resumption of work in the foundries may be delayed due to the transportation problem. All in all, the situation today is such that we now have the coal and ore bases of the whole European Continent at our free disposal, which gives us an incomparably stronger position toward England from the point of view of the iron industry. (England depends for 40 percent of its ore on imports and is at the present confronted with the problem of losing its Spanish and north African imports aside from its Norwegian and Swedish ore imports.) The development of Stahlunion has taken an upward trend; forces which we had ceded to other Konzernstellen have again been taken over by Stahlunion, particularly since our endeavors to take over the European sales of the industry on a larger scale have been increasingly successful. Quantities at our disposal for export have been increased by special allotments, and we are positive that the above-described basic change in the supply situation will further increase the quantities for export. Our foreign organization remains intact, so that at an early victorious culmination of the war-which we here all expect—we are again immediately equipped to carry on our overseas export. The only thing that we feel of the war here are the nightly air raids of which you are informed by the German High Command communiques and by the correspondents of your newspapers. These raids, however, have done little damage to industry in Dusseldorf or the Ruhr district. (Only once-as a matter of fact it was last Sunday-one Canadian plane under cover of heavy clouds was here by daylight. It had lost its way and was promptly shot down.) The production of our plants continues as always, and due to the planless bombing by the English and (respectively) chiefly the Canadian flyers, one has the definite impression that they are not aiming at any important military or industrial centers, but wish only to create unrest among the population. Since the 10th of May it has been only on two occasions that numerous bombs were dropped on Dusseldorf. These bombs, if they hit anything at all, damaged only dwelling houses and, unfortunately, caused deaths among the civilian population. One gradually gets accustomed to the very frequent night air-raid alarm caused by planes flying over the town to and from other regions of western Germany. At the sound of the air-raid alarm one simply goes at half past 12 into one's air-raid shelter to emerge from it 1% to 2 hours later after considerable shooting of the antiaircraft guns, after the all-clear signal has sounded, to continue one's sleep. In view of the absolute worthlessness of these English air raids from the military and industrial standpoint, the purpose of these raids remains inexplicable, especially taking into consideration that the English must know by the events in Holland, Belgium, and France how the success of these raids must appear to the victims of the civilian population. The losses among those of our personnel who are on the battlefield are average; we have lost only two colleagues since September 1, 1939-that is, since the beginning of the Polish campaign. We await with pleasure your own reports and hope that at the time of our next report we will have taken a considerable step forward on the road toward a definite and durable peace based on the recognition of the demands of our legitimate national life. With German greetings, EXHIBIT No. 523 ROTTMANN. [Letter from M. P. (Max Paquet), president, M. Paquet & Co., Inc., New York, to San Francisco office, dated July 24, 1939] SAN FRANCISCO OFFICE: JULY 24, 1939. Your letter S. 621. STEEL AND WIRE SPECIALTY-500 ROLLS NETTING We quite appreciate your discouragement, but as we explained to you many times, the Germans have had the best of the Belgian wire industry. You ask why Kirschner, Oldham, Amerlux, and Steel Union can quote better prices on Belgian netting than the Belgian manufacturers themselves. That is simply because the four above-mentioned firms have connections with the Ger man office. Kirschner and Oldham used to work for Kloeckner and Amerlux, also, they represent Clouterie des Flandres and Felton & Guillaume in Germany and Steel Union, of course, is a 100 percent German output. We resent, just as much as you do, to see our mills subjected to the German dictatorship. However, we know that it is very diflicult for our mills to get out of it. They have been striving themselves for a year and a half or two years to recover their liberty of sales or, to speak more correctly, to have the right to quote on all their commodities including nails and wire and that is why they had set up that commercial office named Samesco. It was their hope that the Samesco office would be accepted in what is known as the club for the United States of America in the Iweco. Of course, our nasty competitors are using all possible tricks to keep them out and if Samesco would go against the will of everyone and simply sell how they like, where they like, and at the price they like, according to the agreement, their