The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
CONFIDENTIAL 201 Paraphrase of Code Radiogram Received at the War Department at 10:48, my 23, 1941. Bucharest, filed May 22, 1941. 1. The any of as new organised consists of 20 divisions and 2 montain brigntes. About 14 divisions are located in east Ements. A detailed order of battle is not obtainable. The much publicised n organisation of the and foress has not been realised. So for, meet of the equipment received from the Germans has been antiaireraft. IS is of Polish origin for the meet part, with odds and ands of French, Dateh and Belgian. The Garmans apparently keep for themselves captured mechmised and materised equipment. Since last astumn has reportedly n caived 150 modern German planes. 100 unders planes with forcy Immission markings were from recently. Whether by pilets is not known. 2. The rele the Immenian any will play in the future, which I can visualise only in the cass of a German attack on Russia, is to ast as seavengers of the battlefield like the Bulgerians in the recent Balkan paign. Its probable fate, if Germany is vistorious, will be to be retured to a small police force, with labor service taking the place of compulsory military service. 3. The Hungarian any is despised by the Remanians and played no role whatever in aiding Germany in Emania. 4. The Rumanian any and air force should not be taken seriously. The Germans certainly do not. They appear to have given up the idea, if they ever had it, of making soldiers out of Rumanisms. Training results have been achieved only in antisireraft defense. Otherwise the only visible effect is that officers now wear awards at all times in public. This, however, does CONFIDENTIAL 202 CONFIDENTIAL not keep hands out of pockets nor prevent them from presenading are in arm. 5. I have had no success in checking remore conserting German shipments by plane from Rumania to Turkish Black Sea parts and adress Turkey to Ireq or Syria. No reports about rail shipments from south. I w lieve that a secret agreement already exists between Germany and Turkey. This belief is also held by high Rumanian officials. The Turkish Military Attache, a good friend of mine, who heartily detests the Germans, has been avoiding me for some time. 6. Information from returning Germans indicates that German lesses in the Greek and Yagoalav operations were small because there was little fighting and this all rear guard action. of course, the British claim they fought like Tigers. The German never minimise OF belittle the fighting of opponents. The fiereer the emmay fights the greater the German military clary - considering the results. The General do not object to being I as nighty maters of tigers. 7. The is open. oil barges arrived at Giargia a week ago. Leading is going on despite much . enfusion and congection. s. There is heavy traffic of leaded German transport planes from Rumania to Dulgaria. Ultimate destination 9. The tension over Russia has decreased. The bulk of General tessege is reported moving north into Dukovine from Meldavin. Meldevia is perrisoned by Rumanian troops. RATAY Distribution: Assistant Chief of Staff, 0-2 Secretary of War State Department War Plans Division office of Naval Intelligence Assistant Chief of Staff, G-3 Secretary of Treasury Under Secretary of War Chief of Staff 2 CONFIDENTIAL 203 CONFIDENTIAL Paraphrase of Code Cablegram Received at the War Department at 12:20, May 23, 1941 Rome, filed May 23, 1941. 1. Authentic sources state that in the Balearie Islands there are no Italian troops. *2. The sise of the wheat crop in Spain will determine largely whether the Spaniards will allow any passage of German troops through that nation. It is believed that if Spain allows such troop movements the British will retaliate by cutting certain wheat supplies now necessary to Spain. 3. It is not believed that a bumper wheat crop will be had in Spain this year. FISKE , / 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 Office of Naval Intelligence CONFIDENTIAT 204 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE May 31, 1941 Secretary Morgenthau TO Mr. Kamarok FROM Subject: Weekly Military Report: The Reliability of the Reports of our Rome and Berlin Attaches Summary 1. As a source, Rome is unreliable. A compilation of the forecasts of future events made by our Rome Attache for the past nine months shows a score of sixty percent wrong. This 18 not BO much a reflection on the caliber of the Attache as on Rome as a source of information. There is no real difference in this matter between the two Military Attaches, Paine and Fiske, whose reports are included in this period. 2. The reports from Berlin include fewer prognostications or estimates and these are generally about eighty percent accurate. Reports from Rome September 10, 1940 A usually reliable informant states that Hitler has demanded that 400 Italian planes participate on September 15 in a mass attack on England, and that on the following day the Germane will launch their main attack. A different and well- informed source Bays that the German attack may be expected this week-end. (Paine) October 23, 1940 At attack on Greece by Italy at the present time would be a strategical blunder. It is possible but not probable. (Paine) 205 -2- Division of Monetary Research December 3, 1940 Badoglio hae resigned 88 Chief of Staff, according to reports received from several trustworthy sources. General Ugo Cavallero is being suggested as a possible successor if Badoglio goes. (Paine) (This change was publically announced several days later.) March 11, 1941 It 1s believed that an offensive is impending in Albania. (Fiske) (The offensive did occur.) March 24, 1941 The Germans intend to start operations in North Africa in fifteen days or started around the first of April.) thereabouts. (Fiske) (The German attack March 24, 1941 To my mind there is no chance at all of success in an Italian offensive in Albania now. The morale of the troops is too low. (Fiske) April 5, 1941 It has been reported although not confirmed that German troops are departing for Albania from Italian Adriatic ports. (Fiske) (Incorrect) April 6, 1941 There is now further evidence confirming that there is a large movement of German troops into Albania. (Fiske) (Incorrect) April 9, 1941 Large Italian and German forces have been concentrating near Brindisi and Bari. The intention is a landing operation on the west coast of Greece. This 18 based on a thoroughly trustworthy source. (Fiske) (Never happened) April 19, 1941 The statement 18 made by Italian sources believed to be trustworthy that the German command in Africa is getting ready for a direct push from the Oasis of Jarabub. This will move over the desert and hit somewhere south of Cairo. (Fiske) (Never happened) 205 -2- Division of Monetary Research December 3, 1940 Badoglio hae resigned 66 Chief of Staff, according to reports received from several trustworthy sources. General Ugo Cavallero is being suggested as a possible successor if Badoglio goes. (Paine) (This change was publically announced several days later.) March 11, 1941 It is believed that an offensive is impending in Albania. (Fiske) (The offensive did occur.) March 24, 1941 The Germans intend to start operations March 24, 1941 To my mind there is no chance at all of success in an Italian offensive in Albania now. The morale of the troops is too low. in North Africa in fifteen days or thereabouts. (Fiske) (The German attack started around the first of April.) (Fiske) April 5, 1941 It has been reported although not confirmed that German troops are departing for Albenia from Italian Adriatic ports. (Fiske) (Incorrect) April 6, 1941 There is now further evidence confirming that there is a large movement of German troops into Albania. (Fiske) (Incorrect) April 9, 1941 Large Italian and German forces have been concentrating near Brindisi and Bari. The intention is a landing operation on the west coast of Greece. This 18 based on a thoroughly trustworthy source. (Fiske) (Never happened) April 19, 1941 The statement 18 made by Italian sources believed to be trustworthy that the German command in Africa is getting ready for a direct push from the Oasis of Jarabub. This will move over the desert and hit somewhere south of Cairo. (Fiske) (Never happened) 206 -3- Division of Monetary Research Reports from Berlin September 30, 1940 The German air force has not yet gained air supremacy over the British. March 21, 1941 It is believed that Germany is giving first priority to the attack on England. Nevertheless, there has been an increase in the German forces in the east. The reason for this increase is not known. April 3, 1941 April 17, 1941 May 15, 1941 At attack on Yugoslavia and Greece is expected in the near future. (The attack began April 6) Some observers here believe the next major German push will be against Russia. A fairly reliable source in Berlin reports without confirmation that the Germany army is going to attack Crete, supported by parachute troops. 207 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE June 3, 1941 Secretary Morgenthau TO FROM Mr. Kamarok Subject: Summary of Military Reports Cyprus The British have only one good air base for land planes at Cyprus and one fair seaplane base. There are several other poor bases. The British, however, are not trying to improve their bases since they do not want to hand over finished air fields to the axis. There are no British planes now based on Cyprus. (Cairo, Military Attache, May 25) (The tone of this report coupled with the great damage and losses suffered by the Mediterranean fleet around Crete makes it doubtful whether the British have much of a chance to hold Cyprus against a determined German attack.) Egypt The Suez Canal is still closed by mines. (One section or another has been closed since May 9. Probably at most only a small intermittent flow of supplies has been coming through. (U.K. Embassy, London telegram, May 29) Syria The British think the French forces in Syria (25,000 men, ill-equipped with poor morale) would resist a British invasion. (London, Military Attache, May 25) Crete The British Army Chief of Staff felt a week ago that none of the allied troops in Crete would be evacuated. He commented bitterly on the fact that no air support had been granted. This would probably result in bad feeling in New Zealand. (The British commanders in Greece emphasized the desire of the army to have air support under army command.) (London, Military Attache, May 28) 208 -2- Division of Monetary Research Russia On May 19, according to British Military Intelligence, army consisted of 131 infantry divisions, 25 cavalry divisions, the Russians had in the west about 3,800,000 men. This 32 armored brigades, 10 motorized brigades and 14 presumably moto-mechanized brigades (a combination of motorized and armored elements). (The Germans at a maximum would not have more than 18 armored divisions. The Russians, therefore, with 32. armored brigades on the western frontier alone have the equivalent of at least 16 German panzer divisions. In a German invasion of Russia, the Germans would, therefore, meet for the first time an enemy over which they would not have overwhelming superiority in quantity of men and equipment.) According to the Yugoslav military attache in Mosoow, Stalin has revealed a desire to give the final blow to Germany should the United States and England be able to weaken Hitler: thus making possible a Soviet Europe. Yugoslavia would not be re-created but a Balkan Red Union with constituent republics of Serbia, Croatia, Montenegro and Bulgaria would be set up. There is no indication of Soviet military activity in the south. The U.S.S.R. will not permit transport of German troops across its territory but will furnish grain to Germany as far as it can "up to the starvation point". The new class of conscripts is being called to the colors now instead of in the fall. According to the Japanese military attache, the Russians are shifting key men from their Far Eastern armies to form the Cadres for new divisions in the west. (This is significant since the Japanese military attache scoffed at earlier reports of the shifting of troops from the Far East as being propaganda.) (Moscow, Military Attache, May 24) German Navy The Scharnhorst and Gneisenau are reported to have been sufficiently damaged by RAF bombing to keep them in dock for repairs for at least two months. (London, Military Attache, May 27) 209 -3- Division of Monetary Research On May 28, the Tirpitz (sister ship to Bismarck) the Hipper (10,000 ton cruiser) and Admiral Scheer (pocket battleship) were in their usual positions at Kiel. (U.K. Embassy, London telegram, May 29) German Army Distribution of German Army on May 19 (According to British Military Intelligence) Total- All Divisions Scandinavia West Russian Border Balkans Italy Armored Divisions - 13 47 2 110 4 29 4 1 2 En Route to Libya Strategic - Reserve - Germany Total 2 2 27 3 230 16 (Unaccounted for: Troops already in Libya Finland Residual Grand Total 2-4 3-5 20-26 (?) 260 according to our Berlin attache) (It is not possible to make an exact comparison with earlier reports since the British identify only 230 divisions and our Berlin attache 260. However, compensating for this, the Germans appear to have slightly reduced their strength in the west in the last month but have about maintained their strength of 110 divisions (around 2,000,000 men) on the Russian frontier.) 210 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE June 4, 1941 Secretary Morgenthau TO Mr. Kamarok FROM Subject: Monthly Report: Royal Air Force Activity to June 1, 1941 Comment 1. The bulk of the bombing attacks made by the R.A.F. in May occurred in the first half of the month. After May 14 while raids still occurred, a definite lull in bombing activity occurred. The explanation may be bad weather or the arrival of Hess. 2. The summary tables which are appended are not com- pletely accurate. This is because the British often report raids in vague terms "The docks at Calais and Ostend and other ports in occupied territory were attacked". However, the figures do indicate the direction of the main effort of the British. 1. Analysis of Targets Ports, dooks, shipping Attacks During May Airdromes and seaplane bases Industrial plants 011 refineries, synthetic oil plants and tank farms Total of Above 84 Total Number of Attacks to June 1 934 12 712 18 668 6 120 336 2,650 211 -2- Division of Monetary Research 2. Leading Cities Attacked Attacks During May Total Number of Attacks to June 1 A. Germany Hamburg (port) Bremen (port) 70 66 54 Wilhelmshaven (port) o 65 48 4 48 Gelsenkirchen (synthetic oil) Berlin (industrial center) Kiel (port) o Cologne (industrial center) 4 Emden (port) Mannheim (industrial center) Essen (industrial center) Hanover (synthetic oil) Total of Above (11 Cities) 43 42 40 , 3 31 39 3 1 34 o 33 25 528 4 85 1 68 B. Occupied Areas Boulogne (port) Calais (port) Ostend (port) Flushing (port) Brest (port) Lorient (port) Total of Above (6 Cities) 2 66 0 63 4 61 0 48 11 391 C. Italy Turin (industrial center) Naples (port) o o Total of Above (2 Cities) Losses 3. R.A.F. Losses in During May Bombing Raids in Northern Europe 64 11 9 20 Total Losses To June 1 664 212 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE June 5, 1941 Secretary Morgenthau TO FROM Subject: Mr. Kamarck Summary of Military Reports Crete One third of the allied army in Crete was captured, one third killed or wounded and one third evacuated. About 8,000 soldiers were evacuated by May 30. The Mediterranean fleet suffered extensive damage. Bombing hits were scored on every ship but one. (Cairo, Military Attache, May 30) German Air Attacks on England It was bad weather which stopped German air attacks on England during the last half of May. This gave England sixteen days of rest. The Germane apparently save their resources for heavy attacks in good weather. (U.K. Embassy, Telegram, May 31) 213 SECRET By authority A. C. of S., G-2 Received at the Mar Department at 05:28, June 1, 1941. DateJUN 4 1941-( Ro Initials ) Persphrees of Code Cablegree Gaire, filed 21:14, My 30, 1941. the following is a - of the stunties in Grobe. 1. AS the last report, about 8,000 of the Allied foress have 3 been successfully transported be other theaters, 2. the - defense of Grate has developed tate a disester. The entire force my be divided approximately as follows: 1/3 captured 1/5 commited, and 1/3 commities. 5. In Like air abservers have reported heavy antiatrement fire in the Assis area. 4. Damage to the Fiest during the Grate operations was extensive. With the single comption of the hite were seared - every ship and damage renges from alight to staking. FELLESS Distribution: Decretary of Mar State Department Secretary of Treasury Union Secretary of Year Shief of Staff Assistant Sist of Staff, as War PLAN Division office of Neval Intelligence 6-3 SECRET 214 BRITISH EMBASSY, PERSONAL AND SECRET WASHINGTON, D.C. 3rd June, 1941. Dear Mr. Secretary, I enclose herein for your personal and secret information copies of the two latest reports received from London on the military situation. Believe me, Dear Mr. Secretary, Very sincerely yours, The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 215 Telegram from London dated May 31st. Naval. His Majesty's Ship "Imperial" disabled by bomb later sunk by His Majesty's Ship during operations north of 1. Grete night of May 28th/29th, her crew taken off. A/8 travier "Sidonie" sunk in heavy dive bombing attacks Tobruk. Admiralty tanker Cairndale (8129 tons) sunk by U-boat May 30th 150 miles west of Gibreltar. 2. Grate. Very little news owing to difficulty of can- munications. Further German air borne reinforcements arrived May 29th and intensive dive bombing continued all day. Our troops exacted heavy toll of the enemy. Abrasinia. General Oaparati Commander 21st Italian Division surrendered. 3. 4. Libra. Patrols active night of May 28th/29th Tobruk, destroyed one enemy Breda post and inflicted at least 12 casualties. May 29th. Harbour heavily bombed, a jetty damaged and almost empty oil tanker set on fire. Four enemy aircraft destroyed by anti-sircraft fire. 5. German Air ACTIVATE Weather has stopped enery air attacks last week. Enemy appear to adhere to policy of holding resources for heavy attacks in good flying weather; heace the last 16 days have given Britain valuable rest and uninterrupted production. At least three bombe dropped in Dublin during night of May 30th/31st. 17 persons killed near Amiens Street station, total casualties about 100. Iri ah Anti-sircraft fired on the reider May 30th/31st. 135 enemy aircraft operating of which 25 were sea-mining off west east ports. No concentrated attacks. 6. Irag. Our column from Fallujah has reached outskirts of Bagdad. Our aircraft carried out operations in support of our ground forces in Bagdad area and caused a darge fire in an M.T. depot at Rashid where screaming bombs were dropped. 216 Telegram from London dated 1st June, 1941. Orate Operations. His Majesty's A.S. Perth hit by board and speed reduced to 96 knote. His Majesty's destroyer Napier damaged by near miss. His Majesty's Ship Calcutta sunk. 2. British aircraft obtained three direct hite Italian merchant vessel Flore II outside Sfax. 3. At Home Unfavourable weather prevented Royal Air Force operations during May Slot or night of Sist. Night of 29th/30th Royal Air Force bombed aerodromes Rhodes and Scarpanto. Our a ghters maintained protective patrel over naval units between Crete and Egypt on 29th and 30th destroyed four enemy bombers, damaging others and forcing further so to jettisen boube. 4. Enemy Air Activity over United Kingdom negligible during daylight Slot but night of Sist/lst 130 at rereft operated over went and northwest, concentrating on Merseyside. Damage not severe and casualties light. Fighters destroyed three enemy aircraft. 5. Takenk. Attack on May 30th by enemy bombers three of which destroyed by anti-aircraft fire. May 30th, ten enemy AFV's were engaged by our artillery, one emery tanis knooled out. Five enemy tanks approaching perimeter dispersed. 6. Iraq 217 6. Irag. Truce for time being ends Iraqi war. Two reasons contributing to this end (1) German assistance came too little and too late owing to bad timing of Rashid Ali, (2) commercial life of country paralysed because no faith in Rashid All and because we hold Basrah, country's only port. 218 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE TO Secretary Morgenthau FROM Mr. Kamarok Subject: June 6, 1941 Weekly Military Report: The British Defense Against Night Bombers Summary England is making progress on the crucial problem of stopping the night bombers. This is shown by the increasing German casualties. There is no one answer and headway has been made from several angles: by using new tactics based on a longrange fighter, the use of radio detection, the development of a chemical air searchlight, countering the German radio beams, adapting airplanes as specialized night fighters, and carefully selecting pilots for night fighter crews. 1. The increasing German losses of night bombers in the past five months begin to offer the hope that in a reasonable period of time England will be able to find the answer to the night bombing menace. The known German losses of night bombers since the first of the year are as follows: January 15 February 15 March 47 April 90 May 156 The high German casualties in May are particularly noteworthy since the Germans did not undertake any large-scale attacks on England in the last half of the month due to bad weather. The British figures of German losses are to be regarded as minimal. Last fall, the British found that they were losing three times as many night bombers in crashes on landing as they were over Germany. Obviously, such a high ratio could not hold now. But it is certain that the Germans have losses of which the British are unaware. 219 -2- Division of Monetary Research 2. The increasing success of the British in meeting the night bomber has been due to a number of reasons. No one single answer has been found completely effective to date. The combination of a number of approaches has, however, begun to make headway. (a) Using a new long-range fighter, the Beaufighter, the British have been ambushing the German night raiders at their home airdromes as they return from raids. (b) For defense over England, a secret radio detecting device has been developed which makes it possible to direct a fighter to within 1,500 feet horizontally of the night bomber. On a clear moonlit night this 1,500 foot gap can be surmounted to some degree by the fighter pilot himself. The result is high German casualties on clear nights with a full moon. (c) On dark nights when contact has been successfully made through use of the radio finder, the German bombers have often been able to break away by a twisting dive, losing their pursuer. To correct this, the British are developing a high powered chemical searchlight to be installed in the nose of the American Douglas DB-7 (the "Boston" or "Havoc"). During the two or three minutes of its burning, this light is said to be more powerful than any electrically operated ground searchlight. With this searchlight, night fighters will hunt in pairs. When contact is made the fighter carrying the search- light will turn it full on the German bomber while the accompanying fighter attacks. (d) On nights when there is little visibility the Germans at times engage in area bombing guided by radio beams. A beam from Norway and a beam from France are made to intersect over the target in England and at the intersection the bombs are dropped. As a measure of defense, the British have been fairly successful in "bending" the radio beams. In this way, the bombs are dropped in non-vital areas. At the same time, the British knowing the point of interesection are able to concentrate their defense to meet the attack. 220 -3- Division of Monetary Research (e) A special type of night fighter is being evolved. for night fighting. An ideal night fighter has to be able to excell the bomber in climb, speed and maneuverability. At the same time, it should carry a three man crew; a pilot, a radio operator and a gunner who does not need to spoil his vision by looking at illuminated dials. The American bomber, Douglas DB-7 or "Boston", has been found to be suited for conversion into a night fighter. When used as a night fighter, the British name it the "Havoc". It was first employed as a night fighter on April 10. (f) Night fighter crews are likewise becoming specialized. The men are carefully selected for excellence of night vision. In preparation for a flight, The day fighters have proven themselves not best suited they wear dark glasses for hours to prepare their eyes. 221 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE June 10, 1941 Secretary Morgenthau TO Mr. Kamarck FROM Summary of Military Reports Subject: Syria The forces entering Syria are believed to be composed of two British divisions and an incomplete Free French division (total, perhaps 40,000 men). The Vichy forces are estimated as comprising five or six weak divisions totaling 49,000 men. (An earlier estimate placed the figure at 25,000.) The Germans are reported to have left. (On present indications, the British will probably be successful in occupying Syria. The tempo of the advance to date, however, 18 dangerously slow. Beirut and Damascus should have been seized by the second day of the invasion.) (M.I.D., Situation Report, June 9) German Navy The Prinz Eugen (10,000 ton cruiser), escort ship of the Bismarck, is now in Brest. (The Germans are assembling quite a striking force on the Atlantic: two 26,000 ton battle cruisers and now a 10,000 ton cruiser have slipped out of the North Sea to Brest.) (London, Military Attache, June 8) Crete The Stuka attacks on ships were most dangerous. The attackers dropping out of the sun were sometimes not seen until after the bombs had been released. The aircraft carrier, Formidable, because of a lack of aloft. These, however, were effective in warding off the planes was never able to keep more than two pursuit planes Stuka attacks. The cruiser York was sunk by an Italian one-man torpedo. (First mentioned as used at Gibraltar. A one-man torpedo is steered by a volunteer clinging to it. After aiming, the man slips off while the torpedo goes straight ahead. To knowledge, this is the first successful use of this device in the war.) (Cairo, Military Attache, June 14) my 222 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE June 13, 1941 Secretary Morgenthau TO I FROM Mr. Kamarok Subject: Weekly Military Report: Some Political Factors Influencing Military Developments in the Near East (Much of the military situation in the Middle East is explicable only in terms of the political background. This memorandum is based largely on the scattered references of our Cairo Military Attache on this subject.) 1. The peoples of the Middle East have developed a strong national consciousness and a desire for freedom and independence from all outside control including British control. In Egypt, for example, our Cairo Military Attache reported that the Egyptians wish neither German nor British domination and that one of the reasons Egypt has not entered the war is the refusal of the British to promise to leave Egypt after the war is over. It is not possible to dismiss this longing for independence as being due to German influence or German bribes. Our Cairo Attache states that the British themselves are dropping the story that Rashid Ali, the recent head of the Iraq government, was bribed by the Germans. Rashid Ali received support from the people of Iraq because he sincerely expressed their desire for independence. Our Attache likewise reports that the Arab leader of Palestine, the Mufti Amin el Husseiny, is not pro-Nazi but is anti-British. The Mufti, who is now living in exile in leader alive. The Mufti is working for a united free Arab Iran, is considered by the Egyptians as the greatest Arab people. As it happens, the Jewish settlement in Palestine has become to some degree the symbol of foreign control to the Arabs and opposition to it, therefore, has become one of the unifying elements in the Arab world. 223 -2- Division of Monetary Research 2. The British do not possess the military strength to rule the Middle East with naked force alone. They, therefore, must move discreetly. This partly explains the cautious slowness with which the British have moved in Iraq and Syria. The campaign against Rashid All in Iraq took a month to complete. It is important to note that Rashid Ali and his movement were not crushed by force. Rashid Ali was driven from Iraq more by political maneuver than by force of arms. The British military leaders in the Near East, indeed, wished to compromise with rather than oppose Rashid Ali. Pressure to force Rashid All out was on direct orders from London. The leader of the opposition to Rashid All, the Regent Abdul Illah, demanded and received from Anthony Eden acceptance of the principle of Arabic unity and freedom for Iraq. In this way, Rashid All's platform was stolen from under his feet. At the same time, the British control of Iraq's main port, Basra, caused economic distress to certain sections of the population. The Iraq minister of war came back from his visit to Ankara with the demand that Rashid Ali resign. This split the upper army and government circles. Finally Rashid Ali had an empty treasury and could not pay his army to keep fighting. The last fact indicates that the charge of German bribes was unfounded. It was the combination of all of these political and economic factors rather than actual warfare which drove Rashid All out. While Rashid All is gone, it is necessary to remember that the situation in Iraq has not substantially changed. Similarly the entrance of allied troops into Syria had to be preceded by a British promise of independence for Syria. The slowness of the advance which is inexplicable on purely military grounds is probably due to the political factors in the situation. 224 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE June 16, 1941 Secretary Morgenthau TO A. M. Kamarck FROM Subject: Summary of Military Reports AAA Syria While the French regular soldiers are resisting, there have been a great many desertions by the Sengalese Native troops. Nazi planes are attacking the Free French column entering Syria. German mortars have been landed in Syria by air for use by the Vichy French troops. (London, Military Attache, June 13, 1941) The Allies are making little progress in Syria because of the resistance of the French and the lack of motor vehicles. (Cairo, Military Attache, June 11) Russia The British War Office believes that 30 per cent of the German Army is now concentrated along the Russian border. (London, Military Attache, June 13, 1941) The British Military Intelligence considers the movement of German troops to the Russian border to be a part of the steadily growing German squeeze play on Russia. . There are reports again of the Romanian General Headquarters having been moved to Moldavia. (London, Military Attache, June 11, 1941) Iraq No damage to the pipelines to the Mediterranean from Iraq or the Mosul oil fields has as yet been reported. The pipeline branch leading to Haifa has suffered no damage. (London, Military Attache, June 12, 1941) 225 SECRET By authority A. C. of S., G-2 Received as the Mar Deportment DatesUWN.14-1941 R Initials at Tixe, Jane 13, MAI. Lealing filed 13:30, Jason 13, wil. the following is a - of the information motioble at the Mar office salary 1. I & - - of atviliance to still g forward, but the writtens stunties evented w the - I str seed is - when control. b. Sange - patricia - active alamy the benton, but these - no activity in the Stine - s. I n to the optains of the office that fully w of the - - is - consultated along the Description bender. 28 is Mangha that - Suress Security in the worth part of Barray - boing / - the Hantak addition of Secretar benton. 3. - s Share have body a - - Insurance w Househ active woods, but the Street regular - officiales a - deal of restolance to the Britten position. Your teah - - have been lasted in Syrta w - - the Tide I I - was these - . Heat please - attacking the east colom (ubleh is make w of Free Transh) with medias - five and bate. This colam has reached (8). SECRET INFORMATION COPY ) Jaraphress of Code Sublegram SECRET 2. 226 It is - for the British to use heavy fire to dispell the strong resistence pas w w the French during the attack - Mary Agence This term has new been captured - the Viday Survese are retreating to the worth. the Bristen force that was moving - along the const 1tas - heavy which yes - a Storee resistance. They were driven off or destroyed w artillary five - this salem me, when last reported, (night of - 11-22), as Solden. name foress - also retreating to the worth in this region. 4. Imm. There - prestically - questions in this Member. The British have not resistance as only - place since - last supert. Is is fell that the activities in Systa are belying to close - the attention in Iraq. Distribution: Secretary of Yes State Department Bearetary of Treasury Made of Assistant Becrobany Other of Statt, as Me Please Division Office of Navel Intelligence as Air George SECRET 227 Paraphrase of Code Cablegram Received at the Mair Department at 10:45, Jane 12, 1941. SECRET By authority A. C. of S. G-2 Ro Date JUN 1.4.1941( Initials Daire, filed 21:14, Jane 11, 19th. 1. arria. Two separate Free French Foress are proceeding towards Demaceus. The eastern furse was opposed at Kissons and attempted to 8 around the defense position w movement to the east. 2. British column creased the Syrian border with 4 separate forces. On the east the British and Indians not serious exposition as Merj Ayoun. The Australians advancing north - the coast have now reached Bidon with their two column. 3. Two Visity French destruyers off the Byrian const attached the destroyer eargements the British floot (which consisted of 2 errisers and 4 destropers) and seriously damaged - destroyer without less to themselves. 4. The investing foress are making alight progress on of the resistence of the French and the lack of mater vehicles. Distribution: Secretary of War State Department Secretary of Treasury Assistant Shief of Staff, 6-2 War Plans Division Office of Naval Intelligence G-3 Air Garge SECRET INFORMATION COPY ) 229 SECRET available No confirmation has been received of the statement that 16 - Divisions have been stationed in the vistulity of the benter. British Military Intelligence considere this movement of tweege as - item in the stendily growing - equesse play on Baseta. 5. last. In the country correcting School both oldes have been actively patrelling. In the Solium area Anis petrols have been pashing south of Holfigra and - - amoved - has born tabus w the Dyitish. The laber supply as Alemeiria has because more entistuctory but the civilian population are still Leaving the city. Distributions Secretary of War State Department Secretary of Treasury Assistant Shief of Staff, a-s Mar Please Division Office of Neval Intelligence 6-3 SECRET CONFIDENTIAL 230 of Cafe Received at the Mar Department at 08:30, Jaso 10, 1941. Leadon, filed 13 Jaso 12, MM. The following information is submitted in reply to year eable of Jane 6 requesting available information - - to Dring pipe lines. 1. British foress have - as for as Elsink and Boditin and have not seas back information in regard to - destruction of all fields. The entire Haifs Line is water British central and has suffered no - only part of the Tripoli line is water their centrol, but no damage has been reported - that part. 2. The statement has been velms w the Iroq Petroleum Geograp that the facilities in the field are barned, and up until Jane 11 no reports had been received that the pipe lines had been damaged at - potat. IS - be that - alight destruction took place in the akimishing in that neighborhood. 3. The Mar office has no information in regard to I oil fields or Lines. Distributions Secretary of War State Department Secretary of Treasury Valor Secretary of War Assistant Ohiof of Staff, 6-2 Mar Plans Division office of Neval Intelligence Air Gurge INFORMATION CONFIDENTIAL COPY 231 All TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE TO Secretary Morgenthau FROM Mr. Kamarok June 21, 1941 Subject: Weekly Military Report: Recent Developments in the German Army Summary Since July, 1940 the German Army has attained its maximum numerical strength of almost 5,000,000 men under arms. Its greatest progress, however, in this period has been in raising its technical level and increasing the quantity and quality of its mechanisation. 1. The German Army of September, 1939, compares poorly with the German Army of today. At the outbreak of war, Germany mobilized 150 divisions (compared to 250-260 today). Only 90 of these, however, were regarded as fit for combat. At the same time, the Germans had only 6 armored divisions (compared to about 18 today). 2. During the fall and winter of 1939-40, intensive work was carried on in expanding and training the army. By May, 1940, the army had a strength of 190 divisions. Probably only 150 could be considered as fully suitable for active warfare. Ten of these were armored divisions. (In May, 1940 the French had 90 divisions and the British 10.) 3. Since the conquest of France, the army has been 5,000,000 men). This represents probably the peak in numerical strength which the German Army can maintain. In terms of quantity, in other words, the German Army has about reached its peak. Emphasis is therefore now being almost entirely concentrated on the technical and qualitative side. 4. The six armored divisions of September, 1939 which brought up to a total of 250-260 divisions, (or almost had grown to 10 by May, 1940, have now increased to 18, according to the best available information. While it is 232 -2- Division of Monetary Research more difficult to estimate the total number of tanks, the Germans probably had around 5,000 in September, 1939, about 7,500 in May, 1940 and perhaps 15,000 at the present time. The same process of increasing the amount of technical equipment shown by the growth of the panzer divisions has also been true of other branches of the army. For example, the number of anti-tank guns per division has been increased. The total number of motorized divisions (1.0., truck-carried) now amounts to over 20, whereas at the beginning of the war there were not more than 5. 5. Perhaps even more important is the process of restantly. This is most notable in the case of the armored divisions. The light tanks of around 12 tons are being replaced by medium tanks of around 20 tons and by heavy tanks of 36 to 90 tons. A new type of vehicle, the tank destroyer, has been added to the panzer divisions. The tank destroyers consist of powerful anti-tank guns, mounted on a fast self- equipment with newer and better weapons that 18 going on con- propelled carriage, as a sort of first cousin to the tank. Some infantry divisions are also being transformed. For the first time tanks are being introduced directly into the infantry divisions. A light tank company is being incorporated in the infantry regiment. The number of supporting weapons, mortars and artillery, in the infantry division is being increased. Whereas before the war, 25 percent of the total strength of the infantry division consisted of rifle-men, some of the infantry divisions now have only 14 percent of rifle-men. Throughout the army improvements in weapons are being made. The 37 mm anti-tank gun is being replaced by a 50 mm gun (our army is being equipped with a standard 37 mm anti- tank gun). Self-propelled artillery is coming into use. 6. Just as the German Army has reached its numerical maximum so likewise is there a limit to the amount of equipment an army can use (disregarding reserves). In other words, the German Army may well be approaching the saturation point in equipment at this time. In the improvement of quality of equipment there is, however, no immediate limit. It 18 in this field that German military energies would have to concentrate in the unlikely event of a prolongation of the present inactive period of the war. 233 TREASURY DEPARTMENT INTER-OFFICE COMMUNICATION All DATE June 23, 1941 Secretary Morgenthau TO Mr. Kamarok FROM Subject: Russo-German War 1. It will not be possible for several days to make any estimates of the progress of the war. 2. According to our army, the most likely German strategical plan is the following: main attack on the axis Warsaw-Moscow, secondary attack from Finland toward Leningrad, from East Prussia toward Leningrad, from Krakow on the line Lemberg-Kiev, from Romania toward Odessa. 3. The reason why Germany undertook this attack on Russia is probably to be found in the following paragraph in Hitler's speech: there resulted British-Soviet Russian cooperation intended mainly at the tying up of such powerful forces in the East that radical conclusion of the war in the West, particularly as regarding aircraft, could no longer be vouched for by the German high command." Churchill's analysis is similar: the attack on Russia is a prelude to an invasion of England. It is intended to remove the Russian threat to Germany so that preparations can go on unhampered for an invasion of England. This analysis is also concurred in by our Military Intelligence. The only disturbing factor is the fact that there is still no explanation of the Hess affair. Incidentally, this reveals that the Germans have decided that they cannot win the Battle of the Atlantic but must invade England. 4. The campaign the Germans are now embarking upon is something entirely different from any campaign that they have ever fought before. For the first time the Germane encounter an army which is organized on the same mobile mechanized technical basis as their own. For the first time, they en- counter an enemy which is numerically superior to them. In 234 -2- Division of Monetary Research contrast also to all the previous campaigns, a German advance of several hundred miles will not bring a victory unless the Russians commit their whole army for a decisive battle at the border. In view of the unknown quality of the Russian army, it is not possible to make any definite predictions as to outcome. In my opinion, however, if the Germans do win the victory, for once their costs will be very high. The Germans are repeating the mistake they vowed they would never make again -- carry on a two-front war. 5. Above all, the fact stands out that this is Britain's and America's great opportunity to strike at Germany with all our combined strength. 235 AM TREASURY DEPARTMENT INTER-OFFICE COMMUNICATION DATE June 24, 1941 TO Secretary Morgenthau FROM Mr. Kamarok Subject: The Available Information on the Russian Military Power Size of Russian Army Nearly all sources appear to agree that Russia had a total of around 180 divisions on its western frontier. According to British Military Intelligence this total on May 19 was 184 divisions. According to the memorandum of General Keitel of June 11 to Chancellor Hitler which was just published, the total was 178 divisions. In addition, according to this memorandum of Keitel's, the Russians had 33 divisions in strategic reserve in Western Russia. (The British give no estimate for the reserve.) The total Russian western army on the outbreak of hostilities probably totaled, according to these estimates, around 210 divisions. The highest total that any military report has given for the strength of the German army is 260 divisions. The last report on the distribution of German army (on May 19) stated that 47 divisions were located in western Europe, 13 in Scandinavia, and 4 divisions were in Libya, or a total of 64 divisions occupied, leaving at most 198 divisions for the East. It is probably not likely that the Germans could devote more than about 220 divisions to Russia. The British, indeed, stated on June 13 that only 30 percent of the German army, 1.0., 80 divisions, was stationed on the Russian border. The Ruseians probably, therefore, by full mobilization and motorized divisions which are included in these totals, it is not likely that more could be added on full mobilization. could outnumber the Germans. However, of the vital mechanized According to the British, the Russians had on the German frontier on May 19, 25 cavalry divisions, 5 motorized divisions, 16 armored divisions and 7 moto-mechanized divisions (combination of motorized and mechanized elements). According to General Keitel, the Russians had on the frontier around June 11, 20 cavalry and 40 "motorized and tank" divisions (1.e., "motomechanized"). In reserve, General Keitel stated the Russians had 5-1/2 avalry and 1 motorized and tank division. (The Russian cavalry divisions, like our own, are supposed to have a high degree of armored and motorized elements.) 236 -2 - Division of Monetary Research If these estimates are correct, the Russians have available 25 cavalry divisions and from 28 to 41 motorized and mechanized divisions, giving & total of 53 to 66 Russian mobile divisions in the West. According to the British, the Germans had in Europe 1 cavalry division (stationed in Poland) 14 armored divisions and 23 motorized divisions or a total of 38 mobile divisions. On balance, then, it would seem that in terms of quantity the Russians outnumber the Germans in the sphere of mobile divisions. Soviet Air Force There is not enough reliable information on the Russian air force available, in my estimation, to make any judgments. Russian Navy The Russian navy is an unknown quantity. In the Baltic, according to our navy, there are two rebuilt battleships of 23,000 tons each carrying twelve 12-inch guns, several cruisers, about 35 destroyers and 80 submarines. The Germans have avail- able for the Baltic, the Tirpits (sister ship of the Bismarck), two old battleships of 13,000 tons each used as training ships and reported to carry four 11-inch guns, two pocket battleships of 10,000 tons carrying 11-inch guns, and an unknown number of cruisers and destroyers. (This excludes the two battle cruisers and the heavy Hipper cruiser at Breat.) In view of the proximity to land air bases, in my opinion, it is likely that the Germans will control the section of the Baltic between Germany and the southern part of Sweden. Be- cause of the Russian talent for mining, even in this part of the Baltic the Germans may suffer inconvenience. The rest of the Baltic outside of the Gulf of Finland will probably be in dispute, at least for the first part of the war. Our navy reports that in the Black Sea the Russians have one battleship of 23,000 tons, an aircraft carrier of 9,000 tons, six cruisers and a number of destroyers and submarines. So long as the Italian fleet does not enter the Black Sea, the Russians should have command of the sea. 237 -3- Division of Monetary Research Military Expenditures The Russians engaged in an intensive armaments program in the last decade. This is best indicated by the growth of their military expenditures. Russian Military Budget Year 1933 1934 1935 1936 1937 1938 1939 1940 1941 Billions of Roubles 1.5 5.0 8.2 14.8 17.5 27.0 40.9 57.0 70.9 (Budget) 238 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE June 24, 1941 Secretary Morgenthau TO FROM Mr. Kamarok Subject: Information on the Performance of American Planes The War Department does not have any other information on the performance of American planes in the war beyond that furnished in the confidential reports of the military attaches which we have received. The Curtiss P-40 and Bell P-39 have not been used in combat in England as yet. The War Department will be glad to cable our attaches asking specifically for more information if you request it. It might be possible to secure additional data from the British through Mr. Philip Young's office. w. I Kamarak bader was rent do this please 239 III TREASURY DEPARTMENT INTER-OFFICE COMMUNICATION DATE June 26, 1941 Secretary Morgenthau TO Mr. Kamarok FROM Summary of Military Reports Subject: Russia (No reports have been received as yet with information on the progress of the Russo-German war.) As late as June 21 (the day before the German attack on Russia), the British air leaders were in doubt as to the true significance of the lack of activity by the German Air Force (from May 15 to June 22). Air Chief Marshal Freeman, Air Chief Marshal Portal and Chief of Staff Ismay gave a list of possible explanations. The most probable reason given was that the German Air Force was being held in readiness for an attack on Russia. The other explanations advanced were, in order of probability: (a) The Germans were preparing for a huge simultaneous attack on Russia and England to impress everyone with their ability to wage a two-front air war. (b) British attacks had damaged transport facilities 80 badly that supplying squadrone was difficult. (c) The German Air Force had been moved to some other theater. (d) The British successes against night bombers had disheartened the Germans. (London, Military Attache, June 21) Use of American Planes Eight Tomahawks destroyed or disabled 100 trucks on the Damascus-Beirut road. (British Embassy, London telegram, June 22) Forward troops operating in Egypt were given complete protection from axis attacks by patrols of Hurricanes and Curtiss P-40's. (London, Military Attache, June 18) 240 -2- Division of Monetary Research RAF Activity (The following table is a compilation of the information contained in the reports of our military attache in London and in the reports from the British Embassy. As a measure of current British air activity, it might be of interest. ) Night Total Bombs Dropped Tons of Number of June Used Incendiaries 16/17 222 24,300 218 Cologne, Dusseldorf, Duisberg, Boulogne 17/18 No data 16,000 164 Cologne, Dusseldorf 18/19 163 2,400 173 Bremen, Brest 19/20 40 6,000 32 20/21 126 No data 134 Kiel 21/22 152 No data No data Cologne, Dusseldorf, of Bombers High Explosive Cities Attacked Dusseldorf, Cologne Boulogne 241 TREASURY DEPARTMENT INTER-OFFICE COMMUNICATION III DATE June 26, 1941 TO Secretary Morgenthau FROM Mr. Kamarok Subject: Progress of Russo-German War to Date According to our army: 1. The situation is still not clear. However, the Germans appear to have won the all-important air superiority. 2. The big push still appears to be in the north. 3. The Germans have made some progress. The big question is whether the battle now going on is with the main Russian forces or whether it is still merely their advance guard. 242 M TREASURY DEPARTMENT INTER-OFFICE COMMUNICATION DATE June 27, 1941 TO FROM Secretary Morgenthau Mr. Kamarok Subject: Weekly Military Report: The German Panzer Divisions (Based on various articles in the Infantry Journal, various M.I.D. Bulletins, and reports of our military attaches.) 