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Full text of "War diary : German Naval Staff Operations Division"

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WAR DIARY 



German Naval Staff 
Operations Division 



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PART A 



VOLUME 5 



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JANUARY 1940 



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8-5838 



WAR DIARY OF THE GERMAN NAVAL STAFF 



(Operations Division) 






PART A 



January 1S40 



Chief, Naval Staff i 

Chief of Staff, Naval Staff j 

Chief, Operations Division, Naval Staff* 



Grand Admiral Dr.h.c. Raeder 
Vice Admiral Schniewind 
Rear Admiral Frioke 





Volume 5 


begun: 


1 Jan, 1940 


closed} 


31 Jan. 1940 



fstfi 









/ 



J 




CONFIDENTIAL 



OFFICE OF NAVAL INTELLIGENCE 
Washington, D,C. 

Foreword 



1. The Office of Naval Intelligence has undertaken to translate 
important parts of the War Diary of the German Naval Staff, The 
present volume, entitled War Diary of the German Naval Staff, Op- 
erations Division , Part A, Volume 5 is the twenty- second one of the 
series to appear. Other volumes will follow shortly* 

2. The War Diaries, Part A, are important because they contain a 
day by day summary of the information available to the German Naval 
Staff and the decisions reached on the basis thereof. Together with 
the Fuehrer Conferences on Matters Dealing with the German Navy, 1939- 
1945 , which have been published by this office, the War Diaries should 
provide valuable material for the study of naval problems arising from 
total war. The War Diary, Part A, is also a useful index to the German 
Naval Archives of World War II; references may be found in the micro- 
film library of Naval Records and Library. 

3. Due to the cost of publication, only a limited number of 
copies could be ma.de; it is therefore desirable that the copies 
which have been distributed are made available to other offices 
which may be interested. 



Washington, D. C. 
1949 



1 Jan« 1940 CONFIDENTIAL 



Items of Political Importance* 

The Fuehrer made a New Year Address to the Armed Forces, the Party and the 
German people « 

(See War Diary, Part B, Vol* V, page 84*) 

An exceptionally friendly exchange of New Year* 3 greetings took place between 
the Fuehrer and the Duce, as well as the King of Italy, in whioh special 
emphasis was laid on the mutual policy of the two countries* 

From Geneva London Radio reports a declaration made by the British Government , 
aooording to whioh Great Britain has undertaken to do all in her power to 
support Finland. 



Conference on the Situation with the Chief, Naval Staff „ 

Special Items * 

1# Report from the Chief* Operations Branch, Naval Staff on the Armed 
Forces High Command's Directive of 30 Deo* According to this the Fuehrer has 
decided as follows after a report submitted by the Commander in Chief, Navyi 

**a« Greek merchant ships are to be treated as enemy in the U*So 
closed area around Britain* 

b. Attacks are permitted without warning on all shipping in the 
Bristol Channel, attacks whioh are to be ascribed to mines to the outside 
world* 

Both measures ere released with immediate effect*'* 

The Naval Staff feels that paragraph b* of the directive is too narrow in its 
compass, since there is only limited scope for successful submarine attacks in 
the Bristol Channel on account of the distance from Germany and the strong enemy 
defenses* If general intensification of warfare is postponed further, the Naval 
Staff requests authorisation in advance to order attacks without warning in 
certain areas by individual or all submarines , when the situation and operational 
possibilities permit, maintaining at the same time the fiction of mines* 

With regard to paragraph a*, instructions were already issued to Commanding 
Admiral, Submarines on 30 Dec* on the basis of verbal consent from tne Fuehrer • 



CONFIDENTIAL 
- 1 - 



1 Jan. 1940 CONFIDENTIAL 

Special Reports on the Enemy 1 Jan . 

Atlantic ; 

Great Britain ; 

An agent who has just returned from England reports that a British submarine 
was rammed by a battleship and the submarine sank. While proceeding astern 
the battleship's stern is supposed to have struck a mine and to have been 
severely damaged. This is alleged to be the battleship NELSON, which according 
to report is in dock in Liverpool, 

The battleship RE7ENGE is expected in the Western Approaches area. The 
cruiser AJAX* intends to pay a friendly call at Montevideo. 

North Sea ; 

The usual enemy air reconnaissance was detected over the North Sea. Our 
planes sighted a C-class cruiser in Sullom Voe Bay (attack unsuccessful). 
Two heavy cruisers were detected in Scapa Flow. 

Shipping Losses ; 

The British steamer BOX MIX (5,700 tons) and the Norwegian steamer LUNA 
p60 tons) sank after striking mines. 

The second contingent of Canadian troops is said to have arrived in 
England. 



Own Situation on 1 Jan. 1940 ; 

Atlantic t 

The steamer TACCMA has been interned in Montevideo on the grounds 
that the ship is to be regarded as an auxiliary vessel of the SPEE, 
and therefore as an auxiliary cruiser. A protest is being made* 

North Sea: 



Nothing to report. No air reconnaissance. 

Baltic Sea ; 

Nothing to report. 

Attacks on merchant shipping are being carried out by the BRUMMER 
and the HANSESTADT DANZIG. 

CONFIDENTIAL 
- 2 - 



1 Jan. 1940 



CONFIDENTIAL 



According to a report from the Naval Attache in Stockholm the 
Swedish Government has released the crew of the stranded patrol 
vessel "704". The Attache has arranged that the crew are to be 
fetched by patrol vessel VP "706" on the afternoon of 2 Jan. at 
Trelleborg. 



Submarine Situation : 

Atlantic : 

In the operational area: Submarine U "46" Atlantic 

" U "30" southeast of Ireland 
" U "32" west of the Shetlands 

North Sea ; 

In the operational area: Submarines U "56", U "58". 



Merchant Shipping : 

The dispositions of German merchant shipping at the beginning of 1940 were 
as follows: 



In home waters: 

Operating on the Norwegian route: 
49 ships totalling 197,874 BRT 
(8 without radio transmitter) 

Operating on the Dutch route: 
7 ships totalling 10,197 BRT 
(3 without radio transmitter) 

In neutral ports: 

At sea, homeward bound: 

Returned to date: 

105 ships - 12,3 % 

Lost: (plus one ship without radio) 



Trawlers: 

In Northern Waters or en route: 



total: 



■*HHHHHBttB;-^BHttHHBHBHBBBHBJ^^ 

- 3 - 



571 ships - 67.1 % 



240 ships - 28.2 % 
2 ships - 0.3 % 



38 ships - 4*4 % 
851 ships - 100.0 % 



18 



CONFIDENTIAL 



2 Jan* 1940 CONFIDENTIAL 

Conference on the Situation with the Chief. Naval Staff i 

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Special Items t 

It. Report from the Chief, Operations Division, Naval Staff on the directive 
from the Armed Forces High Command of 30 Dec, - subject* Intensification off 
naval and aerial warfare in connection with Ope rati on" Ge lb.' 

In this directive the Navy has been given permission for submarines to sink 
all ships without warning in those areas off the enemy coasts where the use 
of mines is possibl e, once general intensification of warfare commences. 
In these cases a pretense of mines is to be maintained,, The submarines must 
take this into account in their conduct and use of weapons* 

Commander in Chief, Navy is to fix these areas in detail and report them to 
the Supreme Command via Armed Forces High Command. 

The wording of this directive implies a limitation of intensified naval warfare, 
which in this form does not answer the wishes of Naval Staff and which wa3 also 
put to the Fuehrer by Chief, Naval Staff in another sense* In the case of a 
general intensification of warfare it was planned to permit unrestricted use 
of weapons against all ships in the American closed area , the final aim being 
to employ all weapons in a ruthless attack with the object of suppressing all 
commercial intercourse with England,, If possible the sinkings were to go on 
being ascribed to mines. The benevolent neutrals (Italy, Spain, Japan and 
Russia) as well as America were to be treated with as much consideration as 
possible** 

The Naval Staff's view point was expressed verbally to the Armed Forces High 
Command. Since in all probability, however, an intermediate directive for 
the period until the commencement of the general intensification of warfare 
can still be expected, no alteration of the present wording of the Armed 
Forces High Command directive is intended for the time beingo 

• 
2. An inquiry from Group West as to whether naval support is planned for 
any operations which may become necessary in Northern Holland, has been 
answered in the negative. The question was already discussed earlier with 
the Army General Staff and is now being raised afresh by Xth Army Corps. 
The Army General Staff confirms on inquiry that they have made no new requests. 



Items of Political Im port ance a 

lo See "Foreign Press No. 17 n for the French verdict on German conduct of 
naval warfare© See War Diary, Part A, Vol. V, page 83 for the Italian 
verdict on German conduct of naval warfare© 



CONFIDENTIAL 
- 4 - 



2 Jan* 1940 CONFIDENTIAL 



2. See Political Review No. 1 for information on morale in Great Britain 
and Prance. 

3. The Norwegian Foreign Minister has declared that Norway's policy is one 
of peace and strict neutrality. 

4. The British press has sharply oriticixed the way the German Ministry for 
Propaganda treats naval questions! J 



Report from the Naval Staff, Submarine Division 
(Technical) to the Chief, Naval Staff on the 
construction of special types of submarines! 

1. Submarine Tankers t 

Scheduled displacement 1,600 tons, actual cargo 400 tons oil, plus 62 tons of 
lubrioating oil, drinking water, spare parts, etc. No torpedoes, no ammunition • 
Cruising range (160 tons oil) 10,000 miles at 10 knots. Maximum continuous 
speed 12-13 knots, submerged 6 knots. Armament two 3.7 cm guns, one 2 cm gun, 
crew of 51 

Decision on the construction will be necessary about March 1940, and the first 
submarine will be completed at the end of 1941. The sooner construction on 
submarine tankers is commenced, the more severe will be the effect for the 
present numerically small submarine fleet of the necessary reductions in 
operational submarines. 

2. Minelaying Submarines s 

With regard to mines, it is again confirmed that the TMB mine can be used 
operationally. In its present form the TMA has too little buoyancy and too 
thin a mooring ropej when set for the necessary paravane-clear depth of - 20 m 
the explosive charge of 210 kg is too small© Can be used only in depths of 
over 50 m. Because of the great difficulty experienced in their manufacture 
the numbers requested cannot be reached at presento 

The provision of the appropriate shaft mines - with an explosive oharge of 
380 kg and mooring rope - for the first submarine (date of completion about 
April 1941) is ensured. Commanding Admiral, Submarines requested 8 submarines. 
Naval Staff 9 submarines (66 shaft mines for each submarine)© 

The following proposal was approved by the Commander in Chief, Navyj 

Two "submarines are at present under construction (scheduled dates of completion 
1 April 41 and 1 July 1941 respectively). Construction on the third 
submarine is to be continued (date of completion 1 Nov to 1 Dec). The 
parts determining the date of completion are to be ordered for the fourth 



CONFIDENTIAL 
- 5 - 



2 Jan. 1940 CONFIDENTIAL 

submarine. The development of the raw material situation etc, is to be 
awaited before further boats are put into construction and the necessary 
parts which determine the date of completion are ordered. (The first orders 
must be placed in about 2 or 3 months). 

In order to construct 6 minelaying submarines a deficit of 9 torpedo-carrying 
submarines must be reckoned with* 

Special Reports on the Enemy ; 

Great Britain; 

Heavy British forces are distributed as follows; 

Home Waters ; 

Battleships; RODNEY) It is probable that one of the two was damaged 

NELSON)" after striking a mine. 
WARSPITE 
ROYAL SOVEREIGN 
BARHAM (damaged by a torpedo). 

Heavy cruisers; First Cruiser Squadron NORFOLK (damaged ?) SUFFOLK, DEVONSHIRE, 

BERWICK. 

North Atlantic; 

Battleships; RESOLUTION (Canada area) 

REVENGE (at present in the Irish Sea) 
MALAYA (western Central Atlantic) 

Heavy cruisers; Eighth Cruiser Squadron (YORK, ORION, PERTH, EFFINGHAM, EMERALD). 

South Atlantic ; 

Eastern half (Freetown); RENOWN, ARK ROYAL, NEPTUNE, ALBATROSS. 

Western half (Falklands); Heavy cruisers; EXETER, CUMBERLAND, DORSETSHIRE, 

SHROPSHIRE. 

Light cruisers; AJAX, ACHILLES. 

At the end of December the battleship REVENGE arrived at a port in the Irish 
Sea with an important convoy consisting of large steamers, probably troop 
transports. The convoy was brought in by a fairly large number of destroyers. 

The cruiser SUFFOLK will put into the Clyde on the morning of 3 Jan. from the 
sea area west of the Hebrides. 



- 6 - CONFIDENTIAL 



2 Jan. 1940 CONFIDENTIAL 



France t 



Nothing to report. 



Nort h Sea: 

Unsuccessful flights into the Heligoland Bight area by British bombers* 
The cruisers MANCHESTER, NEWCASTLE and SHEFFIELD, also the small cruiser 
CERES were detected on the Northern Patrol. 

The Norwegian Naval Staff issued a warning to Norwegian shipping concerning 
a danger area east of the Moray Firth, and approaching Kinnaird Head Sinoe 
this declared area lies north of the British declared area, this is possibly 
the effect of our own submarine activity. 

For survey of radio monitoring during the last week of December see radio 
monitoring report Nc 18/39. 



Own Situation s 

Atlantic a 

The Commander of the America-West Indies Station 
transmitted on 1 Jan.i 

"in unidentified unit, apparently the German steamer 
ALTMARK, roughly 25° N, 54° W (600 miles northeast of 
Guadeloupe ). n 

It is highly improbable that the given position is that of the ALTMARK, as 
it is too far west. The report was transmitted to the ALTMARK. 

North Sea : 

Nothing special to report concerning naval forces. "Ship 4"' put 
to sea to carry out attacks on merchant shipping. German fighters 
encountered British bombers over the Heligoland Bight. Three 
Wellington bombers were shot down. 

Baltic Seen 

Efforts to salvage the stranded patrol vessel VP u 704'* were finally 
abandoned? with good weather it is estimated that salvage operations 
would take 1 •» 2 months, and no guarantee of success can be given. 
The Naval Attache at Stockholm has been informed and requested to 



CONFIDENTIAL 
- 7 - 



2 Jano 1940 CONFIDENTIAL 



obtain the Swedish Government's consent for the wreck to be 
blown up after all necessary material has been salvaged. 

No Naval Air Force operations because of the weather© 

"Ship 23 " (armed merchant raider 6) has been placed under the 
command of Commanding Admiral, Defenses, Baltic 



Submarine Situation t 

Atlantic t 

Proceeding to the operational area: 

Submarine U "30" southeast of Ireland. 
Submarine U "32" west of the Shetlands. 

On return passage: 

Submarine U "46". 

North Sea : 

Submarines U "56", U "58". 

Submarine U "25" is returning to Wilhelmshaven for the second 

time because of fresh engine trouble. 



Merchant Shipping } 

The German Press Agency in Montevideo reports that the Uruguayan Naval 
Authorities interned the steamer TACOMA on 1 Jan. 1940. The official reason 
given for the internment was that sinoe the TACOMA assisted the GRAF SPKE she 
was to be regarded as an auxiliary cruiser. 

The Embassy in Montevideo confirms the news of the internment. 

Business circles have drawn attention to the danger that in the present 
political situation in Finland Finnish shipping firms will sell their ships 
to Great Britain in order to save their property from seisure by Russia. 



The British news service reports that the German steamer WINDHUK is about 
to sail from Santos. 



CONFIDENTIAL 
- 8 - 



2 Jan. 1940 CONFIDENTIAL 

Enemy Merchant Shipping ; 

According to British press reports, a total of about 1 million tons 
of naval shipping and 1 J million tons of merchant shipping are at 
present under construction in British shipyards. 

London Radio reported: 

During the 10 days from 11 - 20 December 1,454 ships totalling 
3,648,000 tons put into British ports and discharged their cargoes. 

Neutral Shipping: 

Sale of American merchant ships . According to a Eeuter report the Naval 
Commission gave its consent to the sale of eight large U.S. ships to a 
Norwegian concern, the North Atlantic Transport Company* 

The ships are to ply between New York, Boston and London, Liverpool. liumor 
has it that there is British capital backing the Norwegian company* 

This news shows that, with the sale of U.S. ships, contravention of the neu- 
trality laws is intended in favor of the enemy's import trade* 

If this news is confirmed a gradual intensification of the German war against 
Norwegian merchant shipping seems to be called for. 

1HHHHHHHHHHHHHHHHHHHHHHHBHHBH I 



- 9 - CONFIDENTIAL 



3 Jan. 1940 CONFIDENTIAL 

Items of Political Importance ! 

For Russo-Finnish conflict see Foreign Press Reports* Generally speaking, 
the Russian attack has come to a standstill on all fronts. The Russians have 
not yet broken through the main line of defense on the Karelian Isthmus. 
Operations are greatly impeded by the bad weather. 

Addressing the opening session of the joint houses of Congress, President 
Roosevelt expressed the hope and expectation that the United States would not 
be involved in active participation in the war . Roosevelt, however, 
repeatedly declared that there is a great difference between keeping out of 
the war and the attitude that this war does not concern America,, The 
intention of supporting the Western Powers indirectly is clearly obvious from 
further statementso He said it is becoming clearer and clearer that the 
world of the future will be a dangerous place to live in, even for Americans, 
if it is ruled with force by a few* 

The address is a clear proof that in a hypocritical and methodioal manner 
Roosevelt is endeavoring, with the help of the Jews and Freemasons, to prepare 
the American people for war against Germany, and that he himself is already 
inwardly resolved, if England does not find material support sufficient, to 
join actively in the war 

For report on Italy's present attitude to the war, see Political Review No. 2 - 
Mussolini is convinced of Italy* s mission in Europe and does not regard Italy 
as neutral, because he maintains that peace in the future can only be guaranteed 
by the assurance of "living space" for Germany and Italy. The threatening 
danger of Bolshevism from Russia is assessed very seriously© 

The U.S.A. lodged a protest with the British Foreign Office against the 
confiscation of U.S. mail by Great Britain. 



Special Reports on the Enemy * 

Atlantic t 

Great Britain i 

The agent 1 s report concerning the ramming of a British submarine and damage 
sustained by the NELSON has now been amplified, and it appears that the whole 
crew of the submarine perished and the NELSON is said to be lying in dock at 
Liverpool. The agent saw a battleship in dry dock in Liverpool on 29 Dec. 
and has repeatedly met sailors with NELSON capbands. 

Three British vessels, including the repair ship RESOURCE, have been ordered 
to Freetown. The repair ship may have been sent either because Freetown is 
to, be developed as a base, or because the ship is to be sent on to Port 
Stanley to repair the cruiser EXETER. The cruiser AJAX is on a "friendly 

visit" in Montevideo. 



CONFIDENTIAL 
- 10 - 



3 Jan. 1940 CONFIDENTIAL 

The cruiser ACHILLES is to proceed to Buenos Aires for the execution of 
repairs ( I ) • 

France? 

The cruiser MARSEILLAISE, single destroyers and submarines are at present in 
the Bay of Biscay and off the coast of Spain on defensive and patrol duties. 
They are kept informed of the supposed movements of German steamers. 



North Sea ; 

The Admiralty has announced the closing of Cantic Sound and Scapa Flow. This 
may be an indication of fresh minelaying or perhaps preparations for some 
operation from Scapa # 

According to a report from a coastal radio station, mines are said to have 
been laid five miles east of the Goodwin lightship, (deep channel between 
the Goodwin Sands and South Falls). 

All ships were instructed by radio not to send mine reports by radio any more, 
but to deliver them at the next port of call. 

This measure is obviously intended to avoid the intimidation of merchant 
shipping by the transmission of mine reports* 

Shipping Losses; 

Swedish steamer SWARTON (2,480 tons) torpedoed by a submarine off the east 
coast of Scotland, Swedish steamer LARS MAGNUS TROZELLI (1.950 tons) struck 
a mine (east coast), British steamer ARDANGORM (5,200 tons) ran aground on 
the rocks on the south coast of Cornwall, British steamer ATHELBEACH (5,568 tons) 
ran aground on the south coast of Ireland. 

According to a British report, the Swedish steamer KIRUNA was fired on by a 
submarine 100 miles north of the Azores. (There are, however, no German 
submarines in this area). 



Own Situation ; 

Atlantic ; 

Nothing to report. 



- H - CONFIDENTIAL 



3 Jan. 1940 CONFIDENTIAL 

North Sea: 

Nothing to report* 

No air reconnaissance because of ice* 

Baltic Sea; 

Attacks on merchant shipping carried on by the BRUMMER and the 
HANSSSTADT DANZIG, The BRUMMER reported a strikingly small amount 
of traffic in the eastern Baltic Sea. 

Motor minesweeper R M 5" ran aground east of Stolpmuende. 



Submarine Situation; 

Atlantic ; ) 

( No alterations. 
North Sea; ) 

Merchant Shipping and Items of Economic Importance ; 

One steamer arrived in Norway from overseas. (Left Buenos Aires on 
2 August, Vigo on 12 Dec.) 

According to an agent's report, until lately Scandinavian ships tried to get 
through south of Iceland in order to evade the British control* Most of them, 
however, were intercepted on the line Iceland - Shetlands and taken to Kirk- 
wall* It appears from a report on convoy traffic through the Downs that 
towards the end of November 1939 the daily average of ships passing throu^i 
the Downs was; 

inward bound 20 British steamers 

outward bound 15 British steamers. 

This corresponds roughly to British traffic through the Channel in peacetime. 
No essential decrease in enemy convoy traffic through the Downs has taken 
place, therefore, up to the beginning of December. 

Likewise, so far no material and lasting decrease in neutral shipping through 
the Downs has been established. Since the beginning of the war the number of 
neutral ships lying at anchor in the Downs has been maintained at a daily- 
average of about 40 ships. 



CONFIDENTIAL 
- 12 - ~"~* ™~ 



3 Jan. 1940 CONFIDENTIAL 



Havas reports that as a result of the sinking of the GRAF SFF,E, and of the 
noticeable decrease in torpedoings during the last weeks* the insurance 
premiums from and to the United States have been reduced by one half percent. 

According to an official Japanese communication German export goods were 
successfully shipped to Japan on a Japanese steamer departing from Genoa . 
Further negotiations are in progress between Tokyo and London in order to 
secure Great Britain's general consent to the shipment of German goods to 

Japan 

*************************** 



CONFIDENTIAL 
- 13 - 



4 Jan. 1940 CONFIDENTIAL 

Conference on the Situation -with the Chief, Naval Staff t 

Special Items a 

lo During a conference with the Commander in Chief, Air Force, the Chief, 
Naval Staff pointed out the necessity of attaoking merchant shipping in the 
Dorms, which must be regarded as under military control and supervision* 
Preliminary warning to neutrals would be necessary. Commander in Chief, Air 
Force agreed in principle with the Naval Staff's opinion and will take up the 
question of carrying out the attacks as soon as possible. 

2. For Study North and Study Northwest - preliminary reflections of Naval 
Staff, see War Diary, Part C, Vol. II. 



Items of Political Importance . 

Intelligence reports from France confirm the picture of existing conditions 
there « no eagerness for war, much dissatisfaction, increase of communism, 
against which the government is taking strong measures; there is, however, no 
indication that these demoralising factors are in any way having a decisive 
influence on France's will to fight . 

Various reports have been received concerning the first deliveries of arms from 
Great Britain to Finland. In an official communication to the League of Nations 
France has likewise declared herself ready to give Finland extensive support. 

Tense internal political situation in Japan - the Government's resignation is 
expected soon. . - Continuous difficulty of waging war in China. - Obdurate 
attitude of, and fresh demands made by the U.S. with regard to the assurance 
of China's independence Political relationship to Russia not yet clearly 
defined. Under these circumstances Japan cannot for the present be expected 
to join a European group of powers. 



Special Reports on the Enemy 4 Jan. t 

Atlantic t 

Great Britain i 

Commander, Battle Cruiser Squadron is again aboard the HOOD. Commander in 
Chief, Home Fleet is presumed to be aboard the WARSPITB. 

Regarding the report on damage to the NELSON by a mine, the Radio Monitoring 
Service presumes that not the NELSON but the RODNEY is lying in dock in 
Liverpool, since the NELSON appears frequently in radio traffic and must 
therefore be assumed to be in sailing readiness. 

CONFIDENTIAL 
- 14 - 



4 Jan 1940 CONFIDENTIAL 



The heavy oruiser SUFFOLK (?) left dock in Glasgow on 29 Dec, and allegedly- 
put to sea on 31 Dec. in the direction of Icelando 

Shipping Losses * 

The British steamer ROTHESAY CASTLE (7,100 tons) ran aground at the outlet 
of the North Channel. 

North Sea : 

Single vessels of the Home Fleet are apparently commencing a dockyard period 
in the Rosyth area on 8 Jan* 

Radio location indicates a submarine in the vioinity of Hornsriffo 

According to an intelligence report, the destroyer VIVIAN was severely 
damaged on 2 2 Nov, on the Tyne through a collision. 



Own Situation 4 Jan<>i 



Atlantic: 



Nothing to report. 

Reports from London state that the French intelligence service has discovered 
that a German naval base is being established 10 km from Murmansk in Hidovaia 
Bay, The base is supposed to have been ceded to Germany under treaty and is 
being built up. 

North Sea t 

An exploratory sweep carried out by the 6th Torpedo Boat Flotilla on 3 Jan, 
produced nothing of special importance. No air reconnaissance because of ice. 

Information received from Great Britain indicates that the British are aware 
of the return of the pocket battleship LUETZOW (DEUTSCHLAND), No British 
publication, however, mentions that the RAWALPINDI was destroyed by the German 
battleships SCHARNHORST and GNEISENAU, but instead ascribes this sinking to the 
returning pocket battleship DBUTSCHLAND, In spite of this. Naval Staff is 
certain that the British Admiralty knows that the German battleships have 
appeared in the Iceland - Faroes area and is refraining from revealing this 
knowledge publicly only for reasons of prest'ige, 

Baltic Sea t 

Since, according to a reliable report from the police at Tilsit, a cargo 
steamer is said to be leaving Riga for Stockholm on 4 Jan, with 20 - 40 Polish 
refugees, Commanding Admiral, Defenses Baltic has detailed the HANSESTADT 
DANZIG, the cruiser KARLSRUHE and Ship "23 n to patrol in the area - northern 
tip of Gotland - Got ska Sandoe - Sandham, 



- 15 - CONFIDENTIAL 



4 Jan. 1940 CONFIDENTIAL 

Submarine Situation on 4 Jan* 1940 i 

Unchanged* 

Merchant Shipping ! 

Losses < 

The steamer GLUECKSBURG, which ran aground off the Spanish coast 
when being pursued by British destroyers, must be regarded as losto 
The cargo has been salvaged. 

Transshipment capacity of German po rts i 

Iron ore transshipment ! 

Dec,, 59 Nov* 39 Oct, 39 Sept, 39 

780,760 tons 1,064,551 tons 1,093,709 tons 874,198 tons 

Totali Sept. - Dec. 1939: 3,813,218 tons. 

Shipment of coal s 

Dec, 39 Nov* 39 Oct, 59 Sept* 39 

553,262 tons 598,849 tons 681,900 tons 458,142 tons. 

Coal for export included in the above t 

299,528 tons 286,940 tons 317,000 tons* 



Items of Economic Importance ! 

The negotiations for an economic treaty with Russia being conducted in Moscow 
by Ambassador Ritter are taking a favorable course* Russia is ready to reduce 
her high demands and is making efforts to give Germany positive aid* The 
Russo-Pinnish conflict is, however, bound to have a prejudicial effect on 
Russian production* Grain transports have been sailing since 18 Deo* The 
actual effect of the very considerable Russian exports remains to be seen. 

An economic treaty has been concluded with Sweden* Sweden is prepared to 
deliver 10 million tons of ore during 1940* Return is to be made chiefly 
in coal, coke, machinery and home products* 



CONFIDENTIAL 
- 16 - 



4 Jan. 1940 CONFIDENTIAL 



A provisional conclusion of the Anglo-Spanish economic negotiations provides 
for Spanish ores to be exchanged for British coal* 



News from Norway establishes that Germany's unrestricted mine warfare has 
proved most effective; the fact that Germany has so far unknown types of 
mines at her disposal has contributed especially to this* The British 
blockade has reached its maximum effectiveness and can only be further 
increased by the entry of the neutral states into the war on the side of 
the Western Powers. 

******************************* 



CONFIDENTIAL 
- 17 - 



5 Jan. 1940 CONFIDENTIAL 

Items of Polit ical and Economic Impor tance 

1, The entire foreign press is under the impression that the immediate future 
will bring an extension of the war to Scandinavia, perhaps even to the Balkans 
and the Near Easts The infornaation concerning imminent active British aid to 
Finland is confirmed! strong British support is vital since the defeat of 
Finland would bring about a dangerous situation for the Western Powers, and 
Northern Norway must on no account be allowed to fall into Russo-German hands J 

2. Intensification of the British Export Blockade t 

Intelligence reports from Great Britain speak of the imminence of severe 
restrictions on every kind of traffic in goods of German origin to neutral 
countries* Conditions affecting searches for German export goods were already 
tightened up on 1 Jan. 1940, Preferential dispatch will in future only be 
considered for those ships whose entire cargo is fully covered* by an Allied 
consular certificate and has been declared contraband-free. 



Gonference on the Situation idth the Chief , Naval Staff t 

1. Report from the Chief, Operations Division, Naval Staff on Group West's 
plans for the first operations by Commanding Admiral, Naval Forces, West in 1940i 

Th© earliest date for a battleship operation is 25 Jan. Fixture of an exact 
date is desired at once if possible, in order to ensure simultaneous attacks 
on the enemy forces by a number of submarines. Group West is planning to strike 
against the convoy traffic on the Norway - Shetlands route in its first operation^ 

It is proposed to carry out minelaying operations in the Thames and on shipping 
routes off Haisbro, and also north of Newcastle. The passages to the Edinburgh 
Channel are to be closed during the Thames operation. In this operation two 
destroyers will act as mine-carriers, one destroyer as escort and three 
destroyers as a covering force in the southern part of the North Sea (Hoof den). 

2. In agreement with Naval Staff, the Chief, Naval Staff has arranged for the 
question of the utilization of the northern sea route to East Asia to be taken 
up by the Naval Attache in Moscow. If no agreement can be reached with Russia, 
political channels via the Foreign Minister, Molotov, will be tried. 

3. Commanding Admiral, Submarines reported his operational plans for Januarys 
Nort h Sea g 

Between 5 and 7 Jan e submarines U "IS 1 *, *19*, *20* and "24" will proceed to 

CONFIDENTIAL 
- 18 « 



5 Jan. 1940 CONFIDENTIAL 



the Rettray Head area and will also carry out temporary observation east 
of the British declared area from Newcastle to the Firth of Forth; on 
9 Jan submarine U "23" will proceed to the Shetlands - Orkneys. After 
8 Jan, submarines U "60** and U "34" will be ready for a special assignment* 
Submarines U "59", "61", "57** will be ready for operations on 12 Jan.* 
submarines U "13", "21", "22" on 20 Jan. It is planned to operate these 
boats in the sea area north of the British declared area, at Cross Sand 
and on individual minelaying assignments off the northeast coasto 

Atlantic t 

Submarines U "44" and U "25" to operate against merchant shipping about 6 Jan,», 
submarines U "48", "41", "51", "54", "55", "37" between 20 and 25 Jan. 
Minelaying operations after mid-February - submarine U "34" off St.Anthony's 
Head, submarine U "31" Loch Ewe, submarine U "29" Swansea, submarine U "28" 
Portsmouth. 

» 

Chief, Naval Staff has approved Commanding Admiral, Submarines' plans. 

4. Commanding Admiral, Submarines draws attention in a teletype to the 
insupportable delays in repairs to submarines which" are caused by lack of 
manpower, by technical or organisational mistakes and by inefficiency - 
occasionally even negligence - and which have an especially prejudicial effect 
considering the small number of submarines. . In Kiel naval dockyard delays 
of 2 days to 2 months (j) have occurred in the case of 4 boats because of 
sand admixtures in the oil. Delays of 14 days will arise in the completion 
of repairs to five more boats during January, The reason for this lies partly 
in technical and organizational deficiencies, partly in shortage of labor. 
Commanding Admiral, Submarines has already placed two boats in Hamburg dock 
to avoid further burden being placed on Wilhelmshaven. Commanding Admiral, 
Submarines is of the opinion that the west dock should be extensively 
reinforced with technicians, foremen and specialists immediately. 

Naval Staff fully agrees with Commanding Admiral, Submarines' views and 
considers the immediate introduction of large-scale measures to speed up and 
improve repairs to submarines urgently necessary in the interests of 
successful submarine warfare. 



Special Reports on the Enemy 5 Jan. i 

Atlantic: 

Great Britain t 

Home waters j the NELSON is proceeding from the Irish Sea to Portsmouth. 
The NORFOLK put in to the Clyde. 

CONFIDENTIAL 
- 19 - 



5 Jan. 1940 CONFIDENTIAL 

South Atlantic ; 

The ACHILLES put out from Buenos Aires, the AJAX from Montevideo* The 
ARK ROYAL, NEPTUNE and two destroyers are proceeding from Freetown to 
Dakar * 

North Sea s 

The cruisers NORFOLK, DEVONSHIRE and BERWICK are expected in Rdsyth on 
10 Jan* Enemy reconnaissance flights were carried out over the Heligoland 
Bight* According to various reports the British are supposed to have sunk 
about 20 old merchant ships in the entrance channels to Scapa Flow in order 
to prevent any submarines penetrating into them in the future. 



Own Situation 5 Jan* 

Atlantic ; 

Nothing to report. 

For a description of the La Plata action by Rear Admiral Harwood in Monte- 
video see Foreign Press (Naval Information) No* 4 and (according to United 
Press) War Diary, Part B, Vol. V., page 86). 

North Sea ; 

Nothing to report* 

Baltic Sea ; 

In operations against merchant shipping the Swedish steamer KONUNG 
OSKAR was stopped by the KARLSRUHE, and 42 Poles of military age 
and mail were taken off* Later the steamer was again stopped by 
order of the Commanding Admiral, Defenses Baltic and taken prize* 
Operations against merchant shipping are being carried out by the 
HANSESTADT DANZIG and Ship "23". 

Baltic Sea Entrances ; 

According to a radio report from the Norwegian Naval Staff, the 
Danish Navy Ministry has closed the passage through Greens and as 
from noon on 5 Jan. in order to execute mining operations between 
Moen or Falsterbo. 

Sailing instructions will be given by guardships. Closure of the 
southern entrance to Sonderburg by a net and chain barrage is announc- 
ed for the same day. 

CONFIDENTIAL 
- 20 - 



5 Jan. 1940 CONFIDENTIAL 



The Swedish Directorate of Waterworks is said to have prepared a 
scheme to cut the isthmus of Falsterbo between Hoellviken and 
Kaempinge Bay in order to construct a canal, and is requesting 
immediate commencement of the work. 



Submarine Situation s 

Atlantic g 

In the operational area: Submarine U w 30" Irish Sea 

* U "32 n North Channel. 

On return passage* n U "46* Hebrides. 

North Sea * 

Submarines U *56*, U *58*. 

On passage: Submarine U "19" to the area Rattray Head - Firth of Forth. 



Merchant Shi pping* 

According to a report from Daventry the German tanker PAULINR 
FRIBDRICH (4,733 BRT) with a cargo of oil, has been seited by the 
U.S. authorities because of a demand for salary by a former ship's 
officer. 

Dutch Route t 

Since the outbreak of war the following ships have returned home from Holland 
and Belgium along the Dutch coast, making use of Dutch territorial waters: 

38 German ships in all - 57,784 BRT 

of which 17 German ships were in Holland or 

Belgium at the outbreak of war - 39,637 BRT 

and 21 German ships in German ports on the Rhine. - 18,147 BRT 

Their return was delayed and made more difficult by the fact that four ships 
of the Neptune-line had been tied up at the instigation of British creditors 
on aooount of the cancellation of the moratorium; largish sums for dockyard 
repairs and costs arising from their long stay in dock had to be paid in 
foreign exchange for five more ships belonging to different shipping companies. 

CONFIDENT IAL 
- 21 - 



5 Jan. 19A0 CONFIDENTIAL 



In spite of these difficulties all $8 ships were transferred to home ports 
between 9 Oct* and 11 Dec. 1939 without loss by enemy action or from running 
aground » 

•Rie German Naval Attache at The Hague played a considerable part in this 
success; he made all the preparations for the ships' unobtrusive departures 
and provided them with sailing instructions , charts, and also rules of 
conduct. In addition to this, he also managed to arrange that all the re- 
turning ships were escorted by Dutch planes or naval vessels on their route 
inside Dutch territorial waters, 

IHHt ! <HHHHHHH H8HHHHHHHHHHHHH< 



- 23 - CONFIDENTIAL 



6 Jan, 1940 CONFIDENTIAL 

Conference on the Situation with the Chief. Naval Staff 
Special Items ? 

