Selected Documents
HEADQUARTERS FIFTH CORPS AREA
OFFICE OF THE CORPS AREA COMMANDER
FORT HAYES, COLUMBUS, OHIO
WAR DEPARTMENT
G-2
July 15, 1941
SUBJECT: Standard Oil Company of New Jersey Ships Under Panamanian Registry.
TO: A. C. of S., G-2,
War Department
Washington, D.C.
1. A report has been received from Cleveland, Ohio, in which it is stated that the source of this information is unquestionable, to the effect that the Standard Oil Company of New Jersey now ships under Panamanian registry, transporting oil (fuel) from Aruba, Dutch West Indies to Teneriffe, Canary Islands, and is apparently diverting about 20% of this fuel oil to the present German government.
2. About six of the ships operating on this route are reputed to be manned mainly by Nazi officers. Seamen have reported to the informant that they have seen submarines in the immediate vicinity of the Canary Islands and have learned that these submarines are refueling there. The informant also stated that the Standard Oil Company has not lost any ships to date by torpedoing as have other companies whose ships operate to other ports.
For the A. C. of S., G-2,
CHAS. A. BURROWS,
Major, Military Intelligence,
Asst. A. C. of S., G-2
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BANK FOR INTERNATIONAL SETTLEMENTS
BOARD OF DIRECTORS
Ernst Weber, Zurich -- Chairman
Dott. V. Azzolini, Rome
Y. Breart de Boisanger, Paris
Baron Brincard, Paris
Walther Funk, Berlin
Alexandre Galopin, Brussels
Prof. Francesco Giordani, Rome
Hisaakira Kano, Tokio
Sir Otto Niemeyer, London
Montagu Collet Norman, London
Ivar Rooth, Stockholm
Dr. Hermann Schmitz, Berlin
Kurt Freiherr Von Schroder, Cologne
Dr. L. J. A. Trip, The Hague
Marquis de Vogue, Paris
Yoneji Yamamoto, Berlin
Alternates
Dott. Giovanni Acanfora
Dott. Mario Pennachio
Cameron F. Cobbold, London
Emir Puhl, Berlin
EXECUTIVE OFFICERS
Thomas H. McKittrick, President
Roger Auboin, General Manager
Paul Hechler, Assistant General Manager
Dott. Raffaele Pilotti, Secretary General
Marcel van Zeeland, Manager
Dr. Per Jacobsson, Economic Adviser
Dr. Felix Weiser, Legal Adviser
16th June 1943.
________________________________________
Memorandum from R.T. Yingling, State Department attorney, to Assistant Secretary of State Breckinridge Long
February 26, 1942.
Mr. Long:
It seems that the International Telephone and Telegraph Corporation which has been handling traffic between Latin American countries and Axis controlled points with the encouragement or concurrence of the Department desires some assurance that it will not be prosecuted for such activities. It has been suggested that the matter be discussed informally with the Attorney General and if he agrees the Corporation can be advised that no prosecution is contemplated.
This office feels that no formal opinion of the Attorney General for its future guidance is necessary in view of Resolution XL on telecommunications adopted at the Consultative Meeting of Ministers of Foreign Affairs of the American Republics, held at Rio de Janeiro in January of this year. If the International Telephone and Telegraph Corporation feels that activities of the nature indicated above which it maybe carrying on at the present time in Latin America are within the purview of the Trading with the Enemy Act it should apply to the Treasury Department for a license to engage in such activities.
Le:RTYingling: LEY: SS
________________________________________
DEPARTMENT OF STATE
Memorandum of Conversation
STRICTLY CONFIDENTIAL
DATE: September 9, 1942.
SUBJECT: Telecommunication Circuits With the Axis Maintained by Argentina and Chile.
PARTICIPANTS: The Secretary (later); Assistant Secretary Long; Mr. Hackworth, Legal Adviser (later); Mr. Bonsal, RA; Mr. Daniels, RA; Mr. Halle, RA; Mr. Reinstein, A.A.; Mr. Tannenwald, FF; Mr. deWolf, IN.
COPIES TO: A-L, A-A, FF, Le, IN
Memorandum of a Meeting in Mr. Long's Office (Later Adjourned to the Secretary's Office)
Mr. Long pointed out that after months of conversation the American interests in the Consortium Trust (Radio Corporation of America) had done nothing actually to bring about a closure of the circuits maintained with the Axis by the Consortium companies in Argentina and Chile. He said they had proved what degree of control they could exercise over these companies by what had been accomplished in the course of General Davis' visit to Buenos Aires and Santiago, and that consequently he had no doubt but what they could order the companies to suspend the operation of the undesirable circuits. He said that the RCA representatives were coming to see him at 3 p.m. today, and that he had in mind telling them to do what was necessary in order to shut down the circuits by midnight tomorrow (September 10).