1. History The German panzer divisions were evolved to perform a definite mission: to exploit, in cooperation with the Air Force, a break-through in the enemy's line and so prevent a repetition of the war of attrition of 1914-18. Perhaps the most important factor in shaping the character of the World War of 1914-18 was the continuous front extending from Switzerland to the North Sea. The existence of the continuous front made outflanking no longer possible. The only way it seemed possible to win a decisive victory was by a reak-through or by attrition. The latter slow and costly method finally won the war for the Allies. In preparing for the present war the Germans consciously attempted to take advantage of the lessons of the last war and make a successful break-through possible. The attempts at a break-through in the War of 1914-18 showed a fairly consistent pattern. After some initial progress had been achieved, the penetration came to a halt due to several factors. (a) The field artillery of both sides had 80 churned up the ground that movement forward of men and supplies was difficult. (b) The advance had to wait for the displacement forward of the heavy guns which had small mobility. (c) The defender was able to bring up reserves to stem the advance. 243 2 Division of Monetary Research The Germans evolved an answer to the problem. (a) Panzer divisions were created with the ability to advance rapidly over broken ground and take advantage of a penetration into the enemy line. Once in the enemy's rear areas, the panzers acted as cavalry in smashing the enemy's lines of communications while the infantry poured in behind to annihilate the opposing army. (b) The German Air Force was created to act as highly mobile artillery to blast opposition out of the way as the panzer units advanced. The Air Force also performed the important mission of pinning down the enemy's reserves to prevent him from plugging the hole in his front lines. The German panzer divisions first appeared on the maneuvers in 1937. They received valuable experience in the march into Austria in the spring of 1938, into the Sudetenland in the fall of 1938 and into Czechoslovakia in the spring of 1939. On the march into Austria, the panzers made a poor showing. However, the defects revealed were rapidly corrected. At the time of the invasion of Poland the Germans had 6 panzer divisions and 4 light armored divisions. (The light armored divisions had a light tank brigade carried in trucks. They proved not very successful in Poland.) By May 1940 the Germane had converted the 4 light armored divisions into regular panzer divisions giving them a total of 10 panzer divisions. At the present time, June 1941, there are varying estimates of the number of German panzer divisions. The higheat estimate from a British source is 18 panzer divisions. Probably the total is from 16 to 18 divisions. 2. Description a. Composition of a panzer division (1) A reconnaissance group of armored cars and light tanks (2) A shock echelon or tank brigade of 450 tanks organized in 2 regiments (3) A ground-holding echelon or infantry motorized brigade of 2 regiments The division has a total of 14,000 men and 3,000 vehicles. 244 3 - Division of Monetary Research b. Methods of Attack Up to the present time the Germans have always thrown in their whole armored forces into the battle practically at the beginning. The battle thus begins with maximum intensity. This initial heavy blow has been sufficient in the past to win the campaign. A holding attack is made along most of the enemy front designed to hold the front-line enemy troops at their positions. Simultaneously an air attack back of the enemy lines is carried out to tie down the enemy reserves and prevent them from going to the aid of the threatened sectors. The actual break-through is achieved by the use of infantry, artillery, aircraft and tanks working together. Once the break-through is achieved, the armored divisions pour through to strike into the enemy's rear areas and exploit the opportunity to the fullest. Tactically the panzer divisions attack in waves. The first group of light or medium tanks attacks in a wave with a 100 yard interval between tanks. The purposes of this wave are to draw the enemy fire forcing him to disclose his position, at the same time an attempt is made to penetrate the enemy defensive position and to destroy the anti-tank and field artillery guns if possible. The second wave advances about 1,000 yards behind the first wave and makes use of the information developed by the first wave to achieve specific objectives. Subsequent waves of medium and heavy tanks then come over, reducing strong points, using Stuka support if necessary. The infantry follows to mop up and hold the ground gained. TREASURY DEPARTMENT INTER-OFFICE COMMUNICATION M 245 DATE June 27, 1941 TO Secretary Morgenthau FROM Mr. Kamarck Subject: Russo-German War 1. Our War Department has practically no news beyond that reported in the communiques. 2. It is believed that the failure of the Germans to give more details in their communiques is probably due to their falling behind schedule, i.e., operations are not going according to plan. 3. On the whole, the impression is that the war 18 still going successfully for the Germans. 246 Treasury Department Division of Monetary Research O Date June 28 19 41 To: Secretary Morgenthau From: Mr. Kamarok Subject: British Views on American Airplanes You may find of interest the appended quotations from an article on American airplanes in the London Times "Trade and Engineering" monthly magazine 247 U.S. Aircraft on View (The Times - Trade and Engineering, June 1941) "Two hundred and fifty of Britain's leading aircraft designers and test pilots, after spending all day at an airfield looking over every type of fighter and bomber from America, paid glowing tribute to the quality of the planes. It was the biggest conference of experts ever held in Britain. Machines from the little Tomahawk fighter to the great fourengined Liberator bomber were lined up in three ranks." "All Britain's aircraft industry was represented. Executives were also present from the Ministry of Aircraft Production factories responsible for the assembly of the United States types." "After lunch in the airfield messroom the inspection of the aircraft went on through the afternoon. Before everyone left to go on to the flying field again they were told more about the success of the Douglas Boston "Havoo" night fighter. "The designer of Britain's largest bomber, the fourmotored Stirling, looking into the fuselage of the giant American Liberator bomber, described it as a nicely finished job. He added: 'The detail work is very good indeed. We can learn something from America over that. There seems one fault with American planes. They do not put enough guns into them at present. That is being put right.' Another leading designer, who was responsible for the first monoplane bomber brought into service with the R.A.F., was particularly interested in the Liberator bomber -- a machine which carries a bigger load of bombs than most other types in the world and at a fast speed. He said that when he visited the United States factory in 1938 the Liberator was then only on the drawing-board. It has now been in full-scale production for some time. Great interest was taken in the Liberator wing design. It 18 called the Davis Aerofoil and produces more lift and less drag than any other type of wing. The B17C "Flying Fortress" will fly alongside our own four-engined bombers. "A British designer who has developed the tricycle system of undercarriage in this war expressed his pleasure at the admiration shown in America of this type. He said his experience had shown that it was better to have a nose 248 -2"which was directly steerable instead of the American practice of castoring. Many of the experts expressed the opinion that British designers can help the United States in the development of operational equipment, particularly armament. "There was high praise all round on the present smoothness of our technical cooperation with United States plane designers and builders. It has accumulating advantages in the race for air supremacy." 249 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 1, 1941 TO FROM Secretary Morgenthau Mr. Kamarck Subject: Use of Curtiss P-40's in the Near East (Reports of U.S. Military Attache at Cairo, June 21, 22, 23, 24, 25) The British are using two squadrons of Tomahawks (a squadron: 12-15 planes). One squadron is now being used in the Western Desert of Egypt and prior to this was used over Cairo and Alexandria. The other is active in the Syrian caspaign. Summary of Combat Results Enemy losses: damaged: Tomahawk losses: damaged: 5 Ju-58's (German two-motor dive bombers) 1 Cant 1007 (tri-motor Italian bomber) 2 Vichy Martin Maryland bombers 2 Me-109's (German standard fighter) 4 Minor damages to several Comments on Operation The reported comments of the pilots express approval of the plane. One pilot stated that after the pilots have had more combat practice the P-40 will compare favorably with, if not better than, the Me-109 (the German standard fighter). The leader of the Syrian squadron stated that a Tomahawk can easily overtake a Ju-88 and then maneuver to attack from any direction desired. In attacks on the Vichy Martin Maryland bombers, the pilots stated they had no difficulty in catching the Marylands. The Tomahawks show one serious fault according to the pilots of the Western Desert squadron. At altitudes between 15,000 and 25,000 feet, when the throttle is opened to full throttle, there is a momentary out out of the engine. In combat, especially with an enemy in position on the tail of a Tomahawk, this trouble might be fatal. A thorough investigation has not been made to correct this as yet. It is possible that a too rich mixture may be at fault. 250 -2- Division of Monetary Research Better maintenance has overcome most of the minor mechanical troubles previously experienced. A few generator drive failures still occur but these are expected to disappear with the installation of new flexible rubber couplings. In the first combats the Tomahawks engaged in, some of their guns jammed. This was due to carelessness in cleaning off the cosmoline in which the guns were packed, not adjusting the head space properly, and improperly threading the cartridges. The necessary dissemination of instructions to the squadrons on such matters was not accomplished "due to the disinterestedness usual in the case of all American supplies and to administrative awkwardness". The operation of the guns is now considered satisfactory. Some pilots are not satisfied with the ammunition provided. They believe that having 30 caliber armor piercing and 30 and 50 caliber incendiary bullets would be more efficient in destroying enemy planes. Hits on leak-proof airplane tanks are effective only if incendiary bullets are used. Attacks on planes on the ground and motor transport would be more effective with incendiaries. Against armored vehicles the 30 and 50 caliber bullets are not heavy enough to be effective. While hits have been sustained from machine guns on the ground, no losses have been experienced from such fire. First Combat Tomahawks vs. Cant 1007 (three motor Italian bomber). One gun of the Tomahawk jammed. The Tomahawk exhausted its ammunition and the Cant 1007 escaped with its rear gunner a canualty. Second Combat Two Tomahawks vs. a Ju-88. The Ju-88 escaped in the clouds with white smoke coming out of one engine. Third Combat A Tomahawk vs. a two-engined plane (probably a Ju-88). The enemy was too far ahead. The Tomahawk fired at a range of 750 yards without effect. One gun jammed. Fourth Combat Two Tomahawks vs. a Cant 1007. The Cant 1007 was destroyed. 251 -3. - Division of Monetary Research Fifth Combat Two Tomahawks vs. a Ju-ss. The Ju-88 was brought down into the sea. The Tomahawks sustained some hits. Sixth Combat Four Tomahawks vs. two Me-109's. Two Tomahawks attacked. Both Me-109's sustained some hits but escaped by diving down to ground or sea level. Seventh Combat A Tomahawk vs. two Me-109's. A Tomahawk of the preceding flight attacked two Me-109's above him. (No results are given.) Eighth Combat Four Tomahawks vs. a Me-109. A Me-109 dove Past the Tail- end Charlie (the plane at the rear of a Vee formation which weaves back and forth observing to the rear). The Charlie chased it but it escaped. Syrian Squadron Experience The Tomahawks in Syria have the missions of ground strafing of motor vehicles and airdromes and of acting as a protective patrol for the Royal Navy. They have had considerable success in the ground strafing, having destroyed an unknown number of Vichy planes on airdromes without any less. First Combat Seven Tomahawks vs. two Vichy Martin Maryland bombers. The two bombers were caught and destroyed. Second Combat Eight Tomahawks vs. eight Ju-88's of the Italian Air Force. The eight Tomahawks were on a naval protection mission against such threats as these eight Italian dive bombers represented. Three Ju-88's were destroyed and one damaged. Third Combat A Tomahawk vs. a Ju-SS. On the same day as the second combat a Tomahawk shot down another Ju-ss. 252 TREASURY DEPARTMENT In INTER OFFICE COMMUNICATION July 1, 1941 DATE TO FROM Secretary Morgenthau Mr. Kamarck Subject: Summary of Military Reports Russo-German War According to the British estimate of the situation on June 26, the German Air Force appeared to have encountered greater difficulty with the Russian Air Force than it had anticipated. (London, Military Attache, June 27) The disposition of the German Air Fleet when the invasion of Russia started, according to the British Air Ministry, was as follows: Location Eastern Germany and Poland Central Germany Romania Extreme north including Norway Total immediately available against Russia Greece and Crete (Occupied Western Europe Number of Planes 1,143 418 231 78 1,870 294 (North Africa Grand Total 2,164 t (Military Attache, London, June 26) (The last report, also from London, which we had on the distribution of the German Air Force gave the Germans a total of 4,420 planes not including the planes in Poland. The present report identifies only 2,164 planes leaving more than 2,000 unaccounted for. Probably the bulk of these are also on the Russian front.) The British believe that the major part of the German armored force is north of the Pripet marshes. (London, Military, Attache, June 27) 253 -2- Division of Monetary Research R.A.F. Activity Night of June Total Bombers Used Bombs Dropped Tons of Number of IncendiHigh aries Cities Attacked Explosive 22/23 111 6,700 86 23/24 145 10,400 151 Cologne, Dusseldorf, Kiel 24/25 136 15,500 136 Cologne, Kiel, Dusseldorf 25/26 127 4,800 71 Wilhelmshaven, Bremen, Enden Bremen, Kiel, Rotterdam (Military Attache, London; U.K. Embassy, London Telegrams) (The foregoing data cover the first four nights following the German invasion of Russia. The figures indicate that the intensity of the British air raids for these four nights is about the same as before the invasion began.) (The details of the R.A.F.'s daylight bombing activity on a typical day might be of interest.) During the daylight of June 25, two bombing raids were carried out over occupied territory. The first raid was made by 12 Blenheis bombers and was protected by 19 squadrons of fighters (1.e., 228 fighters). The second raid was made by 12 bombers and was protected by a fighter escort of 16 squadrons (192 fighters). On these raids the R.A.F. lost 6 Spitfires while 4 were damaged. The Germans lost 13 Me-109's, 7 more were probably destroyed and 7 were damaged. of thes Me-109's, 4 were Me-109F's, that is, latest model Messerschmidts. (London, Military Attache, June 26) 254 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 2, 1941 TO FROM Secretary Morgenthau Mr. Kamarok MT Subject: in Information on the Performance of American Planes the War 1. In accordance with your request, the War Department has cabled our military attaches abroad, asking them to supply as much details as possible on the performance of American military planes abroad. 2. According to Colonel W. B. Smith, Assistant Secretary of the General Staff, the main reason the British have not used American planes in England is poor administration. For the operation of a particular plane, a ground crew trained in its maintenance and servicing is essential. The British have, in essence, neglected to provide the proper ground crews for the operation of the American planes. Other than inefficiency, the reason for this behavior may be, perhaps, the hope that the United States may be persuaded to take over the job of furnishing the necessary personnel. General Arnold is reported to have lost practically all patience several times with the British on this score. 255 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION AH DATE July 2, 1941 TO Secretary Morgenthau FROM Mr. Kamarok Subject: General Summary of Hanson Baldwin's Articles on the State of the American Army The Army is still months away from combat efficiency. Not a single division is ready yet for modern war. This is true even though all our organized divisions are already superior to the divisions we sent to France in 1917. Tactics and Technique The main serious fault of the American Army is that it is still being largely trained in the tactics and technique of the last war rather than those of this war. In spite of the four armored divisions, preparations seem to be more for a war of position than for a war of maneuver. There is great emphasis on the foot soldier and perhaps not enough on the tank. Ground-air cooperation is still rudimentary. Communications are generally slow and inflexible with some exceptions. Tanks are sometimes misused and their movements lack surprise in battle. Leadership and Staff Work Many of the faults of the Army stem from its leadership. Some officers are excellent. There are, however, too many senior officers wedded to ideas of the past. Some of the National Guard officers owe their positions to influence rather than ability. Reolassification of officers has been ordered but practically nothing has been done. The necessary job of weeding out the deadwood has still to be done. Staff work is spotty with much cumbersomeness, slowness and red tape. It is, however, improving. 256 -2 - Division of Monetary Research Equipment The Army still has an acute shortage of modern equipment. The four divisions having priority (two Marine and two regular) are almost completely equipped but lack the modern 105 mm. howitzers. The other divisions are less well off. There are shortages of trucks, 50 caliber machine guns, mortars, and ammunition. No new medium tanks, 90 am. anti-aircraft guns, or dive bombers have been issued as yet to service units. We have no heavy tanks and one is only now about to be tested. There is urgent need for the development of more and better anti-aircraft and anti-tank guns, tanks with greater armor protection, self-propelled mounts for field artillery and durable battle uniforms. In quality our new equipment is uneven, some of it being as good or better but there are still "bugs" in many of the types. Our tanks are faster, about as well armed but have better than and some worse than the German. Our planes are less armor. Physical Condition, Morale and Discipline The physical condition of the men is excellent though not yet at its peak. The soldiers have been toughened and can take hardships. Fifteen to twenty-five mile marches with soldiers carrying a fifty pound pack are now common. Health is good and the sick rate is low. Basically, morale is satisfactory though uneven between units. Probably most of the soldiers are unenthusiastic about long tours of duty and do not want to fight. But 1f we enter a shooting war, an incentive will be provided, the lack of zeal will be overcome and an aggressive spirit will be aroused. However, should the present period of non-belligerence continue, major problems of morale will arise. Actually, the various agencies concerned with morale have accomplished little to meet this situation. Discipline is still slack though essentially sound. It should become satisfactory after the present tightening-up process is completed. A TREASURY DEPARTMENT INTER OFFICE COMMUNICATION 257 DATE July 3, 1941 TO Secretary Morgenthau FROM Mr. Kamarek Subject: Monthly Report: in Royal Force Bombing Activity June,Air 1941 Comment 1. The R.A.F. maintained a fairly even level of bombing activity throughout June. This is in contrast to May when there was a bombing lull during the last half of the month. 2. The R.A.F. paid much more attention to the industrial districts of Germany during June than it had during May. Total losses 1. Losses during June R.A.F. losses in bombing raids in Northern Europe 2. Analysis of Targets Airdromes and seaplane bases Industrial plants 011 refineries, synthetic oil plants and tank farms Total of Above July 1 746 82 Total number Attacks during June Ports, docks, shipping to of attacks to July 1 80 1,014 17 40 729 708 3 339 140 2,790 258 -23. Leading Cities Attacked Division of Monetary Research Attacks during June Total number of attacks to July 1 A. Germany Cologne (industrial center) Hamburg (port) Bremen (port) Enden (port) Wilhelmshaven (port) Kiel (port) Gelsenkirchen (synthetic oil) Berlin (industrial center) 10 75 1 4 3 2 5 o 1 Mannheim (industrial center) Essen (industrial center) Hanover (synthetic oil) Total of Above (11 Cities) 71 70 51 50 45 43 43 42 4 38 2 35 35 563 Boulogne (port) 7 92 Ostend (port) 1 must B. Occupied Areas Calais (port) Flushing (port) Breat (port) Lorient (port) Total of Above (6 Cities) 1 0 4 o 13 69 67 63 65 48 404 C. Italy Turin (industrial center) Naples (port) Total of Above (2 Cities) 0 11 o 9 o 20 259 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 8, 1941 Secretary Morgenthau TO Mr. Kamarok FROM Subject: Summary of Military Reports Russia (There is practically no information on the Russo- German war not in the communiques. Neither the Germans nor the Russians have permitted our military observers as yet to visit the front.) The British now estimate that more than 2,500 operational German aircraft are engaged against Russia. (On June 27, the British estimated this total at 1,900 planes, on June 29, at 2,000.) (U.K. Embassy, Telegram, July 4) R.A.F. Activity Night of Total Bombers Used Bombs Dropped Tons of Number of Incendiaries High Explosive June 26/27 27/28 28/29 29/30 No data 5,700 137 No data No data 13,800 No data No data 64 No data No data 145 No data 30/ July 1 130 106 1/2 2/3 161 15,000 132 3/4 163 15,500 121 57 - 69 Cities Attacked Kiel, Cologne, Dusseldorf Bremen Bremen, Hamburg Bremen, Hamburg Cologne, Dusseldorf, Duisberg Brest, Cherbourg Bremen, Cologne, Duisberg Bremen, Esseh (Military Attache, London; U.K. Embassy, London Telegrams) (Compared to the week before the German invasion of Russia, the R.A.F. night attacks from June 22 to July 4 have decreased slightly. This is somewhat to be expected in view of the 260 -2- Division of Monetary Research difficulties of maintaining a sustained offensive over several weeks. There 18 no evidence from our data of any tapering off in the R.A.F. attacks. R.A.F. - Night Attacks June 16-22 June 22-July 4 Nightly average 140 125 dropped 140 111 dropped 12,000 Number of bombers used Tone of high explosive Number of incendiaries 11,000 ) 261 BRITISH EMBASSY, WASHINGTON, D.C. PERSONAL AND SECRET July 7th, 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, Halifax The Honourable Henry Morgenthau, Jr., Secretary of the Treasury, Washington, D.C. 262 TELEGRAM FROM LONDON DATED JULY 4th. Naval. Night of July and - July 3rd Tripoli (Zybia) harbour and shipping bombed, one ship set on fire. Following day less level attack was carried out on shipping Tripoli (tyble) when three shipe, two being estimated as 6,000 tons, were not on fire. 2. ReAgF Night July and - July 3rd more than 160 tons of H.E. and over 16,000 incondiaries were dropped on targets in Germany. 3. Last night 165 aircraft despatched to attack ship yards and industries Bremen, Drupp works and railways Kasen. Seven aircraft missing. 4. Day light yesterday ss equadrone of fighters excorted small force of bombers ever France. Eleven enemy aircraft destroyed seven probably and seven damaged. We lost one bomber, six fighters. 5. Military, Russin. Apparently Germans have not yet reached Hurmansk. Pressure between Riga and Drinek towards Smolenak and Kiev continues. In the south Germane and Roumanians appear to have crossed the Pruth River. Estimated over 2,500 German operational aircraft engaged against Russia. 6. Tybia. Exyot. Small enemy patrol activity. M. 263 7. Abyssinia Gondar area. Garrison Debra Tabor has surrendered, Priseners 3,000 Italian and 1,200 native troops. 8. Cypras. July and. Unidentified aircraft dropped bombs on Paphos area causing no damage beyond out telephone wires. 9. ered July 3rd. Syria. Garrison of Palayra surrend. 264 Treasury Department Division of Monetary Research Date To: July 9 19 Secretary Morgenthau From: Mr. Kamarok According to an interview with Lyttelton, recently appointed British War Cabinet representative for the Near East, one of his duties will be to set up an organization of technical experts to handle American material in the Near East. This is because though the United States material is of the highest possible quality there was a risk of its being damaged by British personnel unfamiliar with it..." new 1944 Lyttelton Praises Equipment Later in the day. Oliver Lytteltoh, Minister of State, who has just arrived by air from London to represent the War Cabinet in political and other matters, recelved the correspondents and praised the high quality of United States war material shipped to the Middle East. He said the appearance of such supplies in this theatre was one of the most heartening factors in the Middle Eastern situation. Organization of the handling of such United States equipment is one of his many duties. He said that though the United States ma. terial was of the highest possible guality there was a risk of its being-damaged by British personnel unfamiliar with It and that he wished to set up an organization of technical experts who would see to it that this was done. The Minister explained he had been sent out to take over some of the immense number of varied non-operational problems in this vast theatre of war that had hith- erto overburdened the Commander in Chief. Among such tasks, Mr. Lyttleton is taking over relations with General Charles De Gaulle, leader of the Free French, and Emperor Halle Belassie of Ethiopia. He will also have general authority over the arrival of war and other supplies and unloading and putting them into the hands of the military commanders. 266 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 9, 1941 Secretary Morgenthau Mr. Kamarok FROM Summary of Military Reports Subject: Russo-German War The British Air Ministry believes that the Russian Air Force is operating efficiently. (This fact, if true, is most encouraging. Prior to this campaign, the Germans were always successful in annihilating the opposing air force in the first days of invasion. A blitzkrieg without complete command of the air is most difficult.) According to British information, all German parachute the Russian campaign). (London, Military Attache, July 6) troops have been removed from Greece (probably for use in R.A.F. Activity During daylight of July 5, three Stirling bombers dropped 13 tons of bombs on the steel works at Lille. A Stirling bomber dropped 5 tons of high explosive on the Abbeville railroad yards. (The Stirlings are new British heavy bombers made by Short Bros., the builders of Short Sunderland flying boats. The bomb load of 5 tons carried by the Stirling that bombed Abbeville 18 to be compared to the bomb load of one ton usually carried by British bombers.) (London, Military Attache, July 6) 267 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 9, 1941 TO FROM Secretary Morgenthau Mr. Kamarok Subject: Request for Information on the Performance of American Military Airplanes The Treasury has received all of the information available to our military attaches on the performance of American military airplanes in the war. In accordance with your request, the War Department cabled all of our attaches asking them to report all data, not already transmitted, on the performance of American military airplanes. Answers have now been received from all of our attaches that they do not have any information beyond that already furnished to the War Department. Full reports will be made of any further information the attaches acquire on the subject. The War Department has transmitted to the Treasury all of the information it received in the past on this subject. 268 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION AM DATE July 11, 1941 Secretary Morgenthau TO FROM Mr. Kamarok subject: Summary of Daily Reports Rus so-German War (According to our Army, the front has temporarily been stabilized. However, the Germans have been able to create a bridge head across the Dnieper River to the east of Bobruisk. In the Ukraine the Germans have advanced to within 50 miles of Kiev. In northern Bessarabia, the Germans have secured a bridge head on the eastern bank of the Dniester River. These advances, if accurate, do not represent great territorial gains, but as jumping off places for a renewed offensive are, obviously, of great significance.) The British believe that recent German air activity in the west indicates that in order to offset the British air offensive, the Germane are withdrawing many of their fighters from the Russian front. (London, Military Attache, July 7) On July 6, there were 500 German fighters in defensive patrols over the occupied territories (compared to 300 on July 2). (London, Military Attache, July 8) R.A.F. Activity (The British lately have increased the intensity of their night bombings. During the night of July 5 and 6, 246 tons of high explosive and 18,000 incendiaries were dropped. This is to be compared with a nightly average of 111 tons of high explosive and 11,000 incendiaries for the period June 22 to July 4.) 269 -2- Division of Monetary Research Night of July 4/5 5/6 Total Bombers Used Bombs Dropped Tons of Number of Incendiaries 150 202 208 246 High Explosive - 18,000 Cities Attacked Brest, Lorient Munster, Bielefeld, Osnabruck, Magdeburg 6/7 230 202 7/8 301 No data 7,700 No data Breat, Munster, Enden Cologne, Osnabruck, Munster, Rheydt The British use in action about 1,000 fighters a day. For example, during daylight of July 7, R.A.F. fighters were used on the following assignments: Number of Fighters Offensive patrols over France, etc. Protection of shipping patrols Interceptor patrols over England Special miscellaneous patrols Total (London, Military Attache, July 7) 452 246 143 109 950 270 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION AM DATE July 11, 1941 Secretary Morgenthau TO Mr. Kamarok FROM Weekly Military Report: The Reliability of German Subject: and Russian Communiques Summary It is not possible to check the claims of casualties in men and material inflicted on the enemy. Such claims are, therefore, not considered. Both the German and Russian communiques appear to be accurate in geographical detail. The German High Command, however, gives out very little information of this nature while the Russians are much more generous and prompt. The German communiques have proven themselves inaccurate in greatly over-stating German success. The Russian communi- ques, while apparently accurate as to the actual facts, dress them up with the most optimistic language and interpretation. After almost three weeks of the Russo-German War, it is possible to make a partial check of the reliability of the communiques of the opposing armies. The statements made by non-military sources are not treated since, at best, they originate from secondary sources. It is not possible to check the claims of casualties inflicted on men, tanks and planes of the opposing army. Both sides have been generous in ascribing high casualties to the enemy, the Germans particularly and unbelievably so. 271 -2- Division of Monetary Research German Communiques The German communiques seem to be accurate in geographical details. However, in this campaign the German High Command has given out very little information as to the location of the fighting. Some of the German statements appear to have shown themselves as false already. On July 2, the High Command stated, "It is to be perceived more and more that the destructive battle east of Bialystok has brought a decision of world historical proportions. Unbelievable chaos has closed over the Soviet Army This communique definitely gives the impression, which was accepted by many military experts, that the Russian Army was through. Hanson Baldwin, for example, wrote on July 2, "As German spearheads drove deeper into Russia yesterday and Nazi troops tightened a ring of fire and steel around encircled Soviet forces the Red Armies apparently faced a major debacle." "Altogether the greatest battles in military history appear to be developing rapidly into a Tannenberg far more decisive and disastrous than the first." (New York Times, July 2, 1941) . On July 3, the High Command stated, it now appears that resistance of the Soviet Army is broken. Backward movements of the enemy have become apparent on the entire front." On July 4, it was announced that "Pursuit of the Soviet Russian armed forces is proceeding relentlessly on the entire front The picture painted obviously is one of a beaten Russian Army in full retreat. The reality is that since July 3 the Germans have not made any major advance on the crucial WarsawMinek-Moscow axis. During the last week, however, the Germans have become more cautious and continue to play different variations of the theme "Operations are proceeding according to plan". 272 -3- Division of Monetary Research Another instance of German over-statement is the announcement on June 29: "Although greatly out-numbered the air force on June 22 won air mastery in the East and administered a destructive defeat to the Russian air force." (My emphasis, AMK) The implication is that, as in the case of Poland and France, the Russian air force had been destroyed in the first days of the war. But on July 2, the communique stated, "In the fight against already considerably weakened bolshevist air force units, new successes were scored. (My emphasis, AMK) In my opinion, there is a large difference between an air force that has suffered "a destructive defeat* and one that is "considerably weakened". Russian Communiques The Russians apparently give an accurate geographical description of the war. They include far more details than the Germans do. As a result, the Russians often announce German advances before the German High Command itself does. In some cases, the Russian communique gives the Germans a greater gain than the German Army itself claims. For example, this was true of the German advance in Bessarabia where the Germans merely claimed Cernauti while the Russians placed the fighting at Mogilev Podolski, a much longer German advance. While the skeleton of geographical details of the Russian communiques appears to be, on the whole, true, the flesh in which it is clothed is deceptive. The Russians, for instance, will speak of fierce resistance at some point in one day's communique. The next day, they will mention a Russian counterattack against a German column at a location quite a few miles in rear of the proceeding day's position. In other words, the Russian resistance on the first day was overcome but this is not mentioned. Again, the Russians have not made any acknowledgment of the German encirclement of troops near Minsk and Bialystok, though it seems very likely that this defeat occurred. 273 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 14, 1941 Secretary Morgenthau TO FROM Mr. Kamarok Subject: Summary of Military Reports Russo-German War (Our Army believes that the Germans have broken through the Stalin line on the road to Leningrad.) According to the British, the Russians, on July 10, still held the Fisherman's Peninsula (controlling the entrance to Petsamo), Murmansk and Kandalsaksha. (In other words, the Germans and Finns in spite of many inspired stories had not made any progress on the northern and central Finnish front.) (U.K. Embassy, London Telegram, July 10) According to the Air Ministry, the Germans have on the Russo-German front: Long range bombers 300 342 Two-engine fighters (Me-110) 279 Single-engine fighters (Me-109) Operational trainers used as fighters (Total of above) 150 1,071 (This seems to be an under-estimate particularly in view of the British estimate of a few days ago that 2,500 German planes were being used on the Russian front. A part of the discrepancy may be accounted for by the fact that dive bombers are not included in the foregoing detailed table.) (London, Military Attache, July 10) The Germans are using reconnaissance bombers and mine-laying planes for the night bombing of British inland cities. Operational trainers are being used by the Germans as night fighters. This information the British secured from intercepting the German radio control during the night of July 8 and 9. (It is obvious that the Germans have concentrated most of their first-line equipment against Russia.) (London, Military Attache, July 10) 274 -2- Division of Monetary Research Use of Flying Fortresses First Raid During daylight of July 8, three B-17C's were sent to attack the naval barracks at Wilhelmshaven. One was forced to turn back because of oil trouble. The other two went on and dropped six 1,100 pound bombs from an altitude of 30,000 feet. The attack probably took the Germans by surprise as there was no anti-aircraft fire and no enemy fighters were encountered. Second Raid Another raid on an unspecified objective was made by three B-17C's. Two of the bombers dropped six bombs on the objective while the remaining bomber dropped four bombs on the town. As one of the dFortress-ones" (the British name) was nearing its objective, two German fighters were encountered. The B-170 climbed to 30,000 feet and leveled off. This apparently was above the ceiling of the German fighters. One, therefore, turned away while the other when last seen was in a spin. (London, Military Attache, July 9. 10) Africa Freetown, British West Africa, was attacked by an airplane on the morning of July 8. (The great distance of Freetown from the nearest axis base would indicate that the plane came from a commerce raider or from a base in Vichy or Spanish territory.) (U.K. Embassy, London Tele gram, July 10) 275 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 15, 1941 Secretary Morgenthau TO FROM Mr. Kamarek Subject: Summary of Military Reports Russo-German War According to the British Air Ministry, the Russians are still carrying on the air war vigorously. Supply and maintenance are being provided for efficiently. The activity of the Russian Air Force has been exclusively tactical, except for a few small raids over Romania. (The Russians do not intend, evidently, to make the mistake the Allies made last spring in the West. This mistake, which the British themselves now condemn, was to bomb German towns hundreds of miles in the rear while the battle at the front was being lost for lack of air support. The Russians, in contrast, are concentrating on bombing the German troops and front areas.) (London, Military Attache, July 11) The British information is to the effect that the German Air Force is doing a great deal of night bombing, particularly in the Ukraine sector. (This report would indicate that the Germans have not succeeded in winning daylight command of the air.) (British Embassy, London Telegram, July 12) Battle of the Atlantic Although more German planes were engaged in bombing shipping, in May and June the losses of shipping due to German airplanes were less than 50 percent of the losses during February and March. (London, Military Attache, July 11) (Shipping losses from air attack: February 95,000 gross tons March 97,000 May 74,000 25,000 April June 22,000 ) During the night of July 9 and 10, a convoy was attacked by German aircraft. One Norwegian ship of 200 tons was sunk. One British ship of 1,700 tons was damaged but arrived in port. The German communique reporting this attack claimed that five ships totalling 21,000 tons had been hit and sunk. (British Embassy, London Telegram, July 11) 276 CONFIDENTIAL Paraphrese of Code Sublegram Received at the Mar Department at 14:01, July 11, 1941. Losion, filed 19:20, July 11, 1941. 1. British Air Activity over the Centiment. a. Night of July 9-10. British bombows dropped 73 teas of high explesive be and STOO incentiaries upon Aachen and 48 - of high explesive bumbe and 5200 incentiaries upon . Day of July 10. The chemical works and power dation as Chocques were attacked by three Stirlings. Tealve Blenheims attacked chipping off Oherbourg and twelve, the harber facilities of Le Navro. A total of 636 fighters were dispatched as follows: ⑉ - offensive patrels, 169 interception patrels, 30 on special patrols, and 174 in the protection of shipping. 2. Eight of July 10-11. 130 because were dispatched to Cologne and 2 to Benlegas. 2. General Air Activity over Britain. a. July Replayed were 10 recommissioned aircraft and 10 long range because 2. Night of July 9-10. The German foree consisted of 10 mine- laying aircraft, 25 fighters, 30 long range bembers, and 10 recommission aircraft. g. Day of Jair 10. German operations consisted of recommissence over the English Channel and off the east coast of Seetland. 4. Night of July 10-11. Limited activity occurred along the east coasts of Seotland and Regions. CONFIDENTIAL INFORMATION COPY 277 CONFIDENTIAL 3. Aircraft Lessee Reserves. a. British lesses. Two be were unreparted free the - on Cologas during the night of July 10-11. a the day of July 10th last by anti-airwraft were, one Blonhoin over - - - Stirling - the my out over the Chemmel Coast. Tea Spitfiree and eight pilete were also last on this day and six Spitfires damaged. 2. Axia leases. a the day of July 10th German lessee were as follows: 13 No-109's and , No-LOSE's shot com, , Ma-109's and 1 No-10 probably destroyed, and 2 No-109's and , damaged. A statement has been issued by the Air Ministry to the effect that the number of tens of shipping seak by the Common Air Force has progressively decreased since last February, the leases for My and Jane being less than 50% of the lessee during February and March, although a greater number of German aircraft were employed throughout the later period. They also state that the activity of the Bassion Air Force has been exclusively tastical, except for a few small raids over Romania, and that its apply and main- tenance were being provided for efficiently. The are said to be still carrying on the air war vigerously. IN Distribution: Secretary of War State Department Assistant Chief of Staff, 6-2 War Plans Division Office of Naval Intelligence Chief of the Army Air Forces Secretary of Treasury Assistant Chief of Staff, 6-3 Air Gerge -2- CONFIDENTIAL 27 BRITISH EMBASSY, WASHINGTON. July 15th, 1941. PERSONAL AND SECRET. Dear Mr. Secretary, I enclose herein for your personal and secret information copies of the latest reports received from London on the military situation. Believe me, Dear Mr. Secretary, Very sincerely yours, Halifak The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 279 TELEGRAN FROM LONDON DATED JULX 11th. 2.120 Navel. "Defender" is the Mediterranean hit by bomb early 11ths engine room flooded. "Vendette" reported taking her in tow. His Majesty's Ship "Canton" intercepted German 2. "Hermes" 7,209 tons 300 miles north west of St.Pauls Rooks on 10th. Hermes souttled, a boateloads survivors picked up. Night of 9th/10th Convey off Bude attacked by S. enemy aircraft; one Norwagian ship 800 tons hit and sunk. One British ship 1,700 tone damaged but arrived in harbour. Illustrating the mondacious enemy claims the German communique of 10th stated that in this attack five ships totalling 21,000 tons had been sunk. Reval Air Force. 4. Two forces of Blenheins with strong fighter escorts attacked shipping Is Havre and Cherbourg. AS La Havre four ships hit 6,000 ton merchant vessel 2,000 son Inden tanisar 3,000 too merchant vessel set on fire and 7,000 too merchant vessel two direct hits. At Cherbourg 7,000 ton tanker hit, explosion caused; two merchant vessels also hit. Warehouses set alight. Tennage mainly estimated. 5. Since February German Air Force has sunk less and less tomage. Estimated that in May and June our losses from aircraft were over BOS less than in February and March despite increased number of aircraft operating. 6. Right of 9th/10th 78 tone of high explosives 8,760 incendiaries dropped on AACHEN 48 tonshigh explosives 3,240 incendiaries dropped on Oanabruck. / 7. During 280 7. During raids on France day/night of 10th 16 enemy fighters shot down certain, four probable, five damaged. We lost two bombers ten fighters, two fighter pilote safe. 8. Night of 10th/11th, 132 aircraft bombed Cologne on previous night 6 Wellingtons from Malta bombed Naples; Central railway station, warehouses, aircraft factories and marshalling yards hit. Same night 34 bombers gave Benghasi severe plastering. 9. German Air Force, 9th/10th. 15 enemy aircraft dropped bombs and mines Sues and Shaluffa. Second formation bombed Abu Suvfo. 10. Night of 10th/11th Minor attack on Full. Elsewhere nothing particular. 11. Military. Syria. Mosul Kemeshli railway undamaged. Train service functioning. Near the coast our troops have improved position north of Jessine. Vichy troops hold Beit ed Dine. Further west we have reached the outskirts of Beirut having captured Damour together with 17 guns, 3 tanks, 5 armoured care and several prisoners. 12. Russia. German pressure continues in all sectors being strongest in Paker area towards Leningrad and in Vitebak area. 281 TELEGRAM FROM LONDON DATED JULY 18th,1941 2. Defender sank night 10th/11th off sidi Barrani. Following air raid early 10th Suon Canal now closed. 3. Russia. No new information. German Air Force doing such night bombarding particularly Ukraine sector. 4. Royal Air Force. Night of 10th/11th 74 tons of H.E., over 6000 incendiaries dropped on Cologne. Bonn and Coblens also bombed. All aircraft returned. July 11th daylight sweeps over France continued. 8 Messerschmidts 109 destroyed certain, 4 probable, 8 damaged. Two Junkers 87 destroyed on ground. We lost 6 Spitfires one pilot safe. Night of 11th/12th bombers attacked Naval base at Wilhelmshaven. All returned. Wellingtons attacked Naples night of 10th/11th. Eight tons of H.E. dropped on railway station, warehouse and oil tanks hit. Tripoli (L) bombed 9th by Blenheims from Malta. 6 hits scored on four merchant shipe 7 to 12,000 tons. 50 Italian fighters attacked Malta 11th destroyed one Wellington on ground but Harricanes shot down 3 enemy fighters, damaged 4. A/A guns damaged 11. 5. German Air Force. LAbya and Egypt. In attack on Abu Sueir aerodrome enemy aircraft destroyed 16 and damaged 2 of our aircraft. 6. Syria. Successful attack July 10th enabled us to establish troops, 19 bombers damaged on Beirut Road. In areas Merjayoun and North Zessine Vichy troope gained some local successes. Advance on Beirut along coastal road has made progress. Subsequent action suspended from midnight of 11/12 July. Result of negotiations not yet confirmed. 282 TELNGRAN FROM LONDON DATED JULY 13th. 1941. Navals British submarine has sunk Italian tanker stronbo 5,232 tons in Zea channel. 2. Part said dive-bonbed night of July 11th/12th. One Greek ship damaged, one Dutch ship 5,500 tons set on fire. Iamailia also bombed. No other serious damage reported. on July 19th Coastal aircraft dropped 3 bombs on mine sweeper about 1,200 tons off U.SHANT. Considered certain to sink. Three Stirlings of bomber command attacked Unboat yards at LeTrait; hite in target area claimed. Daylight July 12th. A few bombers escorted by fighters raided France. six M.E.109's shot down certal n; two probables nine damaged. We lost 2 Spitfires. Last night over so beabers despatched to attack Bremen. Two missing. 3. Irea. Further reinforcements have arrived. 4. Russia. Germans claim the occupation of Narva (90 miles west of Leningrad). Almost certain that they have advanced in the area north of Ostrov. w (283 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 15, 1941 Secretary Morgenthau TO FROM Mr. Kamarok Subject: Better Information on Foreign Military Developments 1. The Russian Embassy receives reports from Russia on the course of the war. Some of this information is released to the press but, undoubtedly, some of it is not. It should be possible to make an arrangement by which the Russian Embassy would provide us with a daily report on the war similar to the one furnished by the British Embassy. Since our other sources of information on the Russo-German War are very poor, such a service by the Russian Embassy would be valuable. 2. While generally through personal contacts I am able to secure necessary information from the War Department, at times this basis is inadequate. (a) For analyzing reports of developments in the Russo-German War, it would be helpful to have access to the information our Army may have on the Russian equipment, training, tactics and strategy. However, official authorization is necessary before I may talk to the officer in charge of the Russian section of Military Intelligence on this subject. (b) It is necessary, also, to get official permission to use the working reference libraries of Military Intelligence. 3. Colonel Donovan, new Coordinator of Information, may have information on developments in the war which we do not now receive. (At the same time, we undoubtedly have other data which we could furnish to Colonel Donovan's office.) Contact with this organization, therefore, might be helpful. 