1. It is true that the short reports received from the GRAF SPEE so far 
have given the Naval Staff an adequate enough picture of the engagement for 
a preliminary report. The details of the progress of the action are, 
however, not yet known, and the insight gained is not sufficient to permit 
a definite answer to the question n Yifhy did the GRAF SPEE not fight out the 
action with the EXETER until the British cruiser was destroyed ?'* and 
""What considerations decided the Captain to put in to Montevideo ? n The 
answer to these questions on the basis of the reports already received can 
be found in War Diary, Part B, Vol, V©, Pago 88 , The knowledge gained 
requires amplification as soon as possible for the purpose of exhaustive 
evaluation. At present, dispatch of the war diaries and written combat reports 
cannot be expected. The First Officer of the GRAF SPE& has therefore been 
instructed, through the Naval Attache at Buenos Aires, to transmit the 
following particulars in code Hi 

a. Detailed combat report, with special consideration given to the following 
points: 

1. "Why did the GRAF SPEE not continue the action until the EXETER 
was 3unk ? 

2, V/hat caused the GRAF SPEE to put in to Montevideo during the 
action ? 

3« . State ammunition reserve and armament out of action when putting 
into port, 

4, Condition of the engines and maximum speed possible before end 
after the action, 

b» Report on specially important experiences during the operations against 
merchant shipping, including radio communication with Germany, 

Secret and Most Secret material is not to be dispatched for the. present, 
owing to the insecurity of postal communication. 

2, The Chief, Naval Staff attaches great importance - especially with 
regard to assignments affecting the Navy - to the existence of well trained 
and equipped companies of assault troops in readiness for action, and has 
therefore ordered a second company of assault troops to be established in 
Swinemuende in addition to the present one, (1st Company, 3rd Naval Artillery 
Battalion,} 



"•2 3"" 

CONFIDENTIAL 



6 Jan. 1940 CONFIDENTIAL 



Items of Political Importance * 

Resignation of the British Minister for War, Hoare-Beli sha is announced, 
allegedly because of differences of opinion between the War Ministry and 
Air Ministry regarding the authority of the Air Force. The true reasons 
for his resignation have not yet come to light. 



Special Reports on the Enemy 6 Jan. 

Atlantic t 

Great Britain a 

At noon, two British convoys were 200 miles west of Cape Villano and 360 miles 
west of the Berlengas on a northerly course, escorted by the HERMES and one 
minesweeper or gunboat. The cruisers ARETHUSA, PENELOPE, and GALATHBA, whioh 
have been stationed in the Mediterranean up to the present, are being relieved 
by three "C 1 * class cruisers. The ARETHUSA is already in the Channel area and 
was probably replaced by the CALEDON. 

France : 

Naval Attache in Madrid reports* 

During the night of 5 Jan. a vessel, apparently a French auxiliary cruiser, 
with two 8,8 guns and two anti-aircraft guns, trellis mast and a long forecastle 
put in to Vigo at 2300, steamed round the tanker NORDATLANTIK, illuminated it 
and put out to sea again. The Spanish authorities apparently noticed nothing. 

North Sea j 

Activity by light forces was deteoted in the area of the Wash and off the Firth 
of Forth. According to Reuter the trawler ETA was sunk by a mine in the drag 
net. An agent in Dublin reports that the cruiser BELFAST is badly damaged with 
her back broken. The cruiser NORFOLK is likewise supposed to have been 
damaged. The latter report, however, is apparently out of date, since the 
cruiser is now at sea. 

Shipping Losses i 

The British steam tanker BRITISH LIBERTY (8,500 tons) was allegedly torpedoed 
off Dunkirk. The German submarine concerned is supposed to have been attacked 
by French forces. Since severe damage to the ship is established, presumably 
one of the aerial mines laid by Commander, Naval Air, West was the cause. 

The British steamer CITY OF MARSEILLES (under 300 tons) struck a mine off Dundee. 

CONFIDENTIAL 
- 24 - 



6 Jan* 1940 CONFUF^TTIAL 



The Belgian mail steamer PRINCE CHARLES (2,938 tons) collided with a Prenoh 
patrol vessel off Dunkirk* which was severely damagedo 

Own Situation* 

Atlantic * Nothing to report* 

North Sea » 

The operation by Commander, Destroyers and the 1st Destroyer Flotilla (with 
the destroyers HEIDKAMP, BCKHOLD, STEINBRINCK, IHN, BEITZEN and KOKLLNER) 
has started according to plan in accordance with operational instructions 
from the Commanding Admiral, Naval Forces, West. 

Assignment * 

Fouling of the new detour routes followed by British shipping into the Thames 
Estuary (Edinburgh Channel and Queens Channel) with ground mines* Commander, 
Destroyers, in command. To be carried out by two destroyers as mine carriers, 
one destroyer as escort destroyer and three destroyers as a covering force in 
the southern part of the North Sea (Hoof den). 

Mines* 50TMB 13RMB 2 R M A. 

The presence of a strengthened patrol soreen and encounters with light enemy 
forces - principally destroyers and patrol vessels • must be expected during 
the operation* Favorable opportunities for firing torpedoes are to be 
exploited, also against worthwhile merchant targets west of 3° E, if these are 
sailing without lights* 

(For details see orders issued by Commanding Admiral, Naval Forces, West 
Gkdos* 240 A I Chefs* dated 30 Deo.) 

Air reconnaissance and proposed reconnaissance of lights along the 
enemy southeast coast had to be abandoned because of the weather* 
Since air reconnaissance by the Naval Air Force is frequently 
prejudiced or rendered impossible by ice, Xth Air Corps has already 
taken over as much of the air reconnaissance over the North Sea as 
possible* The previous tacit agreement on this was expressly confirmed 
by the Commander in Chief, Air Force in the following tele print* 

"■Until further notice Xth Air Corps will, in direct agreement with Naval 
Group Command West, take over as many reconnaissance assignments over 
the North Sea as possible, if Commander in Chief, Navy^ reconnaissance 
forces are not adequate. Xth Air Corps will make the decisions regarding 
operations*" 

The report of the sinking of an Estonian steamer after striking a mine west 
of Lister, which was regarded as improbable two days ago and which in the mean- 
time has been ascribed by radio announcements to bombs from planes, making it seem 

" 2b " CONFIDENTIAL 



6 Jan. 1940 CONFIDENTIAL 

even more unintelligible, has been clarified since Ship "20" put in to port. 
Ship "20 n fired a torpedo at an Fstonian steamer proceeding without lights 
west of Lister and then attacked with gunfire, thinking she was being fired 
upon. Further action was broken off because of the nearness of territorial 
waters ♦ The steamer ^vas probably sunk. 

(For short report on Ship "20 tt, s first operation see War Diary, Part B, Vol.V., 
page 87.) 



Ship "37" (Trawler SCHLESWIG) of the 2nd Special Group is reported 
to be operational. 

A survey of the declared area off the east coast of England was 
issued to Group West and Commanding Admiral, Submarines. 

In this review Naval Staff came to the oonolusion that although it was necessary 
for air reconnaissance and submarines to keep the declared area off the east 
coast of England under constant observation, this area was not important enough 
yet to cause serious prejudice to our own operations. It is much more 
important to keep the initiative, in spite of enemy countermeasures, - by 
continuing the mining operations already carried out so successfully - to carry 
out resolutely the plan of mining the east coast of England and to convince 
neutral shipping that the British countermeasures are ineffective. 

There is, in addition, the task of blocking the important entrances to this 
"War Channel" to the north and south - the enemy will place these under 
specially effective protection and patrol - without limiting the operational 
freedom of our submarines which find this area a specially productive field 
for operations. 

(For copy to Group West and Commanding Admiral, Submarines see War Diary, 
Part C, Vol. VI. # Mine Warfare.) 



Baltic Sea a 

Operations against merchant shipping are being carried out by 
the HANSBSTADT DANZIG north of 58° 30 • N, and by Ship "23* south 
of this latitude. 

The Swedish steamer KONUNG OSKAR (735 BRT) which was taken in prise on 5 Jan. 
with Poles on board, put in to Mease 1 with a prise crew. Group Baltic reported, 
at the same time informing the Reich Commissioner of the Prise Court, that 
the taking prise and subsequent seisure are justified under Prise Law since 
the steamer undertook her voyage for the express purpose of conveying Poles 

CONFIDENTIAL 
- 26 - 



6 Jan. 1940 CONFIDENTIAL 



of military age who wished to enter the service of France, There were 
obviously no other passengers on board. 



Submarine Situation! 



Atlantic: 



In the operational areas Submarine U "30 ,% in the Irish Sea to carry 

out a minelaying assignment off Liverpool, 
Submarine U "32" in the North Channel. 

On passage* Submarine U "44"© 

On return passage: Submarine U "46". 

North Sea t 

Submarine U "56". 

Submarine U "58"* on the Dogger Bank, homeward bound, reports 
sinking two steamers and one escort vessel (probably a destroyer) • 
Submarine U "19" on passage into the operational area. 

Operations against merchant shipping by submarines : 

Commanding Admiral, Submarines, Group Baltic and Group West have been given 
the following orders in connection with the Fuehrer's basic consent (as in 
the written report of Commander in Chief, Navy on 30 Deo.) to firing without 
warning in oertain definite areas of the American closed zone where the 
fiction of striking mines can be upheld: 

"Submarines are permitted full use of weapons against all vessels in the 
North Sea between 61° and 56° N and ,4° W and 0° with immediate effect. 
Attacks to be made as unobtrusively as possible, in order to maintain the 
fiction of hits on mines." 1 

This means that submarines may act without warning in the area off northeast 
Scotland from StoAbbs Head northward, including the Orkney and Shetland 
area. The former most productive operational area for our submarines from 
Kinnaird Head to St .Abbs Head, where our boats were already taking action 
practically without warning , is thus considerably extended and the submarines' 
prospeots of success are materially increased. Intensification of operations 
against merchant shipping in this area will affect - apart from enemy merchant 
traffic - principally the neutral Nordic states still trading with Great 
Britain. 



CONFIDENTIAL 
- 27 - 



6 Jan. 1940 CONFIDENTIAL 



In accordance with the directive about the sinking of Greek 
ships issued by Naval Staff on 30 Dec,, Commanding Admiral, 
Submarines issued the following order to submarines on 6 Jan*: 

"Greek merchant ships are to be treated as tankers, that is, in 
accordance with new Standing War Orders 121, para 5, first line* 
Endeavour to remain unseen. w 



Merchant Shipping ; 

The steam tanker NORDMEER (5,671 tons) from Curacao put into Vigo* 
The ship lost 1,000 tons of its cargo en route during heavy- 
weather* 

The Embassy at Montevideo wired that during the night of 3 Jan,, 
five of the TACOMA's crew made an attempt to escape in the GRAF 
SPEE's damaged pinnace, which was still on board, but only reached 
the wreck of the pocket battleship and were arrested there by an 
Uruguayan guard boat. The flight caused great agitation in the 
highly overwrought Uruguayan government. The TAG0MA was taken 
over by 100 men. from the cruiser URUGUAY at 1S30 on 4 «J*n# and the 
captain forbidden to go ashore. 

The crew threatened to set fire to the ship the following night, which in 
the Ambassador's opinion would have caused a general fire in the harbor 
because of the quantity of oil on board, and produced political complications, 
The Captain fears he cannot control the crew. Situation is extremely tense* 
The Ambassador considers the crew's behaviour foolish and hopes to prevent 
them from causing fresh trouble* 

Naval Staff looks at it differently and considers the behaviour of the crew 
a most gratifying sign of courageous spirit and an honourable frame of mind 
which deserves special recognition. 

The matter will be settled through diplomatic channels* (See memorandum to 
the Foreign Office, War Diary, Part B, Vol. VI, page 89)* % 

JHBHHHH H HHHHHH H HHHHHHHHHHH H HHH Ht 



- 28 - CONFIDENTIAL 



7 Jan. 1940 CONFIDENTIAL 

Special Reports on the Enemy 7 Jan . 

Atlantic t 

Great Britain : 

Disposition of forces: The NELSON put into Portsmouth. According to Reuter 

there are several British naval vessels in Mexican 
waters keeping a check on the sailings of German 
steamers from ports in that area. The British trawler 
KINGSTON CORNELIAN (449) sank in the Straits of 
Gibraltar after a collision with a French steamer. 

France: 

Flag Officer Commanding, Atlantic Fleet (DUNKERQUE ?) probably put into 
Brest on 7 Jan, Forces were sent out on an anti-submarine hunt in the Calais 
area. A convoy on westerly course was off Cherbourg at 0700. 

Otherwise no reports of special interest. 

North Sea ; 

British submarine UNDINE destroyed (see own situation). 

No observations of special interest apart from the customary patrol 

activity off the east coast* 

On the evening of 7 Jan. Radio Scheveningen announced that the North Goodwin 
lightship was to be passed 2 to 3 miles to the south as there was a danger 
area north of the lightship. This warning indicates the first effects of the 
Commander, Destroyers' operation. 

Shipping Losses; 

The British steamer TOMLEY (2,900 tons) struck a mine and sank off 
the southeast coast of England. 

Own Situation : 

Atlantic : 

Still no report from the ALTMARK. News that the ARK ROYAL has put 
into port, that the NEPTUNE is in Dakar, and the position of the 
HERMES (west of Spain) has been transmitted to the ship. 

North Sea; 

The operation of Commander, Destroyers went according to plan and 
without incident. The southern entrances to the Thames have there- 
fore again been fouled successfully. About 1100 the second sub- 
division of the 12th Minesweeping Flotilla sighted a torpedo track 

- 29 - CONFIDENTIAL 



7 Jan 1940 CONFIDENTIAL 



about 10 miles west of Heligoland,, 

A damaged British submarine surfaced after several depth charge attaclrs 
and was attacked with gunfire© A white flag was then shown from the 
conning tower and the entire crew (3 officers, 26 men) climbed out. The 
submarine proceeded onwards at 6 knots well down by the stern and with 
rudder hard to starboard* Efforts to take her in tow failed. The Flotilla 
Commander, Lieut. Petxel, who had come up in the meantime, salvaged the 
confidential books from the submarine's radio office personally. Vfhen 
the submarine's engines were stopped by the Commander of the leading ship 
(Lieut. Grau) and a stoker C.P.O. 2nd class, the boat sank. Efforts are 
being made to salvage her and the strictest secrecy is ordered. She is 
the submarine UNDINE, 730 tons, the latest type of the so-called Small 
Submarine Class of 1938. 

The sinking of this submarine has supplied the tangible success so long 
desired in our anti-submarine activities. It was all the more necessary 
since, on account of the complete lack of success so far in our anti- 
submarine operations, justifiable doubts were arising concerning the 
effectiveness of our anti-submarine defenses. This success will provide 
the necessary impetus towards further vigorous prosecution of our anti- 
submarine activities o 

Ice hindrance is having a prejudicial effect on the activities 
of naval forces, especially submarines. The old battleships 
SCELESIEN and SCHLESWIG-IIOL STEIN are therefore being put into 
operation to assist ice-breaking on the Elbe. 

Baltic Sea t 

Nothing to reporto 

Contrary to the intelligence report that 10 to 15 steamers are 
fast in the ice in the Kogrund Channel, the 15th Patrol Flotilla 
reports that the Kogrund Channel is completely ice -free and 
traffic is unhindered. 

So far no success worth mentioning in the salvage operations 
for motor minesweeper R "5 n . 

Submarine Warfare: 

Atlantic : 

Submarine U "30" in the Irish Sea, 

Submarine U "32" off the Clyde, reports that the whole ar«a, and 
v&specially the upper Clyde, is closely guarded by stationary 
listening and echo-ranging installations and also by numerous 



CONFIDENTIAL 
- 30 - 



7 Jan. 1940 CONFIDENTIAL 



patrol vessels, and that her assignment could therefore not he 
carried out as ordered. \i r ith the consent of the Commanding 
Admiral, Submarines the submarine is fouling the route followed 
by naval and merchant vessels which she has observed running from 
the Clyde to the Irish Sea, southeast and south of Ailsa Craig, 

On passage* Submarine U "'44". 

On return passage: Submarine U "46" 

North Sea t 

Submarine U "56" in the operational area near Cross Sand 

Submarine U "58" on return pas sage 

Submarine U "19" on passage© 

Submarines U "20", "24" making for the operational area off 

Rattray Head© 

Merchant Shipping ! 

According to information from the Naval Attache in Washington, a representative 
of the British Ministry of Shipping is at present conducting negotiations in 
New Yoric regarding the purchase of six ships belonging to U.S. shipping 
companies* The United States Maritime Commission in New York will probably 
give its consent to the sale, which in the opinion of the Naval Attache may 
form a precedent for further similar sales on a larger scale. According to 
the report the U.S. President is in the picture and approves the transaction. 

*************************** 



CONFIDENTIAL 
- 31 - 



8 Jan, 1940 CONFIDENTIAL 

Items of Political Importance I 

1, For Rus so-Finnish conflict see Foreign Press. 

; ■ • 

2 Intelligence from Great Britain says that she is about to initiate more 
active warfare by extending the conflict to other theaters of war, splitting 
up German forces and burdening the German war economy, particularly as the 
continuation of the present inactivity primarily benefits Germany* 

3. In Chile (Chilean Foreign Ministry circles) the United States is 
expected to enter the war at the beginning of 1940. 

Chief, Naval Staff was in Kiel for an inspection of dockyard 
installations, to give an address to dockyard workers and attend 
a conference with Group Baltic and Naval Station, Baltic 



Special Reports on the Enemy 8 Jan. i 

Atlantic a 

Great Britain ; 

Shipping movements? Nothing special to report from the home area* In the 
South Atlantic the heavy cruisers DORSETSHIRE and SHROPSHIRE have commenced 
passage to Rio after taking on fuel in the La Plata area; they are to join 
the oruiser AJAX at Rio. Task Force G (probably the two heavy cruisers) 
is to patrol a certain area (exact position unknown) after 12 Jan, while the 
cruiser ACHILLES is to carry out patrol duties in the La Plata area at the 
same time. 

The ( ARK ROYAL with the NEPTUNE and two destroyers put out from Dakar on 
8 Jan. after a short stay. 

A British communications officer has been installed in Montevideo, and, as 
was later discovered, reported to the Senior Officer of the South America 
Division on 13 Deo. that he would keep a constant watch on the frequency 
850 kc/s. 

France t 

A Frenoh auxiliary cruiser (RECARCEA?) ran aground and sank near Onxa* The, 
captain and 29 men were saved. 

The search for German steamers along the north coast of Spain is continuing 
with increased intensity; however it has been unsuccessful so far. 

The cruiser ALGERIE was off Casablanca on 8 Jan. 



CONFIDBNTIAL 
- 32 - 



8 Jan. 1940 CONFIDENTIAL 

North Sea* t 

The entrances to the Firth of Forth were freshly marked by trawlers at anchor 
after new gaps in the barrage had been made, and the former markings were 
removed * 

Merchant ships passing Dover are again to keep Ig- miles from the entrance 
and to hoist a passage signal (troop shipments or new minelaying measures?)© 

According to a report from Bergen, a foreign steamer is supposed to have 
been subjected to heavy fire from a submarine some days ago off the coast of 
Norway, although she reached territorial waters It is not impossible that 
this refers to the encounter between Ship "20" and an Estonian steamer 
If this is so, the ship must be still afloat* 

Shipping Losses t 

The British steamer CODRINGTON COURT (5,200 tons) sank off the southeast 
coast on 7 Jan, after striking a mine<» 

Baltic Sea t 

Submarine warning in the western "part of the Baltic Sea, but 
no definite sightings. 

The plan for a cut through the Falsterbo Isthmus seems to be 
assuming more concrete form. According to newspaper reports 
work is to be commenced immediately* It is hoped that considerable 
progress will be made in the construction of the canal this year. 



Own Situation s 

Atlantic t 

Nothing to report Still no report from the supply ship ALTMARK, 
so she may still be supposed in the South Atlantic. The ALTMARK 
received the following instructions regarding returnt 

1. Position report not heard so far* 

Naval Staff considers the moment favorable for commencement of return passage* 

2* Doubtful whether ice will permit passage through Denmark Strait* 
British auxiliary cruisers and cruisers patrol mostly on a line Hebrides - 
Faeroes - Iceland and northwest of Iceland* 

This line must be breached at night at high speed in weather made propitious 
by bad visibility. 



CONFIDENTIAL 
33 - 



8 Jan. 1940 CONFIDENTIAL 



3, Proceed to Kiel through the Great Belt, taking advantage of neutral 
territorial waters. 

Report position by radio before entering Norwegian territorial waters. While 
in territorial waters no false markings to be exhibited, national service flag, 
no stops; if there are prisoners on board, keep then below deck. If stopped, 
demand free passage as a Government ship* 

North Sea t 

Nothing to report. 

According to former orders, after the beginning of January, Xth Air Corps is 
at liberty to attack darkened vessels within 30 miles of the British coast, i.e. 
west of the British declared area. Group West proposes an extension of the 
attack area, to bring it into line with the operations permitted by Naval Staff 
to naval forces (attacks against darkened ships in the area between 20° W, 
62° N, 3° B, 44° N) and to naval air forces (torpedo attacks against darkened 
ships west of 3° E). 

For the following reasons* however, Naval Staff does not intend to alter the 
orders given t 

1. The limitation of Xth Air Corps' night operations to a 30-mile wide strip 
along the English coast excludes any possibility of confusion, and the need for 
navigational data, and permits the most effective operations between the enemy 
coast and the screen formed by the British declared area. 

2. Naval air forces could be permitted to use torpedoes west of 3° E, since 
radius of action and prospects of suocess preclude operations in the area from 
the south part of the North Sea to the Dogger Bank, and the state of training 
and dependence on the Group exclude the possibility of confusion. 

3. Operational experiences are not yet available. 

Group West will be instructed to this effect by teletype* 
Xth Air Corps is to be informed by the Group* 

Baltic Sea t 

Operations against merchant shipping t The PREUSSEN is operating 
south of the Aaland Sea, the KOENIGIN I.UISE in the Gotland area* 

The 17th Subchaser Flotilla is patrolling the Kattegat. 



Submarine Situation* 



Atlantic; Unchanged. 



CONFIDENTIAL 
- 34 - 



8 Jan 1940 CONFIDENTIAL 



North Sea t 

Submarine U "58" returned from operations. Submarine U "56" in 
the Cross Sand operational area. 

Submarines U "19", U "20", U "24" on outward passage to the north 
coast of Scotland. 



Merchant Shipping : 

One 3,200 BRT steamer has returned from overseas (left Las Palmas 
on 12 Dec). 



The British Ministry of Shipping has bought a number of 
5-6,000 BRT U.Sc freighter s 



Afternoon : Conference at the Ministry of Transportation on the problem of 
the future of German ships in neutral foreign countries: 

Special Items * 

All negotiations regarding the sale of German ships in foreign countries have 
so far been frustrated by the conditions demanded by the enemy side. To 
date no German ship has been sold. 

1* Two million pounds are necessary to free the ships already seized and to 
prevent the seizure of further ships on the pretext of creditors 1 demands. 

An annual amount of 15 millions in foreign exchange is necessary to support 
our ships lying in foreign countries, i.e. 3 million cash in foreign exchange, 
the rest by account 

2. It was apparent from the comments of the representative from the Ministry 
of Economics, that the latter was not aware that because of the time of year 
(long nights) the return of German ships from overseas to Germany is a matter 
of urgency and must be expeditedo The delay in the sailings of ships from 
South America and Spain is caused by difficulties with cargo (the particular 
cargo of special value to the war economy cannot always be obtained at once)o 
Henceforth ships are to sail for home as soon as possible, with less important 
cargo or only with partial cargo, even empty, if necessary. AH. ships which 
can still get home are to commence their homeward voyage as soon as possible, 
irrespective of whether the cargo is complete. In future the Ministry of 
Economics will issue only non-negotiable foreign exchange of more or less 



CONFIDENTIAL 
- 35 - 



8 Jan. 1940 CONFIDENTIAL 

frozen credits, and no more cash foreign exchange (for example, two million 
Reichsmarks in cash foreign exchange were given for the the ARAUCA's cargo). 

3 Subject* Sale of ehipsi 

Spain s The High Command, Navy has consented to the sale of ships for use 
exclusively in Spanish coastal trade (in territorial waters only), and for 
traffic between Spanish colonies, but only if the enemy recognises the change 
of flag without option* 

Italy s The High Command, Navy has consented only to the sale of ships which 
are intended to ply in the Adriatio exclusively* 

Russia ; The High Command, Navy would consent only in the case of ships for 
Ealtic and Black Sea trade, but in this case a sale is out of the question 
because of our own requirements in these areas. 

Japan s The High Command, Navy has agreed to sell individual ships exclusively 
for the voyage Japan - China, given enemy recognition of the change of flag 
without option, and if Japan agrees to other political stipulations, such as, 
no mortgaging of German ships because of enemy demands, as is at present 
intended in Holland for instance. If occasion arises, further ships can be 
brought up from the Dutch East Indies and western America for the Northeast 
Passage. 

South America ; The High Command, Navy would only agree to the sale of certain 
definite ships under the conditions indioated, to obtain foreign exchange in 
order to prevent seizure* 

4* The Chief of Staff, Naval Staff declares himself ready to postpone the 
steamer WINDHUK's homeward passage another two weeks, so as to give the Africa 
Line 1 an opportunity to settle with its creditors, in 3pite of the disadvantages 
entailed by the advanced season (shorter nights) and in spite of the risk that 
the WINDHUK may be put under full arrest during that period (prestige I)* 

5* The Ministry of Transportation's attention is drawn to the following 
facts* 

a. that it is even more urgent to set sail from South America than 
from Spain because of the longer route; 

b. that the simultaneous sailing of several ships from different 
ports is favorable as they effect mutual relief; 

c* that Naval Staff emphasizes the special importance of numerous 
ships staying in foreign countries in readiness or apparent 
readiness to sail, since this gives mutual relief and restricts 
the movements of a number of enemy patrol forces* This 
diversionary effect must be kept up as long as possible* 

**************************** 



CONFIDENTIAL 
- 36 - 



9 Jan. 1940 CONFIDENTIAL 



The Commander in Chief, Navy in Tfilhelmshaven for an inspection of 
dockyard installations, to give an address to the dock workers and 
attend conferences with Group West and North Sea Station. 

Items of Political Importance 

The resignation of the British Yfar Minister Hoare Belisha has given rise to 
great internal political unrest in Great Eritain and to sharp attacks on the 
Government, The principal reasons for his dismissal seen to lie in the 
military sphere. It is emphasized that his resignation implies no alteration 
in the policy of the War Cabinet, The possibility that a Ministry of Defense, 
comprising all the armed forces, will be formed is being discussed. His 
successor, Oliver Stanley passes as a hardworking but indifferent politician 
with no outstanding qualities.) Hoare Belisha was said to be a supporter of 
the- defensive war policy. His resignation means that the General Staff will 
come more sharply into prominence and therefore possibly a transition to 
more active warfare. 

The German representative was handed a declaration by the Dutch Foreign Office 
to the effect that the Netherlands intend to defend themselves against any 
attacks not just "symbolically** but with all the means in their power. 

The Argentine Government declares that the belligerent powers have no right 
to lay mines outside their own or enemy territorial waters. The Argentine 
reserves the right to claim compensation for all damage. 

The U.S. Government has made a fresh protest to Great Britain, against the 
way British contraband control is forcing U.S. ships in to the war zcne and 
into a British control port. No political importance is, however, attached to 
this protest since American shipping acquiesces willingly in all British 
blockade measures. 

For Chamberlain's speech at the Guildhall see Foreign Press. 

Special Reports on the Enemy 9 Jan . 

A tlantic t 

Great Britain t 

Radio monitoring report from the Indian Ocean j 

The aircraft carrier GLORIOUS with escorting destroyers has put to sea again 
after a short stay in Aden The cruiser SUSSEX is in Colombo. 

Otherwise no reports of special interest. 

France t 

The Flag Officer Commanding, Atlantic Fleet was. southwest of Brest and making 

-37- 

C CONFIDENTIAL 



9 Jaru 1940 CONFIDENTIAL 



for the passage off Point du Raz. 

A large ship, probably the STRASSBOURG or the BEARN is to put in or out 
of Gibraltar on the morning of 10 Jan. 

Radio monitoring reports various patrol forces off the northwest coast of 
Spain, The patrol vessels in the Channel are repeatedly being ordered to 
divert neutral steamers to French ports* 

North Seat 

The British submarine STARFISH was destroyed (see Own Situation). 

For statements made by prisoners of war from the submarines UNDINE and 
STARFISH see War Diary, Part B, Vol. V, Page 90. 

According to Danish reports some of the drifting mines washed ashore on the 
coast of Jutland were filled with sand and cement instead of explosives. 

It is assumed that these are mines from a dumay British minefield. 

Shipping Losses i 

By striking a mine; the British steamer DUNBAR CASTLE (10,000 tons). 

Own Situation ! 

Atlantic t 

Nothing to report. 

North Sear 

Group West reports the sinking of the British submarine STARFISH 
(640 tons) 40 miles northwest of Heligoland, caused by a depth 
charge attack from minesweeper M 1f 7 n » Crew rescued. The submarine 
was located by echo ranging set before the periscope was sighted. 
After the crew was taken off, the submarine sank, so that it was 
not possible to salvage the confidential books. 

A most gratifying success, which is to be valued especially highly after the 
recent destruction of the submarine UNDINBj this will give our subchaser 
units more confidence and certainty and, it is hoped, will convince the British 
submarine arm of the dangers of operating in the Heligoland Bight. The sinking 
will be kept secret in order to leave the enemy in doubt as to the type of 
German anti-submarine measures usedo 

Ship *4* has returned from her first operation. No successes were 
gained. The commander operated with great caution, as he believed 
he had been identified and reported by a British plane as suspicious. 



-38- 

C0NFIDBNTIAL 



9 Jan. 1940 CONFIDENTIAL 

Like the first operation of Ship "20" this operation too bears the stamp of 
lack of experience in warfare. The officer personnel on these special 
vessels should be examined, in order to ensure, as far as the assignments 
require it, that experienced officers are posted as their commanders. In 
addition, special emphasis must be laid on thorough briefing beforehand, 
especially of the less senior commanders, on their assignments, the 
particular situations which may arise, the enemy's procedure, procedure 
against submarines and planes etc 

Naval Staff has information concerning the trawlers of the Special Group, 
from which it appears that several of these vessels are suitable in a limited 
degree only for the combat tasks assigned to them, since after their conversion 
to special vessels they retain little of the main quality of unobtrusivene ss 
which was ascribed to them. The tasks assigned to these combat vessels should 
therefore not exceed the operational possibilities which are restricted by 
their external appearance, and no vessels which are actually unsuited to their 
assignments should be sent on operations* 

Because of these criticisms, the Coamander in Chief, Navy is taking the 
opportunity of his presence in Wilhelmshaven to obtain some information 
personally on these Special Groups. 

During the forenoon and afternoon of 9 Jan, armed air reconnaissance 
was flown by the Xth Air Corps against the east coast of England 
between the Thames and Kinnaird Head, with attacks on British 
merchant shipping. According to reports from Xth Air Corps, more 
than ten steamers were attacked; attacks on six British steamers 
of between 680 and 4,500 BRT were confirmed by radio monitoring 
reports. 

The Admiralty admitted that the following were sunk t 

The British -steamer COWRIE (689 BRT) and the Danish steamers IWAN KONDRUP 
(2,368 tons) and PBDDY (955 tons). The attaoks on the British steamers 
were answered by machine-gun and anti-aircraft fire* (See also Air 
Situation for 10 Jan.) 

According to British statements the air attacks are said to have taken place 
throughout on unescorted and unprotected steamers. Because of misty weather, 
fighter defenses could not establish contaot with the German raiders. 

Naval Staff values the successful attacks of the German Air Force on British 
merchant shipping especially highly, because - in conjunction with the 
minelaying offensive - they are highly suited for the intimidation of enemy 
and neutral ships alike, even if the ship attacked is not sunko In this way 
the greatest success can doubtless be gained by ruthless warfare against both 
enemy and neutral shipping© 



CONFIDENTIAL 

- 39 - ' 



9 Jan, 1940 CONFIDENTIAL 



Several enemy planes penetrated the Heligoland Bight during the 
night of 9 Jan. Three bombs were dropped north of Sylt without 
any result* 

E altic Sea ; 

Unsuccessful anti-submarine hunt in the western Baltic Sea. The 
presence of submarines is improbable. Attacks on merchant shipping 
are being carried out by minelayers. The GRILLE was damaged in a 
collision with a German steamer. The steamer sank. 

Russo-Finnish conflict: 

The Chief of Staff, Russian Fleet demands that inefficient Naval 
Air Force radio personnel be relieved, and threatens judicial 
punishment of the commanders responsible if there is a repetition 
of faulty radio operating. 

The Russian garrisons on Saeskaer and Lavansaari have been reinforced, 
guns to be set up on the islands are en route in transports. 

Submarine Situation : 

Atlantic : Unchanged. 

North Sea; 

In the operational area: submarines U "56", U "19" • Submarine 
.U "56" reports the execution of her minelaying assignment at Cross 
%and (six ground mines). Outward bound: Submarines U "20", U "24" 
(Rattray Head) and - putting to sea today - submarine U "23" (bound 
for the Shetlands). Success report from submarine U "58" which 
has just returned includes the steamer LARS MAGNUS TROZELU 
(1,955 tons), the SWARTOEN (2,475 tons) and destroyer VISCOUNT . 

Further successes in the war against merchant shipping : The Greek steamer 
TONIS CHANDRIS (3,200 tons) sent an SOS from position near the Shetlands and 
reported she was sinking. 



Merchant Shipping: 

Unidentified ship, apparently the German steamer BAHIA BLANCA ■ 
(8,558 BRT) reported at 2230 on 9 Jan. from 66 9 f N, 26 20* W 
(Denmark Straits) that the ship had sprung a leak caused by the 
ice and was slowly sinking. The Danish rescue ship AEGIR put out 
from Reykjavik to go to her rescue. This report was confirmed by 
the German Consul on inquiry* The British radio report on 30 Dec. 
that the steamer BAHIA BLANCA was taken prize by a British cruiser was 

- 40 - CONFIDENTIAL 



9 Jan. 1940 CONFIDENTIAL 



therefore a barefaced fabrication intended to scare German 
steamers returning home* 

The fact that Greek shipowners are firmly refusing to operate their ship! 
between England and Greek ports is said to be causing some disquiet in 
British export circles. 



The weather outlook leads us to expect the continuance and 
worsening of the present frosty weather. The penetration 
of severe Siberian cold as far as western Europe may possibly 
be expected. 

The following teletype has been sent to Group West, Group Baltic, and 
Commanding Admiral, Submarines: 

1. Expect frosty weather to continue and become more severe because of 
east and southeast winds until 20 Jan. at least. 

2. Report what measures it is proposed to take if the Kiel Canal should 
become closed to naval forces and shipping entirely, and especially with 
regard to the routing of Scandinavian shipping (ore and coal) through the 
North Sea* 

3* Groups to report ice situation at base3 daily* 

The Fuehrer has postponed his decision on "Operation Gelb* 
until 10 Jan. 

****************************** 



CONFIDENTIAL 
- 41 - 



10 Jan. 1940 CONFIDENTIAL 

Conference on the Situation with the Chief, Naval Staff > 
S pecial Items : 

I. The Chief, Naval Staff gave a review of his conferences in Wilhelmshaven 
and Kiel as follows s 

Special Items a 

a* The experiences gained during the first battleship operation 

(21 - 27 Nov.) (see copy in War Diary, Part C, Vol. II) as evaluated 
by Naval Staff were passed on to the Commanding Admiral, Group West, 
and the Commanding Admiral, Fleet by the Chief, Naval Staff in an 
interview. 

The next battleship operation will not be possible before 30 Jan. 

b» With regard to the use of the Special Groups the Chief, Naval Staff 
has given orders as follows, on the basis of his inspection at 
Wi Ihelmshaven s 

An examination is to be made in each case to see whether the steamers 
of the Special Group are suited for the execution of their assignments. 
These assignments, however, must be in accordance with the character 
of the vessel. On principle, vessels which are not suitable are not 
to be sent out. 

The present officer personnel aboard the vessels is not adequate. 
Steamers with special assignments are to be manned by experienced 
officers. The assignment of only- one young officer, unassisted by 
a watohkeeping officer or warrant quartermaster is also inadequate 
for trawlers. Vessels must henceforth be manned with a watohkeeping 
officer or warrant quartermaster. 

c« The cruiser LEIPZIG is to be de- commissioned while under repair, and 
the crew commissioned to the PRINZ BUGBN. 

d. Group West has requested the allocation o*f the 2nd PT-Boat Flotilla 

to his command* The Chief, Naval Staff has consented to the transfer 
of the 2nd PT-Boat Flotilla to the North Sea as soon as the ice 
conditions permit. 

II. The Commander in Chief, Air Force has given basic sanction for attacks on 
the docks at Rosyth by the German Air Force. When these attaoks are carried 
out, similar attacks by the Royal Air Force on the docks and dock area in 

Wi Ihelmshaven, Hamburg and Bremen can be expeoted at once. Naval Staff 
oonsiders it of great importance that the German Air Force does not carry out 
these attacks on British dockyards for the time being, owing .to the close 
proximity of the German dockyards to each other and the Navy*s great dependence 
on the dockyards in the west. 



