Office of Strategic Services - Reports, March 26, 1942- April 13, 1942

PSF: Office of Strategic Services: Donoven Reports, March 26- - April 13, 1942 Folder # 8 PSF Sub File Box 16 PSF: OFFICE OF STRATEGIC SERVICES 1942 Donovan Report No. 8 March 26 to April 13 No. 348 March 26, 1942 12:00 Noon MEMORANDUM FOR THE PRESIDENT: From: William J. Donovan The following is from the Weekly General Directive of PWE. 1. Policy. No mention to be made of Madagascar. 2. Strategy. a. Russia. Operations: Despite desperate German resistance near Staraya Russa, good progress. In central sector west of Moscow, severe fighting. The position west and southwest of Rzhev confused. Russians are attacking northeast of Gshatsk. The Russian thrust south of Vyasma is being prevented from reaching Dorogobush by Germans. German communications from Vyasma to Smolensk still intact, though threatened. On the wide front southwest of Yukhnov there is heavy fighting. The Russians are attacking east of Orel, and have gained ground northeast of Kharkov. Pressure is being exerted from Kharkov via Donetz salient to Taganrog. Interpretation: The Russians are still attacking relentlessly although they have not made any considerable advances. Their gains have not been offset by any German successes. It should be emphasized that the Russians are still forestalling efforts to prepare the Spring counter-offensive which Hitler must -2- try in order to obtain oil It should be pointed out that Russian Air Force superiority will be increased because: a. Practically the whole Italian Air Force and approximately fifty per cent of the Luftwaffe are contained by the Royal Air Force operating from the Middle East and Britain. b. Hitler is already obliged to send many squadrons back to the Eastern Front which he withdrew because of point of collapse. C. Ever increasing stream of reinforcements from Allies is constantly strengthening the Russian Air Force. It is concluded that in 1942 Germany will learn from experience that Allies have gained air superiority. Special Note: Regional heads should note that while above line of propaganda is particularly suitable for German and the Balkans, a reliable information indicates that Germany forces are being marshalled in the South for a counter- offensive in the Ukraine and are very formidable. There is every reason to believe the impending attack will be on a heavier scale than the initial attack of last year. b. Far East. Our forces in Burma are continuing to retire northwards to link up with the Chinese allies. There is still resistance in Java and Sumatra by scattered allied forces. Japanese operations have been confined to aerial reconnaisance and bombing since the occupation of Salamoa, Lae and Fischaffen -3- in New Guinea. Their naval forces have been located at Kessa Buka in the Solomon Islands. There are evidences that Japan intends to capture air bases in the New Hebrides and the Solomons with a view to occupying New Caledonia. These operations, if success- ful, will enable Japan to establish a ring of air bases threatening Northeast Australia and communications between the Southwest Pacific and the United States. 3. Propaganda Policy. a. Always make reference to the coming Spring offensive as the German Counter-Offensive and point out: First, Germans are making preparations to attack because they are forced to; Second, Germany has had to withdraw forces from occupied countries because losses in Russia are so heavy; Third, Nervousness over the ordeal before them made the Germans brutal in suppressing any signs of resistance, as in Norway for example. b. In preparing for Spring our objects should be: First, To strive to increase this German nervousness over the occupied countries at the moment when they are concentra- ting on the East; Second, Emphasize our contribution to the war, i.e., Speech of Lord Halifax on manner in which we are accelerating and tightening the conduct of the war so as to be prepared to make a more effective and bigger contribution in the Spring. -4- C. Such long term conceptions as the war of attri- tion should be gotten away from. In this war not only the enemy, but most of Europe is hit by attrition. It is quite different from the last war in this respect. Europe wants a victory soon and so do we. This impression should be given in our propaganda. No. 349 March 26, 1942 12:00 M. MEMORANDUM FOR THE PRESIDENT FROM: William J. Donovan The following is from Weekly Survey of Axis strategic intentions deduced from propaganda in regard to Turkey. Strong Axis pressure on Turkey was further in- creased either to obtain concessions or to prevent Turkish concessions to the Allies. For the second successive week German Home Propaganda failed to use the good stories indicating Turkish good will such as Sarajogla interview Popolo di Roma, 18 March, Ineonu statement, 17 