284 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 18, 1941 Secretary Morgenthau TO Mr. Kamarek FROM Subject:Against Weekly Military Report: The British Air Offensive Germany (Based on data compiled from reports of the U.S. Military Attache in London, and the military reports of the British Embassy) Summary The R.A.F. night bombing offensive against Germany has only slightly increased since the invasion of Russia, mainly because the British were already "all-out" when the German attack on Russia began. The principal assistance the R.A.F. has been able to give Russia is by forcing Germany to double her defensive fighter patrols against the new British daylight offensive. The daylight 20 a day) and is limited in scope by the short range of the British fighters acting as protection. Daylight attacks on targets beyond the range of the fighters must depend on surprise, thus restricting longer-range attacks to coastal objectives. offensive uses relatively small numbers of bombers (average, 1. Since the German invasion of Russia, the R.A.F. has only slightly increased the intensity of its night air raids. This is probably due to the fact that the British were already attacking with all-out vigor when the invasion occurred. The following table on the R.A.F. night raids bears out these conclusions: 285 -2- Division of Monetary Research Nightly average of R.A.F. Bombing Attacks (Partially estimated) Average Tons Average Number of Week of June 1/2 to 7/8 June 8/9 to 14/15 June 15/16 to 21/22 Bombers Used of High Explosive Average Number Dropped Dropped 30 35 130 145 110 135 130 155 110 135 130 145 of Incendiaries 2,000 10,000 13,000 Invasion of Russia June 22/23 to 28/29 June 29/30 to July 5/6 July 6/7 to 12/13 9,000 10,000 17,000 2. The R.A.F. night raids during June, except for the first week when there was bad weather, probably represent the greatest bombing volume achieved by the R.A.F. so far in the war. In the month of June, the Royal Air Force dropped 3,000 tons of high explosive bombs and 250,000 incendiary bombs on Germany and German- occupied territory. 3. While the night raids are important in injuring German production and German morale, they are not of great immediate assistance to Britain's new ally, Russia. The principal immediate aid that the R.A.F. has given to the Russians has resulted from the R.A.F.' day raids across the Channel. Because of these daylight attacks, the Germans have had to double their defensive fighter patrols in the West from an average of 200 - 300 a day to 400 - 600. While the R.A.F. carried out sporadic daylight raids prior to the attack on Russia, no sustained daylight offensive was begun until after the German invasion. The daylight raids are not comparable in size to the night raids. Where a night mission will take 100 - 200 bombers, the day mission uses 10 - 20 bombers. As far as military effectiveness against a specific target is concerned, the day bombing may compare very well with the much greater volume of night bombing. 286 -3- Division of Monetary Research In order to carry out the daylight raids successfully, the British have had to provide great numbers of fighters as protection for their bombers. On the average, the R.A.F. daylight attacks use a total of 20 bombers. For these bombers, 200 to 220 fighters are used for protection. The British daylight raids are limited in soope by the short range of the British fighters. Daylight attacks, like those of the Flying Fortresses on German cities, beyond the range of the fighters have had to depend upon surprise for success. This has prevented attacks from being made on German inland cities where warning of the approach of the bombers may be given. 287 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 18, 1941 Secretary Morgenthau TO FROM Mr. Kamarok subject: The Russo-German Military Situation (According to our Army based on data secured from the German military attache.) 1. The German drive on Leningrad has widened in scope and now appears to be headed towards the Leningrad-Moscow railroad. 2. The attack in the center towards Moscow has made progress. The Russians are counter-attacking in an attempt to nip off the salient. A little to the north and west of the Smolensk fighting, a German armored column has pushed through the front line. 3. The Germans are approaching Kiev from the west. At the same time, one armored column is striking around to the north of Kiev, while another is encircling Kiev from the south. 4. In the north, the Germans and Finna are believed to have cut the Murmansk railway at Kandalaksha and to be at the outskirts of Murmansk. (In my opinion, this part of the report seems more than dubious. There is no reason why the Finns should not have announced such successes in their communique - and they have not done so.) LEGEND 288 Front Line Germans endrarsk Russians 1 sirs anch Bambings Direction of Attack Malakata Old Russian Border 1 inch - 100 miles Scale 1 I Tulivere Sarcevala Ex 1. LAKE Keshalm LADOGA fipuri Hango Valagada 2. Helsinki Verathilov Tallin Nergan (3) Defenre Karathar/ Command SHER Faitu DR A Piker Qutroe Pres Mescaw LATV A Drinch AND THUAN Vitabak Lepel Grabe vilne Berison Hegiler Mink n U. and 5 Bryansk Reyacher Timothenico Defente Command THE WIH German Eailystok imm ATTACH Warsaw prippet 6 Luck Army Cream Q 17 R E Budyenny K Defense Command Hang Army LINE A 10 289 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 22, 1941 TO FROM Secretary Morgenthau Mr. Kamarck Subject: Summary of Military Reports Russo-German War German casualties are thought to be heavy and difficulties are being encountered owing to the long lines of communication and the hard wear on tanks. (U.K. Embassy, London Telegram, July 18) A Polish railroad official reported to his government in London that ten trains of German wounded have daily passed through Kracow alone for more than a week (5,000 to 10,000 a day; perhaps the Russian claim of inflicting 60,000 casualties a day is not as exaggerated as it appeared). (London, Military Attache, July 17, 1941) The Russian air attacks on the Romanian cities Jassy (near the Pruth River) and Constantza (oil port on Black Sea) have been very successful, reports reaching British Military Intelligence indicate. The Russian claims of damage caused to Ploesti (Romanian refining center) are believed, however, to be over-optimistic. (London, Military Attache, July 17, 1941) Sabotage by Romanians has severely damaged bridges over three Romanian rivers causing the cessation of railroad service on sections of two railroads. Because of this, tank cars with oil for Italy have to proceed on very roundabout routes. The government is attempting to conceal the cause of the damage by attributing it to high water. Traffic through the Danube port of Orsova (opposite Yugoslavia) has also been interrupted. (London, Military Attache, July 17) Western Europe The Germans have lately attempted to supplement their over-strained land transport in Western Europe by using coastwise shipping. The RAF has made a number of successful daylight 290 -2- Division of Monetary Research attacks on these ships. Over 200,000 tons of shipping has been sunk or damaged in the attacks in the last week. A new form of sea-level approach is being used successfully. (U.K. Embassy, London Telegram, July 20, 1941) Italy The Italians have raised the Cavour battleship which was sunk at Taranto by British torpedo planes last November. The ship is now in a floating dry dock. (U.K. Embassy, London Telegram, July 19, 1941) North Africa During July 15, two axis air formations were intercepted by Curtiss Tomahawks and Hurricanes off the coast of Libya. Two Me-109 fighters and six Ju-88 bombers were brought down. (London, Military Attache, July 17, 1941) Accumulating evidence from prisoners of war, captured documents, etc. indicates that the British attempt to relieve Tobruk last month caused more serious losses to the Axis forces than had been at first believed. The offensive power of the German forces in Cyrenaica has been seriously impaired by their losses of tanks and trucks and by casualties among personnel. (U.K. Embassy, London Telegram, July 17, 1941) Six torpedo-bomber flying boats have arrived at Dakar. Vichy started reinforcing the Dakar garrison at time of Syrian armistice. (U.K. Embassy, London Telegram, July 18) 291 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 24, 1941 TO FROM Secretary Morgenthau Mr. Kamarok Subject: Developments in the Russo-German War (map attached) There has been no major change in the front (lack of change shown by coincidence of green and brown lines). 1. (See encircled numbers on the map.) There are Soviet troops (shown in blue) in rear of the Panzer columns (shown in red) west of Novgorod, Polotsk-Nevel, and south of Smolensk. 2. Russian troops have driven through the supply lines of the German panzer divisions near Kiev putting these divisions in a dangerous position. 3. Moscow was bombed again at night. This shows again that the Germans have not been able to win the important daylight command of the air and that the German claim of crushing the Russian Air Force is inaccurate. 4. and 5. Though earlier reports had indicated that the Russians had withdrawn from most of Bessarabia, they still hold the mouth of the Danube from Reni. 6. Ploesti, Romanian oil refining center, was severely damaged by a Russian air raid last night. (Comment on the map: The map is prepared by Military Intelligence based largely on data provided by the German Military Attache. It is likely, therefore, to give the Germans somewhat more terrain than they have actually conquered.) M.I.D. RUSSO-GERMAN WV.D. -- m SITUATION 24 JULY LEGEND 11AM treat LINE Germans 00 1 Direction 1 Passions Attack Front Line,July 23 1 inch 100 miles Scale Finnich Sortevele!! Army Mamorheim rekarante Koll Valoyde are Voroshilo Aninerad New Tallin wared ESTONI (X) Ostro Mostow.D Army Group 18 Army RITTER (2) 16 Army VON LEED alamy LITHUANIA Vitebak Legel Okilna Boris - Timoshenko a Omastic Le Army ArmyGroup 4.4rm BOCK Bobruis OWHITE RUSSIA Rogachey OGamel Bailystock pripas 6 Army Army Group 27 Army RUNDSTEDT Luble Wing Arm Luck bitomi Kown Smartesty 2 Lvov Ao, K VAKIA Budyema Podohki Army Group 1 Roman ANTONESCU U N G A R O M is E 293 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 24, 1941 Secretary Morgenthau Mr. Kamarok FROM Subject: Weekly Military Report: The Russian Military Forces (This memorandum is based on data secured from Colonel Guenther, head of the Russian section, Military Intelligence. Colonel Guenther appears to have an anti-Russian bias which to some extent may influence his judgment. This is shown in two sample remarks: "The Russian pursuit ship I-18 probably can go 385 miles per hour but what can you do with a pursuit plane that fast? "The Russians are carrying on guerrilla fighting but that's nothing new; its been done for centuries. ") Summary The war is likely to continue for some time since the Ruesians will keep on fighting even if driven back of the Urals. The Russian Army outnumbers the German Army in every type of organization except motorized divisions. The Russian enlisted men and lower officers are good, the higher leaders are poor. Morale is very good. The Russians probably had 6,000 first line planes on the Western Front but these planes are not comparable to German planes. The Russians still have almost 800,000 men in the Far East although 200,000 were recently transferred to the West. 1. Probable Course of the War The war is not likely to end soon, but to go on for some time. Even if the Soviet Army is pushed back of the Urals (and Colonel Guenther apparently believes that they will), the Russians will continue fighting. They will not be a major threat to the Germans but they will constitute a drain and a nuisance to the German Army. 2. Size of the Army The Russian Army has a total of 368 divisions (compared to the German Army's 250-260 divisions). This would give the Russians from 5,500,000 to 6,000,000 soldiers in the ranks. 294 -2- Division of Monetary Research The Army is backed up by an armed population of many millions. The Russians have pursued a policy designed to give arms and training to practically everybody old enough to carry a rifle. 3. Composition of the Army Number of divisions Russian Infantry Cavalry Armored Motorized Air (Russian is one-fifth the size of an Infantry division) 225 (200-210) 50 (1) 38 (18-20) 16 (23) 39 (6) Total number of divisions of all kinds (German) 368 (250-260) According to this data, the Russians are superior in numbers to the Germans in everything but motorized divisions. The Russians have a somewhat larger infantry division than the Germane do. Where the Germans have 16,000 men in a division, the Russians have 18,000 to 20,000. This makes the Russian division more bulky and harder to handle. Estimates on the number and kind of Soviet tanks vary. Based on the number of Russian armored brigades, the Russians had almost 20,000 tanks at the start of the invasion. About 50 percent of these were light tanks, 40 percent medium, and 10 percent heavy. 4. Personnel The enlisted men are good defensive fighters. They have excellent physiques and are easily led. Because of the large number of young men of conscript age every year, the Russians have been able to satisfy their military needs with the cream of each age class. The soldiers are accustomed to and can bear physical discomfort and hardships which the soldiers of no other European nation other than possibly Germany could endure. 295 - -3- - Division of Monetary Research The lower ranks of officers are good. They make good company officers. The higher commanders are poor leaders. They lack ability and education. The handling of large units of armies or groups of armies is, consequently, faulty. The higher officers have been trained in defensive I strategy and tactics rather than in the offensive science of war. The system of political commissars is bad since it results in divided command. It inhibits the growth of group loyalty among the officers for it checks the development of wholesome inner loyalties and reliance on the group. 5. Morale Morale in the army is very good. Skillful government propaganda has done an effective job in this respect. 6. Air Force The Russians had at the time of the invasion 9,500 first line planes. Only 7,000 of this total could be classed as first class planes. 1,000 of these are in the Far East, leaving 6,000 for the Western Front. (The Germans have shot down well over 1,000 of this total of 6,000 to date.) One-third of the Russian Air Force consists of pursuit planes, one-third, light and medium bombers, and one-third are heavy bombers. The Russian planes are not comparable in quality either to the German or American planes. They would not stand sustained use in combat as well as German or American planes would. 7. Forces in the Far East The Russians still have almost 800,000 men in the Far East. Ten divisions (or 200,000 men) have been recently moved to the Western Front but they still have for defense against the Japanese, the following: Infantry divisions Cavalry 20 10 Armored . Motorized Air Grand Total, all divisions 52 2 7 44 296 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 25, 1941 TO Secretary Morgenthau FROM Mr. Kamarck Subject: Developments in the Russo-German War (34th day) (Map attached) The German advance has been definitely checked in the Leningrad and Smolensk sectors. Some of the Russian troops encircled northwest of the Smolenek sector have out their way out. 1. (See encircled numbers) Hard fighting in great depth (70 to 100 miles) is going on in the Smolensk sector. 2, 3. The Soviet Army is still holding its position across the lines of communication of the German panzer columns around Kiev. Operations of both sides are slowed down by the weather. 4. Moscow and Odessa were bombed again. In the case of Moscow, the Germane stated individual attacks took place. This would imply that the previous mass attacks were too costly. (The map has been corrected in the Northern Finnish sectors. Here it had previously inaccurately shown German and Finnish advances across the Murmansk Railroad. I feel that the extent of the advance here is still exaggarated.) M.I.D. W.D. SITUATION RUSSO-GERMAN 25 JULY A.M. 11 LEGEND delakers front Line Germans 00 Rossiana Army Bombingt - Direction of Attack Front Lime,July 24 - Scale Linch . 100 miles Tulivage Finnish Army Petrosevodsk, Sareayal Pitkfrenta Vologda Voroshilo Tallin Nevgered ESTONI Pskor 2h Ostrost Moscow 4 Newer Army Group NaArmy 16 Army RITTER VON LEED LITHUANIA Vitabat Timoshanko Lepel OVilna Berise Mouilev 19 Army Army Group Rogallier Bobruisk 4 Army BOCK WHITE RUSSIA Gome/ Beilystan Army Group RUNDSTEDT prioret Army V7.Anny Hone Arms (2) strow o Luck Checkessy E Lvey Kavian a enigorodka OVAKIA Anny Group ANTONESCU N Any Round G Chilman A Eherson Black Budyenrix 298 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 26, 1941 Secretary Morgenthau TO FROM Mr. Kamarok Subject: Developments in the Russo-German War (End of the Fifth Week) (Map attached) A. Information from Military Intelligence There are no major changes anywhere along the front. The second big German offensive of the war appears to have been halted with no large German gains. 1. (See encircled numbers) A large group of Russians are still encircled between Pskov and Luga. 3. The German Panzer thrust that broke through beyond Smolensk has been cut off from its following infantry by a Russian counter-attack. (This has also been admitted by the German official military spokesman in Berlin.) 3. The situation around Kiev is chaotic. The Germans are supplying their advanced armored divisions from the air. They are making an attempt to encircle part of the Russian army south of Kiev. At the same time, the Russians are still maintaining their position across the rear of some of the German Panzer columns. 4. Moscow was bombed again last night by "a few" German bombers, according to the German official spokesman. 5. The Nazis made a slight advance towards Odessa in the South and are now about 50 miles away (the outline map is slightly deceptive, making Tiraspol look closer to Odessa than it is.) B. Summary of Military Reports The members of the British Air Mission to Russia report that in all the Russian Air Force is surprisingly are efficient. All respects airdrome facilitiesfrom underground they except report for the control tower. Returning Murmansk, that the Russian Air Force has gained air superiority at Murmansk. The ground situation in this area is a stalemate 299 -2between two Russian divisions and two German divisions. From the Russian viewpoint this situation is satisfactory. (London, Military Attache, July 23, 1941) The Moscow raids have caused little material or moral damage. (U.K. Embassy, London telegram, July 23, 1941) 300 M.I.D W.D. - SITUATION RUSSO-GERMAN adrows Mask 11 A.M. 26 JULY LEGEND eleksha Front Line Germuns 00 Russians Bembings Direction swo of Attack Front Line,July 25 Scale 1 inch 100 miles Tulivera Finnish Sortevel Army Petrozavodzk Pitkaran Lake Kelbolmi wNerve Turke Veloeda Ledoga, VIAMER Helsinki Voroshife Leningrad 10 Tallin Novgered ESTONIA Yaroslavi Pardy and Ostror AT Arms Group RITTER VW Moscow A Newel 2 1/6 Arms 14 Army VON LEED LITHUANIA Smolens! 2 Vitebak Timosho Lepel Vilne orang Borisoi Dantig (2) RUSSIA O Camel Prieval 6 Army Army Group Bryansk Roother Bobrun 4.Army WHITE Beilyston BOCK Mogilev Finst D Army Army Group IT Army RUNDSTEDT o Mung Army Lublin Chitomire Luck O. Rowne Checkessy E OBerdiche Lvevi A R Syenigorodke K OVAKIA Bar 3 Budyerh Uma marte Army Group ANTONESCU N to callev Podolski Holdou Army Roun Army G Chinineus A R Kherson 301 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 26, 1941 TO FROM Secretary Morgenthau Mr. Kamarck Subject: Colonel Famonville's comments on the Russian Army 1. The Course of the War The Russian Army will not collapse the way the French Army did. The war will continue for quite a while, the duration partly depending upon how much assistance is given by the United States and England. The Russians will continue to resist the Germans as long as they have arms with which to fight. It will not be possible for the Germans to wipe out all armed resistance even* if they should succeed in breaking the back of the Russian Army. The outcome of the present campaign hinges on the ability of the Russians to take the punishment resulting from the German Panzer break-throughs. The Russians are making a virtue out of necessity when they state that they let the armored divisions go through in order to nip them off. Actually, they would much rather prefer to stop the Panzers at the front line. Since the armored divisions do succeed in biting their way through, the Russians attempt to close the gap and then destroy the armored divisions while they are isolated from the German infantry. The Germane have been able to punch their way through the Russian lines for three reasons: (a) From the many campaigns the Reichewehr has been in, it has developed perfect teamwork and coordination, and it now functions like a beautiful machine. (b) The Germans have been on the strategic offensive, enabling them to pick for attack the soft spots in the Russian line. (e) They had the initial advantage of surprise. 2. The Military Forces The Russians are equal to or superior to the Germans in quantity of material and number of soldiers. The Russian equipment is probably not quite as good as the German 302 2equipment is. The Germans have now been able to draw not only on the experience of their many campaigne but also the genius of the armament industries of all Europe. The Soviet Army more than any other army, save the German Army as a result of its campaigns, is accustomed to living in the field with the attendant hardships. The Russian Army has been brought up to endure hardships which would break the heart of any other army. In a word, the Russian soldiers and officers are tough. The Russian Air Force is fairly efficient and well-trained. The Russians are very air-minded. Perhaps as a result of the purges, there is no doubt of the loyalty of the officers towards the regime. The officers are good, including the higher commanders, and are welltrained. They unquestionably lack the polish and brilliance of French officers, for example, but they make good leaders. The Russians do not have nor do they wish to have a Napoleon. They make no attempt to develop individual genius but concentrate on coordinated teamwork and group leadership. The Russians work and think in terms of masses. Morale is superlatively good. Perhaps more than in any other nation Russian military strategy is closely integrated with national policy. That policy has been one of keeping Russia at peace so that the work of internal construction could go on. Russian higher military strategy has therefore been basically defensive. In the spring and summer of 1939 in their negotiations with the Allies, the Russians regarded as a defense essential the gaining of Baltic positions which would serve to absorb the shock of the initial German blow. The British could not see this necessity. The Russians, therefore, adopted a policy of buying peace and time from Hitler while they strove to strengthen their military position at all costs. This policy won them almost two years for intensified preparations for the attack which came a month ago. 303 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 28, 1941 TO Secretary Morgenthau FROM Mr. Kamarok Subject: Developments in the Russo-German War (37th day) (Map attached) No major changes have occurred in the front. 1. (See encircled numbers) In spite of German attempts at renewed pressure, the drive on Leningrad has made no pro gress. Although the Germans are within 100 miles of the city, it is not being bombed. 2. (Ostrov) The Russians are attempting to cut off a German spearhead and relieve the encircled Russian troops between Pakov and Luga. 2. (Smolensk) The Soviet Army is maintaining its position across the lines of the German advance towards Moscow. 2. (Zhitomir and Kiev) Situation here remains chaotic and unclear. 3. (West of Moscow) The Russians have encircled the Eighth German Armored Division which is fighting desperately to escape. 4. (Bessarabia) Situation remains unchanged. (It is necessary to emphasize that the major source of the information charted on the map is the German military attache in Washington. As a result, the map always errs on the German side. For example, it would appear from the map that the Finns have cut the Murmansk railroad at Petrozavodsk, east of Lake Ladoga, whereas the Finne have just announced that they are "threatening" to cut the railroad.) 304 M.I.D. W.D. 11 SITUATION GERMAN RUSSO A.M. 28 JULY LEGEND edaleksha Front Line Germans Falkenha 00 Rassians Army Bomberge - Direction of Attack Front line, July26 Scale: Linch 100 miles Sortow Artrozavoeizk e Finnish Army Moenerheim Volegde VIRGET Helsinki Voroshil Ve/ajey 9 Diva Tallin ESTON Yeroslovi Paker Ortion Original Mercon A Army Grove Newer 2 Army RITTER 16 Army VON LEEN a RO apolotsk LITHUANIA Smelensk o. Timoshen Vitebak Wilna Minsk 9 Army Army Group Mogilev Bryansk Rogacher (4 Army BOCK Ocomel 6 Army Army Group 17Army RUNDSTEDT Lublin 2 -Kier Thitamir Berdicher Lvey Psvenigorodka Budyen Podelski Army Group Holden ANTONESCU U N ChisineuO G A R 305 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 29, 1941 TO Secretary Morgenthau FROM Mr. Kamarck Subject: Developments in the Russo-German War (38th day) (Map attached) There have been no major changes in the location of the front. The situation is, however, now characterized by heavy Russian counter-attacks on most sectors of the front. 1. (See encircled numbers) The German advance on Leningrad has been stalled. 2. (Newel) A large-scale Russian attack is taking place. 2. (East of Smolensk) The number and scope of Russian counter-attacks is increasing. It is believed that the bulk of the German Eighth Armored Division, which was encircled, has been destroyed. 2. (Zhitomir) The Russian thruet across the rear of the German panzer columns is holding its ground and increasing its strength. Heavy rains in this area have slowed up all movements. 3. (Southern Ukraine) No changes of importance have occurred. 4. Moscow and Odessa were bombed again. (In my opinion, the position of the front line shown on the map as being east of Smolensk is inaccurate. The German armored column which penetrated beyond Smolensk is shown as being out off. Under these circumstances, the aotual infantry front line is behind the column not ahead of it as the map shows.) 306 M.I.D. W.D. NURSO-GERMAN -- SITUATION #/crandroyth Harmanski 29 JULY 11 A.M. LEGEND Front Line Germans falken. Kendalehshe 00 Russians Arm Bambings Direction Attack - of Prant Line,July 28 swip Scale 1 inch 100 Miles A Finnish Petrozevedzk Sertavela Army Pilkarance Mannerheim LAKE Veloyda LADOGA Dive DIVS. - Helunki Voroshilov Leningrad 7 Luga Tallin Nivoared ESTON Yere) Pikey estron ris Fire ATV Army Group RITTER VON LEEB Mascel 2 Nevel A 4 Vyeznia 10 Army 16 Army LITHUANIA Smalenzi (2 Vitchik Timoshenk Level Vilne OrsA Magiler Army Group BOCK 19 Army Beyersk Rogacher Babruisi 4 Army O Gamel Army Group RUNDSTEDT Pripyet Army 17 Army Hung Army Lubhi Kha Zhitemir o 2 Cherkossy One E Lver RUL Svenigwodka K Budyenny o OVAK, Uman mean COMM Army Group ANTONESCU ikt Pedelshi Holden way License Army Oldina G R Khelson 307 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 30, 1941 Secretary Morgenthau TO FROM Mr. Kamarek Subject: Developments in the Russo-German War (39th day) (map attached) Russian bounter-attacke are increasing in intensity along the whole front. On the whole, the Russians appear to have seised the initiative temporarily. 1. The outcome of the battle north and south of Smolensk continues to be in doubt. The Germans are threatening to enoirole a force of Russians east of Smolensk. 2. The Russians have achieved considerable success around Kiev. The threatened, or actually achieved, encirclement of Kiev no longer exists. Some of the advance German Panser units beyond Kiev have been destroyed, others have been driven back. The Russians are strengthening their position across the rear of the remaining units. The Germans have, on the other hand, succeeded in encircling some Russian troops south of Kiev. 308 M.I.D. W.D. - RUSSO-GERMAN SITUATION 11 A.M. 30 JULY LEGEND Front Line Germans Fallene Russians swos Bombings 00 other - Direction Attack of from tua Front Line,July 29 Scale: I inch . 100 miles o ravodek finnish Army Pitkaranta Mannerheim Lake TOWN Velagada Ladooa Dive Helsinki Voroshilov Lemingrad Tallin spered STON Yeroslavl Pskdv November 1 LATV Arms Grove to / Army RITTER 10 Army VON LESS 4 LITHUANIA Vitabak Timoshenko Lepel Orsh Vilna I Army Army Group Bryansk Reyache 4 Army BOCK Gamel Prigrat Army Army Group RUNDSTEDT (IF Army Hung Army Khark Lublin Kiey jonner Checkensy THE merodka 2A Budye K U OVAKI Padolski Army Group Molday Army ANTONESCULArmy N Chisinaus G R Reni Odessa Tin Kherson 309 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 31, 1941 TO Secretary Morgenthau FROM Mr. Kamarok Subject: Developments in the Russo-German War (40th day) (Map attached) front. There are still no major decisive changes along the entire 1. A joint Anglo-Russian action against Petsamo and Kirkenes, Norway (a few miles to the west of Petsamo) appears to be in process. (Success in this venture would make much safer the Murmansk route for help to Russia.) 2. The Germane have not made any further progress towards Leningrad. 3. The Russians have encircled a German armored force east of Smolensk. The Germans are trying vigorously to free this force and beat off Russian attacks at the same time. 4. The penetrations of German armored units immediately north and south of Kiev no longer exist. Some units were destroyed, others retreated to the safety of German lines. The dangerous threat to Kiev has thus been dissipated for the time being. Farther south of Kiev, some Russian troops near Berdichev are still encircled by the Germans. 310 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 31, 1941 TO FROM Secretary Morgenthau Mr. Kamarok Subject: Summary of Military Reports Russo-German War The British are asking for information from their Moscow Military Mission to be used for long-term planning based on the estimate that the war will last two to three years more. (London, Military Attache, July 25, 1941) Collier, Air member of the British mission to Russia, states that the German airplanes are avoiding combat with the Russians (the Russians have repeatedly made such a claim). The Russian planes drop grenades which explode when German tanks run over them. In areas where tanks are operating, incendiaries are dropped to start fires. The primary purpose of the German raids on Moscow is an attempt to weaken Russian morale. (Colonel Famonville has known Collier for many years and says that any report Collier makes is absolutely reliable.) (London, Military Attache, July 24, 25, 1941.) It is claimed that the morale of the Germans near Pskov (the thrust towards Leningrad) is not good. (London, Military Attache, July 24, 1941) Four groups of long-range bombers were recently withdrawn from Western Europe to be used against Moscow. They may have carried a full load of bombs during this transfer. (London, Military Attache, July 25, 1941) The British Air Ministry believes that most of the German bombers attacking Moscow have to operate from airdromes about 250 miles in rear of Smolensk (1.e., to the west of Minsk). The Do-117 is not believed to have sufficient range to be used in this attack and, therefore, Ju-88's and He-111's are being used. (London, Military Attache, July 25, 1941) 311 -2- Division of Monetary Research The Romanian oil fields at Ploesti have been bombed by the Soviet Naval Air Force from the Crimea. (This partly explaine why, with the bulk of the Russian Air Force being used tactically directly against the German Army, strategic raids are made on the Romanian oil supply. These raids serve to bring into action the Naval Air Force which might otherwise be idle. The rest of the explanation for the raids must be the Russian belief that oil represents the weakest link in the German situation.) (London, Military Attache, July 28, 1941) Use of American Planes Three Flying Fortresses flying at an altitude of 32,000 feet attacked Brest during daylight of July 24. Two German fighters tried to attack the Fortresses but could not make contact (perhaps due to the high altitude). Twelve 1,100 pound bombs were dropped and one direct hit on the Gneisenau was claimed. (London, Military Attache, July 25, 1941) A Focke Wulf (long-range four-motor bomber) was shot down off Achness Head by a Lockheed Hudson on convoy duty. (London, Military Attache, July 24, 1941) New British Weapon In a British raid on Mannheim on the night of July 23/24, the British, in addition to dropping the usual high explosive bombs (including one huge two-ton bomb) and incendiaries, dropped 44 tons of deckards. These are described as being tine of incendiary material designed to ignite automatically at a set temperature. (These are probably cousins to the incendiary leaves dropped on forests and crops. This is the first mention I have seen anywhere of "deckards". While we do not know, as yet, anything of the efficiency of this type of incendiary, there is a virtue in change itself. The counter-incendiary squads are trained to meet one type of bomb and introduction of a new type catches them off guard. It also takes time to develop measures and train men to meet the new threat.) (London, Military Attache, July 25, 1941) R.A.F. Activity About the heaviest daylight raid of the R.A.F. to date occurred on July 24. On this date, the R.A.F. sent out 529 fighters on offensive patrols and a total of 149 bombers on bombing raids (compared to the usual daylight raid of 20-30 bombers). (London, Military Attache, July 25, 1941) 312 CONFIDENTIAL Paraphrase of Code Cablegrea Received at the Now Department at 13:56, July 25, 1941. Lonion, filed 19:40, July 25, 1941. 1. - Air Antivity over the Cestiment. On Numbers were deepped 56 tens of a. high explosive bonbo, including - 4000 1 been, 300 incentiories and 44 tons of declaria, which are time of incondiary material designed to iguite intentionlly at a not temperature. Your tens of high explesive boube were tropped - to Barre. Three tess of the - were knopped as Ostead. The target area at Is Palliee received 40 teas of high explesive bonbe and 1000 incentiaries. a Freakfort were dropped 26 tess of high explosive bombe and 1100 incentiaries. . Day of July a A total of 931 fighters were dispatched as follows: 104 - interseption patrols, 185 in the protection of shipping, 113 on special petrols, and 589 - offensive patrols. Brest was attacked by three 3-17's flying at 32,000 feet. Two - fighters twice to cogange them but were mable to make contact. Service 1100 yound busing were dropped, with - direct hit - the Once sisteed. 78 Wellingtone and 18 Examples because with also attested Breat. two direct hite on the Oneiseman were claims. During this raid considerable Germa fighter activity and heavy fire were encountered. the Looks at Cherbourg were attached by 35 Blooksime with fighter occurs. Eight Halifax bembers, of a total of 15 dispatched, attacked the Scharahorat. 25 tens of high explosive bombo Yesre dropped from 13,500 feet, one direct hit being claimed. All aircraft returning from this mission had boom hit by German fighter ambiaireraft fire. INFORMATION COPY CONFIDENTIAL CONFIDENTIAL 313 e. Fight of July sh-85. The bember effort was as follows: 47 to Balon, a to Hel, 1 to Wilheinshaven, 4 to Betterian, and 6 - sea mining missions off the Fristan Inlands. the majority of these sircraft attached their primary objectives, the weather being good. 2. German Air Activity - Britain a. Day of July 23. 10 recommissionee aircraft ml 10 long range bembers were employed. . High of July 23-24. German foress consisted of , recommiss. sase aircraft, so long reage bombers, 10 mine Inguse and 10 fighters. e. were Defensive patrels were mistates in the area of dalate. Meteorological - flights were also mis at sea. y a the area of the east coast of England and Seetland small seals activity took place. 3. Airwraft Leases Devertes. a. British lopess. During the day of July a British lesses were as follows: , Wellingtons and 2 Suppose unreported and 1 Wallington crashed in the sea near Plymouth in the vaid - Brest, 5 Holifex bumbers lost during - attack - the Scharahouse, 7 Spitfires, 1 Surrieme, and 7 pilote destroyed and 1 European damaged. During the night of July 24-85 British bomber leases were as follows: in the said - Balon, 2 unreported, 1 made foreed leading and 2 cresched, the erows of which last two aircraft are safe; and in the raid - Kiel, 2 become unreported. 2. Axis Leases. For the day of July a Germa leases were as follows: at Breat, 18 No-109's and 1 No-2098 shot down, 1 No-109 probably destroyed and > No-109's damaged; during the vaid on the Babarahoust, , No. 109's and 1 No-1098 destroyed, 1 16-209 probably destroyed and 1 No-1098 -2- CONFIDENTIAL 314 CONFIDENTIAL damaged; and by fighter action, 11 No-109's and 1 Mo-1098 destroyed, 4 No-109's and 1 No-1098 probably destroyed and 4 No-109's, 1 No-10gm and 1 Ju-88 damaged. Another Ju-88 was shot down w antiairenaft fire and a third crashed for - unknown reason. IS is believed w the Air Ministry that meet of the Germa aircraft engaged in attacking Resees - required to operate from airlrense located approximately 150 miles to the year of Smalenak. The Do-117 is not thought to have sufficient reage to be wood in this attack and that Ja-88's and Me-111's are being used. D is also believed that the four groups of long reage beakers recently withdrew from the vesters theater and used against Noneovary have servied a full load of bumbe during the transfer. Collier, one of the nombers of the British air mission in Mossov, reports that Bassian aircraft drop grantee which exploits when F over by the German tenis, also that they start five by dropping insentiaries in the areas where the tanks are operating. Long term pleasing, estimating that the was will last 2 to 3 years more, is the basis upon which all in- I formation is requested from the British Mission in Nesson. Distribution: State Department Assistant Chief of Staff, G-8 Mar Please Division office of Naval Intelligence a. H. e. Chief of the Army Air Foress Secretary of Treasury Assistant Secretary of Mar for Air Assistant Chief of Staff, 0-3 Air Gerra -3- CONFIDENTIAL 315 CONFIDENTIAL Paraphrase of Code Cablegram Received at the Was Department as 17:33, July 24, 1941. London, filed 23:00, July 24, 1941. 1. British Air Activity ever the Certificate a. Night of July 23-33. Tea tins of incentlary leaves were dropped - the forest area south of Dereal and 95 time were dropped upon the forest area between the Rhins and the Montille w one Wellington bember participating in a valid - Trankfort. Thirteen tens of high explesive busbe - 1,700 incentiaries were dropped upon Manhhain and 34 tens of high explesive beabe, including four 1,900pound bombe, and 4,500 incentiaries were dropped - Trankfort. b. Day of July A total of 993 fighters were employed as follows 111 on interseption patrole, 221 on offensive patrols, 23 on special patrels, and 188 in the protection of didging. Three, of six Stirlings disputched, attacked La Pallice, where they were opposed by 8 No-109's and heavy fire from 2 fisk ships and the Schemberst. One of the beebs dropped was - to burst or near the Scharabarat. One beher attached the wrong position and another returned to its base because of engine trouble. Blenhain bombers dispatched as follows 11 to attack a carver off the Hague, which was prevented w German fighters) 6 to attack shipping near Graveline, the remite of - attack by them - two motor vessels not being observeds 6 attacking the area of st. - the results of which were not determinates and 6 to the part station at Mastageabe, 3 of which attacked without - protective antistrement fire being very heavy. CONFIDENTIAL INFORMATION COPY CONFIDENTIAL 316 6. Night of July 23-24. During this night bembers were sent out as follows 33 to the industrial center of Frankfort, 52 to the Mannhaim industrial center, , to the deeks at Le Havre, 3 to drop leaflets over Lille, Recen and Paris, 1 - - mining off the Fristan Islands, 30 to attack the at La Pallion, and 5 to attack the deeks as Ostend. Due to darkness and the glare from workslights 24 of the aim craft sent to attack the Scharnhorst were unable to find it and dropped their bombs over its estimated position. 3. Aircraft Leepes Reported. a. British leases. During the day of July 23, six Klenhains, 1 Stirling, 1 Hurricane, 34 Spitfiree and 9 pilots were lost. During the night of July 23-24 one bouber created in England and one failed to return. b. Axis leases. 2 Me-109's were shot down from a Stirling bomber at La Pallice the day of July 23. Additional losses - that day were as follows: 10 No-109's shot down, 2 Me-109's probably destroyed, and 9 No-109's and - He-59 damaged. A Focite walf was also shot down off Achness Head by a Hulsen Bember on convey duty. 4. British Air Activity Other Theaters. a. Meditorrenome Theater. A convoy of motor vessels off Pantellaria was attacked by Royal Air Force planes from Malta on July 23. Serious damage was done by direct hits on 4 vessels totalling 24,000 tens in the convey. A report has been received at the Air Ministry from its mission in Mossow to the effect that the German raid on that city during the night of July 22-23 was on a fairly heavy scale, having as its chief objective the railway center. Antiaircraft fire and mearchlights were need extensively. The operations were started soon after dusk and continued until damn. 2 CONFIDENTIAL 317 CONFIDENTIAL General aircraft are avoiding conbet with the according to a report by Collier, a number of the mission mertioned. Its also states that the primary purpose of these vuide is to affect the America marale. IS is alained that the marals of the General in the area of Paker is not good. The only change in the battle front has occured at the point of the Demanism advance. Kiev is not thought to be # immediately threatened. Kleven Asia aircraft attacked the Abu Sudi nour Immilin, during the raid - Succ - July 12. The fires which were started destroyed 9 P-40's - 17 Brittah airwork and damaged 40 Bristal engines and 20 aircraft. This equipment had not yes been dispured, is only having arrived the night before. LEX Distributions State Department Assistant Chief of Staff, w Year Plans Division .... office of Naval Intelligence Record Section Intelligible Brench Grief of the Army Air Forces Secretary of Treasury Assistant Secretary of War for Air Sesties File Collection Bestim British Repire Section Assistant Grief of staff, as Central & Balkans & Near East Sections Air Geras Eastern Section Western Section CONFIDENTIAL 318 CONFIDENTIAL Paraphrase of a Code Cablegram Received at the War Department at 8:48, July 28, 1941. London, filed 15:00, July 28, 1941. 1. British Air Activity over the Continent. a. Day of July 27. A total of 274 fighters were employed as follows: 53 on interception missions, 172 in the protection of shipping) 13 - special patrole, and 36 on offensive patrols. Bad weather prevented the dispatch of bombers. b. Eight of July 27-28. The bomber effort was as follows: 3 to Rouen, 14 to Dunkisk, 16 to St. Nasaire, 3 to Le Navro, 20 on sea mining off Lorient, and 3 to drop leaflets over Limoges and Paris. 2. German Air Activity over Britain. a. Day of July 26. 10 reconnaissance aircraft and 10 long range bombers were used. b. Eight of July 26-27. 5 fighters and 5 long range bombers were dispatched. 0. Day of July 27. Reconniissance of shipping was carried out. Patrols of defensive fighters were also maintained. d. Eight of July 27-22. Operations on a somewhat larger scale were made against Lesson. No serious damage was done during this minor raid. CONFIDENTIAL INFORMATION COPY 319 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE August 1, 1941 Secretary Morgenthau TO FROM Mr. Kamarok Subject: Weekly Military Report: Review of the Russo-German War After six weeks of the Russo-German War, there are a number of salient facts which appear evident. While further German successes are quite likely, the central fact of the absence of a decisive German success to date appears clearly. 1. The Russian Army is considerably stronger than most of the American military experts had given it credit for being. Colonel Betts, Situation Officer of Military Intelligence, admits this frankly. He also states that if the Russians continue to do as well, up to August 15 as they have up to now, the Germans will not win a decisive success on the Russian Front this year. 2. The Germane are considerably behind schedule, whatever that schedule may have been. This is admitted even by Colonel Guenther, Chief of the Russian Section, M.I.D., who is most optimistic about the progress of the German Army. 3. Since the initial German victory over the Soviet frontier forces and an advance of several hundred miles in the first two weeks, the Germane, as yet, have not made any further significant major gains nor won any further major successes. This situation, after 41 days of fighting, is to be contrasted with the Campaign in the West where it took only 38 days to achieve a complete victory over Holland, Belgium and France. While it is not possible to make a definitive table, on the basis of the information available, on the actual progress of the German Army, the following appears to be fairly accurate: 320 -2- Division of Monetary Research Period German Progress First two weeks 350 miles advance, progress on Second two weeks 125 miles advance Last two weeks Penetration of 50-75 miles in Smolensk sector. No major gains elsewhere. Armored thrusts all fronts around Kiev thrown back. 4. The German offensive was supposedly timed to capture the wheat crops while they were still green and, so, unburnable. The Ukrainian wheat harvest is now on and still under Russian control. 5. The German Air Force appears not to be as strong numerically as has been sometimes asserted. It is able to operate on only one major front at a time. For the Russian campaign, it has had to move most of its squadrons from Western Europe and from Italy, Sicily and North Africa. 6. The Russian Air Force is still in existence and, according to the British, is operating efficiently. 7. Russian resistance rather than weakening appears to have strengthened. To some extent, the Soviet Army has been able temporarily to seize the initiative along some of the sectors of the front. Russian counter-attacke have characterized the fighting for the past week with considerable success won around Kiev. 8. Russian morale is still high and the Germans are now even admitting it is unshakable. According to Peters, New York Times correspondent in Berlin, "The Russians, the Germans reiterate, simply do not fight according to the European rules of war. Regardless of the hopelessness of their positions, they allow their troops to be slaughtered rather than capitulate, it is asserted." they continue, there is no possibility of the Russian Armies suffering from a collapse of morale, 'because all the prerequisites of such a collapse are lacking as a result of the bestializing of the individual that has occurred in Russia." (New York Times, July 31, 1941) 321 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE August 4, 1941 Secretary Morgenthau TO FROM Mr. Kamarck Subject: Summary of Military Reports Distribution of German Army on Russian Front Number of Divisions Infantry, including Front Finnish Mountain and S.S. Armored 1/2 9 Northwest (Leningrad) 15 5 Central (Moscow) 27 7 Southwest (Kiev) 43 Romania (Odessa) 15 Totals Motorized 10 1/2 1 - 109 6 2 20 1/2 Total 9 6 2 18 20 43 55 19 147 1/2 (Moscow, Military Attache, July 30, 1941) (This data, which is probably incomplete, would indicate that the Germans are using at least 3,000,000 men. The number of divisions on the Kiev front (55) would indicate that this may be an even more important offensive than the Moscow thrust (43 divisions). Use of American Planes During daylight of July 26, two Flying Fortresses were sent to attack Emden. Due to bad weather, one could not attack its target. The other dropped four 1,100 pound bombs which exploded in the northwest section of the city. Smoke followed the explosions. No German fighters or anti-aircraft fire were encountered during the raid. (London, Military Attache, July 27, 1941) 322 -2- Division of Monetary Research On July 23, in the first British Navy Mediterranean operapatrol. While belonging to the Fleet Air Arm, they were operated from shore bases. All nine Grummans were on patrol four hours and operated satisfactorily. Two planes were lost when they ran out of gas due to the excessively high speed of the patrol. (Cairo, Military Attache, July 26, 1941) The most satisfactory fighter in the Middle East is the P-40. One squadron of P-40's in Syria secured 24 victories and lost only three planes; one by anti-aircraft, one in combat, one through engine failure at the take-off. tions since Crete (May 30), nine Grummans were used as a combat The British assign a squadron of P-40's and one of Blenheim bombers to the divisions making the main attack. The P-40's are used for attacks on ground personnel and motor transport. They are also used for protection of the Blenheims on bombing missions. The P-40 squadron leader likes the 50 caliber machine gun and recommends that it replace the 30 caliber guns on the P-40. (Cairo, Military Attache, July 24, 1941) Singapore The R.A.F., at Singapore, is still short of reconnaissance bombers and pilots. On July 24, 1,500 men belonging to the administrative and maintenance staffs of the R.A.F. arrived, but no pilots. The War Ministry has not as yet alloted any reinforcements to meet the French Indo-China situation. (Singapore, Military Attache, July 28, 1941) Comments on the Syrian Campaign The French had superiority in the air in number of planes and, generally, in better performing planes. This was, however, offset by the British system of air attacks on ground forces. The Vichy French did not use fighter protection for their ground strafing attacks and suffered losses in consequence. In one case, six British Gladiator fighters, with a speed of 245 miles per hour, shot down two out of five Dewoitine 220's which have a speed of 360 miles per hour. The Dewoitines were attacking British ground troops without an umbrella of fighter protection at higher altitude. (The 360 miles per hour speed of the French fighters shows that these are good planes. The Spitfire I only does about 365 miles, both the Hurricane and P-40 are, believe, slower.) 