CONFIDENTIAL 
- 42 - 



10 Jan. 1940 CONFIDENTIAL 



1200 Report from the Chief, Naval Ordnance Division, Bureau of Naval 

Armament to the Commander in Chief, Navy on tho result of Ambassador 
Hitter* s economic negotiation in Moscow, Stalin conducted the 
Russian negotiations in persons 

Results on the whole satisfactory, as could be seen from the reports from 
Ambassador Ritter already telegraphed* Deliveries of iron, ore and scrap 
metal were conceded. Likewise colored metals - including quantities of 
nickel, copper and tin, which had not been expected so far - both for special 
Russian deliveries and German requirements Also unexpected amounts of 
chromium ore. However there are a considerable amount of details still to 
be attended to, so that, for example, valuable iron ores will not be available 
until 1941. 

Russian demands for naval gear have come well to the fore in the discussion of 
returns to be made by Germany. 

Thanks were expressed for readiness to hand over the LUETZOWo Former demands 
have been greatly moderated as regards quantities and dates of delivery. 
However very heavy guns (for ships) are still desired - e go three 38 cm- 
twin turrets and three 28 cm triple turrets, and four 15cm triple turrets. 

These demands permit interesting conclusions as regards the Russian construction 

program. 

The Chief, Naval Ordnance Division, Bureau of Naval Armament, is going into the 
question of how these demands can be met in full. The Chief, Naval Staff is 
on principle taking the attitude that the decision as to whether they shall be 
fulfilled or not depends ultimately on how far we have to depend on Russian 
production. Furthermore, the views of the Ministry of Food (feeding stuffs 
for pigs) and the Ministry of Economic Warfare (pig iron and ores, oil) are 
decisive in this respect. The Fuehrer will of course have to decide certain 
points (e.g. delivery of 40.6 cm). These are also other urgent Russian 
requests regarding the plans of the TIRPITZ, submarine periscopes, batteries, 
tanker construction, delivery of repair ships and training ship construction. 
These questions are being examined in conjunction with the Bureau of Naval 
Armament, Naval (Ship) Construction Division, and a report will be made later. 



Special Reports on the Enemy* 

Atlantic: 

Great Britain i 

The old battleship ROYAL SOVEREIGN was at sea off Portsmouth on 3 Jan. according 
to radio monitoring and must therefore have finished her dockyard overhaul. 

••43- 

C0NFIDENTIAL 



10 Jan. 1940 CONFIDKNTIAL 



A report from a steamer again confirms that fairly fast, and above all, 
large armed passenger steamers are sailing without escort also in the 
North Atlantic. 

Shipping Losses i 

The steamer ROTHESAY CASTLE (7,016 tons), which ran aground off the west 
coast of Scotland on 4 Jan., has been abandoned by the crew as she was 
threatening to break up. 

Franc e i 

Numerous vessels at sea in the Channel covering steamer traffic and on 
anti-submarine patrol. 

On 10 Jan. three submarines in the West Indies are to commence the search 
for the German steamer XONSUL HORN, which sailed from Aruba. 

Neutral s : 

French patrol vessels were informed on 9 Jan. that a cruiser of the OMAEA 
class and two other U.S. naval vessels were in the Asores area on 8 Jan. 

North Sea t 

Destroyer movements in the Tyne area. 

Bomber squadrons penetrated the Heligoland Bight. 

Shipping Losses * 

The Norwegian steamer MANX (1,350 tons) struck a mine 45 miles east of Noss 
Head, the French steamer MONTAUBAN (4,200 tons) ran aground north of 
Hartlepool o 



Intelligence reports from Holland i 

1. The islands of Texel, Vlieland, Terschelling, Ameland and Schiermonnikoog 
are occupied by naval and shore-based forces. 

a. The Navy is attending to the minelaying tasks and supervision of 
the mined areas between the islands. 

b. Shore-based troops are servicing the anti-aircraft guns (2.4 and 
7.5 cm), camouflaged anti-aircraft batteries have been built into 
the dunes and are invisible from the sea. Since, however, the 



CONFIDBNTIAL 
- 44 - 



10 Jan. 1940 CONFIDENTIAL 



islands slope towards the mainland, they can be seen in part 
from the rear* There are also dugouts, trenches and machine-gun 
positions and the occupying force is said to be fairly strongo 

2© Rottum is not occupied by troops. There is only one lighthouse keeper 
and three or four other people on this island 

3. The causeway to the island of Ameland has gone to rack and ruin and ha:? 
not been used for decades. It runs past point Nes to the village of Holwert 
on the coast. 



Own Situation s 

Atlantic : Nothing to report. 

North Sea t 

Operation by the Commander, Destroyers against the east coast of 
England commenced according to plan at noon on 10 Jan. on release 
of the keywords ,r Neustadt u and "Herford" with ten destroyers of the 
1st and 4th Destroyer Flotillas, and the 7th Destroyer Division. 
Instructions from Group West (see Group T s instructions as per Gkdos. 
368/40 Chefs o dated 5 Jan. 1940) o 

Assignment I t 

Fouling of the sea area between the English coast and the British 
declared area in the strip between 55° 10* and 55° 15 f (i.e. between 
Blyth and Coquet Island), if possible widespread and as close as 
possible to the coasto 

Four destroyers as mine carriers 

Two destroyers as escorts. 

Mines : 305 EMC with contact setting, 5 RMA. 

Assignment 2 t 

Minelaying in the area near Haisbro Lightship by two destroyers 
as mine-carriers and one escorting destroyer. 

Mines s 50 TMB. 



CONFIDENTIAL 
- 45 - 



10 Jan. 1940 CONFIEENTIAL 



During the night, reconnaissance of lights was carried out by 
planes of the Xth Air Corps with observers supplied by Commander, 
Naval Air, West in connection with the minelaying operation* 

German Air Force over the North Sea area t 

Reconnaissance and bomber forces of the Xth Air Corps carried out 
a search for a Norway - U.K. convoy during the forenoon, without 
finding the enemy Heavy fighters belonging to the 76th Heavy 
Fighter Wing had a brush with nine Bristol Blenheims at about 
13C0. Three planes were shot down. No losses of our own. 

Enemy attacks were unsuccessful© Bombs were dropped on the 
flats north of Sylt 

Ealtic Sea t 

Attacks on merchant shipping in the eastern part of the Baltic 
Sea are being carried out by the PREUSSEN, patrol of the Kattegat 
south of Anholt by the 17th Subchaser Flotilla. 

Salvage work on motor minesweeper R "5" has brought no success. 
Prospects of salvaging her are slight. 



Submarine Situation t 

Atlantic a 

Submarine U f *32 n has carried out her Ailsa Craig assignment, is 
north of the North Channel and is making for the North Sea because 
of the weather Submarine U n 30" reports the execution of her 
difficult assignment off Liverpool at Bar lightship. An excellent 
achievement J 

Proceeding to the Atlantic j Submarine U w 44'* west of the Shetlands. 

Submarine U "46 w put in to port from the Atlantic. 

North Sea t 

In the operational area* Submarines U w 20 tt , U w 23 tt . 

Submarine U "SB**, on return passage from Cross Sand, reports 
discovery of a safe, mine-free route off Smith's Knoll. 



CONFIDENTIAL 



10 Jan. 1940 CONFIDENTIAL 



Cross Sand lightship in its peacetime position. Submarines U w 19 
and U ""24 n are returning from the Rattray Head operational area. 



Merchant Shipping : 

The Naval Attache in Madrid reports on the tanker NORDMEER, which has 
put in to Vigo: 

The NORDICER was chained up in Curacao. Before she put to sea, the captain 
ordered a breastwork made of cement to be erected around the wheel-house and 
was able to carry out his plan without casualties, despite lively machine gun 
fire from a Dutch patrol boat, British naval vessels were given the "lip 
during the night by alteration of course. The captain and crew of the 
steamer NORDICER deserve recognition" for the initiative and skill which they 
displayed. 



According to reports from Italy the British government is said to have 
declared itself ready to agree to any possible sale of German ships to Italy, 
The French government however has taken the opposite attitude, so that the 
impression is gained that the Western Powers are playing different roles in 
full agreement with one another, and the concessions made by the one can be 
canceled by the other. 

Group Vi'est reports in answer to yesterday's query that if the Kiel 
Canal cannot be used because of ice, it is intended to route Scandinavian 
shipping via the Skagerrak at night and then along the coast of 
Jutland, The points where neutral territorial waters are left and 
entered are to be changed as frequently as possible. Naval forces 
are to be transferred around Skagen when necessary. 



****************************** 



-47- 

CONFIDENTIAL 



11 Jan. 1940 CONFIDENTIAL 



Forenoon 



As a result of Group West's request for an exchange of North Sea drifters 
for trawlers of Commanding Admiral, Defenses Baltic, which are better suited 
to the North Sea, the 10th and 12th Patrol Flotillas were to be exchanged for 
the 7th and 11th Patrol Flotillas. As, however, the total number of trawlers 
in the 7th and 11th Patrol Flotillas is only 16, as against 24 drifters tro be 
handed over, Group West considers that such a numerical weakening of the 
patrol units in the North Sea is not acceptable, and therefore requested that 
Commanding Admiral, Defenses Baltic should hand over a third trawler flotilla 
to Commanding Admiral, Defenses North or leave the 12th Patrol Flotilla in 
the North Sea, 

Naval Staff has decided that there is no question of handing over a third 
trawler flotilla from the Baltic Sea, Group West has therefore been 
instructed to exchange one drifter flotilla only (10th Patrol Flotilla) 
for one Baltic trawler flotilla. 



The Bureau of Naval Armament, Communications and Equipment Branch urgently 
requests release of the experimental vessel STRAHL from the command of 
Commanding Admiral, Defenses North for urgent experimental assignments with 
the Communications Equipment Experimental Command, Group West has asked 
that the STRAHL should be left where she is for as long as possible. Naval 
Staff considers the transfer necessary and justified, considering the sub- 
chaser situation in the North Sea. The STRAHL will therefore be released 
to the Communications Equipment Experimental Command after 15 Jan, 

Items of Political Importance t 

The Swedish Foreign Minister declares that he is quite prepared for confidential 
cooperation with Germany. The Western Powers have so far exercised no pressure 
of any kind on Sweden, 

The Japanese Prime Minister Abe has resigned, 

A report from the Italian Military Attache in Moscow states that Russia will 
in all probability occupy Bessarabia in the spring. 



News from Holland shows that at the present time there is a great fear of a 
German invasion of Holland, Her firm determination to resist is emphasised. 



CONFIDENTIAL 
- 48 - 



11 Jan. 1940 CONFIDENTIAL 

Special Reports on the Enemy * 

Atlantic t 

Great Britain ; 

Radio monitoring detected light units (8th Destroyer Flotilla) at sea in the 
Western Approaches area. The Commander in Chief, Home Fleet issued an order 
to search the sea area near the North Channel (hunt for submarine U "32"?), 

The cruiser SHEFFIELD is at sea in the Northern Patrol area, The 7,267 ton 
tanker EL 0S0 fell the first victim to -che mines laid by submarine U "30" when 
she struck a L\ine and blew up off the west coast, A coastal radio station 
then broadcast at 1150t "Danger area within radius of 1^ miles on bearing 
180°, 6 miles from Bar lightship." 

It is to be hoped that submarine U "30" spread her minelaying over a wide area, 
so that the danger zone announced does not take in all the mines laid. 

According to a Renter report, German naval vessels are cruising along the 
Equator with orders to escort the German ships lying in Brazilian ports home. 
The steamers are alleged to have orders to sail at once. 

The British Admiralty has announced a declared area off Sierra Leone. 
Position is between 8° 31 » N, 8° 34' N, 13° 15 • W, and 13° 20* W (Freetown). 

North Sea s 

On the morning of 11 Jano a fairly old cruiser of the northern Patrol seems 
to have met with an accident east of Kinnaird Head, which led to urgent and 
lively radio traffic. 

Shortly after 1030 enemy reconnaissance planes reported our destroyers in 
groups of three at the eastern edge of the declared area, giving course and 
speed. At 1120 these reports were transmitted to all submarines in home 
waters. 

At 1130 an unidentified patrol vessel repeated a report on the sighting of 
six destroyers north of the Wash. It is not impossible that this patrol 
vessel saw the southern group (Commander, 4th Destroyer Flotilla) twice 
and claimed them as six destroyers. 

Shipping Losses : 

The Italian steamer TRAVIATA (5,100 tons) struck a mine northeast of Cromer. 
The British steamer LUCIDA struck a mine 25 miles east of Newcastle. 

CONFIDENTIAL 
- 49 - 



11 Jan. 1940 



CONFIDENTIAL 



A danger area stretching three miles in position 53° 2.05' N, 1° and roughly 
40' E, has been announced in the area Croiaer - Haisbro as a result of the 
destroyer minelaying operation. 

According to the latest radio monitoring report, heavy forces are distributed 
as follows* 



WARSPITE (flagship) 

HOOD 

REPULSE 

NELSON 

ROYAL SOVEREIGN 

RODNEY 

BARHAM 

QUEEN ELIZABETH 

VALIANT 

REVENGE 



) 
) 
) 



in northern Scottish waters 

Portsmouth dockyard (?) 
in the Portsmouth area 

Liverpool dockyard 

in Portsmouth dockyard 
in Devonport dockyard 
Irish Sea 



Airoraft carrier FURIOUS 



« 



H 



HERMES 



RESOLUTION and MALAYA 



in the Clyde 

in a Channel port 

on the western side of the 
Atlantic o 



This survey shows how fully the British dockyards are taken up with heavy 
ships, and the fact that the heavy strain on these ships during the first 
four months of the war has resulted in the urgent need of a comprehensive 
dockyard overhaul for all these forces* 



See radio monitoring report 1/40 for particulars of the distribution of 
forces and for items of special interest in the radio monitoring service 
during the first week of January. 



CONFIDENTIAL 



- 50 - 



11 Jan. 1940 CONFIDENTIAL 

Special Items i 

1. Northern Patrol cruisers and auxiliary cruisers as before. Bases 
in the east, Rosyth, in the west, the Firth of Clyde. 

2. Escort duties on the east coast carried out by destroyers and gunboats. 

3. New defense and minelaying measures in Hoxa Sound, Scapa Flow. 

4. Convoys from Gibraltar follow courses a great distance offshore on 
the northbound route. 

5. South Atlantic? No definite picture of further operations by the 
cruiser units. The DORSETSHIRE and the SHROPSHIRE will form Task Force G 
in Rio on 12 Jan.., and will then cruise in the South Atlantic. 

6. Cruisers of the 3rd Cruiser Squadron in the Mediterranean (the ARETHUSA, 
PENELOPE and GALATEA) are being exchanged for older cruisers of the C-class 
from home. 

7. See Appendix to radio monitoring report for survey of British submarines 
in the North Sea, The 2nd, 3rd and 6th Submarine Flotillas are operational 
with 35 boats. Command stations at Rosyth, Blyth, Tyne, Dover, and Harwich. 



For interrogation of the crew of the submarine STARFISH see War 
Diary, Part B, Vol. V, Page 90. 

Own Situation ! 

Atlantic t Nothing to report. 

North Sea i 

The destroyer operations off Newcastle, Blyth and Haisbro all 
proceeded according to plan. The groups will put in to the 
estuaries during the afternoon. 

Enemy planes shadowed from 1100 on. At 1345 the group of 
Commander, Destroyers was unsuccessfully attacked near Hornsriff 
by two formations of four bombers each. Only two planes dropped 
bombs, the others turned away in the face of accurate anti-aircraft 
machine-gunfire; one plane was definitely shot down, one doubtful. 

The destroyer operation was a fresh success for the German - 
minelaying offensive on the east coast. 



CON FIDENTIAL 
- 51 - 



11 Jan. 1940 CONFIEBNTIAL 

The 6th Torpedo Boat Flotilla is carrying out an operation against 
patrol vessels, radio beacon vessels and submarines to the west of 
the declared area. 



Operations Air Force ? 

Air reconnaissance by Xth Air Corps was carried out according to 
plan No convoys established in the Shet lands -Norway area* 
Assignment broken off at 60° 30* N because of bad weather. 

As reported from Norway in the meantime, the expected convoy has already left 
Bergen on northerly course. The convoys keep on a northerly course till they 
are about 62° N, i.e* roughly off Stadlandet, and leave territorial waters 
here on a westerly courseo Planes on armed reconnaissance attacked patrol 
vessels and merchant ships off the east coast of England, various hits were 
scored* Aerial battle with British fighters directly off Yarmouth* Attack 
made on convoy (20 ships, 1 cruiser, 5 destroyers) off the Huraber in the 
afternoon. One steamer was left on fire. 

Photographic reconnaissance flights were made over British and French ports 
as well as the successful armed reconnaissance flights. (See air situation 
for 12 Jan. for particulars.) 



The cruiser EUDEN was placed under the command of the Naval 
Training Inspectorate as a cadet training ship on 1 Van. 40. 

Baltic Sea t 

Severe displacement of ice has occurred in the Gjedser Channel 
since early this morning. Shipping is badly impeded. - The 
straightening of the gap in the barrage will be commenced in the 
Sound on 12 Jan. - The net barrage n Jade 1* has been raised* 

It appears from Swedish press reports that at the beginning of January work 
was actually commenced on the construction of a oanal through the Falsterbo 
peninsula from Kaempinger Bay to Hoellviken. The surveying of the territory 
was commenced and the cutting of a path through the Priest's Wood there has 
begun. 



CONFIDENTIAL 
52 - 



11 Jaru 1940 CONFIDENTIAL 



All seaplane bases in the Baltic and North Sea except Heligoland 
are frozen, so it is no longer possible to take off and land. 



Submarine Situation! 



Atlantic: 



Submarine U "34" has put out for the Atlantic operational area. 
Otherwise unchanged* 

North Sea t 

Submarine U "20" off Kinnaird Head, submarines U "15", U "60" 

outward bound to the operational area in the southern part of 

the North Sea. 

Submarine U "23" in the inshore waters around the Orkneys and 

Shetlands, submarines U "56", "19", "24" on return passage or 

in port. 

Submarine U "32", returning from the North Channel, has been 

assigned an operational area off Kinnaird Head. 



Merchant Shipping ! 

Own Shipping ! 

New instructions concerning the return of German ships have been wired to the 

German representatives in Buenos Aires, Montevideo and Rio de Janeiro by the 

Ministry of Transportation, According to these instructions all ships are 

to return home regardless of whether their cargoes are complete or noto 

The blockade zone is to be traversed by the end of March at the latest. 

The moment for putting to sea is to be selected so that, as nearly as possible, 

the ships put out from the various ports simultaneously. 

Ships en route for Rotterdam have been halted because of the ice conditions 
in the Dutch waterways. 

# 
Neutral Shipping i 

Numerous reports from neutral countries confirm the very great difficulties 
with which neutral shipping to Great Britain has to contend because of 
unwillingness on the part of the crews. According to new regulations Danish 
ships may no longer sail alone. The Naval Attache, Copenhagen reports t 

a. At present no less than 13 ships are lying in Copenhagen, whose sailing 
is delayed by their inability to bring their crews up to strength. According 
to information received by him, more ships are also lying in other Danish ports 
and cannot sail for the same reason. 

CONFIDENTIAL 
- 53 - 



11 Jan, 1940 CONFIDENTIAL 

b. The Danish Seamen's Trade Union is now said to be taking steps to force 
seamen who have been unemployed for a longish time to sign on for trips to 
Great Britain by threatening that their benefits will be stopped if they do not 

do so fl 

Obviously even the wages, which were increased by a further 150 % some time ago, 
are not sufficient inducement to sign on. 



At present the Japanese are experiencing no difficulty in connection with the 
shipping of German goods. It may be assumed as a fact that there is an agree- 
ment between the Japanese and the British, under which the British let the 
goods through without further control on condition that the Japanese voluntari- 
ly put into a British control port* 

Research carried out by the Naval Intelligence Division has shown that no 
neutral Scandinavian ships can so far be proved to have participated in enemy 
convoys, Norway is actually supposed to have instructed her shipowners not 
to take part in enemy convoys. Neutral steamers sailing alone must obtain 
sealed sailing instructions from the Consul at Bergen after their papers have 
been examined. These may not be opened till they are at sea. 

They are provided with further instructions by a patrol vessel near the 
Moray Firth, 

1845 Lieut, (sg. ) Loewe of the Armed Forces High Command (National Defense) 
informed Naval Staff in person that the Fuehrer had definitely decided 
on tJelb". 

The Armed Forces High Command's decision follows in writing. Key word 
serial number should read 51» 

1900 The Operations Officer, Group West was informed by telephone that the 
first two figures in the teletype, subject, conferences on recognition 
signals, should read j>l 1 



- 54 - CONFIDENTIAL 



12 Jan. 1940 CONFIDENTIAL 

1100 

i 

Conference on the Situation with the Chief, Naval Staff ; 

Special Items ; 

Letter from the ^rmed Forces High Command concerning operation ^elt^ with 
the Fuehrer's final decision, has been received. (See letter from Armed 
Forces High Command dated 11 Jan.). • The verbal instructions received on 
the evening of 11 Jan. are confirmed; 

" Key word serial number 51 - time; 0816 . " 

According to the instructions given, the Navy may commence operations in 
advance of the general operation. Naval Staff considers that 0500 will be 
early enough. The Chief, Naval Staff has agreed that all the proposed 
measures will be put into operation. The disposition of the torpedo-carrying 
submarines is to be reinforced if possible. 



On inquiry Group West was informed by telephone that "the conference begins 
at 0815". 

During the afternoon the following directives were issued to Group West and 
Commanding Admiral > Submarines - operational ; 

I. 1613 Most Secret Teletype; 

Conference on recognition signals for submarines is planned to take 
place as per 3/Skl Gkdos. 5115. 

Ski/ 425/40 Gkdos. 

1614 

II. Most Secret Teletype; 
Reference Ski. Gkdos. 425/40. 

1. Operations HM, IM, CM, WM, 0U, TU, HL, IL, 0L, WL, 0U . 

2. All operations number 51» 

3. Reinforce TU as far as possible. 

4. Time of execution as per Ski I op 470/39 dated 12 Dec. 
paragraphs 2 and 4. 

CONFIDENTIAL 
- 55 - ~~ 



12 Jan, 1940 CONFIDENTIAL 



5. Issuance of orders as per Ski I op 413 paragraph 2 reserved, 
even for isolated operations. 

6. "A™ time follows,, 

Skl/426/40 Gkdos. 

III. 1740 Most Secret Teletype (SoO.s only) in Special -Staff Officer 1 s 
code* 



Reference Ski Gkdos. 426/40 paragraph 6, 0816 hours 
Ski I op 42/40 o 



(for explanation of keyword operations as under II paragraph 1* see Part C, 

Vol.11). 

Since there have been various serious cases in which unauthorised 
persons were informed of secret matters, which thus reached the 
knowledge of the foreign intelligence services the Fuehrer has 
issued the following basic orderi 

1. No one, no office or offioer may learn of a matter which is to be 
kept secret if it is not absolutely necessary that they should know for 
service reasons. 

2. No office or officer may learn more of a matter which is to be kept 
secret than is absolutely necessary for the exeoution of their particular duty* 

3 e N» office or officer may learn of a matter which is to be kept secret, 
or the part concerning them, earlier than is absolutely necessary for the 
execution of their assignment. 

4* Thoughtless passing on of orders whose secrecy is of decisive 
importance in accordance with any general distribution code is forbidden. 

Adolf Hitler. 



Items of Political Importance t 

See Political Survey No. 10 for the Jewish problem in Great Britain and 
reflections on the elevation of India to Dominion status. According to an 
intelligence report, the British are intending to exempt the Italians from the Suet 
Canal dues (about 30-40,000,000 marks annually). This would answer a pressing 

-56- 

CONFIDENTIAL 



12 Jaru 1940 CONFIDENTIAL 



request from the Italians* 



The Naval Attache in Moscow and the Foreign Office have been informed of 
Naval Staff's interest in the question of using the northern sea route. 
The Naval Attache has been requested to give constant reports on the progress 
of the conferences. 

Naval Staff is interested in the use of this route: 

1. for merchant raiders; 

2. for our own imports, and the return of our shipping from 
the Far East. 

With reference to l. t 

Constant merchant raiding operations become increasingly important as the 
war goes on as they tie up enemy forces permanently in distant maritime 
areas and make the conduct of our own warfare around Great Britain easier* 
The break through the Shetlands-Iceland passage will probably become more 
and more difficult, especially for these ships, and further difficulties 
will arise in reaching their individual operational areas (South Atlantic, 
Indian Ocean and the Pacific) because of the necessity of crossing the 
North Atlantic routes and through the Freetown - Bahia passage. 

A northeast passage "postern gate* on the outward and homeward passage would 
therefore be most usefulo The merchant raiders are already being fitted 
provisionally with the necessary reinforcement against ice. 

With reference to 2» > 

Permission for German shipping to use the Northeast Passage is desirable so 
that the ships still in the Far East may get home and avoid scuttling or 
seizure by neutrals, especially as the latter measures always benefit the 
enemy indirectly by releasing other tonnage© 

Further, the inauguration of sea transport from the far eastern area for 
such goods as are scheduled as bulk articles under the Russo-German treaty ^ 
would also bring much desired relief to the Soviet authorities, especially 
if the barter goods - when bound for the far eastern part of the Soviet 
Union - took the same route. 

Naval Staff is quite aware that such a use of the northern sea route requires 
very thorough preparation, especially in consideration of time, and that it 
would only be possible if German shipping movements were incorporated in the 
Soviet schedule. 



CONFIDENTIAL 
- 57 - 



12 Jan, 1940 CONFIDENTIAL 



The very fact, however, that participation of German shipping here would meet 
Soviet traffic interests halfway seems a good way of inducing the Soviet 
authorities to support this plan. 



Special Reports on the Enemy: 

—a— i w mi— — — ^mm n— — ■■ ■ n ■!■■■ ■ — ■ m ■ ■ ■ mm 

Atlantic ;* 

Great Britain ; Nothing to report, 

France: 

Radio monitoring intercepted convoy movements, also various submarine warnings 
and submarine attack reports in the Channel, though there are none of our 
boats there at present, - in the afternoon two submarines put out from Fort 
de France for Casablanca* 

North Sea : 

The Commander in Chief, Home Fleet, was 120 miles west of the Shetlands. Air 
reconnaissance was detected in the vicinity of the Faroes. - British coastal 
radio stations are issuing warnings regarding a dangerous minefield east of 
Blyth. 

Shipping Losses on the Sast Coast: 

The British steamer GRANTA (2,700 tons) as the result of a mine, 

British steamer KEYNES (1,700 tons), • 

Steamer PITWINES (932 tons) and 

Trawler CR0XT0N (195 tons) in air attacks. 



Own Situation: 

Atlantic: 

Nothing to report. 

North Sea : 

The operation of the 6th Torpedo Boat Flotilla against patrol vessels and 
radio beacon vessels west of the declared area proceeded according to plan 
and produced nothing of special interest. 15 unsuspicious fishing vessels 
were detected. 

CONFIDENTIAL 

- 58 - 



12 Jan. 1940 • CONFIDENTIAL 



The anti-submarine hunt west of List produced no results. 

The ice situation lias become more seriouso The SC'rlLF-SIEN has been put into 
operation on the Jade to assist ice-breakingo Air reconnaissance by the 
Naval Air Force had to be canceled. 

In accordance with Russian wishes, our patrol forces picked up the Russian 
steamer STALIN near Borkum. The improbable report had come from the Hague 
that Polish destroyers had been sent out against her by the British. 

In the forenoon the operational G erman Air Force reconnoitered the Firth of 
Forth end the area between St.Abb's Head and the Wash. There are about 
25 barrage balloons at a height of 1,000 meters in the Firth of Forth. 
No enemy forces were detected. 

Successful armed reconnaissance in the afternoon between northern Scotland 
and Norway, also operations against merchant shipping off the east coast of 
F.ngland. Approach to the coast in the Thames area was prevented by British 
fighter forces on defensive patrol* Numerous barrage balloons at a height 
of 300 - 400 m were detected along the whole coast from Southend to 
Orfordness. 

Several patrol vessels and steamers were attacked successfully, two patrol 
vessels and one steamer were definitely sunke A convoy of 30 ships escorted 
by two cruisers and four destroyers was sighted off the V/ash. No attack was 
made because of heavy defenses* 

Baltic Sea t 

Commanding Admiral, Defenses Baltic reports worsening of the ice situation* 
Tugs are necessary at all bases except YJarnemuende, Neustadt and Kiel 
The Cjedser net barrage is torn and driftingo Investigations are in progress. 
Heavy freezing in the Belts is forcing restriction and partial withdrav/al of 
the Danish lightships and pilot service c Operations against merchant shipping 
are being carried out by the minelayer PRF.USSEN, and patrol of the Kattegat 
by a sub-chaser flotilla. 



Submarine Situation: 



Atlantic: 



On passage: Submarine U "44'* west of Ireland, submarine U "34" 
in the central part of the North Sea. 



CONFIDENTIAL 
- 59 - 



12 Jan. 1940 CONFIDENTIAL 

Homeward bound: Submarine U "30" west of the Hebrides, submarine 
U "32" west of the Orkneys. 

North Sea; 

Submarines U "19" and U "24" put into port. Situation otherwise 
unchanged. 

Submarine Operations against Merchant Shipping : 

The order given on 6 Jan. for unrestricted warfare in the area 
Shetlands - St. Abb's Head is amplified to the effect that benevolent 
neutrals and American ships are to be spared for the present. 
Commanding Admiral, Submarines has therefore issued orders as 
follows, cancelling the previous orders: 

"Proceed in accordance with Standing War Order No. 121 in dealing with all 
ships including neutrals, except Russian, Italian, Spanish, Japanese and U.S. 
ships , in the area between 61° N and 56" N, and 4° W and Q W. Remain unde- 
tected if possible." 

In accordance with instructions from the Fuehrer, orders have been 
issued for submarine attacks without warning in an area in and off 
the Bristol Channel, for further intensification of the war against 

merchant shipping. 

"Submarines are permitted unrestricted warfare against all ships, with the ex- 
ception of those definitely identified as North American, Italian, Russian, 
Japanese or Irish, in the area between the points 50° N, 5° W; 50° N, 8° W; 
•51 b N, 8° W; 52° N, 6° W eastwards as far as the west coast of England. If 
possible remain undetected during attack in order to maintain the fiction of 
mines. 



Merchant Shipping: 

The possibility, indicated a short time ago, that Uruguay may enter the war has 
caused the following information to be sent to all diplomatic representatives 
concerned (except those in the Nordic and Baltic countries, including Holland). 

Information to be passed on, No. 101/40: 

"Captains are responsible for making all preparations for the sure and thorough 
destruction of their ships. Carry out destruction if the Government controlling 
the port of call enters the war against Germany, and it is not possible to put 
out for a home or neutral port in good time. Navy." 

CONFIDENTIAL 
- 60 - " 



12 Jan. 1940 CONFIDENTIAL 



In addition, the following information to be passed on to all German merchant 
ships in the North and South Atlantic oceans was issued on 11 Jan.: 

Information to be passed on No. 1/40: "The BaHIa ELANCA sank on 8 Jan. in 
66°9 t Nj 26°20' W as the result of a collision with an iceberg. All the crew 
were saved. Otherwise ice conditions in the Denmark Strait continue favorable. 
Naval Control," 



- 61 - CONFIDENTIAL 



13 Jan. 1940 CONFIDENTIAL 

Weather Report for 13 Jaru 1000 . 

Western TVuropr- and the greater part of Germany are still lying in the high 
pressure area stretching from the Balkans over the North Sea to the Faeroes, 
and the weather is therefore calm with hard frost. No disturbances from the 
Atlantic to be expected. On the contrary, a warm northwest current of air 
has penetrated the Baltic Sea, and is already producing a slight thaw in East 
Prussia. In the immediate future the temperature will rise above 0° in the 
east, there will still be slight frost in western Germany. 



Conference on the Situation with the Chief, Naval Staff . 

Special Items g 

1. For the present there is no alteration in the situation regarding 
operation "Gelb". Permission for the operational air force to attack enemy 
fighter units may be expected on 14 Jan. (see letter from Armed Forces High 
Command dated 11 Jan.). 

In addition the Commander in Chief, Air Force has ordered an increased degree 
of alarm for our anti-aircraft guns. The same is to be ordered for the North 
Sea and Western Baltic. 

In accordance with Naval Staff's orders, the Commanding Admiral Submarines will 
probably be able to provide two more submarines for operation "TU" ♦ 

After the mines have been laid as ordered for "Gelb", it is intended to announce 
corresponding declared areas. The Fuehrer's approval is to be requested. 

?. o "Study North" received from the Armed Forces High Command. This gives a 
rough preliminary survey of the possibilities of German operations in the northern 
area. The Fuehrer has ordered a Working Committee to be formed to revise the 
study j it is- to be headed by an Air Force General, who will at the same time be 
entrusted with the execution of any eventual operation© The Chief of Staff of 
the V/orking Committee will be a naval officer and the Chief of Operations Branch 
an army officer* 

The study commences with the premise that should Great Britain establish herself in 
the Norwegian area it would create an impossible situation for Germany in her 
military strategy, and that probably the only way to preventthis would be for 
Germany to anticipate a British move and occupy Norway first. Anti -German feeling 
is growing in the Scandinavian countries as the situation becomes tenser owing to 
the Russo-Finnish conflict, and this would be in favor of England if she were to 
take action in Norway. Resistance on the part of the Norwegians can hardly be 
expected. According to Study North, the possibility of such a development becomes 
the more probable because the Storthing, e contrary to constitutional practice, 
was not dissolved on 11 Jan. and the Jewish pro-British Prime Minister, Hambro 

CONFIDENTIAL 
- 62 - 



13 Jan. 1940 CONFIDENTIAL 

remains at the head of the present Norwegian Government. In the opinion 

of the Armed Forces High Command it is also possible that a German offensive 

in the West will be used by England as a pretext for occupying Norway, 

The armed Forces High Command's study was initiated by a report made to 
the Fuehrer on 12 Dec. 1939 by the Commander in Chief, Navy, in which the 
latter, as the result of his conversation with Quisling on 11 Dec., drew 
attention to the great threat which the establishment of the British in 
the Scandinavian area would imply to German strategy, and explained the 
opportunities for German operations which the possible development of 
internal political conditions in Norway might afford. (See memorandum of 
conversation between the Commander in Chief, Navy and Quisling, and the 
report to the Fuehrer in War Diary, Part C, Vol. VII). 

The Chief, Naval Staff is still firmly convinced that Great Britain intends 
to occupy Norway in the near future in order to cut off all exports from 
the Norwegian - Swedish area to Germany completely, and to hinder German 
warfare on the ocean and in the North Sea; in so doing she will be able to 
count on Norway's tacit consent or at least that of the Government and the 
majority of the population because of the Norwegians* anti-German attitude. 
This opinion is confirmed by special intelligence, which has reached the 
Chief, Naval Staff. In the view of the Chief, Naval Staff, the exercise 
of very strong British pressure on Sweden could be expected as a further 
result of such an occupation, with the aim of choking off the flow of all 
merchant traffic to Germany, and, if possible, of forcing Sweden into the 
war on the side of the Western Powers. The Chief, Naval Staff sees a most 
serious threat to Germany in such a development, since the occupation of 
Norway by Great Britain would have a decisive effect on the war against 
Germany. 

In partial opposition to the opinion of the Chief, Naval Staff, the 
Operations Division of Naval Staff does not believe that an imminent British 
occupation of Norway is probable* Apart from the fact that it is in any 
case doubtful whether Great Britain is at present capable of such a dis- 
play of force, in the opinion of the Operations Division, Naval Staff, 
such an operation would involve great risk and great difficulties for 
Great Britain, The occupation of Norway would bring Great Britain into 
strong and extremely undesirable opposition to Russia, and, further, would 
immediately call forth severe counter measures on Germany's side. The 
establishing of British forces in Norwegian bases would directly result in 
the immediate extension of German operational bases to Denmark and, if 
necessary, to Sweden, and German sea and air forces would thus constitute 
an effective threat to any British activities in the south Norwegian area. 

Any British military pressure exerted on Sweden from Norway could be rendered 
ineffective by immediate German action against Sweden, since the effects of 
German warfare could be made felt to a much greater degree and much more 
quickly than would be the case with British operations undertaken from the 
Norwegian area, 

- 63 - CONFIDENTIAL 



13 Jan. 1940 CONFIDENTIAL 

In the opinion of the Operations Division, Naval Staff it must be regarded as 
very improbable that Great Britain could release such strong forces at home 
as would be necessary for. the occupation of Norway, in order to counter the 
grave threat from Germany effectively. 

The Operations Division, Naval Staff considers, however, that an occupation of 
Norway by Germany , if no British action is to be feared, would be a dangerous 
undertaking, both from the strategic and economic point of view. After German 
seizure of Norway, the neutral Norwegian territorial waters would no longer be 
safe, and with Germany^ at present still small naval strength, the maintenance 
of German ore imports - especially vital during the winter months - from the 
Norwegian area, and of the important sea routes to Base North and to and from 
overseas could no longer be guaranteed . While in complete agreement with this 
opinion, the Chief, Naval Staff is also convinced that the most favorable solution 
is definitely the maintenance of the status quo, which, while Norway preserves 
the strictest neutrality, permits Germany* s important wartime sea traffic to 
use Norwegian territorial waters in safety, without the fear that Great Britain 
will make any earnest attempt to disrupt these sea communications. The develop- 
ment of the political situation in Norway and also the situation of the war as 
a whole cannot be predicted. It is therefore necessary, on principle, to include 
an occupation of Norway in the operational preparations for general war strategy, 
and, where the Navy, which would play a decisive part, is concerned, to get all 
preliminary work under way which would be necessary for the fulfilment of any 
demands which may be made on the Naval Staff, possibly at -short notice. This 
preliminary work will be summarized in Study North. 