Mr. Bonsal suggested the advisability of informing the Argentine and Chilean Governments in advance of the contemplated action, pointing out that the political consequences of doing otherwise might have wide ramifications involving the basic policy governing our relations with the two republics. Specifically, he said, action taken by the companies in response to an initiative from this Government to close the circuits might raise the whole question of control by national governments over public utilities operating within their own jurisdiction. He felt that one of the consequences might be that nationalistic interests would point out that the public services in these countries were controlled by Washington, rather than by the national governments which should properly have jurisdiction.
Mr. Long expressed the view that, should the Governments be notified of the proposed action in advance, they would immediately call in the Axis representatives and that then we would have a fight on our hands. Mr. Bonsal felt that, in any case, we should be much better informed than we were of what the legal and political consequences of such action would be before we embarked on it.
The suggestion was advanced by Messrs. Daniels and Halle that it might be sufficient to have the RCA representatives be prepared to issue the necessary orders immediately when the Department gives them word to go ahead. This suggestion was based especially on the possibility that the Chilean Government might cut the circuits in the near future on its own initiative, and that since such initiative would lead the country nearer to a complete diplomatic break with the Axis, it would be preferable to company initiative.
The meeting thereupon adjourned to the Secretary's Office, where Mr. Long placed the problem and various considerations that had been advanced before the Secretary. The Secretary, citing the vital economic assistance that we were extending to Argentina, especially in the way of iron and steel shipments, said that we had a right to expect a good deal more cooperation in return than we were getting. He said that, while he had not been in close touch with the situation in Argentina over the past few months, he felt the time had come when we should deal more severely with the Argentine Government. Consequently, he favored Mr. Long's proposal to ask RCA to have the circuits abandoned by midnight tomorrow. Mr. Bonsal expressed his view that we should have more information on the provisions of the franchises under which the companies were operating before proceeding further. The Secretary said that he felt the question of what the franchises provided concerned the Consortium and the Consortium companies rather than this Government. It was agreed that, because of indications that the Chilean Government would not oppose company initiative in this matter, the Chilean authorities should be notified in advance: In the case of Argentina, the Secretary expressed no objection to our having the company take the action forthwith.
RA: LHalle: MM
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DEPARTMENT OF STATE
Memorandum of Conversation
DATE: May 24, 1943.
SUBJECT: Communications.
PARTICIPANTS: Colonel Sarnoff, RCA
Mr. Long.
COPIES TO: RA, IN
I talked to Colonel Sarnoff on the telephone and explained to him that we had reason to believe that more messages than the agreed 700 code-groups a week were being sent from B.A. by the Axis powers to their Governments. I told him I could not disclose down there the source of our information. In an effort to obtain additional information our representatives down there had approached Hayes. Hayes had seemed to them noncooperative. There may have been very sound reasons why he refused to disclose the exact number of messages sent in code-groups by each of the Axis representatives to their Government. However, there didn't seem to be any reason why the managership should not request a report on all code-groups being sent over a period of time, day by day, and to include a report on all belligerents, and that if he would obtain that information through confidential channels we would be appreciative. I suggested it be not done by telegraph or telephone and suggested the mail, but offered to make the pouch available.
Colonel Sarnoff replied that he would talk to Mr. Winterbottom but he saw no reason why we should not do it and that he would communicate with us if they wanted to use the pouch.
After receipt of this information we will be in a better position to judge what our policy should be.
B. L.
A-L: BL: lag
________________________________________
May 25 1943
Secretary Morgenthau
Randolph Paul
A short time ago a brief investigation was made of the files of the Ford Motor Company of Dearborn, Michigan, in order to determine the extent of its relationship and its control over its French subsidiary. Since the investigative report is rather lengthy, I have attached hereto a summary thereof which discloses that from the fall of France to July 1942 -- the date of the last letter in the files from Ford of France to Ford of America: (1) the business of the Ford subsidiaries in France substantially increased; (2) their production was solely for the benefit of Germany and the countries under its occupation; (3) the Germans have "shown clearly their wish to protect the Ford interests" because of the attitude of strict neutrality maintained by Henry and Edsel Ford; and (4) the increased activity of the French Ford subsidiaries on behalf of the Germans received the commendation of the Ford family in America.
I am sure you will want to read the attached report. We propose to submit informally copies of the investigative report to Military Intelligence, Office of Naval Intelligence, Federal Bureau of Investigation and other similar investigative agencies.
If you are in agreement, please so indicate below.
(Initialed) H.E.P.
Attachment.
(Signed) H. Morgenthau, Jr.
Approved:
RRShwartz: rhb 5/22/43
________________________________________
By Jean Pajus-June 1944
Memorandum by Jean Pajus. Foreign Economic Administration
June 1944.
