numbers to 50 Wright GR2600-A5B-5 Enginee at Browster, Johnsville,Pa. 1845 1,551.00 Amond Contract A-5344 to provide reslashing of 3 Enginee for Vultee 72 under Contract A-3555 DiveBombers Wright GR2600-A5B-5 4,740.00 Requisition Number Date Description of Stores 65/40/1859 June 16, 1941 Payment to Standard 011 Company of New Jersey 1863 June 17, 1941 Amond. Contract A-71 to provide for embalming 10 used Wright 1820-0105A Engines for use on Brewster Buffalo's on Contract. 1864 June 17, 1941 June 16, 1941 1867 June 18, 1941 June 19, 1941 Payment for flight testing Lockheed Lightning aircraft, to Lookheed Aircraft Corp. 1869 1670 June 17, 1941 June 17, 1941 June 17, 1941 67.80 24.00 17,281.00 1 Main Fuselage Entrance Door for Aircraft 915 at Montreal 1868 650000 50 70 Ampere non-renewable fuses for Tomahawk aircraft 1866 $1,033,206.76 20 Electric Cable Connectors, 40 Electric Cable Clasps and 20 Electric Cable Connectors from American Phenolic Corp. 1865 Value 297.00 25 pr. Lamp Filaments for fuel capacity Gange Volt,ge Compensator from Lookheed 61.00 2 Automatic Stepping Switche 62.73 50 Heads Assembly Mounting, 140 Strape Assembly Window. Purchase to be affected as an amend. to Contract F-221 1872 1873 1874 1875 588.40 June 18, 1941 2 Consolidated Bomb Adaptors 173.28 June 19, 1941 1,000 Cartridge, Valve, Electric for astuating floastion gear, from Walter Kidde Co. 490.00 825 ft. Co-exial Cable for Martlet II 267.30 June 19, 1941 June 20, 1941 Spares from Lockeed for servicing Hudsons under Contract A-5293 3,282.01 way 178 PRELIMINARY LIST of time That an Dommum major lazin " what Steel, including Tinplate Non-Ferrous Metals Oil Motor Vehicles Machine Tools Fertilizers Food (for certain Colonies) Tobacco Agricultural and some other Machinery Paper-board Wood pulp Sulphur Timber Equipment for Railways, Docks, Harbors Telephone and Communications Equipment Civil Aircraft Any other article suitable for centralised purchase Washington, D. C. 26th June 1941. Healer wants muley the - /2// 179 TREASURY DEPARTMENT INTER-OFFICE COMMUNICATION DATE June 26, 1941. TO Secretary Morgenthau FROM Mr. Cochran CONFIDENTIAL Registered sterling transactions of the reporting banks were as follows: Sold to commercial concerns Purchased from commercial concerns £206,000 £ 21,000 Open market sterling moved from an initial quotation of 4.03-1/2 to 4.03-1/4 at the close. The only reported-transaction consisted of £1,000 sold to a commercial concern. The Canadian dollar discount widened to 11-15/16%, as compared with 11-3/4% last night. The Uruguayan free peso, which closed at the current high of 45-1/16 last night, eased to a final quotation of .44-1/2 this afternoon. In New York, closing quotations for the foreign currencies listed below were as follows: Argentine peso (free) Brazilian milreis (free) Mexican peso Cuban peso .2375 .0505 .2070 1-3/16% discount In Shanghai, the yuan was unchanged at 5-13/324. Sterling remained at 3.91-1/2. There were no gold transactions consummated by us today. No new gold engagements were reported. In London, a price of 23-3/8d was fixed for spot and forward silver, representing a decline of 1/16d in each case. The U.S. equivalent of this price is 42.444. The Treasury's purchase price for foreign silver was unchanged at 35 Handy and Harman's settlement price for foreign silver was also unchanged at 34-3/44. We made no silver purchases today. MV. 180 C 0 P DEPARTMENT OF STATE Y WASHINGTON In reply refer to FA June 26, 1941 Mr. V. Frank Coe, Care of the Treasury Department, Washington, D. C. Sir: You are hereby appointed Special Assistant to the American Ambassador to Great Britain for such period of time as may be necessary for the performance of the duties to which you will be assigned. If you will inform the Department of State of the date of your contemplated departure for London, it will make the necessary arrangements for priority in connection with your air travel from New York to London. Very truly yours, For the Secretary of State: (s) G. Howland Shaw G. Howland Shaw Assistant Secretary Copy bj:7-8-41 Photostet 181 mm Cochan TREASURY DEPARTMENT 7/1/41 INTER OFFICE COMMUNICATION DATE TO Secretary Morgenthau FROM Mr. Cochran June 26, 1941 At 5:30 p.m. yesterday Assistant Secretary of State Shaw telephoned me to the effect that a message had been received from Ambassador Winant wherein he agreed to the contemplated arrangement for sending Mr. Coe to London. Mr. Shaw raised the question as to when Mr. Coe would be ready to depart. He said that the State Department had already indicated to Mr. Coe its desire to assist in arranging for his transportation over the Clipper route via Lisbon. He said also that Mr. Coe should call at his early convenience at the Department of State to apply for a diplomatic passport. An instruction is being issued by the Department of State directly to Mr. Coe appointing him "Special Assistant to the Ambassador". The Treasury will be provided with a copy of this instruction. I told Mr. Shaw that the Treasury Department would make the necessary arrangements in regard to Mr. Coe's allowances. After receiving this message from Mr. Shaw. I telephoned Mr. Coe, who came to my office. I gave him copies of my memoranda of June 21 and 23. and told him of the message from Mr. Shaw. Mr. Coe was to discuss with Mr. White the question of date of departure. I gave Mr. Coe such information as I had concerning conditions which he would meet in London and concerning State Department procedure. At the Staff meeting this morning I reported to the Secretary the receipt of the above message from Mr. Shaw. and suggested that the question of time of depar- ture for Mr. Coe should be left to Mr. White. The Secretary said that he desired to see Mr. Coe, with Mr. White, before Mr. Coe leaves for London. This forenoon I have talked with Mr. Erhardt. formerly Consul General at London, who is now in charge of Foreign Service Personnel in the Department of State. He said he would be happy to have Mr. Coe come over and see him in regard to living and working conditions in London. Mr. Erhardt recommended the desirability of Mr. Coe traveling with one of the Foreign Service Officers from Europe, and particularly London, now on leave in the United States who will be returning to Europe within the next few weeks. Such an officer could be helpful to Mr. Coe in the troubled travel conditions which now obtain. It was Mr. Erhardt's recommendation that Mr. Coe might prefer to stop at one of the hotels near the Embassy, most likely the Dorchester House. This is supposed to be the safest hotel in London. In answer to my question, Mr. Erhardt said that there were no living quarters in the Embassy. at Most of the officers still live in the