In view of danger from the air following the projected operations of the Air 
Force the following teletype was sent to Groups West, North and Baltic* 

As from the early hours of 14 Jan. increase degree of anti-aircraft alarm in 
the North Sea and west part of the Baltic Sea unobtrusively. The German Air 
Force has issued similar orders. Ski. 49/40. I op Gkdos. 

Before it had been decoded by the operational stations, however, this order 
was declared invalid, as the scheduled air operation was again canceled. 



According to a directive received, Group West, Admiral Commanding, Submarines 
and the German Air Force General Staff were informed that Swastika flags are 
to be used as markings for recognition by planes in operations of 426/40 Gkdos* 



CONFIDENTIAL 
- 64 - 



13 Jan. 1940 CONFIDENTIAL 

The keywords for "Execution" and "Stop" have been altered by the Armed Forces 
High Command. Group West and Admiral Commanding, Submarines are being 
informed of the alteration,, 

At 1710 Group West reported that operation "M" is scheduled as from 0500, 
Three submarines have been assigned for "TTJ", Eight machines from Holtenau 
are to carry out operation "L" . Focal points for this "0" and "W" (see also 
reply - teletype of 1G Jan e ). 

The Navy is ready for operation "Celb". 



Items of Political Importance . 

The Russian Government hes sent not^s to the Swedish and Norwegian Governments 
in which she charges both powers with violation of neutrality (in connection 
with armament deliveries). Both Governments have rejected the Russian protest, 
emphasizing their desire for strict neutrality. 



For the political situation in Bast Asia see the report in Political Review No. 13. 



The British press brings news of an alleged German attack on Hollandl 



The Germen Government has made a tentative and non-binding offer to the 
Russian Government to arbitrate in the Russo-Finnish conflict* 



1200 Report from the Chief, Underwater Obstacles Branch, Naval Ordnance 
Division to the Commander in Chief, Navyj 

Special Items t 

1« Delivery of RMB mines t Complaints from Group West concerning delay in 
delivery are unjustified, since the delivery of 160 RMB mines could not be 
expected before the end of January or the beginning of February. A further 
300 RMB mines are due during February and Llerch. 



CONFIDENTIAL 
- G5 - 



13 Jan. 1940 CONFIDENTIAL 



2 Paravanes: 

Paravanes at present in operational use are subject to the following 
restrictions: 

a. maximum continuous speed, 21 knots 

b. maximum speed for a short time, 24 knots 

c. the gear must be taken in every four hours for checking. 

The Commanding Admiral, Naval Forces has made the following comment: 

Limitation of the maximum continuous speed to 21 knots restricts the use of 
the gear by ships end destroyers quite inadmissibly, since almost all 
operational undertakings have to be carried out at greater speeds for strategic 
reasons, (traversing declared areas at night, widespread sortie under cover of 
darkness etc*). 

The taking in of gear every 4 hours for checking the paravane and hawsers is 
an impossible limitation of operational freedom of action and endangers the 
units in areas where there is danger from submarines* 

The lack of practicable wartime bow protection and accessories has so far had 
no disadvantageous effect owing to the fact that so far Great Britain has not 
commenced offensive mine warfare. Greater activity on the part of the enemy 
must, however, be expected at any time* 

Everything must be done to expedite the provision of a mine protection gear 
for use on active service (paravane, hawsers and single parts) as soon as 
possible* 

The Chief, Underwater Obstacles Branch, Naval Ordnance Division draws attention 
to the fact that the new paravanes are substantially stronger and are constructed 
for stresses of 28 - 30 knots (8 hours). It is expected that they will be 
permitted 28 knots. Equipment will be released for operation during the course 
of the summer* 

The Chief, Naval Staff considers the demand for 30 knots excessive, and 
considers that 25 knots continuous speed with paravane is ample. 

3. The Naval Staff's request for the construction of a depth charge for use 
by planes has been fulfilled. >The depth charge has been finished throughout 
for a dropping height of 200 m* It will b^ possible to release them for 
operations in the immediate future. 



CONFIDENTIAL 
- 66 - 



13 Jan, 1G40 CONFIDE N TIAL 

Special Reports on the Enemy : 

Atlantic: 

Great Britain * 

Shipping movements: The. cruiser ARETHUSA (5,220 tons) coming from the 
Mediterranean and the cruiser EFFINGHAM (9,700 tons), coming from Canada, put 
in to Portsmouth The cruiser EMERALD (7,500 tons) was on escort duty west 
of the Channel on 12 Jan 

The cruiser KENT is in the Indian Ocean; she put out from Colombo and is 

apparently proceeding to Singapore or Hongkonge The aircraft carrier 

GLORIOUS, with escorting destroyer, put out from Port Said on 12 Jan, in the 
direction of the Mediterranean, 

France: 



Radio monitoring intercepted patrol force movements in the Channel and off 
the Spanish coast, A number of vessels were at sea to the west and southwest 
of Casablanca on escort duty. The Atlantic forces and especially the patrol 
vessels off the Spanish coast were again informed of the movements of German 
steamers. 

According to a broadcast from Daventry the French Navy Minister, speaking in 
Brest declared that French naval forces had sunk 10 German submarines since 
the outbreak of war, escorted 2,300 ships in 200 convoys and confiscated 
622,000 tons of goods destined for Germany, 

Neutral s t 

The F.mbassy in Dublin reports: The Minister for Defense has ordered that 
while on duty, ships of the Irish Navy and Coastguard Service are to fly 
the national flag, and a blue pennant with a yellow harp on an azure field. 

The flags are to be flown day and night outside territorial waters, inside 
them when going alongside foreign ships. 

Group West and Commanding Admiral, Submarines have been informed. 



North Sea : 

Various enemy reconnaissance flights over the Heligoland Bight, Nordemey 
unsuccessfully attacked by low flying planes. 



CONFIDENTIAL 
- 67 - 



13 Jan. 194C CONFIDENTIAL 



Shipping Losses t 

The steamer DAPHNE (1,969 tons) aground east of the Goodwins, the Norwegian 
steamer FRED VILLE (1,150 tons) sank (as result of striking mine). 



Own Situation ; 

Atlantic ! Nothing to report* 

Uorth Sea : 

Nothing special to report apart from unsuccessful enemy flights 
over the Heligoland Bight. One bomber of Xth Air Corps was shot 
down by fighters in the Firth of Forth while on individual 
reconnaissance* The battleship SCIIARNHORST reports that since 
the completion of her dockyard overhaul extraordinary defects have 
been constantly arising in all parts of the gunnery installation; 
among other things this has included the breakdown for days at a 
time of the movement and convevor mechanism in the turrets, and 
the heavy and light anti-aircraft guns, as well as the anti- 
aircraft command post stabilisors etc 

It is to be expected that these breakdowns which are now appearing will be 
fully obviated during the course of the coming training and firing exercises* 
Naval Staff is especially keen for the battleships to be in full operational 

readiness by the end of January* 

Baltic Sea t 

Ice no longer gives any special difficulty in the Great and the 
Little Belts. In the Gedser Channel ice conditions are unchangedo 
Shipping is severely hampered and insufficiently protected steamers 
can only get through with the help of icebreakers* Buoys have been 
displaced. The SCHLESWIG-KOLSTEIN is assisting icebreaking* 

Naval Air Force operations were broken off because of the weather. 
The minelayer PREUSSEN is continuing operations against merchant 

shipping* 



Submarine Situation* 

Atlantic t 

Proceeding to the operational area: 

CONFIDENTIAL 
- 68 - 



13 Jan. 1940 CONFIDENTIAL 



Atlantic: Submarine U "44" south of Iceland 

" U "34" north part of the North Sea 
" U "25" put to sea. 

Assignments according to Admiral Commanding Submarines' operational orders: 

Submarines U "44", U "25": Proceeding according to Standing Yfer Orders of 
Commanding Admiral, Submarines No. 101 - 171. 

Exploit all opportunities while homeward and outward bound and in the 
operational area. 

Endeavor to act in conjunction with other submarines. 

Operational Areas : 

Submarine U "25" area west of the Spanish -Portuguese coast, north of 42° N; 
submarine U "44" area west of the Portuguese coast, south of 41° N. 

Special Items : 

Vessels are also to be counted as darkened which have not set the full number of 
navigation lights or even have them dimmed. Always endeavor to carry out the 
sinking undetected. 

Submarine U "34" : Mirmlaying operation off Falmouth. 

Homeward bound from the Atlantic : Submarines U "30", U "32"; U "32" has 
taken up an attacking position near Kinnaird Head. 



North Sea : 

Submarine U "20" near Kinnaird Head. 

Submarines U "15", U "60" northern entrance to the Channel. 

(for TU, operation "Gelb"). 

On return passage: Submarine U "23". 

For short reports from submarines U H 19 n and *24" see Part B, Vol. IV. 

Submarine U "19" : one 4,000 ton tanker sunk, 
Submarine U "24": misses and failures 1 



-69- 

C0NFIDENTIAL 



13 Jan. 1940 CONFIDENTIAL 



Weather on the evening of 15 Jaru t Broad belt of high pressure from 
Greenland over Iceland-Great Britain to the Balkans is preventing the 
advance of Atlantic disturbances* On its northeast side, however, a 
vigorous low pressure area is being drawn southwards from Scandinavia and 
is splitting up the high in this area. The northwest current of air is 
still penetrating the North Sea, Baltic area and northern Europe and is 
causing misty weather on account of the temporary warmth * Temperatures 
above zero , 

Evening ! During the course of the evening, the Fuehrer decided to postpone 
A-day because of the weather* The keyword serial number was 
altered to 6015 The decision will be made on A-5 day. 1800* 



Because of the New Armed Forces High Command directive, Operations 
Officer, Group West was informed by telephone that the serial 
number had been altered to 6015 o 



*************************** 



CONFIDENTIAL 
- 70 - 



14 Jan. 1940 CONFIDENTIAL 



Items of Political Importance: 

ixeports from Great Britain state that the British Government is seriously 
examining the question of Germany's use of Norwegian territorial waters. If 
in the future Germany were to seize cargoes destined for Finland in Norwegian 
territorial waters, France and Great Britain would feel justified in defend- 
ing these transports. 



Since the resignation of the Abe Cabinet in Japan, Admiral Yona has been 
entrusted with the formation of a new cabinet. The Foreign Minister, Arita, 
stays. No decisive alteration in Japanese policy is to be expected. The 
new Cabinet has been described as a "puppet Cabinet" in the hands of the court 
circle, Endeavours to reach a compromise with the United States continue. 
Friendship towards Germany is emphasized and a policy of "good relations with 
all" is being aimed at. 



The news of an imminent German attack on Holland and Belgium caused the follow- 
ing steps to be taken: intensification of Belgian defense measures, call-up 
of reservists, recall of troops on leave, requisitioning of automobiles, horses, 
etc. 

Simultaneous preparations in Holland I Recall of troops on leave. 



Special Reports on the Enemy : 

Atlantic : 

Great Britain : 

No information of importance apart from the detection of enemy convoy movements. 

France : 

The cruiser DUGUAY TROUIN, coming with a convoy from Dakar, arrived off Casablanca. 



North Sea: 

The Senior Officer of the First Cruiser Squadron put into Rosyth on 10 Jan. 

CONFIDENTIAL 
- 71 - 



14 Jan 1940 CONFIDENTIAL 



according to plan* with the DEVONSHIRE, the BERWICK, and the NORFOLK. 



Own Situation ! 

# 

Atlantic t 

Nothing to report. 

Telegram was received from Buenos Aires with the replies from the 
First Officer of the GRAF SPEE to the questions put by Naval Staff 
on 7 Jan.: 

Question li 

Yfliy could the GRAF SPEE not continue the action until the EXETER 
was sunk ? 

A definite answer is impossible; this could only be given by the 

Captain* 

Possibilities* 

a » Uncertainty as to the speed of the EXETER after she was out of 

sights 

b» The possibility of further enemy forces in the vicinity on the 
basis of our own radio monitoring report© 

c Damage limiting our own seaworthiness* 

Question It 

What were the reasons which caused the SPEE to put in to Montevideo 
during the action ? 

Damage confirmed after the action© 

Question" 3j 

Stock of ammunition and guns out of action when the ship put in to 

port 1 

Main armament 306 

Secondary armament 423 

Anti-aircraft 2470 

Torpedoes 6, 

Out of action* Foretop gear of the forward anti-aircraft command post; 
starboard anti-aircraft; secondary armament - third port gun and hoists of the 
forward group and the anti-aircraft ammunition hoists. Port torpedo range 
transformer, starboard torpedo direction indicator, foremast gear, torpedo tuba 2, 



-72- 

CONFIDBNTIAL 



14 Jan e 1940 CONFIDENTIAL 



Question 4i 

Condition of the engines and maximum speed possible before and 
after the action ? 

Engines capable of maximum speed before and after the. action except 
for the cracks reported in all auxiliary engines* Oblique exhaust 
casings of the forward installation and funnel of the auxiliary boiler 
damaged, causing breakdown of the auxiliary boiler, on account of the 
danger of explosion from the furnace oil trap tank. As a result, 
breakdown of the fuel oil and lubricating oil separators « Purified 
fuel oil for 16 hours after the action. 

The report now gives with impressive clarity the following picture of the 
operational condition of the GRAF SPEE after she put in to Montevideo j 

1* Personnel ! 

Action readiness was not prejudiced to any extent worth mentioning by casualties 
to the crew, 

2* Material : 

Main armament* Fully operational 

Secondary armaments In working order except for the third port gun and the 
ammunition hoists for the forward group* As a result of this breakdown there 
were only 4 ammunition hoists available aft, so that it was necessary to carry 
ammunition forwarda 

Anti-aircrafts one third out of action* Anti-aircraft ammunition hoists out 
of action* Control restricted* 

Speed $ not affectedo 

Damage to the hull, through which the ship made water in seaway* The large 

amount of gunnery ammunition which was still available is surprising and 

materially exceeds expectations; at approximately 3/V of the main, and 

over half of the secondary armament amnunition, this considerably exceeds the 

previous assumptions of the Naval Staff* An action report of the SPEB is on its 

way. 



North Sea > 

An explosion occured aboard minesweeper M "98 (6th Minesweeper Flotilla) 
while picking up a type UMA mine* The captain and 13 men were killed. 



" ?3 " CONFIDENTIAL 



14 Jan. 1940 CONFIDENTIAL 



Ba ltic Seat 

In the Gedser Channel there is pack ice off the coast for about 
5 miles, further out the sea is ice free. Through-passage traffic 
is maintained during the day. The patrol vessels -which were 
stuck in the ice are free again. 



According to the Swedish press, ll f 597 ships passed through the 
Flint Channel during 1939 as against only 7,573 ships in 1938. 
This increase in traffic took place only during the period from 
September to December 1939; it must however, be taken into 
consideration that traffic through the Kiel Canal ceased almost 
completely during this period. It was very heavy in peacetime and 
most of it has obviously been transferred to the Sound. 



The thorough investigation conducted by the Commanding Admiral, 
Defenses, Baltic into the incorrect position of the n Great Belt 
minefield**, which has led to the loss of one patrol vessel, one 
subchaser and one trawler, is summarized in a report to the Naval 
Staff and provides the following datat 

The minefield was laid by the minelaying vessel PRKUSSEN with great care, 
employing the best of her knowledge and ability,, There is no question of 
blame involved j the false position can be ascribed to unavoidable sources 
of error* The following are basic lessons which can be drawn from it. 

1. The limits of a declared area must be chosen so that they definitely 
include the actual position of lay and make allowances for navigational 
difficulties uncontrollable in advance, which, as this experience has shown, 
can produce considerable deviations from the minelaying reports. 

2 9 Defensive minefields which adjoin the territorial waters of foreign 
states in order to exclude any possibility of by-passing them outside 
territorial waters, or minefields in whose vicinity there is constant 
traffic, must be laid systematically, i«e© the commencing and finishing 
points of the single rows of mines are to be fixed and marked beforehand 
with the greatest accuracy© Further, measurements of current are to be 
taken and the laying course is to be followed blind. 

3« If the measures as under 2„ cannot be carried out, the position of 
lay must be carefully checked as soon as possible after the minefield is 
laid. 



-74- 

CONFIDENTIAL 



14 Jan. 1940 



CONFIDENTIAL 



Submarine Situation: 



Atlantic j 



In the operational area: Submarine U "'44" 
On passage: 



Submarine U "34" in the north part of 

the North Sea 

Submarine U "25" in the central North Sea* 

On return passage* Submarines U n 32" , U "30". 

North Sea: 

In the operational area: Submarines U '*15 n , U "60" o 

On return passage: Submarines U "23", U "20". 

On account of the ice situation in the Baltic Sea, submarines U "9", 

U "14", U "13", U "7", U "17" and U "10", which are at present 

training, will be detailed to the North Sea operational area after 
17 - 23 Jan, 



Merchant Shipping s 

Own Shipping : 

In order to exploit the favorable enemy position which has arisen from the 
hunt for the steamer CONSUL HORN, the Ministry of Transportation, acting on 
the advice of the Naval Staff, despatched the following telegram on 14 Jan© 
to the Embassy at Caracas for transmission to the agent in Curacao: "As a 
consequence of the CONSUL HORN'S departure, use the temporarily favorable 
opportunity for departure of a total of 5 ships from Curacao and Aruba for 
Germany or Spain. Ministry of Transportation©" 

The Ministry of Transportation has sent orders to the Consul General in 
Batavia for the four ships lying in the Dutch East Indies - the MONI RICKMERS, 
the SCHEER, the SOPHIE RICXIJERS and the RENDSEURG - to proceed to Japan, in 
line with the general transfer of ships to make the Northeast Passage - insofar 
as this is materially possible and there is no difficulty with regard to the 
bills of lading. 



CONFIDENTIAL 



- 75 - 



14 Jan. 1940 CONFIDENTIAL 



Foreign Shipping: 

The sale of eight large U.S. ships of the United States Line to a newly- 
formed Norwegian company is said to have fallen through because of objections 
on the part of the Norwegian Government I 

For a summary of losses sustained during the war by enemy and neutral 
merchant fleets, and a survey of merchant shipping traffic of the Scandi- 
navian countries, see report under 3/3kl. FH No, 1/1940 " Foreign Merchant 
Shipping" , 

According to the report, we must reckon that during November and December 
supplies for Great Britain from the Ealtic Sea area continued almost unre- 
stricted by evasion of the German control measures, though this involved 
considerable difficulties, and that a further two million or so BRT of con- 
traband goods, carried by ships of the Nordic neutrals, escaped seizure by 
Germany in the Ealtic and North Sea, The following points are to be kept in 
mind when devising countermeasures: 

1. Ealtic States (provisions, wood): 

Continuation of previous procedure by means of holding up, 
long investigations, circuitous changes of routs, making of 
numerous difficulties, constant raising of working expenses, 
to make the voyage to England a losing business, and break 
the profit-seeking of the Baltic shippers and exporters, 

2, Finland (wood, cellulose): 

As a result of the Rus so-Finnish conflict exports to England 
are still strictly limited. 

Further developments remain to be seen, 

3, Denmark (foodstuffs): 

Gratifying swing-over of trade towards Germany, Foodstuffs 
are conveyed to Great Britain in accordance with an agreement 
with Germany, Suspicion of abuse of the Malta Treaty so far 
not confirmed. 

There are prospects that the agreement will be broken off 
within a short time. 

4. Sweden (wood, cellulose): 

Extensive support to the enemy. Almost all the Swedish shipping 
firms are shipping to England by tramps, Gotenburg is the 
largest European port of transshipment to England, The heaviest 
political pressure and most intensive operations against 
merchant shipping are ncessary, 

CONFIDENTIAL 
- 76 - 



14 Jan. 1940 CONFIDENTIAL 



5* Norway ; 

No longer any direct support to Great Britain from Norwegian 
shipping companies. The fleet of tankers has been withdrawn 
almost completely from supplying the enemy. Heavy transit 
traffic in Narvik and Trondheim, extensive transshipment traffic 
in Bergen from neutrals to British ships. Vigorous operations 
against British merchant shipping from Norway to England by 
submarines, and air and surface forces are therefore an urgent 
necessity. 



- 77 - CONFIDENTIAL 



15 Jan. 1940 CONFIDENTIAL 

Conference on the Situation with the Chief, Naval Staff , 
Special Items ; 

1. The Fuehrer has not consented to air attacks on the merchant ships lying 
in the Downs proposed by the Commander in Chief, Air Force, as they consist al- 
most exclusively of neutral ships. 

2. The Fuehrer has agreed to the Naval Staff's proposed announcement of the 
minefields for operation "Gelb" in the form of announcing a declared area, 

3. Group West has drawn attention to the inadequate number of patrol and 
minesweeper flotillas in the North Sea and has requested the formation of 
more flotillas. In view of the shortage of personnel and material the Naval 
Staff considers the formation of further flotillas out of the question for 
the present. It remains to be seen, however, whether single patrol units 
could be withdrawn from the Baltic to the North Sea when the question of 
closing the entrances to the Baltic Sea (testing of the minefields in the 
Belts, readjustment of the Sound barrage) has been settled* No such with- 
drawal is possible for the present, 

4» After weighing the advantages and disadvantages to be expected, the 
Chief, Naval Staff has ordered a public announcement of the destruction of 
the two British submarines UNDINE and STARFISH, since their loss is now known 
to the enemy. At the same time, efforts are to be made to bring the existence 
of new and especially effective German anti-submarine measures to the enemy's 
knowledge via foreign channels, in order to deter submarine operations in the 
Heligoland Bight still further. 



Items of Political Importance: 

There is news from Holland and Belgium concerning mobilization and special 
military defense measures against a possible attack by Germany, The press, 
however, contains reassuring articles on the situation and is endeavouring 
to calm the panic which has arisen, Keports from Paris give 20 Jan, as the 
date for the German offensive (!!!), 

Rumors concerning a military alliance between Holland and Belgium are being 
denied at the Hague, according to a Reuter report. 

The British press speaks of a German "bluff" designed to shatter the nerves of 
her victims. 



- 78 - CONFIDENTIAL 



15 Jan. 1940 CONFIDENTIAL 

Intelligence reports from America state that Roosevelt - acting on alleged 
reports concerning a Rus so-German offensive alliance - has held out the 
prospect of help from his own and other American states to the Government 
of the Netherlands. The United States' answer to the Finnish appeal through 
the League of Nations is, on the other hand, very cautiously worded* 



For the Hungarian Foreign Minister's full statement on his conference with 
Count Ciano, see Political Review No© 12 » 



Special Reports on the Enemy ; 

Atlantic t 

Great Britain ; 

The Consul at Reykjavik reports: 24 armeo" British trawlers, with a cruiser 
and an auxiliary cruiser in attendance, are fishing west-northwest of Iceland, 
The Spanish Intelligence Center reports as follows on the patrol service off 
Gibraltar: more guard boats, patrol boats, converted yachts, etc, and there- 
fore fewer destroyers have been operating lately on patrol duty. Four zones 
directly off Gibraltar can be identified: 

1. From Algeciras Bay to south of Punta CarnerO - one or two guard boats, 

2, From south of Suropa Point as fan as approximately the middle of the 
Straits between Suropa Point and Ceuta - two guard boats. 

3c From the middle of the Straits between .Suropa Point and Ceuta to south- 
west of Ceuta - one minesweeper or destroyer, 

4* In the eastern half of the Straits between Tangier and Tarifa, in the 
middle of the Straits, from time to time closer to the African coast - one 
destroyer. 

Six of the patrol vessels are based on Gibraltar, while four others are also 
drawn upon for escort duties. Two vessels of the yacht type, two minesweepers 
and about six destroyers are also definitely stationed there. 

According to Associated Press reports from Buenos Aires, British warships 
are combing the South Atlantic for a German cruiser or auxiliary cruiser. 



- 79 - CONFIDENTIAL 



l. r > Jan. 1940 CONFIDENTIAL 



North Sea t 

It is reported from Bergen that a fairly large convoy rdll start from 
Floroe for the west on 15 or 16 Jan. 

Normal patrol activity only detected on the east coast. 

Shipping Losses ? 

The Dutch steamer AEEND8KF.RK (7,906 tons), proceeding from Amsterdam to 
South Africa with a mixed cargo, was sunk 100 miles from Quessant by a 
torpedo fired from a submarine (U ! *44 w ) after being stopped and searched. 

The British steamer ATLANTIC SCOUT (4,575 tons) sank after running aground; 
the British steamer KILDALB (3,900 tons) struck a mine near Sunk lightship 
(and was severely damaged). 



The French Navy Minister, Campinchi, revealed the following to a 
Havas representative on 13 Jan.: 239 merchant ships were checked 
by the French Navy, 622,000 tons of contraband were stopped and 
260,000 tons were confiscated. 30 German submarines were 
destroyed, 10 (?) of these by French forces, that is, six by destroyers 
and patrol vessels, three by the SIROCCO, one by the ADROIT, one by 
the ADMIRAL MOUCHEZ and one by the COMMANDANT DU BOC. 



Own Situation : 

Atlantio : Unchanged, 

North Sea » 

Nothing special to report. Air reconnaissance and reconnaissance 
of lights had to be canceled because of the weather. 

Baltic Sea : 

Attacks on merchant shipping are being carried out by the PREUSSEN 
and the KCENIGIN LUISE. 

Minesweeper w ll w is carrying out olearing sweeps in the Sound in 
order to straighten the mine-free passage through the barrage. 
The ice situation in the Belts is unchanged, the Gedser Channel 
is for the greater part ice-free. 



■SO- 
CONFIDENT IAL 



15 Jario 1940 CONFIDENTIAL 



After calculating the work to be undertaken in the construction of a canal 
through the Falsterbo peninsula, it has been estimated that the work would 
probably take a year. This is assuming that the necessary dredging gear 
could be procured. It was also confirmed that considerable difficulties 
might arise from stony or rocky subsoil, and that, after completion, 
obstacles could arise from unforeseen currents. 



Merchant Shipping : 

On 31, Dec 1939 there were 744 sea-going ships, totaling 2,558,663 BRT, in 
hone waters, made up as follows t 

Requisitioned by High Command Navy 108 ships totaling 455,031 BRT 

on the eastward run 

on the Baltic ore run 

on the Norwegian ore run 

in German ports and on the general 

Baltic run 
laid up and under repair 
(including passenger ships) 

744 " " 2,558,663 BRT 



6 


n 


II 


42,307 BRT 


55 


n 


II 


202,218 BRT 


47 


ti 


It 


361,641 BRT 


459 


«t 


It 


912,429 BRT 


69 


H 


II 


585,035 BRT 


(20) 


tt 


II 


(378,395 BRT) 



According to a report from the Naval Attache in liadrid on 4 Jan. there are 
increasing rumors concerning U.S. plans to equip Vigo as a European port 
of transshipment. 



Evening Verbal communication from the Armed Forces High Command that the 
Fuehrer has decided that state of readiness for "Gelb" must be. 
maintained. Five day period of notice as before. Decision 
reserved from day to day,, 



2200 The Operations Officer, Group West was informed (by telephone) 
concerning the alteration of the keyword serial number to 6315. 
The Staff Officer, Commanding Admiral, Submarines was advised 
to th;e same effects 



CONFIDENTIA L 
- 81 - 



15 Jan. 1940 GCNF-IDEMXIAL 



Naval Staff's reflections on the conduct of the Propaganda War j 

The Naval Staff views the development of German propaganda since the 
commencement of the war with increasing anxiety. Leaving aside the effects 
of this propaganda in other fields, the Naval Staff has reached the conclusion 
that in the field of naval warfare , for which it is responsible, present 
German propaganda is not completely fulfilling its function as an auxiliary 
weapon to support strategic demands. Rather it is becoming increasingly 
independent and has reached a stage that must - if the war continues - act 
more and more as an aggravation to, if not as a direct danger to the conduct 
of the war. 

The present propaganda is calculated to undermine confidence in the 
credibility of German war reporting. A new system of reporting and direction 
of propaganda appears to be urgently necessary in military interests , The 
following steps should be considered: 

1. Instructions to the press, conveying regulations for the propaganda 
sections with regard to war reporting as a whole. 

2. Stricter and more comprehensive control of the press and radio in all 

questions of war reportingo 

3. Penalties for arbitrary disregard of instructions issued. 

For particulars, see comments made by the Operations Division, Naval Staff on 
these questions in letter to the Commander in Chief, Navy (Naval Administrative 
Staff) dated 9 Jan, (War Diary, part C, Vol. VIII). 

*************** ***************** 



CONFIDRNTIAL 
- 82 - 



16 Jan. 1940 CONFIDENTIAL 



Items of Political Importance : 

For explanation in the House of Commons on Hoar e-3eli she' s resignation, and 
Chamberlain's survey of the situation see Foreign Press Report* 

For the Sino-Japanese situation see Political Review No. 13. 

According to foreign radio reports, Great Britain - invoking her full 
belligerent rights - ha s not formally declined her consent to the creation 
of the neutral Pan-American zone, but has attached such severe conditions 
that this is in practice almost equivalent to a refusalo Great Britain 
demands a guarantee that the German Government will undertake to despatch 
no further warships to tho neutral zone, and at the same time the Pan -American 
States are to guarantee that no German merchant shi ps shall participate in 
inter-American trade 5 



Conference on the Situation with the Chief, Naval Staff , 
Special Items* 

1, Fuehrer ? s decision (see letter Armed Forces High Command dated 15 Jan«)$ 
State of readiness for "C-elb" must be maintained in the immediate future* 
Five-day alert Decision will be taken at any time, 

2. Group West requested permission on 13 Jan, to occupy R (Rottum, Tr.N.). 
Observers should be taken prisoner at A-hours, 

The Chief, Naval Staff has agreed to the improvised execution of these measures, 
No special preparations or provisions are, however, to be made, as if they 
become known, countermeasures can only be expected, Vfe must allow for the 
possibility of a later execution of the operation, owing to the decision to 
make no preparations. 

Group West has been informed accordingly by teletype, 

3 o Report by the Chief, Operations Branch, Operations Division on the Naval 
Staff's present plans regarding future warfare in the Atlantic , 

a. The LUETZOW will probably be operational at the beginning of March, i.e. 
her dockyard period will be over, and training and firing exercised carried out, 

Breakthrough into the Atlantic in suitable -weather. Will operate against 
merchant shipping in the South Atlantic and Indian Ocean, 



CONFIDENTIAL 
- 83 - 



16 Jan. 1940 CONFIDENTIAL 



b Auxiliary cruisers: Five auxiliary cruisers will be operational from 
15 Feb to 6 April. All are equipped for minelaying ("33" - 400 mines, 
"36" - 270, "15" - 60, "21" - 60, "3.0" - 60). 

Operational areas t South Atlantic and Indian Ocean, (For more detailed 
data on the auxiliary cruisers and their cruising range see War Diary, 
Part B, Vol. V, 91). 

c. Experiences gained from the "GRAF SPEE operations" (see also evaluation 
of the SPEE -operation in War Diary, Part 0, Vol, I). The SPEE executed her 
task in the war against merchant shipping very well. The tonnage sunk in a 
78-dey period of operations was vary good. She remained only a short time 
in nearly all the operational areas, she always turned away into another 
area after the first success. The operational area was always left before 
enemy defenses appeared on the spot. These tactics have stood the test 
extremely well. 

This procedure was altered in the last operational area on the La Plata route; 
this high risk was probably run in full knowledge in order -to gain further 
tangible success before commencing the homeward voyage. 

Conclusions drawn from the action * Host unfavorable moment. Action enjoined 
in full knowledge of the situation. 



j' 



The question of whether evasive action could still have been taken cannot be 
answeredo From the point of view of future operations against merchant 
shipping, an attempt to evade the enemy would have been correct, so long as 
tactical conditions permitted the out-distancing and shaking-off of three 
cruisers* After battle contact had been established, however, the enemy 
should have been attacked with every weapon at the SPEE's disposal until the 
main enemy was beaten. The course of the action demonstrates the great 
difficulties and extraordinary risk incurred by a pocket battleship fighting 
out an action with 2-3 cruisers, since a few direct hits, unimportant in 
themselves but if unlucky can rob the pocket battleship of the power to make 
use of her main element i.e. the wide extent of the Atlantic. The strategic 
effects of the SPEE-operation are very considerable. 

do Conclusions drawn with regard to further operations against merchant 
shipping in extra-territorial waters: 

The situation requires the immediate resumption of warfare in the Atlantic 
with every vessel at our command. 

1. Pocket battleships : 

The fundamental idea must be to threaten enemy sea communications in as 
widespread an area as possible. Great mobility. The task must lie more 
"*" n dl sru P"fci n g ©nemy trade routes and in causing the enemy constant disquiet. 
The number of sinkings is not to be the standard of success, it is only the 



CONFIDENTIAL 
- 84 - 



16 Jan. 1940 CONFIDENTIAL 



means of attaining this disruption and disturbance* The tying-up of great 
numbers of enemy forces in order to bring relief to the home theater of war 
is the goal to be striven after. Actions against enemy warships are not 
compatible with the main task and are therefore to be enjoined only when 
unavoidable* Then, however, everything should be thrown into the fight, 
Th9 operational area must be altered frequentlyo Operations against the 
British whaling fleet must unfortunately be abandoned this year, as forces 
will not - contrary to original expectations - be ready for operations in time. 

No tactical cooperation between auxiliary cruiser and the pocket battleship, 
since the pronounced difference in the tactical attributes of these two types 
of ships only brings disadvantages. On the other hand, operational 
cooperation necessary under the control of the Naval Staff. - Allocation of 
suitable operational areas - Exploitation of the reciprocal effects of 
individual merchant raiders - Snort signals as useful radio procedure between 
the Naval Staff and Atlantic forces, and also between the merchant raiders. 
The use of the pocket battleship for a long operation in the South Atlantic 
and Indian Ocean from the beginning of March to the end of August, from which 
may be expected a long-term threat to far-extended trade routes which the enemy 
finds difficult to protect, and considerable diversionary effect. Good chances 
of success - favorable opportunities for changing the operational areas. 

II. Auxiliary cruisers : 

Plans: Merchant raiders HSK "1" and "2" (Ships "36" and "16"): Indian Ocean. 
Merchant raider KSX "3" (Ship "21"), with two submarines if possible, 
at the beginning of March: Canada. 

Merchant raider HSK "5" (Ship "3"): Indian Ocean, Persian Gulf 
(minelaying) . 

Merchant raider "4** (Ship "10"): as the situation dictates, the South 
Atlantic or in addition the Indian Ocean© 

Cooperation with two submarines as scouts and torpedo-carriers in the Halifax 
operation. Merchant raider will also be tanker and supply ship for the 
submarines (oiling near Greenland?). 

It is expected that the submarine will prove an effective complement to the 
merchant raider. In order to gather experience it is at present proposed to 
use them for only limited operations. In so doing* the Naval Staff is well 
aware of the disadvantages arising from the fairly long absence of two boats 
from the P^uropean theater of operations* The success to be attained from the 
appearance of mines and torpedoes at distant trade junctions in the British 
Empire is, however, estimated as exceedingly high. The auxiliary cruisers' 
breakthrough into the Atlantic will be difficult because of the surveillance 
at present exercised at the approaches to the North Sea. Everything possible 
must therefore be done to support the breakthrough (Special Groups, planes, 
submarines). For psychological reasons special importance is attached to 
getting the first auxiliary cruiser safely through. 



CONFIDENTIAL 
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16 Jan, 1940 CONFIDENTIAL 

Special Reports on the Pnemy t 
Atlantic: 



Great Britain ; 

Radio bearings placed some units west of the Hebrides and in the western 
approaches to the Charm e] • An enti -submarine hunt was started on the 
basis of a location of a German submarine. 

The cruisers CUMBERLAND , DORSETSHIRE, and SHROPSHIRE will probably go into 
dock at Simonstown at the beginning of February, 

The Intelligence Center, Spain reports the departure of a convoy today at 
1400 from Gibreltar Strength 34 ships escorted by two destroyers. The 
convoy, proceeding via a point 100 miles west of Gibraltar and 150 miles west 
of Cape St, Vincent is probably making northwards. The Flag Officer, 
Atlantic Fleet and French destroyers were also informed of the route, so 
that it may be assumed that the convoy will be relieved or reinforced by 
French forces. 

In addition to the dangerous area near Bar lightship already reported on 
11 Jan. off Liverpool, a further such area was announced within a radius of 
3 miles around a point 53° 37' 30" N and 03° 29 « 15" W. 