March. German press gave great publicity to alleged "Bolshevization of Iran" and to "British bombing of Milas" as a deliberately brutal terrorist act of pressure. There are indications that the Axis is conducting a war of nerves designed to spread alarm among the enemies of Germany. Examples: Lahti Radio Station discussed, March 19, Turkey's permitting the German troops to cross 807 - 2 - their country to attack Russia. Berlin correspondent of the Social Demokraten said on 20 March that Turkish Minister to Germany, Gerede's visit to Ankara was con- nected with German proposals that Turkey enter the war. At least four propaganda sources suggested during the last five weeks, that Germany intends to attack Turkey in the Spring with the "limited objective" of securing control of the Straits or of securing bases. It seems more likely than it did a week ago, from open propaganda evidences, that Germany expects to have to proceed to this extreme, although all hope has not yet been abandoned for a "peaceful settlement". THE WHITE HOUSE WASHINGTON March 31, 1942. MEMORANDUM FOR I. J. D. Be sure to send a copy of your No. 350, March 26th, to the Acting Secretary of State and Mr. Rockefeller. F.D.R. > No. 350 March 26, 1942 12 Noon MEMORANDUM FOR THE PRESIDENT: FROM: William J. Donovan Further on the subject of the so-called "Secret Map" of South America, the following is an article written by Santiago Sanches Calvete, in Buenos Aires to the President of "The Pittsburgh Courier Publishing Company", which you might be interested in reading.. "1. General Wilhelm Faupel Author of 'Secret Map' Denounced by President Roosevelt In the Map Room of the Ibero-American Institute of Berlin, there are an extraordinary number of charts, mili- tary, naval and topographical. These would not be out of place in a Regimental Headquarters but it is very strange to see them in a supposedly cultural organization which pretends to deal exclusively with the betterment of relations between Germany and the Latin-American Republics. Here many men spend hours studying and discussing in low voices economic, military and political problems of South -2- America. They sit around a big center table on which are spread many maps. We are now at Breitstrasse 37 in the German capital, in the buildings which were once the Royal Stables and are now the Ibero-American Institute founded in 1930. Its formation was based on the library donated by Dr. Ernesto Quezada and which today consists of 150,000 volumes. Who are these men who, once the doors of the Institute are-closed, spend their time in the Map Room secretly studying and discussing? What are they planning? These men, whose activities now concern not only Central and South America but also the United States, I know intimately. They are General Wilhelm Faupel, Director of the Institute; Mayor Felix Von Frantzing, his adjutant; Mr. Juan Lumme, chief of the German-Latin- American Economic Organization centered in Berlin; Mr. Bock, specialist in Central-American economic and cultural problems; Professor Fiebrig, head of the Argentina-Paraguay- Uruguay section and many others. During the months of October, November and December 1938, I was Advanced Spanish Professor in the Institute's night-school. Classes were held three times a week. Many times at the beginning or -3- close of the lesson, I would see those who met in the Map Room going by secretly as though afraid of being seen: "I an telling these incidents as they are intimately related with a recent event in the U.S.A. I refer to the sensational announcement made by President Franklin D. Roosevelt in which he stated the existence of a secret Nazi Map, which divided Latin-America into five sections, which will be conquered or come under complete Nazi control. Up to now, President Roosevelt had not published the contents and origin of this secret map made in Germany, perhaps with the object of not compromising certain people involved. "Having been for several years (1935 to 1939( literary collaborator, military translator and personal friend of General Wilhelm Fuapel, I am in a position to corroborate the existence of the aforementioned map which was made and thoroughly prepared by the same General Faupel and his technical helpers, all of them perfect masters of the language, customs and culture of the Latin American countries. -4- It cannot be otherwise, for there is no other person in Germany who knows Latin America more thoroughly than Faupel and his wife Dr. EdithFaupel. After his return from Spain where he had been the first German Ambassador to the then traumphant Franco, he became for a second time in March, 1938 Director of the Institute. From that moment he intensified the cultural, intellectual and military espionage which the Institute had already been carrying out in Latin America. He maintained a great interchange