city, but some are staying in the country present. It is my recommendation that Mr. Coe be given a per diem allowance of he $8.00 is sta- from the Stabilization Fund for his period of travel and during the time which tioned abroad. This is the rate for Mr. Frese in China. and the rate on Will Foreign Service Officers in Europe have traveled for the Stabilization Fund. the Secretary this rate in order that the necessary arrangements may be made? is ok.1mm approve AMP. 182 L C 0 P Y PARAPHRASE OF TELEGRAM RECEIVED FROM: American Consulate General, Shanghai, China. DATE: June 26, 1941, 3 p.m. NO. : 752. (The first two sentences of Shanghai's telegram no. 752 were received in badly garbled form and the paraphrase of these two sentences is largely conjectural. A service telegram has been sent to Shanghai and a corrected paraphrase will be circulated if discrepancies from the conjectural paraphrase are found). FROM FOX FOR THE SECRETARY OF THE TREASURY. The question whether or not the Stabilization Board could act formally without British member has arisen here. It is our impression that under the terms of the American agreement a board of three Chinese and one American would act formally in case there is undue delay in appointment of a British member, and that this is sufficient to constitute a quorum. Are we correct in so construing agreement. I should be glad to receive a legal opinion and any suggestions. Leaving Chungking 6:30 p.m. Sunday by plane made close connection at Hong Kong with a Dutch liner which arrived at Shanghai this morning, Thursday, June 26. Have not yet formulated plans for Shanghai but will probably stay here a week or ten days and then go to Hong Kong for a few days before returning to Chungking. LOCKHART NPL EA:FL:VCL eh:copy 183 June 26, 1941 Files Mr. Cechras Upen the receipt yesterday of the cablegram of June 24 from Mr. Fox is China, I discussed a few of the points therein with Under Secretary Bell. It was understeed that I should attend to as many as possible of the points raised in this message. Consequently, I have this morning telephoned Mrs. Fox and have summarised to her an account of her husband's travels and activities, as portrayed is the recent cablegrams, and have particularly given her the message of June 24 to the effect that Mr. Fox was well, but that he understood that his airmail letters to her had been delayed. I am writing a letter along these lines to Mrs. Frese, who is in Indiana. I have also endeavered to reach Mrs. Taylor by telephone, and will give her the same message whonever I have communication. I have also telephoned the Tariff Commission with respect to the documents requested in the cablegram under reference. This morning I have spakes with Mesers. Erhardt and Bailey in the Personnel Division of the Department of State concerning the possibility of obtaining American clorical assistance in China for Mr. Fox. They were aware that in a recent message to Mr. Fox, sent through the Department of State, the Treasury had suggested that Mr. Fox consult Ambassador Gaues on this question. My colleagues in the Department of State confirmed Mr. Fex' report that the Chunging Embassy has no extra American clerk to make available to Mr. Fox. At present the State Department itself is sanding three clerks from the United States to meet the increased requirements of the Quagking Embassy. These officers doubted that any American assistance could be found in Chunging, but think 11 might be possible to find someone in Shanghai or Hong Kong. Since the sablegrams would indicate that Mr. Fox is now on a visit to Shanghai presumably via Hong Kong, I think we can let the matter of a clerk go for a few days. If he does net find anyone on this trip, and provided the Board is soon formally established to do business, and our Stabilisation Fund is extended beyond to June send out 30, ve could then actively proceed toward engaging someone is this country to Chungking. In the meantime, I have asked Mr. Bailey to watch for any prospective candidates for this job among the applicants when he receives for State Department joba abroad. While the foregoing minor matters are being taken care of. we should that is. be mindful will we a real have to be decided by the Treasury shortly, not represented that approve American problem participation may is a Board on which the British are been resolved and that It appears that the question of masing a British member has this not point. It may become HII there be between the British and Chinese on at an early date. necessary may to as give impasse Mr. Fox a definite instruction in the premises HMC:1ap-6/26/41 184 C 0 P Y RRECTION June 26, 1941 In cable No. 590, from Buenos Aires dated June 19, 4 p.m. regarding deposits in Central Bank, in 4th line delete #17,500,000" and insert "175,002". DIVISION OF COMMUNICATIONS AND RECORDS eh:copy 185 C 0 DEPARTMENT OF STATE P WASHINGTON Y In reply refer to EA June 26, 1941. The Secretary of State presents his compliments to the Honorable the Secretary of the Treasury and encloses a paraphrase of telegram No. 713, dated June 24, 1941, 4 p.m., from the American Embassy at Rio de Janeiro re- garding Italian and Japanese funds on deposit with the Bank of Brazil. Enclosure: From Embassy, Rio de Janeiro, No. 713, June 24, 1941. 186 C 0 P Y PARAPHRASE OF TELEGRAM RECEIVED FROM: American Embassy, Rio de Janeiro, Brasil DATED: June 24, 1941, 4 p.m. NO.: 713 In view of the Italian Government credit of $7,690,000 in the Bank of Brazil and the recent develop- ments in the United States, the Director of Exchange of the Bank of Brazil has been requested to keep the Embassy informed of movements in their dollar balance. To this the Director agreed and to indicate his willingness to cooperate, he has issued the following instruction to the Bank's staff: Confidential: Dollar applications of Italian and Japanese Governments should be regarded cautiously. The purpose of the applications must be clearly stated and when there is doubt, refer to Director of Exchange. The Yokohama Specie Bank and the Mitsui Company hold dollar credits of approximately $8,000,000 and $89,000 respectively. An application of the Banco Francese Italiano to open a $10,000 credit in its name has been turned down by the Bank of Brasil. eh:copy TO: 187 Mr. Foley 7/22'41 Is this assignment complete so that I might send it back to Miss Chauncey for her file? McGuire Yes No MR. FOLEY 188 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION STRICTLY CONFIDENTIAL TO Secretary Morgenthau FROM Mr. Klaus DATE June 26, 1941 In the absence of both Messrs. Gaston and Wiley I report the receipt of a letter from J. Edgar Hoover saying that in view of the general freezing order of June 14, 1941, FBI is discontinuing all work previously performed by it in connection with the monitoring of foreign funds. This means that we will not receive any information concerning countries not frozen (such as Japan and Latin America) and countries under general license (such as Switzerland, Sweden, and Soviet Russia). Inasmuch as we have no available substitute machinery, it may become necessary to ask Mr. Hoover to reconsider his decision or to under- take to obtain reports ourselves. The latter alternative would have to be worked out carefully with FBI. I have advised Messrs. Foley, Pehle, Bernstein, White, and Cochran of the receipt of this letter. 