322 2- Division of Monetary Research On July 23, in the first British Navy Mediterranean operapatrol. While belonging to the Fleet Air Arm, they were operated from shore bases. All nine Grummans were on patrol four hours and operated satisfactorily. Two planes were lost when they ran out of gas due to the excessively high speed of the patrol. (Cairo, Military Attache, July 26, 1941) The most satisfactory fighter in the Middle East is the tions since Crete (May 30), nine Grummans were used as a combat P-40. One squadron of P-40's 1h-Syria secured 24 victories and lost only three planes; one by anti-aircraft, one in combat, one through engine failure at the take-off. The British assign a squadron of P-40's and one of Blenheim bombers to the divisions making the main attack. The P-40's are used for attacks on ground personnel and motor transport. They are also used for protection of the Blenheims on bombing missions. The P-40 squadron leader likes the 50 caliber machine gun and recommends that it replace the 30 caliber guns on the P-40. (Cairo, Military Attache, July 24, 1941) Singapore The R.A.F., at Singapore, is still short of reconnaissance bombers and pilots. On July 24, 1,500 men belonging to the administrative and maintenance staffs of the R.A.F. arrived, but no pilots. The War Ministry has not as yet alloted any reinforcements to meet the French Indo-China situation. (Singapore, Military Attache, July 28, 1941) Comments on the Syrian Campaign The French had superiority in the air in number of planes and, generally, in better performing planes. This was, however, offset by the British system of air attacks on ground forces. The Vichy French did not use fighter protection for their ground strafing attacks and suffered losses in consequence. In one case, six British Gladiator fighters, with a speed of 245 miles per hour, shot down two out of five Dewoitine 220's which have a speed of 360 miles per hour. The Dewoitines were attacking British ground troops without an umbrella of fighter protection at higher altitude. (The 360 miles per hour speed of the French fighters shows that these are good planes. The Spitfire only does about 365 miles, both the Hurricane and P-40 are, I believe, slower.) 323 -3- Division of Monetary Research The French did not machine gun air personnel who came down in damaged airplanes or by parachute. The Germans, who are very anxiousAttache, to destroy all24, flying personnel, have done so. (Cairo, Military July 1941) 324 CONFIDENTIAL Paraphrase of a Code Bollogram Received at the War Department at 9:32, July 30, 1941. Nessew, filed 10:40, July 30, 1941. The Seviete say they have located the following German unites s.s. Inf. its. Armared Net. Treepore Total Exenta Rumania (Odeasa) 15 0 2 2 0 19 Southwest (Kiev) 37 2 6 6 4 55 West (Neecow) 24 0 7 9 3 43 Northwest (Lemingred) 15 0 0 0 5 20 1 0 18 7 Finland 7 Total 98 4 20) 10) 147) United States Mission has reached Moseow. Necces cable of July 28, 1941, should read German divisions instead of Ressian. YEATON Distributions State Department Secretary of Treasury War Plans Division Office of Neval Intelligence (2) a. ne. CONFIDENTIAL INFORMATION COPY CONFIDENTIAL 325 Paraphrase of Code Cablegram Received at the Wax Department at 9:43, July 26, 1941. London, filed 15:38, July 27, 1941. 1. British Air Activity ever the Continent. a. Night of July 25-26. The following numbers of tens of high explesive bombs and numbers of incentiaries were dropped upon the targets nameds 25 and 4700 on Banburg) 14, including one 4,000 pound bomb, on Berling and 45 and 3800 on Hanover. b. Day of July A total of 297 fighters were employed as follows: 64 on interception patrols, 153 in the protection of ship ping, 23 on special patrols, and 57 on offensive patrols. Two Flying Pertresses were sent to attack Endon. Bad weather prevented one of these from attacking its target. The other attacked, dropping four 1100 pound bonbs which were seen to explode in the north west section of the city. Smoke followed the explesions. During the raid no German fighters or anti-sireraft were encountered. e. Eight of July 26-27. The unfavorable state of the weather prevented the dispatch of bembers. 2. Gareen Mr Activity over Britain. a. Day of Julr 25. 15 reconnaissance aircraft and five long range bombers were employed. CONFIDENTIAL INTORNATION GOYA CONFIDENTIAL 326 b. Eight of July 25-26, 20 fighters and 5 reconnaissance aircraft were used. No bembers were dispatched. e. My of July 26. In addition to defensive fighter patrols there was reconsissance activity against shipping. d. Night of July 24-37. A for night fighters operated off the East Coast. There were also mall seale operations against shipping. 3. Aircraft Losses Reported. a. British leesea. During the day of July 26 no British planes were lost. b. Asia lesses. One No-109 was shot down on July 26. An attack was attempted July 26 on Grand Marber (G-2 note, Valette, Halta) by light Altis navel forces. The fighter ossort of these forest was attacked by British fighters and three Axis air- craft shot down, with the loss of one British fighter. Four E-boats were also destroyed by the British fighter aircraft. The Axis forces lost eight 2-man submarines and five meter terpedo beats before any of these could reach their objectives. The attack was repulsed. The Scharnherst has returned to Brest, according to photographic reconnaissance reports. page Distributions State Department Assistant Chief of Staff, a-e War Plans Division Office of Navul Intelligence (2) a. H. e. Chief of the Army Air Foresa SecretaryofTreasury Assistant Secretary of War for Air CONFIDENTIAL SECRET 327 By authority A. C. of Date JUL 31 1941 Personance of Salta Received as the Mar RDB, Initials as not, July 27, ALL entre, filed 13th, July m, m. - first - of the May in - - about Grobe, - July s R.A.F. Signature - in the / Greens of the Fiest Mis I Styling - I side fighters ware - patrol - - hours. All of the - the please - loss - they - - of - to the - high speed of the 1 Mass, of Mar as to Ate Air Gerra SECRET INFORMATION COPY 328 SECRET By authority A.C. of S., G-2 of Code Received as the New Date JUL 31 1941 as 15ml July m, Hong Initials Gaise, filed July n, 1941. I in Ate - - Byria I - egaires a Byria epispot with - a vistorica with Leases of only three airplanes - - - w subtainments, - a a - - - is - taking off when the engine failed. the fighter in the middle That is - p.m. the I fighters - only - Give attack - the beet tasties - attenting from above, / - w from from working all a the Westain Describe - Indicas merifiest their of apool w tomiting to term - - the alone Brittah fighters. All of the fighter - agree in - - that the - of - planting explesive, ball and - should to egual for middle - in explanes. The no - Sealer Liked the new caliber - and - that they be - is number as the expense of the shirty milibur - . has born I the strength - the 1 sight I vehicles, and - transports - to destruyed w using tenantialy mehine - fire, Thoughts the Syrtim operations Signature have been work for this type of minstes and the apportantly, in - and strength, of French airplanes ma streggted w 1 - - Vider Trush ass w - fighter protection for the 1 stanfors - in - - a formation of 6 Melisters with a again of - Instrut miles you hour when com two Develtime Five I with a - of three Insured state miles you h out of a to of five that were 1 SECRET INFORMATION COPY SECRET 329 starting at a related speek. the British have found a is a assessity to have fighter protection - 1 starting Signature as all Steee. the - or flight should musta about five - fees above protected night. n is also committed that the proborting film - - ground streffing addresses to - a unified / the British - - again of - - of to the divisions - with the main offers. the 3-be's - nood for 1 stanting I - water I Shey also were - - the protection of the Members when - booking minstes against - - areas needs, - I days. the labber adoptions is as well designed or enclyped to partian the basing missions of Blocking - made, - attacking - positions. - and fighter - - - to have - atoplance c but were the mast that - dispotched - - mission daring those questions. Yes your information and those is a definite station to be fulfilled w See Syying these please should to - below and in trust. A fighter having a high compensation - should - be microes - - starting the - - - - a - all Styping 1 - two, 19 is not practicable to my to - alow Stying attplanes in wg - theater of operations regulations of how - protection is affected w - airward. the I ass not main-gm 1 - - threed - w damaged airplases or 1 as the Anis have done. From online. 1 Distributions State Departments Assistant - of staff, a-es Year Please Divisions office of Naval a. in. 6 Okles of the Away Air Terms of Treasury Anstebant of - for Air) Atm Barga. SECRET 330 Paraphrase of Soda Sublegrim Received as the Mar Department as 18(21, July 2, inc. SECRET By authority A. C. of S., 0-2 DateJUL 3.1.1941Initial ( Hary Singapore, filed July n, 1942. The following personal have boda added state Report Number 9: July 24 1000 for mistence, no pilote. The 2, 4. 7. is still short of pilote and bether reconneignence planes. The Year Ministry has not as yet, make any allethent: of reinforcements to meet the situation in French Indo China. BRINK Distributions State Department Assistant Chief of shaff, 6-8 War Plans Division office of Naval Intelligence e.m. Okief of the Away Air Forces Secretary of Treasury Assistant Secretary of Mar for Air Air Corps SECRET INFORMATION COPY 331 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION NX DATE August 7, 1941 Secretary Morgenthau TO FROM Mr. Kamarok subject: Summary of Military Reports Russo-German War The British Air Mission in Moscow reports that the Russians believe that they have the situation in hand in all areas. The Russians are using a radio direction finder of a type similar to the British but not quite 80 far developed. They can detect German aircraft at a distance of 60 miles but cannot determine their height. (London, Military Attache, August 1, 1941) On the extreme north and the northern front near Salla, the Finne estimate their own casualties at 15,000 and the Germane' at a minimum of 6,000. (There are probably 3 Finnish divisions and 1 German division on these fronts. This would mean a casualty rate of about 25 to 30 percent. For the entire Russo-Finnish War the Finna admitted only 20,000 killed, 1.8., a total of 60,000-80,000 casualties.) (U.K. Embassy, London Telegram, August 2, 1941) The British believe that German casualties are certainly heavy but that no estimate is possible at present. (U.K. Embassy, July 30, 1941) Battle of the Atlantic The British Air Ministry is informed from a reliable source that the Nazis expect to have the battle cruiser Gneisenau in service in October. The Gneisenau 18 now having extensive repairs made on her engines. (London, Military Attache, August 1, 1941) A Hurricane catapulted from a British naval vessel shot for down a German Focke Wulf bomber shadowing a convoy bound England about 450 miles west of Lands End. (This report illustrates the German method of attacking a convoy. The long- and range four-motor Fooke Wulf plane picks up a convoy at sea 332 -2- Division of Monetary Research shadows it behind cloud cover, if possible. It then summons submarine pack to the attack. Closer to the Continent, German a bombers are called in. This is the first mention that the British are using Hurricanes catapulted from naval vessels as a counter to the German technique of attack.) (U.K. Embassy, London Telegram, August 4, 1941) German attempts to mobilize shipping of occupied territories are being seriously impeded by shortage of skilled personnel. The release of 10,000 prisoners of war, French naval officers and men, may be intended to relieve pressure in manning the French mercantile marine. (U.K. Embassy, London, Telegram, August 1, 1941) Iceland On July 30 German aircraft carried out a complete reconnaissance of Iceland. (U.K. Embassy, August 1, 1941) Mediterranean During the night of July 27/28 in the Gulf of Euphemia, a British submarine wrecked a train which piled up and burst Calabria (on the northern side of the toe of the Italian boot), into flames. (U.K. Embassy, London Telegram, August 4, 1941) 333 CONFIDENTIAL Paraphrase of a Code Cablegram Received at the War Department at 14:34, August 2, 1941. N/A London, filed August 1, 1941, London, filed 20:35, August 1, 1941. 1. British Air Activity over the Continent. a. Day of July 31. A total of 282 fighters were dispatched as follows: 51 on inherception patrols, 162 is the protestien of shipping, 12 on special patrels and 57 on offensive missions. Four Blenheim bembers dispatched with an escort of fighters to a stack shipping off La Tougust returned to their bases. Some results were obtained in as attack by Spitfires - German R boats. A member of B boats were also damaged during sastack by Nurricane fighters. 2. German Air Activity over Britain. a. Day of July so. 10 recommissance aircraft and 5 long range bombers were employed. b. Night of July 80-31. Disportation were 10 fighters, 5 long range bembers and 5 recommissance aircraft. 8. Day of July 31. In the area of Calais, defensive patrels were maintained. A few reconneissance operations were carried out over the east coast of England. d. Night of July 31-August 1. One German plane flow over the northeastern counties, while a few others operated over the East Angliens coast and off Cornwall. 3. Aircraft Losses Reported. a. British lessee. Two Harricanne and 1 Spitfire were missing from fighter operations on July 31. The same day a Hurricane made a foreed landing in France and a Spitfire erached CONFIDENTIAL INFORMATION COPY 334 CONFIDENTIAL in the sea, the pilot of which was recount. b. Axis lessee. In the day of July at these were as follows: 2 No-100's and 1 Do-17 shot down. 1 No-100, 1 and 1 De-17 damaged. 4. British Air Activity Other Theaters. e North African Theater. 4 5-79's were damaged during an attack by the Reyal Air Force - the sindress as Swarn, Tybia. The Air Ministry has information from a source which 14 considers reliable to the effect that the Nasis agest to have the Oneigenia in service in October. It is believed that this erniser is new having extensive repairs made to her engines, previously reported as damaged. According to photographs taken of the Oncisenda on July 24, the superstructure known to be in position on June 29 has been removed. The German Air Force beebed Pervensisk (Direise, south of Kiev) without success on July 31. The Ressians are using - early type of British radio direction finder. With these they can detect German Aircraft at a distance of 60 miles, but easnet Internine their height. The Air Ministry has also received a comminution from its mission is Moseow to the effect that the Russiana believe that they have the situation in hand in all areas. LEE Distributions State Department, Assistant Chief of Staff, G-2, War Plans Division, Office of Naval Intelligence, Chief of the Army Air Fereos,/Secretary of treasury, Assistant Secretary of War for Air, Assistant Chief of Staff, G-3, Air Corps. INFORMATION COPY CONFIDENTIAL 335 BRITISH EMBASSY, WASHINGTON. August 5th, 1941. 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, Halifix The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D. C. 336 TELEGRAM RECEIVED FROM LONDON DATED AUGUST 4th. 1941 On July 22nd British submarine near Samos shelled Caique flying German flag and carrying German troops and set her on fire. During night of July 27th/28th in Gulf of Euphemia, Calabria British submarine wrecked train which piled up and burst into flames. Same sulmarine Dello July 96th sank escorted laden merchant vessel of 4,000 tons south bound ten miles north west of Paole. PtMs Hurricane catepulted from Haplin 2. shot down Fooks Wulf shadowing homeward convey about 450 miles west of lands End. Another enemy aircraft shot down August 3rd by fighters whilst attacking convey south of Orfordness. Free French pilot of coastal command fired cannon shells into E boat off Gris Nes and left her in flames. S. Mediterrenean. P.M. August 2nd, force of 20 - 30 J.U. 87's, ME 109's attacked two destroyers running supplies to Tobruk. Hurricanes shot down 5 enemy aircraft and probably two more, three hurricanes missing. 4. at Reggie Calabria. on August 3rd two Beaufighters attacked by thirty 20 aircraft with cannon and M.O. fire) claimed many d estroyed and severely damaged. 5. Night of August 3rd/4th. Aircraft sent to Hanover and Frankfurt railway centres. One missing. At Hanover large fires started and burst of one 4,000 pound bomb caused blackout of Flak and searchlights over approx- imately 2 square miles for more than five minutes. / 6. Russia. 337 6. Russian Fighting continues Velikie Luice. (half way between Lake Ilnen and Smolenak) and east and south of Smolensk. No progress towards Kiev but thrust south eastwards in Uman area continuing. 7. Tobruk. Night of August 1st/and one of our patrole located enemy minefield and removed 80 mines. 8. Axis oil tankers. It is estimated that during July enemy (including French) tankers sunk . claimed as total loss in Mediterranean and on West Atlantic coast amounted to about 60,000 tons. During these operations Azia must have lost in addition some 20,000 tons of oil. 33 BRITISH EMBASSY, WASHINGTON. August 4th, 1941. Personal ana 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, Halifex The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D. C. 339 Telegram from London dated August 2nd. 1. revel. During night of July 31st/August 1st "Heori" bombarded seeplane slipway and buildings Porte Conte Sardinia. "Cessack" fired star shells over Alghere while nine Swordfish attacked aerodrome. 2. Naval. Night of August let and 2nd two British ships bombed off Sunderland. Both reached harbour under own steam. One British ship 4,000 tons bombed and sunk off Blyth. 3. Shipping losses for last week greater than previous week, but still below average. 4. on August let three Blenheims attacked tasker about 1,500 tone, a freighter and auxiliary ship off Ostend. Tanker set on fire and left sinking. Night of July 31st/ August 1st one 5,000 ton merchant vessel in convey off Pentell aria believed hit by torpedo when 5 Swordfish attacked. One July 24th British submarine sank 6,000 tons ledon merchant vessel assorted by one destroyer off Trapani. 5. Night of July 31st/August 1st 6 aircraft attacked Malta. Damage elight. 6. Tobrak. July 31st. successful patrol activity. Some damage and several casualties from bombing. 7. Frontier. Evening of July 31st shelling forced our forward patrol to withdraw. 8. quants. Fierce fighting all fronts. Some German progress in Estomia and on the Ukraine-essarabien front. Finne estimate own essubities 15,000 and German minimum 6,000 in extreme north of and near sells. Finns claim capture of Olonets and advence towards Petrosavodak. Further German advance towards Tellins reported. No advance towards Lenisgrad from Southwest, smolensk sector, no German advence. situation confused but Germans probably retain initiative. Southern front, Germans probably neering Dnieper River 60 miles south of Kieff. 340 BRITISH EMBASSY, WASHINGTON, D.C. July 31st 1941. 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, Halifex The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 341 TELEGRAM FROM LONDON DATED JULY soch 1241. 1. NAVAL. Two attacks made on outward bound convey west of spain. Four small morehant ships have been sunk in a attacks, , are unaccounted for but are not overdue. German claim is grosely exaggerates. B. Enemy air attack on east eoast convey night of July 29th/30th resulted in 1 British ship of 2,671 tons bombed and sunk off Tyme. 5. ROYAL AIR FORCE. Bad weather outsilled Royal Air Force operations. 4. on July 28th, B Beaufighters attacked 4 aerodromes in sieily a on each target. 54 aire craft believed destroyed, in addition number were damaged. 5. MILITARY. Ruenia. Confused situation Smolenak area. Germa progress east and alleged mopping up operations east of Smolensk meeting fieree resistance. Possible that Germans forced on the defensive here some sectors. Some Germate progress east of Megiler but Russians attacking towards Regacher. In the Ukraine Germans advancing half. way between Kiev and odesse against vigorous resistance. Further south the Germans are across the Daiester almost down to Tiraspol. German ensualties certainly heavy but no estimation possible at present. 342 BRITISH EMBASSY, WASHINGTON, D.C. 4th August, 1941 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, Halifex The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 343 TELEORAN RECEIVED FROM LONDON AUGUST 187, 1941 NAVAL In addition to losses previously reported one Dutch ship, one British ship both medium sim and one unknown ship were torpedoed in outward bound convey attacked west of Spain. In operations by Naval Aircraft against Petsano and 2. Kirkenes on July 30th 4 enemy aircraft destroyed certainly, two probably. A shadowing aircraft destroyed on the following day. 3. German attempts to mobilise shipping of occupied countries being seriously impeded by shortage of skilled personal. some small French vessels seised at the time of occupation being handed back to French. Release of 10,000 prisoners of war, French naval officers and retings may be intended to relieve pressure in manning French mercantile marine. 4. Weather again prevented operations by the Royal Ats Force. Night of July SisteAugust 1st. Emery activity over the United Kingdom still very slight. on July 30th German aircraft carried out complete reconneissance of Iceland. 5. SYRIA All Vichy French artillery and fixed defenses also most of machine gine and mortars now in our possession. We are occupying chief assimition depota and other ammunition in possession of troops is being handed over satisfactorily. 6. TOBRUK Water supply maffected by damage reported in telegram of,July,31st. 7. KUZBA July we established patrole as Biller / (Lee siles worth week of Rafra) and Samurbo (80 miles further West). s. RUBSTA No change reported. I 344 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE August 7, 1941 Secretary Morgenthau TO Mr. Kamarok FROM Subject: Monthly Report: Royal Air Force Bombing Activity in July, 1941 Comment 1. The all-out level of R.A.F. bombing activity 18 indicated by the number of bombers lost in July - 132. This probably represents a fourth or a fifth of the total British first-line bomber strength in Western Europe at the beginning of July. 2. The R.A.F. has resumed bombing of Italian targets. In addition to three raids on Naples, a number of raids on widely scattered towns in Sicily and southern Italy were undertaken. These attacks originate from the base at Malta which has recently received bomber reinforcements. 1. Losses Total Losses Losses during July R.A.F. bomber losses in bombing raids in northern Europe 2. Analysis of Targets Industrial plants Airdromes and seaplane bases Oil refineries, synthetic oil plants and tank farms Total of above August 1 878 132 Total Number Attacks during July Ports, docks, shipping in Raids to of Attacks to August 1 80 1,094 73 781 19 748 345 6 178 2,968 345 -23. Leading Cities Attacked Division of Monetary Research Total Number Attacks during July of Attacks to August 1 A. Germany Cologne (industrial center) Bremen (port) Hamburg (port) Emien (port) Wilhelmshaven (port) Kiel (port) Mannheim (industrial center) Berlin (industrial center) Gelsenkirchen (synthetic oil) Essen (industrial center) Hanover (synthetic oil) Total of Above (11 Cities) 80 e5 75 73 2 54 3 52 2 46 1 4 46 1 44 43 O 39 1 38 3 590 27 B. Occupied Areas Boulogne (port) Ostend (port) Breat (port) Calais (port) Flushing (port) Lorient (port) 96 4 74 7 70 5 70 1 63 0 49 1 422 18 Total of Above (6 Cities) C. Italy Naples (port) Turin (industrial center) Total of Above (2 Cities) 12 3 11 0 23 3 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION All 346 DATE August 8, 1941 Secretary Morgenthau FROM Mr. Kamarok Subject: Weekly Military Report: Some Aspects of the War While the actual fighting in the Russo-German War deservedly 18 receiving most attention, there are certain repercussions outside of Eastern Europe of the War which are of importance. 1. The German campaign against Russia has already taken 80 long and used up so much of the German manpower and material that a successful invasion of England is no longer a likely possibility this year. 2. It is fairly certain that the British will not lose the Battle of the Atlantic. The growing participation of the United States in the war with the rapidly increasing volume of American shipbuilding can be reasonably counted on as a guarantee of ultimate British success in this battle. The Germans, I believe, also recognized this after the failure of the Bismarck. The invasion of Russia is a clear indication of the Nazi conolusion that they were not winning the Battle of the Atlantic. 3. While the German Air Force is busy fighting in Russia, Great Britain has been able to regain control of the Central Mediterranean. In the latter part of the winter, the German Air Force based on Sicily was able to interdict the flow of British supplies through the middle part of the Mediterranean Sea. With the withdrawal of the German planes, the British have again been able to send convoys from Gibraltar to Suez through the Mediterranean. 4. The preoccupation of the Nazis with Russia enabled England successfully to complete her conquest of Syria. The immediate danger to Suez from Asia Minor, which was so acute after the Nazi conquest of Crete, has thus been overcome. In addition, Suez has been provided with another strip of buffer territory against future attacks. 5. England, now, has been free from any large-scale bombing attacks for almost three months (since May 15). The resulting increase in production and improvement in morale must be of significant help to the British war effort. 347 -2- Division of Monetary Research 6. Japan has become, at least temporarily, very vulnerable to American and British pressure. Japan has been isolated from any possible aid from her European partners. At the same time, both England and the United States have their hands comparatively free to deal with Japan, if they so choose. 348 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE August 9, 1941 Secretary Morgenthau Mr. Kamarok FROM Subject: Summary of Military Reports Russo-German War The Russian High Command expects gradually mounting pressure on the Kiev and Leningrad fronts as the Smolensk area quiets down. The Germans are slowly being forced on the defensive around Smolensk where they are starting to entrench. There is fierce fighting on the Kiev sector and the Red Army has fallen back a short distance at two points. The retirement, however, is well contained and the Germans are losing great numbers of men. According to trustworthy sources the Russians expect Odessa and Nikolaev (town somewhat to the east of Odessa) to fall before encircling axis forces. The Russians are evacuating the defending garrisons from these cities to the Crimea. The Red Air Force has been scoring effectively against enemy ground forces in the Leningrad area where the Germans, receiving reinforcements, are increasing pressure. The situation has not passed beyond Russian control, however. Up to August 1, the Germans are estimated to have had 750,000 casualties. (London, Military Attache, August 6) Far East British Military Intelligence estimates that most of the 500,000 reservists and new troops called up in Japan during June and July have now been transferred to Korea and Manchukuo to man the new formations possibly being organized there. The present strength of Nipponese troops there, less the recent arrivals, is believed to be 15 divisions (1.e., 300,000 men, with arrivals men).200,000 Reports further indicate themaking mobilizing a of another Japsfrom the older classes for servicing of the rear army installations. the new total of 800,000 (London, Military Attache, August 5) 349 -2- Division of Monetary Research (The Russians probably have 500,000 to 750,000 soldiers in the Far East. The Japanese reinforcements are probably to take advantage of any opportunity to invade Siberia in the case of a German victory. In any case, the Japanese are effectively aiding the Germans by tying down the large bodies of Russian troops in Siberia which are needed on the German front.) Spain Food and fuel supplies are being built up in Spanish Morocco. Around Tarifa, (on the Spanish side of the Strait of Gibraltar). a submarine and mosquito fleet base is being built. Munitions and sundry other materials of war are being carried out of the Balearic Islands to the Canaries, Spain proper and Morocco. (London, Military Attache, August 5) (It appears that Spain is making preparations for entering the war.) German Battle Cruisers The Scharnhorst has received hits on her bridge and starboard propeller shaft, according to the Air Ministry, and will probably not be fit for action within six weeks. The battle cruiser is in drydock at Breat. (London, Military Attache, August 5) Use of American Planes During daylight of August 2, Kiel was bombed by two B-17's from 32,000 feet. Four 1,100 pound bombs were dropped near the docks in the southern end of the city. Another B-17 attacked Bremen from 32,000 feet dropping eleven 100 pound bombs. Slight damage was done to this aircraft during an attack by two Me-109's at 22,000 feet, 25 miles north of Cromer (on the British coast south of Hull). Results of the raids were unobserved. (London, Military Attache, August 3) 350 SECRET By authority As & of 8., G-2 of -Sale / as come, I 6 2041. Date AUG 7 1941, BPH, Initials .) I filed 15:00, I 6, m. 1. - - - the mer - - - as the - with in looked - w the I mTO IBet leave has fallen beek a share distribue as - potate as Stores signing stire the Eter - - - retirement is well - - the are testing was - of e. Requebing / - Etheleen to sell before enstrating bets forest, the - - describing - from these essics to the Origna, according to - which also - of - falling into - I 3. Further Information from the - states that the Red six - I I morning attentively - - / - a the Imingred - where the - - - - adding pressure. the attenbios I - 1 bigent I central, I Mony the definative is being Street - - I - they - starting to - 4. Pignes - - - committee to August Limited 790,600. - of - Distributions Shief of muss, as the Plane office of Boral Shief of Staff - of think of the I Ate Person Mater of Assistance must of Staff, as SECRET INFORMATION COPY CONFIDENTIAL 351 Paraphrese of Code Received at the Was Department at 10:52, August 5, 2941. Lesson, filed 16:10, August 5, 1951. 1. British Military Intelligence estimates this date that meet of the 500,000 neervists and new troope called w in Jegan during June and July (as reported in - dispatch of August 3) are now transferred to Korea and Manchakue to - the now formations possibly being organised there. The present strength of Hippenese troops there, loss the recent arrivals, 10 believed to be 25 divisions. Reporte further indicate the mobilising of another 200,000 Jage from the older classes for duty with service of the year installations. 2. The situation is unchanged in the Likyan theatre. 3. The assembling of food and fuel supplies observed in Speaish Marcooo was contained in the report of a generally trustwertly searee which further sold of activity around Taxifa in the building of a submits mequite floor base. The report liberine ergeito of and emailing other materials of mar being carried out of the Baloarie Islands to the Camaries, Spata proger, and Marcooo. 4. With the exception of - gains south of Kior in a yush outboast through the I sector, more is lacking of - / healthy against Reseia. Reports reach British Military Intelligence of continuous fighting northeast of Nevel around Velikiye Laki and of the paranged action east and south of Smalenak. IN Distribution: Secretary of War, A. 0. of s., G-8; State Departments MPD, CHI; G.H.G., Chief of Staff: Chief of Away Air Forces; Waler Secretary of Mary Segretary of Treasury A. 0. of 2., as. CONFIDENTIAL INFORMATION COPY 352 CONFIDENTIAL Paraphrase of a Code Cablegram Received at the War Department at 6:03, August 5, 1941. N/A London, filed August 5, 1941. London, fileds August 5, 1941. 1. British Air Activity ever the Continent. Night of August 3-4. The following numbers of tens of a. high explosive bonbs and numbers of incendiaries were dropped upon the objectives named: Freakfort, 25 and 2600; Calais, 8 and 600, and Hanover, 26 and 3600. b. Day of August 4. A total of 336 fighters were employed as follows, 71 on interception patrols, 177 in the protection of shipping, 23 on special patrols, and 65 on offensive missions. Unfavorable weather again prevented any bombing operations. 2. Germa Air Activity ever Britain. a. Day of August 3. Tea reconnaissance aircraft, 15 long range bembers were employed. b. Hight of August 3-4. 10 reconnaissance aircraft, 15 fighters and 15 long range bombers were used. 3. Aircraft Lesses Reported. a. British lesses. On August 4, one Hurricane and pilot were lost. b. Axis lesses. No lesses were reported for August 4. 4. British Air Activity, Other Theaters. a. North African Theater. The airdrome at Benghasi was attacked by 18 Wellington bombers during the night of August 2-3. CONFIDENTIAL INFORMATION COPY 353 CONFIDENTIAL Benghasi harber was mind by 5 Wellingtone. 5. Axis Air Activity, Other Theaters. a. Middle Basters Theater. Sues was attacked without serious results by 10 Axis aircraft the night of August S-s. The Scharnherst has received hite on her bridge and starbeard propeller shaft, according to a report obtained by the Air Ministry, and will probably not be fit for action within six weeks. This vessel is in the drydook at Brest. LEE Distributions State Department Assistant Chief of Staff, G-2 War Plans Division Office of Naval Intelligence G. H. Q. Chief of the Army Air Forces Secretary of Treasury Assistant Secretary of War for Air Air Gorps Assistant Chief of Staff, G-3 CONFIDENTIAL INFORMATION COPY 354 CONFIDENTIAL Paraphrase of Code Cablegram Received at the War Department at 12,57, August 3, 1961. Lender, filed 19:30, August s, 1961. 1. British Air Activity ever the Certificate a. Day of America A total of see fighters were dispotated as follows: as on interception patrole, 36 - interception jatrula, 17 on special patrols and 190 in the protection of shipping. not was boubed by 2 3-17's from sance fest. These aircraft dropped four 1200 pound bones near the docks in the worthern end of the city. Another B-17 attached I from 88000 feet, dropping eleven 100 pound slight was done to this aircraft during - attack w 8 200-200's at 22,000 foot, 25 miles north of Greener. The results of neither of these raids were served. One patrol vessel was seek during an attack - shipping in the areas of Charbours, Tunel and Ameland by 27 Membein b Right of August 3.2g A total of see bombers were its patched as follows: so to the shippards at No1, 80 to the railany yaris at so to the Cherbourg dealer, 48 to Barlin, and 6 - sea mining missions off Kial. 2. General Mr Activity over Britzin, a. Day of Accept 1 Niner damage was - to shipping in attack by 10 recommissence aircraft and 5 long range bembers. be Night of Ampust John A small I of d was done to shipping around the coasts of England by 15 long range bembers. No opera- time over England were reported. 3. Aircraft Lesses Reported. CONFIDENTIAL INFORMATION COPY CONFIDENTIAL 355 a. British Lesses. During the day of August 2, one spitfire, the pilot of which was caved, was shot down. Seven bembers were reported, 8 bembers were foreed down at sea and s bombers entached in England after returning from their missions. Another bember was lost due to anti-aireraft fire. b. Axis Lessee. On August 2, British fighters destroyed a Ju-ss's. One of the 10-109's attacking the B-1718, as mentioned, was d 4. British Air Activity Other Theaters. a North African Theater, Benghast harber was attacked by 5 Wellingtons from Malta the night of July 33-August 1, with the less of bember. The redulta of this raid were not assertained. A Blenhein bember operated by the Free French Forces jossieaned its blue over Assass when attacked by 2 which are Italian fighters. One of the attachers was damaged. One Blenheim was lost when three of these aircraft attached shipping off the east of Bicily. During this attack three vessels were his. 5. Axis Air Activity, Other Theaters, a North African Theater, - houses were destroyed and a few civilian cannities occurred as Alemedria during an attack by nine Jo-88's. LEE Distributions State Department Assistant Chief of staff, as War Plans Division Office of Maral Intelligence a. H. Q. Chief of the Army Air Forces Secretary of Treasury of Air Assistant Secretary War for Assistant Chief of Staff, as Air Carpa CONFIDENTIAL 356 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE August 15, 1941 TO FROM Secretary Morgenthau Mr. Kamarok Subject: Progress of the Russo-German War 1. Comparing the situation today with that of three weeks ago as shown on the appended maps, it is obvious that the Nazis have made only minor gains on the Finnish, Leningrad and Moscow fronts. On the Ukrainian front, the map today shows the Germans as having accomplished a major advance in the central and southern Ukraine. But where three weeks ago Kiev appeared to be on the verge of falling to the German Army, today Odessa is dangerously threatened. 2. Colonel Fortier (formerly Military Attache in Yugoslavia, Acting Situations Officer, M.I.D.) believes that the Russian situation in the Ukraine is becoming more critical, 80 far as can be ascertained. From the information available, the Russians seem to be giving way. Their withdrawal, however, is being wellexecuted and in good order. There does not appear to be a slicing up of Russian armies and piecemeal annihilation similar to that which occurred to the armies of the other German enemies. The Russians are retreating but in a solid front. 3. Colonel Guenther (Eastern European and Russian Section, M.I.D.) is of the opinion that the situation looks very dark for the Russians. He believes that in the next six weeks the Germans will take Odessa and push on eastward as far as the Volga (1.e., as far as the Caucasus Mountains). In the north, the Germans and Finna will encircle Leningrad and 80 neutralize the troops in that city. In the center towards Moscow, the Germans will probably make some further progress but will not take the city -- partly (This statement is particularly interesting in view of our Army's opinion at the start of the war that the offensive towards because they do not want to take the city before next spring. Moscow was the main German thrust. Also, according to most information, the largest numbers of German armies and panzer divisions were concentrated in this sector.) 357 -2- Division of Monetary Research Having achieved these goals, reaching the Volga and encircling Leningrad, the Germans will either attempt to make peace with the Russian Government or stabilize the front until Spring. During their attention British out Then, take War by the Mediterranean the winter the and Germans try to will drive direct the completely. again to the in the spring of 1942, the German Army will turn again Russia, (The and end the Russian smashing on very of the RedMoscow Army. foregoing estimate, although statedrest to be dark for the Russians, actually is the most optimistic picture Colonel Guenther has yet had of the situation. Several weeks ago he believed that any aid to the Russians which did not arrive very soon would arrive too late.) 4. Colonel Guenther stated that one curious recent development is the absence of indications of any intense German air activity on the Russian front. The relative German air inactivity, he said, a 18 corroborated a German news agency, D.N.B. According to the New York Times, may be due to a lack of planes, pilots, or a of gasoline. (In way, this statement by shortage dispatch from the August 14, D.N.B. asserted that, In the past four nights German planes had dropped 60, 35, 70 and 40 tons respectively of explosive bombs on the Russian capital." This is to be compared with the 300 to 400 tons of bombs a night which were dropped on London at the height of the bombing. The R.A.F. now makes peak raids which drop 200-250 tons of explosive on German cities and averages around 130 tone of bombs a night. Perhaps the Russian claims of extensive damage to the German Air Force are reasonably reliable.) 5. In view of the continual German claims that Operations are proceeding according to plan" in the Russian War, it might be of interest to recall the comment made by one of the great German chiefs of staff, the elder Moltke: "No war plan extends beyond the first military engagement with the hostile main forces. Only the layman believes that the course of the campaign has followed a predetermined course, which has been planned in detail far in advance, and has been clung to tenaciously to the bitter end." 358 M.I.D. W.D. Alexandrovsk Murmansk SITUATION RUSSO-GERMAN JULY 23 A.M. LEGEND Kandaleksha Front Line Germans Russians Bombings 00 Direction of Attack Front Line,July 22 I 1 Scale 1 inch . 100 miles Tulivers 1 Petrozavoask Sortevela trates Pifkaranta Loke Kexholmp Vologda Ladosa Vipuri Malginki Leningrad Voroshilov HS FLUE O'rallin Noveared ESTONIA Yardslavi Ostror LAT WI a ORIGO Moscow ONewal A DVIAIR e 18 Anmy BITTER Relotek 1/A Army LEEP Smelensk ULT HUANIA Vitebak Lepel OVilna 2 Corsha Barise Army Group (9 Army BOCK (4.Army Babruisk WHITE RUSS Parget Regacher Timoshan Gamel Dellystok RUNDSTEDT pripyet 6 Armz 17 APRU O Lublin Luck O counsed sterring 1I 3 Army Group Raddmyal Us OF Cherkassy E Lvova Svenigerodka K U/S Office ELOVAKIA Budyenny mest Army Group lev.Podolski 11 Army ANTONESCU U N G A Chisina R Please RESTRICTED - M.I.D. W.D. RISSO-GERMAN SITUATION 11 Murmansk A.M. 15 AUG LEGEND Front Line Sermane @kandalaksha 00 Russians Bombings Enis Uhtua Direction of Attack 1 Front Line, Aug.H NWFren Scale:finch: 100miles Offilivars Woroshile S Armie F Vetroravodzk Sortavala One Army Pitkaranta Woyda THNIA Loningrad. 200D and ESTONIA 0 TaHin e Overyong Valdai Hills xxxx Handya E Kursa Ya Cholm Two Armies One Pancer LATVIA Moscom Bely, Army Marma FIMEMENT Yartseve LITHUANIA Smolensk 7 AIMMIES Vitabile Partar/92 Minsk Three Armies dBryansk o Two Panzer Armies xxxx Game pripyat BUDENNY Teams 4 Three Armies Koresten One Panser Army and 2 Retachments M x @Cherkassy Hyployer LOVAKIA Dreads Two Armies G R FORM Umara 360 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE August 28, 1941 Secretary Morgenthau TO Mr. Kamarok FROM Developments in the War Subject: A. Situation Report The Finne have advanced a few miles on the Karelian Isthmus, but in essence there have been no substantial changes on the Finnish front for a number of weeks. The Nazis have made some progress southeast of Leningrad, (1), and are supposed to have out the direct Leningrad-Moscow railroad. (This, I believe, overstates the German advance.) On the Central front there have been no recent changes. However, compared to two weeks ago the Germans have widened the lower half of the Smolensk salient and are now close to Bryansk. Northeast of Kiev, (2), a Nazi armored column is believed to have thrust through the Russian lines which have closed behind it. A Russian counter-offensive is underway against this column. In the south, the Ruesians are holding the river line of the Dnieper. B. Summary of Important Military Reports The R.A.F.'s greatest effort has been to try to force the Germans to withdraw their fighters from the Russian front. The day fighter sweeps have not been successful in relieving German fighter pressure on the Russian front. (London, Military Attache, August 14, 1941) 361 -2- Division of Monetary Research (This judgment of our London military attache is most important. For a brief period in early July it looked as though the British had forced the Germans to return some of their fighters from the Russian front. The reluctant conclu- sion that the R.A.F. has not been able to give any immediate assistance to the Russians explains in large part the continued ability of the Germane to advance. ) The Soviet withdrawal in the Ukraine has been orderly. Supply services are working well and morale is most satisfactory. (U.K. Embassy, London Telegram, August 17, 1941) The British Air Ministry states that some units of the German Air Force have been withdrawn from the Russian front to Central Germany for overhaul or to provide rest for the crews. (London, Military Attache, August 18, 1941) a TION 28 AUG. Z One Group Aug.27 SCALE NW Front Vorestulor GULF Armies BUTHENIA Divs one Army GULF XXXX- West wo Armies (Limoshic Panzer Army Armies wo Painzer Armies xxxxThree Armies am Famer Army and Detachments 2 Budye Two Armies 3 363 TREASURY DEPARTMENT INTER-OFFICE COMMUNICATION DATE September 2, 1941 Secretary Morgenthau TO FROM Subject: Mr. Kamarck Summary of Military Reports Use of American Planes An engagement took place off the Egyptian coast between 45 axis planes and a number (unstated) of P-40's. One P-40 was shot down but its pilot was saved. One Me-110 was shot down, four more probably destroyed and eight damaged. (London, Military Attache, August 24, 1941) Three Flying Fortresses were dispatched to attack Dusseldorf during daylight of August 21. However, icing conditions and mechanical difficulties caused the abandonment of the mission. (London, Military Attache, August 22, 1941) R.A.F. Strength in Middle East On August 1, 1941, the R.A.F. had almost 1,300 planes in the Middle East. of these, about 50 percent or 680 were modern serviceable planes. Of the others, 100 were obsolete and the rest in depot undergoing repairs, overhaul, etc. (This is to be compared to the situation on April 25 of this year when the R.A.F. had a total of 500 planes in the Middle East. Since almost half of the se were obsolete and others were undergoing overhaul or repair, the British probably could not put more than 175 planes into the air against axis forces.) The R.A.F. plans to increase the number of squadrons in Egypt by 50 percent (from 40 to 60) by January 1, 1942. 364 -2- Division of Monetary Research Distribution Squadrone Total Number of Planes Egypt, Palestine Bombers Fighters Other types 442 495 17 21 2 940 40 Malta Bombers Fighters 19 2 73 6 92 8 Sudan (obsolete) 83 5 27 Aden (obsolete) 51 Iraq (obsolete) (others) 101 my 152 8 Grand Total 61 1,294 (Cairo, Military Attache, August 15, 1941) Russo-German War The Russian bombing attacks on the Romanian oil fields carried out by the Russian Naval Air Force use, on the average, about 40 medium bombers each carrying half a ton of bombs. The British Air Ministry believes that the morale of the Russian Fleet and its Air Arm in the Black Sea area is good. (London, Military Attache, August 12, 1941) / 365 CONFIDENTIAL Purpose of Code Cablegram Received as the War Department as 8.44 a.m., August 24, 1941. fileds Ingust 24, 1:55 Damo, 1941. 1. Mr Activity over the Continuent. any a. of During the operations of this night 78 - of m, 96 large incentiaries and $300 small in centiaries were dropped on Members. on 30 Name - drapped 32 team of . and 2200 incentiaries. Security suggests n reived 18 tess of m, 48 large incentlaries and 900 mail in conditions b. Date of Amount 23. I of bad weather m benefits were A total of 233 fighters were employed as follows % on interesption patrols, 334 in the protection of shipping, 14 on special operations and 7 in offensive missions. 2. I Air Activity a. Day of Issue 22. 25 recommissence aircraft and 10 long range were w n 23-31. 10 fighters and 25 long reage because - explayed. e. Defensive patrols were maintained in the area of Calais. Small seale shipping also took place off - east coast of Britain. d. A few mide were made between the Firth of Forth and Standaren. Small seals operations also occured off the north east coast of Britain. 3. I Reported. a. Name reported. CONFIDENTIAL 366 CONFIDENTIAL 4. Mr. a. made - State, on the / . - House separated. / took place between appreciately is I streets and - university - of - - - shot - I its pilot - I Into I - 1 20-320 that - 4 No-330°C destroyed - a I the Hopits is as Mall, assenting to serial / - of that part - Ingust n. a . ⑉444 the I Mr Forces I (a) (a) Section Brench w - Pite N. A.G.C -a- CONFIDENTIAL CONFIDENTIAL 367 Response of date as the - as 1040 Ingust m, 2042. I fileds 5mm pallo, I m, ma. 1. MANA Mr - the a. - the A total of - fighters - explane as Salieves m on Internation principal M in the protection of shipping, . - agental missions, - w - offenative statement. Ising conditions and - - , 9-29's which and I / to attack I to / mission so the directed - as - - 18 Membelse w fighter 1 s of these attending, w the - with of - sold - - chearved. - direct hite distued dating - stick from - electric of 90 Seas - the stool - as / w 22 Members with Signature protection w M of I ASS - - / I of - weather. a. - My Antializ - - a. - CLASS as - alowen and s long sunge - - - w 5 Signature - 25 long - benhaire - 1 e. Inforative agen patrette - - taked in - - of state. I of weather and shipping we covered - off Best legite. is Herbite and I 2 - aircraft appeared saland. a. any 2 streets - - CONFIDENTIAL 368 CONFIDENTIAL these - reported as mediathange and / 3. Marath I - a. - During the w of Ingust n 36 w five and 23 pilote - Best - a / - n business - last the sight of Ingust n-m. w I Per the - of August no these - as Selleves 2 - also - , ware and q - I destroyed and s - - 2 - - Darking to / of mm, British sign - what - - 4. - Statements a. Made - - Date - dropped - Insuits - Part Bold daving - attack - - w s Into admin - - of Ingust - a report of - - I - - I.E. # 7 saw, 4/22/12 I the Any Mr Person I I (a) A.S.N.A. of - Fite Collection Section 3.8. ia CONFIDENTIAL 369 SECRET By authority of A.O. of S., G-2 Date Initials. Perepheness Received as the of - Code # as 6.96 Bello, Ingust 26, 2042. caire, filed 11.00 Ingust 25, 2041. 2. the following information is for the Mr Garges the - bor of questional - of the Regal Mr Term in the made met had boom Increased to 40 w August 2, 1943. n is proposed to further increase this - to 6 w I 200, 1942. the sellering is the - depositions of - a with the National Secure and Patertimes , - of Members, so strent service and 116 in depoty 1 - of - 22 service and 2 is 34 - of Serious, - able and 106 in dispute 5 / of as corvice 98 in engine 4 - of M TO service and on in disposes s - of Wellingtone, " - and 15 in a -- ofof I 12 , in 1 1 s service and - in exports 2 - of with / s in depety - 2 - of of the old - - a , service and - in deposit 2 - completed sirweft in a service / - 2 in the reports deposit. 2. the - of street closed as service and that of those - supple to the - as separates. Dating the week enting I our, = - - from take the made Seat or evected h 3. the stuction in other - is as Milka a Street class - of Harrison with 16 please, 2 SECRET A.S. 0-2 of 370 - SECRET - of - alass Device with n / 1 - of Wellington with 13 I 2 - of with 2$ please, 1 - of I with s - - 1 / of Invoice with s pleases - s - - a Parent and leving in all . element of destate - - 27 - destate sirwers, m a - and a / I loving in all 1st aircraft, all of which - destate - 4 - of - loving a please, and 1 / of Device leving 24 please. I State CLC - and Please of Oblet I Motion of Inhallignee staff, be (a) Record Sociales / of the - Mr Peress NEW of 4.0.00 of SECRET 371 CONFIDENTIAL Paraphrase of Code Cablegram Received at the War Department at 18:51, August 12. 