of literature, books and information of all kinds, he encouraged visits of Latin American intellectuals, doctors and military men to Germany, paying their expenses and treating them with great regard in order to convert them into admirers of the Third Reich and BO turn them into conscious or unconscious agents for the territorial and economic conquest of the Western Hemisphere which is part of the plan for world conquest proposed by Mr. Hitler. "The five territorial regions which appear in the secret map correspond exactly to the five sections in which the Ibero-American Institute has been divided for -5- many years. As I have been in and out of the Institute continually during the years 1935 to January 1939, trans- lating military, economic and technical papers for the General and other heads of departments, I am áware of the excellent method, iron will and amazing organizing power of Wilhelm Faupel. "The five divisions of the Institute which to my mind correspond with the sections in the secret map, are as follows: SECTION 1. Argentine, Uruguay, Papaguay. In charge of Professor Fiebrig former director of the Botanical Gardens of Asuncion, Para- guay, deported from this country for mixing in internal politics. His principal collaborators are Mrs. Simmons, Mr. Erwin Hoene and Dr. Edith Faupel. SECTION 11. Brazil. In charge of Professor Otto Quelle. Principal collaborator Dr. Richert. Professor Quelle has been often in Brazil visiting the German colony there. SECTION 111. Chile and Bolivia. In charge of Fritz -6- Berndt, headmaster of an elementary school in Berlin and correspondent in Germany for several Bolivian newspapers. His principal technical adviser is Federico Nielsen Reyes, former Secretary of the Bolivian Legation in Berlin and a great Nazi propagandist in South America. SECTION lv. Peru, Ecuador, Colombia and Venezuela. Under the direction of Dr. Edith Faupel, wife of the General, a woman with an extraordinary capacity for work, a great diplomat and with a thorough knowledge of Latin American countries. Her principal assistants are Professor Max Uhle, two permanent secretaries and many others. SECTION V. Mexico, Central American countries and the Antilles. Under the direction of Dr. Walter Hagen, Assisted by Mr. Bock. Both these men have excellent knowledge of these countries. -7- "Each one of the five internal divisions of the Institute covers what in German is called a "Wirtschaftraum" (Economic Region) of Latin America, which depicts the specific and determined character and industries which separates it from the other four sections, and also points out the strategic and internal political aspects which are sarefully studied and controlled. "The Institute has had many spies and agents in Central and South America, some of which I have spoken to personally in Berlin when they have been to deliver information and to receive their instructions from their chief head of the Gestapo in Argentina and who escaped to Brazil to avoid being detained by the Argentine authorities. Another of these agents is my ex-Spanish pupil in Berlin, former Consul- General in Santiago de Chile, Paul Baradon, who was expelled from this country for giving false passports to the sailors of the "Graf Spee" who escaped from their internment in Argentina. At present Baradon occupies a diplomatic posi- tion in Uruguay where he continues unmolested in his work of spreading Nazism, sabotaging and preparing for the Nazi conquest of South America. -8- "The pupils in my classes in the Ibero-American Institute were a group of adults who had lived for some time in Latin America. General Faupel instructed them secretly for their future roll of emissaries of the Third Reich in South America. He also ordered them to be taught characteristic Spanish by a native, in this case myself. Among the pupils who were being trained as spies I would mention Mr. Herta Degenfuhrt, employed by 'Scade' since transferred to Ecuador; the mysterious Ella Hunne, Gisele Thies, Walter Machalski who has expert knowledge of Brazil, Mr. Hermann and Messrs. Hornkohl knaut, etc. All of them, naturally under assumed names, are now 'working' in our countries with the financial help and protection of the Reich. "The principal spies in Argentina under the orders and protection of Faupel are Godofredo Santede, Wilhelm Hammerschmidt, former German Consul in Cordoba (Argentina) actually living in Chile as head of propaganda. He still goes continually to Argentina attending meetings of Nazi leaders in La Faldo, Cordoba, presided by the German ambassador Edmund von Thermann. Santede, Hammerschmidt -2- and the Faupels tried their utmost to bribe me and make me a traitor to my country. Because of their continued threats to inter me in a concentration camp, I left Germany secretly on January 31, 1939. "Actually as our country is about the only