821 Foley please steak to me Hmg. MEMORANDUM RE: INCLUSION OF "ADMINISTRATIVELY DIFFICULT" U.K. IMPORTS UNDER LEASE-LOAN PROCEDURE. During March and April 1941 a series of meetings were held by the competent Departments in London to consider the creation of machinery for bringing under lease-lend U.K. imports (valued at approximately $140 millions a year) of certain miscellaneous goods. There were two main problems: (a) The range and variety of goods was so great that it would be essential to retain the specialized services of existing importers in order to obtain the products rapidly, to correct specification (often a vital matter), and at the right price. It must be borne in mind that as a result of war demands there is now in the United Kingdom a most acute shortage of personnel suited to administrative work and that it would therefore be very difficult to establish or extend the appropriate government departments to take over from existing trade channels the detailed work and specialized knowledge involved. (b) Assuming, however, that the specialized knowledge of the trade could be retained but the goods themselves were imported under government auspices, there would remain the problem of handling and distributing the goods on arrival, and in particular of dealing with the documents and invoicing work. Although the value of the miscellaneous manufactures class is relatively small, the number of transactions covered is altogether out of proportion to the value. A very large staff would have to be established and trained before the work could be handled smoothly. It is most -2- important that delays should be avoided in procuring goods in this class which include many small components required to ease bottlenecks and maintain U.K. production in balance, or to replace output interrupted by enemy action. Here again the shortage of administrative personnel was & serious difficulty. Difficulty would also arise in planning the organisation which would have to be established in America to handle the documents involved, together with the general agency and forwarding business which would arise. At present the documents are handled and the forwarding business despatched smoothly and efficiently by existing commercial organisations. It was clear that a very large staff would have to be assembled and trained in the U.S. to deal with the great numbers of transactions a purchase costing $10.00 may involve just as many documents as a large consignment under lease-lend. After considering a number of projects, the Committees exam- ining this problem were unable to devise any entirely satisfactory scheme. The accompanying Appendix outlines a procedure which had been tentatively put forward, but which was far from meeting all the problems. It would have overcome part of the difficulties in the U.K. by retaining the specialized skill and connections of commercial importers and by cutting down the need for organisation in Great Britain to handle documents. But it would still have required a very large addition to the B.P.C. staff in America and the establishment of an organisation in the U.K. to receive payment from importers' banks against the goods obtained under lease-lend. -3- Mr. Harriman, who was privately consulted, told us that he gravely doubted whether Washington could even consider a procedure which left the. negotiation to private traders. At the end of April it was decided that no further work should be done on these projects, the hope being entertained that as a result of an extension of lease-lend in other directions, a sufficient current surplus might accrue in dollars from exchanges between the sterling area and the dollar area to provide means of payment for this "administratively difficult class. If, however, the U.S. administration were prepared to consider a procedure which left the detailed work of negotiation and specification to private traders and only brought in the lease-lend procedure when the stage was reached where the order itself could be confirmed, it is possible that a considerable part (by value) of the miscellaneous class could be brought within lease-lend without imposing too great a burden on the administrative organisation at either end. Since the miscellaneous manufactures have never been handled by Government purchase, little information on detailed schedules is available in Washington. But it is known that among miscellaneous manufactures there are classes, which both in point of being essential to the war effort and in representing substantial sums, appear suitable for requisition under lease-lend. Washington, D.C. June 26, 1941. APPENDIX SUGGESTED PROCEDURE FOR BRINGING MISCELLANEOUS MANUFACTURED GOODS UNDER LEASE-LEND PROCEDURE. 1. The B.P.C. puts in a blanket requisition for, say, $20 millions worth of miscellaneous manufactured goods for delivery by H.M. Government to persons other than its ents 2. The U.K. importer (who is presumed to have been in touch with his potential American supplier and to know prices and delivery possibilities) approaches the U.K. Import Licencing Department for permission to import the goods. This is normal procedure under present arrangements. The Import Licencing Department satisfies itself that the goods are essential** and fall within the total amount (and value) for such class of goods as passed by the Inter-departmental Import Licencing Committee** (also current procedure), and issues a licence subject to:(a) The import being submitted by the B.P.C. to the appropriate U.S. authority for decision on its eligi- bility for lease-lend procedure. If it is passed eligible it must be handled under lease-lend. (b) Opening at his bank an irrevocable credit for the appropriate sterling c.i.f. value of the goods in favour of the appropriate department of H.M. Government. It would ba agreed that in the event of the goods not being passed eligible for lease-lend the credit would be cancelled. 