1941. London, filed 19:00, August 12, 1941. 1. British Mr Activity ever the Continent. a. Day of August 11. A total of 174 fighters were exployed as follows: 36 on interception patrols, 126 in the protection of shipping, 2 on special missions, and 10 on offensive patrole. b. Night of August 11-11. During the night 98 bembers were dispatched as follows: 29 to the railway station at Khoyit, 35 to the dooks at Retterdan, 1 to the Antwory deeks, and 29 to the railway center at Krefeld. Am attack on airfields in occupied France was also made by , Havees. 2. German Air Activity over Britain. a. Day of August 10. 10 recommissence aircraft and 5 long range bembers were used. s) Right of August 10-11. 5 recommissence aircraft, 5 fighters and 10 long range bambers were dispatched. e. Day of August 11. Recommissance of shipping at sea occurred on a small seals. No many aircraft flow ever Britain, d. Night of August 11-18. A single aircraft operated against shipping off the east coast of Britain. 3. Aircraft Lessee Reported. a. British lesses. No lesses occurred during the day of August 11. During the night of August 11-18 and Havee was lost. b. Axis lesses. None reported CONFIDENTIAL INFORMATION COPY 372 CONFIDENTIAL 4. Axis Air Activity, Other Theaters. a Middle Hasters Theater. Airdrence south of Immilia and Bues were attacked by so Amis aircraft during the night of August 9-20. Only a small amount of damage resulted from this vaid. The Russian Fleet Air Arm employed about 40 medium because each carrying a board lead of 1000 pounds, in the attacks - the Immentation oil fields, according to information obtained by the British Air Ministry. This source also believes that the Passions will make a vigorous stand at Odessa, also that the marale of the Bussian Floot and its Air Are in the Blask Sea area is good. LESS Distributions State Department Assistant Chief of Staff, G-2 War Plans Division office of Naval Intelligence G. H. a. Chief of the Anny Air Foress Secretary of Treasury Assistant Secretary of War for Air Assistant Chief of Staff, G-5 Air Corps CONFIDENTIAL 373 AM TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE September 3, 1941 TO Secretary Morgenthau FROM Mr. Kamarok Subject: Monthly Report: Royal Air Force Bombing Activity in August, 1941 Comment 1. The numbers of bombers lost monthly by the R.A.F. in its raids over northwest Europe have been increasing. This is shown in the following table: R.A.F. bomber losses over northwest Europe Average monthly losses - May 1, 1940-May 1, 1941 May, 1941 June, 1941 July, 1941 August, 1941 50 64 82 132 142 2. The attacks on the German battle oruisers at Brest provide an indication of the relative value of daylight and night raids. During August the R.A.F. made one daylight raid on Brest and the results of this were apparently sufficient to keep the battle cruisers out of action. In preceding months, to achieve the same end, the R.A.F. had to make four to five night raids a month. 3. Most of the British daylight raids are carried out by Blenheim bombers. These bombers are regarded as obsolete and are apparently being expended in this way. 374 2- Division of Monetary Research Total Losses 1. Losses Losses during September 1 August R.A.F. bomber losses in bombing raids in 142 northern Europe 2. Analysis of Targets Industrial plants Airdromes and seaplane bases of Attacks to September 1 64 1,158 56 30 837 778 3 348 Total of above Leading cities Attacked Total Number August 011 refineries, synthetic oil plants and tank farms 3. 1,020 Attacks during Ports, dooks, shipping in Raids to 3,121 153 Total Number Attacks during August of Attacks to September 1 A. Germany Cologne (industrial center) Bremen (port) Hamburg (port) Enden (port) Wilhelmshaven (port) Mannheim (industrial center) Kiel (port) Berlin (industrial center) Gelsenkirchen (synthetic oil) Essen (industrial center) Hanover (synthetic oil) 87 7 78 3 75 2 may 55 1 52 0 52 6 51 46 43 52 0 42 3 41 622 32 Total of Above (11 cities) B. Occupied Areas Boulogne (port) Ostend (port) Breat (port) Calais (port) Flushing (port) Lorient (port) Total of Above (6 Cities) 101 5 79 71 4F 71 1 0 63 0 49 12 434 375 - 3 Division of Monetary Research - C. Italy Total Number Attacks during August Naples (port) Turin (industrial center) Total of Above (2 Cities) of Attacks to September 1 0 12 0 11 0 23 M TREASURY DEPARTMENT 376 INTER OFFICE COMMUNICATION DATE September 4, 1941 TO FROM Secretary Morgenthau Mr. Kamarok Subject: Summary of Military Reports Use of American Planes During the day of August 31, a B-17 was dispatched to attack Kiel but abandoned its mission because of bad weather. Another B-17 attacked Bremen from an altitude of 35,000 feet. (This is the highest altitude reported for an attack by a B-17 yet.) The bombs burst in the heart of the city. A third B-17 was sent to Hamburg. Because of bad weather it could not attack its primary objective. In its attack on the secondary objective, its bombs fell into the sea. (London, Military Attache, September 1, 1941) Battle of the Atlantic Imports into Great Britain in convoy for the week ending August 23, totaled 1,373,683 tons. This is the highest weekly total for the past year. (U.K. Embassy, London Telegram, August 29, 1941) Spain Air reconnaissance over Germany on August 24 showed continued indications of a traffic trend southwards toward the Spanish frontier. Exceptional military activity was also seen. (It is not indicated whether the military activity was also directed toward the Spanish border.) (U.K. Embassy, London Telegram, August 30, 1941) (The Germans may be already beginning to make preparations for their winter campaign in the Mediterranean basin.) 377 CONFIDENTIAL of Sale College Reserved as the - 1. - as 1.00 Pillo, Superhouse 20 2943 Leasting filed 3.00 palley September 2, MM. a. - 8 - of ⑉ and 2000 incentlaries were dropped on b. with A total of ⑉ fighters as sollems 239 in the protection of shipping. n - Indernation potents, 9 - officetion stations and - special question. Members behave - explayed as selleres 6 signinest nother will 1 - n. - 22 against 3433o, s against the sintress at Institution, and s against the diggard as to Truit, share all have - seen to burnt - the okipage. & - degree to attack not but - the mission I of had weather. Danb basis were deserved in the have of I during - attack w mother B-89 as 35000 Sout. A think 9-37 was disputated to but attached its - dispositive because of had mother. Its base fall tate the - e. - A total of 204 become - dependent as adidas 10 to the return enter as n to I s to / as s to attack searchlighte - cologra, s - - sining off the Fristan Intents, s to the member of and the - and s to Imagesme. 2. - Mr NUMBER - Britale. a. with 35 - sirwaft and 5 20mg - behave were wood. . the strength consisted of 2 nighters CONFIDENTIAL CONFIDENTIAL 378 and 25 20mg range beckurs. a. Date of n No - - over Regiant. the strength of - - defensive in the datate ONE increased. d. e Hgt fighters quested over and that legita. questions against shipping took place in the - Returned and off Flamberough Hand, the Name Islands - Milfard I 3. MEMBER I a. - 2 system and pilete were Seat and , d - Inquired n. Beaker I during the night of August 1 were as follows Cologra sold, 4 seen, 2 created is Initials, 1 - at m and 1 shot - over Britain w a sight Signature sold, 1 Lesty and mis, 1 Seet. . Main Daving the day of August x these were as m I 1 no-100 shar - 2 no-sent's probably destroyed, - , I During the night of August 2, a British Instighter shot - a Do-327 over the - 4. Mr. America other Seature. a. - States 2 targoto hits - statued - a 1200 tea motor in - attack w 5 sirwaft from Malta. . Firse were started is the deek area of Tripuli as a revents of - I w , willington during which 15 tes of bate were drapped. - 9/2/42 CONFIDENTIAL 379 CONFIDENTIAL Mr Three Staff, be Pime office of (2) a. a. e. Section Intelligence -secretary of Transacty A.S.W.A. Section File Collection Socition D.S. list CONFIDENTIAL 380 THE BRITISH EMBASSY, WASHINGTON, D.C. PERSONAL AND September 2nd, 1941. SECRET. Dear Mr. Secretary, I enclose herein for your personal and secret information copies of the latest reports received from London on the military situation. Believe me, Dear Mr. Secretary, Very sincerely yours, R.I. Campbell The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 381 TELEGRAM FROM LONDON DATED AUGUST 29th 1942 British submerine reports sinking of laden 2,000 ton merchant ship off North West sicily on August 20th and obtaining two terpedo hits on Italian fleet oiler in same area on August 27th. H.M.S. Phoebe hit by aircraft torpodo north of Bardia Dome August 27th has returned to harbour 18 knots. H.M.S. Hawkins on arrival at Simonstown on August 26th had been 47 days at sea out of so. Imports into Great Britain in convey for week 2. ending August 23rd totalled 1,373,683 tons. Highest workly figure during past 12 months. August 96th. Blenheims with fighter aircraft made low-level attack on Betterdan dooks. Direct hite on one 3. merchant vessel of 8 to 10 thousand tons and on another of 8 thousand tons; other vessels and ships under construction attacked wi th unobserved results and one aircraft claimed direct hit on sheda in dooks. Heavy anti-sireraft opposition. 7 Blenheims, 5 fighters missing. Night August 28th-29th. 150 aircraft despatched 4. to targets including Duieburg railway centres and searchlights Ostend and Dankirk, 9 missing, at Duisburg concentration Flak and searchlights was the biggest experienced but good results obtained. Direct hite claimed on railway station and huge explosion close to it. very large fires also started. 5. Middle East. August 26th/87th. Light attacks by Wellingtons on Benghast harbour and by Marylands on tank concentrations 48 miles east of Tobruk. Fighters protecting shipping shot down 3 German fighters) one Hurricane missing. 6. August 27th/28th. Our torpedo bombers soored hit on 8,000 ton merchant vessel near Laspadus and on August 28th Blenhaims over Ionian Sea made 3 hits on 5,000 ton merchant vessel last seen stationary and down by the sterns 1 hit obtained on another ship. 382 TELEGRAN FROM LONDON DATED Denomica has arrived Gibreltar Phoebe has arrived in harbour. A British submarine seared a pescible hit on merchant ship in Nandri Channel Botto 25th. Also sust by gun fire on August 20th schooner with earge of oil. E.M.A.S. Yarra captured Italian merchant vessel Hilda 8,000 tone in the Persian Gulf August 27th fires started on board the Hilda were extinguished. She is being towed into harbour. During air raid on Sues Canal sone night of August 27th/20th only damage reported at ABU Sultan where ammition train hit. Sues Canal reported closed. Boyal Air Force August 99th. During day our fighters over Northern France destroyed 10 enemy fighters; we lost ten 2. Spitfires. August 89th/30th. Over 940 despatched to targets including Mannhais and Frankfurt. Five missing. Regults not JOB known. 3. German Air Force. as German aircraft operating, 15 crossed the coast. Majority mine laying or working against shipping off the East Coast. One destroyed by balloon cable and another probably destroyed by night fighters. Royal Air Force August 28th. 5 Blenheims attacked by two shipe previously reported west of sapiensa. Three hits obtained on one ship of 5,000 tones when last seen ship 4. stopped down by the storn. One bomb hit the other ship but the results not seen. No opposition. Believed ships probably Italian Ciliceis and Orion. P.M. August 87th at Tobruk during air raid by 40 dive bombers mine sweeper Skind and sunk. One aircraft shot down certain three probably. S. Germany. Air reconsistance August 94th shown traffic border area increasing. Marshalling sidings filled. Continued indication traffic trend southwards towards Spanish frontier. Exceptional activity of Military assessed. 383 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE September 5, 1941 TO FROM Secretary Morgenthau Mr. Kamarek Subject: Extracts from Military Journals on the War Recently there have been a number of articles on the war in the military journals which might be of interest. As far as possible I have attempted to extract the most important points of the articles for this compilation. The Russian Air Force Russian Air Power: The Strategic Plan (The Aeroplane, July 18, 1941) "Russian military and aeronautical journals have discussed (air strategy and taotics) in more detail than publications in any other country. "The basis of these discussions has been the no-called Preliminary Regulation' for the employment of the During air force 1937 in the field, published in the Spring of 1935 and 1938, long extracts from this Regulation were published by German military and aeronautical journals together with the comments of Russian experts. The curriculum of the German Air Warfare Academy contains a number of lectures on the Regulation, which was described as the first of its kind to lay down the principles for the use of the air weapon. "A survey of the German air operations of the present War suggests that most of them have been modelled on the Russian Regulation whether they were independent air force operations or collaboration with the ground forces. This is not surprising 1f one keeps in mind that most of the prominent Luftwaffe Generals learnt their first lessons in aerial warfare in Rus sis before 1933, when the German and Russian High Commands worked closely together on building up their armed forces. "The second part of the Regulation is the more interesting. The great battles of this War launched by the Germans seem to have been modelled on it; and examples of its operation are the breakthrough at Sedan and the German thrust towards the Channel ports. 383 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE September 5, 1941 TO FROM Secretary Morgenthau Mr. Kamarck Subject: Extracts from Military Journals on the War Recently there have been a number of articles on the war in the military journals which might be of interest. As far as possible I have attempted to extract the most important points of the articles for this compilation. The Russian Air Force Russian Air Power: The Strategic Plan (The Aeroplane, July 18, 1941) discussed "Russian military and aeronautical journals have (air strategy and tactics) in more detail than publications in any other country. "The basis of these discussions has been the so-called 'Preliminary Regulation' for the employment of theDuring air force 1937 in the field, published in the Spring of 1935 and 1938, long extracts from this Regulation were published by German military and aeronautical journals together with the comments of Russian experts. The curriculum of the German Air Warfare Academy contains a number of lectures on the Regulation, which was described as the first of its kind to lay down the principles for the use of the air weapon. 'A survey of the German air operations of the present War suggests that most of them have been modelled on the Russian Regulation whether they were independent air force operations or collaboration with the ground forces. This is not surprising if one keepe in mind that most of the prominent Luftwaffe Generals ... learnt their first lessons in aerial warfare in Russia before 1933, when the German and Russian High Commands worked closely together on building up their armed forces. "The second part of the Regulation is the more interesting. The great battles of this War launched by the Germans seem to have been modelled on it; and examples of its operation are the breakthrough at Sedan and the German thrust towards the Channel ports. 384 -2 Division of Monetary Research Had the Regulation been as thoroughly studied by the Allies as it was by the Germans, they might have learned how to use their defending forces against the Stuka-Panzer onslaught. The Russian Air Fleet (The Aeroplane, July 18, July 25, 1941) the Red Air Fleet is still in being and operating as an organized whole. That is the best tribute to its quality which can be given, for only the Royal Air Force of Great Britain has been able to exceed this performance. According to the most reliable of many unreliable estimates, the operational strength of the Red Air Fleet is around 8,000 'first line' aeroplanes, of which about 900 are seaplanes. The total strength is probably about five times this figure. "In the fighting so far two Russian types seem to have done well -- the I-18 fighter, which resembles the Spitfire, and the TB-6 four-motor bomber. The great L-760 six-motor bomber has also been reported in action. "The I-18 is a single-seat fighter -- a low-wing monoplane motor said to develop 1,100 h.p. The top speed is reported to be about 360 a.p.h. (about as fast as the Spitfire) with a single and the armament eight machine-guns in the wings. form "The TB-6 is a four-motor mid-wing monoplane. In its latest ... the top speed is quoted as 274 m.p.h. at 19,000 feet and the range 1,240 miles with 4, 400 1b. of bombs. (Maximum speed of the Flying Fortress is said to be 300 m.p.h., range 2,500 miles and maximum bomb load 8,000 lbs.) "The Red Air Fleet is trained in close support operations with the Russian mechanized land forces rather than in long-range strategic bombing. For that reason most of the newer Russian bombers approximate to the American 'attack bomber' formula instead of to the bigger four-motor types with which the Russian Air Force was predominantly equipped some years ago. "Maintenance on the ground is probably the weakest point in the organization of the Red Air Fleet. "Taken as a whole, the Red Air Fleet cannot be regarded as of high quality. However, it gained much operational experience in Spain and in Finland and has had a year in which to apply these latest lessons and to study the experiences of the War in France and over England." 385 -3- Division of Monetary Research Russian Tactics Editorial (The Fighting Forces, Britishhmilitary magazine, August, 1941) "In Poland and France the German Panzer divisions were followed up at comparatively short intervals by motorized divisions, and neither the panzer divisions nor the motorized infantry encountered unduly formidable opposition, certainly there was no tank opposition in either case worth speaking of. The Russians have been unable to prevent the panzer divisions from penetrating eastwards, in some cases for considerable distances, but they have concentrated on and counter-attacked the motorized German infantry and in any case have interposed large forces between the German forward elements and their infantry, and, in some cases, between the motorized infantry and the reserve forces. In fact, the Russian tactics of separating German tanks and infantry have definitely proved a source of embarrassment to the Germans "To summarize up to date one can say that the tactics employed by the Russians to meet the German attack have been absolutely correct, and reflect much credit on their General Staff." "Russian Achievements" by Major-General Sir Charles Gwynn (The Fortnightly, August 1941) "It is abundantly evident that in the first four weeks of the war both the Red Army and Air Force have proved themselves much more formidable than was expected, even by the most optimistic. "Yet the conditions were favorable (for the Germans). Striking, fully mobilized and deployed, at their selected moment, the Germans employed the element of surprise to quite as great an extent as in any of their previous campaigns of the war. Under the circumstances initial successes were inevitable, and the German war machine is specially designed to make these of a decisive character. In a few hours the Luftwaffe might have gone far towards establishing decisive air supremacy, and in a day or two panzer divisions might have disrupted the organization of ground defenses if defensive plans had not been skillfully made. Yet plans would have been unavailing if the morale of the troops and their leaders had been paralyzed by the suddenness and violence of the attack. The Germans admit it was the absence of this moral paralysis, which previous experience had led them to expect, that has delayed, if not upset, the development of their strategical plans." 386 Division of Monetary Research British Air Assistance to Russia "The War in the Air" (The Aeroplane, July 18, 1941) "Thus for a time the bulk of the German Air Force must remain in the East. Should too many squadrons be withdrawn while the Red Air Fleet remains formidable then there would be a serious risk of the Russians establishing a measure of air ascendancy, of smashing the German communications and so opening the way to a major disaster to the invading Germans. "That is where the present striking power of the R.A.F. may have a tremendous influence on the course of the whole campaign. For if the destruction caused in Germany can be made so serious that the threat has to be met quickly then the Russians have a chance to strike back effectively. The whole position hinges on whether Hitler correctly estimated the striking power of the R.A.F. when he withdrew his Air Fleets from France and began the new campaign." "Air Ministry Strategy" (Flight, August 7. 1941) "So far, one looks in vain for evidence that strategic bombing (British bombing of German industrial centers) has put any check on the operations of the German Army. There have been pauses in the invasion of Russia while the invaders reformed and refitted, patched up their tanks and brought up more supplies of fuel and ammunition, but these pauses were obviously due to the resistance of the Russian armies and their air contingents. Nothing suggests that they were due to damage done by British bombing operations against factories. Bombing of enemy production must certainly go on. It would be folly not to interfere with that production. But it is raising extravagant hopes to suggest that this single operation will bring us victory. Naval Warfare "The Bismarck" (The Fighting Forces, August, 1941) "Because of the happy ending to the chase of the Bismarck people are neglecting some important aspects of the chase. The explanations for the loss of the Hood are particularly bad. The explanations that it was due to a 'lucky hit' or that the Hood was an old ship are untenable. 387 -5. Divi sion of Monetary Research be avoided that the decisive shot that struck the Hood blew her up not because it was a lucky one but because the ship had not been given that degree of protection which reasonable foresight should have seen was necessary." "The conclusion cannot "It is true that the ship was old, but a full nineteen years had elapsed between her completion and the outbreak of war, during which there was clearly ample time to add to the protection of her magazines so as to make them proof against shells which were, in fact, no larger than those carried by the Hood herself. "It is indeed a remarkable thing, and one about which there has been surprisingly little comment, that despite the fact that the Bismarck was shelled into complete silence two of the most powerful battleships in the world, the King George V and Rodney, could not sink her by gun fire. She had previously been in gun action with the Hood and Prince of Wales. She was later under fire from the King George V and Rodney for about two hours, during which time probably over 1,000 rounds of 16-inch and 14-inch shells must have been fired at her, many of them from close range. Yet the torpedo had to be brought in to put her under water." "The War in the Air" (The Aeroplane, August 1, 1941) "In open waters the air-launched torpedo has proved to be a decisive influence in naval warfare. without adequate air support to repel the attacking torpedo aeroplane no warships can venture to sea within range of air attack." 388 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE September 5, 1941 TO FROM Subject: Secretary Morgenthau Mr. Kamarok Summary of Military Reports Iran The British and Russians are making the following demands on Iran. (See attached map) (a) The Russian Army is to occupy area 1. (Turkish frontier districts and northern terminus of Trans-Iranian Railroad) (b) The British Army is to occupy area 2. (011 fields and southern terminus of Trans-Iranian Railroad) (c) War supplies and munitions are to be freely transportable through Iran. (d) All Germans except a few technicians are to be deported within a week. (e) Iran is to maintain strict neutrality. (U.S. Military Intelligence, September 4, 1941) Use of American Planes During the day of September 2, three B-17's were sent out. The two dispatched to Hamburg and Duisberg abandoned their missions because of bad weather. The third B-17 attacked Bremen from 30,000 feet. There was no opposition by German fighters. One of the bombs dropped burst in the center of the city. (London, Military Attache, September 3, 1941) German Threat to American Aid to British The British Air Ministry states that the Germans have based a squadron equipped with 6 Focke Wulf bombers (long distance four-motor bombers) on an airdrome in Crete. This squadron is apparently intended for attacks on shipping in the Red Sea. (London, Military Attache, September 3, 1941) 389 2- Division of Monetary Research German Navy According to a British photographic reconnaissance on September 1, the location of the major units of the German Navy was as follows: At Breat: 2 battleoruisers, Scharnhorst and Gneisenau 1 - 10,000 ton cruiser, Prince Eugen At Kiel: 2 pocket battleships (10,000 tons), Scheer and Lutzow 1 - 10,000 ton cruiser, Hipper Steaming to Kiel: 1 battleship, Tirpitz (sister ship of Bismarck) At Travenmunde (southwest of Kiel on Baltic) 1 light cruiser, Koln (Unaccounted for: 2 light cruisers) (U.K. Embassy, London Telegram, September 2, 1941) 390 S. U. CONSTANTA B LACK A E S S. R. TIBILIS POTT U.S. BAKL MARNA BATUME BULGARIA LALARTY CASPIAN SEA BURGAS SLENINAKAN SAMSUN ZONGULDAK RABAZON SARIKAMIS UNIFORM GAGE NAYDARRASA TAZURUM ADAPAZARI TSTANBUL BANDAR SHA Que OZAL LIGHTERAGE SERVICEONY SMAS 1 ANKARA ESKISEHIR BANKESIA Y K U E KARVIN ALAYUN? OKAYSEA AFYON KARAHISAR ADANA MERSINO AMOUSLIMITE ALEP 1 TELL KORCHER MOSUL SYRIA DKIRKUK KERMANS I ULUKISLA LFAT-HA R A N UNAFI-I-SHAM 2 A HOMS? MEDITERRANEAN SEA AND CYPRUS BANINAZIR TRIPOLIH LEBANON TO STAACE (RIVER) RAYAR LEGEND BEYROUTH RAILWAYS DAMAS S FT GAGE 6-1/2 IN.GAGE 3 FT. 5-1/4 IN GRANDAR HAMPUR SQUEIDA 3 FT 3-3/8 IN HAIFAC 2FT 6 IN. GAGE 2 FT SI/Z IN GAGE 1 PIPE LINES DESERT HGWY. TRANSPORT ROUTES INTERNATIONAL BOUNDARY JAFFEE NASSIB PERSIAN GL SAUDI ARABIA 4 FT. 8-1/2 IN.GAGE ALWYS.UNDER CONSTRUCTION AL MUWAIT AMMAN ROSETTAS MATRUM ALEXANDAIA STRATEGIC TRANSPORT ROUTES DORKANTERA IN G Y P THE NEAR EAST T E CAIRO MUDALWARA 00.40-342 the 391 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE September 11,1941 TO FROM Secretary Morgenthau Mr. Kamarok Subject: Summary of Military Reports R.A.F. Raid on Berlin (During the night of September 7/8, the Royal Air Force made its biggest raid of the war to date on Berlin on the first anniversary of a large German raid on London.) Nearly 200 bombers took part. 138 tons of high explosive were dropped including five 2-ton bombs (the big new super-bombs), 12,000 four-pound, 160 25-pound and 385 50-pound incendiar- ies. It is estimated that the center of the city was severely damaged. (The magnitude of the raid is well on a par with the large German raids on London last fall.) (London, Military Attache, September 9, 1941; U.K. Embassy, London Telegram, September 8, 1941) Use of American Planes Four Flying Fortresses were sent to Oslo, during the day of September 8, to attack a shipyard. They were attacked at an altitude of 29,000 feet over Akernes (near Oslo) by German pursuit planes. The mission was abandoned. Two B-17's were shot down in Norway and a third crashed on its return to England. (This is the first loss of a B-17 since they were first used two months ago. The altitude at which the German attack 00curred suggests that the Germans have been taking counter- measures to meet the high ceiling of the B-17's.) (London, Military Attache, September 9, 1941) 392 -2- Division of Monetary Research British submarine activity A British submarine demolished a 120 foot railway bridge on the south coast of Sicily during the night of August 27/28. (This is the second time that a British submarine has successfully attacked Italian land targets.) (U.K. Embassy, London Telegram, September 5, 1941) The submarine Trident shelled a merchant ship off Bredsund, Norway (opposite the northern tip of Scotland) and scored five hits. On August 22nd, she sank the German ship Ost Preussen out of a convoy of 4 ships at the entrance of Fuglo Sound (near the northern tip of Norway, 1.8. about 800 miles from the first incident). On the 30th she attacked a convoy of four ships escorted by destroyers, trawlers and one aircraft off Boroen Island and hit a 1,500 ton ship and a 3,000 ton ship. The first ship is believed to have been sunk. Observing two hours later, the second ship was seen on fire with a heavy list. The Trident sustained no damage although 56 depth charges were dropped around her. (U.K. Embassy, London Telegram, September 4, 1941) Imports into England During the week ending August 30, imports into Great Britain (brought in by convoy) totalled 819,275 tons compared with 1,373,683 tons in the previous week, and an average of 882,805 tons for past ten weeks. (U.K. Embassy, London Telegram, September 5, 1941) (From time to time, we have received fragmentary data, some of which overlaps, on British imports in convoy. The available data indicates that imports decreased during last fall and winter, but are now increasing again. Average Weekly Feb. 23 - May 3. 1941 March 30 - June 14, 1941 June 15 - Aug. 23, 1941 950,000 tons 820,000 695,000 . 795,000 885,000 # July 28 - Oct. 5, 1940 Sept. 29 - Dec. 5, 1940 # Ten Week Periods Imported in Convoy 393 394 as m 22.00 any - 9 M CONFIDENTIAL 2. - - - - Made 406 - n ma. a. me - a - - of - dropped - as - I ⑉ - of mb Industries s . - poond I 100 on 1 I you - n 1 I is 100 . 4 1 I me 30 take of ⑉ - - - - - w - of = - see n - A telect of M Signature - of as I - a - I of / % - - -1-/---1 - 22 Metabo - explained against - / is the / the mills of this / have w I - 4 sans - thats station against the / as and - attention as n, - - - w - yours. a sare - - - - 2 - - the - Here w - with to - - / Saler. a n 95 - - deposited against - - - as I s baction - explayed a a. - I - - all - Make Made - - attended w 9 business. a. - abroads and 1200 n - 20 - s / - bater - 1 strenth and se song - business - explore CONFIDENTIAL 395 CONFIDENTIAL a. I & Saturas of determine - material in the was of state. I states partners our the Register / and the Months. d. - e / against - w 2. I - covered off the const and n. Courges Chemist. mm fighters - active - Beet legisla. a. I a R.N.F. streets - loss - System e - than to , 2-27's mentioned shore. the sign of Suptotal se, 1 beaker ended in Registered n I Date the sight of September 79, Middle business short - 1 No-199 - 2 will and I - find - plans. British signs fighters shot - - No-333 over Regional the might of September as. 4. Mr Antivity Other Therefore a. Date was been w 15 w ingleme the sign of Suptotal 6.7. Military stares - sald to have been s. Isla Mr AMERICA other Statem. as MADE Indian Thester. Smill attach were - - the sintresse as and I - Toback - September % Date me attention w as lets streets the sight of September 7.e. the suite of this said have - have separate SAN I. 2. in 443300, WIS CONFIDENTIAL CONFIDENTIAL 396 breff, be Intelligence (a) CONFIDENTIAL 397 BRITISH EMBASSY, WASHINGTON. PERSONAL September 10, 1941 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, R.J. Campbell The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 398 TELEORAN FROM LONDON DATED SEPTEMBER 8. 2941 In foul weather at 08.30/7 Nigeria and engaged enemy force in inlet east North Cape; result obscure but seems certain that small destroyer, one trewler and another ship sunk. German Brense and another ship were -Whit and former may have been torgedoed by our side. we suffered no casualties but Nigeria damaged her bow by raining a wreck in a smoke screen. 2. In east coast convoy attacked by E beat night September 6thw7th one British ship of 478 tons and ono of rather more than 1436 tons were sunk. 3. Relating to air raid Alexandria night September 5th-6th Woolwich, Kandahar and Maine hospital ship slightly damaged by near misses. 4. Night of September 6th-7th 7 Swordfish attached convey of three merchant ships, 3 destroyers, 20 miles north of Pantellaria northward bound. Three hits made on merchant ship estimated at 6000 tons; last seen with heavy list. Ship tanker type estimated at 6000 tons also hit by two terpedoes. September 7th. 12 Hlenheims attacked shipping and believed hit merchant ship of 2000 tons west of the Hagues 5. later seen enveloped in smoke. 1200 tons A.A. ship was hit and blow up. two A.A. missing. 6. Night of September 7th-5th over 300 aircraft de spatched from United Kingdom - Kiel and Boulegno attacked by about so each and nearly 200 plastered Berlin, Estimated centre of city severly damaged. 7. only/ 399 7. only about 17 energy aircraft attacked United Kingdom but caused more damage than usual on That and South East coast. s. South-cast of Genel Russians reported retreating to line of R. Deana. Some increase in military traffic Germany to Norway. A second Italian motorized division reported arrived at Tripoli (2) area, 400 BRITISH EMBASSY, WASHINGTON, D.C. 8th September, 1941 PERSONAL AND SECRET Dear Mr. Secretary, I enclose herein for your personal and secret information copies of the latest reports received from London on the military situation. Believe me, Dear Mr. Secretary, Very sincerely yours, R. I. Campbell The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 401 TELEGRAM RECEIVED FROM LONDON SEPTEMBER RTL 1941 Wolfhound has arrived in barbough AS 0580/5 Scheer seen Northern Singerrack steering north towards Oals. His Majesty's submitte demolished 180 feet railway bridge 2. south coast of sicily night of August 27th/98th. H. M. Submarine hit with torpedo Italian ship Aquitania and sank tanker south bound in convey off Marittimo August 26th. August 28th she hit and probably sank Duilio class liner couth bound near Capri. The latter in company with two Italian 19,000 ton ships. Night 3rd/6th three Swordfish failed to find damaged tanker outside Tripoli (L) but claimed destruction of destroyer by one torpedo two miles outside the harbour. Merchant vessel estimated 8,000 tens hit by one 500 pound boab result not observed. 3. During week ending August 30th isporte into Great Britain totalled 819,278 tons compared with 1,373,682 tens in previous week and average of 882,805 tons for past ten weeks. 4. Royal Air Force, 4th. Small force of Blenheims des- patched with fighter essort to Cherbourg docks and Masingarbe (near Bethune) synthetic oil plant. Both attacks successful. Several hits on oil plant and explosions. One Blenheim lost, 10 M.E. 109's destroyed, 11 probable and 5 damaged, we lost 8 fighters. A fortress boubed Rotterdam docks. 5. Libys. Night of and/ord. Wellingtons attacked Desur and landing grounds at Bardia and casala. and, Syria. Fighters destroyed without less, at least 5 of the so Italian fighters which attached our landing grounds in sidi Barrant area. e. cm, Our fighters destroyed 6 of the so Italian fighter planos which approached Malta. 3 more Italian fighters of 18 covering vencue operations off sicily were destroyed later. 2 Hurricence missing. 7. / 402 7. German Air Force str/sm. 40 enery aircraft of which 14 were over land. Principal activity mine laying and and shipping patrols off the East coast. Libya, Bgypt. Tobank attacked. and/3rd and night of 8. the and/Brd when since also were dropped. No serious damage. 1 energy aircraft destroyed and 2 probably destroyed. Same night 18 aircraft attacked Abu Sueir severly damaging Wellington. 9. Malta night 3ad 4th. 5 aircraft bombed damage negligible. 403 TELEGRAN RECEIVED FROM LONDON SEPTEMBER MT. 1942 H.N.S. Wellbound on accort duty off Sheringham had bows blown off by reported near miss. After part being towed to harbour. 2. Submarine Trident shelled merchant ship off Bredsund Norways scored 6 hits. send. She Bank German Ost Proussen out of convey of 4 ships entrance Pagle Sound. 30th. She attacked convey of 4 ships escorted by destroyers trawlers and 1 aircreft off Soroen Island and hit 1,600 ton ship and 3,000 ton ship. Former believed sunk. 2 hours later the latter observed on fire with heavy list. Trident sustained no damage though 56 depth charges dropped round her. Enemy convoy of 5 merchant ships estimated between 8,000 and 15,000 tons escorted by 7 destroyers off Cape Spartivento September 3rd surprised by 9 Swordfish, 1 merchant ship estirated at 8,000 tons torpedoed and blew up, another 9,000 ton torpedoed smidships and 2 others hit by 2 torpedoes these results not known. Convoy thrown into wild disorder, enery destroyers firing in all directions. 3. Royal Air Force. Night of 2nd/ard 84 tons of high explosive and 13,350 incendiaries dropped on Frankfort. Attack very successful. Many burst seen on and around aiming point, one particularly large fire reported near railway centre and 2 others in dock area. 46 tons of H.E. on Berlin. Many burets and fires seen wi thin one mile radius of Alexander Plats very large fire reported centre of the city. 12 tons of H a. dropped on Ostend. 1 aircraft previously reported missing has returned. Srd/sth. TO aircraft despatched against warships at Breat. All returned. Night of and/ord/ 9 enemy aircreft attacked Port said. 4.1 404 4. Mr. www. as - strents over- land in Type area, residenter on anti-shipping sotid time. 5. Threat to Lealagres increasing Genera attack south east of essal being developed. ASSEMPT to wors Snieper continuing. 405 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE September 12, 1941 Secretary Morgenthau TO Mr. Kamarck FROM Subject: Weekly Report: The Decisive Factor in the Russo-German War Summary The Russians have demonstrated that the German blitzkrieg can be stopped. The war has now become a war of attrition in men and materials. Russia has enough trained men but its production of war materials is much smaller than Germany's. If the Russians are forced to depend largely on their own productive resources after their reserves are exhausted, the Germans are assured of ultimate victory. 1. The German successes in the first year of the war were not due to a "secret weapon" as the almost forgotten Nazi propaganda of a year ago attempted to prove. The basic reasons for the victories of the German Army are now well-known. Most military observers would agree with the following British summary of the Reichswehr's technique: "Each of the German offensives in this war in Poland, in the Low Countries, in France, in Greece - has been based on such the same strategic conception and carried out on much the same tactical lines. The enemy has employed his armoured forces in close cooperation with his air forces and has pushed forward with relentless speed, making use of every opportunity which has presented itself of penetrating behind any organized line of resistance that he may encounter. His object has been to out his opponent's lines of communication, to cause alarm and despondency among the civil population and to give no time 406 -2- Division of Mone tary Research for the organization of any further resistance in the rear. Dive bombers have covered the ad- vance of his .armoured divisions, and parachutists and troops, armed with Tommie-guns and machine guns, carried in aircraft have been utilized to work behind his opponent's lines. this plan of campaign has been signally successful - because the Germans have always been infinitely better provided with armoured vehicles and aircraft than their opponents, and also because their land and air-troops have been # trained to work in the closest cooperation." (The Army Quarterly, July, 1941) 2. Only the Russian Army of all the opponents of the Nazis has demonstrated its ability to stop the German lightning war. In the twelve weeks of the war, the German Army has not yet achieved a decisive success. Although threatened, not a single major city has yet fallen to the Nazis. The important Moscow offensive of the Germans has stopped six weeks ago. Since then, not only has no progress been made but the Germans have been forced back 60-70 miles from the fartheat point reached, Vyazma. It has become clearly evident that there are three main reasons why the Russians have not been defeated up to the present time. (a) The Red Army possessed large enough masses of mechanized land equipment and large enough num- bers of airplanes, and the knowledge of how to use them, to prevent the Germans from attaining overwhelming superiority in this field. (b) The soldiers and civilian population have a superlatively high morale's (c) The Red Army has developed successful tactics of defense. These tactics appear in main outlines to be as follows: 407 -3- - Division of Mone tary Research (1) Defense is organized in great depth. While a surprise attack may overwhelm the first defenders, the lines of resistance in the rear are forewarned. (2) Friction in every manner is created to slow down the speed of the enemy's armored forces. Encircled units do not draw the "logical" conclusion that resistance is hopeless and, therefore, surrender, but fight to the last man and last cartridge. The Germans are for- ced to detach men and equipment to wipe out these cen- ters of resistance. When a Russian unit is disintegrated, every soldier becomes a guerrilla and attempts to take at least one German along with him to the grave. (3) The supplying of the panzer divisions is made difficult. In France, the tank units were able to a large extent live on the country, even obtaining a good deal of their gasoline from French gasoline stations. In Russia, the 'scorched earth" policy forces the Germans to tie up large numbers of men and trucks to transport supplies for hundreds of miles from the German Reich. (4) The encirclers are encircled. In the earlier campaigns, the German armored divisions struck out boldly into the rear areas of the enemy with their own flanks exposed. They were able to do this successfully, because the shock and dismay caused to their opponent of finding the enemy in his rear resulted in a moral paralysis which prevented taking advantage of the situation. If this was not suffi- cient, the German overwhelming air superiority pinned down its enemy's reserves and kept them out of action. The Russians have not given way to despair when the German columns have broken through, but have seized such opportunities to strike at the weak spot between the tank units and the following motorized infantry. The lack of complete German command of the air gives the Russians some freedom to move their reserves to meet a threat, and these reserves can move as rapidly as the Germans can. The Red Army has thus been able to strike at the flanks of the German penetrations and encircle the encirclers. 408 Division of Monetary Research 3. The German blitzkrieg has definitely been stopped. The Germans no longer send long probing armored fingers for hundreds of miles behind the Russian lines, but confine themselves to a methodical, closely integrated advance of all elements. The war has become a war of attrition - not at a 1914-18 pace but at the greatly accelerated 1941 tempo. The expenditure of men and material is at an unprecedented rate. And, as in all wars of attrition, victory will now go to the power which can longest stand the consumption of men and material. The Russians have sufficient trained man-power to win. However, in the even more important sphere of ammunition, ordnance, tanks, planes and other equipment, the Russian Army is at a marked disadvantage. The Russians probably were equal to or superior to the Nazis in production of war material until the German have added to their territory the industries and armament factories of all of Continental Europe, except Sweden and Switzerland, whi oh also contribute to Nazi war production. While war damage, sabotage, dislocations, and shortages tend to curtail the effectiveness of the se acquisitions, they still strengthen powerfully the war industrial potential of Germany. At the same time in these victories, the Reichswehr captured as booty most of the arms reserves of Continental Europe. annexation of Czechoslovakia. Since then, the Germans The Russians, on the other hand, have had to give up a large part of their territory and industry in the pre- sent war. These losses, together with the other dislocations caused by the war, have certainly reduced Russian industrial capacity by at least a third. Even with the most optimistic interpretation of the facts, it is fairly obvious that present German over-all war production must be, at a minimum, twice that of the Russians. The requirements of the occupation forces and the defense against British attacks undoubtedly prevent complete concentration on Russia. Yet it is reasonably certain that, even accounting for all similar offsetting factors, the Russians are in a position of great inferiority. 409 -5- Division of Mone tary Research The conclusion 18 inescapable, therefore, that if Russia is forced largely to depend on its own arms production alone, ultimate victory for the Germans is assured in the present war of attrition. 410 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE September 15 1941 TO Secretary Morgenthau Mr. Kamarck FROM Subject: Merchant Shipping Losses (Shart Appended) 1. Losses in the last three months have greatly decreased; figure for August is preliminary) undoubtedly due to the German preoccupation with Russia. (The 2. The British have revised their shipping losses figures for the past year, so that the previous "policy" understatement, of which we were aware, has been eliminated. There is still some understatement of losses due to the exclusion from the figures of N missing ships" (1.e. not heard from again due to instant destruction or raider action) and losses of merchant ships serving as naval auxiliaries. 411 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE September 16,1941 TO FROM Secretary Morgenthau Mr. Kamarok Subject: Summary of Military Reports R.A.F. in Russia On September 12, R.A.F. fighters in North Russia carried out six missions escorting Russian bombers and made attacks on airdromes. One patrol destroyed two German Me-109 fighters, probably destroyed another, and damaged one Henschel (German Army observation plane). The British lost one fighter. (U.K. London Telegram, September 14, 1941) Russo-German War The continued progress of the German drives southeast of Gomel and north from Kremenchug is diminishing the prospects of successful extrication of the Russians in the Kiev salient. (U.K. London Telegram, September 14, 1941) German Army Rations Rations for the German Army were reduced on June 1 for the second time since the beginning of the war. For front-line troops, the week's meat ration was reduced from 3 to 3 pounds, and the week's fat ration from 10 to 8 ounces. The week's rations for other troops have been reduced to the level of the rations for civilian heavy workers, that is, 1 3/4 pounds of meat and 61 ounces of fat. A comparison with English Army rations follows: 412 Division of Monetary -2- Research Meat Present German rations Front-line troops Other troops Fats ₹ 3 pounds 1 3/4 pounds 81 OZ. 6 oz. British U.K. Army 31 pounds 31# oz.* British Middle East Army 4 3/8 pounds 31 oz.* (* 10 oz. margarine, 21 oz. bacon) (The new rations of the German soldiers are certainly not small enough to cause a drastic decline in efficiency. However, the psychological effects of a declining standard, in spite of victories, may be important) (U.K. Embassy, London Telegram, September 10, 1941) Western Europe During the night of September 13/14, 154 British bombers were dispatched to Breat (to attack the two German battle- cruisers) and Havre. Visibility at Brest was excellent until spoiled by the effects of a smoke soreen. (This is the first mention, I believe, of the use of a smoke screen as protection for the battle cruisers). (U.K. London Telegram, September 14, 1941) 413 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE September 20,1941 TO FROM Secretary Morgenthau. Mr. Kamarck Subject: Battle of the Atlantic (Charte attached) Total shipping losses of England, the Allies and neutrals amounted to only 100,000 tons in November, 1941. This is lower than any other month, except March, 1940, since the beginning of the war. (The comparison to March, 1940 is suggestive. This was the month before the invasion of Norway and the submarines were being withdrawn in prepara- tion for intensive action in April). Launchings of British and American vessels were over 200,000 tons, or more than double the losses of the month. 414 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATESeptember 25,1941 Secretary Morgenthau FROM Mr. Kamarck Subject: Summary of Military Reports Battle of the Atlantic During the week ending September 13, imports in convoy totalled 1,540,000 tons. This is the highest week's total of the war. It included an exceptionally high tonnage of foodstuffs and 9,500 tons of tobacco. During the past year, there were 11 weeks in which imports in convoy exceeded 1,000,000 tons. (U.K. Embassy, London Telegram, September 21, 1941) According to the British Air Ministry, there are 10 Focke Wulfs (German long range four-motor bombers) at the Merignac airdrome near Bordeaux. (The Germans probably do not use more than 20-30 of these bombers altogether for attacking shipping). (London, Military Attache, September 21, 1941) R. A. F. in Russia On September 17, eight Hurricanes destroyed four Me 109 fighters in North Russia. (U.K. Embassy, London Telegram, September 21, 1941) Use of American Planes During the day of September 20, Emden was attacked by a Flying Fortress from an altitude of 31,000 feet. No anti- aircraft fire or enemy fighters were encountered. The bomb bursts were observed in the center of the city. (Remembering the effect the daylight raids on London had, these daylight attacks on German cities with bombs falling out of the sky without warning must do great psychological damage.) (London, Military Attache, September 21, 1941) 415 -2- Division of Mone tary Research On September 18, 15 Martin Marylands bombed enemy supply dumps and mechanical transport concentrations in North Africa. (U.K. Embassy, London Telegram, September 20, 1941.) During the night of September 19/20, six Marylands bombed supply dumps near Gambut, North Africa. (London, Military Attache, September 21, 1941.) German Navy On September 10, a 6,000 ton Dutch ship was torpedoed and sunk 400 miles North northwest of Natal, Brazil. (U.K. Embassy, London Telegram, September 21, 1941.) According to the British Air Ministry, the Admiral Scheer (10,000 ton, pocket battleship) has now left Swinemunde (middle of German Baltic coast) to which it was moved from Oslo. (It probably is going into action against the Russian fleet) (London, Military Attache, September 21, 1941) R.A.F. Activity (The following two incidents illustrate the bomber wastage that OC curs even without enemy action.) During the night of September 20/21, the R.A.F. sent out 145 bombers, 77 to Berlin, 34 to Frankfort, 34 to Ostend. Very few of the bombers attacked their targets, as all of them were recalled because of the threat of fog over Britain. Seven bombers did not return (either lost over GermAny or crashed in the North Sea on the way back.) Double this number, or 14, crashed in England. (London, Military Attache, September 21, 1941.) During September 22, 11 Blenheims from Malta made an attack on Italian North African bases. Two of the bombers collided over the target and a third crashed on its return. (London, Military Attache, September 23, 1941.) V 416 BRITISH EMBASSY, WASHINGTON. 