suppliers of wire rods, which, actually is their raw material, would have to refuse to supply them. Samesco being a sister company of Ucometal, wire rods are coming mainly from Ucometal. If, therefore, Ucometal would continue to supply them with raw material, Ucometal would, themselves, break up the European steel cartel and, should the steel cartel break up, the prices of all steel commodities would dwindle down very fast. This only fear has been keeping everyone together up to now and the big banks controlling the various mills, also see to it that they respect their engagements. Anyway, we are writing today to Samesco, as per copy herewith and we will see what happens. STEAMSHIP "ELIAS G. KULUPUNDIAN" This steamer, on which the horseshoes have been shipped, sounds very Greek to us; most likely that will be the boat on which our young friend, Mr. Louwers, of Ucometal, will be coming. If that is so, and if he calls on you, we would appreciate it if you will extend to him the help he may need. He is a very nice fellow and we are sure you will like him. BLAKE MOFFITT & TOWNE Needless to say this was a terrible blow. However, you mention that Zellerbach have not complained. Do not forget that Zellerback buys Grapevine twine. Of course binder twine for machine use should be even a little better and we are at a loss to understand what happened. We had here some samples of the regular machine binder twine and the writer remembers having shown you such samples that he had in his car. In Los Angeles, the only complaint was that there was a little too much oil but this is really not justified, because, for machine use, you need quite a bit of oil. For their further business we will, of course, request the mills to put less oil in the twine. Needless to say, we are going to take that matter up very strongly with Corbel and the writer will see them in Europe as soon as the health condition of our Miss Noonan is good enough so that the trip to Europe may be considered. COPPERED HAY ROPE We gave you prices last week. Yours very truly, M. PAQUET & Co., INC. EXHIBIT No. 524 [Translation of letter written by Rottman, Stahlunion Export, G. m. b. H., Duesseldorf, dated March 31, 1933. From the files of Cron & Dehn, Seattle, Wash.] Source: Files of Cron & Dehn. [Translation from the German] STAHLUNION EXPORT G. M. B. H., Duesseldorf, March 31, 1933. CONDITIONS IN GERMANY A short time ago we gave our most important agencies a detailed review of the conditions in Germany and requested them to do everything in their power to counteract the false reports spread abroad about developments here. Meanwhile events have gone on apace both abroad and in Germany. The foreign press, particularly the New York newspapers, have published accounts of deeds of atrocity against the Jews which in part at least come very close to the atrocity propaganda conducted against Germany during the World War and which do not appear to consider the judgment of their readers in a very high regard. This has resulted in a boycott of German wares and considerable harm to Germans abroad. The National Socialist Party has therefore decided in the interest of Germans abroad and in the interests of our exports to take countermeasures and to begin a boycott of the German Jews if these measures are not immediately stopped abroad. The manner in which this boycott is to be carried out is seen from the following appeal directed to the people of Duesseldorf by the Committee for the Prevention of Jewish Marxist Atrocity Propaganda Abroad: "Our Government has done everything in order to correct the Jew lies about conditions in Germany. In spite of this, agitation continues. Now we are forced, unfortunately, to take up countermeasures. German men and women: Help us in the interest of our people and our fatherland. Boycott all Jewish businesses, warehouses, and merchants. Do not go to Jewish doctors or attorneys. Boycott all newspapers which do not explain sufficiently well this international Jewish agitation. However, at the same time we demand of you: Maintain the greatest discipline and order. Help us to suppress immediately provocateurs and other irresponsible elements who will use this opportunity for disturbances of the peace, plunder, and personal attacks. Do not touch a hair on the head of any Jew. Obey absolutely the decrees of the police and auxiliary police. The boycott will begin on Saturday, April 1, promptly at 10 o'clock. It will last as long as counterboycott results. Finally, we emphasize again our regret at being forced to take these measures." The history preceding this is briefly as follows: The 5th of March brought a complete victory of the national revolution which became even more thoroughgoing through the later decree of the empowering act according to which the Government can make all important decisions without Parliament. Action against the Communists and Marxists came immediately and it is to be noted that Jews for the most part have been the profiteers and leaders of the Marxist revolution of 1918 and that even