France t 



Radio monitoring reports convoy positions and patrol activity e The EMILE 
BERT IN, the DUGUAY TROUIii, the large destroyer EPERVTER and three more vessels, 
probably submarines, are at sea in the Casablanca - Canary Islands area* 
One cruiser of the Mediterranean Fleet is proceeding from Casablanca to Dakar, 



North Sea * 

Since Germany announced the sinking of two British submarines, the British 
Admiralty admits the loss of the submarines UNDINE, STARFISH and SEAHORSE. 
All three are supposed to have been entrusted with specially dangerous 
missions. It can be concluded from this that the SEAHORSE was also operating 
in the Heligoland Bight and that this is one of the sinkings reported as 
very probable by the Commanding Admiral, Defenses Baltic. 



CONFIDENTIAL 
- 96 - 



16 Jan. 1940 



CONFIDENTIAL 



The cruiser AURORA, which has not teen heard of since the air attack on 
25 Nov. reappeared in radio traffic for the first time on 15 Jan. 

According to radio monitoring a light French vessel obviously struck a 
mine in the southern part of the North Sea. 

Sh 5. pping Losses : 

A large tanker struck a nine and sank two miles off Horlstone Point (south 
coast of the Bristol Channel). The British steamer STANLAKE (1,700 tons) 
ran & ground off Sunderlando 



Own Situation: 



Atlantic: ) 



North Seat) 



) Nothing to report. 



Baltic Sea : 

Operations against merchant shipping by the HANSESTADT DANZIG and 
the KOENIGIN LUISE. 

Violent easterly storm prevented patrol and control service • No 
air operations. Pilot service in the Sound and minefield patrols 
in the Great Belt and Gedser had to be withdrawn. 

Rus so-Finnish conflict : 

According to a radio monitoring report of 14 Jan. Russian forces 
were informed in a secret directive that a larger area off Baltic 
Port than had previously been closed to shipping, was going to be 
mined. 



Submarine Situation: 



Atlantic: 



In the operational area; 



Submarine U "44" is 200 miles southwest of 
Quessant and reports: "Am proceeding south- 
wards* Three steamers sunko The ARENDSKERK 
because of an attempt to escape, use of radio, 
contraband. Convoy not picked up. Anti- 
submarine and air patrol. Weather* favorable. 
Heavy neutral traffic, mostly Italian." 



CONFIDENTIAL 



- 87 - 



16 Jan. 1940 CONFIDENTIAL 



On passage t Submarine U "34" west of the Orkneys* 

Submarine U "25" west of the Shetlands. 

On return passage: Submarine U "30" Route "Blau", 



North Sea i 

In the operational areas Submarines U "15", U "60" • Boats have 

received orders that their assignments 
according to operational orders ("Gelb") are 
canceled. 

Submarine U "15" is to use her torpedoes* 
Submarine U "60" is to operate in the area 
between the Maas lightship and Nordhinder 
lightship. 

On passages Submarines U "59", "61", "22"; 

Submarine U "59" at Cross Sand, submarine 
U "61", in a position north of the British 
declared area, is proceeding to the eastern 
edge of the declared area to observe traffic, 
submarine U "22" off the Pentland Firth, 

Entered port s Submarine U "20" 1 (for short report see 

Part B, Vol ©IV), Boat reports 3 shots at 
a 2,000 ton steamer without result; probably 
failures due to non-firing. One 3,000 ten 
steamer sunk east of North Head, 



Merchant Shipping ; 

Losses t 

The steamer JANUS was scuttled by her crew after being stopped by French 
naval forces, (Steamer left Vigo on 13 Jan,) 

Enemy Commerce : 

According to a report from a captain, a British naval captain is said to have 
an office in the Consulate General in Bergen; he controls convoys along the 
Norwegian coast, A steamer occasionally chartered by this officer is used 
to transfer the pilots. 



CONFIDENTIAL 
- 88 - : ! 



17 Jan. 1940 CONFIDENTIAL 



Items of Political Importance : 

The German Government has made a tentative offer to Soviet Russia to act as 
mediator in the Russo-Finnish conflict* The Russian Government, however, 
is resolved to continue the struggle. 



The British" reply to the Fan-American protest concerning violation of the 
safety zone is regarded as unsatisfactory in the U.S.A. Internment of 
German merchant ships is considered impracticable. 



The tension has slackened a little in Holland and Belgium; the necessity 
for maintaining the increased state of alarm is emphasized, however. 



Intelligence reports from America indicate that the U.S. Military Headquarters 
is giving more and more attention to the cooperation of the 21 American States 
in military policy. In general, the United States ere trying to use the 
powerful position which they have gained as the result of the European conflict 
to develop their Pan-American position. 



Special Reports on the Enemy t 

Atlantic : 

Great Britain : 

After two ships were lost off Liverpool through striking mines, two areas off 
Liverpool, each with a diameter of 3 miles, \vere already announced as suspect 
of mines; The British Admiralty finds itself forced, as a result of further 
losses, to close the port of Liverpool completely for the first time as a 
temporary measure on the evening of 17 Jan. and to forbid shipping to proceed 
east of 3° 35' W. The mines so well laid by submarine U "30" have therefore 
had especially far-reaching effects. 

Movements of forces : 

The Commander of the British Naval Forces off the east coast of Canada, who 
arrived in Liverpool on 30 Dec. in the REVENGE with the second contingent of 
Canadian troops, is at present returning to Canada with the ROYAL SOVEREIGN. 



CONFIDENTIAL 
- 8S - 



17 Jan. 1940 CONFIDENTIAL 



The EMERALD, which was on escort duty to the west of the Channel on 10 Jan. 
has reappeared in the Canadian area. 

In the home area, radio monitoring detected various vessels at sea west of 
the Shetlands, Hebrides and North Channel, 

South Atlantic t 

Intelligence reports from America state that the cruiser EXETER has been 
beached in Port Stanle2' - , since she can no longer operate in the naval war 
as a result of the severe damage she 3ustained She is to be used as a 
floating battery as part of Falkland Islands' defenses. 

The report sounds credible© 

The AJAX, with the Senior Officer of the South America Division, left 
Freetown on 17 Jan., probably homeward bound. 

Mediterranean : 

The GLORIOUS put out from Alexandria on 15 Jan escorted by two destroyerso 

France t 

Disposition of force3j Battleships and the old battleship PARIS in Brest. 
Destroyers and large destroyers were detected on patrol along the coasts of 
Spain and Northwest Africa. The cruiser DUPLK3X and one submarine are at 
sea in the Dakar area. Submarines in the Azores-Canary Islands area are 
being relieved. Various convoy movements were intercepted. 

North Sea t 

The cruisers NORFOLK and CURLEW are at sea in the Rosyth area with a few 
destroyers, probably as escort for a convoy to Norway. Radio traffic in 
the North Sea area kept within the normal limits, but frequently bore 
indications of priority Submarines were reported in the eastern Channel 
and vessels were sent out on submarine hunt (none of our own boats). 

It is now. established that one of the vessels in the French 5th Destroyer 
Flotilla, which was carrying out a submarine hunt in the south part of the 
North Sea, struck a mine at 2226 on 16 Jan. 

Shipping Losses s 

West coast j The British steamer CAIRN ROSS (5,499 tons) sank near Bar 
lightship after striking a mine. 

The British steamer GRAZIA (5,642 tons) was severely damaged by a 
mine explosion one hour after putting out from an Irish Sea port. 



CONFIDENTIAL 
- 90 - 



17 Jon. 1940 CONFIDENTIAL 



The crew was rescued. The ship was beached at first, and was 
refloated later. The Belgian steamer JOSEPHINE CHARLOTTE 
(3,422 tons) sank after striking a mine off the southwest coast 
of England o 

East coast* The French steamer NOTRE DAMES DES DUNES (500 tons) sent an SOS 
from the south part of the North Sea (Hoofden), 



Own Situation i 



Atlantioj 



No reports from the ALTMARK, whose position is now assumed to 
be in the North Atlantic o 

According to discoveries made by the radio monitoring service and decoding 
service, the radio monitoring control station considers tl_«*y the battleship 
NELSON, which was reported to be in Great Britain by agents and prisoners 
of war, was probably damaged by a mine on approximately 15 Dec, The NELSON 
was observed at sea off the Shetlands on 30 Nov., was then in Port "A n 
(probably "Loch Ewe w ); next observed at sea on 13 Dec. without the Commander 
in Chief Home Fleet, and transmitted a radio message on 15 Dec. in which a 
mine was mentioned. On 7 Jan, the NELSON was lying in Portsmouth dockyard. 
The ship may have undergone temporary repairs at Liverpool in the meanwhile. 

North Sea i 

The operation under the Commander, 4th Destroyer Flotilla against 
the southeast coast of England (area near Cromer) commenced 
according to plan, but had to be broken off because of the weather. 
On the return voyage 30 type FMC mines with pins fell overboard 
north of the eastern tip of Terschelling, One of the mines 
exploded* The mines lie in grid squares 8316 and 8324, The 
failure of the operation is especially regrettable, since it must 
now be postponed for the present because of increasing moonlight, 
and other assignments. 

In his order for an exploratory sweep west of the declared area by the 6th 
Torpedoboat Flotilla (Commanding Admiral, Naval Forces, West Gkdos. 55 A I 
dated 7 Jan,), the Commanding Admiral, Naval Forces, West sanctioned the 
bringing in of prises through the declared area. The Naval Staff considers 
this step incorrect and has issued the following instructions to the Commanding 
Admiral, Naval Forces, West and to Group West and the Commanding Admiral, Defenses 
North « " Under no oircumstances are prizes to be brought in through the declared 
area. The very fact that the delcared area is being traversed - which certainly 

CONFIDENTIAL 
- 91 - 



17 Jan, 1940 CONFIDENTIAL 

cannot be kept secret from the crews of the steamers - lessens the effect- 
iveness of the minefield." 

Baltic Sea : 

Ice Situation : 

The ice situation in the Belts, off Gedser and in the Sound has* again 
worsened. The Danes have withdrawn some of the minefield markers and light- 
ships in the Eelts, Pilotage is carried out by day as far as possible. 
There is thick floe ice in the Great Belt as far as Revsnaes, The German 
northern pilot station cannot be maintained in the Great Belt because of 
pack ice. There is a light, but solid covering of ice in the Sound, and the 
southern entrance is frozen except for a narrow channel; steamers have, how- 
ever not yet been held up. Heavy traffic still proceeding through the Kogrund 
Channel. 

Operations against merchant shipping in the eastern Baltic Sea are 
being carried out by minelayers. 

Air reconnaissance severely restricted. 

Submarine Situation : 

Atlantic : 

Submarine U "44" west of the Bay of Biscay. The boat has been 
informed of convoy movements. Bearings were obtained on the boat 
by French direction-finding stations during the transmission of 
her radio message on 16 Jan, The position located, however, was 
about 70 miles out. 

Proceeding to the operational area: 
Submarine U "34" northwest of the Hebrides 
Submarine U "25" west of the Shetlands. 

Sailed: Submarines U "55" and U "31", 

Operational orders for submarine U "55" (also for U "37" , U "41", 
and U "51") see BDU Gkdos, 59 0-Befehl Atlantic No. 21 j 

Task : Operate in the maritime area south of Ireland to west of 
Portugal, according to the Commanding Admiral, Submarines* Standing 
Orders No. 101-171* Exploit any opportunity to attack which may 
offer itself while outward and homeward bound as well as in the 
operational area. Delays arising for this reason en route must 
be taken into account: Endeavour to cooperate with other submarines. 
Operational area for submarine U "55" - BE 30 (southwest of Ireland) 
(Operational areas for the other boats in accordance with 
operational order)* 

- 92 - CONFIDENTIAL 



17 Jan. 1940 CONFIDENTIAL 

Assignment for submarine U "31" ; Minelaying operation in Loch Ewe. 

Entered port ; Submarine U "30" . 

North Sea ; 

In the operational area: Submarines U "32", U "15", U "60". 
West of the declared area: Submarines U "59", U "61". 
Proceeding to the Orkneys area: Submarine U "22". 
Sailed: Submarines U "9" and U "57". 

Special Items from Submarine Warfare against Merchant Shipping : 

Great stress is being laid on the sinking of the Dutch motor vessel ARENDSKERK 
in Holland, and it is said to have made a very strong impression in Rotterdam 
shipping circles. The sinking has been judged as the prelude to further in- 
tensification of German naval warfare and the fear is expressed that Germany 
wishes to cut the supply of goods from Holland and Belgium to allied countries 
entirely. The ARENDSKERK shipping company is said to have suspended activi- 
ties, affecting 25 ships for the present. 

Merchant Shipping : 

A survey of German merchant ships still lying in neutral ports gives 
the following picture: 

In neutral ports: 235 ships - 27.7 % 

which includes those chained up - 24 ships 
and also those not considered able 
to return home: 

a* because of the unfavorable 
position of the bases (Medi- 
terranean, Black Sea, Red Sea, 
Persian Gulf) 73 ships 

& 5 without radio 

b. scheduled for special 

missions: 41 ships. 

There are therefore 92 ships at present whose return to Germany is still 
pending. 



The following special task was assigned to the Commander, Naval Air, West 
(Brigadier General Coeler) while retaining his present office, in an order 
from the Commander in Chief, Air Force dated end of December 1939: 



CONFIDENTIAL 
- 93 - 



17 Jan, 1940 CONFIDENTIAL 



"Promotion and further development of aerial mining " 

In this special province the Commander, Naval Air, West is placed directly 
under the Commander in Chief, Air Force, to make suggestions with regard to 
the further development of the apparatus as well as the training of the 
specialized personnel, and in so doing work in direct conjunction with the 
offices of the German Air Force General Staff concerned. Within the scope 
of this special assignment, the Commander, Naval Air, West has under his 
command; 

1, 7th Squadron, 26th Bomber Wing 

2. one squadron of 1st Group, 30th Bomber Wing 

3 C later, after formation, 1st Squadron, 40th Bomber Wing. 

(At present as experimental and training formations, at the same time to clear 
up undecided questions with regard to aerial mine warfare*) 

A course for aerial rainelaying personnel is being arranged at the German Air 
Force Ordnance School (Naval Air) at Dievenow. Three minelaying bomber 
wings are to be formed later. 

The Naval Staff welcomes the concentration of training of the aerial mine- 
laying units under the Commander, Naval Air, West whose main tasks - sea 
reconnaissance, occasional bombing of naval targets, aerial" mine warfare 
against short-range targets, and operations against merchant shipping - 
must remain unaffected by the assumption of the new duty, and be ensured by 
suitable arrangements. 

The Air Force General attached to Commander in Chief, Navy considers that no 
weakening of the naval air formations in favor of the aerial minelaying formations 
is to be expected© Effects on personnel are at present slight, so that no 
detrimental effects of any consequence to the personnel situation are to *b"e 
feared 9 

Naval Group Command, West, too, welcomes the fact that the Commander, Naval 
Air, West has been entrusted with the formation and training of the rainelaying 
squadrons because of his experience, and considers this command the best 
guarantee that these formations will operate in close conjunction with Group 
West and will participate in other naval operations. 

Three commands will have to cooperate in the future conduct of air operations 
against Great Britain s 

Commander Naval Air, West t Sea reconnaissance and occasional bombing of 
naval targets, attacks on merchant shipping, aerial mine warfare against 
short-range targets. 

Xth Air Corps t Bombing of naval forces at sea and in port, also harbor 
installations! attacks on merchant shipping. 

-94- 

CONFIDENTIAL 



17 Jan* 1940 CONFIDENTIAL 



Minelay ing Air Corps: Aerial mine warfare along the entire coast of Great 
"Britai"n"~an<i in her 'Harbors* 

Group West in so doing draws special attention to the fact that mine warfare 
by air and surface forces is one and the sane and that minelaying operations 
by naval forces must be kept up continuously and carefully synchronised. 
Group West considers the appointment of a General, &ir Force to Group West as 
the representative of the Commander in Chief, Air Force a serviceable solution 
to the question of close cooperation; he will direct the operations of the Xth 
Air Corps and Aerial Minelaying Corps on behalf of the Commander in Chief, 
Air Force after adjusting them to the requirements of naval warfare by issuing 
operational instructions* 

Re-or gani zat i on of the Staff of the Commander, Naval Air has already commenced , 
with a view to such an organization. The Commander, Naval Air f s former Chief 
of Staff, Colonel Czech, takes over the minelaying formationse LieutoCol. 
Geisse will take over the duties of the latter The Naval Staff considers that 
it is quite a feasible proposition to carry out the organization as suggested 
by Group West, 

With regard to operations by aerial minelaying formations. Naval Group Command 
West takes the view - in fundamental agreement with Naval Staff - that mine- 
warfare carried out by air forces off the more distant coasts of England, 
especially on the we st and southwest coasts should not be commenced until it 
can be done suddenly 5 simultaneously and on a large scale, since by this means 
the greatest <- and in conjunction with the other means of naval warfare 
perhaps even decisive - effect, can be attained* 

In the. Groups opinion, aerial minelaying operations should be limited to the 
area formerly considered, perhaps extended to the east coast from Dover to 
Newcastle, until the planes and aerial mines necessary for the large-scale 
operation are ready* (For Group 1 s letter on aerial minelaying operations see 
War Diary, Part C, Vol* VI, Mine Warfare,) 

It is not yet possible to give a final verdict on the question of whether it 
was correct to use the aerial mine for the first time as early as November 
1939 i*e* at a moment when a sufficiently large number of mines and mine carrying 
planes was not yet available. The fact remains that the aerial mine was 
used on the southeast coast of England and that its existence thereby be came 
known to the enemy* Patrol flights and defensive patrols, attacks on our 
airfields, preparation of fighter formations, and erection of numerous balloon 
barrages on the east coast clearly show that the enemy is conscious of the 
danger threatening him and has resolved on large-scale counter measures* 
Naval Staff , in agreement with Group West, considers that since the dropping 
of mines from planes on the east coast has been begun and detected by the 
enemy, we should now continue this with all the means at our disposal, following 
up our former objective in the conduct of offensive mine warfare in .the North 
Sea, namely that of making the east coast of England and its ports impassable 
until any merchant traffic is completely suspended© 

-95» 

CONFIDENT IAL 



17 Jan. 1940 CONFIDENTIAL 



Conditions on the west coast of England are different. Although the enemy must 
also be expecting the dropping of mines from planes in this area, he will in 
all probability - in the endeavour to protect the east coast ports which are 
particularly endangered and at the same time to protect the interior from air 
raids - first build up his main line of defense on the east coast with fighters, 
searchlights, anti-aircraft batteries and balloon barrages. He will not set 
to work on the effective defense of the west coast until the east. has been pro- 
tected, possibly not even until the western ports are actually threatened with 
attacks by aerial mines. 

Under these circumstances it seems best to leave the aerial mining of the west 
coast and its important ports and bays until a moment when the stock of mines 
and the number of suitable mine-carrying planes will enable the execution of 
a large-scale minelaying offensive or continuous minelaying operations on the 
enemy west coast. 






- 96 - CONFIDENTIAL 



18 Jano 1940 CONFIDENTIAL 

Conference on the Situation with the Chief, Naval Staff 

Special Items > 

• 
1, The following directive was issued by the Armed Forces High Command 
in an order dated 17 Jan flp canceling the former orders regarding intensified 
operations against merchant shipping: The Navy, i.e. submarines, are 
permitted, with immediate effect, to sink all ships without warning in the 
sea areas off the enemy coasts, in cases where it is possible to attribute 
the sinking to mines. 

In these cases the procedure and action taken by the submarines must be 
compatible with the fact that the sinking is to be claimed as the result 
of a mine. Ships of the U.S.A., Italy, Japan, and Russia are exempt from 
these attacks (marginal note: Sweden). 

As long as the Ge rman-Dani sh treaty regarding the export of Danish foodstuffs 
to Britain (Maltese Cross Treaty) remains in force, Danish ships marked with 
the Maltese cross are also to be exempt from the above-mentioned attacks on 
the voyage to and from England. 

Attacks on enemy exports, as reprisal for the British Order in Council will 
be sanctioned as soon as the law prepared has been passed and released for 
publication by the Fuehrer 

The instructions issued in OKHil/rtFA 22249/39 Gkdos. Chefs, dated 30 Dec. 1939, 
regarding permission to sink Greek ships without warning are amplified to 
the effect that the attack must be made' undetected. It must be possible 
to deny the sinkings of these steamers when the expected protests are made. 

When warfare is intensified the Air Force is at liberty to attack, among 
other targets, especially the troop transports from England to France, 
Belgium or Holland including the ports of embarkation and disembarkation. 
Attention is, however, expressly drawn to the fact that it does not lie 
in the interests of the war as a whole to let loose an all-out air war on 
Great Britain on our own initiative before we have created a favorable base 
for operations and strong forces suitable for operation against Great 
Britain are available. 

The orders for the Navy contained in this directive now afford far-reaching 
opportunities for the Naval Staff to conduct effective operations against 
merchant shipping in the waters off the enemy coasts, though the necessity of 
sparing benevolent neutrals certainly still remains in force. Submarines 
were formerly at liberty to attack without warning in the area in and off 
the Bristol Channel and in the area off the northeast coast of Scotland from 
the Firth of Forth to the Shetlands. In an endeavor to make the intensifi- 
cation of warfare against merchant shipping gradual, corresponding to the 
forces available and opportunities for attacks, the Naval Staff at present 
plans the following extension of former measures. 

-97- 

CONFIDENTIAL 



18 Jan, 1940 CONFIDENTIAL 

1« Extension eastwards of the area off the northeast coast of Scotland 
in which unrestricted offensive action is permitted, 

2* Extension to the 200 m line of the permitted area in the Bristol Channel* 

3 Liberty to attack without warning in the northern approaches to the 
English Channel, with the exception of an area along the Dutch-Belgian coast. 

The pretense of hits on mines must be maintained i.e. the boats must remain 
unseen, using electric torpedoes, and may fire without warning only in areas 
in which the sinkings can be attributed to mines* 

The maintenance of this pretense has, regrettably, been made very much more 
difficult lately by the more frequent occurence of torpedo failures * Speedy 
elimination of the deficiencies still inherent in the magnetic pistol is an 
urgent strategic and political necessity and Professor Cornelius, who has been 
commissioned with further development of the torpedo, is giving his entire 
attention to this matter A successful outcome is expected shortly© 

A blockade of the English Channel to the west, by means of submarine attacking 
without warning in the western approaches to the Channel, is out of the question 
until the Dutch-Belgian question is settled, because of the neutral traffic 
proceeding to Belgium and Holland* 

If German warfare against merchant shipping is further intensified, in the 
Naval Staffs opinion forbearance must still, for important political reasons 
(not in accordance with the Naval Staff's own wishes), be shown towards the 
benevolent neutral states of Italy, Russia, Japan and America - and also 
towards Ireland in the waters around Ireland - even after a general intensi - 
fication of warfare has commenced* 

The directive issued since the beginning of the war concerning operations 
ugainst merchant shipping are collected in the Appendix to the War Diary, Part B, 
Vol. V, Page 92* 



The Chief of Operations Branch, Operations Division reported on the Fuehrer's 
directive of 17 Jano, concerning the reinforcement of the numerical strength 
of the Army by the formation of 10 new divisions using every source available* 
The Navy and the Air Force have to support the new formations by handing over 
trained younger men (officers, non-commissioned officers and men from coastal 
defenses, anti-aircraft artillery etc.), insofar as the Army requires extra 
personnel from the other services. 



~ 98 ~ CONFIDENTIAL 



Ifl Jano 1940 CONFIDENTIAL 



For the present the Naval Staff does not anticipate that the Army will make 
any special demands which will seriously affect Navy personnel Since, 
however in the Fuehrer's new directive there is clear concentration on the 
importance of the Army, the Naval Staff foresees considerable difficulties 
in providing for and reinforcing the Navy's material needs© 

In the directive, the Air Force is assigned, among other things, this task* 
Fitting up and equipment of bombers as minecarriers, and injunctions to force 
ahead the mine production program » 

3 The Armed Forces High Command informed us verbally that in connection 
with the state of readiness for operation n Gelb" the Fuehrer has decided to 
alter the previous long alerts to very short ones e©g© alerts of approximately 
18 hours, so as to utilise favorable weather quickly and to maintain the 
element of surprise. 

In its support of Army operations this would affect the Navy as follows i 

a, Submarines no longer on constant alert, but provision for operation '*Gelb n 
within the range of normal submarine activity, 

be Operation n L" as before, 

c© Operation n M" by surface forces must be limited to specially urgent 
assignments© A few destroyers only will remain at 24-hours 1 notice. The 
Naval Staff is contemplating further possible changes since the issue of the 
new orders* 



Items of Political Importance 

1© The tension in Belgium has slackened considerably© Military preparations 
are going ahead methodically© The evacuation of certain areas continues© The 
Government at present shows no signs of giving up its policy of neutrality in 
favor of Anglo-French aid© The state of siege has been extended to new areas 
in amplification of previous orders by a Dutch royal decree© 

2 According to intelligence reports from France, French circles expect the 
German offensive against Belgium to commence on 20 Jan© (l) 

3© The Swedish Prime Minister declared in Parliament the Government's 
determination to maintain strict neutrality© Belligerents would not be 
permitted to transport war material through Swedish territory© No military 
bases would be ceded to foreign powers. 

4. For Great Britain's attitude to Norway (according to a Foreign Office 
report) see Political Review No© 15# 

-99- 

CONFIDENTIAL 



18 Jan. 1940 CONFIDENTIAL 

British propaganda in Norway is being intensified at considerable expense. 
There is, however no impression that Great Britain plans to take action against 
Norway in the immediate future. The Finnish conflict is working out in favor 
of Great Britain's ultimate plans. The Norwegian people would offer no resi- 
stance to a British occupation of their ports. On the other hand considerable 
opposition is to be expected from the Government. No more sympathy for Germany 
in Scandinavia after the Finnish affair. Denmark alone is reality neutral, 

5. Pan-American neutrality congress in Rio de Janeiro. The question of how 
to keep the war away from America is indicated as the main purpose of the 
conference* 



The Naval iittache in Estonia (Lieut. Cdr. Cellarius) has given a survey of the 
situation in Estonia and Latvia and the state of the Husso-Finnish conflict. 
No Russian successes to date. Heavy Russian losses, sometimes of catastrophic 
proportions I The Finns are using very skilful strategy against Russian 
supplies. Russia is at present not capable of more extensive action because 
of the great difficulties she is facing. No indications of a political or 
military extension of Russian positions in Estonia and Latvia, 

V erdict on Russian Navy ; much activity, but no kind of operational or tactical 
training or exercises. No gunnery training noticed. Crews seamanlike, but 
hardly military, very unassuming, on an average respectable, severely disci- 
plined. The officers indifferent, lacking interest, socially impossible. 

System of command unsatisfactory. The Navy is not in a position to carry out 
large tactical operations of any kind . No contact at all between Estonians 
and Russian military. Both sides have definite orders not to fraternize. The 
Naval Attach© does not believe that, in the long run, relations can remain as 
they are at present. It is possible that the Estonians are - while the Russians 
are contending with serious difficulties - endeavouring to regain complete 
independence, over-estimating their strength. 



Special Reports on the Enemy : 
Atlantic : 

Great Britain: 

The ban on shipping entering Liverpool as a result of the mines laid by 
submarine U "30" was lifted again at 1000 on 18 Jan. in a radio announcement. 
Neutral shipping is instructed to steer for Morecambe Bay lightship and then 
to keep as close to the coast as the safety of shipping permits, 

- 100 - CONFIDENTIAL 



18 Jan. 1940 CONFIDENTIAL 



A' reliable agent learned from conversations with Dutch ships' officers that 
Great Britain intends to equip the large Atlantic steamers and steamers on 
the Australian route with underwater torpedo tubes. This measure is said to be 
directed against German surface raiders. According to a report from the Con- 
sulate, seven steamers loaded with troops, escorted by the RAMILIES and the 
CANBERRA left V/ellington and Sidney during the night of 5 Jan. for Europe. 
This is the first contingent of New Zealand troops, 6,000 strong. 

According to an agent's report the War Department in Yvashington is said to have 
made the proposal to the British Government in November 39, that if the United 
States takes an active part in the war the Bermudas should be placed at the 
disposal of the American Navy and Air Force as a base. British permission is 
said to have been given on 8 Dec* 39» 



France; 

According to radio monitoring about five different French convoys escorted by 
cruisers (including the MONTCALM) and destroyers are in the Bay of Biscay and 
west of the Spanish coast. 

The radio picture otherwise shows normal patrol activity* 



North Sea ; 

A new declared area with a radius of 1 1/2 miles was announced in the area off 
North Foreland. Otherwise nothing to report. 

Shipping Losses ; 

The Greek steamer ASTERIA (3,300 tons) southeast coast, (mine); the Norwegian 
steamer ENID (1,200 tons) north coast of Scotland, (submarine); the Norwegian 
steamer FAGERSHEIM (1,590 tons) Bay of Biscay, (submarine)* 

For disposition of forces and activity of main enemy units during the second 
week of January, see Radio Monitoring Report 2/40. 

Special Items; 

Great Britain; 

1* The overhauling of ships, which has become necessary after the severe 
strain put on them during the past months, is being carried out on an increasing 
scale. This is causing a temporary weakening of the operational strength of 

- 101 - CONFIDENTIAL 



18 Jan 1940 CONFIDENTIAL 



a part of the British Fleet, This is being compensated for by the greatest 
possible submarine activity. Surface forces' activity is limited almost 
exclusively to escort duty and patrolling. 

2 9 Anti-submarine defenses, patrolling and escort services concentrated on 
the west coast as the vital import area of the enemy. Only gunboats and 
destroyers on the east coast. 

3. Three battleships (the ROYAL SOVEREIGN, the MALAYA, the RESOLUTION) 
operating as protection on the Canadian side of the North Atlantic rou!;e. 

4. Additional discovery that "Force X" in the South Atlantic was composed 
of the aircraft carrier HERMES and the battleship VALIANT . (The presence 

of the VALIANT with this force was not hitherto known.) 

It has returned to Portsmouth. 

5. Vfithdrawal of destroyers from the Gibraltar patrol, for which trawlers 
and armed yachts have been substituted. 

France t 



6. Lively activity and reinforcement of Channel forces. 

7. Numerous unfounded warnings of submarines, and submarine chases in 
the east part of the Channel area. 

8. Reinforced surveillance of merchant shipping off Vigo by armed trawlers 
and destroyers continues. 



Own Situation t 

Atlantic i 

Nothing to report* 

North Sea t 

Nothing to report© Unsuccessful submarine chase by planes in our 
anti-submarine area© 

Baltic Sea t 

Ice situation beooming worse* The northern part of the Sound is 
thickly frozen over, shipping has stopped. Severe ice hindrance in 
the Great Belt, Little Belt unchanged. Thick pack-ice in the Gedser 



-102- 

CONFIDENTIAL 



18 Jan. 1940 CONFIDENTIAL 



Channel, severe hindrance. Several trawlers and freighters fast in 
the ice. 

The SCHLESWIG HOLSTEIN has been requested to assist in ice-breaking. 

An area 2 J miles across on the southwestern flank of the minefield 
"Undine 2* in the Sound has been cleared to date towards the straight- 
ening of the gap in the minefield. 



Submarine Situation: 

Atlantic ; 

In the operational area ; 

Submarine U "44" off the west coast of Spain. The boat apparently 
sank the Norwegian steamer FAGERHEIM (1,590 tons) from a convoy (?) 
in the Bay of Biscay. (Ship broke in two and sank within two minutes). 

Outward bound ; 

Submarine U "34" west of the Hebrides 

" U "25" northwest of the Hebrides 
" U "55" central North Sea 
" U "31" central North Sea 
" U "51" put to sea. 

Operational assignment ; 

Submarine U "51" same as U "55" (see 17 Jan.). 
Operational area; 

Grid square BF 10 in the western approaches to the Channel as far 
as 11°30» West. 

North Sea ; 

t 

In the operational area * 

Submarines U "15" and U "32" are commencing the return passage. 
Submarine U "59" making for Cross Sand with torpedoes. 



- 103 - CONFIDENTIAL 



IS Jan. 1940 CONFIDENTIAL 



Submarine U "61" 
n y »22» 

» U "9" northeast coast of Scotland. 
» u m6o m 

Outward bound ; 

Submarine U "57" with mines to the Moray (Cromarty) Firth 
" U "13" with torpedoes to the Pentland Firth area 
" U "23" v.ith torpedoes to the Shetlands 
" U "19" with torpedoes to the Firth of Forth. 



Merchant Shipping ; 

On 16 Jan. the Ministry of Transportation wired to the Consulate General at 
Batavia; "When the seizure is lifted, it is planned to send all ships, if 
not subordinate to the High Command, Navy, east of the Philippines to Japan, 
nil ships are to put out from the different ports at the same time if possible. " 

On 16 Jan. the Ministry of Transportation instructed the Embassies in Panama, 
Bogota, Caracas, and Mexico to prepare ships in Colombia, Venezuela, Curacao, 
Aruba, Mexico, and Costa Rica to put to sea, either homewards through the 
Atlantic Ocean or to Japan through the Panama Canal. This is to be carried 
out about February. Roughly 19 ships are affected. 

Because of losses as the result of mines north of Terschelling-Ameland, ships 
bound for Holland were instructed to keep close to Ameland. The steamer 
AUGUST THYS3EN (2,243 BRT) struck a mine and sank one mile north-northeast of 
Understen Light in Soedra Kvarken Strait. Although a pilot cutter was at the 
gap in the minefield, no pilot was requested, and the ship proceeded east, 
instead of west of Understen Light as prescribed, outside the- official gap 
in the minefield. The crew was picked up by a Swedish naval vessel. 



- 104 - CONFIDENTIAL 



19 Jan. 1940 CONFIDENTIAL 

Conference on the Situation with the Chief. Naval Staff. 
S pecial Items ; 

1, Feelers put out by the Naval Attache in Moscow on the subject of the 
•Northeast Passage and conferences to date with Russian authorities show the 
Russians' readiness to meet us halfway. There will probably be no difficul- 
ties of a political nature, but they may be expected in practical execution. 

2. The Foreign Office has declined the proposal made to it by the Naval 
Staff that ships of the benevolent neutrals, particularly Italy, should be 
clearly warned against the voyage to Great Britain once more. Also, no answer 
will be made to the Italians regarding our refusal to name a safe English port 
and a minefree approach route as desired, since at present the Foreign 
Minister considers that no useful purpose would be served by further dis- 
cussions on the subject, and in order to maintain complete freedom of action. 

The Foreign Office considers the risk of sinking Italian or other neutral 
ships on isolated occasions must be taken. 

3* The Spanish Cabinet has agreed to the plan to construct submarines to 
German plans in Spanish dockyards, delivering every second boat to Germany. 

4» For a review of minelaying operations to date and the target set for 
further operations, see War Diary, Part C, Vol. VI. 



Conference with the Commander in Chief, Navy, on the subject of the 
Italian request to the Ge-rman Navy for war equipment, blue prints etc. 

Principles % 

1. • Nothing of great military importance to be handed over. 

2. No delivery of equipment which could be used against us in this war if 
passed on to our enemies, or knowledge of which could prove of advantage to 
the enemy 1 s conduct of the war. 

3» Large-scale cooperation is, however, desirable. 

a. in order to awake and maintain in the Italians the feeling of 
future brotherhood in armsj 

b. in order to support those Italian circles, which are resolved to 
enter into the closest relations with Germany; 

c. in order to gain, by a display of cooperation on our part, the 
Italians 1 consent to German requirements (e.g. handing over of submarines). 

- 105 - CONFIDENTIAL 



19 Jan. 1940 CONFIDENTIAL 



For some time past the following Italian requirements have been under 
consideration by the German Navy, 

1. Request for 12 torpedoes, later reduced to two* 

2, Data concerning warhead pistols* 

3* Request for a submarine fire control system. (This has meanwhile - 
independently of the other items - again been specially requested.) 

The following were offered in return* 

a. an explosive net barrage with automatic mooring, 

b* the latest Italian torpedo, 

c* towed mine, 

d* submarine mine* 

4* Data concerning wartime submarine construction, eventual exchange of 
plans (Italian type 555 tons 15 knots). 

5* Data on the weight groups and synchronized couplings of the new 
BISKARCK battleships. 

6* Continued exchange of information on new construction according to the 
Naval Treaties. 

Requests 1. to 4. were to be refused on the basis of an earlier decision; no 
decision had been taken on 5. and 6* No answer has been given yet* In 
accordance with instructions the matter has so far been treated in a dilatory 
fashion* 

Thorough investigation indicates that, in view of renewed inquiries by the Italian 
Naval Attaohe and also reports from our Naval Attache^ in Rome, an alteration in 
our previous uncooperative attitude in a favorable sense is necessary . The 
Naval Staff has deoided to reply to the Italian requests as follows, after 
conferences with the Chiefs, Naval Ordnance Division, Naval (Ship) Construction 
Division, and Service Division, Naval Staff as well as the Naval Attache. 

Re 1* electric torpedoes t yes , two as samples; 

re 2* warhead pistol si no; 

re 3* submarine fire control system - 

Plans s yes , but no assembly sketches and plans* 
System t no, not available because of our own requirements* 
"T£ems offered in return for 1. - 3* not accepted. 

-106- 

CONFIDBNTIAL 



19 Jan, 1940 CONFIDENTIAL 



re 4. Submarine construction plans; information that forner types are 
still being built in as short a time as possible* If plans are 
then requested, those of the German 500 ton type may be placed at 
their disposal. 

re 5. Yes. No objections , since up to the outbreak of war exhaustive data 
had already been exchanged, 

re 6. Yes, but with limitations. 