23rd September, 1941. 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, R.I. Campbell The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 417 Telegram from Lender dated 21st september, 1941. Week ending 13th september. importe is convey totalled 1,542,157 seee compared with 708,151 previous week and average 946,508 past tea weeks. This is the highest week's total of the war. During the past 12 months million mark exceeded eleven times. This hage total included acceptionally large teamage of feelstuffs and tobacco totalling 9,542 sens. A.M. of 20th September as achmalter RFA Dombydale, Derham, British 10,000 teas and eiling halk Piena shelled anchored in bay appeared terpedoo& by - submarine; Dombydale seriously damaged, Design may have been beached, Picas shelled and make. city of Durham AND arrived in Thomas with 500 posite unexploded 1 - board. In 5-beat attack on ecavey soble total of 4 shipe .. far Imera terpedone. Three eank fearth - 8,000 sea tasker possible. on 10th September Dutch ship 5,719 some toryotoon and outh 400 miles north northwest of Datal, Breath. 12th September. seviet sabmarine K2 sank lades 2. merchant ship about 3,500 tens by guafire off Varanger Fjord. Two N-beat attacks were made on east coast conveye last sight. NO damage reported our side. vivien and Mayne22 each considere damaged one 3-beat. 3. night of 18th/19th September. British subsrime attacked convey of three very large limers excorted by destroyers North Khones. one liner sank another probably seak. 4. 20th September. Royal air Force off Dateh coast attacked two conveys result merchant ship estimated 5,000/ -a 5,000 teas set on fise, large teaker his several Since one excert vencel, ship estimated 7,000 seee his and chipe, another similar tennage had back breating. During day 15 many fighters were ahot doom certain, swe probable, siz damages. We less 7 fighters, 3 In 4 Blenheim off has midshipe wall heavily Indea marchant vessel; she was as on fire, claimed sunk. 5. Highs 20th/21st September. Nearly 150 bombore despetched so deliver heavy attack on Berlin, lightsing attacks - Freakfurt and Ostend, 5 missing. 20th September railway centree Basebrouch and Abboville, shippards near Rease and Oherbourg deeks bonhed by and Hampdone, a fortress attached Indea. 198h/Both September aircraft dropped 65 sens of high explecives and 2,000 incondiaries on stottin. may burets seen in ceasre of town, on warehouses and on main millary station. 6. 27th September. 8 Hurricanes destroyed four Hooserochmids 109's. 7. M Tripeli (2). 19th September Blenhoins seared hite - - destroyed outside harbour. 20th September. 11 sens of boube dropped on deeks. a. Genesa Alp Perso. 20th/21st September. About 40 enery aircraft penetrated ever southern and eastern coastal counties. one was destroyed by our night fighters. 9. Resels. Bussions surrounded in Kiev area believed still fighting stubbornly. 419 of Cafe Caldiogram Received as CONFIDENTIAL at 10:53 22, 1943 Lesson, fileds 4:00 Pollo, September 21, 1941. 2. Britter Air Activity our the Certificate a. Right of September 29-30. 23 test of m and 3300 in centiaries were dropped. b. by of 20. Basion was attached from 33000 feet w a 3-37. no anti-street or - fighters were contered - bomb barate were observed in the city. Other baber operations were as follows: 24 with fighter excert attacked skipping off Handvoort and the Hock of Halland, elaining hite - 5 medium sind natur vessale) , Manhaine at described a fish all factory on the coast of northern Hermany 12 Klenhaine with fighter assers attacked the shippards mar Roum with good resulte) 6 attached decis at Overbourg , Monhalms attached the railway center of Registration and s - - attached the railbay outher as AMbeville, elating direct hits. A total of 673 fighters were employed as follows 100 in the protection of shipping, a - interesption patrole, 398 - offensive operations and 26 - special missions. e. Base of mm A total of 245 busbers were dispatched as follows 77 to Borlin, 34 to Treakfort and 34 to the deeks at Ortuna. Very for of those bembers attached their targete as all were recalled - a threes of sog ever Britain. 2. No Activity over Britain a. Day of - 19. 35 - aircraft and 20 long range bembers were wood. CONFIDENTIAL + 420 CONFIDENTIAL n Section 10 s long - business were explayed. e. Bar Limited 20. Activity on this w constated principally of defensive fighter patrels. d. tmn Right fighters - active over Linesinshire and Test Anglis. Long renge blue - a small said over the and Partmarth area. Operations against shipping test place off the month of the Newber. 3. Manager Leave a. - On September 20, these were as follow, , 7 Spitfires - 7 palate losts and 2 spitfire aged. Newber I the night of September 20-21 - 7 parted and 34 created in Britain, , of the - of the latter being all safe. b. a September 20 these were as follows: 25 No-200's shot down, 2 No-100's probably destroyed, and 6 10-309's - 1 No-211 was short down the night of September 20-21. 4. a. North Theater. s Wallington attached Dongheat - the might of september 18-39. Supply damas near were beebed w 6 Marying the night of September 19-20. The - night, , millingtone booked the harber of Tripoli. w Birth Peoples Thester. On September 27, 4 No-100's were shot down w 8 Reviewes while on - patrol. 5. Anda Mr Antivity other a. mana Instern Theater. e Anis aircraft attented CONFIDENTIAL 421 CONFIDENTIAL the night of September 18-19. No department - was - The Medical Sahner has now left to which 10 was moved from Oals, according to the Mar History. this were also states that aerial photographs disclose ten Posite was as Mortgree airdrens, near Bordeaux. LINE I. 3. 12 90401, 9/22/42 Distributions Oklah of the have Air Peress State Department (2) War Plans Division Office of Naval Intelligence (2) e. LA. Record Section Intelligence Breasts Secretary of Treasury O.A.S.W. A.S.W.A. Section File Collection Section B.S. as A.C. 08.3 - S.S. CONFIDENTIAL 422 V422 BRITISH EMBASSY, WASHINGTON, D.C. SECRET AND PERSONAL September 22, 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, R.I.Cambell The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 423 TELEGRAN FROM LONDON DATED SEPTEMBER 20th 1942 Night of September 18th-19th hodeward bound convoya 044 attacked by V-beats. Three ships reported torpedood 800 miles east of Kunorinak (Greenland) but no further particulars received. Canadian Corvette Levis I ossort sunk. September 18th. Five Swordfish attacked convoy 2. off Trapani three torpedoes dropped believed one hit soored on merchant ship estimated 6,000 tons. Follow- ing night further attack made by Swordfish. Results uncertain. September 17th, four Blenheins sank two 800 tons schooner off Zuara both laden. Two Blonheims missing. During night of September 18th/19th liner 3. estimated 24,000 tons at Tripoli (L) probably hit during attack by four Wellingtons. During operations Libys September 14th/15th we 4. captured one German heavy tank with crow complete des- troying 9 others. Eight Italian aircraft shot down. Sixteen airmen captured. Reference OPTEL September 12th/13th. Latest news 5. of attack on homeward convoys 042 off Greenland shows ten ships sunk, five unsertain, one missing three believed torpedoed arrived United Kingdom, Remainder safe in harbour. 6. Royal Air Force. September 19th. During fighter sweeps over northern France and Belgium four goods trains, ensay troops and cargo ship wore attacked. One fighter missing, two enerty aircraft destroyed. Coastal Command Blenheims estimates four hits on small merchant vessel Bay of Biscay. September 19th/20th. Over 70 aircraft/ 424 aircraft bombed Stettin in good weather. Two missing. 7. Libya. Sept. 17th/18th. Benghasi Tripolt (L) Harbours attacked by heavy bombers. On September 18th 15 Marylands bombed enemy supply dumps and mechanical transport consentrations. Sept. 18th/19th; 14 tons of bombs dropped on Tripoli (L), 84,000 ton liner probably hit. Further attack at dawn resulted in three hite on this liner and two more on 8,000 ton merchant vessel. 8. German Air Force. Sept. 19th/20th. One German bomber destroyed off Lincolnshire by His Majesty's ship. Russia. Germans reported occupied Bologojo Poltava and Geniwrok and entered Kiev. 9. 425 Persphese of Code Cablegreen CONFIDENTIAL Received at New at 9:34 a.m., September 23, 1941 London, filed: 2:15 Demo, September 23, 1941. 1. Britter Mr Activity - the Certificate a. Day of Section 22. A total of 132 fighters were played as follows: 55 in the protection of shipping, 6 - is terception patrols, 4 - offensive missions and 33 - special operations. Bad weather prevailed and no bembers were dispatilities. 2. Alx Activity over Britain. a. Day of September 21. s reconsissince aircraft and 5 long range busbers were employed. b. Might of September 23-32. 30 long range because were word. 5 Ja-ee's attacked Margate. e. Day of September 22. Bocause of bad weather operations were on a very mall seale. a. Held of September 22-33. A few operations against ship plag took place off Spurn Head and Lowself. 3. Megan Tennes health a. I reported. . a September 22, 1 No-109 was probably destroyed. 4. Me Antivity Other Testers. a Theater. A marchant vessal of 24,000 teme assorted w 6 destroyers - attached w , Medicine off the Kerkmank the night of September 22-22. s direct hite easing serious - were alained. 1 of the attacking become me damaged w anti-aircraft fire. In on attack the day of CONFIDENTIAL 426 CONFIDENTIAL September 22, w 22 Membeine from Milin, - military I as Misurate and I s - of m were dropped and good results obtained. 2 of those aircraft collided ever the target and a third crushed - its return. IN 4.1.11 1200, 9/23/42 Distribution: think of the Jaway Air Forces State Department (2) War Please Division office of Reval Intelligence (2) G. N. e. Record Sestion Intelligence Branch Becretary of Treasury O.A.S.W. A.S.W.A. Section File Collection Section D.E. as A.C. 03,3 AM CONFIDENTIAL 427 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE September 26,1941 Secretary Morgenthau FROM Mr. Kamarck Subject: Military Report: Army Views on the Russo-German War of There are three sections in Military Intelligence whose work it is to follow developments in the Russo- German War: the Eastern European (Russian) Section, the German Section, and the Situations Section. The three sections provide the expert evaluations upon which Army opinion on the Russo-German War is based. A summary of the views of these officers, after three months of the Russo-German War, might, then, be of interest. Lieutenant Colonel Betts, Situation Officer, in my judgment, is the most objective. He now acknowledges that he under-rated the Russian Army but, on the whole, he has proven himself to be fairly accurate in his estimates of the situation. Major Smith, acting head of the Eastern European (Russian) section in the absence of Lieutenant Colonel Guenther, seems, in general, to have the same approach as Lieutenant Colonel Guenther. Lieutenant Colonel Maguire, head of the German sec- tion, and Lieutenant Colonel Kramer, his assistant, appear to adopt the German public version of progress in the war. Lieutenant Colonel Kramer studied for a year at the German General Staff School and was with the German Army in its conquest of Poland. 428 -2- Division of Monetary Research Lieutenant Colonel Thomas J. Betts, Situation Officer There is no doubt but that the Russians will keep the war going through the winter. The Russians will be able to keep Moscow but will probably lose Leningrad. On the whole, however, the situation looks pretty good for the northern and central Russian Armies. In the south, the Russians have suffered a severe defeat but we do not know, as yet, the extent of their losses. It is quite probable, therefore, that the Germans may reach the Don before spring. We cannot estimate how strong the Russians will be when the German spring offensive opens. This depends, among other things, on how much assistance the United States and England give. Major Smith, acting head, Eastern Euro pean (Russian) Section The war will certainly last through the winter. Beyond that, it is impossible to prediot. The Russians do not have a chance unless they receive a flood of supplies from the United States and England, backed up with British military forces. The weather factor is being over-played, since it is not possible to predict what its effects may be. The Germans may wish to stop, however, at some line, perhaps East, perhaps West of Moscow, and put the main pressure elsewhere during the winter. The Germans will certainly take "Petrograd". The Russians are very good fighters because they have no fear of death or wounds. This may be a Slavic peculiarity due to the fact that the nervous systems of Slave probably are not highly developed. While no data is available, the Russians probably still have a first line air force of around 2,000 planes left. The seige of Odessa is being carried on by Rumanians who are suffering very heavy casualties from Russian attacks. The Germans have left this job to the Rumanians because they have not wanted to tie up their own troops in a drawn-out stage operation. 429 -3- Division of Mone tary Research Russia has asked for our secret bomb-sight but will not get it, if the decision is left to the Army. The Army would like to refuse to assist the Russians to force them to tell us the important vital facts as to the front. We have not been able to get any desired information, such as the number of divisions they have at the front, the number of planes available, where and when equipment furnished to them will be used. Lieutenant Colonels Maguire and Kramer, German Section The war is going according to the German plans. It is even doubtful that the Reichswehr has been delayed, since the Germans do not seem to be in any hurry to finish the campaign. It is not possible to predict what will happen, since only the German General Staff knows what is going to occur. One can- not say that the war will last until spring, since the Russians are likely to collapse. No army can take the hammering and continual defeats that the Red Army has been receiving and not collapse. Lieutenant Colonel Kramer stated that, in his opinion, the weather would aid the Germans and not the Russians. The Russians need heavy replacements of men and equipment and will not be able to get them to the front because of the condition of the roads. The Russian armies in the north and in the south have been beaten. The Russian army in the center did hold up the Germans. But when that was done, the German Panzer divisions slipped off to the south and helped take Kiev. Once Leningrad has been taken, the Germans will probably close a giant pincers on the central Russian armies. In any case, the progress of the Germans in the south will out off the Cauca- sian oil fields and the route from Iran, while the northern German armies out the Murmansk and Archangel routes. Thus the Russians, in any case, will be isolated from all aid. 430 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE October 2, 1941 Secretary Morgenthau FROM Mr. Kamarck Subject: Summary of Military Reports IM Use of American Planes On September 24, nine Hurricanes intercepted 24 Me-109 fighters over Sidi Suleiman in North Africa and damaged one. Two Tomahawks attacked a Ju-88 bomber and damaged it. Three Hurricanes and one Tomahawk were shot down. One pilot was rescued by another airman who landed in enemy territory and carried him off. On September 28, Maryland bombers, some of which were escor- ted by fighters, attacked the Bardia area. Dumps, motor transport concentrations, and warehouses were hit. Four enemy fighters were probably destroyed. One Tomahawk and one Maryland are missing. (U.K. Embassy, London Telegrams, September 26,29, 1941) Battle of the Atlantic During the night of September 21/22 a convoy was attacked southwest of the Canary Islands. One British ship of 5,000 tons was torpedoed but may still be saved. The following night two more ships of the convoy were torpedoed west of the Canaries. (If the submarines involved were operating from France, they were 3,000 miles from home. If they were operating from Dakar, they were 1,000 miles from their base. If they were operating from the Spanish Canary Islands, they were only a few hundred miles from their base.) A convoy from Gibraltar to England was attacked by a submarine on September 25. That night there were two more attacks. The next night, there were four attacks. The losses are estimated at eight ships. (Both of these stories illustrate the submarine wolf-like methods of harrying a convoy.) (U.K. Embassy, London Telegrams, September 23,27, 1941) 431 -2- Division of Monetary Research R.A.F. in Russia On September 26, Hurricanes, while on bomber escort, destroyed two en emy fighters and probably a third without loss. On September 27, Hurricanes destroyed two more German fighters. (U.K. Embassy, London Telegrams, September 27,29, 1941) Russian Navy On September 26, a Russian submarine torpedoed two merchant ships, 8,000 and 5,000 tons, in Petsamo harbor. The ships were alongside the dock discharging cargo. After firing, the submarine broke surface and experienced heavy rifle and machine gun fire. Before the submarine regained the open sea, five hours later, she was heavily attacked with depth charges. (The Russian navy has been doing very well in the war, as this daring attack illustrates.) (U.K. Embassy, London Telegram, September 29, 1941) Italian Navy A force of two Italian battleships, cruisers, and destroyers was at sea on September 27, east of Sardinia. They approached to within 95 miles of British forces (guarding the passage of a convoy to Malta) when they turned north and raced for Naples. (Evidently, the battleship fleet of six, with which Italy began the war, has been reduced to an effective force of two.) (U.K. Embassy, London Telegram, September 29, 1941.) Iran (The situation in Iran is becoming increasingly troubled.) There are tribal disturbances in two of the outlying provinces. The Banda Shapur (southern terminus of Iranian railway) army is disintegrating, and the Iranian authorities are no longer in complete control. Communications are becoming difficult. (U.K. Embassy, London Telegram, September 27, 1941) 432 BRITISH EMBASSY, WASHINGTON, D.C. September 29th, 1941. 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, R.I. Campbell O The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 433 TELHORAN FROM LONDON DATED SIGNED 20th 1941. $ Thunderbelt on 9th also bonbarded Portina Beroli sirte. Night 23rd-94th during bombing of Benghast by six Wellingtons a ship at outer mole blow up. According to Finnish report which may well be true Finne have erossed River Svir at several S. points. Germans are continuing efforts to eater Opinea against substantial Russian resistance. s. Rozel 85th. As results of attack on a so 88 off Lisard one Spitfire missing. 4. Libra. 84th. Sine Hurricanes intercepted 04 as 100's over 8161 Suleiman and damages one. Two Tenahanks attacked one JB 88 which was damaged. Three Hurricenes and one Teachers shot down but pilots recente one by another airman who landed in enemy territory and carried him off. 434 BRITISH EMBASSY, WASHINGTON, D.C. PERSONAL AND September 25th, 1941 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, D R.I. Campbell The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 435 TESHIRAN RECEIVED FROM LONDON DATED 23rd,1961 Daving night of 21st/sand convey attached South West of Generies, One British ship of 5,000 tens was terpedeed but still may be saved. Following sight two further ships of this convey terpedoed west of Canaries. A Beaufort assered one hit on 5,000 ten morehant vessel off South-West Morray. Owing to adverse weather conditions only few aircraft sent to Beulogne. They returned safely, bombs seen to straddle deeks. Rist. two Blenheims attached 24,000 ton liner emerted by six destroyers off stax. Eight hits obtained smidships and another materline. LIBYA. soun/Sist. longiest harbour again attacked by Wellingtone. State Monhains dropped 4 tens of boube on objectives at House (L) and Misurate. Mach damage inflicted on barrack blocks,moter transport and damps. s Blenheims lost. Encircled Russian forces east of Kiev believed attempting strenuously to break through to the east. Germans while mintaining pressure on them continuing thrust eastwards towards Knarkov. 36 BRITISH EMBASSY, WASHINGTON, D.C. October 1st, 1941. 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, The Honourable R.I. Captell Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 437 TELEGRAN FROM LONDON DATED REPRESENTED 29th. 1941. Foree of 8 Italian battleships, cruisers and destroyers was at see on September 87th east of Sardinia and approached our forces to within 95 miles when they turned north and reced towards Naples. On September 87th Nelson was hit by one torpodo s. from aircraft her speed reduced to 15 knots. On September 26th, Russian submarine terpedoed is 3. Petseme sue merchant ships estimated 8,000 tone, 5000 tona. They were alongside discharging eargo. After firing, submarine breke surface when heavy firing from rifles, machine guns experienced. Before getting to sea 5 hours later she was heavily depth charged. One 8000 ten British ship in Gibralter unaccompanied 4. was suak night of September 27th, September 28th. 5. September 86th. Fighters attacked objectives is setting OR fire 2 petrol trucks near Casa and damaging enemy aircraft and enemy hangare at Merlaix. 6. Hight of September 28th, September 89th. 108 air- eraft cospatenes to deliver medium weight attacks on Genea and Preakfort; light attacks on St. Nasaire Anden. Near st. Nasaire good fires started enougest oil tasks, 5 air- craft missing. 7. on September 97th smongst other operations ten Beaufighters attacked aerodromes, seaplane bases sicily and Bardinia. se neeplanes on water seriously damaged, s sircraft probably destroyed in the air. 8. Libya September 28th Marylands, some escorted by fighters, attacked Bardia area. Dumps M.T. concentrations / and 438 a. and warehouses ms. s - fighters probably Gentroges, one MaryLand and eas missing 9. Borth September Wrs. I destroyed two more Comman fighters. 10. Bessione resisting strongly is Foltove - Melitopal areas. 439 BRITISH EMBASSY, I WASHINGTON, D.C. SECRET AND PERSONAL September 30, 1941. Dear Mr. Secretary, I enclose herein for your personal and secret information copies of the latest reports received from London on the military situation. Believe me, Dear Mr. Secretary, Very sincerely yours, R.I.C.prell The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 440 I STREE 1941. Homeward bound convey from attraltar attached by U-beat 95th and two further attacks night of fourth attack night 20th/svth. Estimated lessee about eight shipe. Immunition explosed on board s.s. Premoonia leading at Liverpeel. Casualties four killed, two wounded. 26th. Royal Air Ferce destroyed - sine- a. sweepers and damaged two Flak ships off Dunkish, also sank mater beat near Guernaay and destroyed trainer air. craft near st. Valery. Highs 24th/ssea. Wellingtone attacked Bangbasi harbour. Same night and following night Stardfish and Wellingtons bombed barracks at Totyoli and laid mines in harbour approaches. 96th September marchant ship of 1000 tone sunk off Tripoli - by Regal Ats Force. Six Wellingtons bombed Falermo night of - started numerous fires. 25th Sey- - tess marchant ship attacked by Reyal Air Peres - set on fire and left almost submerged off 3. Rayal Air Force 25th/27th. About 100 air- waft dispatched but recalled. Believed 5 raided Cologno, one bombed Genoa) others attacked character parts. one missing, two crashed. North Russia. 86th. Burrieanes on bember 4. concert enterezed two enemy fighters and probably a third without less. German Air Force 26th/27th. Very few aircraft 5. n° over the coast, one destroyed by our fighters. 6./ 441 6. Lybia. 25th. Tobruk harbour attacked, few casualties. Malta 24th/25th and 25th/26th abortive enemy raids. 7. Russia. Murmanak front. German forces southern flank driven across Litsa river. Headquarters of 138th German Infantry Regiment captured with operation doouments. German pressure towards Kharkon and the Crimea. Iran. Tribal distarbances Ajerbaijan and Kindistan. Banda Shapur army disintegrating, Iranian authorities no longer in complete control. Communications becoming difficult. 8. 442 TELEGRAM FROM LONDON DATED SEPTEMBER 86th. 1941. During operations Mediterraneaa when large convey escorted by strong forces of His Majesty's ships was successfully passed into Malta from the Westward a.m./20th, 1 British merchant ship 18,000 tons was torpedoed and later sunk by British forces. 8. Total of seven shipe is this SL convey have been sunk. 5. N/A ship Springbank escorting homeward bound convey from Oibrelter torpedoed and sunk night of September 96th/stth, 600° (sie) N.W. of Finisterre. 4. On September 87th during R.A.F. raids over France, Failway centres were attacked. Bombing of Amiens was very successful by 18 Blenheims, all bombers returned. Our fighters shot down Slenomy aircraft certain, 9 probably and damaged 16. We lost 14 fighters; 8 pilots safe. 5. Ruenia. Between Murmanek and Petsamo Russians report driven the Germans across river Lites and captured regimental headquarters. The Russians resisting German aitack on the Crimes, also still fighting south of Daieper river estimary. 443 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATEOO 4, 1941 Secretary Morgenthau Mr. Kamarck FROM Subject: Military Report: Development of Plane Types in the R.A.F. since September 1939 Summary In contrast to the German Air Force, which has depended mainly on modifications in its old types to keep up to date, the R.A.F. has not only introduced new models of old types, but has introduced many new types. The Luftwaffe has brought out new types generally only to perform new functions. The R.A.F. has done this, but has also brought out new types to replace those already in use. Since September 1939, the British have put into service six new fighter types, three new bomber types, and have used extensively three American fighters and four American bombers. 1. The R.A.F. is still in large part fighting the war with 1939 airplane types: Hurricane and Spitfire fighters, Blenheim, Beaufort, Hampden, Wellington, and Whitley bombers. However, all of these have been modified so as almost to have become new plane types. Engines of greater horse power are now being used, 1,400 horse power motors replacing 1,000 horse power. Armor-plate protection for the pilots, self-sealing gasoline tanks, and more guns have been added. The most recently produced Spitfires now carry either 12 machine guns or two cannon and four or six machine guns. 2. In addition, the British have introduced a large number of new types since the beginning of the war. Some of these have been in service for a considerable period. Since September 1939, six new fighter types have been introduced. (a) The Boulton-Paul Defiant two-seater fighter was designed to fight at night and is now being used as a night fighter. But it made its bow at Dunthan ordinary fighters, it was able to slaughter Nazi planes by its surprise broadside attack from its four-gun turret. kerque with great success. Although much slower 444 Division of Monetary -2-- Research (b) The British, finally, a year ago started replacing their out-moded, bi-plane, under-gunned, airplane carrier fighters with the eight-gun Fairey Fulmar. (c) A few months ago, the first British long-range fighter, the Beaufighter, appeared. This plane has the greatest armament carried by any plane to date, four cannon and six machine guns. Strictly speaking, this airplane should not be classified as a fighter since it is not fast enough, nor maneuverable enough to stand up to a real fighter. The German classification of "Destroyer" is better since its primary function is to destroy bombers. It has been used mainly to ambush German bombers on their return to their airdromes. (d) Another long-range fighter, the two-motor, 12-gun, Whirlwind, is also being introduced. The first notable action in which Whirlwinds took part was the daylight bombing of Cologne on August 12. Apparently, the Whirlwind has not been very success- ful since it did not have sufficient range to convoy the bombers the whole distance to Cologne, but had to turn back over Holland. (e) Two more new fighters have been reported, the Typhoon and Tornado, but have not yet been mentioned in action. The British have three new bomber types, the four-motor Stirling and Halifax and the two-motor Manchester. All three of these bombers are being introduced into operational squadrons. The burden is still being carried, however, by the older types. This can be shown best in a sample night's activity. During the night of September 19/20, 72 bombers were sent out. The composition of the raiding squadrons was as follows: Old Types: Wellingtons Whitleys 46 9 55 Total New Types: Stirlings Halifax Manchesters Total 10 4 3 17 445 -3- Division of Monetary Research 3. Another important change in the R.A.F. since the beginning of the war is the addition of American types. The British are now making active use of four American planes in northern Europe: Lockheed Hudson reconnaissance bombers, Consolidated Catalina patrol bombers, Douglas DB-7s used as night fighters, and Boeing Flying Fortresses heavy day bombers. In the Middle East, Curtiss P-40's probably make up half of the British fighter force, while the Martin Marylands form the greater part of the bomber squadrons. In the Far East, Brewster Buffalo fighter planes are the bulwark of Singapore. 4. To keep up-to-date, the German Air Force has depended mainly on modifying the design of its basic types already in use. The latest German fighter, for example, is model F of the old Messerschmidt Me-109 that saw action in Spain, Poland, and France. In this way, the Nazis have secured the advantage of minimizing the interruptions in production. The few main new types the Germans have brought out have been, generally speaking, to meet new needs which could not be satisfied by any of the old types. In the spring of 1940, the Messerschmidt Me-110 made its appearance. This is the two-motor 'long-range fighter which is used as a bomber escort for long-range bombing. In the last year, the Focke Wulf Condor appeared. The Condor is a fourmotor long-range bomber, designed for attacks on British convoys. A new Junkers bomber, the Ju-88 was also introduced in 1940. This bomber, which can be used for either level or dive-bombing, proved to be more useful than the narrowly specialized Ju-87 or "Stuka". The Germans did produce two new fighters which were appar- ently designed to replace the standard Me-109. These two, the Heinkel 113 and Focke Wulf 187 Zerstoerer (Destroyer), were tried out over England but may have proved a failure, since they have not been used again. 446 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE October 7,1941 TO Secretary Morgenthau FROM Mr. Kamarok Subject: Summary of Military Reports Russo-German War The Finna have out the Murmansk railroad at Petrosavodsk. This does not cut off, however, the use of this route since there is a branch line from the railroad running along the southern shore of the White Sea to Archangel. The Germans are on the defensive from Leningrad to just above Smolensk. From Smolensk to the northern Ukraine, the German Army has launched a general attack directed at present at Moscow. Some initial progress has already been made. (M.I.D., Situation Report, October 7, 1941) During the week ending September 27, the main part of the German fleet made a war cruise in the Baltic. The follow- ing units are still in the Baltic: 1 battleship (Tirpitz, 35,000 tons) 1 pocket battleship (Luetzow, 10,000 tons) 1 eight-inch cruiser (Hipper, 10,000 tons) 3 six-inch cruisers (Nuerenberg, 6,000 tons; Koeln, 6,000 tons; Emden, 5, 400 tons) 2 old battleships (Schlesien, Schleswig- Holstein, 13,000 tons, built in 1906) The pooket-battleship, Admiral Scheer, which also took part in the cruise, was in the Hamburg shipyards on September 28, presumably for repairs. (The other major units of the German Navy are at Breat: 2 battle eruisers, (Scharnhorst, Gneisenau, 26,000 tons) 1 eight-inch cruiser (Prinz Eugen, 10,000 tons) (U.K. Embassy, London Telegram, September 30, 1941) 447 -2- Division of Monetary Research Sinking in American Waters During the night of October 1/2, a 13,000 ton tanker in a convoy was torpedoed 770 miles east northeast of St. Johns, Newfoundland. (U.K. Embassy, London Telegram, October 2, 1941) Vichy Africa On September 29, a British Sunderland flying boat on convoy escort duty, owing to an error in "briefing" pilot (giving orders to the pilot), reconnoitered Dakar. It was attacked by four French Mohawk fighters (Curtiss-Wright P-36's). A second Sunderland flying boat came up. One French fighter was destroyed, others damaged. (U.K. Embassy, London Telegram, October 2, 1941) Mediterranean The British H.M.S. Hermoine (light cruiser) bombarded the Italian naval base of Pantellaria (small island in the straits between Sicily and Africa) during the operations passing a convoy through the Mediterranean to Malta. (The British have a regular offensive-defense pattern for bringing their Mediterranean convoys through. This has evolved during the war and makes possible an operation which was judged impossible by most naval and air experts before the war. While the convoy is passing within air range of Italy, British bombers attack the Italian air bases in an attempt to keep the Italian air force out of the air. At the same time, naval units bombard the mosquitoboat submarine nest at Pantellaria.) (U.K. Embassy, London Telegram, October 2, 1941) 448 V448 BRITISH EMBASSY, WASHINGTON, D.C. PERSONAL AND October 6th, 1941 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, Halifix The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 449 - RECEIVED FROM LONDON IMM 1002 Borneine treasured Italian Naval base Pentelleria during operations passing convey to mits. Right of 1st/ms, 18,868 - in convey 770 siles east north east off no. Johns (Nore). Hight of 1st, ensay convey off Datas coast attached by aircraft of coastal - direct Mits seeved on vessels, estimated 3000 sans and 30,000 tens. Both attacking sircnaft - - patrel. P.M. October 1st eight Reviewed attached eight E boats off Dieppe, All 3. bests has and damagelle Fight of October 1st/Ms airerate Mt two small merchant shipe off North Princien Zalanda Sales estimated 2,800 time also assested and structled. Night of Sept. some when Impact assested by thirteen Wellingtons, several assest Mis - - merchint ships alangside miss RUSSIA design advence from Poltem - Masher moting stiff resistance and German progress in Perchase Settress has been halted. TOTAL AIR you Sept. se/cet. 1st. 62 time H.S. - so chorbourg and so stetting mas - - - and Vose ate trans festory and railing junction as AS boube fell in docks area and as stestin Sarata seen is entre of some October 10th - fighters destroyed - anowy fighters, - system - - recerve operations and - on photographic recometenence missings 449 TELEGRAN RECEIVED FROM LONDON DATED OCTOBER Sada 1941. H.M.S. Bermoins beesbarded Italian Naval base Pantelleria during operations passing convey to Melta. Hight of 1st/End, Tanker 19,848 time in convey torpedood 770 miles east north east off st. Johns (N.F.). Night of Sep.30th/Ost. 1st, enemy convey off Dateh coast attacked by aircraft of ecastal commands direct hite secred on vessels, estimated 3000 tons and 10,000 tons. Both attacking aircraft were on patrol. P.M. October 1st eight Harricanes attacked eight E boats off Dieppe. All 3. boats hit and damaged. Night of Ostober 1st/last aircraft hit two small merchant ships off North Priesian Islands. Tanker estimated 2,800 tons also attacked and struddled. Night of Sept.2911/ sosh, when Donghest attacked by thirteen Wellingtons, several direct hits made on merchant ships alongside Hole. RUSSIA German advance from Poltava towards Khaskev meeting stiff resistance and German progress in Perekop isthese has been halted. ROYAL AIR FORCE. Sept. so/oat. 1st. 61 tens N.E. dopped Hamburg, so Cherbourg and 29 Stettin. Hits seen on Blohn and Vose air from factory and railway junction at Hamburg. AS Charbeurg boube fell in docks area and at Stettin bursts seen ine entre of some October 1st, Our fighters destroyed two enemy fighters, two spitfires on sea reserve operations and one on photographic reconcissance missing 450 Signi of October into I air activity United Kingdom very slight. Night fighters shot down two, 88 of our aircraft delivered medium weight attacks on Karlarune and Stuttgart. One missing. Libya 30th/1st. Wellingtons attacked M.T. depot Tripoli (L) many direct hite seen and large spreading fire. Africa. 29th. Sunderland on convey escort duty reconnoitred Dakar owing to error in "briefing" pilot, it was attacked by four French Mohawk fighters and joined by second Sunderland. One French fighter destroyed and others damaged. V 451 BRITISH EMBASSY, WASHINGTON, D.C. PERSONAL AND October 2, 1941. 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, R.J.Campbell The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. TELEGRAN FROM LONDON DATED SEPTEMBER 30th, 1941. 452 Nevels During operations in the Meditor ranson, 13 enemy aircraft brought down by anti-aircraft fire and fighters. Three of our aircraft lost one reas out of petrol and two shot down flying low during enemy attack with torpedo aircraft, only one of crew wee lost, 2. British submarine on patrol in Adriatio damaged enemy tanker on 18th, another on the 24th and sank one ship off Dalmatian coast on 23rd. 3. During the past week majority of effective German main naval units including "Tirpits" and "Seheer" have carried out a war cruise in the Baltie. Following units are still in the Baltie; one battleship, one pocket battleship, one eight inch cruiser, three six inch cruisers and two old battleships, Photographic air recommissence reported "Scheer" in Hamburg ship- yard on September 28th, presumably for repairs. 4. Russians inflicting heavy casualties on German forces attempting advance in Novomoskovak Daisprophtwovak area. 5. September 29th. Fighter a carried out small offensive patrols over French and Belgian coasts. A barge left sinking and patrol boat set on fire. A bomber destroyed on the ground. Three of our aircraft missing. Two pilots safe. 6. September 29th-30th. Hearly 250 aircraft sent to targets including Stettin, Hamburg and Havre. 10 missing. Most aircraft identified primary targets. 9/ Libya 453 7. Libya. September 27th-28th. Attack was renowed on an enemy ship in Bardia harbour. Bombs fell near ship and three large fires started in dooks. 8. September 29th. 6 Blenheins attacked Buerat, Gulf of Sirte, causing extensive damage to wireless station, motor transport and stores dumps. 9. Sicily. September 28th. 18 Hurricanes made three separate attacks on Comiso aerodrome dropping two tons of bombs. Hits scored on hangars and buildings, two seriously damaged. 10. Rhodes, September 27th-28th. 11 Wellingtons successfully attacked the harbour. German Air Force. September 29th-30th. 24 11. aircraft operating, 7 asmo inland. 454 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE October 13,1941 Secretary Morgenthau TO Mr. Kamarok FROM Subject: Summary of Military Reports Use of American Planes London announced on October 10 that Airacobra fighters had been employed especially for protection of long-range bombers during their attacks on Nazi-occupied positions on the continent. (M.I.D., Situation Report, October 11, 1941) On October 7, Axis supply concentrations near Gambut, Libya were attacked by nine Maryland bombers protected by 21 Tomahawks. One Me-109 fighter was shot down and another damaged. (London, Military Attache; U.K. Embassy, London Telegram, October 9, 1941) On October 6, twelve Tomahawks engaged fourteen Me-109 fighters in the Sidi Omar area. One Me-109 was destroyed, another, probably destroyed. Two Tomahawks were lost. (U.K. Embassy, London Telegram; London, Military Attache, October 8, 1941) R.A.F. in Russia On October 6, the R.A.F. airfield at Murmansk in northern Russia was attacked and bombed. Fourteen Axis bom- bers and six fighters participated. The Hurricanes protect- ing the field shot down two Ju-88 bombers, one Me-109 fighter, probably six more Ju-88s were crippled and three Ju-888 were forced to turn back. (That leaves three that got through). The R.A.F. sustained no losses and there was little destruc- tion resulting at the field. (The R.A.F. wing aiding the Russians is, therefore, evidently located near Murmansk and is operating against the German and Finn forces threatening Murmanek). (London, Military Attache, October 8, 1941) 455 -2- Division of Monetary Research Air Developments Comiso Airfield (Sieily) was bombed by nine Hurricanes during October 6. During the night of October 6/7, high explosive bombs totaling 12 tons were released by eight Hurricanes over Tripoli harbor. Apparently, one 10,00 ton ship was damaged. (This 1s the first mention of the use of Hurricane fighters as bombers. Apparently, the British have taken a leaf from the Nazi book. The Germans last year used fighters to bomb London by day. Although fighter planes used for this purpose cannot carry a heavy load of bombs, nor have a long range, there are certain advantages. If attacked by fighters on their way to the objective, the bomb-carrying fighters jettison their bombs and can defend themselves. If they reach their objective, after dropping their bombs. their speed is great enough to escape the interceptor fighters taking off.) (London, Military Attache, October 8, 1941) While on interception patrol over the Devonshire District, a Beaufighter (British long-range fighter, 4 cannon, 6 machine guns) was allowed to approach to within 400 yards of a He-III bomber. The He-III, then, deliberately climbed and dropped six cannisters, approximately one foot in length, which were attached by nearly one yard of wire to a parachute. There was no apparent attempt to take cover in the clouds. (This may have been an attempt to jettison some parachute land mines or a new form of defense.) (London, Military Attache, October 8, 1941) Nazi Activity in Western Hemisphere During the night of October 4/5, a small British vessel carrying bauxite from Georgetown to Trinidad had an internal explosion when east of Trinidad and sank. Sabotage is suspected. (U.K. Embassy, London Telegram, October 7. 1941) 456 CURRENT SURVEY OF THE INTERNATIONAL October 7 - 14 The war in Russia continues to occupy the obviously central position in the international scene. Last week's picture is still valid to the extent that the peripheral powers have their attention rivetted on Russia, and that in every case their future policies must reflect the outcome of the struggle for Moscow. The short-run picture is a somewhat different one, however. Here the Anglo-Saxon bloc has won successes of one kind or another in Indochina, France, Turkey, Spain, and even Panama. These successes should, however, be accepted with the greatest reserve, and all but that in Panama may soon be the subject of serious change. Indochina has been the seene in the past fortnight of steadily widening Japanese activity. The hand of the Japanese army has been closing steadily on the Saigon and Hanoi areas, and present preparations seem clearly to indicate the arrival of much larger military forces. A Japanese press campaign has pictured the menace to Indochina of Chiang Kai-Shek's army, and lends color to the fear of the French that large forces are soon to be debarked at Haiphong. The Vichy government has quite naturally sought to exploit this situation to enlist our aid against the Japanese. Ii 457 -2- They began by playing the well@known chords of the Open Door Policy, and urged that, by opposing Japan, we should be rescuing our own chestnuts as well as theirs. At this point the maladroit tactics of the Japanese played into their hands. The latter needed oil storage space at Saigon. They requested the Standard and Texas Companies to lease them storage space and to hand over information on other facilities. The French government in Indochina weakly (and perhaps cleverly) told the two American companies that they must comply or have their tanks requisitioned by the French goverhment to prevent their seizure by the Japs. The companies refused. Our government gave them its support and warned Japan sharply that such a seizure would constitute an unwarranted intervention in our interests. We then induced Vichy to direct its Indochinese govern- ment to refuse to requisition the tank space. And Vichy took the final step when it warned Tokyo that it would resist, by force if necessary, any encroachment of the Japanese which went beyond the terms of the recent accord with Indochina. The newly established entente in Indochina between Vichy and the United States seems to have drawn a line beyond which the Japanese have been told not to go. In Manchukuo quiet continues to prevail in the strictly military sphere. Few troops movements are reported. On the other hand, the construction of trenches and air-raid shelters goes on apace in various places. And our consul at Mukden 458 -3- reports a curious phenomenon: At a mass meeting of White Russians on October 3, instructions were given as to the service they were expected loyally to give Japan, and they were told that an emergency would exist in Manchukuo within the next two months. The other center of interest is the Near East. The AngloSaxon bloc won the first round of the chrome battle, and no ore is to go to Germany this year or next. But the Nazis finally secured the prior right to 90,000 tons in 1943 and again in 1944. Apparently the British are satisfied, and both they and the Turks feel that an international arrangement covering 1943 has about the same validity as a description of heaven. Our own ambassador, Mr. MacMurray, however, believes we have suffered a notable defeat, that the repercussions on Turkish morale will be unfortunate, and that German propaganda in the Near East will exploit this victory to the full. Reports from Iran have emphasized the unfortunate character of the activities of the Soviets, who have been alleged to be lending encouragement and support to separatist movements. We have been particularly disturbed about the only too probable reactions of the Turks to any nationalist movement among the Armenians. Vyshiriski has just now roundly denied all such allegations of Russian activity; and the Soviets have agreed to remove their troops from Teheran with the signing of the projected Tripastite Treaty. Our minister 459 -4- also suggests that the mutual distrust and non-cooperation of the Russians and British may seriously compromise the effort to ship supplies to Russia through Iran. In the Libyan-Egyptian sector there are indications of approaching military activity. The consul at Tunis notes a very considerable increase during the past few days in sea and air traffic toward Tripoli. The recent accord between Vichy and Italy is being rapidly implemented, and a train a day is leaving Tunis for Gabes with wheat and other supplies. There is much speculation concerning the transfer in the not too distant future of large elements of German air strength from the Russian front to Libya. Rumors from Cairo suggest that there may be an early British military move in Libya as well. But the realities of British preparedness, as revealed in the stark reports of Mr. Kirk, do not offer much encouragement in this connection. The Port of Suez, where unloading is subject to the direction of four different authorities, is in a chaos of disorder. Tanks and their essential spares, although arriving on the same vessel, are frequently separated and even completely lost. Cooperation between the army, navy, and R.A.F. is often shamefully lacking. Mr. Kirk is of the opinion that a unified command and a coordinated system of control must be instituted at once or the most serious results will follow. 