MEMORANDUM ON SKF
In the current investigation on SKF the following points are important:
1. The important foreign files, including the correspondence between SKF in this country and SKF Sweden, and other foreign countries have been destroyed by order of the American SKF officials. According to an interview with Mr. William Batt it is the custom of the American SKF to destroy its files every seven years. It is extremely significant that Mr. Batt ordered the destruction of all foreign correspondence for the years prior to 1941 and 1942. Orders to destroy these files came down three days after Sweden was blocked by the United States Treasury in 1941.
2. Ever since the war began the Swedish company has been giving orders to its American affiliate with respect to volume of production, prices, and other matters of major policy. At one time it appears that the Swedish company deliberately withheld the shipment of necessary machinery to curtail production in this country for about eight months. All ball bearing machinery for SKF companies must be imported from Sweden and, consequently, the parent company can dictate changes in ball bearing production in foreign countries.
3. All of these orders from the Swedish parent company came through the Swedish Legation in Washington, thus escaping the normal channels of censorship.
4. There is a very considerable investment of German capital in the Swedish company. At the time of the merger of the German companies into the VKF Combine, under control of the Swedish SKF, a very substantial block of shares in the Swedish company was given to Germany. The shares received by the Germans were so-called B shares -- those without voting rights -- but the evidence is clear that the Germans have a very important position in the determination of all major matters of policy. In fact, the former manager of the German ball bearing is now manager of the Swedish company.
5. The largest share of SKF's production is located in Axis-controlled Europe, 52% in Germany and 64% in Germany and France.
6. There is considerable evidence of a direct German interest in the United States Company. Just prior to the last war the Hess-Bright Company, owned by the German Munitions Trust was purportedly sold to the Swedish SKF. The Investigation made by the Alien Property Custodian at that time indicated great doubt in the validity of the sale to the Swedes. A cash transaction of $2,800,000 reported paid to the Germans by the Swedish Company for the property was never traced. In fact the whole investigation was a fraud, since the final report submitted by the United States Secret Service was written by the vice president of SKF. Other evidence indicates that the Swedish company merely acted as a front for the German company and that that situation still exists.
7. Further evidence to show how the German and Swedish interests are inextricably linked is the fact that in 1912 SKF Sweden purchased 50% of the Norma Ball Bearing Company, Cannstadt, Germany. This purchase was necessary in order to secure access to German patents and to make sales in the German market from which it was previously excluded by the German Ball Bearing Cartel. In 1912 they joined the German cartel and became a licensee under the Conrad Patent. In 1929 the Norma Company was merged into VKF and a further German interest in the Swedish Company took place.
The Norma Company of America, a branch of the German Norma Company, was taken over by the Alien Property Custodian upon our entering into the war and, subsequently, was sold to American interests in 1919. At that time William Batt acted as an attorney in fact for the Norma Company. This indicates how closely knit Mr. Batt's interests with the Germans have been in the past.
8. Until 1940 Mr. Batt was a member of the board of directors of the American Bosch Company which has since been seized by the U.S. Alien Property Custodian. This company attempted to cloak its German ownership under a purported sale of the properties to Swedish interests affiliated with SKF just prior to our entrance into the present war. The Alien Property Custodian nevertheless seized the properties on the ground that the transfer was fraudulent. It is reported that, at the time of the American Bosch investigation, a memorandum was prepared by the Treasury Department on Mr. Batt's connections with German companies, which was sent to the White House. The memorandum raised the question of the desirability of allowing Mr. Batt to hold a prominent position in the War Production Board in the light of his business affiliations.
9. Numerous letters in the SKF files indicated that Mr. Batt was under orders from the Swedish company to supply the Latin American market, irrespective of current war orders in the United States; and that all sales in the United States should be based primarily on the long-term business interests of the company rather than the needs of the war effort.
At the present time an FEA representative is in Sweden attempting to purchase the SKF production in Sweden for $30,000,000. In the light of the above facts it would seem that action other than that of purchase could be effected to get the results desired.
The following steps are suggested:
a. Declare null and void the voting trust agreement now placed by Swedish SKF in the hands of Mr. Batt.
b. Seize the SKF properties in the United States, placing them under the Alien Property Custodian.
c. Place on the U.S. Proclaimed List all SKF companies in Sweden and Latin America.
d. Encourage American firms to export ball bearings to Latin America to compete with the SKF monopoly in those countries.
e. Place on the U.S. Proclaimed List all major Swedish companies affiliated with SKF., i.e., Asea, Atlas Diesel, Separator, Etc.
f. Block all transfers of funds from Latin American subsidiaries to Sweden.
g. Eliminate the Swedish cartel in ball bearings in Germany after the war.
h. Eliminate the Swedish monopoly in France and Japan.
i. Seize all patents belonging to SKF Sweden and SKF Germany and other patents held by SKF subsidiaries in Europe.