among the intelligent Jews (actors, etc.) Communist elements are to be found against which the wrath of the people is directed. But in Duesseldorf this has up to now amounted only to this, that for about 2 days the huge Jewish warehouses and other Jewish businesses were closed by the Storm Division or marked as Jewish businesses. But after 2 days these businesses were open again and no one has been hindered in patronizing them, nor will they be up until the beginning of the boycott. Everything is completely peaceful and quiet as always and even molestations of Jews in Duesseldorf are unknown to us. If individual local groups sometimes get out of hand on the occasion of this national revolution in Germany or if the provocative elements let themselves be drawn into individual actions, this cannot be avoided during a revolution like today's. But we are concerned here only with exceptional cases which are strictly punished by the National Socialist Party in the interest of carrying out a program of absolute discipline in their ranks. A party with the surprisingly quick growth and the colossal size which the National Socialist Party represents today cannot even at the present time be designated as a homogeneous group. But even the most bigoted foreign enemy of the movement must realize that the present national revolution has taken place with the exemplary order and discipline in contrast to the Soviet Russian Revolution. If one views the present domestic political situation and the results which the National Socialists have attained in the last few weeks in cleaning up their domestic political life, one can only greet the national revolution in its entirety wholeheartedly regardless of which party one belongs to. In particular, foreign countries should realize that communism in Germany is completely suppressed by the national government and that the Communist organization is completely destroyed, a consequence which we hope will also be noticeable among the Communist movements in other countries. In regard to foreign politics, the situation is unfortunately such that the entire world, just as during the last war, has now taken up a position against Germany. if one is willing to identify the newspapers abroad, which are in the hands of certain interested parties, with world opinion, which unfortunately is still the case because of the lack of judgment of the readers (war and atrocity propaganda, ghoulishness, etc.). Besides the anti-Semitism which has come to light in Germany during the national revolution, the reawakening of nationalism in Germany and economically the attempts to arrive at autarchy are the chief political reasons for taking this attitude which is harmful to Germany. This increased nationalism—which, thank God, has also had the effect of suppressing all counterrevolutions, including the Bavarian-is a natural result of the former policy of suppression. In the last analysis one cannot treat some 60,000,000 people as vanquished, and the necessary revision of the peace treaties must be carried out as quickly as possible. But on the other hand, it is obvious that since disarmament has been accomplished for the moment we cannot enforce our demands by resort to arms. Moreover, Hitler has himself declared repeatedly that Germany will do everything in its power to maintain peace. Finally, insofar as Germany's attempts at autarchy are concerned, it should be noted here that these notions of autarchy do not arise in Germany; on the contrary, our friends abroad know exactly that every single country is desirous of making itself independent; that everywhere, even under the most favorable circumstances, national industries are protected by high tariffs, etc. The "buy British" and "buy American" propaganda, which has turned itself ostentatiously against the import of foreign materials for years or months, should be mentioned here. Germany's attempts at autarchy are completely understandable under these circumstances, for when our exports are gradually cut off, we must for our part, simply in order to balance the books, see to it that there is a corresponding curtailment of imports. Almost all countries do exactly the same thing, as is evident every day. It is strange that the world understands measures of this sort, which are introduced by other countries, but attacks Germany in a more or less spiteful manner for the same thing. If, for example, because of the curtailment of bacon imports of England, thousands of young swine in certain countries must be slaughtered, the press does not answer it with spiteful attacks against England, but, on the other hand, if butter imports from the same countries are curtailed, there immediately begins a systematic campaign against Germany under the motto, "Boycotting of German wares should begin." In regard to exports as such, Hitler stated in his speech about the party program on the 23d of March, “We know that the geographical position of Germany, which is poor in raw material, does not permit the complete development of autarchy. It must be