3. On issuing the import licence the I.L.D. would allot a lease-lend serial number to the transaction and cable to the R.P.C. Stores Clearance Department (in standardized form) giving the serial number and brief particulars of the goods, price, supplier, importer and importer's bank (for subsequent forwarding of documents). The B.P.C. Stores Clearance will transfer the particulars to a standardised card and file under serial number, with a cross-index to importers' name for safety. The above is not an actual draft but has been put together by a member of the Commission from his memory of what was under discussion. ** The Import Licencing Department and The Import Licencing Committee have established a searching standard in assessing the essentiality of imports in the wliscellaneous" class, and have an efficient machinery for investigation. -2- 4. U.K. importer informs American supplier of serial number and instructs him to confirm particulars of specifi- cation. price. deliveryautor to OF Storee Clearance Department. 5. B.P.C. S.C. Department check supplier's particulars against the card in their file and submit a requisition to the U.S. Government representatives (who, it is suggested, might sit in with the Stores Clearance Department in New York for this purpose). If the U.S. Government approves the application, they confirm the order to the supplier and instruct him to make delivery to the B.P.C. Stores Clearance Department as agents for the U.K. importer. The cost of the goods is charged off against the market requisition referred to in (a) above. 6. On taking delivery, the B.P.C. Stores Clearance Department sign the receipt in the usual way, and forward the documents to the U.K. bank named in the original cable from the Import Licencing Department. On receipt of the documents the bank pays H.M.G. under the irrevocable credit referred to in 2(b) above, and releases the documents to the importer. Washington, D.C. June 24, 1941. f 194 BRITISH EMBASSY, WASHINGTON D.C. PERSONAL AND SECRET 26th June, 1941 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, Halifex The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D. C. 195 Telegram received from London dated June 24th, 1941. Naval. Pytchley damaged by mine east of Flamborough Head arrived at the Harbour in tow. 2. Enemy supply ship Alsterufer intercepted by eighth D.F. southwest of Cape Finisterre afternoon of June 23rd scuttled, survivors rescued include 44 British. 3. Solon, mine-sweeping trawler, shot down enemy aircraft which had sunk another mine-sweeping trawler off Cromer. 4. British submarine morning of June 16th in Messine Straits possibly hit with torpedoes Italian liner of about 19,000 tons. 5. French hospital ship Canada has been released, no irregularity discovered. 6: From June 12th to June 18th inclusive 22 French vessels total tomnage 100,000 tons passed Gibraltar east-bound and eleven passed west-bound. Ten east-bound vessels totalling 40,000 tons have not previously been employed in the Mediterranean. 7. Military. Abyssinia. Our forces occupied Jimma without incident morning of June 21st. Estimated 8,000 Italian troops in the town including Generals Tessi, scale, Maynardi, and eight Brigadiere. 8. Syria. Palmyra. Vichy aircraft here repeatedly and accurately attacked columns moving from Iraq into Syria causing casualties to personnel and vehicles. June 22nd. Vanguard reached outskirts of Palmyre which Vichy still holds. Two further columns are moving up. Damascus/ 196 -2- Demascus Area. The Free French have captured Barse and are on the high ground about Chargi feature (sic) of North Damasous. We are on the same feature astride Demascue-Beyrout road. Further British troops began attack on Mafia-Beyrout road through Qatana June 23rd. Damascus quiet. Merjayoun Area. Attack by our troops from the south began June 23rd. Coastal Area. Area 4 miles north of Berja reported clear of the enemy. Our artillery fire Demour area increasing. 9. June 23rd. Blenheims, escorted by strong force of fighters carried out successful attacks on industrial plants and railway centres in Northern France. Fighters destroyed 20 German fighters; the lost 2 Blenheims and 4 Spitfires, 2 pilots safe. 10. June 23rd/24th. 145 bombers sent to Cologne, railway centres, main station and industrial centres; Dusseldorf and Kiel, amonget the bombs dropped were 3 of 14,000 pounds, one burst just east of the industrial centre; the other two caused explosions. One aircraft missing. Malta. 4 Hurricanes attacked and hit a number of flying boats at Syracuse. 12. German Air Force. June 23rd/24th. About 11. 135 enemy aircraft operated against shipping and in the vicinity of night bomber stations. be 197 CONFIDENTIAL MILITARY INTELLIGENCE DIVISION TENTATIVE LESSONS BULLETIN WAR DEPARTMENT No. 125 G-2/2657-235 Washington, June 26, 1941 NOTICE The information contained in this series of bulletins will be restricted to items from official sources which are reasonably confirmed. The lessons necessarily are tentative and in no sense mature studies. This document is being given an approved distribution, and no additional copies are available in the Military Intelligence Division. For provisions governing its reproduction see Letter TAG 350.05 (9-19-40) M-B-M. AIRCRAFT FOR OBSERVATION MISSIONS SOURCE The information contained in this bulletin is derived from a study made by the Military Intelligence Division, G-2, Air Section, War Department General Staff. The study was based upon reports from all sources available to the Aviation Section. CONTENTS 1. GREAT BRITAIN a. Western Front b. Middle East Theater C. Conclusions by the British 2. FRANCE 3. GERMANY : G-2 CONCLUSIONS CONFIDENTIAL -1- 198 CONFIDENTIAL AIRCRAFT FOR OBSERVATION MISSIONS 1. GREAT BRITAIN a. Western Front When the War started, the following types of airplanes were considered suitable to carry out missions corresponding to our conception of observation, corps and division observation and liaison missions: Westland Lysander Fairey Battle Engine Single Single Crew Two Two Type High-wing monoplane Low-wing monoplane Maximum speed 206 M.P.H. Guns .303 caliber: two fixed forward; one flexible rear 210 M.P.H. .303 caliber; one fix forward; one flexible in rear cockpit Tanks Not leak-proof Not leak-proof Armor None None Remarks Requires improved airdromes for operations In theory, these airplanes were to carry out the missions of close infantry cooperation, artillery cooperation, command missions, and visual and photographic reconnaissance of division zones to a depth of about ten miles. In practice, these missions were never performed, for it was discovered immediately upon attempting to utilize these planes that they were helpless when offensive pursuit was present, and they were promptly withdrawn from the front. The British then relied on French reconnaissance. The R.A.F. in France made the decision