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TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE FEB 12 1945
TO: Secretary Morgeuthau
FROM: Harry White HDW
Information re Case Bk activities in Paris.
You will recall that on September 12, 1944, we reported to you that a study of an exchange of correspondence in New York between Chase, Paris, and Chase, New York, from the date of the fall of France to May 1942 disclosed that (1) the Paris branch collaborated with the Germans; (2) Chase was held in "very special esteem" by the Germans; (3) the Paris manager was "very vigorous" in enforcing restrictions unnecessarily against Jewish property; and (4) the home office took no direct steps to remove the Paris manager as it might "react" against their interests. We were then aware that the Paris branch of Chase acceded to the demands of the Germans to continue normal operations, even though both the Guaranty and National City had refused and substantial liquidation ensued.
On the basis of this report, you agreed with our recommendation to investigate Chase in France. As of the present date our investigation of the Chase records in France confirms the above mentioned findings, and discloses the following additional information:
1. S. P. Bailey, an American citizen who was in charge of the Paris office in June 1940, felt that it was desirable to, and actually commenced to, liquidate the Paris office. Some time thereafter and certainly by June 1941 his powers were revoked when the home office conferred authority on Niedermann who thereafter successfully ran the Paris office during German occupation, and Bertrand who remained at Chateauneuf in then unoccupied France.
2. Although Chase in New York did not, so far as is presently known, send instructions for the Paris branch after February 4, 1942, there is thus far no evidence that Chase even attempted to veto any transactions of the Paris office or between the office in the Free Zone and the office in Paris even when such contemplated transactions were the subject of requests for instructions.
3. Between May 1942 and May 1943, deposits in the Paris office virtually doubled. Almost half of the increase in deposits took place in two German accounts.
4. About a month after United States' entry into the war, the Chase attorney in Paris advised that it was a matter of "the most elementary prudence" to block American accounts notwithstanding that no such instructions had been issued by the occupying authorities. We are awaiting further reports as to whether the suggested action was taken.
5. In May 1942 the Paris branch advised a Berlin bank that certain instructions of the latter had been carried out and that the Paris branch "are at your disposal to continue to undertake the execution of banking affairs in France for your friends as well as for yourselves ***."
I will keep you advised of further developments in the investigation of Chase and the other American banks in Paris. In this connection you might be interested in reading the attached cable received yesterday from Hoffman in Paris which describes a meeting he held with Mr. Larkin who was apparently sent to Paris by Aldrich to try to straighten up the Chase offices. Larkin reported that Aldrich and the New York board of Chase were very much concerned over the situation in the Paris office of Chase, and that it was Larkin's job "to get to the bottom of the situation and make the necessary adjustments in personnel." It is significant that Larkin emphasized the fact that Chase, New York, had been cut off from the Paris branch since the United States entered the war. This does not agree with our findings which disclose that between the date of the fall of France and May 1942, Chase, New York, was kept advised about activities in Chase, Paris.
Attachment.
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6
RECEIVED
DEPARTMENT Of STATE
Ref: 1634/21/43
No: 366
1943 JUN 1 PM 3.21
DIVISION OF
COMMUNICATIONS
AND RECORDS
DIVISION OF
JUN 21 1943
THE AMERICAN REPUBLICS
DEPARTMENT OF STATE
His Majesty's Ambassador presents his compliments to the Secretary of State and has the honour to state that His Royal Highness, the Duke of Windsor, Governor of the Bahamas, has enquired whether the United States Government would be so good as to grant exemption from United States censorship to the correspondence of the Duchess of Windsor. Lord Halifax would be grateful for such sympathetic consideration as can properly be given to this enquiry.
BRITISH EMBASSY,
WASHINGTON, D.C.,
31st May, 1943.
________________________________________
DEPARTMENT OF STATE
ASSISTANT SECRETARY
June 18, 1943
Memorandum
I believe that the Duchess of Windsor should emphatically be denied exemption from censorship.
Quite aside from the more shadowy reports about the activities of this family, it is to be recalled that both the Duke and Duchess of Windsor were in contact with Mr. James Mooney, of General Motors, who attempted to act as mediator of a negotiated peace in the early winter of 1940; that they have maintained correspondence with Bedaux, now in prison in North Africa and under charges of trading with the enemy, and possibly of treasonable correspondence with the enemy; that they have been in constant contact with Axel Wenner-Gren, presently on our Blacklist for suspicious activity; etc. The Duke of Windsor has been finding many excuses to attend to "private business" in the United States, which he is doing at present.
There are positive reasons, therefore, why this immunity should not be granted -- as well as the negative reason that we are not according this privilege to the wife of any American official.
A.A.B., Jr.
A-B: AAB: ES