460 of The Spanish government is evincing genuine eagerness to implement the newly developing economic detente with the United States. It is obvious, as was suggested last week, that Spanish policy is being guided here, not by preference or ideology, but by the grim realities of economic necessity. The palace revolution in Panama has been managed with such dexterity that our government has chosen to take the Panamanian view of things--that the changes are all perfectly constitutional and that, therefore, the problem of formal recognition of the new regime does not even arise, In any event the new President has gone out of his way to assure us that the allegedly pro-Nazi policies of his predecessor are a thing of the past, and that we can rely on the cancellation of the earlier prohibition of the arming of ships carrying the flag of Panama, and that the German consulate will be closed. Both promises are off the record for the present, but these steps will be taken at the earliest moment that they become diplomatically practicable. & 461 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE October 15,1941 TO Secretary Morgenthau FROM Mr. Kamarck Sub ject: Summary of Military Reports British Aid to Russia The British Air Ministry claims that their attacks on Germany have kept half the Luftwaffe fighting force.on the Western Front and thus aided in preventing the Germans from gaining control of the air over the Eastern Front. (M.I.D. Situation Report, October 15, 1941) (On August 14 our London Military Attache reported that the R.A.F.'s day fighter sweeps have not been successful in relieving German fighter pressure on the Russian front). A supply convoy from the United Kingdom has arrived at Archangel. (This may be the origin of the Swedish story of a British Expeditionary Force in North Russia). (U.K. Embassy, London Telegram, October 12, 1941) Albacores (Fairey Fleet Air Arm torpedo biplanes) from the aircraft carrier Victorious bombed and set on fire 1,000 ton merchant ship in Vest Fjord (off Narvik). Two south bound merchant ships of 2,000 tons escorted by anti-aircraft ships were also hit and a small Norwegian merchant ship was abandoned after being hit. (This activity should curtail the flow of supplies along the Norwegian coast to the German and Finn forces attacking Murmansk). (U.K. Embassy, London Telegram, October 11, 1941) Battle of the Atlantic During the week ending October 8, 821 ships were convoyed. Imports into the United Kingdom totalled 796,584 tons. One cruiser, four anti-aircraft ships, six AMC's (auxiliary merchant 462 -2- Division of Monetary Research cruisers), 93 destroyers, including 20 United States destroyers, and 95 of His Majesty's other ships (probably mostly corvettes) were employed on escort duty (or a total of 199 ships to convoy 821 merchantmen, or almost one escort ship to protect every four merchant ships). (U.K. Embassy, London Telegram, October 11, 1941) During September, 10,720 tons of cargo destined for the enemy were seized. Seizures since the beginning of the war total 810,239 tons. (U.K. Embassy, London Telegram, October 11, 1941) French Collaboration with Hitler French collaboration with Germany increases. A joint German-French aircraft production scheme has been worked out according to which factories in both the occupied and monthly by August, 1942. Port Caronte (a part of the port facilities of greater Marseilles) has been given up to Axis cargoes carried in French ships from North Africa and Spain. unoccupied zones of France expect to produce 300 planes (U.K. Embassy, London Telegram, October 11, 1941) 63 ships totalling 207,000 tons, out of 90 Allied and neutral ships detailed by Vichy, are reported to have been taken over by the French. 21 of these, totalling 96,000 tons, have already been placed under direct Axis control. The majority will work for the Axis under cover of the French flag. Some are reported sent to Italian ports manned by Germans. 42 of these ships are, at present, in the Mediterranean. (U.K. Embassy, London Telegram, October 10, 1941) (N.Y. Times, October 15, report from Lisbon, Portugal:) "From unimpeachable sources here there are indications that General Maxime Weygand, delegate-general of the Vichy Government in North Africa, has much increased his prestige and authority since his appointment to that post. 463 - -3 - Division of Monetary Research "His concern for the welfare of the native population is much appreciated in these hard times. "The barter agreement between North Africa and the United States is proving a great boon." Conditions in the Axis Countries The acute shortage of textiles in German Europe has resulted in at least a 25 percent reduction in the German clothes ration (which was low enough before) and an embargo in Italy of the sale of clothes, pending the inventory of stocks and even wardrobes. Germany is making intensive efforts to get cotton from Turkey, wool and manufactured goods from Spain. German anxiety over food supplies for the winter is reflected in the rationing of potatoes in some provinces. (U.K. Embassy, London Telegram, October 11, 1941) German Navy Photographic reconnaissance recently showed the Admiral Scheer (pocket battleship) in floating dry dock at Hamburg. She may be damaged or suffering mechanical defects. (This ship has now been in dry dock since September 28, or about two weeks). (U.K. Embassy, London Telegram, October 11, 1941) Use of American Planes On October 10, nine Marylands attacked about 50 tanks and 200 trucks east of Tobruk. Three of these received direct hits. (U.K. Embassy, London Telegram, October 12, 1941) Japan Since July 1941, the daily average of Japanese merchant ships outside Japanese waters has fallen from 172 to 40 on October 6 (a 75 percent decrease). (U.K. Embassy, London Telegram, October 12, 1941) 463 -3. - Division of Monetary Research "His concern for the welfare of the native population is much appreciated in these hard times. "The barter agreement between North Africa and the United States is proving a great boon." Conditions in the Axis Countries The acute shortage of textiles in German Europe has resulted in at least a 25 percent reduction in the German clothes ration (which was low enough before) and an embargo in Italy of the sale of clothes, pending the inventory of stocks and even wardrobes. Germany is making intensive efforts to get cotton from Turkey, wool and manufactured goods from Spain. German anxiety over food supplies for the winter is reflected in the rationing of potatoes in some provinces. (U.K. Embassy, London Telegram, October 11, 1941) German Navy Photographic reconnaissance recently showed the Admiral Scheer (pocket battleship) in floating dry dock at Hamburg. She may be damaged or suffering mechanical defects. (This ship has now been in dry dock since September 28, or about two weeks). (U.K. Embassy, London Telegram, October 11, 1941) Use of American Planes On October 10, nine Marylands attacked about 50 tanks and 200 trucks east of Tobruk. Three of these received direct hits. (U.K. Embassy, London Telegram, October 12, 1941) Japan Since July 1941, the daily average of Japanese merchant ships outside Japanese waters has fallen from 172 to 40 on October 6 (a 75 percent decrease). (U.K. Embassy, London Telegram, October 12, 1941) V 464 BRITISH EMBASSY, WASHINGTON, D.C. October 14th, 1941. 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, Halifer The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 465 TALIDRAN FROM LONDON DATED 007038 18th. 1941, A supply ceavey from the United Kingdom has arrived at Archangel. s. Kaming aireraft again attacked Faree Islands p.m. October 11th, a Bernegies travier was weak and houses sure machine Small Greek merchant vessel is convey was s. sunk by mine off Number October 10th. small British merchant vessel was bombed 4. and suak off the East coast early this morning. Canadian Government tanker has now arrived 5. at Iseland. Tebrate As a counter to enemy night operations 6. with tanks against our forward observation posts on October 9th 18 of our Infestry Banks successfully intercepted an tank formation and foreed 18 to withdraw. so German tanks took part of which many were certainly damages. Care outained only minor repairable damage and we had two committee. Rezal Air Perso. October 9th/10th. Revieed castalties. 10 bembers missing, 4 cracked, 1 crow killed. October 10th/11th. objectives were attacked 8. 9. as follows. Kyuppo Works Massa 56 aircraft, 59 tons of high explosives, 6640 incondiary bombs. delease. as aircraft, 76 tons of high explosives, 4960 smoondiary baba. 19 aircraft, 16 tone of high explosives, mil. 9 aircraft, . tons of high explosives, 1080 inconstary bombs. saturda 16 aircraft, BY tons of high explosives, 840 incentiony bomba. / Retterdam. 8. Betterime . aircraft, 10 sens of high explesives, 900 incentiary bomba. Total - 100 aircraft, 194 tone of high explesives, 14,480 incentiary boube. Bad weather prevented secreta bombing but many fires were started and one 4,000 pound base was seen to bwat is the centre of Cologne. 9. October 11th. Some small offensive operations were carried out by our fightere over Northern France. 10. October 11th/1sth. 89 aircraft were sent out 87 to Indea and 18 see mining - all returned safely. 11. October 9th/10th. Successful attacks were made on Benghest harbour Deras and two aerodremes. October 10th 9 Marylands attacked about so tasks and 800 mechanical transports east of Tobruk, 8 of which received direct hite. 18. Meditorroness October 10th/11th. Navel aircraft from Malta attacked as enemy convey two merchant vessels of about 6,000 sono were seriously damaged and stopped. 18. German Air Foree. October 11th/18th. one s.u. 00 collided with aircraft, both being destroyed and another may bember landed near Dangeness and was severely damaged - the crew of 4 being captured. Bombing was some- what heavier than recently but was scattered. No damage of national importance and casualties small. Aa air-reid presention headquarters damaged at Tomby and some damage to utility services at Great Yermouth and Whitetable. 14. It is reported that 50,000 men are now / engaged 467 engaged on railway construction work and 88,000 on reads. Hailway between Svilengrad and adiras (Adrienople) will not now be repaired until early December. 15. Janes, Since July 1941 daily average Japanese merchant shipe outside Japanese waters has fallen from 178 to 40 on October 6th. 16. Aircraft essualties over and from British areas. German 8 destroyed and British mil. 468 BRITISH EMBASSY, WASHINGTON, D.C. October 13th, 1941 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, Hahjax The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 469 TELEORAN FROM LOUPON DATED COVORER 11. 1001 Albacores from Vistorious bombed and set on fire 1,000 tea merchant ship in VEST Fjowd. Two South bound marahant shipe of 8,000 tons accorded by A/A shipe also his and smill Norvegian merchant ship abandoned after being his. 9. During last week shipping lesses light. Winter gales started in the Atlantic interfering with movement of conveys. Successful attacks against - shipping in the Meditoryanoan have continued by British submarines and aircraft. 3. Pog over the United Kingdom and continent has restricted air operations but night of 10th/11th of October 180 aircraft raided Kruppe, Essen, Cologne, Dunkisk, Bordeeum, ostend, Rotterdam and searchlight bels in Rubers 18 aircraft not yet reported back. 4. G.A.Pa Eight of 10th/11th October, 25 many airwrets operated against this country near .............. and in East suffolk. No material damage, - enemy bomber destroyed by night fighters. 6 Maral. During week ending October 8, 881 shipe were conveyed. one oruiner 4 NA ships, six AMO'S es controyers, including so United States destroyers, and 95 other H.N. ships employed on essort duty. 6. Importe into the United Kingdom totalled 784,564 sons plus 8,000 tone of special Government sarge making average of 962,114 tons for last sen weeks. 7. During September 10,780 tons of eargo destined for the enemy seised in prise. Total seimures 810,239 tons since the beginning of the war. w./ 470 a. Photographic recommissence recently showed Mistral School in fleating deek Bashuag. She my be d or suffering mechanical defeats. Relate October. In Seleen 9. attack off Hereing reported October 10th, - his made on 9000 tea marrhant vessel, and another as pound incendiary on 8000 ton ship. Believed two hits made on - 8-10,000 tea vessel. 10th, off the Reguse a supply ship of 2,000 sons was twice his and probably sunk. Min. October, 18 Wellingtons 20. seredrum near Benghasi, damaging Hangers, buildings and oil stores. 11. Aircraft cannalstes. In last seven days Ours,one fighter twelve common two certain one probable. made East: Ours, two bembers. Germane, one certain two probable, one damaged. Russia: - for certain, six damaged, cure nil. 28. Ameria. Germans continuing drives on Medical from directions of Typese and oral. Asube shortage of tentiles in German Surepe 18. has resulted in as least ass reduction in German clothes rations and embargo in Italy of sale of elethes pending inventory of stocks and even verdrobes. Germany is making intensive efforts to got costion from Turkey, wool and manufactured goods from Spain. 14. German anxiety over food supplies for the winter is shown in rationing of potatoes in some provinces. 15./ I 471 15. French collaboration increases joint German French aircraft production scheme on which factories in both sense expect to produce 800 planes monthly August 1948. Fort Caronie given up to Axis cargoes carried in French shipe from North Africa and Spain. 472 BRITISH EMBASSY WASHINGTON, D.C. October 11, 1941 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, Halifax The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 473 . COTD HER DATE. 1041 68 ships totalling 207,000 tone out of 8 allied and neutral ships detained by Visity reported taken ever by the French. Twenty one of these totalling 93,000 tess already placed under direct Axis centrol. Majerity will work for Axis under cover of French 110g. Sease reported sent to Italian parts manned by Germans. Forty-two of these ships as present in on October 9th. Ostend Cherbourg areas fighter a. aircraft set on fire shipe estimated at 1500 and 500 tons, damaged another 800 tens. Night of October 9th/10th ten coastal aircraft attached two mony ships off AAlessand) full details not 3. known but one direct hit estimated. Hight of Ostober 7th/october 8th. Reyel Airforee eircraft not OR fire merchant ship in Tripoli (L) Herbour 4. and destroyed lighter. Merchant ship estimated at 2000 tons west of Tripoli (L) was bombed probably suak by Blenheim. Following night neval aircraft attacked convey stellion Channel and sunk Merchant estimated at 6000 tons off Harittino island Wellington seored direct hit merchant ship estimated at 6000 tons. 5. Large Ruesian forces near Vynena and certain Russian forces near Bryanak probably surrounded. Germans advancing towards Khasket and reported reached Mortingal. on October 8th fifty enesty aircraft in two WAVES 6. attacked Tobruki four were badly damaged. Our casualties two killed few wounded. 474 Treasury Department Division of Monetary Research Date To: October 22, 1941. 19 Secretary Morgenthau In the appended memorandum prepared by Mr. Kamarck, estimates of Axis and Allied tank production are compared. As in the case of his survey on plane production, the estimates are based on inadequate data. However, the secondary sources of information are intelligently employed and I believe the results merit consideration. It should be easy for you to check his estimates of U.S. and British production from your special sources of information. His estimates of tank production are, in the light of the requirements for strategic equality, no more reassuring than those of plane production. H.D.W. MR. WHITE Branch 2058 - 2141 475 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE October 15, 1941 Mr. White Mr. Kamarck OM Preliminary Memorandum: Axis and Allied Production of Tanks. abject: Summary (a) As in the case of air power, to secure a tank arm as effective as that of the Axis, it is probably necessary that the total Allied pro- duction of tanks should be considerably more than Axis production. The Axis occupies the more favorable strategical central position and the Allied needs are, perhaps, somewhat greater. (b) The production of tanks for Axis armies averaged from 1,000 to 1,700 tanks a month for the year before June, 1941. Since throughout this period the rate of production increased, present production should be from 1,500 - 3,100 tanks a month or even higher. English production, Russian production, and the Allied share of American production probably totals from 1,000 to 2,200 tanks a month. (English monthly production, range 400-800, most probable, 600; U.S.S.R. production, range 333-1,000, most probable, 700; Allied share of U.S. production, probably 300; total of foregoing,range, 1,033-2,200, most probable, 1,600.) I. Axis and Allied Needs The Axis occupies the central position while the Allied forces are ranged along the periphery. It is difficult to measure quantitatively the advantage this position gives to the Axis, but there is no doubt that it is great. The panzer divisions in the campaign against Poland never encountered British and French tanks. In the Balkan campaigns, the Germans sent in as many panzer divisions from their central reserve as they considered necessary. The British, on the other hand, faced the difficult and time-consuming task of transporting their tanks to the Middle East. Furthermore, if the British depleted their home forces seriously, the panzer divisions in the Balkans could return to the Channel Coast and land in England long before the defending British tanks could return from Greece. 476 -- Division of Monetary Research The Germans, perhaps, do not have as large a number of their tanks tied up in subsidiary or potential theaters of war as do the Allies. The Russians are forced to maintain large forces in the Far East against the Japanese threat. To counter-balance this, there is the fact that the Germans have to maintain troops in the occupied countries. On balance, however, the Japanese are probably a greater threat than the unarmed populations of the conquered countries are. II. Axis Production (a) From September, 1939 to May, 1940, German and German-controlled tank production averaged around 300 a month. Production in April, 1940 probably was about 500 tanks a month. The U.S. Army Military Intelligence Division estimates that the Germans had 6,000 tanks on September 1, 1939. At that time, the Germans are believed to have had six panzer divisions and four light armored divisions (truck-borne light tanks). Each division had 450 tanks with a total of 4,500 tanks as the organic strength of the ten divisions. In addition, there was a G.H.Q. reserve of one-third or 1,500 tanks. During the winter of 1939-40, the Germans replaced the casualties of the Polish campaign, which we may estimate at 10 percent or a total of 600 tanks. The regular wear and tear resulting from the vigorous war exercises of the fall and winter also caused some tank casualties. A figure of 1,000 tanks as total necessary replacements due to the Polish campaign and the winter maneuvers, might be regarded as, reasonable. The Germans also expanded their tank park by 1,500 tanks. French G-2 in a study of the campaign in the West has estimated that the Germans had 7,500 tanks on May 10, 1940, or 1,500 more than the U.S. Army's estimate of 6,000 on September 1, 1939. The Germans had ten panzer divisions on May 10, 1940, the four light armored divisions of September 1939 being converted to panzer units during the winter. That would give 4,500 tanks as the organic strength of the panzer divisions and 3,000 tanks, or an additional two-thirds in the G.H.Q. reserve and in other units (infantry cooperation tanks). According to the foregoing reasoning, the Germans produced in the eight months, September 1, 1939 to May 1, 1940, 2,500 tanks, or an average output of 300 tanks a month. It is quite likely that the Nazis increased their tank production during this period, so that in April, 1940, the monthly output may have been more than the average of 300 a month. If we assume that the gain in production proceeded with an equal monthly increment throughout the eight 477 -3 - - Division of Monetary Research months, the production in April, 1940 cannot have been more than 600 tooks. To get a higher figure would pre-suppose a negative tank production in September, 1939. We might assume, then, that tank production in April, 1940 was likely. between 300-600 units a month, with a figure around 500 as extremely (b) From May, 1940 to June, 1941, production of all tanks for the German Army averaged from 1,000 to 1,700 tanks a month. Production of medium and heavy tanks alone averaged around 700 to 850 units a month. Production of all tanks in June, 1941 was probably from 1,700 to 3,100 tanks a month. Present production may be even higher. The Russian Government informed Lord Beaverbrook at the Moscow Conference that it estimated that the Reichswehr had 30,000 tanks at the time of the attack on Russia. This would represent an increase of 22,500 tanks over the German tank park of 7,500 in May, 1940. During this period, also, the casualties of the Campaign in the West had to be made up and the normal wear-and-tear replacements provided for. To offset this, there is the captured British and French tank booty. Assuming, again, that the tank casualties were 10 percent, the Germans lost 750 tanks in the campaign. (This may be fairly accurate. The total German personnel casualties amounted to 3 percent of the whole army. The panzer divisions which bore the brunt of the fighting may well have had triple the casualties of the army average). Necessary normal replacements in the next thirteen months may have amounted to 500-1,000. We have no available basis for comparison. The British Army, according to information given our Military Intelligence, lost 700 tanks in France. The French lost 2,000 tanks, according to their official account of the campaign. The British attempted to destroy the tanks they were forced to abandon. That they were not wholly successful, we know from reports of observers. An even larger number of the French tanks fell unharmed into the hands of the Germans. Under the circumstances, we might safely say that, on the whole, the German tank losses in the Campaign in the West were probably more than balanced by tank captures. The surplus may have been sufficient to offset the normal non-fighting tank losses. If we assume that this is true, German tank production from May, 1940, to June, 1941, on the basis of the Soviet estimate, amounted to 22,500 tanks or an average of 1,700 tanks a month. 478 - -4- Division of Monetary Research If we accept the estimate that tank production in April, 1940 was 500 units, and if we assume that it increased with a constant monthly increment, to achieve a monthly average of 1,700 tanks production in May, 1941 would have had to be 2,900 tanks. We may also approach the problem from another direction. At the time of the German invasion of Russia, the Nazis are believed to have had 18-22 armored divisions. British Military Intelligence estimated the number at 18, while the U.S. Military Attache in Moscow estimated them at 22. Since we know that the Germans had 10 panzer divisions in May, 1940, in the thirteen months following, eight to twelve divisions were added. This would represent an increase of 3,600-5,400 tanks, on this score alone, (at 450 tanks per division). The Germans would also have a G.H.Q. reserve of one-third, at least, behind these divisions or an additional 1,200-1,800 tanks, bringing the total increment to 4,800-7,200. According to our and the British Military Intelligence services, during the fall and winter of 1940-41, the Germans reorganized their panzer divisions. The light tanks were replaced with medium tanks and in some divisions heavy tanks took over the functions of the medium tanks. The light tanks that were replaced were transferred to the motorized infantry divisions or assigned to regular infantry divisions as infantry cooperation tanks. This substitution of medium and heavy tanks for light tanks meant that tanks had to be produced even for the old panzer divisions. The panzer divisions on May 10, 1940 generally had 150 medium or heavy tanks and 300 light tanks. Since there were 10 such divisions, 3,000 light tanks had to be replaced with medium or heavy tanks. For the organic tank strength alone of the 18-22 panzer divisions of June, 1941, the Germans had to produce between May, 1940 and June, 1941, 6,600-8,400 medium or heavy tanks (3,000 to replace the light tanks of the old ten divisions and 3,600-5,400 for the eight to twelve new divisions). Assuming a one-third G.H.Q. reserve, the total number of new medium and heavy tanks added would be 8,800-11,200. The average monthly production of medium and heavy tanks from May, 1940 to June, 1941 would be, then, from 670 to 850. Since the average conceals a rising rate of production, the rate at the end of the thirteen months, unquestionably, would be greater than the average. In view of our estimate of a production of 500 tanks of all types in April, 1940, production of medium and heavy tanks at that time was probably not greater than 250 tanks a month. For, after all, the Nazis did not have a total of more than 2,500-3,000 medium or heavy tanks at that time. 479 -5- - Division of Monetary Research To achieve an average of 670-850 tanks a month for the thirteen months preceeding June, 1941, starting with a monthly production of 250 and assuming an even monthly increment of growth, would make production in May, 1941, 1,100-1,550 medium and heavy tanks. In the period between the Campaign in the West and the Russian Campaign, the Nazis, also, added tanks to their infantry formations. A tank company became an organic part of the motorized infantry regiment. For this purpose, the Nazis had available, the 3,000 light tanks being displaced from the panzer divisions. They also, unquestionably, continued to produce light tanks. We do not have any information available from which to derive estimates of light tank production. The United States is producing many more light tanks than mediums or heavies. The same was certainly true of Germany prior to May, 1940. We might safely say, then, that present German production of light tanks is from 50 to 100 percent of the production of medium and heavy tanks, or from 550-1,550 a month in May, 1941. Estimating medium and heavy tank production at 1,100-1,550 a month in May, 1941, and light tank production at 550-1,550,total German production would be 1,650-3,100 tanks a month. From this basis of estimation, we secure an average monthly production of 1,000-1,700 tanks during the thirteen months preceeding June, 1941, and a production for May, 1941 of 1,650-3,100 tanks. These figures are reasonably comparable with our first estimate of an average production for the period of 1,700 tanks a month and a May, 1941 production of 2,900 tanks. (c) Italian production and the Italian share of the occupied countries' production probably does not total as high as 100 tanks a month. Italian tank production is very small. Before the war, the Italians produced mainly small tanks, not even large enough to be called light tanks, but rather tankettes of 3 1/2 - 4 tons. The U.S. Military Attache in May, 1941 informed our army that the Italians had only three armored divisions and were not contemplating any increase. These divisions were lacking their full complement of tanks but were being equipped with tanks from France. The new French tanks were to relieve the shortage and to replace the old Italian models. For 3 armored divisions, roughly 1,800 tanks are necessary, 450 per division and 450, general reserve. The French only produced 2,000 tanks for their own army. Even if all of these were produced from Munich, September, 1938, to May, 1940, it would not be at an average rate of more 480 -6- Division of Monetary Research than 100 per month. It is scarcely likely, then, that the Italians are getting more than 100 tanks a month from France. Yet at the rate of 100 per month, it would take eighteen months to equip three divisions. At the rate of 50 a month, it would take three years. So far as we know, the rate of equipping the Italian Army is pro- gressing more rapidly than this. We might assume, then, that the French production, Italian production, and other tanks made available by the Germans might total about 100 a month. III. Allied Tank Production (a) British tank production is almost certainly not more than 800 tanks a month. The most probable figure is 400-600 a month, though it may be lower. The British lost practically the entire equipment of the British Expeditionary Force of ten divisions in France in May, 1940. This included 2,600 fighting vehicles of which 700 were tanks. In December, 1940, by straining and over-working the armament labor force, the British Army had 10,000 fighting vehicles, according to our Military Intelligence. It is likely that one-fourth of these, or 2,500 were tanks, though this proportion may be too high since Bren gun carriers and armored cars are much easier to produce. One armored division with about 500 tanks had been sent to the Middle East. In December, 1940, then, the British may have had a total of around 3,000 tanks; 2,500 at home, 500 in the Middle East. If all of these were produced since Dunkerque, British production had averaged 500 tanks a month. A similar figure is derived from the number of British armored divisions in existence. In December, 1940, the British had two complete armored divisions and three others were in process of organization. If all the equipment at that time were already on hand, that would mean a total of 2,700 tanks. A one-third reserve would make this total 3,600. It is hardly likely, however, that such a reserve existed. Again, if all of these tanks were produced since Dunkerque, the average monthly production would amount to 600 tanks a month at most. Since December, 1940, it is possible that production has further increased. It may have done so by as much as 50 percent. In view of the fact that the figure of 500-600 a month for the period JuneDecember 1940 is almost certainly an overstatement, it is not likely that the present tank production in England is greater than 800 tanks a month. In substantiation of this conclusion is the very feeble tank support given to the Greeks and Yugoslavs in April and the still weak tank strength of the army of the Middle East. 481 -7- Division of Monetary Research If tank production had been anywhere near 800 a month during these campaigns, in view of the size of the British home forces the British could have easily spared more than the few score of tanks that were sent to the Eastern Mediterranean. As an independent estimate, Hanson Baldwin on October 6, 1941 (New York Times), estimated that British tank production was running at a rate between 80 and 400 tanks a month. According to Washington Merry-Go-Round (Times-Herald, October 10, 1941) a memorandum written by Stacy May and Robert Nathan to Secretary Stimson, stated that U.S. production of tanks "is forging well ahead of the British". Most estimates of American production state it to be 600 tanks a month. This would make British production smaller than 600 units a month. (b) American tank production appears to be, at the present time, about 600 a month. According to W. W. Chaplin, I. N. S. staff writer, light tank production is 300 a month and medium tank production 150 a month, giving a total of 450 a month. (Washington Post, October 11, 1941). The Associated Press stated on October 13 (Washington Post, October 13) that "Reliable reports from commercial sources have indicated that United States' output of medium tanks now is around 200 a month, with production of light tanks about double that figure". This would give a total of 600 tanks per month. According to news reports (N.Y. Times, October 12, 1941), R.E. Carpenter, Vice-President of the Spicer Manufacturing Company, stated that it produces 300 light tank transmissions a month. The only other company producing transmissions for light tanks, he said, is the Wis- consin Axle Co. which produces 100 units a month. At the maximum, then, there could not be more than 400 light tanks a month produced. The actual figure may be somewhat lower, since some transmissions may be needed for replacement. Our production of medium tanks is probably only half that of the easier-to-make light tanks. We have not been producing heavy tanks. This would make the total number of American tanks produced monthly 600 Units. A large proportion of the American tanks is not going into the service of the Allies, but is being diverted to the American armored Divisions. Probably not more than 50 percent is being exported to the Allies. This would make the American contribution at the present time, 300 tanks a month. 482 -8- Division of Monetary Research (c) The only direct estimate available of Russian tank production is 400 a month. Estimates derived from estimates of the strength of the total Russian tank park at various times give figures for Russian tank production varying from 333-1,000 units a month. Probably the correct figure in June, 1941 was around 700 a month. TriffGerman news agency, D.N.B. on August 3, stated that Russian tank production was 400 a month. According to Max Werner's book, The Military Strength of the Powers, German sources believed the Russians to have 10,000 tanks in 1935. By 1938-39, Werner states the Russians had 20,000 tanks. This is an increase of 10,000 in 3-4 years. Assuming that only the increment of 10,000 tanks were produced in these years, gave the Russians a tank production averaging 200-275 a month. If during these years, the whole of the Russian tank park or 20,000 tanks were renewed, the Russians had an average monthly production of 400-550. According to the Deutsche Wehr (cited in Werner, p.93) in 1939 the Russians had 20-25 tank brigades and, in addition, had tank units attached to infantry formations. The tank brigades, at 250 tanks per brigade, would have totalled 5,000-6,250 tanks. With reserves for mobilization and infantry tanks, the total number of tanks may have amounted to about 10,000 tanks. According to M.I.D., on June 1, 1941, the Russians had 77 tank brigades at 250 tanks per brigade, or 19,000 tanks. With reserves and infantry tanks, the total might come to 28,000 tanks. General Keitel, Hitler's Chief of Staff, stated that the Russians had on June 11, 1941, 46 motorized and tank divisions. (Memo to Hitler, published by German Government, June 22, 1941). Assuming all of these were tank divisions (which they were not) to make up for the under- estimate the Germans admit they made of Russian strength, the Russians would have had here 23,000 tanks. With reserves and infantry tanks, the maximum number of Russian tanks would be about 35,000. The Vichy French on June 22, 1941, estimated Russian tank strength at 50-55 armored brigades, or a total of 12,500-13,750 tanks in these units. In addition, each infantry division had one tank battalion - around 50 tanks. A total of 200 divisions would have 10,000 tanks. The Russians would have, at least, a one-third reserve. The total number of tanks in front-line units, then, would be 20,000-25,000, plus a reserve of 7,000 to 12,000, which would give a total Russian tank park at the beginning of the German invasion of 27,000-37,000 tanks. 483 -9- Division of Monetary Research Roberto Farinacci, member of the Fascist Grand Council, stated that Russia had had 35,000-40,000 tanks at the beginning of the invasion. (Washington Post, October 1, 1941) Practically all of the foregoing sources appear to arrive at a total of 30,000 to 40,000 tanks in the Russian Army in June, 1941. There are two estimates of the Russian tank park around the begin- ning of 1939; Werner's direct estimate of 20,000 and the derived estimate from the Deutsche Wehr of 10,000 (also in Werner). From around the beginning of 1939 to the middle of 1941, the Russians, then, added 10,000-30,000 tanks to their force. This would mean an average monthly production of 333 to 1,000 tanks a month without replacements. Probably the actual figure at the time of the German invasion was around 700 tanks a month. 484 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE October 16,1941 Secretary Morgenthau TO Mr. Kamarck FROM Subject: Comment on attached chart of ship sinkings and launchings 1. The top chart compares total Allied and Neutral ship sinkings for the different years of the war. Sinkings for June, July, August and September are running under the same months of the preceding year. 2. The bottom chart shows that the launchings of British and American ships were practically equal to total sinkings in August, 1941. The figures on launchings are partially estimated, but are believed to be fairly accurate. The comparison of sinkings and launchings should provide an index of the progress made in winning the Battle of the Atlantic. 0 100 400 500 600 0 Z 280 100 200 500 300 400 600 Thousands Aug. Aug. 1942 1942 July July June June May May 1941 Apr. Apr. 1941 1940 Mar. Mar. J F M A N J J A 8 ONDJFNANJJ A Peb. Feb. D 1941 Launchings 0 Jan. Jan. COMPARISON OF SHIP SINKINGS 8 A J Sinkings 300 Dec. Dec. J 1940 YEARLY 1940 M 200Gross Tons Thousands200 N A Nov. Nov. Thousands 1939 M U. K. AND U. 8. LAUNCHINGS COMPARED WITH SINKINGS Gross Tons F 1940 Oct. J Oct. 1030 D 1941 N Sept. Sept. 0 1939 8 0 0 100 400 600 300 200 500 100 300 400 Gross Tons Thousands Gross Tons 500 600 Office of the Secretary of the Treasury --- 486 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE October 17,1941 Secretary Morgenthau TO Mr. Kamarck FROM Subject: Monthly Report: Royal Air Force Bombing Activity in September, 1941 Comment September showed a slight decrease in British bombing activity in northern Europe, probably due to bad weather with the coming of fall. British bomber losses correspondingly decreased. R.A.F. Bomber Losses over Northwest Europe Average monthly losses - May 1,1940 -May 1,1941 50 May, 1941 64 June, 1941 82 July, 1941 132 August, 1941 142 September, 1941 91 -21. Losses Division of Monetary 487 Research Total Losses in Raids to Losses during September October 1 R.A.F. bomber losses in bombing raids in Northern Europe 2. Analysis of Targets 1,111 91 Attacks during September Ports, docks, shipping Industrial plants Airdromes and seaplane bases 011 refineries, synthetic oil plants and tank farms 3. Leading Cities Attacked of Attacks to October 1 1,228 70 845 O 26 804 350 2 Total of above Total Number 106 3,22 Attacks during of Attacks to September Total Number October 1 A. Germany Cologne (industrial center) Bremen (port) Hamburg (port) Emden (port) Wilhelmshaven (port) 80 2 Hanover (synthetic oil) Total of Above (11 cities) 78 3 56 1 53 1 Mannheim (industrial center) Kiel (port) Berlin (industrial center) Gelsenkirchen (synthetic oil) Essen (industrial center) 89 2 53 53 1 2 49 3 43 0 0 42 0 41 15 6 B. Occupied Areas Boulogne (port) Osten (port) Breat (port) Calais (port) Flushing (port) Lorient (port) Total of Above (6 cities) 104 me 81 2 73 2 72 1 63 0 50 1 9 488 Division of Monetary -3- Research C. Italy Attacks during September Turin (industrial center) Naples (port) Total of Above (2 cities) Total Number of Attacks to October 1 2 13 0 12 2 25 489 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE October 20,1941 Secretary Morgenthau TO Mr. Kamarck FROM Subject: Summary of Military Reports Royal Air Force (The reports on the size of the protective escort and the losses experienced during the R.A.F. daylight raids indicate sizeable German air strength in the west. Whether it is as high as one-half of the German Air Force is another question.) During the day of October 12, 24 Blenheim bombers escor- ted by 19 fighter squadrons (probably 228 fighters) attacked the Boulogne docks. On the same day, 12 Blenheims, accompanied by two fighter squadrons (24 fighters), bombed a convoy off the Dutch Coast, hitting a tanker of 3,000 tons and a timber ship. Seven German fighters were destroyed. The R.A.F. lost two Blenheims and two Spitfires. (U.K. Embassy, London Telegram, October 13, 1941) During the day of October 13, 24 Blenheim bombers and 25 fighter squadrons (275 fighters) attacked Bethune. The Germans lost 20 fighters, four more probably, and 16 were damaged. The R.A.F. lost 13 fighters and one Blenheim. (U.K. Embassy, London Telegram, October 14, 1941) During the day of October 15, 12 Blenheim bombers, escorted by fighters (number not given, probably 225-250), attacked the docks at Havre. The British destroyed five German fighters, but lost seven out of the twelve bombers and one Spitfire. (U.K. Embassy, London Telegram, October 16, 1941) 490 2- Division of Monetary Research German Air Force There are indications of an increase in German glider production. Decoen in Belgium (one of the largest furniture manufacturers in Europe) is reported to have switched from making hutments to building wings for gliders and dummy aeroplanes. Production seems to be mainly concentrated on the wooden wing type used in Crete, but recently a larger all metal type, capable of carrying or light tanks has been made as well.50 men, or field guns (U.K. Embassy, London Telegram, October 14, 1941) (This may well be the beginnings of the preparation for an invasion of England once the German Air Force 18 extricated from the Russian campaign.) Tobruk During the nights of October 9/10 and 10/11, an Austra- lian Battalion carried out three highly successful fighting patrols. On October 9/10, an Italian working party, about 150 strong, was ambushed by a patrol of 20 which opened fire at point-blank range with Bren and machine guns, inflicting 30 to 40 casualties before withdrawing without loss. On October 10/11, another patrol successfully engaged at 250 yards range, a party of 50 enemy bunched on the skyline. The Italian group was destroyed without any British loss. A third patrol, 24 strong, allowed an Italian party of about 30, preceded by scouts, to approach to within 10 yards, when fire was opened with every available weapon. Fifteen of the enemy were killed, a wounded officer was captured. British casualties were two slightly wounded. (U.K. Embassy, London Telegram, October 13) 491 BRITISH EMBASSY, WASHINGTON, D.C. PERSONAL October 15th, 1941. 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, Halffax 1) The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D. C. 492 TELSGRAM FROM LONDON DATED OCTOBER 13th. 1041. Summary. Nevel. His Majesty's Destroyer Norman (words omitted) T.U.C. officials on board arrived at Archangel on October 12th. East coast convoy was attacked by E. boats 2. off Cromor night of 12th/13th; two small merchant vessels were sunk. An attack on another convoy later was driven off without loss and two E boats wore possibly damaged. Reference our telegram October 7th, third 3. paragraph. After investigation there appears no evidence of sabotage or of intornal explosion in this ship, which probably struck Darion rock. 4. Military. Tobruk. During nights 9th/10th and 10th/11th an Australian Battalion carried out 3 highly successful fighting patrols. On 9th/10th an Italian working party about 150 strong was ambushid by a patrol of 20 which opened fire at point blank range with Brons and MOs inflicting 30 to 40 casualties before withdrawing without loss. On 10th/11th another patrol successfully engaged at 250 yards range a party of 50 enemy bunched on the skyline; patrol destroyed, no loss. A third patrol of 24 strong allowed an Italian party of about thirty, proceded by acouts to approach within ten yards when fire was opened with every available weapon; about 15 energy were killed and a wounded officer was captured; our casualties were 2 slightly wounded. In Southern sector of perimeter German tanks 5. and Italian infantry succeeded in clearing one of our observation posts, our casualties 2 killed and 7 wounded; enocy consolidated this area with help of 10 tanks following guorning. 493 morning. He is also consolidating his position about 18 miles south of perimeter under cover of several tanks. 6. Royal Air Fores. 11th/18th. Unden. Twenty aircraft attacked, dropping 29 tons of bombs fires started. Coastal aircraft off Forway hit a merchant vessel of 4,500 tons, another 1,000 tons which was left sinking and a fish oil factory, which was set on fire. Two Beauforts mined an enemy occupied French harbour and a third is missing. 7. 18th. 24 Blenheims escorted by 19 fighter squadrons attacked Boulogne dooks and 12 Blenhains escorted by 2 fighter aquadrone bombed convey off Dutch Coast hitting a tanker of 5,000 tons and a timber ship. Fighters destroyed 7 enemy fighters. Our losses were 2 Blenheims and 2 Spitfires. 8. 12th/13th. 376 aircraft were sent out. Nurnberg and Siemens Works 142 including 16 heavy: Bremen 99; Ruls Chemical Works 93, including 11 heavy: Boulogne Doeks 94: Rurh searchlights 51 mine laying 3. 11 airone staff, including 2 heavy,/missing and 3 crashed, including a Halifax in Sea; 1 crow safe. Preliminary reports state: weather at Hurenbarg was good and visit successful. 55 aircraft reported huge fires also at Bremon. 9. A Hudson obtained 1 hit on a 1,000 ton ship off Dutch Coast. 10. Libra. 10th/11th. 17 Wellingtons bombed Derna and 10 Blenissime Bardier At former power station and at latter M.T. workshops were set on fire. 11. Reference yesterday's summary paragraph Mediterranean. Considered 2 ships of this convoy were sunk and 1 or 2 damaged. /12. 494 -. 12. 11th. 6 of which 2 were destroyed by anti-sireraft five probably sank merchant vessel of 3-5,000 tons and left ship of 1,000-1,500 tone on fire off Libyen Coast. 13. German Air Force. Sixty-eight aircraft were plotted, of which 04 came inland over Lancashire, the Midlands and East Anglis, 1 was destroyed by night fighters. 14. Libya, 10th/11th. Tobruk and Mersa Matruh were bombed and a service casualties and damage resulted. 4 Elenhains were damaged in attack upon Fuka landing ground 495 495 BRITISH EMBASSY, I WASHINGTON. D.C. October 16th, 1941 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, Hahfex The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D. C. 496 Telegram received from London Dated October 16, 1941 Nevel. An enemy aircraft attacked two Air Rescue Service launches south of Newhaven yesterday causing three casualties. Two ships in a homeward bound Canadian Convoy were torpedoed yesterday 750 miles west of Ireland (R) and another (9,500 tone) independently routed 600 miles West of Ireland (R). 2. Military. Russia. Although no further German progress reported South towards Rostov nor in centre North Eastwards from Orel and only slight progress South West of MOSCOW. New thrust has developed Eastwards of Rshev (still believed in Russian hands) towards Kalinin with apparent intention of turning City defences from North. 3. Royal Air Force. 14th October/15th. Owing to bad weather only 35 bombers reached Nurnberg on which 40 tons high explosive and 3,000 incendiaries were dropped. Remainder bombed alternate targets in Western Germany. Six aircraft did not return. 15th October. 12 Blenheims attacked shipping off Prisian Islands and hit a cargo vessel of about 4,000 tone. 12 others escorted by fighters bombed Havre dooks hitting amidships 10,000 tone vessel which blew up. We lost 7 Blenheime and 1 Spitfire and destroyed 5 enemy fighters. 3 Hudson bombed docks at Eabjerg in Denmark. 15th/16th October. 45 bombers were despatched. Cologne 34 (7 heavy) Bolougne 8 and Amsterdam Aeordrome 3. 3 Wellingtons missing. Libya. Benghasi Harbour was bombed by 11 VEEA Wellingtons/ 497 Wellingtone 13th/24th October and 6 Marylands. 14th, Hite on guays sailway sidings work shope. 4. German Air Force. 15th/16th October. = 29 aircraft were operating, 13 came inland. Few bombs fell in Yorkshire and as Great Yarmouth. No assumities reported. 498 BRITISH EMBASSY, WASHINGTON. October 16th, 1941. 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, Halifex The Honourable Henry Morgenthau, Jr. United States Treasury, Washington, D.C. Telegram received from London October 14. 1941 499 Naval Osteber 13th His Majesty's ship Lechoskmis (Armed Boarding vessel) was damaged by POCKE WULF Aircraft so miles south west of Lisben, 7 oree wounded. Mediterranean. His Majesty's Submarine reports she torpedoed 4,000 too merchant vessel already aground on Sangeorgia Island (East Milo) on October 3rd. and a merchant vessel probably French THEOPHILE GAUTHIER on October 4th. On October 7th off Suda Bay she sank a 3,000 ton merchant vessel in convoy. 2. Military Tobruk, October 11/12 Patrol Activity with tanks continued by both sides. At times opposing tanks were within fifty yards of each other but poor visibility made observation of enemy casualties and damage impossible. We had one light tank damaged. Enemy withdrew from our observation post captured previous night. October 12th considerable enemy activity in ELADEM SECTOR consolidating outpost positions gained during last three nights. Frontier area October 12th British Patrol attacked four enemy armoured oars and some mechanical transport in area Sheferson. One enemy Armoured Car destroyed, three ammunition dumps blown up and four German prisoners taken. Russia, Position in MOSCOW and Mariupol sectors remains serious. 508 3. Reyal Air Force. October 12/15, attack on Nuremberg very successfully; 95 tons high explosive dropped. Other targets received Dremen 76 ions, Hule Chemical Works 33 tens, Boulogne dooks 36 tens and alternative targets 88 tens. Two hits were made on a ship in Denhelder Harbour. October 13th. 94 Blenheims despatched to attack targets at Arques and Masingarbo (Bethune area). Direct hite observed at Masingarbo. 25 fighter equadrons participated in these operations. so enemy aircraft destroyed, 4 probably destroyed and 16 damaged, our losses thirteen fighters (two pilots safe) and one Blenheim. October 13/14, 118 Aircraft despatched to Dusseldorf 60 (8 heavys), Cologne se (9 heavys), Boulogne 6 (1 heavy) and sea mining 13. Five aircraft (including 2 heavys) are missing. Libya Oe tober 11/18; four Wellingtons attacked Benghasi Harbour. Ten Elenhains attacked methonital transport work shops at Bardia. October Life fighters fought approximately 30 M.E. 109's and 10 Italian fighters, four eneay fighters destroyed, two more probably destroyed and four damaged. Our losses four fighters. October 11/12 and October 18/13 Wellingtons attacked Tripoli Harbour 22 tons of bombs dropped. October 13th, Blenheims attacked Mechanical Transport Column 15 miles east of Gulf sidra, three lorries and trailers being destroyed and others damaged. 501 4. German Air Force - Egypt October 11/12 seven Junkers 88's attacked Fuka main landing ground, a petrol dump fuel train and service ammunition train being destroyed and aerodrome rendered unserviceable. 5. Intelligence. Gliders. There are indications of increase in German Glider production. Decoen in Belgium (one of the largest furniture manufacturers in Europe) is reported to have switched from making hutments to building wings for gliders and dummy aeroplanes. Production seems to be mainly concentrated on wooden wing type used in Crete, but recently a larger all metal type, capable of carrying so men, or field guns or light tanks, has been made as well. 502 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE October 21,1941 Secretary Morgenthau TO Mr. Kamarck FROM Sub ject: Excerpts of Interest from Military Periodicals I. British Comments on American Planes "The Chesapeake (Vought-Sikorsky scout-bomber, our navy's SB2U2) is now in service with the Fleet Air Arm and seems to have been re-named, not too appropriately, the 'cheese-cake by those in the carriers who have to do with it. It is voted a good aeroplane." (Source: The Aeroplane, September 12, 1941, p. 269) "Keeping Them Flying" "American aeroplanes and aero-motors are reach- ing this country in appreciable numbers. Several thousands are in service Now the question of keeping these aeroplanes in the air becomes of paramount importance. "The maintenance of American aero-motors and airframes is not the same as the maintenance of British aircraft. The technique and proce- dure is utterly different " British methods cannot and must not beand We cannot applied to American machines do not know better than they how to maintain To get and operate these new aeroplanes the best results we must study and accept precisely the operating instructions and pro- cedure of the U.S. Army Air Corps and the U.S. Navy. Otherwise we shall have American aero- planes lying all over the country in various stages of unserviceability. 