that inasmuch as the above type of airplane could not "live" on the modern front, it wanted a different type. It was agreed that each squadron should be equipped with two light planes, unarmored and unarmed, to transport officers to conferences and for general courier service. The War in France was over before these airplanes were obtained. CONFIDENTIAL -- 199 CONFIDENTIAL The British artillery wanted about the same type of airplane for its own observation of fire. It was thought that such a plane could fly three miles behind the front at about 1,000 feet or less, and remain in the area protected by ground machine guns. The plane would be warned by the ground observer's radio of the approach of any pursuit. This airplane has never appeared. Production of single-engine, two-place, observation-type airplanes was halted, and those in service were used in the United Kingdom for training purposes only. The British recognized the need of a high-performance airplane for photographic missions, particularly over Norway. Not possessing such equipment, in desperation they turned to stripped Spitfires. This was the standard fighter with all armor and armement removed and a camera substituted. It carried over-load gasoline tanks and depended upon its speed and altitude for its protection. Numbers of these planes were lost on photographic missions over Southern Norway. The British now expect to use an airplane similar to our A-20 for reconnaissance missions. b. Middle East Theater During the successful advance of the British in Libya, two army cooperation squadrons were assigned to the ground commander. Although originally equipped with Westland Lysanders, these squadrons used Hurricane fighters, which performed the most satisfactory obser- vation missions for ground troops in the entire theater. In early December, the British maintained daily reconnaissance flights over Italian positions and kept ground forces informed of every Italian move. Defensive fighter patrols were flown constantly to prevent Italian reconnaissance of British movements, and when the Italian retreat got under way, these fighter observers were utilized for machine gunning troop columns. Urgent requests were received from Cairo for turbosupercharged Douglas A-20-A's completely equipped for reconnaissance missions. General Dill stated that in the advance toward Tripoli, aerial photographs had been of the greatest value. The need for photographic mapping of all areas of operations was critical, particularly in Greece where British equipment on hand was not usable. Since no Westlands were sent to Greece, reconnaissance was performed by the Greeks using the French Potez-63. C. Conclusions by the British A board of high ranking British staff officers, of all branches concerned, net during April, 1941. and decided that the needed for artillery reconnaissance should be slow, safe, airplane easy to fly. and able to be operated from small fields and highways; CONFIDENTIAL -3- 200 CONFIDENTIAL it should have folding wings, and be able to be towed by truck, its own maintenance truck if possible; it should be a two-seater with observer facing to rear, and with armor protection against ground fire, preferably removable; it should carry excellent radio equipment, but no guns or fittings.* Observation missions and reconnaissance of any nature forward of friendly front lines must be done by fast, well-armed, highperformance airplanes. 2. FRANCE For observation purposes, the French commenced this Var with the Mureaux-115. This was a single-engine, two-seater with a high speed of 193 M.P.H., and it had one fixed 7.5-mm. machine gun in the nose and one flexible 7.5-cm. machine gun in the rear. It had no armor, but its tanks were protected by rubber covers. About 230 of this type were on hand in September, 1939, but production stopped immediately thereafter. The Potez-63, a thoroughly modern twin-engine machine, was in March, 1940, designated France's No. 1 reconnaissance airplane. Although originally designed as a fighter, its performance was inferior to German fighters and since single-engine observation planes had disappeared from the front, this type was welcomed as a substi- tute. It was equipped with a transparent nose, two radial engines of 680 H.P. each, two 20-mm. cannon fired by the pilot, and one 7.5-mm. machine gun which fired to the rear. It had a speed of 285 M.P.H. at 13,000 feet; its ceiling was 32,000 feet and its range 620 miles; armor of 7.5-mm. thickness was provided for both pilot and gunner. The Bloch-174, which was somewhat larger than the Potez-63; had two engines of 1,000 H.P. each, twin rudders, and weighed 14,550 pounds. Its speed at 13,000 feet was said to be 342 M.P.H. The armament consisted of two fixed machine guns in the wing, two in a rear turret, and three in the trailing edge of the wing, firing in a 30 degree cone; all guns were 7.5-mm. When these ships first appeared in reconnaissance squadrons, the pilots were quite enthusiastic about them - later comment is not available. On March 15, 1940, the Germans claimed to have shot down a Mureaux two-place observation plane. The French High Command quickly announced that this was no indication that such planes were *This airplane might be considered a general purpose type, inasmuch as it could be used by observation squadrons for liaison and battle reconnaissance. In addition, every type of squadron could use it for general transportation, inspections, and for courier service. The type is very economical. CONFIDENTIAL -4- 201 CONFIDENTIAL in general service; that they had been found entirely unsuitable at the beginning of the War and had been withdrawn from use, except for training. At this date, the French officers complained bitterly that they had no suitable long-range airplane for reconnaissance work over Germany. Up to this time, the average penetration of French reconnaissance flights into German territory was 20 miles. On May 2, 1940, an American official observer in France reported that he visited a where the two squadrons were reconnaissance group at equipped with Potez-63's and Bloch-174's. They made individual daily flights into Germany at depths a little more than 50 kilometers, crossing the frontier at about 30,000 feet. No fighter protection was furnished, and for detailed photographs, it was necessary to descend to 3,000 feet at the objective. This group had sustained the heaviest losses in French aviation up to that date. It was 08timated that in the four months prior to the invasion of the Lowlands, at least tvo-thirds of the assigned aircraft had been shot down. On the other hand, in May, 1940, the French were confronted with so many German reconnaissance missions over France that no scheme of