one in Latin America that has not severed relations with Axis, all the Nazi spies from Central and South America are arriving here. The Argentine authorities take no notice of this invasion which is a menace to our country. "The Nazi infiltration in Latin America and Argentina in particular, is now complete. Everything is prepared and ready for action. The Nazis will now try the military conquest of South America as the U.S.A. is occupied with the war in the Pacific. Recently we got news that General Faupel is at present in Spanish Morocco. Knowing the General's methods, I am sure he is preparing the invasion of Latin America. The attack may come about in a few months or in a few weeks. With the help of Vichy the Germans will launch a double offensive. First, from Dakar against Brazil (Natal) by means of their powerful aviation; Second, against Argentina by means of their super-submarines, which have an immense radius of action and can carry any amount -10- of cargo (I heard vague reference to these submarines whilst in Germany). The 'Fifth Column' in Brazil, Argentina and Chile will be ready to assist. "What is done here in Argentina with regard to this imminent Nazi attack? Almost nothing, because, according to the government, Argentina is not in danger of any out- side enemy. We just look at the smoke and do not investi- gate its source." No. 351 March 26, 1942 6:00 P.M. MEMORANDUM TO THE PRESIDENT FROM: William J. Donovan I enclose a copy of a memorandum gotten out by Little, Brown & Company in relation to a new book to be published April 6 entitled "How Japan Plans to Win", by Kinoaki Matsuo. I do not know whether this has been called to your attention. LITTLE, BROWN & COMPANY presents its own WHITE PAPER To Be Published on the publication of the book APR 6 1942 HOW JAPAN FLANS TO WIN by Kinoaki Matsuo Liason Intelligence officer for the Japanese Foreign Office and Admiralty and Chief of the Press Bureau of The Black Dragon Society of Japan. translated by Kilsoo K. Haan PREFACE At a Los Angeles hotel, in January 1941, a Korean gentleman quietly obtained a pass key from a chamber maid, entered the room of two Japanese military authorities, and as quietly departed with a copy of a Japanese book under his arm. The Korean was Kilsoo Haan, of the Sino-Korean People's League. The book was a copy of "The Three-Power Alliance and a U. 8.-Japanese War," written by a Japanese official to convince the Japanese people that war with the United States was not only inevitable, but wholly advantageous to Japan. Little, Brown & Company feels that this book should be brought to the attention of the American people to eliminate whatever false sense of security yet remains after December 7, 1941. This book, written for Japanese home consumption, may be as important and significant to America as "Moin Kampf" was-- or should have been. The following pages present, in question and answer form, some account of the history and nature of the publication. The Faots Behind HOW JAPAN PLANS TO WIN 1. Precisely what is the book about? It is a Japanese blueprint for viotory, by an officer of the Japanese Naval Intelligence, published in Tokyo in October, 1940. It is & complete, detailed timetable of military operations, to which events in the three months since December 7th have so far strictly adhered. 2. Is this merely a summary and analysis by an American "expert"? It is emphatically not. Except for an introduction by Senator Guy M. Gillette of Iowa, it consists of a translation of the exaot text as written by its Japanese author, and a note by the translator. 3. Will any Japanese person or agency receive any royalties? Even in peacetime there is no copyright protection for an English translation of a Japanese book in the United States. Obviously, the publishers have not consulted the Japanese author at this time. 4. As a bookseller, how am I to differentiate between this book and the "Tanaka Memorial"? HOW JAPAN PLANS TO WIN was written in 1940, under the direct spon- sorship of the Japanese government, and 1s directly concerned with political and military events as they stand today. The "Tanaka Memorial" was written in the 1920's, and applied mainly to the economio situation as it stood at that time. 5. Why has the book been re-titled HOW JAPAN PLANS TO WIN? The title was changed from "The Three-Power Alliance and a U. 8.