The matter will be brought to the Fuehrer's notice when the Commander in 
Chief, Navy makes his report. It is intended to transmit the data to the 
Italians and in so doing to emphasize particularly that Germany expectes 
cooperation in the matter of the purchase of submarines, supplies for 
submarines etc,. 



Special Reports on the Bnemy i 

Atlantioj 

Great Britain i 

Nothing to rep or to 

France * 

Radio monitoring detected various convoy movements. Chase for alleged 
German submarine in the eastern Channel. - Patrol forces are watching for 
neutral steamers putting out from ports in western Spain, as German merchant- 
men are suspected to be among them. Shipments of colored troops from 
Indo-China to France. 



North Sea t 

Scheveningen Radio reports a dangerous area off Nord Hinder. 

According to a reliable agent's report, British warships are said to have 
docked for repairs at Liverpoolc The docks are surrounded with freighters in 
order to render spying impossible© The names of the repair ships have been 
removed from the crews' cap bands and replaced by "Royal Navy'* with no ship's 
name » 



■107- 

CONFIDEIITIAL 



19 Jan. 1940 CONFIDENTIAL 



Shipping Losses ; 

The Greek steamer ITICOLAV ZOGRAFIA (7,000 tons) severely damaged in a 
"collision" off the Scottish coast; the Japanese steamer TAJIMA. {7,000 tons) 
beached in the Thames. The British steamer EFFRA (1,500 tons) in a "collision" 
off Outer Dowsing. The Norwegian steamer NOTOS (2,713 tons) sent an SOS from 
a position west of the Hebrides. The British steamer BIAFRA (5,400 tons) and 
the LACKENBY (5,112 tons) collided off Liverpool. The DUCHES*S OF YORK 
(20,000 tons) of the Canadian Pacific Line was severely damaged when she ran 
aground on a sandbank off the Scottish coast. 






Own Situation ! 

Atlantic t ) 

) Nothing to report. 
North Sea t) 

According to a report from Croup West, the third British submarine, the 
SEAHORSE, was probably destroyed by Mine Exploding Vessel "5 M on 29 Dec. 
as was suspected at the time. She saw a periscope southeast of Heligoland 
and, after altering course several times, rammed an obstruction under the 
surface with her extended bowspar so that the bowspar broke off. A heavy 
patch of oil was observed. 

Baltic Sea a 

Ice situation becoming increasingly worse. Heavy drift ice in the 

western Baltic Sea as far as the Gedser Channel. No shipping in 

the Great Belt up to a line from Nyborg to Korsoer. The Kattegat 

ioe free, the Sound completely frozen between Helsingoer and Helsingborg. 

Numerous ships are stuck fast in the ice, some went aground during 

a northeasterly gale. The patrol vessel HUGIN is stuok in the ice 

in the Great Belt. 



Submarine Situation } 

Atlantic t Unchanged. 

North Sea a 

In the operational area* submarine U "59" 1 . 

On passage: submarines U n 61 H , n 22 n , "57 n , "23 u , tt 19 n , *18 n . 

On return passage $ submarines U n 60", "9 1 *, **15 n . 

Entered portt submarine U n 32". 



-108- 

CONFIDENTIAL 



19 Jan. 1940 , CONFIDENTIAL 

Merchant Shipping : 

The steamer RIO DE JANEIRO (5,261 tons) returned home from overseas 
(Vigo) via Narvik. 

The continued freezing of the entrances to the Baltic Sea and of the Baltic 
Sea itself has caused the diversion of shipping on the Norwegian run to the 
North Sea. The Consul at Haugesund has been instructed accordingly. 

Homeward bound German ships are to leave Norwegian territorial waters east of 
Lindesnes and steer for Danish territorial waters around Hanstholm; they are 
t-hen to proceed in Danish territorial waters as far as Nordmanns Deep and 
through this deep to position 55° N, 8° 17' E (off Sylt). 



During the trade negotiations recently concluded in Stockholm the Swedes 
agreed to transport up to 200,000 tons of coal and coke from Rotterdam in 
their own ships in the immediate future. This arrangement benefits Germany 
considerably, since, as the result of transport difficulties, a sufficient 
quantity of coal cannot be exported to Sweden via German ports. Care must 
therefore be taken that Swedish ships proceeding to Rotterdam in ballast, 
in order to load coal for Sweden, are permitted to continue their voyage 
with the least possible loss of time when brought in or inspected by our 
naval forces. 

Economic Warfare ; 

The sinking of the Dutch steamer ARENSKERK is still causing much comment in 
Holland. It is suspected that the illegal extension of the list of things 
which may be classed as contraband now being applied by Germany is in reali- 
ty a reprisal measure for the illegal blockade of German exports . In the 
Press the fear is expressed that economic warfare will be further intensified. 

Teletype received from Group West to the Naval Staff and Commanding 
Admiral, Naval Forces, West: 

Commanding Admiral, Naval Forces, West is hereby directed to carry out the 
following operations before 30 Jan, if possible and weather permitting: 

1. A destroyer flotilla to carry out operations against merchant shipping 
off the southwest coast of Norway and in the Skagerrak, The X Air Corps 
will probably provide air reconnaissance, 

2. A destroyer flotilla operation against position "Y" (submarine) west 
of the declared area and against suspected enemy patrol vessels west of 
the declared area. 

CONFIDENTIAL 
- 109 - 



20 Jan. 1940 CONFIDENTIAL 



Items of Political Importance 

For the latest information on the Russo«Finnish conflict, and the speech 
made by Halifax, the British Foreign Minister, on the political situation, 
see Foreign Press of 21 Jan, 



The warnings to Norway in the German press urging her not to let herself 
be involved in the war are having a strong effect. The Norwegian Press 
is again very definitely in favor of the strictest neutrality. 



The Japane se Foreign Minister has drawn attention to the endeavors of the 
new Government to effect a compromise with the U.S.A. and to slacken the 
tension with Russia, while continuing to pursue the same policy as the 
late Government. Friendly relations with Germany and Italy remain unaltered 
as also the Anti-Comintern Pact* 

For the moment Germany judges the prospects of the new Japanese Government 
unfavorably. 



Conference on the Situation with the Chief, Naval Staff t 

Special Items : 

The Naval Staff gave the following orders for the sailing of the first 
auxiliary cruiser (Ship "'IB") which was originally scheduled for between 
v 4 and 10 Feb. and has now been postponed as she is not yet ready . (Marginal 
note % new moon 8 Feb., 9 March, 7 April.) 

1. Until the line Shet lands - Stadlandet is crossed control by Group 
West. Unobtrusive air reconnaissance, intensified submarine chase and 
protection against mines for this purpose. No direct escort. 

2* After the line Shetlands - Stadlandet has been traversed the Naval 
Staff will take over command. Group Vfest_is to prepare planes of the 
Transooean Squadron for operations in the Shetlands - Faroes - Iceland area. 
The Naval Staff will give the order to commence operations. A Special Group 
will carry out reconnaissance for ice and enemy patrol activity. It is 
proposed to station two vessels in the Denmark Strait north and northwest of 
Iceland, and one vessel south of Iceland. Orders will be issued by the 
Naval Staff. , % 

-110- 

CONFIDENTIAL 



20 Jan. 1940 CONFIPK-NTIAL 

3. The Commanding Admiral, Submarines will detail two submarines to take 
up waiting position 60 miles west of Stadlandet and two more submarines to a 
waiting position 100 miles northeast of Langanes (Iceland) 67° 10 T N, 11°K« 

4. All preparations are to be made unobtrusively. The strictest secrecy 
is necessary for the success of the operation* 

The Naval Staff is very keen that the bringing out of this first auxiliary 
cruiser should be carefully prepared, and supported in every way possible, 
since the psychological effect of a first successful breakthrough in spite 
of the great difficulties which will doubtless be encountered in passing 
through the northern approaches to the Atlantic^ must be rated very highly. 
Group West had intended ships "9", "37", and n 13 u of the Special Group to" 
execute the reconnaissance assignments, but reported - after learning the 
prospective area of operations (Iceland) - that it must be realized that 
the vessels can be identified as German trawlers by any expert by day and 
that the torpedo camouflage is bad , especially against sighting by planes. 

The Naval Staff 5s well acquainted with the deficiencies inherent in the 
trawler special vesselso (See Naval Staff's comments on the question of the 
Special Groups, War Diary, Part B, Vol. V, page 93.) 

Since the ships of the 2nd and 4th Special Groups (trawlers) are both 
inadequately camouflaged and unable to get ready to fire torpedoes while under 
camouflage, these vessels cannot be assigned to carry out operations against 
merchant shipping for any length of time in one and the same area, or to 
hunt submarines in an area where no trawlers normally remain 
for long. 

On the other hand, the Naval Staff sees operational possibilities in distant 
maritime areas B where the vessels can appear singly, carry out reconnaissance 
tasks, and use their torpedoes against those enemy surface forces they may 
chance to meet with every prospect of success. As long as torpedo armaraent 
under the surface is impossible, and complete camouflage cannot therefore be 
achieved, any surprise attacks using this weapon made by the trawler special 
vessels by day must be abandoned and, instead, the camouflage is to be made as 
effective as possible during the day with apparatus, baskets, nets, etc. 

With regard to the ease of recognizing them as German trawlers claimed by 
Group 7/est, the Naval Staff believes on the one hand that the enemy can be 
deceived to a great extent by taking suitable simple precautions, and on the 
other that there is little likelihood that every enemy observer will be so 
accurately informed on the different types of trawler that he can identify 
the true character of these vessels at short notice with any certainty. The 
danger of recognition will be reduced to the minimum if they operate singly 
in more distant sea areas where there are normally a large number of trawlers. 



-111- 

C0NFIDENTIAL 



20 Jan. 1940 CONFIDENTIAL 

Special Reports on the Enemy t 

Atlantic : 

Great Britain: 

The Commander in Chief, Home Fleet aboard 7/ARSPITE was en route for the Clyde 
on 20 Jan. 

The British auxiliary cruiser MOULTAN (20,900 tons) off the coast of Portugal, 

France : 

The cruiser MONTCALM off Groix. The submarines AGOSTA and BEVEZIERS in the 
area west of the North African coast on their return passage from the West 
Indies to Casablanca. 



North Sea : 

Organization : 

A re-organization of the cruisers is in progress in home waters* The Second 
Cruiser Squadron, based on Rosyth, consists of the SOUTHAMPTON, the EDINBURGH 
and the GLASGOW. The Northern Patrol Cruiser Squadron consists of the 
MANCHESTER, the NEWCASTLE, the SHEFFIELD . and the AURORA. The Commander, 
Destroyers has obviously remained on the WOOLWICH in order to free the AURORA 
for the Northern Patrol. The Senior Officer Commanding, Second Cruiser 
Squadron appears at the same time to be Flag Officer Commanding, North Sea 
Forces. 

Shipping Losses; 

Unidentified steamer sunk east of Noss Head (submarine). The Swedish steamer 
PA J ALA (6,900 tons) torpedoed off the Scottish coast. 



Own Situation : 

Atlantic : . 

Daventry reports: "It is believed that the GRAF SPEE depot ship 
ALTMARK has reached Germany with 300 prisoners". 



- 112 - CONFIDENTIAL 



20 Jan. 1940 CONFIDENTIAL 



Shortly afterwards Da vent ry announced that the ALT MARK, equipped 
as a privateer with three 15 cm guns, anti-aircraft guns and aircraft 
and special ammunition for sinking ships, is privateering with a 
falsa name under a neutral flag. Her speed is 25 knots. 

Havas reports that the British sailors retained as prisoners aboard the 
German supply ships are being treated in the most humiliating fashion. Bad 
accommodation and bad food* 

The source of this information is unknown Since the ALTMARK is still en 
route and there are so far no indications that the ship has fallen into enemy 
hand3, this is purely propaganda, possibly put out for the purpose of learning 
details of the ship's position 



North Sea > 

Nothing to report. 

No air reconnaissance because of the weather. Patrol boat "005 n and 
another boat with her were unsuccessfully attacked with bombs. 

The SCHLESVVIG HOLSTEIN has been dispatched to the North Sea to help with 
ice-breaking since the ice situation there has become worse and is especially 
prejudicial to submarine movements. 



Baltic Sea t 

Minefield pilotage has had to be suspended in the Little and Great Belts, 
in the Sound and in the Gedser Channel because of ice and a northeasterly 
snow storm* Minefield patrol units are sheltering close in to land. An 
examination of the Gedser barrage showed its position to be unaltered and 
that it was completely effective despite the ice drift which had passed 
over it a number of times. 

The patrol boat HUGIN has freed itself from the ice. 



Submarine Situation: 



Atlantic* 



Unchanged. U "44" received details of convoys which had been 
detected. 



-113- 

CONFIDEITTIAL 



20 Jan, 1940 CONFIDENTIAL 

Submarine U "34" reported execution of minelaying assignment off 
Falmouth* (Position 2). 

Successes ; The Danish steamer CANADIAN REEFER (1,830 tons) was 
sunk off the northwest coast of Spain (submarine U "44" )• 

North Sea ; 

In the operational area; Submarines U "22", U "61", U "57", U "59". 
Outward bound; Submarines U "14", U "23", U "18", U "19". 



Merchant Shipping; 

The following coded order was radioed to all German ships in the Baltic and 
North Sea on 20 Jan.; 

"Ships returning from Norway and the Kattegat are to proceed via the North 
Sea because of ice conditions in the entrances to the Baltic Sea. Pass through 
the Skagerrak at night. Proceed under cover of the coast of Jutland via 55° N 
and 8° I? 1 E. Pilot vessel there. Signed Naval Control." 

The order was also wired via the Foreign Office to diplomatic representatives 
in Stockholm, Copenhagen and Oslo for transmission to German ships in these 
ports 9 

Intelligence reports from France state that Norwegian ship owners are handing 
over large amounts of shipping to the Allies, In the course of the next few 
months the Union of Norwegian Shipowners is to place a large number of tankers 
(150 were mentioned !) at the disposal of the Allies, 

The British radio furnishes the following particulars about British shipping: 

Out of approximately 6,600 ships escorted, 12 have been sunk by submarines to 
date. This figure representing 0»2 % is under the average for the World War. 

Losses to date amount to 2,5 % of the total British tonnage, (According to 
German calculations the losses for 1939 stand at approximately 3 %)• 

New construction for the year may be expected to amount to 2,500,000 tons 
(according to Chamberlain) within the range of the war program. 

Steps taken in the Economic War ; 

U.S. airmail is checked in the Bermudas. The British declare that 
from now on all Transatlantic airmail in both directions will be 
censored. This step is meeting with strong objection in the United 

O T>& wSS . 

JHHHH HH HHH HH HHHHHBHHHHHH H HH** 

CONFIDENTIAL 
- 114 - 



21 Jan. 1940 CONFIDENTIAL 



Items of Political Importance ; 

According to a British news report the Japanese steamer ASAMA MARU, with a 
number of Germans on board, was stopped by a British cruiser in the Northern 
Pacific, The Germans were taken off. Further particulars still unknown. 



Churchill's radio speech on 20 Jan.: Unequivocal demand to the neutrals to 
abandon their neutrality and range themselves on the side of the Western 
Powers . German naval strategy chiefly damages neutral shipping. The neutrals 
would be lost if Germany won the war* An ignominious peace could only be 
avoided by united action I The Franco-British convoy system offered the 
neutrals complete safety. 



The ban on leave has been lifted in Holland. 



Special Reports on the Enemy : 

Atlantic : 

Great Britain : 

According to a report from the Attache in Washington, a fairly large Halifax- 
convoy is to assemble 50 miles east of Halifax on 23 Jan. Intelligence Center, 
Spain reports that the large destroyer KEPPEL put into GIBRALTAR on 20 Jan. 
at slow speed and with a badly damaged bow, probably as the result of a 
collision. 

France: 



Very heavy patrolling was detected in the Channel, especially in the eastern 
Channel. Various submarine warnings were intercepted, including ones south- 
east of Plymouth and west of Oporto (submarines U "34" and U "44"). 

According to a report from the Naval Attache in Madrid, French patrols off 
Vigo, Gijon and Bilbao have been intensified. Tallying reports and observat- 
ions from steamers say there are at least five armed trawlers of 1,500 tons 
with three guns off Vigo. Submarines as well as patrol vessels are reported 
off the north coast. 



CONFIDENTIAL 
- 115 - " 



21 Jan. 1940 CONFIDENTIAL 



North Sea ; 

The British Admiralty announced the loss of the destroyer GRENVILLE 
(1,485 tons) as the result of a mine or a torpedo. 

According to a report from German steamers through the Consulate at Trondheim, 
British and neutral ships are said to have put out from Sognefiord or Stad- 
landet on 9 or 10 Jan# (under escort of destroyers and cruisers waiting out 
to sea), for an escorted voyage westwards* The presence of the cruisers is to 
be concluded from the appearance of a catapult plane in territorial waters. 
The Consulate at Haugesund reported that in Norwegian shipping circles the 
opinion is growing that it is safer to sail under British escort than alone* 
Insurance companies recommend ships to sail in convoy, crews likewise press 
for escorted passage and will not sign on for ships sailing alone, in spite 
of an increase of more than 200 % in wages. Already the last three convoys 
are said to have been mixed , 

Shipping Loss es t 

The British steamer PROTESILAUS (9,577 tons). Bristol Channel, mine. The 
British steamer LLAKDAFF CASTLE (10,786 tons), collision, damaged. The 
British tanker CARONI RIVER (7,807 tons) explosion off the southwest coast 
of England, sank » 

The French steamer RABELAIS (4,999 tons) sent urgent request for a tug. 

The Greek steamer EKATONTARCHOS DRaCOULIS (5,329 tons) torpedoed west of 

Oporto. (Submarine U "44".) 

The Italian steamer CRASSIO (11,966 tons) on fire off Toulon, 

The Estonian steamer NAUTIC (2,000 tons) off the Shetlands. 

The Danish steamer THEKLA (1,500 tons) northeast coast. 

The Swedish steamer FLANDORA (1,200 tons), mine. 

The British steamer FERRY HILL (1,100 tons) northeast coast. 

The Norwegian steamer ILA (1,600 tons) aground near the North Goodwins, 



Ow n Situ ation : 

Atlantic : ) 

( Notning to report. 
North Sea ; ) 

Eastern Baltic Sea ;. 

Swedish minefield pilotage in the declared area of Soedra Kvarken 
suspended because of ice. Russian operations against Finland 
severely hampered. 

CONFIDENTIAL 
- 116 - 



21 Jaru 1940 



CONFIDENTIAL 



Western Baltlo Sea t 

Areas surrounding the minefield in the Little Belt ice-free • Great 
Belt: pack ice. Gedser ice -free in parts. No pilotage in the Sound 
and near Gedser,,' Great and Little Belts not occupied. Thick driving 
snow. Shipping still severely impeded. Some of the steamers caught 
in the ice are in a difficult situation. The SCHLESWIG HOLSTEIN, 
which stuck fast in the ice, ran aground and was damaged; must go 
into dock. 



Submarine Situation* 



Atlantic j 



Submarine U "44" off the west coast of Spain, is being kept informed 

of convoy movements© 

Submarine U "34" western approaches to the Channel. 

Submarine U n 31 tt off the Minch, 



On passage : 

Submarine U n 25 n west of Ireland 



u 
tt 

n 



U "55" west of the Hebrides 

U "51" Shet lands area 

U "41" Heligoland, should put to sea today, 



North Sea t 

In the operational area* 
-On passages 



On return passage: 



submarines U *22*, U "61", U "57". 



submarine 
n 

n 

n 

t* 



U "14" west of the declared area 

U "23" northern North Sea 

U "18") 

U "19 n S central North Sea 

U "59". 



Returned from operation! Submarine U "60" • For short report see 
War Diary, Part B, Vol. IV. The boat was in the southern North Sea 
on special assignment "Gelb". After receiving permission to attack, 
one miss and one failure, owing to non-firing, at steamers with lights. 
(During an attack on 19 Jan« the steamer stopped ajf'ter" "the first torpedo 
(surface runner), two G 7 R torpedoes were failures because of non - 
firing ,) The boat brought back valuable observations on shipping 
movements and light So 



-117- 



CONFIDENTIAL 



21 Jan. 1940 CONFIDENTIAL 

Items of Importance from the T.'ar against Merchant Shipping : 

A torpedo fired by a submarine at the Norwegian steamer N0T0S missed. The 
crew went on board again. The boat is supposed to have disappeared after 
an audible explosion (torpedo exploding at the end of its run). 

Merchant Shipping: 

The Neptune steamer PHAEDRA (619 tons) - proceeding to Rotterdam 
under Dutch pilotage with a cargo of ore - has been overdue since 
14 Jan., and was probably taken prize by British forces (submarine) 1 

The following special announcement was given out after the news on the German 
radio according to Plan A on 21 Jan.: "Minefield pilotage in the Little Belt, 
Great Belt, Gedser Channel and the Sound suspended." 

According to a communication from the Soviet Commissariat for Foreign Affairs 
the German steamer THETIS struck a mine and sank near the islands of Odensholm 
(Osmuasaar) and Gross Roogoe (Suur pakrissar) on 11 Jan. According to the 
Commissariat for Foreign Affairs they were to all appearances Finnish mines 
which had been laid by a Finnish steamer or a Finnish submarine (?)• 



- 118 - CONFIDENTIAL 



22 Jan. 1940 CONFIDENTIAL 



The Commander in Chief, Navy in Swinemuende for conferences with the Commanding 
Admiral, Defenses Baltic. 

Items of Political Importance e 

1, For a survey of British wartime policy in Great Britain see Political 
Review No* 18. 



2. Intelligence reports from various sources say that Great Britain is 
giving serious consideration to the possibility of exploiting Russia's present 
weakness by means of a large-scale attack on the oil-producing areas of south- 
ern Russia I 



3# The demands made in Churchill's speech to the neutrals have met with 
definite refusal in the majority of the neutral countries* The Nordic States 
are especially unwilling to cooperate* 

Hearty approbation in Great Britain and France. (For particulars see react- 
ions to Churchill's speech, Foreign Press Report of 23 Jan*)« 



4* Sign.'ng of the Franco-Spanish trade agreement on 18 Jan. according to 
which Spain has undertaken to deliver raw materials in exchange for foodstuffs, 
agricultural machinery etc„; France is to make no demands of any sort for 
war materiel > Spain's deliveries of rav/ materials are to include 431*000 
tons of pyrites, 365,000 tons of iron ore, 672,000 tons of mercury an 1 600,000 
tons of lead* 



5« The Japanese Government has made a strong protest to Great Britain re- 
garding the stopping of the ASAMA MARU and the taking off of the German 
passengers. The incident has provoked an acute reaction throughout all 
Japan, particularly as she was stopped in the immediate vicinity of the Ja- 
panese coast. Japan's extremely uncooperative attitude is undoubtedly based, 
not on any specially pro-German sentiment felt by the Japanese people or 
Government, but on the natural resistance of the Japanese mentality to any 
foreign exercise of power in the eastern Asiatic sphere, in which Japan 
claims, and is determined, to predominate. This incident therefore strikes 
Japanese national pride in the most sensitive spot* 



CONFIDENTI AL 

119 - ........... 



22 Jan. 1940 CONFIDENTLY 



6. According to information from the Foreign Office, the Norwegian 
Admiral,, Tank Nielsen, has offered to provide escorts for valuable German 
merchant ships in Norwegian territorial waters, if so desired. The Foreign 
Office v?as informed thst the Naval Staff gratefully accepts the offer and 
viill gladly make use of jt when occasion arises. 



Special Reports on the Enemy : 

Atlantic : 

Great Eritain: 

The port of Liverpool is closed to all outward bound ships for 20 hours on 
22 and '23 Jan. 

The large destroyer HARDY and the destroyer H06TILE are proceeding from 
Gibraltar to England. After their return there will only be two boats of the 
Second Destroyer Flotilla left in the South Atlantic and two in the Gana- 
dian area, 

France* 



No observations of importance. The position of submarine U "44" was trans- 
mitted to two submarines off the Spanish coast. One destroyer was detailed 
to operate against submarine U "44" • 

North Sea : 

The Admiralty admitted that the overdue patrol vessel VALDORA (250 tons) 
was sunk. 

According to radio monitoring the submarines SALMON, SNAPPER, URSULA, and 
TRIDENT are at present operating in the North Sea, 



Own Situation: 

Atlantic : 

Nothing to report. The British radio announced that the aLTMARK 
is suspected of being engaged in mercantile warfare. 

North Sea t 

The Group reports that owing to the increasing acuteness of the ice 
situation and the fact that the SGHLESV/IG HOLSTEIN is out of commission as 



- 120 - 



CONFIDENTIAL 



22 Jan. 1940 CONFIDENTIAL 



an ice-breaker it may shortly be impossible to bring through vessels of all 
types. Relief of patrol boats is already impossible. Planes of Commander, 
Naval Air, West are no longer operational owing to technical deficiencies. 



Baltic Sea t 

Barrage patrols in the Sound and also in the Great and Little 
Belts withdrawn* Pilot stations in the Sound temporarily 
unmanned, those in the Great and Little Belts not manned 

Net barrage off Gedser dislodged. 

The SCHLESWIG HOLSTBIN is damaged and temporarily out of operation. 
All minefield indicator buoys and a large number of channel buoys 
have been dislodged off Kiel. 



Submarine Situations 



Atlantict 



Unchanged. Submarine U "44"' has been ordered by the Commanding 
Admiral, Submarines to take on supplies in the bay off Cadiz during 
the night of 25 Jan. The boat is to report if the attempt fails 
and she has not sufficient fuel for the return passage. 

North Sea t 

In the operational areai Submarines U "61 w , U w 23". 

On return passage % Submarine U n 57" reports the execution of her 

minelaying assignment (Cromarty) and one steamer sunk. Also on return 
passage, submarine U rt 22" reports having sunk a destroyer (GREKNVILL3 ?) 
and a steamer. (Marginal notet probably EXMOUTH according to later 
reports, as the GREENVILLE was lost as the result of striking a mine.) 
(Boat is operating east of the Pentland Firth.) 

Merchant Shipping ! 

Own Shipplng t 

On 19 Jan. Batavia replied to the Ministry of Transportations* instructions of 
16 Jan. to the Consulate General in Batavia to despatoh German ships in the 
Dutch East Indies to Japan as soon as possible; among other things, it was 



-121- 

CONFIDENTIAL 



22 Jan. 1940 CONFIDENTIAL 



stated that it is impossible to keep preparations and departure secret. 

The Hapag-Lloyd-Agency in Batavia is a Dutch firm with many British connections. 

Further seizures are to be expected ! 



According to a report from an officer of the motor vessel HANNOVER - still 
lying in Curacao - who has returned via Vigo, very unsatisfactory conditions 
prevail on board the German ships, especially on board the HANNOVER, in so 
far as the captains are not doing their utmost to obey the clear order to 
return home, although the opportunities are there. The Naval Staff 1 s special 
instructions have been destroyed by some of the captains. The captain and 
chief engineer of the HANNOVER have done everything in their power to oppose 
a possible sailing. 

The Ministry of Transportation has been requested to have the captain and 
chief engineer dismissed. The ship's executives will be called to account 
after her return home. A new general directive to captains seems necessary 
in order to prevent the repetition of such unworthy conduct on their part. 






The captain of a prize ship informs us that as a result of the peril in 
British coastal waters the Latvian Government has decided to forbid Latvian 
ships to sail to Great Britain in future. 

The captain of a German steamer reports that on 17 Jan. two Estonian ships 
were lying in Malmoe; these were to proceed to England in ballast. The 
entire crew, however, refused to sail. 

■JHHHHHHBBHHHHHHHHHHHHBHHHHHHHfr 



- 122 - CONFIDENTIAL 



23 Jan. 1940 CONFIDENTIAL 

Conference on the Situation with the Chief, Naval Staff * 
Special Items ; 

1. Since - according to a report from the German Embassy in Stockholm - 
the Swedish Foreign Minister considers the German proposal for the mining 
of Swedish territorial waters in the Sound by Sweden very serious, the 
Swedish Government has how officially declined the German proposal, since 
minelaying would not be compatible with Sweden's strict neutrality and would 

be regarded by Great Britain as biassed support of Germany, In this connection, 
possible consequences with regard to the British attitude in the question of 
Norwegian territorial waters were pointed out. 

The Naval Staff is unanimously of the- opinion that the danger of a British 
invasion of Norwegian territorial waters must be avoided at all costs; it is, 
therefore, in acknowledgement of Sweden's difficult situation in this question 
that it is not intended to exercise stronger pressure on Sweden for the present. 
The Swedish Government has declared its willingness for further discussions on 
the subject of minelaying operations against an invasion by submarines ♦ 
(See also War Diary, Part C, VIII ). 

2. The fact has emerged from a discussion between the Chief, Naval Staff 
and the Councilor of State Essberger that the Ministry of Transportation 
possesses no powers to enforce her demands where shipping firms are concerned, 
and that it has so far neglected to procure those legal instruments which are 
absolutely necessary in order to carry into effect the decision taken, and 
thereby exercise a strict control over all German merchant shipping in the 
interests of the war as a whole* 

3. Conference with the Commanding Admiral, Submarines (Rear Admiral Doenitz) 
on the submarine situation and further operational plans: 

a. Review of the state of submarine operations and of the mining of 
the east and west coasts of England. The Commanding Admiral, Submarines consi- 
ders the minelaying operation off Liverpool an extremely difficult one, which 
tries the boat to the full, - shallow water, no possibility of evasive action, 
and heavy patrolling. Submarine U "30" (Lieut, (sg) Lemp) succeeded only because 
he had a dark night, specially favorable weather conditions and his own great 
skill. The operation requires an extremely capable commander. Considering the 
very great risk involved, the Commanding Admiral, Submarines would advise 
against a repetition of the operation, if this could be undertaken by the Air 
Force instead. 

The Naval Staff itself considers it very important that another operation 
should be undertaken since it would create specially great difficulties for 
British traffic, and particularly since the Air Force will probably not be 
able to carry out its own minelaying operations until May. The Chief, Naval 
Staff will not, however, insist because of the very great strain which the 
operation implies, but leave the decision to the Commanding Admiral, Submarines, 
pointing out that, if necessary, the mines could be laid, not directly off 

CONFIDENTIAL 
- 123 - 



23 Jaru 1940 CONFIDENTIAL 

Liverpool, but on the approach routes in the Irish Sea. 

b. Halifax operation : Taking into account the limited weather 
conditions at this time of the year and the fact that the auxiliary cruiser 
which was intended to take part in the operation will not be ready until 
later, the Commanding Admiral, Submarines proposes that submarines should 
carry out the operation alone , i.e. without the auxiliary cruiser; they will 
be in a position to do this when their reconstruction is completed (additional 
tanks). 

The Commanding Admiral, Submarines considers the Halifax operation extremely 
worthwhile. Speedy execution desirable (period of fog from March to July 
and deteriorating ice situation)* 

The chances of surprise are greatest if submarines alone are used. The boats 
intended to take part in the operation (submarines U "37", U "38", U "43") 
will be ready at the beginning of February. Provision has been made for 
the despatch of three boats. If submarine U "37" is ready much earlier, 
making it necessary, in the interests of utilizing the boats to the full, to 
use her elsewhere, the long-distance operation will be carried out by two 
boats only. 

& TMC or 12 TMB mines and 6-10 torpeVioes, will be used for the operation. 
Great success can be expected. The mines are to be laid with a 14 -day delay, 
so that the subsequent use of torpedoes takes effect first of all, and the 
period of alarm then extended by the mines. If the boats wait until the 
auxiliary cruiser is ready the operation will be endangered. 

The Naval Staff agrees to the Commanding Admiral, Submarines proposal, 
although great prospects of success could have been expected from a combined ' 
operation between the auxiliary cruiser and the submarines, with the combination 
of submarine reconnaissance, mines laid by submarines, use of mines by the 
auxiliary cruiser, and torpedo attacks by the submarines. From a strategic 
point of view, however, it is considered better to make use of the favorable 
time of year and the availability of the long-range submarines during February 
in order to attain quick successes, especially since it seems by no means 
definite yet that the auxiliary cruiser can be got ready to execute a mine- 
laying operation. Whether it will still be possible to despatch the auxiliary 
cruiser after the submarine operation remains to be seen; in this case 
submarine reconnaissance is of the greatest value. 

The Commanding Admiral, Submarines has received instructions to make preparat- 
ions for the operation. The political aspect and the question in so far as it 
affects International Law will be examined by the Naval Staff in conjunction 
with the Foreign Office. 

c. Question of submarine support for the auxiliary cruisers' break- 
through. 

- 124 - CONFIDENTIAL 



23 Jan. 1940 CONFIDENTIAL 



The Commanding Admiral, Submarines is aiming at the highest degree of 
concentration in his operations, in order to make the best possible use of 
the' small number of submarines. He does not see any chances of success in 
the disposition of submarines off the Norwegian coast and near Iceland as 
requested by the Naval Staff, and does not think that the boats will be of 
any assistance to auxiliary cruisers making a breakthrough into the Atlantic* 
He points out that at least two mining operations would have to be cancelled 
because of this and two Atlantic boats fall out, »and requests that no boats 
be furnished for these assignments. 

The Naval Staff is well aware that the chances of successful attacks on enemy 
forces or on merchant shipping are slight, and that if the weather is bad 
there may be no support for the auxiliary cruisers ' breakthrough. However, 
it attaches such high importance to assuring the successful breakthrough of 
this very first auxiliary cruiser, that it seems completely justified to 
use the submarines to aid the auxiliary cruiser by their reconnaissance 
activity, and by their ability to attack any patrol forces present, also 
especially because of the psychological effect on the captains and crews of 
the auxiliary cruisers. In contrast, successful sinkings are of secondary 
importance. The Naval Staff therefore still requires the operation of two 
boats in the area south of Iceland, but will dispense with the boats off 
the Norwegian coast. 

d. Further submarine operations; The following minelaying operations' 
are planned: 

Submarine U "28" Portsmouth 

» U "29" Bristol Channel 

" . U "48" Weymouth (Portland) 

n u H33 » Plymouth or Liverpool again. 

Torpedo attacks: 

The Naval' Staff plans to extend the area in the Bristol Channel in which 
all weapons may be used to the 200 m line, to release a new area off the 
southeast coast of England and to extend the area off North Scotland as far 
as 2°E, The Commanding Admiral, Submarines considers these measures - 
especially the extension of the Bristol area - an essential and, in the in- 
terests of making submarine warfare easier, a highly desirable intensificat- 
ion of operations against merchant shipping. 

Reconnaissance of the British declared area is to be continued in order to 
establish whether there are favorable opportunities for destroyer operations. 
If the ice situation permits two boats are to be stationed off the North 
Channel, one off the Minch, three near the Pentland Firth and May Island, 
and three between the Shetlands and Norway for operation "Nordmark'U 



- 125 - CONFIDENTIAL 



23 Jan. 1940 CONFIDENTIAL 

The Commanding Admiral, Submarines points out the present severe hindrance to 
boats entering and leaving port as a result of the ice. All available boats, 
including training boats, are being withdrawn from the Baltic to the North 
Sea* 

e. Torpedo failures * The Commanding Admiral, Submarines calls 
attention to the depressing effect of the numerous torpedo failures on the 
boats at the front. Failures have been reported by the most able commanders 
and best shots when firing with certain data and under peacetime conditions, 
and cannot therefore be classed as misses. Everything possible must be done 
to correct this and Professor Cornelius has already commenced work on the 
project. (The Commanding Admiral, Submarines has stated that according to a 
conservative estimate, about 300,000 tons more shipping could have been sunk 
if the torpedoes had worked properly. 13 more failures in the period 10 to 
21 Jan. i) 

f . The Chief, Naval Staff has called the attention of the Commanding 
Admiral, Submarines to the necessity for submarines to use radio as sparingly 
as possible, since the enemy direction-finding service works very quickly and 
accurately. The Commanding Admiral, Submarines does not regard the danger as 
so great, since bearings also often show a fairly large margin of error, and 

he emphasizes that generally the boats only use their radio for the transmission 
of important shadowing reports and weather reports, or if their presence is 
known to the enemy in any case. The Chief, Naval Staff has ordered that weather 
reports are to be transmitted only when the boat incurs no risk by so doing. 






Conference with the Naval Attache. Copenhagen and Chief, Operations Branch 
Group Baltic . 
Special Items ; 

1. The Danish Navy has offered to close the gaps in the Danish minefields 
in the Belt by means of deep-laid mines as a protection against penetration by 
submerged submarines. The offer has been accepted. The following minefields 
have been requested: in the Little Belt from the bottom to a depth of 12 m, 
in the Great Belt from the bottom to a depth of 15 m; an extension of the 
shallow minefields up to the 5 meter, possibly even to the 4 meter line has 
also been requested. Our own minefields in the Belts are to be swept as soon 
as the weather and labor situation permit. 

After the Danes have completed these minelaying operations the Naval Staff con- 
siders the Belts can be regarded as completely secure against any penetration 
by submarines. 