interception by the warning net was effective. They therefore resorted to continuous patrols of two fighters, which had some success against single reconnaissance planes. German reconnaissance planes were escorted by Me-109's at depths of 15 to 25 miles before May 10, 1940, and nearly all of the German photographic missions were pro- tected by pursuit, although no standard ratio of protective slaves existed. It was reported that on January 19, 1940, a French reconnaissance plane encountered twelve No-109's at 35,000 feet. Intense cold prevented firing by either side. After that the French recon- naissance planes were furnished from three to nine escorting pursuit planes except when reconnaissance operated at very high altitudes. According to a French staff officer, each ground army had assigned to it one group of fighters, one or more groups of observation and reconnaissance, and one group of bombardment. Of these, only the reconnaissance aviation made a decent showing. A French artillery colonel said that even before May 10, 1940, it required 15 days' negotiations to obtain one observation plane for a 155-mm. - G.P.F. battery and that the value of this observation was less than in 19171 Although the activities of the Army and Air Force were supposedly coordinated and directed by the Minister of National Defense, there was no one who would actually take command and secure the necessary cooperation and training. Consequently, the mechanics of liaison broke down completely, and numerous cases of conflicting orders by artillery and defense commanders were noted. Wire communications *In April, 1940, a French reconnaissance plane at an altitude of 25,000 feet, was badly shot up by antiaircraft just over the German line CONFIDENTIAL -5 202 CONFIDENTIAL between air commands were at best undependable, and later non-existent; the urgent need for liaison aircraft was at once apparent. In an interview granted to an official American observer on December 3, 1940, M. Costa de Beauregard, who was well qualified to speak on air-ground liaison problems in France just prior to the 1940 Armistice, stated that the duties of his command on May 10, 1940, were transportation of Air Force officers and Army Staff officers, messenger service, survey of damage by German bombing, canouflage sur- veys, special surveys for air force headquarters of Northern France, emergency transportation of equipment, and traffic reports on railroads and highways. Prior to May 18, 1940, his group was equipped with two types of single-engine aircraft, the Mureaux-115 described above, and a smaller type, which cruised at 80 M.P.H. and landed at about 40 M.P.H. The urgency for passenger space resulted in the assignment of a twinengine transport. M. Beauregard concluded that the essential design of a special liaison command airplane should include automatic folding wings, to disappear immediately upon landing, and superior all around view and rear vision. It should be able to take off in 300 feet and land at not more than 40 M.P.H., thus enabling it to make use of small, unprepared fields; it should have no armament, and should be two-place but not dual-controlled; it should have very good radio, B.N.F. crystal control by pilot, and a range of 700 miles. 1 Drawing upon the statement made by Marshal Foch - "There is no combat without artillery; and no artillery without aviation" - the Commandant of L'Ecole Superieure De Guerre contends that sufficient planes of modern type must be made available to the artillery, and adjustment of fire must be made by specially trained artillery officers and not by air force personnel. Adjustment of fire by aviation personnel was always slow, and at best was unsatisfactory. 2 When necessary, the commanding general of the division should be able to call on, and obtain, pursuit protection for reconnaissance planes from the Air Army. An officer of the U.S. Army Air Corps, having made a study of the situation in France, recommends eliminating two-seat, single-engine types and believes that the reconnaissance airplane now needed will have the following characteristics: 1.. Believed excessive - probably induced by desire for consecutive missions without refueling. G-2. 2. The French have for years trained observers from the officers of the interested arm. In addition, all physically qualified general staff officers were trained as, and rated, observers. CONFIDENTIAL - 203 CONFIDENTIAL Engines Fuel two, turbo-supercharged; Crow three; Speed 425 M.P.H. at 30,000 feet; 1,300 miles at 75% power, at altitude; Range Armament Equipment two hours at full throttle; two fixed forward 20-mm. cannon; two .50 caliber machine guns in rear upper turret; two .50 caliber machine guns in rear lower turret; rounded, transparent nose for observer; camera and radio installations remotely controlled by observer; provisions for carrying bombs externally; ample oxygen supply for two hours. He states that the French did not believe that ground guns could defend an unarmed airplane when enemy pursuit was in the vicinity. Although the French had 66 autogiros when the War broke out, none were seen at the front. A French officer from the Ministry of Supply was to be sent to the United States to buy a light, cheap liaison plane for the French artillery - the Air Army had nothing to do with this mission - but the war ended too soon for his mission to be completed. 3. GERMANY The Germans learned much about observation airplanes and missions in Spain. Their doctrine then envisaged: a. That general reconnaissance, by big planes, of the principal theaters of action will be well in advance of German action; b. That tactical scouting against enemy objectives a day or so in advance of contemplated action must be done by big airplanes; C. That combat scouting, as action progresses, is best done by very light, slow-type airplanes similar to the FieselerStorch; d. That liaison missions of various categories could all be performed by the Fieseler. In a German report of the Polish campaign, the High Command stated: "For liaison, rescue, command observation, and general utility, the Storch proved to be a most useful and valuable type." Captain Kleks, General Air For ce General Staff stated: "The German High Comand observed the progress of the campaign from the very CONFIDENTIAL -- 204 CONFIDENTIAL useful Fieseler-Storch." The Henschel-126 is a single-engine, two-seater, parasol monoplane with a high speed of 190 M.P.H.: it has one machine gun in nose and one in rear, both 7.9-mm. Late models had leak-proof tanks but no armor.