503 -2- Division of Monetary Research "One thing which is not generally realised is that American aero-engines and their accessories are designed to run as sealed units for their operating life between overhauls. They run well if left alone. To open them up according to normal Air Ministry routine every few hours impairs, rather than improves, reliability. "The subject of maintaining and flying these new and specialised American types is immensely detailed. When we adopt American methods we shall get fine service from them The Ameri- can types are coming to us with an immense amount of goodwill. Let us maintain that goodwill by seeking American advice on getting the best out of them." (Source: II. The Aeroplane, September 12, 1941, p.292) Japanese Air Force " So far as is known, the total strength of planes, including 800 first-line and 850 secondline aeroplanes, and 2,500 pilots. This force the (Japanese) Army Air Force is 1,700 aero- comprises 36 Reconnaissance squadrons with a total of 300 aeroplanes; 35 Fighter squadrons with a total of 350 aeroplanes; and 15 Bomber squadrons with a total of 150 first-line aero- planes. "The Naval Air Force consists of 2,000 pilots, 600 flying-boats and 400 carrier-based landplanes. The second-line strength of the Naval Force, including obsolescent types, is 1,000 aeroplanes. Japan has seven aircraft-carriers and three seaplane-carriers. "The geographical distribution of the far-flung Island Empire of Japan renders some of its vital parts particularly vulnerable to air attack. The relative smallness of the islands, the great density of population and the high concentration of important production resources within the operational range of foreign air forces leaves the very nerve centre of Japan's war strength highly susceptible to interference from the air. 504 - 3- Division of Monetary Research "This is particularly true of the important sector Tokyo-Yokohama-Fusan, which is close to the Russian air bases at Vladivostok, a danger which has been a constant factor in Japan's air strategy "In the Pacific sector, Japan's strategic position in the air has been appreciably strengthened through the recent acquisition of bases in French Indo-China. Even before this, her possession of a number of islands furnished her with excellent harbour facilities and hiding places for U-boats, as well as with advantageous bases for air operation against Malaya and the Dutch East Indies. "Favourable as Japan's air strategic position in the Pacific appears in the light of geographic survey, its advantages are offset by the British-U.S.A. triangle of air and naval bases Singapore-Manila-Guam, which lies athwart Japan's air and maritime communications in the Pacific. Coupled with the extension of the range of attack by carrier-borne aircraft, an air force operating from these bases could effectively counteract a Japanese push towards the South Pacific. The existence of the AngloRussian Alliance may also act as a brake upon any precipitated action by Japan; for so long as the Russian Air Force has still an effective striking capacity, Japan may well prefer to sit on the fence rather than lay herself open to an air attack on her vulnerable rear. Russia's Far East Air Force, which is estimated to be of considerable strength, is thus an important stabilising factor in the Pacific area as well." (Source: Japan's Air Power by Dr. V.L. Gruberg, in the British Air Magazine, The Aeroplane, August 15, 1941) 505 Division of Monetary -4- Research III. German and British Air Losses in the First Two Years of War (The data are from The Aeroplane, September 12, 1941, British air magazine, which derived them from official sources and its own record.) (The figures given are probably greatly understated. The actual total losses may be as much as twice as great. This is because the losses quoted are only those shot down in combat, whereas all other losses are usually quite high.) Exclusive of the Russian campaign, in the first two years of the war, the Axis lost 8,000 airplanes shot down in combat; 6,000 were Nazi planes and 2,000 Italian. The British forces lost 3,000 planes. The Axis lost 20,000 airmen. The British 8,000. A more detailed breakdown of losses follows: Number of Planes Lost Norwegian Campaign R. A. F. 55 22 German 56 Battle of France R. A. F. 379 957 German Battle of Britain (Aug.8-Sept.27) R. A. F. German 989 fighters 573 fighters 1,123 bombers 2,112 all planes 506 -5-- Division of Monetary Research Number of Planes Lost Other German Attacks on England R. A. F. German British Attacks on Germany R. A. F. German 311 1,520 1,356 692 Middle East R. A. F. German Italian 388 480 2,127 (of these, 907 destroyed on the ground) Grand Total - All Sectors R. A. F. German Italian 3,116 5,918 2,127 IV. Nazi Air Force in Russia The Red Army paper Red Star points out that after nearly three months of war against the Soviet Union, simultaneous air warfare over the entire battlefront is virtually impossible for the Nazis. "Enemy air battles in one sector of the front always coincide with lulls in other sectors, an evidence of the weakening of Nazi air strength. At the beginning of the war the enemy was able to keep planes active along the whole front." (Source: U.S.S.R. Embassy Information Bulletin, Sep tember 16,1941) 507 -6- Division of Monetary Research Raids on Moscow "At the outbreak of the war, the German Airforce was prepared for an all-out air attack on the Soviet capital. The Nazis relied particularly on the 53rd Squadron of long-range bombers, known as the Condor Legion. This Nazi air unit gained sinister notoriety by slaughtering defenseless populations of Republican Spain, Poland, France, Great Britain, Yugoslavia and Greece. By mid-July, the formations assigned to raid MosCOW numbered 250-300 planes, manned by approxi- mately 180-200 crews. Each crew consisted of sergeants and officers trained for long night flights. "By mid-August the number of crews experienced in night flights had apparently dwindled to 100-120 and the number of warplanes to 150-180. This induced the Germans to transfer to the eastern front a fresh replenishment for their diminished formations. "on August 14 four groups of long-range bombers, 80-100 planes, were transferred to the Smolensk area from western Europe. "In about 30 raids on Moscow in two and a half months of war, enemy planes have made 2,500 indi- vidual flights, probably carrying a total of not less than 1,800-2,000 tons of bombs. In this period only about 100 planes managed to break through to Moscow, and a large proportion of bombs dropped caused no damage. "The Nazi Airforce paid heavily for its raids "In place of experienced fliers with Iron Crosses on their chests, the raiding planes are now manned by green youths, hastily trained in four to six months. Because of heavy losses, German fliers raiding Moscow have been ordered to evade air com- bat with Soviet fighters. "The to tal effect of German air raids on Moscow has been negligible." (Sour ce: Colonel Ilyin in Pravda, U.S.S.R. Embassy Information Bulletin, October 6, 1941) 508 -7- Division of Monetary Research Comments on the Russo-German War (In the U.S. Army Command and General Staff re School Military Review, October, 1941) - by Colonel Fatte Barrows, Field Artillery If On November 30, 1939 the Russo-Finnish war began with Russia the aggressor, resulting in an interchange of territory in favor of the Soviet Union. In the light of subsequent events, it appears that Russia needed that territory for her protection of Leningrad in the present war, and since she did not absorb Finland, many now believe that was her sole reason. All she took was a buffer strip that has since stood her in good stead. "At the time of the German-Polish War, Russia secured about half of conquered Poland. That, with her acquisition (about the same time) of Estonia, Latvia, and Lithuania, which Hitler didn't like but had to stomach, and a little later, the grabbing of Bessarabia, gave the Soviet Union an excellent buffer strip against the Axis, extending some 1,500 miles -- from east of Lake Ladoga to the Black Sea. This buffer strip was a most wiseSoacquisition, one might as one can see by glancing at the map, say the Russian bear was not exactly asleep and this acquired sponge has not only absorbed thousands of German lives and material but has given the Soviet Union time to mobilize the rest of her army and better prepare her defenses V. Naval and Air Tactics (War on land is being increasingly waged by a ground-air team, rather than by ground forces with "air cooperation". A similar development is occurring on the water.) Naval control near enemy territory is becoming steadily more dependent on air action. The Italians are using a mixed escort of destroyers and aircraft for their Libyan convoys. The Germans are putting more Kuriers (four motor bombers) on their Atlantic forays. The British 509 -8- Division of Monetary Research are employing aeroplanes from all Commands to strangle enemy shipping, while they continue their policy of hunting submarines by mixed forces of naval and air craft. The enemy's choice of tactics and the conditions imposed on coastal warfare by his occupation of neighboring lands have combined to turn British aeroplanes into shipbreakers. The work is being splendidly done. It is making hay of an ancient naval tradition." (Source: The Aeroplane, September 19, 1941) VI. Malta " The Italians had boasted that Malta could be made quite untenable by their bombers, and at first it was very difficult to arrange for its air defence. Gradually those difficulties have been overcome, and the people of the island have borne an infinity of air raids with a fortitude which has equalled that of the Londoners. The Mediterranean Fleet certainly cannot make Malta its headquarters, but, none the less, the damaged carrier, H.M.S. Illustrious, was there patched up, in spite of the enemy's attempts to finish her off, and was able to steam away to Alexandria If (Source: Article by Major F.A. de V. Robertson in the British air magazine, Flight, September 11,1941) 510 SECRET CURRENT SURVEY OF THE INTERNATIONAL SIGNATION October 14 - 21 Public opinion and the high policy of the powers continue to follow the rhythm of the Battle of Moscow. Hitler's successes have, momentarily at least, instilled new confidence in the Germans and in the Japanese, and have spread pessimism and defeatism in various other quarters. Despite the confused character of the Far Eastern scene, the fall of the Japanese Cabinet would appear to reflect the Russian defeats, and is probably also connected with the course of the Japanese-American con- versations. In any event a more vigorous Japanese policy is forecast by most competent observers. Our military and naval attaches in Chungking report that highly placed Chinese officers believe an attack on the Maritime Provinces is imminent. The fact that troop movements into Manchuria have been slowed (not more than a thousand men a week are reported as passing through Dation) may simply indicate that the Japanese concentration is virtually complete. How far the Russians have weakened their forces in the Far East is a matter of conjecture. Competent authorities here believe the two armies to be about equal in strength. 2 511 -2- The nature of Japanese purposes in Indochina adds an enigmatic note to this uncertain picture and may reflect once again the essentially atomic character of Japanese policy. At the very time when it seems desirable to capitalize Russian weakness by an attack in Siberia, the Japanese have elected to incur the renewed hostility of this country and Britain by what appear to be serious preparations for a forward move in Indochina. Troops have been moving steadily into the Haiphong area, and extensive preparations in both northern and southern Indochina suggest that even larger troop movements are contem- plated. It is of course perfectly possible that these activities are merely a screen for an all-out effort in Manchuria. This southern movement may already have had its uses in luring the Russians into withdrawing troops from Siberia in recent weeks. Or again the Japanese may simply be moving a sufficient number of troops to the south to hold Indochina while the main effort is being made in the north. Meanwhile the government of Thailand is alarmed and expects an early attack. The tearful plea of the Foreign Minister for early delivery of American planes strongly suggests that his government is being swept by a wave of panic. The Nazi victories in the East are reported to have visited the French public with a deep feeling of pessimism, and the latter has been fortified by general discouragement 512 -3- with the British failure to seize boldly the present opportunity. The French are asking, our Ambassador reports, why the British do not attack in Libya or send direct aid to the Russians or carve out a bridgehead on the Continent which would divert German strength even though it failed in the end. of more immediate importance than this alleged shift in public opinion are the current indications of renewed collaboration. There is some official opinion in Vichy which believes that Darlan is preparing to carry France one step farther into the twilight zone between the armistice and the final peace. The creation in Vichy of an arm of the German embassy in Paris, under the leadership of Krug von ida, is an event which lends color to this view. On the other hand, Charles Rist has just been offered, on behalf of Petain, a special mission to the United States, which it is assumed would presently ripen into the ambassadorship itself. Rist, who is said to be a reluctant candidate at best, would scarcely accept a mission to this country which had been compromised in advance by any sensa- tional fresh concessions to the Germans. German propaganda abroad is capitalizing recent successes to the full. In Hungary the Nazis claim that the British are always unwilling to fight far from home and that they will find themselves in a helpless position following the collapse of Russia. Our minister to Hungary discovers a notable decline in British prestige there in recent weeks. 513 Mr. Pell also reports that the Regent cancelled his acceptance of a dinner to be given in his honor by the Minister under conditions which gave it the character of an affront. This step was taken under Nazi pressure, and Mr. Pell believes the Germans are seeking incidents to widen the breach between the axis and the democracies, a theory which fits nicely into the pattern of recent sinkings. The Portuguese press has used brave language and has given vent to its "vehement indignation" over the German submarine sinking of the Corte Real, but Portuguese diplomacy has proved far more circumspect: Portugal has reserved her position, but has made no official protest to date. In Brazil, Ambassador Caffery reports that recent German victories have spread consternation among the friends of the democracies. The Near Eastern scene affords about the only elements of relief to the general gloom. In Iran the occupying forces have been withdrawn from Tehran, and our minister states that the conduct of the Russians has improved and that there have been no further Armenian separatist meetings. And in Turkey, an initial inspection of the new commercial arrangements with Germany reveals that the Turks are to get German war materials in the present in return for promises of chrome in the future (1943-44). Highly placed British officers in the Near East are of the opinion that at least two months would be required for 514 -5- withdrawal of German troops from Russia and reorganization preparatory to an attack on Turkey. By then (December) the roads in Anatolia are impassible, and another month would be required to reach Syria, even if the Turks granted the Germans passage. This means that there is little liklihood of an attack before spring, they are confident, and by then there will be an adequate British force in the Near East to meet a German thrust. Recent reports indicate that our campaign against axis airlines in South America may soon be crowned with success. During the past week Standard has agreed to sell no further stocks of gasoline to Lati, and YPF will sell no more to Lati, Condor or Air France. The last named line has just been placed on the black list to present it from becoming a front for Condor and Lati following their nominal disappearance. The Department of State is seeking to have Lati's franchise revoked by Brazil or to accomplish its objects by drying up Lati's supply of gasoline (the new Panair Line--New York, Belem, Natal, Portuguese West Africa (9), Listin to replace Lati). Discussions are now proceeding as to how Condor may most effectively be removed from the scene; it has gasoline supplies for only about a month and a half. On the other side of the balance sheet in South America, we must place Peru, where press and public have been profoundly irritated by the action of our government in attaching planes 515 -6- originally intended for Sweden and more recently purchased by the Peruvian government. Adverse newspaper editorials and manifestations of public irritation with news reels featuring Americans greet our policy at a time when we are deeply interested in an early settlement of the Peruvian-Ecuadorian boundary dispute. 516 TREASURY/DEPARTMENT INTER OFFICE COMMUNICATION DATEOO 23,1941 TO FROM Secretary Morgenthau Mr. Kamarok Subject: Military Report: Military Intelligence Appraisal of the War. (Based on Conference with Colonel Betts, Situations Officer and Major Smith, Chief of Situations Section) Russo-German War 1. In spite of the still grave danger to Moscow, the be able to drive Russia out of the war this year and are situation does not appear too gloomy. The Germans will not sustaining great losses. Russian morale remains high and there is no evidence of disintegration in the Russian Armies. From the data that our army has been able to secure, it appears that the bulk of the German Air Force is occupied in the Russian campaign. An unknown part of it has been left for defense against the English in the west, but this by no means is as high as one-half of the total. The Germans have not been able to attain complete air superiority over the Russian front. They are able to secure local air superiority by massing sufficient planes in a sector. The German air advantage is numerical since the Russian planes have proven themselves to be very good and fully comparable to the German. 2. The German push towards Moscow, substantially, has been at standstill for a number of days now. This may be due to the Russian resistance, or it may be due primarily to the necessity of resting troops, bringing up fresh supplies, and re-forming and reorganizing for a new offensive. Time is running short for the Germane on this front since the real winter is now beginning. After winter has definitely set in, most large-scale activity here will have to stop until spring. 517 -2- Division of Monetary Research 3. The situation along the Russo-German-Finnish front is quiet at present. It is likely, however, that the Finne will attack actively along this front during the winter in order to out the Murmanek railroad as a source of supplies to Russia. 4. The situation around Leningrad appears to have been stabilized. The Russians are making counter attacks, but these are of a local and strictly minor nature. Apparently, the Germane have settled upon a policy of siege warfare here. Military Intelligence is now convinced that Leningrad is encircled and that the only route of access to Leningrad from the rest of Russia is across Lake Ladoga. The Russians must have had enormous supplies in the city since they have not only been able to hold out, but seem to have sufficient ammunition for counter-attacks. This 18 the explanation that Military Intelligence Division has for the fact that a city of several million people has been able to hold out successfully against the Germans for 80 many weeks. 5. In the southern sector, there are accumulating evidences of preparations for a large offensive. The Russian Army here appears still to be fairly strong and unified, and by no means is incapable of action. 6. One indication of the huge German casualties is the admission by the Rumanians that they had suffered 111,000 casualties up to October 1. The maximum number of Rumanian soldiers that could be mobilized is around 500,000. In view of the bad internal political situation, probably not more than 350,000 could be sent to the front. A casualty list of 111,000 represents, then, about a third of the Rumanian Army. While the Germans are better soldiers, they have also done more and harder fighting in the war. Their casualty rate should, therefore, be comparable or higher. with a total of 4,000,000 to 5,000,000 men engaged at any one time, Nazi casualties should, therefore, be around 1,300,000 to 1,700,000. 518 -3- Division of Monetary Research Asia There has been no notable activity in the Chinese war in the last week. In Manchuria, the Japanese have concentrated large forces of around 500,000 to 600,000 men, but this has made them no more than numerically equal to the Russian Far Eastern Armies. The Russians have transferred some troops to the western front, but the bulk of the two Red Banner Armies of the Far East are still ready for the Japanese. In airplanes, the Japanese Manchurian Air Force is still inferior in numbers and quality to the Russians. The bulk of the Japanese Air Force, 80 far as we know, is still tied up in China. Our army gets the definite impression that the Japanese are stalling for time in the hope that the Germans can decisively defeat Russia fairly soon. The belligerency of the Japanese towards Russia and the United States thus fluctuates up and down with the course of the Russo-German War. 519 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE October 23,1941 Secretary Morgenthau TO FROM Mr. Kamarck Subject: Port Facilities at Vladivostok and Archangel Vladivostok 1. Vladivostok has a population of 200,000. The port is kept open in winter by the use of ice breakers. It has a natural harbor, easily accessible, four miles long by one mile wide. 2. There are 35 wharves allowing the accommodation of 25 ocean-going vessels at one time. A stone mole 5,200 feet long can handle 13 ships, while pantoon stages 6,300 feet long have accommodation for 17 ships. There are two dry docks. Coal and oil bunkers are available. 3. The port has 70 warehouses providing a total of 32,000,000 cubic feet storage capacity. There are available four floating cranes, ranging from 40 to 100 tons; several locomotive cranes, ranging from 5 to 15 tons; and one bridge crane. Loading and discharging is facilitated by means of electric conveyors. 4. Vessels of 30 feet depth and over can safely navigate the harbor. Depth at entrance is 15 fathoms, while depth at quays is 25-32 feet. 520 -2- Division of Monetary Research Archangel 1. Archangel has a population of 54,000. Generally, navigation is open from the middle of May to the middle of November. However, powerful ice breakers are available. 2. The port has shipyards, repair work shops and two dry docks taking vessels up to 278 feet long. There is available one 150-ton floating electric crane, one 50-ton, one 20-ton, and several 15 ton cranes. 3. Depth at the entrance is 24 feet at high water; in the town channel, 24 feet; and at the quays, 18 to 25 feet. 4. There are berths for 30 vessels alongside piers. 521 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE October 24,1941 TO Secretary Morgenthau FROM Mr. Kamarok Subject: Summary of Military Reports Italy Because of a shortage of basic foods in Italy, the Italian Government has been making enquiries in most of the countries of German-occupied Europe for potatoes, not normally a part of the Italian staple diet. There is no indication that they have been able to secure any considerable quantity. (U.K. Embassy, London Telegram, October 19, 1941) There are 15,000 Italian soldiers still fighting in the Gondar region of Ethiopia (in the mountainous northwest, near Lake Tana). (U.K. Embassy, London Telegram, October 20, 1941) French Deliveries to the Axis There were 1,400 motor vehicles in French North Africa which were to be turned over to the Axis after the Armistice. of these, on August 31, 581 had been delivered to the Libyan frontier, and 343 were ready for delivery (leaving 476 out of the total still unaccounted for). Out of 400 trucks in France which were to be delivered to Libya, 72 have arrived in North Africa, but have not yet reached Libya. (U.K. Embassy, London Telegram, October 18, 1941) Use of American Planes in Middle East A formation of 15 Marylands attacked two Cyrenaican landing grounds recently. Results are unreported. (U.K. Embassy, London Telegram, October 20, 1941) 522 -2- Division of Monetary Research Malta (The British are successfully using Malta as a fixed airplane carrier to harass the Italians with night bombing raids on industrial centers, daylight raids on airdromes, and attacks on convoys to Libya.) During the night of October 16/17, 16 Wellingtons bombed Naples. They dropped 16 tone of bombs including three huge 2-ton bombs. It is thought that the torpedo factory was completely destroyed and that the Royal Arsenal and the Alfa Romeo works (air- plane engine factory) were also hit. During the day of October 17, Blenheim bombers escorted by Hurricanes attacked the Syraouse seaplane base. Bursts were seen on the objective and one enemy fighter was probably shot down. During the night of October 17/18, seven naval aircraft attacked an Italian convoy south of Pantelleria. Two merchant vessels were damaged by torpedoes and three were possibly also hit. By October 19, a British convoy, carrying more airplanes to reinforce Malta, successfully accomplished its mission. The only loss was one Swordfish airplane carrier fighter. (U.K. Embassy, London Telegram, October 19, 1941) 523 BRITISH EMBASSY, WASHINGTON. PERSONAL AND October 20th, 1941 SECRET Dear Mr. Secretary, I enclose herein for your personal and secret information copies of the latest reports received from London on the military situation. Believe me, Dear Mr. Secretary, Very sincerely yours, The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. Halifex 524 TELEGRAM REJEIVED FROM LONDON GOTORER 191.1941 Operational Commission (infernation received up to , B.M. October 19th, 1941). NAYAL Reference summary 18th, torpedoed British destroyer has sunk, 96 survivors so for reported. Operation to reinforce mile with aire craft has been successfully completed with loss of one Swordfish. Two shadowing enemy aircraft were destroyed by our fighters. One large and one small rehenant vessel in southbound acastal convey were mined and sunk in Western Thanes (sie) approaches, p.m. 18th. MILITARY. RUSSIA. CENTRE. Although Germans have taken Kalinin and Mojaisk and made progress east of line of Nojaisk Kaluga, execution of counter attacks and bad weather have alowed down their advance. Situa. tion north east of Orel unchanged. South. Small German advances are reported north-most of Kharkev and north of Mariupol but eastward thrust towards Rostev has been alowed down. ROYAL A IR PORCE. 18th and 18th/19th. Bad weather no important operations. HAPLES. 16th/17th. 16 Wellingtons from Malta dropped 16 tons of bombs including three 4000 pounders. It is thought that torpedo factory was completely destroyed, Royal arsenal and Alfa Romeo works were also his. SICILY, 17th. Blenheims escorted by Hurricanes attacked Syracuse seaplane base; bursts seen on 525 - cojective, - enery fighter was probably shot don. 17th/18th. Wellingtons bombed Tratent expedrency buildings were his and 1 aircraft doe. woyed on ground. BARDINIA. 17th/18th Wellingtone cooperating with navel force (peragraph 1) attacked Elmas aerodromo histing reways and buildings. PITERRANEAM. Hight27th.Bth. , naval aircraft attacked a convoy with or Pantellaria, 2 merehant vessels were damaged by terpodees and third possibly hit. OURMAN AIR FORCE. 18th/19th. Only 5 aircraft pletted. NATTA. Between 16th and 18th. Several day and night attacks were mades no damage or essualties reported. ITALY, As a result of shortage of basis food, engatrics have been made in most countries of German controlled Harope for potatoes, not normally part of staple diet of Italians. There is no indication that they have been able to secure any considerable quantity. 526 Telegram from London dated October 18th, 1941 Operational summary. (Information received up to 7 a.m. October 18th, 1941.) Nevel. Russian submarine has terpedoed and sunk 3,000 tea ship off North East Norway. small tanker and small Greek ship carrying petrol and stores for Tobpuk were sunk by submarine 50 miles west of Alexandria early October 17th. Honeward Canadian convey was again attacked on October 16th/17th and 8 ships, totalling about 45,000 tons were sunk) 3 British, 3 Norwegian, 1 Greek and 1 Penemanian. Two were tankers the others carried F materials and general eargoes. Early October 18th 1 escorting British destroyer was torpedoed, she is still afloat. Military. Russian statement that they evacuated the greater part of the odessa garrison by sea is probably correct. Tobrak. October 15th/16th. British patrol of 2 officers and 24 other ranks engaged large enemy working party S.E. of Tobrak and inflicted about 20 casualties without loss. 13 enemy tanks seen in this area withdrew to dead ground. Royal Air Force. October 16th/17th. Duisburg. 66 aircraft dropped 72 tons of H.E. and 7400 incendieries. Total of 25 tone dropped on Dunkirk and Ostend: burets seen in decks and fires were started. A Hudson possibly hit 6,000 ton merchant vessel off Dutch coast. October 17th. Hurricanes and a spitfire attacked small enemy craft off Zebrugga and Ostend Two/ 527 -2- Two travlers were set on fire. Libra. October 15th/16th. 18 Wellingtons bombed Benghasi. German Air Force. October 17th/18th. 20 enemy aircraft were operating. One came inland. Enemy casualties in operations over British Ieles. British October 16th/17th two constal (additional). of about 1400 motor vehicles destined for the Axis, in French North Africa after the Armistice on August 31st 581 were reported delivered to Libya frontier and 343 ready for delivery. of 400 trucks in France agreed to be delivered to Libya, 72 have arrived in North Africa but have not yet reached Libya. 528 BRITISH EMBASSY, WASHINGTON, D.C. October 21st, 1941. 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. President, Very sincerely yours, Halpfux The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 529 ZALIGRAN FROM LORBON DATED OCTOBER 20th 1941. Marale A Russian submarine on return from patrel eastwards of North Gape claims four enemy merchant ships hit between 1. September 96th and October 11th. One of His Majesty's submarines seak two ships in convey so miles west of Lampedusa on the 18th. A 9,000 ten tanker was torpedoed off Straits of Gibreltar on 19th but is still afleat in two halves. 2. Militarze Bussia. Germans hampered by hard weather have made little progress towards Moscow. They are advancing slightly towards Kharker is Donets basis and towards Restor. Ethiopian Enery troops, combatant strength about 15,000 remais is Gondar. 3. Revel Air Foree. 19th. Fighters carried out 10 small offensive operations ever Northern France. 19th and 19th/80th No operations by Bomber Command. Middle Heat. 10th. 16 Marylands attacked two Cyrenalean landing grounds. 10th/19th. Mediterrenean. Naval aircraft attacked convey 88 miles north west of Tripeli (L) and made 3 torpedo hite on a 6,000 tea ship which was left stationary and on fire. A second ship was probably damaged. 19th. A Hurrieane destroyed an Italian bomber south of Lampoduse. sistly. 19th. e Blenheims attacked ammunition factory and power station at Licats and 5 Hurricanes carrying bombs aerodrome at Comise. No enemy opposition: bombs fell is the target area. athionise 17th. Bembers and fighters attacked objectives and trenches near Asaso. 4. german Air Force. 19th/20th. 35 enemy aircraft were ' ing principally in Themes Natuary: flew inland. Night figh destroyed one bomber. 530 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE October 24,1941 Secretary Morgenthau TO Mr. Kamarok FROM Subject: Snow in Russia (attached map, based on data from the Weather Bureau) 1. Leningrad Region Snow covers the ground for the winter near Leningrad normally around October 2. It may begin to do 80, however, as early as the 29 of September, or as late as November 27. The snow usually lasts to April 14. Snow is deepest here in February at which time it is usually about a foot deep. 2. Moscow Region Snow covers the ground for the winter near Moscow normally about the 4 of November. It may begin as early as October 10, or be delayed until November 24. The snow usually lasts to April 12. It is deepeat in March, when it averages two feet in depth. 3. Kharkov region Snow covers the ground for the winter generally about November 19, though it may come as early as the 24 of October, or be delayed until December 14. The snow lasts until about March 22. The deepeet snow 18 during January and February, when it averages 10 inches in depth. 4. Black Sea Coast All of southern Russia except the immediate Black Sea coast usually has some snow during the winter. The Crimes and the region just north of it are covered, on the average, with snow for about a month in the middle of winter. WEATHER BUREAU 5. DEPT. OF COMMERCE APPROXIMATE AVERAGE DURATION OF SNOW COVER IN EUROPEAN PART OF U. S. S. R., IN DAYS ISOCHION CURVES INDIGATE NUMBER OF DAYS 180 90 60 ARCHANGELSK 190 40 120 180 100 160 190 D ENIAGRAD VOLOGDA 80 RIGA VIADIMIN NIJNIP NOVGORAD MOSXOW VIAZMA 60 SMOLENS* MINSK SAMARA PENZA KURS* 140 ORENBURS 120 VORCHEJ TARATOV 100 KIEV 60 80 STALING 60 40 CHEAJON ASTRACHA 20 20 40 BLACK SEA 55-20 FILE STAT 41010 W 532 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE October 24,1941 Secretary Morgenthau TO Mr. Kamarok FROM Subject: Situation in Russo-German War, October 24, 1941 1. The Front remains stabilized in the north and around Leningrad. 2. The lines around Moscow remain substantially unchanged, although bitter fighting is going on. 3. On the southern sector, the Germans have made gains to the northwest and southwest of Kharkhov. 4. Timoshenko, former commander of the central front, has replaced Budenny in command of the southern front. Zhukov has taken Timoshenko's old position. Contrary to newspaper stories, the change is a recognition of Timoshenko's ability, since he is being shifted to the front which is becoming the most important. Zhukov was the commander of the Far Eastern Army when the Japanese were decisively defeated at Kolon Nor in 1938. 533 SECRET CURRENT SURVEY OF THE INTERNATIONAL SITUATION NO. 3 October 21 - 28 While the tempo of the Russian campaign has once again quickened, with a renewed thrust at Moscow and the capture of Kharkov, and an ominous lull hangs over the Far East, the American government has taken a series of fresh initiatives. South Pacific Air Bases Negotiations with Australia will provide us with vital air base links in the chain of our South Pacific defenses. At the same time the government of the Netherlands Indies has been instructed to confer with General MacArthur on the granting of a similar series of "ferry stations" on the Hawaii-Philippine route. Meanwhile the Portuguese government is greatly disturbed by the activities of the Japanese on the Island of Timor, where they are developing a consulate of suspicious sise at this new air-line terminal. Bombers for the Far East A new stage has been reached in our relations with Brazil. A request that we be permitted to fly sixteen Army Consolidated B-24 bombers to Africa over the Belem-Natal ferry route was promptly granted. These bombers were nominally intended for General MacArthur at Manila, but Ambassador Caffery was to 534 -2- confide in the Brasilian authorities that they might be diverted elsewhere after reaching Africa. The whole situation is enigmatic. Mr. Caffery was later told that such diversion would probably take place only in the Pacific area and not to the Middle East. It is not clear why planes should be sent by such a circuitous route to the Far East. American Patrol Bases in Brazil The State Department has now forwarded to Mr. Caffery a letter from Admiral Stark, couched in energetic terms and making a forthright case for the urgent need of naval plane patrol bases at Natal and Maceio. These concessions have become essential to hemisphere defense in the light of the recent sinkings in the South Atlantic and in the interest of relieving the heavy burden imposed on our naval resources by patrol and convoy duty, declared Admiral Stark. (It is to be assumed that the burden of naval protection will be notably increased as the supply route to Archangel is more fully exploited). These two steps-the request for permission to ferry military planes and the request for granting of patrol basesrepresent a planned development in the policy of the United States toward Brazil. Axis Air Lines Meanwhile our government continued its campaign for the elimination of axis air lines in South America. Under 535 -3- the menace of the black list, Standard 011 of New Jersey directed its subsidiaries to sell no further stocks of fuel to Lati, and YPF will be brought to heel by similar methods if necessary. American planes are promised in time and in sufficient numbers to fill the expected vacuum to be left when Condor expires. But the Brazilian Foreign Minister warns that the. planes must be on hand before Brazil will consent to Condor's demise. Mr. Caffery is definitely unsympathetic with the strong line adopted toward Brazil, points out that Brazil has given consistently and received little but promises, and reports that even President Vargas has now joined the chorus of criticism of our lend-lease aid. Chilean Move for Hemisphere Defense Heartening cooperation in hemisphere defense has come from Chile, where Foreign Minister Rossetti has suggested a Chilean-American military alliance and certain concrete defense steps, such as the fortification of the Straits of Magellan by Argentina and Chile. The Peruvian Imbroglio In Peru competent observers believe that, as a result of the plane seisure incident, feeling toward America has never been more bitter. American naval and aviation missions complain that their work has been disrupted. And Mr. Norweb has urged that the War Department offer to replace the attached 536 planes within a reasonable period of time, a suggestion to which the State Department is now giving its urgent attention. We Act in Spain and Finland American initiatives are evident in Europe as well as in the Far East and South America. Preliminary obstacles have been swept aside in Spain; and conversations on the projected Spanish-American trade agreement are about to begin. Mr. Weddell urges that reasonable American concessions be granted in the interest of preventing a recurrence of the turmoil of the revolutionary period, which would improve the chances of an invited German occupation of Spain. Finland has again been warned that a continuance of her offensive against Russia will lose her the friendship of the United States, and furthermore that any attack from Finnish-held territory on American supplies travelling the Arctic route to Russia will precipitate a crisis in our relations. Latest indications are that Finland will adhere to her adopted policy of holding strategic defense positions within Russian territory. Bet-back for Collaboration The German military victories do not appear to be yielding results in the political sphere at all commensurate with their magnitude. In France, as an example, the Germans appear to have lost ground recently. It is true that the 537 -5- victories in Russia are reported to have caused widespread discouragement among the French, who are loud in their criticism of British failure to capitalize present "opportunities." It is true also that the Germans have finally received the right to establish "branches" of the Paris embassy in various places, and among others in Algiers and Casablenca (Baron von Neurath is reported to have arrived to establish the Casablanca "office.") On the other hand, the whole policy of "collaboration" has been given a definite set-back by the German reprisals. France has been deeply stirred by these acts and shocked by the offer of huge rewards for the betrayal of the guilty. Our Berlin embassy notes that the German press has not men- tioned collaboration for weeks nor has it referred to the anniversary of the Montoire meeting which it was said might usher in a new period of Franco-German cooperation. Italian Reactions to Nazism Nor is Italy reacting to Nazi successes as the Germans would wish, Mr. Wadsworth cites the usual estimate-that the population is seventy per cent ant1-Fascist--and notes the gradual growth of a widespread movement against the regime, a movement as yet disnucleated and non-dynamic and reflecting food shortages, military losses, war-weariness, and Germano- phobia. The latter is expressed in many ways, recently by 538 -6- the resistance of the army to the sending of four divisions to Russia (to join the four already there,) the fear being that these soldiers might later become German hostages. The Italian attitude is reflected in the reaction to the recent bombing of Naples, when, according to Vatican circles, the Neapolitans appreciated the consideration shown by RAF fliers who obviously sought out military objectives (with small casualties resulting). The Germans are taking vigorous measures to counteract the anti-axis sentiment of the Italian populace. Most recent of these was the Italo-German trade accord which was hailed, at least in German circles, as offering notable advantages to the Italian economy. German Problems in Occupied Russia In the last analysis, although the Russians have suffered losses of a most critical character in the Eastern campaign, it is nonetheless true that Nazi successes have left the Germans with tremendous problems. This aspect of the cam- paign is thrown into sharp relief by the report of Mr. Oechsner, a United Press Correspondent who has just returned to Bucharest after making an extensive journey in the Ukraine in company with other journalists and at the invitation of the German military. Not only has agricultural and industrial machinery been removed or sabotaged, but the able-bodied men have migrated 539 -7- to the east. Even the repatriated prisoners are viewed as inadequate to the vast task in prospect, and the Germans, already with labor shortages at home, are faced with the problem of importing labor and even of laboring themselves in the colossal task of Russian reconstruction, essential prelude to any effective economic exploitation of their Bonquest. 540 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE June 5, 1942 TO FROM Secretary Morgenthau Mr. Kamarok Subject: Monthly Report: Royal Air Force Bombing Activity in May, 1942. 1. During the greater part of May, very little bombing activity occurred due to bad weather. This inactivity made possible the great attack of May 30/31 on Cologne. In May, around 3,000 tons of bombs were dropped on German targets, or a monthly rate no greater than has often been achieved in the past. However, half of this tonnage was dropped in one night on one objective, Cologne. 2. The Royal Air Force also sowed 1,000 mines during May. A large number of these were laid in the Baltic, as a help to Russia. Even if the mines do not sink any German ships, they tie up a large number of men and vessels in mine-sweeping. 3. The British tried two experiments during the month, the thousand-bomber attack on Cologne being immediately the most important and the most publicized. The use of the new Mosquito bombers may also prove to be a significant development. The British have never been able to make daylight bombing raids beyond the range of their fighters except as a sort of stunt and with heavy losses. The R. A. F. is now, it appears, attempting to use the Mosquitoes as fast day bombers. If long-distance daylight bombing with its high accuracy is practicable, the recent experimental use of a few Mosquitoes may prove to be as important in the winning of the war as the "four-figure" night bomber raids. 541 -2Total losses in the Losses during war to June 1, 1942 May I. Losses R.A.F. bomber losses in night raids over Western Europe II. Analysis of Targets 117 1,750 Attacks during Total number of attacks in war to June 1, 1942 May Ports, docks, shipping Industrial plants Airdromes and seaplane bases 011 refineries, synthetic 37 1,603 11 948 12 911 o 360 plants and tank farms Total of above III. Leading Cities Attacked 60 Attacks during Total number of attacks in war to June 1, 1942 May A. Germany Cologne (industrial center) Bremen (port) Hamburg (port) Emden (port) Wilhelmshaven (port) Kiel (port) Mannheim (industrial center) Berlin (industrial center) Essen (industrial center) Gelsenkirchen (synthetic oil) Hanover (synthetic oil) Total of above (11 cities) 3,822 102 1 93 88 0 1 72 0 o 61 0 59 58 1 50 0 49 0 43 42 O 0 717 3 B. Occupied Areas Boulogne (port) Brest (port) Ostend (port) Calais (port) Flushing (port) Lorient (port) Paris (industrial center) Trondheim (naval base) 2 122 o 107 104 1 83 4 64 1 53 0 5 1 2 0 C. Italy 24 0 Naples (port Turin (industrial center) Total 540 9 Total of above (8 cities) 14 O o 38 542 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE TO FROM Secretary Morgenthau Mr. Kamarck Subject: R.A.F. Activity in June, 1942 July 2,1942 M 1. In June, the R.A.F. made two 1,000 plane raids, one on Essen at the beginning of the month and one on Bremen on the night of June 25/26. To these two cities must be added Emden as a favorite target for the R.A.F. bombers in June. According to the statistics, the R.A.F. dropped approximately 1,500 tons of bombs on each of these three cities during the month. The total tonnage dropped in the night raids during the month totalled more than 5,000 tons, compared to 3,000 tons in June a year ago. 2. According to later Intelligence reports, the situation in Cologne following the R.A.F. big attack in German authorities were quite unable to cope with the May. Emergency feeding, first aid, and evacuation measures broke down. Some people had to walk over 30 miles to find lodging. S.A. and S.S. officials deserted the city under the pretext of seeking emergency accommodation for the homeless. The raids may have seriously deranged the supplies of Ruhr coal and coke for industry. 3. In its daylight sweeps over western Europe, the Royal Air Force 18 conducting an effective locomotive hunt. (It will be remembered that Hitler in his April speech let slip the information that the German locomotive position was tight). On the Nord system in France, which was already desperately short of locomotives, 50 have been put out of action. -2543 Losses during June I. Losses Total losses in the war to July 1, 1942 R.A.F. bomber losses in night raids over Western Europe 204 1,954 Attacks during June II. Analysis of Targets Ports, docks, shipping Industrial plants Airdromes and seaplane bases 011 refineries, synthetic plants and tank farms Total of above attacks in war to July 1, 1942 1,633 30 955 937 7 26 360 O 3,885 63 Attacks during June II. Total number of Leading Cities Attacked Total number of attacks in war to July 1, 1942 A. Germany Cologne (industrial center) Bremen (port) Hamburg (port) Emden (port) Wilhelmshaven (port) Kiel (port) Mannheim (industrial center) Essen (industrial center) Berlin (industrial center) Gelsenkirchen (synthetic oil) Hanover (synthetic oil) Total of above (11 cities) 102 o 97 4 88 o 76 4 o 61 o 59 58 O 2 0 o 43 o 42 727 10 B. Occupied Areas Boulogne (port) Brest (port) Ostend (port Calais (port) Flushing (port) Lorient (port) Paris (industrial center) Trondheim (naval base) Total of above (8 cities) 122 107 104 o o 0 83 o 64 o 53 o o 5 2 o C. Italy 24 Naples (port) 14 Turin (industrial center) Total 540 0 0 38 544 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE July 28,1942 Secretary Morgenthau TO FROM Lieutenant Kamarok Subject: of Possible Interest: Observations on the Army of the United States (While the sample of the army I have seen so far has been very small, still, some of the conclusions which can be drawn might be of interest.) 1. Morale is good. There is more hard work and less complaining than I have ever seen in the Army in the past. The war is a serious job and it is taken seriously. In general, while everybody is too busy with Army duties to do much thinking on developments in the war, there is a deep interest in events. The most intense interest is shown in the fighting in Russia. There appears to be a widespread fear that if Russia is let down this summer, the war will be prolonged for years. As one young second-lieutenant put it: "I may yet get to be Chief of Staff." 2. The Army has learned from the campaigns abroad. A serious effort is being made to gear the army to blitzkrieg tactics. In the field artillery, it is clearly recognized that our guns are now once again in the front line and not, as in World War I, in comparative safety behind the lines. The following resulting changes have been made in field artillery technique: (a) Firing has speeded up. Many short-outs in the preparation of firing data and in the conduct of fire have been introduced. (b) Training is given in point-blank fire at fortifications and in fire at tanks. (a) The field artillery is taught to rely on itself for defense against enemy Infantry. A few years ago a cannoneer never saw a rifle. Now he learns to use it and the bayonet, too. 545 -23. The Army is in process of changing to a new method of recruiting officers. The pool of reserve officers has been practically exhausted. Most new officers, from now on, will come up through the ranks and be trained in the Officer Candidate Schools. In this regard, too, the Army is adopting the practice current abroad: In England, Germany, Russia, all new officers must have passed through the ranks before being commissioned. 4. The new artillery material is very good. Our new light field piece, the basic artillery of the Army, is now the 105 mm. howitzer which has superseded the obsolete French 75. The 105 should really be called a gun-howitzer as its tube length is on the border-line between gun and howitzer and it is versatile enough to do both jobs well. It is the same caliber as the German light field piece and is certainly as good. The British 25-pounder gun-hewitzer fires a lighter shell than our howitzer's 33-pound shell and probably does not have as great a range.