2. The need for the mining of the Sound, especially of Swedish territorial 
waters is not caused by the fear of danger from submarines, but by the necessity 

CONFIDENTIAL 
- 126 - 



23 Jan. 1940 CONFIDENTIAL 



of paralyzing the heavy contraband traffic still running there, Sweden has ' 
refused German proposals to mine the Kogrund Channel, Further German action 
must take into consideration the fact that extensive German demands on 
Sweden may result in the closing of her territorial waters, possibly in 
similar demands from England to Norway for the closing of Norwegian waters, 
and thus in the complete disruption of the German ore traffic. Caution is 
therefore necessary; at present it is not possible for Germany to mine 
Swedish waters. 

The following is therefore proposed: to extend the German mined area north- 
wards and transfer the present Sound minefield to the southern entrance of 
the Flint Channel, Denmark is to be requested to extend her minefield off 
Amager southeastwards to the boundary of her territorial waters. 

For this purpose a broad passage gap which does not impede shipping is to be 
swept in the former German declared area, 

3» General situation in Denmark : 

The Attach* points out the growing difficulties for Danish shipping proceeding 
to Great Britain, Lack of crews; retention in control ports. General 
situation dominated by the Eusso-Finnish conflict, Danish Government resolved 
to maintain strict neutrality, Danish-British negotiations show that Great 
Britain has already given up Denmark as a supplier of food. The foodstuffs 
agreement has however, not yet been repudiated, - Air attacks on Danish 
merchant ships are greatly regretted, also torpedoes fired on neutral 
steamers (DENMARK !), but no official steps taken, Danes display great trust 
in the Commander in Chief, Navy, It is essential that all matters should be 
settled between the two navies as hitherto, 

(See also memorandum in War Diary, Part C, Vol, III,). 



Special Reports on the Enemy : 

Atlantic: 

Great Britain: 

Radio monitoring detected various ships at sea south of Ireland, also 
between Iceland and the Faroes, 

The aircraft carrier GLORIOUS has been in Malta since 17 Jan, Admiral, 
Devonport instructed a Greek steamer as follows* 



- 127 - CONFIDENTIAL 



23 Jan. 1940 CONFIDENTIAL 



The Admiralty assumes no responsibility and advises you to keep 20 miles south 
of Shambles and request Admiral Dover for further advice when approaching 

vicinity© 

France t 



After British stations reported a German submarine 60 miles south of Portsmouth 
(submarine U "34") on the evening of 23 Jan., renewed agitation among the 
French Channel units was unmistakable. 

A false submarine alarm was again given near Barfleur, causing lively radio 
traffic and submarine chasing. 

The convoy "KS" is west of Cape StoVinoent on northerly course proceeding at 
slow speed. Submarine U "44" is shadowing. 

The submarines which have been relieved in the West Indies or the Azores area 
are proceeding to Casablanca* 

North Sea i 

The Admiralty reports the loss of the British destroyer BXMOUTH (1,4?5 tons), 
last detected in the Rosyth area. Submarine U "22" (Lieut. (sg) Jenisch) is 
probably the lucky shot* 

An unidentified vessel was located in the Gez-uan declared trea, possibly a 
submarine • 

According to a report from Kirkenes, the Norwegian Navy is so far 
supposed to have* destroyed 11 drifting mines in Varanger Fjord 
and in the entrance to Booke Fjord. Vessels are recommended to 
traverse the fjord only during daylight. 

Shipping Losses * 

The British steamer BALTANGLIA (1,500 tons) and the Norwegian steamer PLUTO 
(1,600 tons) sank after an explosion off the east coast of Scotland. The 
Dutch steamer 00STPLEIN (5,000 tons) in collision south of Dover* The Danish 
steamer LICA MAEP.SK (2,500 tons) aground near Goodwin .Sands* 



Own Situation % 

Atlantic ! Nothing to report© 

The following was transmitted to the ALTMAHKt 

"1. During the last few weeks several German steamers have passed 
north and south of Iceland and reached home. German ore traffic from 



~ 128 ~ CONFIDENTIAL 



23 Jan. 1940 CONFIDENTIAL 



Narvik in Norwegian territorial waters. 

2. The British destroyer GRENVILLF. was sunk by a submarine. 
Numerous enemy shipping losses off the east and west coasts of 
England " 

North Sea t 

Nothing to report© 

Because of the ice situation Group West has been forced to request 
the HBSSEN for the North Sea to assist in ice-breaking, since the 
SCHLESWIG HOLSTEIN is at present out of action. 

The Naval Staff has requested the Soviet Government through the 
Naval Attache in Moscow, to provide an icebreaker for temporary 
use in the river estuaries* 

Baltic Sea t 

Ice situation substantially unchanged* 

The Gedser Channel at present ice-free, an ice barrier is, however, 
drifting towards the gap in the minefield. Operations against 
merchant shipping in the eastern Baltic Sea carried out by the 
HANSESTADT DANZIG. 



Submarine Situations 



Atlantic i 



In the operational area? Submarines IT "44", U w 34 w , U "SI"', U n 56 n „ 
Submarine U "34 M> has been assigned the area south of Ireland and the 
western entrance to the Channel, submarine U **55 B the area southwest 
of Ireland. Submarine U *34"' is shadowing a convoy on westerly 
ooursej submarine u* *44* is in contact with the convoy w KS tt west 
of Cape St .Vincent. 

Horth Sea t 

In the operational area» submarines U *61 H , U "23", U "18*, U "19". 

On passaget submarine U "20*. 

On return passaget submarines U W 22 M , U *57 w . 

-129- 

CONPIDENTIAL 



23 Jaru 1940 CONFIDENTIAL 



Submarine U "9 !! on homeward passage, reports sinking a 4,000 ton steamer south 
of the Dogger Bank and an 8 - 10,000 ton steamer in approximately the same area. 
While homeward bound the boat observed 12 fishing smacks with lights set or 
route 1 as far as 8 miles east of the western edge of the declared area. 

Submarine U ,j 59" reported that she also used the passage through the 
British declared area east of Lowestoft, which was used by submarine 
U "56". 

The boat observed moderate shipping at night between the declared area 
and the English coast; she sank a 2,500 ton steamer, east of Great 
Yarmouth and reported inexplicable misses for the remaining torpedoes. 






Merchant Shipping ; 

Own Shipping: 

Our suspicions that the steamer PHAEDRA (619 BRT) was taken prize have been 
confirmed,. According to information from the Naval Attache at the Hague, the 
ship was taken prize by the British while on a voyage to Rotterdam with 
a mixed cargo* Daventry Radio confirms that the ship was captured and brought 
in. Time and place not yet known, The ship had a Dutch pilot. 

The shipping route in the North Sea area has been altered and ships now proceed 
roughly as far as Paternoster inside Norwegian and Swedish territorial waters 
and after dark cross the Skagerrak on the line Skagen '-. Paternoster. The route 
then runs inside, or in the vicinity of, Danish territorial waters through 
Nordmanns Deep, and then as before* After the evening of 23 Jan. it will also 
be necessary to close the Elbe to shipping because of ice conditions; this 
however, will not affect the ore shipments to any extent, since the greater 
part of the homeward bound ore steamers are directed to Bremen and Emden. 
According to information from Group West it is at present still possible for 
vessels to enter the Weser and the Ems. 

The Naval Attache in Madrid reports? A Spanish steamer which put in to Vigo 
was stopped by French patrol vessels and the Captain was shown photographs of 
the German ships lying in Vigo. It was remarked that they were waiting for 
these ships to sail. 

Foreign Shipping: 

The Consulate General at Amsterdam reports: According to information from 
Ottawa the British Government has given 60 ships lying on the Pacific coast the 
order to load wood in British Columbia at once and transport it to Great Britain. 
The loading will commence at the end of January* 

CONFIDENTIAL 
- 130 - 



23 Jan. 1940 CONFIDENTIAL 



Eleven grain and meat ships left the La Plata estuary between 21 and 23 Jan. 

Sweden has instituted a convoy system between Stockholm and the Aaland Islands 
and between Gothenburg and Norwegian waters* 



******** ********************* 



-131- 

CONFIDENTIAL 



24 Jan. 1940 CONFIDENTIAL 

Conference on the Situation with the Chief, Naval Staff . 

Special Items ; 

I. Battleship Operation : 

On the subject of an operation by the battleships and the cruiser HIPPER, 
Group West, in a letter dated 10 Jan. stated that it did not consider more 
extensive battleship operations in the Atlantic possible until. the repairs 
to the engines, scheduled for the beginning of April, were executed. The 
Naval Staff finds itself forced to agree, but regrets the long inactivity- 
it implies for the battleships in the North Atlantic and Iceland area, 
especially since it considers the present time, when the British forces 
are undergoing extensive dockyard and repair periods , extremely favorable. . 
The first battleship operation will now only consist of a short sortie against 
convoy traffic between Norway and the Shetlands and, according to information 
from Group West, will not be possible until a sufficient number of submarines 
is ready. The date was previously fixed for 30 Jan. Group West reports 
in a teletype dated 23 Jan., however, the necessity of postponing the 
operation again because of ice conditions, giving the following reasons: 

1. Impossible to get submarines out of Kiel and Hamburg at present. 
Only three submarines will be in position on 30 Jan. One of the fundamental 
requirements for the operation would thus be lacking. 

2. Transocean planes will not be available by the end of January, 
since they cannot be flown-in because of the ice. 

3« It is doubtful whether the battleships can complete their gunnery 
exercises in time because of ice conditions. The Commanding Admiral, however, 
regards the exercises as indispensable for the operation. 

Group West therefore does not propose to carry out the operation until there 
are at least eight submarines available and the battleships have completed 
their gunnery exercises. 

While the Naval Staff agrees with Group West on the necessity for the com- 
pletion of the gunnery exercises before the operation, it takes quite a 
different point of view on the other questions. 

The proposed submarine operations off the enemy bases and in the enemy 
approach areas represent an additional operation to increase the chances of 
success as a whole, and are on no account to be regarded as indispensable 
to the battleship operation. Their principal purpose is not to afford 
relief to the battleships. Dependence on the disposition of numerous 
submarines could cause an insupportable delay in the operation. The state of 
readiness of the transocean planes must not be allowed to restrict the 
operation, whose successful execution does not depend on this, in itself very 
desireable, but by no means exhaustive, long-range reconnaissance. 

CONFIDENTIAL 
- 132 - 






24 Jan* 1940 CONFIDENTIAL 



The following directive has therefore been issued to Group West by teletype: 

1. The number of submarines originally requested need not be 
compulsory* 

2. The operational readiness of the transocean planes is not 
to influence the date chosen for the -operation. 

3. Completion of the firing exercises is recognized as indis- 
pensable. 

4. The present favorable enemy situation makes an early execution 
of the operation advisable. 



II. A new Directive has been issued by the Naval Staff to Group West 
and the Commanding Admiral, Submarines for operation "Gelb" , in order to 
free all possible forces from restriction to definite assignments and to 
give them greater freedom of action: (see War Diary, Part C, Vol. II 
"North Sea"). 

S pecial Items ; 

a. As a result of the continuing unfavorable state of the weather the 
date is still unsettled. If the enemy takes the initiative by crossing the 
Belgian frontier or by establishing himself in the Dutch coastal area, it 
might be necessary to start our own operations at short notice. Former 
preparations remain as before. It must be possible for surface forces, 
concentrating on the Scheldt, to execute their operations within the minimum 
space of time. The next most important mining target is Texel -? Ben Helder 
passage. 

b. No submarines for operation 'Uy but boats operating in the North 
Sea operational area may be used in operation "Gelb". 

c. Operation "L" as before. 

d. 24 hours alert for operation "M". 

Three destroyers to be continuously at 24 hours notice for operations 
»W n - "M". (For keywords see directive). 



Items of Political Importance: 

The French reply on the subject of the Panama Neutral Zone follows the 

CONFIDENTIAL 
- 133 - 



24 Jan. 1940 CONFIDENTIAL 



British interpretation and declares that France could abandon her right to 
patrol in the security zone only if there were no German warships or supply 
ships (l) in the zone, and these ships were interned in U.S. ports. 



In her economic negotiations with Spain, Great Britain has demanded that 
Spain shall not permit thro ugh -transit to Germany of any kind of Spanish 
goods, or goods coming from other countries via Spain. 



According to intelligence reports from Jugoslavia, Turkey has warned the 
Western Powers against an advance in the Balkans, Turkey is endeavoring to 
maintain strict neutrality and has apparently resolved not to support any 
offensive plans the Western Powers may have against the Balkans. 



A fresh U.S. protest to Great Britain against the holding of U.S. ships for 
long periods in British control ports. Churchill's speech coolly received. 



Special Reports on the Enemy ; 

Atlantic; 

Great Britain; 

Nothing to report. 

France; 

Submarine hunt by planes and subchaser units in the eastern Channel in the 
forenoon. Destroyer patrol activity west of Gibraltar. At noon a destroyer 
of the 2nd Destroyer Division, probably belonging to the escort of convoy KS, 
reported a submerged submarine (U "44") west of Lisbon. The report was re- 
peated by British and French stations. 



North Sea; 
Enemy bombers flew over, but only as far as the western boundary of our 

CONFIDENTIAL 
-134 - 



24 Jan. 1940 CONFIDENTIAL 



declared area. 

Two submarines in the North Sea received several priority radio messages 
on the evening of 23 Jan. They may possibly have been connected with the 
German steamer KLAUS RICKMERS which ran aground off Hanstholm. 



Nine trawlers were detected in the Dogger Bank area and south of it. 
Markings G.Y. and names PRINZ VIKTOR, VINDICATE, and "G.Y. with figures" 
(probably British trawlers from Great Yarmouth or Grimsby). 



Shipping Losses : 

The British steamer PARKHILL is overdue. 

The Norwegian steamer BIARITZ sank 20 miles southwest of Ymuiden after 

an explosion. 

The Norwegian steamers SYDFOLD (2,400 tons) and MIRANDA (1,300 tons) sank 
off the Scottish coast. 

The British trawler NEV7HAVEN is overdue. 

The British steamer BARON RUTHAVEN (3,200 tons) was bombed by German planes 
southeast of Lerwick. 



Own Situation ; 

Atlantic; 

Nothing to report. 

The supply ship aLTMaRK received a radio message stating that the 
German Embassy and Consulates in Norway have been informed of her 
imminent return. 

North Sea; 



The ice situation on the lower Elbe has improved to such an 
extent that Group West considers it worthwhile for the HESSEN 
to remain in the Baltic Sea as a target ship for the battleships. 
The submarine hunt by forces of the Commanding Admiral, Defenses 

CONFIDENTIAL 
- 135 - " 



24 Jan, 1940 CONFIDENTIAL 



North cooperating with planes was unsuccessful. 

Air reconnaissance sighted trawlers south of the Dogger Eank 
without flag or national markings; they showed no flag in spJtj 
of warning machine-gunfire. South of them, within visual range, a 
submarine was crash diving, and could not be attacked since the 
place where it dived could not be established dearly. At noon 
one submarine was identified at periscope depth on the Dogger Eank. 
No attack was made because of the ban on anti-submarine hunts in 
this area. 

On the basis of the report from submarine U "9" that twelve fishing smacks 
were seen on Route *1" inside the German declared area, the Group assumes 
that these were Danish fishing smacks. The Commanding Admiral, Defenses 
North, who still controls the Special Groups, has been ordered to detail 
two boats of the 16th and 18th Patrol Flotillas to operate against these 
fishing smacks. Enemy vessels are to be sunk if it is not possible to bring 
them in. Neutral vessels are to be brought in, and if this is not possible, 
expelled from the declared area. Route "1 H is to be traversed by night 
only, vessels taken prize via Route tt Rot M . 

At the sane time, the Group requests that the Danish Government be informed 
through diplomatic channels that fishing vessels run the greatest danger in 
the declared area, and that if they are encountered there they are subject 
to seizure. The Croup considers that the basis of the combat instructions, 
according to which all weapons may be used without restriction in those areas 
expressly declared as dangerous, cannot be applied in the above case. 

Further vessels of the Special Groups are to patrol the ore steamer route 
from Nordraanns' Deep to Paternoster, 

Operational Air Force t 

At 1930 X Air Corps reported the result of the reconnaissance of 
the Shetlands. 

No warships in Lerwick harbor, but a large number of merchant ships. 
Unsuccessful attaok on steamer, (Bombs fell on land as the result 
of a technical failure.) Further unsuccessful attacks, one steamer 
damaged. 



Baltic Sea : 

Gap in the Gedser barrage closed by pack ice, solid covering of ice 
to the north. No longer possible to get through to the west from 
15 miles east of Fehmarn. 



-136- 

CONFIDENTIAL 



24 Jan. 1940 CONFIDENTIAL 

Submarine Situation t 

Atlantic i 

Submarine U "44" off Lisbon at noon, still in contact with the 
convoy (transmitting shadower reports). 

Submarine U "25* probably in the Finisterre area, so that the boat 
will be able to operate on the convoy. 

Submarine U "34" western approaches to the Channel, 

Submarine U "31" off the Minch. 

Submarine U "55* southwest of Ireland, 

On passage x Submarine U "51" west of Ireland, 



North Sea ; 

In the operational area : Submarines U "61", "14", "23", "18", "19". 
On her return home, submarine U "22" reports having successfully 
torpedoed a destroyer (EXMOUTH) and a 1,500 ton steamer. No traffic 
east of the British declared area. (2 misses.) 

Submarine U "60" reports a miss caused by severe yawing in the seaway 
and three misses through torpedo failures. Submarine U "18**, on 
return passage, reports one steamer sunk, three failures. 

Submarine U "59" likewise one steamer sunk, three failures through 
non-firing. 



Iter chant Shipping : 

On 23 Jan, the Ministry of Transportation wired to the Embassy in Oslo* 

"You are requested to advise Norwegian ships proceeding through the North Sea 

to German ports to sail east of the German declared area, close to the coast 

of Jutland© An escorting officer will escort the ship when she approaches German 

territorial waters. 

With reference to the Allies* urgent need for freighters, the French press speaks 
of sanctions against the scuttling of German merchant ships* Scuttling does 

-137- 

CONFIDBNTIAL 



24 Jan. 1940 CONFIDENTIAL 



away with any obligation to save the crew? captains could be brought before a 
court martial • Radio Daventry announces that British warships have received 
special instruction to guard against further scuttlings of German ships. 



The Naval Staff is issuing guiding principles for use of ground 
mines, as a draft for "Ground mine tactics*' 1 , based on war experience 
gained to date, to all offices primarily concerned (including the 
Commander in Chief, Air Force, General Staff and Commander in Chief, 
Air Force, Naval Air Inspectorate). (See War Diary, Part C, Vol, VI.) 

The following most important points have arisen from experience gained to datet 

1. The ground mines are to be laid in such a way that the enemy will 
most likely strike them, cannot evade them and can sweep them only with 
great difficulty. 

2. The best laying position is always an area which the enemy must 
traverse and which does not permit any detour . 

3* The most p ractical form of minelaying is deep and spread out 
(area„not lines')^ 

4. When mining a narr ow c hannel (river or route) do not lay straight 
across the route, but "along it'and in ohequered formation. 

5» Firing setting, mix with moored mines* Anti«sweeping devices 
according to situation and as deemed appropriate. 

6 Navigational accuracy is a basio requirement when minelaying. 
The safety of our own forces, which may possibly operate in the same 
area later on, depends on the reliability of the data given in the 
minelaying report® 



A new directive on Special Group operations has been issued to 
Naval Group Command West, based on experience gained in the first 
operations carried out by Ships "4 W and "20*, and on examination of 
the operational possibilities of the trawler Special Groups. 

Special Group operations are to be planned on the following lines until 
further experience is available! 

1. Main tasks destruction of enemy warships under cover of camouflage. 

-138» 

CONFIDENTIAL 



24 Jan. 1940 CONFIDENTIAL 



2. Subsidiary task* Operations against merchant shipping by- 
surprise sinking of merchant ships at night without warning within 
the soope of the regulations generally issued on this subject. 
Pull camouflage is to be maintained even after sinking. 

3. Reconnaissance activity on certain shipping routes, e.g. between 
the Shetlands and Norway, along the Norwegian coast - combined with the 
assignments under 1. and 2. if occasion arises. 

The attention of the Group is further drawn to the necessity for clearly 

defined allocation of tasks and thorough briefing of the captains on 

operational and tactical procedure. Since the allotted tasks mostly lie outside 

the Heligoland Bight, it is best to subordinate the Special Groups administratively 

to the Commanding Admiral, Defenses North, but operationally to Group West . 

(For further details see directive in War Diary, Part C, II.) 



41**41*41 ***************** 



-139- 

CONFIDBNTIAL 



25 Jan. 1940 CONFIDENTIAL 



Items of Political Importance . 

British steps in the ASAMA MARU case are still causing sharp protest in 
Japan. Mass meetings and protests stress Japanese predominance in Eastern 
Asia and attack any British interference in the Japanese sphere of interests. 
Great Britain, on the other hand, is endeavouring to reach a quick settle- 
ment. 



Churchill's speech with its unconcealed threat to the neutrals is still 
being sharply criticized by the neutral countries. The Government declares 
that this is only Churchill's personal opinion, not the official policy of 
the Government. Even in the U.S.A. growing ill feeling is unmistakable in 
connection with the molestation of free U.S. trading (trade and postal 
control) and damage to other U.S. interests by Great Britain, and is making 
Roosevelt's efforts to support the Western Powers very difficult. 



For the situation in the Balkans and the attitude of Greece and Turkey, see 
Political Review No. 21. 



Reports from our Envoy Ritter indicate difficulties in the course of the 
Russo-German economic negotiations in Moscow, since the Russian Government - 
while in principle ready to deliver raw materials - is very emphatic on 
"reciprocal aid", and will undertake no deliveries without simultaneous 
German return. The negotiations continue. 



Special Reports on the Enemy : 

Atlantic : 

Great Britain : 

The repair ship RESOURCE left Gibraltar for the west on 22 Jan. and is probab- 
ly proceeding to Freetown. 

France : 

Various submarine warning signals were given northwest of Cape Villano and 

CONFIDENTIAL 
- 140 - 



25 Jan. 1940 CONFIDENTIAL 



west of Oporto? these were repeated "by Brest, Dakar, Portsmouth and other 
stations, and can be ascribed to the activities of submarine U **44 w and 
possibly U w 25 w . Vessels have been detailed to attack the northern boat* 
An unidentified vessel off Cap® Villano reported that it had been attacked by 
a submerged submarine- and requested help* 

The convoy which left Gibraltar at noon on 24 Jan* consists of 35 .ships and 
is escorted by four destroyers, including the TIGRB and CHACALj unidentified 
vessels put out from Casablanca on 25 Jan» to patrol the area west of Gibraltar, 
probably in connection with the convoy and the threat of submarines* 

In the evening the French High Command announced a successful attack by a 
patrol vessel on a German submarine (probably the defense which submarine 
U " , 44 w encountered when she attacked the convoy) • 



North Sea t 

Th© destroyers ESCAPADE, ECHO, ECLIPSE and ENCOUNTER, and the gun boats 
GRIMSBY and W00LST0N were detected at sea in the Rosyth area. 

The submarine TRIAD, THISTLE , URSULA and H "'34'* are operating in th© North 
Sea* 

According to a statement made by th© Captain of an Italian steamer, th© 
destroyer WATCHMAN (1,100 tons) was towed into th© Downs severely damaged 
at the end of November*, Parts of the forecastle with guns were missing* 
th© after funnel had toppled over and th© stern was buckled© 

According to reports from Bergen a company of ships (escort doubtful) 
composed of six Norwegians, six Swedes, three Finns, three Estonians and one 
Latvian set sail westwards from Bergen on 26 Jan. 

Shipping Losses* 

Submarine U **44* sank two steamers from the convoy off Oporto* Two J 
British steamers collided off Liverpool; the British steamer GLBMMIES (4,700 
tons) was severely damaged. The British steamer DURBAN CASTLB (8,200 tons) 
damaged in the Rosyth area* The Finnish steamer ONTO (1,300 tons) struck 
a mine in the North Sea* The Swedish steamer PATRIA (1,200 tons) struck 
a mine* Unidentified Norwegian steamer struck a mine. Th© Latvian steamer 
EYERENK (4,400 tons) torpedoed (submarine U w 19 w ). The Norwegian steamer 
GUDVEIG (1,300 tons) torpedoed off Longstone (submarine U *19"). The 
Latvian steamer BVBROJA (7,400 tons) aground off Terschelling. 



•141- 

C&JFIDENTIAL 



25 Jan. 1940 CONFIDENTIAL 

For disposition and activities of enemy forces during the third week 
of January see Radio Monitoring Report No. 3/40: 

Special Items ; 

The extensive overhauling of heavy forces is going ahead, taking advantage of 
the present extremely favorable lull - for England - in Atlantic waters, and 
of the unfortunately enforced inactivity of heavy German surface forces in 
the northern maritime areas. The present great weakness in battleships in 
the home area is therefore worthy of notice (only the WARSPITE, HOOD, and 
REPULSE at present operational); this is of course compensated for by the 
increased number of cruisers patrolling the northern area and protecting the 
convoy routes to Norway. 

A large number of auxiliary cruisers are being put on coastal escort service, 
also on convoy and patrol duty. 

Merchant shipping in coastal waters is becoming increasingly unsafe, but no 
permanent stoppage of shipping in any one spot can be identified. Strong 
patrol forces are concentrating on the interception of German steamers re- 
turning from overseas. Further battle groups are being prepared to combat 
German merchant raiders appearing in the South Atlantic. 

For indication of the effects of the German pocket battleships' appearance 
in the Atlantic, see Radio Monitoring Report. 



Own Situation ; 

Atlantic; 

Nothing to report. 

North Sea; 

In grid square 8317, i.e» northwest of West Terschelling (south 
of our declared area and in the southwest corner of the British 
declared area) the 7th Minesweeper Flotilla is sweeping some mines, 
the first British minefield detected. It is assumed that the mine- 
field covers only a small area. 

This is most probably the same minefield already struck by three neutral 
steamers (the ADOLF BRATT, VEGA, and INDRA), according to a confidential 
communication from the Dutch Admiral Herris to the Naval Attache at the 
Hague (dated 2 Jan.). (See letter from the Attache, War Diary, Part B, 
Vol. V, 94). 

CONFIDENTIAL 
- 142 - 



25 Jan 1940 CONFIDENTIAL 



The Commander Destroyers and seven destroyers put to sea for an operation 
against merchant shipping off the south coast of Norway, (Keyword 
*Hollaender*)« Assignment: Operations against merchant shipping between 
Stavanger and Lindesnaes* 



Baltic Sea t 

The ioe situation is essentially unchanged* Heavy drift ice in the 
Sound, only southern position still occupied* Heavy pack ioe off Gedser* 
All pilot vessels still withdrawn from the Belts* 

The remote control target group HBSSSN and BLITZ is endeavoring to get 
through from Kiel to the firing area off Aroona because of the urgenoy 
of completing the battleships* gunnery exercises* 



Submarine Situations 



Atlantict 



Submarine U *44 n reports an attack on a convoy* Two steamer sunk* 
Severe depth charging. Boat will not take on supplies at Cadis* 
The Commanding Admiral, Submarines assigned the following operational 
areas i 

Submarine U "51* grid square BE 3000 

Submarine U *34**) 

Submarine V •56") 6 rid l ^ uara BP 100 ° as far as th# ch « MM>1 » 

Further, submarine U u Z6 n is in the Pinisterre area and U *31" is off the 
Minoh. 

North Sea i 

In the operational areat Submarines U *61% U *23% U *19**» On return* 
submarine U *14* reports sinking one steamer, two misses* One gyroscope 
failure* Submarine U "18" on return passage* On passage t submarine U *20"j 
sailedt U *7"s Heligoland, ready to sail} submarine U "13** 



-143- 

CONFIDENTIAL 



25 Jan. 1940 CONFIDENTIAL 



Merchant Shipping: 

On 24 Jan, the Embassy in Oslo telegraphed a request for instructions by- 
cable as to v.-hat sailing instructions can be given to Norwegian packet 
steamers on the west of Norway route from Hamburg. The Norwegians are 

quite prepared to sail along the west coast of Jutland, 

« 

The following answer from Group West has been transmitted to Oslo: 

"Steamers to sail from the Elbe to List with an escorting officer. Thence 
via Nordmann's Deep and Danish territorial waters to Hanstholm, Cross the 
Skagerrak on the direct route to Norway," 

Steps in the Economic War : 

According to a report from the Embassy in Washington, the British and French 
Governments have - as in the World War - established a branch of their 
Ministry of Shipping and Trade in the U.S.A. Task - purchase of war materiel, 
transshipment, provision of shipping etc. 



- 144 - CONFIDENTIAL 



26 Jan. 1940 CONFIDENTIAL 



Items of Political Importance ; 

During a conversation between the German Ambassador in Brussels and the U.S. 
Ambassdor, (a friend of Roosevelt), the opinion was expressed that a violation 
of Dutch-Belgian neutrality by Germany would have severe repercussions on 
public opinion in the U.S.A. and might possibly cause the United States to 
enter the war on the side of the Western Powers. 



In a speech the Dutch Foreign Minister declared the Netherlands' determination 
to abide by their policy of strict neutrality, Military preparations were, 
however, necessary in view of the presence of strong belligerent forces on 
their frontier* 



The U.S» - Japanese trade treaty lapses on 26 Jan, According to U.S. reports, 
the United States provides 34 % of Japanese imports, and absorbs 18 % of her 
exports. The U.S. delivered to Japan about 56 % of her essential requirements 
for heavy industry. These figures show Japan's great dependence on trade with 
the U.S.A. and her unfavorable political relationship to the U.S.A, on this 
account. 

The Fuehrer has decided that the designation " Greater Germany's fight for 
freedom " is to be used for the present war. There is no objection to an 
occasional use of the expression "British War" , especially in connection with 
the war at sea. 



Re-naming of the pocket battleship DEUT3CHLAND to LUETZOW was 
published, with the announcement that the s hip returned home some 
time ago after four months of successful operations against 
merchant shipping. The reason for the re-naming was stated to be 
that the name DEUTSCHLAND is planned for a larger ship later on. 



1200 Report from the Bureau of Naval Armament, Naval Construction 

Division to the Commander in Chief, Navy concerning a new type 
of submarine, the "Aurol" boat: 



- 145 - CONFIDENTIAL 



26 Jaiu 1940 CONFIDENTIAL 



Aim. of development j fast boat with wide cruising range. An experimental 
boat of 80 tons with a speed submerged of 27 knots ie to be ready in the 
spring. Considerations so far extend to the construction of a 320 ton boat 
with a submerged speed of 25 knots (cruising range: at 25 knots while 
submerged 110 miles, at 10 knots while surfaced 3,000 miles) and of a 500 
ton boat. Completion of this boat will be possible by spring 1942 at the 
latest. 

Special characteristics of the boats (320 tons) : 

Maximum speed while surfaced is less than maximum speed while submerged. 
Total range corresponds roughly to that of the present 250 ton type, crew's 
quarters more cramped. 

No guns. Probably only 2 torpedo tubes* Difficult to steer while 
submerged because of high speed* 

The Commanding Admiral, Submarines considers that its high speed submerged, 
and the possibility of using it by surprise in this war are so deoisive 
that everything should be done to promote the construction of the boats* 
He suggests that three experimental boats should be built simultaneously 
(can be used later as replacements or reserve). The Chief, Naval Staff 
considers the new construction a new and most important weapon and has 
decided to commence work on plans for the construction of a 320 ton boat 
immediately. 

Before the experimental boats are built, the first experiences with the V 80 
boat, which will be roady in the spring, are to be awaited. 



Special Reports on the Enemy : 

Atl antic : 

Great Britain: 

The cruiser AJAX with two destroyers (HEREWARD, HUNTER) was 600 miles north- 
west of the Cape Verdes at noon on her voyage to Great Britain. 

A convoy escorted by an auxiliary cruiser was detected southwest of the 
Canary Islands on northerly course. 

Fra nce : 

\patrol activity and air reconnaissance in the Channel area. Commanding Admiral, 
Atlantic Fleet at sea in the Bay of Biscay, proceeding to Brest. A heavy 
cruiser (COLBERT ?) and three merchant ships on northeasterly course in the 
western part of the Bay of Biscay. A convoy off Cape Ortegal. 



-146- 



C0NFIDENTIAL 



26 Jan, 1940 CONFIDENTIAL 



Planes of the 1st Flying Squadron over the southern part of the Bay of 
Biscay, proabaly as protection for these convoys and to attack the German 
submarine reported near Cape Ortegal, 

A fairly large convoy on northerly course near Cape St. Vincent (submarines 
IT "25* and U n 44 rt were informed). 

The French' Admiralty informed the patrol vessels off the coast of Spain 
that a German submarine probably put in to Vigo on 26 Jan, Intelligence Center, 
Spain reports that the BRETAGNE, DDPLEIX, TOURVILLE and the 5th Destroyer 
Division passed Gibraltar westwards. These forces are probably to relieve 
the forces stationed off the coast of West Africa, 

North Sea t 

According to a further agent's report from Bergen, the convoy assembling in 
Bergen on 26 Jan, (including neutral ships), is supposed to be waiting for an 
escort of a fairly large number of British warships. 

The submarine ORZEL was detected 15 miles southwest of Feistine (Skudesnaes 
Fjord). 

Reports put out on purpose are appearing in the British press concerning 
an alleged new and very effective type of mine, which has been laid in the 
British declared area along the east coast of England (?). The nines are 
being kept extremely secret (t). 

Shipping Losse s? 

The Swedish steamer COTIA (1,640 tons) off the Scottish coast. The Dutch 
steamer OTTOLAND (2,200 tons) ran aground near Sunderland. The Swedish 
steamer SONJA (1,820 tons) was sunk in the Atlantic on 22 Jan. (submarine). 
The British steamer DIDO (3,534 tons) ran aground in the Quessant area. 

Own Situation ! 

Atlantic t Nothing to report (see Submarine Situation), 

North Sea j 

The Commander, Destroyer's operation against merchant shipping 
between Lindesnaes and Stavanger had to be broken off because of 
the weather. Group West is planning a destrover operation against 
trawler fleets in the Dogger Bank area for 26/27 Jan. (cover name 
*Wikinger*) . 

-147- 

CONFIDENTIAL 



26 Jan » 1940 CONFIDENTIAL 

Baltic Seas 

War Against Merchant Shippings 

The Estonian steamers KBSSU and VEGA, -which were intercepted by 
the HANSESTADT DANZIG on the basis of an intelligence report dated 
25 Janȣ have been taken to Pillau for examination* The cargoes 
consist of 160 tons of flax and 36 tons/ of plywood, 

Baltic Se a Entrances and the Ice Situation s 

The Commanding Admiral, Defenses Baltic reports that, during minesweeping 
operations on the west wing of minefield "Undine 2" to straighten the 
course of the minefield gap, in a stretch of 2 - 3 miles only 10 type 
EMD mines without contact setting were swept. There should have been 
77 mines, half with, and half without contact setting in this wing. 

Still only the south position is occupied in the Sound. The buoys 
indicating the gaps in the minefield have mostly been displaced by 
the drifting ice. 

There is a solid covering of floe ice with open water in places from Holtenau 
to the southern entrance or the Great Belt* No shipping. A solid covering 
of ice in the Great Belt with narrow open channel. No shipping* A smooth, 
solid covering of ice from Holtenau to Fehmarn and in Fehmarn Belt, also in 
Luebeck Bay» Large drifting floes and small lumps of ice, here and there open 
water, in the Gedser Channel 9 East of Gedser there is a solid, smooth covering of 
ice, which is broken up further northwardo Open water in the area 40 miles off 
Bornholra to 10 miles off the coast of Bomholm* 



Submarine Situation; 

" Submarine U *44 M reports that it is not possible to take on supplies 
near Cadis as scheduled, since, if supplies were not handed over 
successfully, there might not be enough fuel for the return passage. 
The Conmanding Admiral, Submarines has therefore assigned the execution 
of this task to submarine U n 25 tt . The boat can carry out the supply 
operation during the night of 30 Jan.* she still has five torpedoes. 

No alteration in submarine dispositions© 

NorthSeaj 

In the operational area* submarines U tt 61 tt , U n 2Z n , U "20*. 



-143- 



C CONFIDENTIAL 



26 Jan* 1940 CONFIDENTIAL 

On passage: submarine U "13". 

In Heligoland: submarines U "7", U "41", U "48". 

On return passage: submarine U "19", the boat reports four torpedoes, 

four hits* 



Merchant Shipping : 
Baltic route : 

The Head of the Transportation Division of the Commissariat for 
Foreign Trade in Moscow declared that the Soviet authorities were 
about to reooaimenoe the routing of the greater part of their 
transports via Hamburg© 

Dutch route: 

Because of the mine situation north of Terschelling Group West has 
requested that the Ministry of Transportation be informed that 
steamers drawing over 7-|v m* are not to be sent to Rotterdam, but 
are to be unloaded in German ports© 

The Ministry of Transportation has been informed. 