- Japanese War" in order to convey more graphically and more con- cisely the full impact of the book. 6. In what respects do the aims of HOW JAPAN PLANS TO WIN diffor from those of MEIN KAMPF? "Mein Kampf" is & generalized statement of political and military aims, directed against many countries. HOW JAPAN PLANS TO WIN is devoted for the most part to actual military and naval strategy to be employed directly against the United States. While many of the plans discussed in such amazing and shocking detail have already come to pass, the full extent of Japan's plans has not as yet been felt. What they may be is set forth in this book. 7. Just who is the Japanese author of this book? Kinoaki Matsuo, being an Intelligence officer in liason between the Japanese Foreign Office and the Japanese Navy, and also chief of publicity for The Black Dragon Society (a fanatical Fascist organization) was the ideal man to write this book. His views represent the concentrated conviction of the adventurers in the three groups with whom he was associated: that war with the United States was completely desirable. His book has had a wide circula- tion in Japan as an expression of the "manifest destiny" of the Nipponese Empire. 8. Just who is the translator? Kilsoo Haan is Washington representative of the Sino-Korean People's League, an organization seeking eventual liberation of Korea from Japan. Made up of Korean patriots in Korea, Japan, and elsewhere, the League bases its aims on the belief that only American domina- tion of the Pacifio will insure Korea's freedom. Mr. Haan lived from childhood in Hawaii working in the sugar cano fields and going to Salvation Army Schools. From 1935 to 1937 he worked in the Japanese consular service in order to strengthen his own organization. 9. Has the Sino-Korean People's League been of any direct use to our own Intelligence Department? Yes. They procured information about armament of Japanese naval bases in Korea, the mandated islands of the Caroline and Marshall groups, eto. Among the comments about Kilsoo Haan by our own government officials is the following from Mr. Frank Knox, Secretary of the Navy, on April 26, 1941: "Your faots and predictions have indeed been borne out by the passage of time and I assure you that the information you have given us has always been highly appreciated." 10. How did Mr. Hann discover where he could obtain a copy of the book? He received information through one of his agents in Tokyo that two Jap- anese military men, members of The Black Dragon Society, were on their way to California to do propaganda work among the West Coast Japanese- Americans. Their names were Major Masaichi Sugihara and Captain Otijiro Endo. Haan was further informed that they had with them a book which would be most interesting to the American Government and the American People, a book which had been published to stimulate Japanese morale and which had become a kind of textbook for Japanese officers. Mr. Haan's informer also stated at what hotel in Los Angeles these officers were to register. As explained in the preface of this paper, he entered their room and left with & copy of the book. 11. Was the book shown to our State and War Departments? On his return to Washington he and another member of the Korean organization made a chapter by chapter English summary of the book. According to the NEW YORK TIMES of January 12, 1942: "Kilsoo Haan sent copies of the book and the English abstracts of it to the State and War Departments last Maroh." 12. According to HOW JAPAN PLANS TO WIN, what is the next stop they will take against our country directly? The next scheduled Japanese move is an all-out attack on Hawaii, by way of Midway Island, which the Navy Department announced re- cently to be still in American hands. 13. Are the Japanese aware of the risk this will involve? According to the book, the Japanese expect to suffer very heavy losses, both in men and in ships; but they believe that the enormous length of the U. S. Communications, the more accurate fire of the Japanese (they oito figures), and the superior Japanese morale (for which read "fanaticism") will give them a decisive edge in the long run. 14. How do they plan to follow up the Hawaii attack? With Pearl Harbor reduced (it's planned down to the percentage of losses to be expected and the probable amount of help from the Japanese population) the Japanese would have & base from which to attack any part of the U. 8. at will, and it is about this time that they would launch a massive attack to destroy the Panama Canal. 15, Do they not recognize, in this book, any attempt of offensive operations by our military and naval forces? Japan expeots the U. 8. Fleet to try to bomb Tokyo. But such, they say, is the strength of their ground and fighter defenses that only twenty percent of our planes will get through, and fewer will return to their carriers. 