* Large quantities were not manufactured. The technical branch of the Luftwaffe was quick to appreciate the peculiar qualities of the Fieseler-Storch, a slow-flying, bizarre-looking craft. Since it has a transparent roof and cabin, the visibility obtained is excellent. It is fitted with many high lift devices which, although reducing its speed, enable it to hever at 32 M.P.H., land at 25 N.P.H., and take off in less than 200 feet. It has an inverted V-8 air-cooled Argus engine of 240 H.P., a weight empty of 1,980 pounds - all up weight of 2,910 pounds. It is not armed; its range is 250 miles, and it can land in practically any field; the run is less than 20 yards when brakes are applied. No great skill is required to fly it since it is so slow and fool-proof. The advantage accruing to army coopera- tion units thus equipped is obvious - they were recognized by Germany in 1936. Further experiments with the autogiro were abandoned in 1937 in favor of the Fieseler-Storch. Commanders of armored units observed and directed their forces from the rear seat of the Storch during the French conflict. Only one occasion is known where the Henschel-126 was employed on the Western Front. On that mission, June 9, 1940, a squadron of Henschels was deployed east of Laon to spot artillery fire, ascertain friendly front lines, and discover locations of enemy railway guns by flash searching. The commanding officer of this squadron stated that his mission was fulfilled only because no enemy pursuit was encountered. German reconnaissance has been performed by high-performance twin-engined airplanes. These were generally the Dernier-17 and the Heinkel-111. They performed missions practically every day over all areas of intended action for several days before that action took place. They were of untold value in the Norvegian campaign as all British movements by sea and by land were observed. For seven days prior to this invasion, all British fleet bases and the North Sea were thoroughly reconnoitered. The same thing was repeated in the Lowlands invasion. Daily photographic missions took place over Belgium and Holland, and whenever pursuit escort was needed, it was furnished. Since the Battle of France, German reconnaissance has operated over wide areas, including Greenland, Iceland, and the Faroes Islands. Most of these flights were termed armed reconnaissance, and the planes carried bombs which were dropped on fruitful targets at the discretion of the individual crew. Missions of this nature were repeated prior to and *It is believed that the large amount of publicity given this plane was intended for foreign consumption and that the Air Force knew it was a failure. G-2. CONFIDENTIAL -8- 205 CONFIDENTIAL during the Balkan campaign, and are now being conducted in the Middle East Theater. No other use of small single-engine aircraft by the Germans, other than that mentioned above, is known. 4. G-2 CONCLUSIONS a. It must be borne in mind that World War, 1940 edition, is a war of movement and that no intensive stabilized ground warfare went on, or is going on, on any front. Prior to the invasion of France, air activity was confined to pursuit patrols and to occasional reconnaissance flights, usually above 25,000 feet. It is doubtful if during the whole period between September 1, 1939, and May 10, 1940, there was as much air activity on the whole Western Front as during a normal day in the Mouse-Argonne sector alone during the latter phase of World War I. b. All belligerents became painfully aware of the failure of single-engine two-seater observation planes immediately after World War II started. C. All belligerents now believe that best results are obtained by training observers from the interested arm. d. Opportunities for adjustment of artillery fire by aircraft during active fighting were minimized by the speed of battery movements. e. Two types of airplanes will be required for observation in army cooperation units - a small, slow-flying airplane similar to the Fieseler, and a twin-engine, very fast, high performing airplane for reconnaissance work like that described at page 7 by the U. S. Army Air Corps officer. f. Pursuit escort must be furnished reconnaissance airplanes whenever required. 6. When supremacy of the air over a local theater is unquestioned, no airplane is obsolete. However in the presence of enemy pursuit, any airplane, to live, must be commensurately able to defend itself. h. On long-range artillery spotting missions, and on photographic and daylight reconnaissance missions deep in enemy territory when hostile fighters are active, three-plane formation will probably have to be resorted to for mutual protection. CONFIDENTIAL - -9- 206 RESTRICTED G-2/2657-220; No. 427 M.I.D., W.D. 12:00 M., June 26, 1941. SITUATION REPORT I. Eastern Theater. General: Finland is at war with U.S.S.R. Ground: No definite information on front lines. German main effort continues in the north with heavy fighting around Vilna and Gradna. In the south, Russian pressure has developed against Przemysl and against the Pruth line (Rumania). Air: Intense German air effort continues. There appears to be a diminution in the scale of Russian strategic bombing. II. Western Theater. Air: German. Light attacks on targets in southern England and in northern Scotland. British. Daylight attacks over northern France were renewed. The night offensive effort was directed against Bremen and Kiel in particular in northwest Germany. III. Middle Eastern Theater. No important developments. RESTRICTED CONFIDENTIAL 207 Paraphrese of Code Cablegram Received at the Yes Department at 11:45, June 26, 1941. Location, filed 17:10, Jaso 86, 1992. 1. British Air Activity over the Continued a. Night of June M.I. During this night English busbers dropped the following number of tens of high explesive boube and numbers of incontiary benibe upon the objectives named: Cologies, 56 and 9700, Desselfort, 44 and ; and Kiel, " and 1900. 2. Bez of Jane 25. Twelve Blomboins, with a fighter occurs of nineteen attacked Longueness and Arten and a like number of with a fighter occurt of sixteen equadrose, attacked the railway center at Nasebroack. Shipping off the Dutch coast and the Frisian Islands was attacked by B leahein bembers, five in each case. Nine rostine and 16 special photographic patrols were performed by Coastal Command aircraft. 2. Night of Jason 25-26. Seven bombers dropped leaflets over Paris, Challette and Orleens. Sea mining operations were carried out by four aircraft off Breat and one off the Frisian Islands. 64 bombers were sent to the Brensa industrial area, 47 to the Kiel ship yards, 6 to bomb the deaks at Betterion and - each to Cologne and Desselforf. Primary targets were attached by 80% of the aircraft dispatched. 2. German Air Activity over Britain. a. Day of Jane 24. Twenty reconnaissance aircraft and ten long range bembers were employed by the German against Britain, on this day. 2. Fight of June 94-85. 