emphasized again and again that nothing is further from the mind of the Reich Government than hostility toward exports. We know that connections with the outside world are necessary." Thus we see that the National Socialists will not close the economic necessity of exportation for the German iron industry, which unfortunately is dependent in great part on foreign countries for its raw materials. Friendly Fascist Italy, whose export industry has made great strides forward in the last few years, can serve as an example. We are always ready to give further information about the present situation in Germany, and we should like to request our agencies to see to it that this circular is passed about in order to enlighten people through the press, chambers of commerce, etc. We are enclosing a second copy of this communication and are ready to distribute further copies. At the same time we ask our business friends to keep us informed about reports about Germany. STAHLUNION EXPORT G. M. B. H. EXHIBIT No. 525 [Quoted from the address of Dr. Vögler, chairman, executive board of the Vereinigte Stahlwerke, A. G., Düsseldorf, at special meeting, F. M., November 29, 1933. Available in the files of the Economic Warfare Section, War Division, Department of Justice] EXHIBIT No. 526 [Quoted from the report of the Vereinigte Stahlwerke, A. G., for period from April 1 to September 30, 1934. Available in the files of the Economic Warfare Section, War Division, Department of Justice] EXHIBIT No. 527 [Quotation from the report of the Vereinigte Stahlwerke A. G. (United Steel Works Corporation). Dusseldorf, Germany, Bericht Uber das Geschafsjahr vom 1. Oktober 1937 bis 30. September 1938 (Auszug), page 5. Available in the files of the Economic Warfare Section, War Division, Department of Justice.] EXHIBIT No. 528 [Copy of statements prepared by Dillon, Read & Co., re: $30,000,000 bond flotation of the United Steel Works Corporation (Vereinigte Stahlwerke Aktiengesellschaft), dated June 1, 1926] $30,000,000 UNITED STEEL WORKS CORPORATION (Vereinigte Stahlwerke Aktiengesellschaft) 25-YEAR 62% SINKING FUND MORTGAGE GOLD BONDS, SERIES A With Nondetachable Stock Purchase Warrants To be dated June 1, 1926 Due June 1, 1951 Interest payable June 1 and December 1. Principal and interest payable in New York at the office of Dillon, Read & Co., in United States gold coin of the present standard. Bondholders may, at their option, collect principal and interest in London at the office of J. Henry Schroder & Co. in Pounds Sterling at the buying rate for sight exchange on New York on the date of presentation for collection. Coupon bonds in denomination of $1,000, registerable as to principal only. Callable as a whole, or in part by lot, on any interest date, after thirty days' notice, at the following prices and accrued interest: to and including June 1, 1931, at 105; thereafter to and including June 1, 1936, at 103; thereafter to and including June 1, 1941, at 101; thereafter prior to maturity at 100. The National City Bank of New York, American Trustee. Darmstaedter and Nationalbank Kommanditgesellschaft auf Aktien, German Trustee. The corporation agrees to provide a sinking fund sufficient to retire the entire issue of Series A bonds by maturity, by semi-annual call by lot (first redemption December 1, 1926), at 100 and interest, at the annual rate of $600,000 to and including December 1, 1938, and of $1,800,000 thereafter to maturity. Principal and interest payable, to others than citizens and residents of Germany, without deduction for any taxes, past, present, or future, levied by German governmental authorities From their accompanying letter, Carl Rabes, Esq., and Dr. Oskar Sempell, Managing Directors of United Steel Works Corporation, summarize as follows: THE COMPANY United Steel Works Corporation, which has contracted to acquire the principal fixed assets (except certain coal properties), the good-will and businesses of four leading coal, iron, and steel concerns in Germany, viz, Rheinelbe Union, Thyssen, Phoenix, and Rheinstahl, will be the largest industrial unit in Europe and one of the largest manufacturers of iron and steel in the world, ranking in productive capacity second only to United States Steel Corporation. Its coal properties will be among the largest in the world with respect to reserves and present productive capacity. United Steel Works Corporation has operated these properties since May 7, 1926, and is at present producing approximately 40% of the entire German steel production and employs about 164,000 persons. SECURITY These Series A bonds, limited to $30,000,000, will be the direct obligation of the corporation, secured, in the opinion of counsel, by mortgage on fixed assets valued by Mr. H. A. Brassert, American consulting engineer, at $537,671,800 (including real estate and coal reserves) subject to about $70,600,000 of underlying obligations, including approximately $29,400,000 obligations under the Dawes Plan based on existing assessments. Against the properties presently to be mortgaged |