16. What major operation do they anticipate from the U. S. fleet? The Japanese expect our fleet to make for the Sea of Japan, there to give battle to the main Japanese Fleet under the most disadvanta- geous conditions imaginable (for the U. S.). The result, according to the confident Nipponese, is & foregone conclusion: the superior determination and the more accurate fire of the Japanese ships and planes will result in utter defeat for the United States Navy. 17, From a purely commercial viewpoint, what are the high-lights of this book? (a) This is an authentic Japanese home produot which shows in shock- ing detail the audacity of the enemy. (b) The book has already had widespread publicity in the press and on the air. (o) The advance sale has to date been more than encouraging. (d) It represents a threat which every thinking American should be aware of. 18. Where can a more comprehensive idea of the contents of the book be found? The last two pages of this "white paper" contain a table of contents of HOW JAPAN PLANS TO WIN. 19. What type of newspaper publicity has Mr. Haan, and therefore the book, been getting? Below are some of the various publicity channels in which either Mr. Haan or the book, or both, have been discussed: International News Service: Dec. 9, 1941 Pittsburgh Post Gazette: Deo. 11, 1941 Washington Merry-Go-Round: Dec. 15, 1941 Washington Daily News: Jan. 7, 1942 New York Times: Jan. 18, 1942 New York Herald Tribune: Jan. 20, 1942 Washington Merry-Go-Round: Jan. 25, 1942 Washington Daily News: Jan. 27, 1942 Time Magazine: Feb. 2, 1942 We are receiving feature stories and clippings from West Coast papers daily -- too numerous to list here. 20. What is the publication date, and at what price will the book sell? HOW JAPAN PLANS TO WIN will be published in early April, and will sell for $2.50 per copy. Advance orders are encouraged. 21. What type of promotion and advertising will back up the book? The same type of campaign that has boen used BO successfully by Little, Brown with "You Can't Do Business With Hitler" and "Defense Will Not Win the War." HOW JAPAN PLANS TO WIN Table of Contents Translator's Note Foreword Author's Preface Japanese Publisher's Note CHAPTER I: The Gravity of the U. 8. - Japanese Crisis CHAPTER II: The Great U. 8. Naval Expansion CHAPTER III: History of the U. 8. - Japanese Confliot CHAPTER IV: The U. 8. - Japanese War is Inevitable CHAPTER V: Armament of the U. S. CHAPTER VI: The New U. 8. Weapons and Mechanized Forces CHAPTER VII: The Great U. S. Air Armada CHAPTER VIII: The U. 8. Strategy CHAPTER IX: The Principles of Quick Battle and Immediate Decision and a Long-Endurance War CHAPTER X: The Opening Period of War CHAPTER XI: Japan's Attack upon the Philippines CHAPTER XII: The Fall of Manila CHAPTER XIII: The Fearful War of Trade Destruction CHAPTER XIV: America's Recapture of the Philippines CHAPTER XV: The Singapore Naval Base and Hongkong CHAPTER XVI: The U. S. Navy's Advance to Hawaii CHAPTER XVII: Japan's Surprise-Attack Fleot CHAPTER XVIII: The U. 8. Fleet's Expedition to Japan CHAPTER XIX: Air Raids by U. 8. Air Army upon Japan, and Espionage CHAPTER XX The Great U. 8. - Japanese Naval Battle in the Pacifio CHAPTER XXI Japan's Occupation of Hawaii and the Closure of the Panama Canal CHAPTER XXII The Japan-Germany-Italy Alliance and the United States ... The complete, detailed blueprint of Japan's war plans HOW JAPAN PLANS TO WIN Published in Japan under the title "The Three-Power Alliance and a U.S.-Japanese War" By Kinoaki Matsuo A translation by Kilsoo K. Haan of a complete timetable of military operations (as scheduled by the Japanese Government in 1940) to which events since December 7th, 1940 have 80 far striotly adhered. $2.50 Boston LITTLE, BROWN & COMPANY Publishers No. 352 March 26, 1942 6:00 P.M. MEMORANDUM FOR THE PRESIDENT From: William J. Donovan We are attempting to make a survey of the typhus situation in Europe. Here is a cable we have received: "Typhus French North Africa rose 1941 far above usual endemic level, Algeria 12,921 cases, Morocco 1,504, Tunisia 7,171. Epidemic now develops 2,500 cases weekly. Spain after autumnal lull epidemic again progresses 20 provinces 6,700, 1941, 1,000 January. France 5 cases February. Belgium, Netherlands, Scandinavian countries practically untouched. Increase usual endemic in 1941 now accelerating Bulgaria 304, 1941, 99 February; Rumania 1,906, 1941, 694 February; Hungarian Subcarpathia 621, 1941, 107 February; Wartheland (Western Poland)1,241, 1941 against 40 pre-war years. Official figures rest Poland unavailable. Severe outbreak Warsaw unofficially reported. No figures for Yugoslavia and Greece where typhus usually sporadic. Small civilian foci throughout Germany multiplying December 342 cases total 1,110, 1941. " Incidence military unavailable. Civilian figures unpublished since January. German army unvaccinated except sanitarians. Known facts suggest importation of infection from -2- extensive epidemic focus in eastern occupied and fighting areas. High endemicity usual throughout U.S.S.R. probably increased by migrations and troop movements but figures unavailable. Russians probably partly immune from previous infection. Incidence now rises Europe and North Africa. Seasonal peak normally expected May."