45 long renge bombers, 10 fighters and 15 mine laying aircraft were used. CONFIDENTIAL copY 208 CONFIDENTIAL the strength of Common defensive patrels 2. was increased. There was elight Germa activity over 4. Best Anglis, Partmenth, the east const of Sootland and the Dever area. 3. Lessee a. British lessen. Two British bombore were unreported from the operation of the sight of June 25-06. 6 Spitfiree were last and 4 damaged during the daylight vaide of Jaso 25. 2. Anis lessee. During the raids of the day of Jane 25, 13 m. 109's were shot down, 7 of the same probably destruyed and T Gamaged, is- elmined in all of which were 4 NE-1098's. Damaged during the sight of June 25-86 were one m-111 and one JU-88. 4. British Atr Activity, Other Theaters. a. Middle Eastern Thester. The British carried out the usual bombing, strafing and recommissence of the Axis positions. 5. Axia Air Activity, Other Theaters. a. Middle Easters Theater. Axis activity is this theater con- times to be - a very small seile. As of June 22 the disposition of the German Air Force is given by the Air Ministry as follows: is the extreme north, including Horoary, 78, all of which were recently flow into the area; in easters Commany and German occupied Palent, 1145, representing the addition of 1011 sircraft, Banemia, 251, the increase being " aircraft; in the combined Greek and Greteen area, 294, a decrease of 78, and in central Germany, 418, representing a decrease of 6 aircraft. LES - Distribution Office of Navel Intelligence Secretary of Mar State Department Assistant Chief of Staff, 6-3 Secretary of Treasury Assistant Chief of Staff, G-2 Air Corpo Mar Please Division -2- CONFIDENTIAL INFORMATION COPY 209 Paraphrase of Code Cablegram Received at the War Department SECRET By authority A. C. of S., G-2 at 9:10, June 26, 1941. Date JUN 27.1941 Initials Cairo, filed June 25, 1941. 1. Seven Tomakawks on their way to a ground strafing mission, in a formation of five skip Yes, with two Tail End Charley's, intercepted two Vichy Martins. When attacked by all of the Tomabasks, they half rolled and dived to the ground making violent skid turns. The Tonabanks followed and made attacks from the bean-quarter and storm, using both fifty caliber and thirty caliber gans. Both Martins were destroyed when they crashed, one was on fire between the right engine and the fuselage and both engines in the other were damaged. None of the Tomahawks were damaged. It was stated by the pilots that they had no difficulty in catching the Martine. 2. The Tonaharks referred and continued on with their original mission of ground strafing, in which they had the same success against motor transports as did the dosert squadron in Egypt. There was some damage to the Tomahawks by ground machine gun fire, but none were lost. 3. An unknown member of Vichy airplanes were destroyed on the ground in several missions against airdrones, without any lesses to the Tomakaska. FELLERS Districtions Severary of War Stat Department Secretary of Treasury Under veretary of Var Chief a Staff Assistan Ohief of Staff, G-2 Var Plans Visision Office of val Intelligence (2) a-s SECRET INFORMATION COPY Paraphrase of Code Cablegram Received at the Wax Department at 2:44, June 26, 1941 SECRET210 By authority A. C. of S., G-2 Dat,ILIN 27 1941 why, Initials Cairo, Filed June 25, 1941. In Palestine the squadron of Tomahanks flown by Australians had the mission of ground strafing and acting as protective patrols over naval fleets. Eight Tomahands in two 3-ship Vees, with one Tail-end Charley (0-2 - Weaving lookout) for each, on fleet protection patrol at fifteam thousand feet, intercepted 8 Italian JU-88's in echelon. The peal-off was made in two ship sections, and the attack by single ships from the beam, quarter and stern with a few ships coming up under the belly after their dive. The JU-88'5 dropped their bombs and started in a dive for sea level. Three JU-88's were destroyed and one damaged after 2 to 5 attacks had been made. Those destroyed were due to hits on the engines. In another protective mission on the same day a JU-88 was shot down by a P-40 after a stern attack in which one burst was fired into the JU-88's belly. The Tomahank then camped on its tail firing bursts into the rear gummer and the engine. It was stated by the squadron leader that a Tomachand can easily overtale a JU-88 and then maneuver so as to attack from any direction desired. Pilots who have taken part in combat bore this out. FELLERS. Distributions Secretary of War State Department Secretary of Treasury Under Secretary of War Chief of Staff Assistant Chief of Staff, G-2 War Plans Division SECRET Office of Naval Intelligence Assistant Chief of Staff, 0-3 Air Corps INFORMATION COPY 211 Perephrase of Code Cablegram Received at the War Department SECRET By authority A. C. of S., 0-2 at 19:11, June 26, 1941 Date JUN 3.0.1941 Amm, Initials Gairo, filed 21:15, June 25, 1941. 1. The only serious trouble reported by pilots operating the P-40 in the deport is a momentary cut out of the engine when the thertile is opened to the full threttle position at altitudes of between 15,000 and 25,000 feet. In ecobat, especially when the many has obtained a position on the tail, this nal-function is very serious. Although no thorough investigation has been made as yet, it is thoughts that a too rish mixture is responsible for the trouble. Better main tenance has now oversome most of the miner mechanical difficulties previously experienced, such as trouble from improper assembly, and in pulleys, guard solenoids, and the like. Since the filler neck coverings were tightened no further trouble has been experienced with all being forced out of the tanks. It is expected that with the installation of new flaxible rubber couplings the few generator drive failures still occurring will be eliminated. The operation of both the thirty and fifty caliber guns is new considered antisfactory. At first some trouble was experienced because of eareless failure to properly clean off the grease in which the gase were packed, failure to properly throad the sartridges, and want of instructions concerning proper adjustment of the head space. At the depet where the P-40's were set up, proper instructions were givens however, the necessary disamination of those instructions to the aquadrone was not accomplished due to the disinterestedness usual SECRET INFORMATION COPY SECRET in the - of all Invoice applies - to abdolstrative FELLERS Materialisms Secretary of state Department Secretary of Secretary of - Chief of Staff Assistant think of staff, as - Please Division office of Neval Intelligence G.M.C. Assistant order of staff, as Air Garge SECRET 212