Foreign Shipping : 

Swedish reports note with satisfaction the release of all the Swedish steamers 
with timber for the U.S.A., which were taken to German ports to be examined for 
contraband* 

For a survey of the routes used by enemy and neutral shipping in the 
North Sea, Atlantic Ocean, Mediterranean and Indian Ocean see Report of 
Naval Intelligence Division No 3 dated 25 Jan* (Foreign Merchant 
Shipping file.) 



afternoon : 

Report by the Commander in Chief* Navy to the Fuehrer j 

Points discussed : 

1* Situation in the Baltic Sea - question of mining Swedish territorial 
waters in the Sound* 

2, North East Passage: No political difficulties* 



-149- 

CONFIDENTIAL 



26 Jan, 1940 CONFIDENTIAL 



3, Situation in the North Seaj Enemy situation - operational plans, 

4, Wer in the Atlantic t despatch of pocket battleship LUETZOW and 
the auxiliary cruisers, 

5, Conduct of submarine warfare* question of further intensification 
of operations against merchant shipping - mine warfare, 

6, Effect of the war against merchant shipping - necessity of air 
support for the Navy - concentration of warfare against Great Britain , 

7, Question of concentration on land warfare. Not possible to withdraw 
personnel and material from the Navy for the Army. 

8, Necessity for further construction on, and maintenance of battleships! 

9, Deliveries requested by the Italians - proposals. 

10, Political questions. The attitude of Russia,, Italy, Norway, Sweden. 

11, Technical innovations: submarine pens, the Aurol submarine, echo- 
ranging sets, anti-location gear. 

The Fuehrer ' stfeci signs ; 

1, The Fuehrer consented to the measures the Naval Staff has planned 
for further intensification of operations against merchant shipping, 

- 2. The Fuehrer emphasized the necessity of protecting the Ruhr as the . 
most important basis for all further warfare and declared that he considered 
the next step should be to extend the land base for the conduot of warfare 
against Great Britain, 

3© The Fuehrer has consented to the Italian requests, provided German 
requests are also fulfilled by the Italians, 

(For particulars see memorandum of the Commander in Chief, Navy, War Diary, 
Part C, Vol, VII.) 

An order has been sent to the Commanding Admiral, Submarines, Group 
West and Group Baltic for further intensification of operations 
^against merchant shipping, on the basis of the Fuehrer* s consent t 
(see l/skl 1 op 93/40 Gkdos. Ch. in War Diary, Part C, Vol. IV, 
Submarine Warfare), 



-15.0- 



8 



CONFIDENTIAL 



26 Jan. 1940 CONFIDENTIAL 

This intensification includes the following measures: 

1. Extension of the area off the north coast of Scotland (56°- 6l°N, 
00 _ 4° 7y) j in which attacks without warning are permitted on all merchant 
ships (except Italian, Spanish, Russian, Japanese and U.S.) as far as 2° E . 

2, Extension of the area in the Bristol Channel in which such attacks 
are permitted as follows: 

50° N, 5° W 
49° N, 10°30» W 
51° N, 10°30» W 
51° N, 8° W 
52° N, 6° W, 

the Irish Sea i s included to the northward with the exception of a 10 mile 
wide strip along the Irish coast, 

3» In the following new area, with immediate effect, submarines are 
permitted to attack with all weapons (except against Italian, Russian, 
Japanese, and American ships): 

Northern approaches to the English Channel: 

54°10«, 0°20» W 

54°10», 3° E 

53° N , 3°45* E 

51°20%2°30» E 

51° N , 1° E. 

4. In all these areas unarmed, illuminated passenger ships of all 
nations sailing alone are to be excepted. 

Attacks are to be made undetected if possible in order to maintain the f ictio' 
of hits on mines. 



Conference at the Foreign Office about further German measures since 
Sweden's refusal to carry out mining operations in the Sound, 

The Naval Staff's attitude on this subject is again summarized in a letter to 
the Foreign Office dated 26 Jan. (l/Skl I ab 1078 Gkdos.) Group Baltic and 
the Commanding Admiral, Defenses Baltic have been informed. 

See letter in War Diary, Part C, Vol. Ill, 

CONFIDENTIAL 
-151- 



27 Jan. 1940 CONFIDENTIAL 



Ite ms of Political Importance : 

lo The Norwegian Foreign Minister has rejected British protests 
regarding the alleged sinking of three British steamers inside Norwegian 
territorial waters - (the steamers GARQUFALIA, DBPTFORD and THOMAS WALTON) 
in a very decided form, which is fortunate for Germany. Violation of Norwegian 
rights is being contested energetically. In not a single case has proof been 
found that the steamers were torpedoed. For the rest, Norway is well able to 
defend her rights as a neutral. The results of the Norwegian Governments 
investigations have been received by the Foreign Office. The German answer 
will be that in all three cases Germany was not responsible. (See Part C, 
VIII for further particulars.) 

2. Intelligence to hand on Turkey's attitude in the future confirms more 
and more the view that Turkey is for the present bent on fostering peace in 
southeast Europe, and will definitely oppose any unprovoked attack made by the 
Western Powers in the Balkans. In a conversation with the Bulgarian Prim© 
Minister the Turkish Under Secretary is said to have given the assurance that 
Turkey would oppose any passage of foreign troops through Bulgaria and even 
Greece. 

3. A Japanese gunboat stopped the British steamer WING SANG off Fooohow 

on 24 Jan. to examine her papers* The steamer was* however, at once released. 
It is not clear whether this was supposed to be a reprisal for the ASAMA MARU 
case* According to reports the Japanese seem to have acted in any case with 
great caution. 

4. The Uruguayan Government has issued a decree, according to which 

the portion of the SPBE'e crew still in Montevideo - including those officers 
and non-commissioned officers who reported for diplomatic service with the 
Naval Attach 4 - are to be interned. The only exceptions are to be the staff 
doctor and the wounded unfit for further war service. The German Ambassador 
is lodging a protests 






Special Reports on the Bnemy t 
Atlantic j 

Great Britain % 

The ARK ROYAL, RENOWN, and four destroyers put in to Freetown on 19 Jan. 
Fresh confirmation has been received from Canada of regular air patrol of 
the North Atlantic route from both sides in connection with the protection of 
oonvoys. The type of plane used is the SUNDERLAND. The planes are based 

-152- 

CONFIDBNTIAL 



27 Jan. 1940 CON FIDENTIAL 

near Plymouth. 

France: 

The cruiser COLBERT, coming from Gibraltar with a convoy, put into Brest. 
Further convoys were detected by radio monitoring. 

Neutrals: 

The U.S. cruiser TRENTON informed the French naval authorities that three 
German steamers would arrive in Vigo on 28 Jan. 

The American press is busy with the activities of German ships in American 
ports and suspects that some of these ships are to operate in conjunction 
with submarines, some of which are already proceeding to the West Atlantic. 



North Sea : 

The netlayer GUARDIAN has been assigned to lay nets in the Scapa Flow area. 

This observation shows that the Admiralty has not the slightest intention of 

ceasing to use the bay of Scapa Flow. Agent's reports received a short time 

ago about blocking the entrances by sinking numerous merchant ships point to 
the same conclusion. 



It is said that the cruiser ARETHUSA, coming from Portsmouth, will put into 
a Scottish port on 28 Jan., obviously as reinforcement for the 2nd Cruiser 
Squadron , which is now composed of the cruisers SOUTHAMPTON, EDINBURGH, 
GLASGOW and ARETHUSA. 



The casualty list of the destroyer EXMOUTH published by Daventry contains the 
names of 15 officers and 173 m en» 



The agent in Bergen tried from 0730 onwards to establish telephonic 
communication with Berlin but was prevented from doing so by the Norwegian 
Post Office. From this it may be concluded that the convoy which has been 

CONFIDENTIAL 
- 153 - 



27 Jan. 1940 CONFIDENTIAL 



reported several times is now on the move* This suspicion was confirmed by 
the report, received in the evening, that the convoy set sail at 0400 in the 
direction of Floroe. 

Shipping Losses ; 

According to a report from Spain submarine U "44" torpedoed the following 
steamers out of the convoy: the French steamer TOURNY (2,769 tons) and 
the ALSACISN (3,319 tons). The British trawler MERISIA (291 tons). ran 
aground and sank near the Isle of Man. The Dutch tanker MAMURA (8,250 tons) 
was damaged by an explosion in the vicinity of the Downs. The Swedish 
steamer SYLVIA (1,500 tons) is overdue* 



Own Situation : 

Atlantic: 

Nothing to report. 

North Sea: 

No operations by naval and air forces except those of Commanding 
Admiral, Defenses North. Operation WIKINGSR postponed because of 
the weather. 

Baltic Sea: 

Ice situation unchanged. 

The battleships 1 gunnery exercises must unfortunately be postponed 
as it is not possible to use the remote control target group 
HESSEN and BLITZ on account of the present ice situation. The 
remote control target group is returning to Kiel. 



Submarine Situation : 

Atlantic: 

Submarine U "31" reports that the Loch Ewe assignment has been 
carried out. The submarine is in the north part of the North Sea. 
No other alterations in the, operational area. Submarine U "41" 
put out from Heligoland, making for the operational area, 

CONFIDENTIAL 

- 154 - 



27 Jan* 1940 CONFIDENTIAL 



North Sea t 

In the operational area* submarine U "20'* 

On passages submarines U "13% U "24% U w 21 w , U *58 n > 

On return passage* submarine U M, 61 n (after sinking a steamer), 



Merchant Shipping * 

The shipping agent of the Ministry of Transportation in Spain wires that five 
ships are to sail from Vigo on 6 Feb. The Naval Staff is requested to lend 
assistance if possible by bringing up submarines off the port of Vigo» 



Foreign Merchant Shipping ! 

According to a British news bulletin, Great Britain is planning to instal a 
new control station in St©Johns, Newfoundland, or in Canada, to examine U»S, 
ships on the Scandinavian run» 



************************ 



-155- 

CONFIDENTIAL 



28 Jan, 1940 CONFIDENTIAL 



Special Reports on the Enemy : 

Atlantic : 

Great Britain : 

The aircraft carrier ARK ROYAL, the battle cruiser RENOWN and the destroyers 
DAINTY and DIAMOND left Freetown some days ago* 

The cruiser ACHILLES was in Montevideo on 26 Jan„ 

According to an agent f 3 report a convoy of 21 steamers gathered 100 miles 
southeast of Halifax on 28 Jan* 

France s 

The aviso DRAGUBUR ran aground in Dunkirk fairway. A destroyer is to go to 
her assistance* 

Radio monitoring detected the usual patrol activity in the Channel area and 
on convoy route Casablanca - Gibraltar - Cape St. Vincent - Bay of Biscay* 
Two convoys merged west of Cape St* Vincent* The cruiser DUPLEIX and a 
gunboat are patrolling the Canaries area. 



North Sea ; 

Parts of the 2nd Cruiser Squadron with the Flag Officer, and destroyers of 
the 3rd Destroyer Flotilla were east of the Orkneys on 27 Jan. and were 
still at sea on 28 Jan. Some connection may be assumed with the convoy which 
left Bergen via Floroe at 0400 on 27 Jan* G-class destroyers in the Harwich 
area, the destroyer ESCAPADE off the Firth of Forth, destroyers of the 7th 
and 12th Flotillas off the east coast, destroyers of the 1st Flotilla in the 
southern part of the North Sea (Hoof den)* 

Shipping Losses : 

The Norwegian steamer FARO (850 tons) north part of the North Sea. 

Own Situation : 

Atlantic : 

Nothing to report* 

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CONFIDENTIAL 



28 Jan. 1940 CONFIDENTIAL 



North Sea; 

Three British mines were again cut in grid square 8317 (6 miles 
northwest of the western tip of Terschelling), of which one, a 
British submarine -la id mine, was towed as far as the lower Ems, 
where it was lost in the drift ice. Air reconnaissance again 
detected many trawlers and some small neutral cargo steamers south 
of the Dogger Bank. 

The battleships in the Baltic Sea have still not carried out their 
firing exercises because of the ice situation. A most regrettable 
delay in the battleships' activities is therefore unavoidable. 

Baltic Sea ; 

Western Baltic Sea ; 

Solid covering of ice from Holtenau to Fehmarn. Channel in Fehmarn 
Belt. Connecting floes from Fehmarn to Gedser. Traffic possible. 
Solid covering of ice in the Sound, no traffic in the Flint Channel. 
Ice-free channel north of Malmoe along the Swedish coast. Northern 
entrance to Sound - Kattegat - eastern side ice free. Narrow channel 
in northern part of the Great Belt, solid covering of ice in the 
southern from Gmoe. 



War Against Merchant Shipping ; 

The HANSESTADT DANZIG took the Finnish steamer CLIO prize off Kalmar 
Sound; she was sailing on her 5th voyage to Great Britain in a 
convoy of eight ships, with a cargo of canvas, cellulose and paste- 
board. The convoy, which included another Finnish ship, the KARHULA, 
carrying cellulose and sawn timber to Great Britain, was conducted 
outside territorial waters by the Swedish coastal cruiser GUSTAV V, 
No incidents, the convoy is proceeding in close formation to Skagen 
at 8 knots, from where ships will proceed independently to Great Britain. 



Submarine Situation ; 

Atlantic; 

Submarine U "44" commenced the homeward passage after sinking another 
steamer (Greek) (Position 200 miles west of Oporto). 

CONFIDENTIAL 
- 157 - 



28 Jan. 1940 CONFIDENTIAL 

Submarine U "34" (120 miles southwest of Ireland) commenced the 
homeward passage after carrying out mining assignment off Falmouth 
and sinking a steamer. The boat also reports a three-fan miss on 
an auxiliary cruiser. 

There remain in the operational area: submarines U "55", U "51 t1 > ■ 
and U "25", which is en route for Cadiz to take over supplies. 

North Sea* 

Submarine U "56" put out for the operational area. 

Otherwise unchanged* 

For short reports from submarine U "14" and U "18", which have 
returned to base, see Part B, IV. 

Submarine U "14 t . 1 southeast coast of England, one steamer sunk, two 
misses, one failure. 

Submarine U "18" Kinnaird Head area, one steamer sunk, two failures, 
one miss. 

SHHHHHH«-JHHHHHHHHHHHHHHHHHHHHHHt 



- 158 - CONFIDENTIAL 



29 Jan. 1940 CONFIDENTIAL 

Items of Political Importance : 

Daladier's radio address contained severe and malicious attacks on G-eraany 
and German policy, and a fervent call to the French home front to adjust 
itself to wartime requirements in the same way as the men at the front. See 
Foreign Press. 



The Swedish Foreign Minister has lodged a strong protest with the U.S. 
Ambassador, in opposition to the action of the U.S. Government in attempting 
to persuade U.S. nationals to leave Sweden in vievf of Sweden's allegedly 
imminent entry into the war. 



1100 

Conference on the Situation with the Chief, Naval Staff . 

1. The Fuehrer has ordered Study "North" to be revised* by the Armed 
Forces High Command 7vorking Committee as "Weseruebung". - Captain Krancke is 
to be the naval representative on the Committee. 

2. Report from the Chief of Operations Division on the enemy dispo- 
sition of forces, and knowledge acquired lately from the radio morfi.torin r g% 
service; it is apparent how regrettable the present inactivity of oufi£ battle- 
ships is, considering the state of unpreparedness and the disposition of the 
enemy forces. Speedy, and if possible constant activity on. the part of our 
battleships is urgently necessary. Since the gunnery exercises necessary for 
this operation have still not been carried out because the target ship group 
was held up by ice, the Naval Staff now suggests in a teletype to the Group 
and to the Commanding Admiral that the exercises be carried out on another 
target elsewhere, in order to exploit the present favorable situation in the 
North Sea. 

3. Group West reports after a further examination that Ship "l" is not 
suitable for the execution of the proposed minelaying operation. In addition 
to constructional and mechanical deficiencies (the ship is already kU years* 
old), the reason given is her very low speed of 6 - 7 knots and the impossibi- 
lity of camouflaging her adequately. Group requests that the vessel be put 
out of commission. The Naval Staff finds this information the more surprising 
as Ship "1" was already lying in the Jade, ready to sail, in the middle of 
January, and was only prevented from doing so because of damage caused by the 
ice. 



CONFIDENTIAL 
- 159 - 



29 Jan, 1940 CONFIDENTIAL 



The operation by this ship must be suspended as a result of the Group's 
report. The choice of this ship must be considered a complete mistake. 
The Naval Staff greatly regrets her elimination since it had attached great 
importance to a speedy execution of the assignment, making use of the present 
especially favorable time of year and operational situation in the North Sea, and 
had hoped for substantial results. 

Discussions on whether to use the substitute Ship "ll* or another ship are in 
progress. 



Special Reports on the Enemy ; 

Atlantic ! 

Great Britain? 

The consul at Reykjavik reports t about 9 British trawlers west of Patreksf jord 
with cruiser keeping guard. 

The ice limit lies 40 - 60 miles west of Iceland. 

(Transmitted to the ALTKARK.) 

France: 

Customary patrolling in the Channel. Several convoys in the Bay of Biscay, 
one convoy passed the entrance to Brest making seawards on 29 Jan. and has 
probably been taken over by the large submarine SURCOUF. (The SURCOUF was 
still in dock a short time age.) 

It appears from intercepted radio messages that a fairly large operation is 
scheduled to take place off the Spanish coast, (Probably against the German 
steamers which were reported ready to sail.) The forces are kept informed of 
the intended movements of German steamers. 

The cruiser ALGERIB put in to Casablanca with four steamers; the old battleship 
PARIS will probably put in to Dakar on 30 Jan, 



North Sea ; 
Nothing to report, 

-160- 



C0NFIDENTIAL 



29 Jan. 1940 CONFIDENTIAL 



Shipping Losses : 

The Dutch steamer NORA. (300 tons) off the southeast coast, mine. The Danish 
steamer ENGLAND (2,750 tons); the Norwegian steamer HOSANGEK (1,600 tons) 
(submarine); the British steamer PRAGUE (4,220 tons) ran aground west of 
Cherbourg. 



'Own Situation: 

Atlantic: 

Nothing to report. 

North Sea : 

Nothing special to report concerning surface forces. 

"Eighteen planes of X Air Corps (6th Squadron, 26th Bomber V/ing and 2nd Squadron, 
26th Bomber Wing) took off between 0800 and 0900 to carry out operations 
against merchant shipping along the whole east coast, and at 1000 one flight 
of the 30th Eomber V/ing (Ju 88' s) took off for armed reconnaissance over the 
Shet lands * 

In the afternoon another plane was sent to operate against merchant shipping 

in the Thames Estuary. Attacks carried out against single steamers and convoys; 

heavy fighter and anti-aircraft defense encountered from time to time* 

For details of the operation see Air Force General Staff report dated 30 Jan. 
(Air Situation), 

Result of the Attacks; 

Sunk : three merchant steamers 

one lightship (Bast Dudgeon). 

Damaged or set on fire : 

three merchant steamers 

one patrol vessel (lightship ?) 

one fighter shot down. 

No losses on our side . 

After flying in above the clouds at 2,000 meters, the Ju 88*8 penetrated through 
the cloud ceiling exactly over the Shetlands and attacked an anti-aircraft cruiser 
in Sullom Voe Bay. Unsuccessful. Heavy anti-aircraft defense, bomb-sights iced 

up. 



-151- CONFIDENTIAL 



29 Jan. 1940 CONFIDENTIAL 



The operation of the X Air Corps, within the wider range of operations 
against merchant shipping, is highly gratifying. The Naval Staff expects a 
very strong and deterrent effect from constant ruthless attacks on traffic 
in the War Channel along the east coast of Great Britain, in conjunction with 
operations "by the Navy. 

With regard to the sinking of lightships the Naval Staff is of the opinion 
that calculated attacks on enemy lightships are at present inexpedient , 
since the disadvantage to the enemy from such sinking would not he as great 
as the disadvantage to our own naval warfare in the waters concerned, and the 
navigational difficulties which would arise in our own coastal areas from 
enemy reprisals* (The lightship which was sunk was also apparently not a red 
lightship, identifiable as such from a distance, but a wartime gray patrol- 
lightship.) 



It appears from reports from various sources (submarines. Attache', agents) 
that lively traffic is running through the Hoofden between ports on the 
southeast coast of England and the chief ports of Belgium and Holland. 

Even though it generally consists of fairly small vessels, this traffic is 
extremely important because of its density and the possibility of strong 
attack by us on the stream of traffic running from north to the east coast. 
Since, according to other intelligence, the Nordhinder Lightship is not only the 
approach point and point of departure for ships making for destinations on 
either side, but was also named as the position of. covering forces which appeared 
from time to time, an attack on this traffic in the area of the Nordhinder 
Lightship appears worthwhile » 

This attack can be made in different ways e.g. by occasional destroyer or PT 
boat sorties at night, by the use of torpedo-carrying planes on moonlight 
nights, or by permanently stationing 1 or 2 small submariries in the area* 

The necessity of taking action against enemy shipping in the Hoof den 
has been pointed out to Group West and the Commanding Admiral, 
Submarines. The Group is to report its plans. 

(See l/skl I o 1062/40 Gkdos. dated 30 Jan. in War Diary, Part C, Vol. II.) 



Situation in the Baltic Sea ; 
Nothing to report. 

-162- 



CONFIDENTIAL 



29 Jan, 1940 CONFIDENTIAL 



Ice situation substantially unchanged* Little hindrance to 
shipping in the Gedser Channel© Ice situation worse in the 

Swinemuende area* 



Baltic Sea Entrance si 

It is necessary to extend the Danish mined area in the Drogden Channel south- 
wards as far as the limit of Danish territory in preparation for further 
German minelaying operations in the Sound* The Naval Attache in Copenhagen 
has received directions on how to handle the affair during discussions with 
the Danish Navy« Group Baltic and Commanding Admiral, Defenses Baltic are 
being informed* (For directive to Attache see War Diary, Part C, Vol* III, 
Letter l/skl I ab 1079 Gkdos.) 

Submarine Situations 

Atlantic : 

In the operational areas submarines U n 25 tt , U M, 55* , 

Submarine U f *51 n reports two steamers sunk; one bow cap cannot 
be closed* Boat unable to dive to more than 50 meters, is 
commencing return passage* 

Also on return passage a submarines U w 31 n , U *34 tl , U tt 44 w * 

North Sea t 

The Commanding Admiral, Submarines has fixed the following operational areas 
for submarines in the North Seat 

Operational area "Alpha* t west of a line between grid squares 1856 and 4145, 

south of 58° 36 » No 

Operational area tt Beta ,t s east of a line between grid squares 1856 and 4145, 

south of 58° 36 • N west of 0° 20' W. 

Operational area "Gamma** i west of 0° 20 • W, north of 58° 36 f N* 

Operational area "Delta" t east of 0° 20 « W* 

Operational area "Greenland** north of 60° 30* N, 

west of 0° 50* W (northwest of the Shet lands)* 



-163- 

CONFIDBNTIAL 



29 Jan* 1940 CONFIDENTIAL 



Operational area "Siberian's north of 60° 30» N, 

east of 0° 50' W (northeast of the Shetlands). 

Operational area "Kanada"* south of 60° 30« N, 

west of 2° Wo 



The following are at present in the operational area or on passage, in 
accordance -with this orders 



U *13 n s 


Beta 


U e 21 n t 


Delta 


U "24* s 


Gamma 


U *58"s 


Alpha 


U *56 n i 


Groenland 


U *10 n s 


Siherien. 



TJ *15 n has also put out for the Hoof den* 

Submarines U "23" and U "61* have returned from operations. Submarine U "23" 
investigated th© bays in the Shetlands, as far as it was possible to penetrate 
them on the bright full moon nights* Net barrages and heavy patrolling were 
detected* One steamer sunk* Otherwise torpedo failures. 

Submarine U n 61 tt detected traffic in the operational area east of the 
Pentland Firth, north of the entrance to the British War Channel at night 
only© One steamer was sunk, otherwise misses or failures. (See short 
report Part B, IV. ) 



Merchant Shippings 

The steamer WINDHUK (16,662 BRT) will remain in Brazil for, the present, sinoe the 
foreign exchange situation permits her maintenance there* The WINDHUK is to be 
used as a "decoy* to help ships returning home, by putting out at the same 
time as the others with the object of deceiving the patrol forces* 

The following information was broadcast, enciphered according to code *H* 

for the maritime area North Atlantic Oceans *Ioe limit lies 40 to 60 miles west 

of Iceland. Naval Control** 

The capture of the steamer PHAEDRA has given us occasion to point out to the 
Ministry of Transportation that the captains of small ships, which are not 

-164- 

CONFIDBNTIAL 



29 Jan* 1940 CONFIDENTIAL 



furnished with special instructions, should also be instructed regarding their 
obligation to scuttle their ships rather than permit them to fall into enemy 
hands o 

Neutral Shipping i 

A German captain reports from Veije (Denmark) that the crews of three Danish 
ships there refused to embark for the voyage to Great Britain « 



Items of Interest in the economic war t 

Reliable intelligence reports from Norway state that Great Britain is about 
to terminate the Anglo-Danish trade agreement (food and cattle fodder), since the 
British supply of fats is now assured to such an extent that she is no longer 
dependent on Denmark, Great Britain will then no longer permit the conveyance 
of further fodder and soya beans to Denmark, so that very soon Denmark will no 
longer be in a position to furnish Germany with regular supplies, because of 
the resultant substantially smaller production of fats. 

This matter requires constant examination and observation and will be conducted 
by the Special Staff for Mercantile and Economic Warfare of Armed Forces 
High Command. As soon as Great Britain discontinues her present deliveries 
of fodder to Denmark, the German-Danish Food Agreement (Malta Treaty) will 
have to be canceled at once* 



*********************************** 



-166- 

CONFIDENTIAL 



30 Jan. 1940 CONFIDENTIAL 

Items of Political Importance* 

The Fuehrer made a great speech in the Sportpalast to commemorate the 30 Jan, 



Reports have been received from Great Britain concerning the possibility of 
a change in the Cabinet. There has been violent controversy lately on the 
subject of Chamberlain as Prime Minister. 



For information on the Eusso-Finnish conflict see Foreign Press. News arriving 
from Finland confirms reports of fresh Russian repulses, but makes it obvious 
that Finland cannot keep up her present tenacious resistance for very much 
longer. Apart from this, the considerable Russian deficiency in materiel, in 
the Army and especially in leadership are emphasized. 



For the situation in the Balkans see Political Review. 



Conference on the Situation with the Chief, Naval Staff ; 
Special Items ; 

1. Report from the Chief of Operations Division, Naval Staff on 
Commanding Admiral, Naval Forces, Wests 1 operational order for sortie to be 
carried out by the battleships (see operational order). 

The Chief, Naval Staff points out again that operations against merchant 
shipping according to Prize Regulations (stopping and lowering of boats l) 
is quite out of the question for the battleships in such a type of operation. 

2. The supply ship ALTMARK has not reported to date. There are absolute- 
ly no indications that the ship has fallen into enemy hands by capture or 
because the prisoners mutinied. There is therefore no cause for anxiety, 
especially as it can be assumed, according to the original plan, that the ship 
made use of the January new moon period to break through the Freetown - Bahia 
gap and will break through the Iceland passage and the Shetlands - Norway 
narrows during the coming new moon period in February. 

CONFIDENTIAL 
- 166 - 



30 Jan, 1940 CONFIDENTIAL 



3 e On 29 Jan* Group West requested permission for naval air forces to 
attack merchant vessels sailing alone and definitely identified as enemy 
(corresponding to permission already obtained for X Air Corps) o 

The Naval Staff will permit attacks as requested within the range of the Naval 
Air Forces* reconnaissance assignments* Regulations fixing the limits of 
reconnaissance areas between the Commander in Chief, Air Force and the Commander 
in Chief, Navy remain in force* Orders issued regarding the use of torpedoes 
at night are not affected by this. 



Special Reports on the Enemy t 

Atlantic : 

Great Britain * 

The AJAX intends to put in to a Channel port on 31 Jan. The REVENGE, which was 
in dock for an overhaul, was again on the North Atlantic route or in the Bermuda 
area on 30 Jan e Submarine U w 34% homeward bound, encountered two battleships 
and one light cruiser 160 miles off the North Channel in the afternoon 
(moderate speed, course 110°) • The boat*s report confirms the assumption that 
heavy forces of the Home Fleet are constantly at sea northwest of the Hebrides - 
west of Soot land* 

According to a communication via the Foreign Office, two convoys a week sail from 
Gibraltar on Sunday and Thursday and Tuesday and Friday alternately* Average 
strength 30 - 35 ships, usually escorted by five destroyers* 

France: 

The old battleship PARIS and the destroyers TERRIBLE and LEOPARD are at 
sea west of Portugal ; one French patrol vessel is off Cadis, 

North Seai 



MOaMSD 



According to a report from Haugesund a convoy of about 30 neutral ships was 
north of Bergen on 29 Jan* on northerly course (collective voyage "?). 

A convoy escorted by the gunboat FLEETWOOD was off Smith* s Knoll on the 
evening of 30 Jan* 

Shi p pi ng Losses * 

An unidentified steamer sank off the Moray Firth, the Danish steaner. FREDENSBURG 
(2,100 tons) off the Scottish coast. 



■167- 

CONFIDENTIAL 



3C Jan. 1940 CONFIDENTIAL 

The British steamer STANBURN (2,900 tons) and the ESTON (1,500 tons), also 
the East Dudgeon lightship, were sunk by air attack on 29 Jan. (south of 
Outer Dowsing), 

The British tanker VACLIT2 (5,026 tons) sunk in the western approaches to the 
Channel (submarine U "55" ?), the British steamer V'KEGON (6,008 tons) was sunk 
by a submarine (U "44") about 200 miles northwest of Cape Ortegal, 



Own Situation : 

Atlantic; 

Nothing to report. 

The following message was sent to the ALTMARK: 

"Successful German air attacks on armed British steamers and patrol 
vessels in the North Sea on 29 and 30 Jan, Several ships sunk and 

damaged. " 

North Sea; 

The 6th Torpedo Boat Flotilla returned from an exploratory sweep in 
the declared area. On the night of 29 Jan. in grid square 6838 the 
submarine U "15" (Lieut. Frahm) which was putting to sea, encounter- 
ed the 6th Torpedo Eoat Flotilla on its return from the declared area, 
and in spite of the exchange of recognition signals was rammed by 
the torpedo boat ILTIS as the result of a series of unfortunate 
circumstances. The boat sank immediately and was lost with all hands. 
(See short report in War Diary, Fart B, Vol, IV). 

A surfaced submarine was sighted proceeding along the coast west of 
Lister within territorial waters. 

The planes which took off for an anti-submarine hunt sighted a number 
of Danish and Dutch fishing smacks, also unidentified drifters, south- 
southwest of the declared area. 

28 He Ill's of the X Air Corps carried out a comprehensive attack on 
merchant shipping off the east coast of Britain, from the Thames 
Estuary to the Orkneys, followed by another by 7 He Ill's. All the 
planes save one returned. 

Two of the steamers attacked were definitely sunk (the steamers 
GIRaLDA, 2,200 tons, and BANCRE3T, 4,500 tons). Six more and two 
patrol boats were hit by high explosive bombs and incendiaries; some 
were severely damaged (see also Air Situation y\. Jan,), 

CONFIDENTIAL 
- 168 - 



30 Jan. 1940 CONFIDENTIAL 



The Naval Staff attaches great significance to these most gratifying successes 

on the part of the Air Force and considers operations by X Air Corps in support 

of naval warfare as often as possible of great importance. Since the Air Force 

itself seems to attach little value to the results obtained, the Air Force 

General Staff is being informed of the Naval Staff's opinion. 

According to later information from the Air Force, 5 merchant steamers and 

2 patrol boats were actually sunk on 30 Jan. 

(See also summary of the result of X Air Corps* operation on 29 and 30 Jan© 
in War Diary, Part B, Vol* V.) 

Baltic Sea t 

The ice situation has again worsened. Solid ice in Kiel, Luebeck 
and Swinemuende Bays; the Fehmarn Belt and Arcona area ice free 
except for a firm strip of ice offshore. 

Large steamers can now only pass through the Flint Channel with great 
difficulty. 

In the Sound very little traffic and several ships fast in the ice. 
The barrage patrol near Gedser had to be abandoned because of the 
ice situation. So far attempts to break through the ice barrier off 
Swinemuende harbor have not met with success, so that it was not possible 
for the minelayer PRUESSEN to sail as planned. 

Operations against merchant shipping are being continued by the 
KCBNIGIN LUISE in the Gotland - Landsort area* 

Submarine Situation s 

Atlantic t 

In the operational areat submarines U "44", U "55", U "25". 
On return passage t submarines U "34'*, U "31", U "SI 1 ** 
On passage i submarines U "41", U "48". 

Assignment for submarine U "4fi"i minelaying operation off Weymouth (Portland). 

North Sea t 

In the operational areat submarines U "13", U "21*, U "24", U "56", U "58". 
On passage* submarines U "59", U "10", U "17". 

On return passage i submarine U "20". 



•169- 

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30 Jaru 1940 CONFIDENTIAL 



Me r chant Shipping j 



No shipping in the western Baltic Sea as far as Arcona because of the ice. 
According to a statement from the Dutch pilot of the steamer PHAEDRA, she 
was captured "by a British destroyer and one patrol "boat just off the Hook 
of Holland within the Dutch three-mile zone during the night of 14 Jan., and 
was taken to London* 

Foreign Shipping : 

According to a communication from the Naval Attache' at Oslo the following 
quantities of ore were shipped via Narvik in the period 1-31 Dec: 

to Germany 118,879.7 tons 

to Great Britain 119,442 „8 tons 

to Belgium 33,371.8 tons 

to the U.S.A. 22,243.4 tons 

total 293,937.7 tons 

Cases are reported from Sweden and Latvia of ships having to cancel voyages 
to Great Britain because they could not get crews to sign on for this voyage. 



After considering how to cause further damage, disruption and 
disquiet to enemy shipping on the west coast by means of 'mine laying, 
a letter was sent to the Commanding Admiral, Submarines, in which 
the necessity of splitting up enemy defenses by laying mines off 
less important ports was pointed out, since the strained state of 
British shipping as a whole will definitely force traffic to use 
the smaller ports more. The more ports which suffer shipping 
losses, the greater will be the effect on morale and the alarm 
caused among shipping. Since the channels are often narrow, the 
desired success can often be attained, circumstances permitting, with 
a small number of mines. 

The Naval Staff suggests mining the following ports: 

Belfast yearly turnround 3,600,000 tons (grain, fodder) 
Barrow " " 600,000 tons (naval construction) 

Preston " n 990,000 tons (Lancashire, industrial area) 

Workington " 750,000 tons (ore, wood, coal) 

Holyhead-ferry, Stranraer-ferry, Larne-ferry. 

********************* 



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31 Jan. 1940 CONFIDENTIAL 

Items of Political and Economic Importance* 

For reaction to the Fuehrer's speech see Foreign press. 



The South African Parliament rejected General Hertzog's motion to end the 
war with Germany by 81 votes to 59 • 



The Japanese Government is said to have instructed its shipping companies to 
convey only Germans not yet of military age on board their ships. 



Increasing shortage of coal is reported from Norway and Denmark, since many 
ship-owners have withdrawn their ships from the traffic or can no longer get 
crews for the voyage to England. Norway is now endeavoring to arrange for 
coal to be transported from the west coast of Great Britain, 



For Chamberlain's speech before the National Committee for Defense see Foreign 
Press. Among other things the speech, partly playing down Churchill's speech, 
was addressed to the neutrals, who "of course' 1 are free to choose whether they 
wish to enter the conflict or not. Skilfully utilizing the fact that to date 
Great Britain has not sunk any neutral ships or caused the loss of neutral 
lives, the British Prime Minister tried to put the sole balrae on Germany for 
all the unpleasantness, disruption of trade and economic difficulties ex- 
perienced by the neutrals as the result of her inhuman war against merchant 
shipping. 



Special Report on the Enemy ; 

Atlantic : 

Great Britain : 

The AJAX put in to Plymouth according to plan. The AURORA is at sea with the 
Northern Patrol. The DELHI, which was also there to date, appeared near 
Quessant on a southwesterly course early on 1 Feb. 

CONFIDENTIAL 
- 171 - 



53 Jan c 1940 CONFIDENTIAL 



Radio monitoring intercepted various convoy movements* A convoy of about 

steamers which assembled near Halifax on 23 Jan. was roughly south of 
Ireland on 1 Feb, 

The successful crossing made by three German merchant ships from Huelva to 
Seville on 28 Jan, has caused the line Cabo Roche and Ayamonte to be patrolled 
by two British destroyers (probably the DEFENDER and DECOY) and two armed' 
French trawlers. Also air reconnaissance by day, 

France s 

The DIINKERQUE intends to put in to Brest in the evening. 

In addition to patrol vessels the destroyers TERRIBLE and LEOPARD have 
beer, detected off the north and west coasts of Spain, 

The German steamers KLIO, I4ELILLA and BULER, which left Bilbao on 31 Jan, 
making westwards, were reported by a French patrol vessel in the evening to be 
in Santander roads with the Spanish gunboat CANALEJAS, 



North S<?a t 

A permanent enemy submarine position (57° N, 07° B) was discovered about 40 
miles west of Hanstholm. 

The submarines SNAPFER and SHARK were at sea in the Nore area. 

According to reports from Bergen it is definitely established that the convoy, 
which sailed from Bergen at 0400 on 27 Jan, left the Norwegian coast at Bulandet 
on 28 Jan,, and that the neutral ships were taken under escort by enemy warships. 
It can be concluded from the times given that a considerable period was needed 
to assemble and arrange the convoy. 

Participation of neutral ships in British convoys, and the propaganda spread 
by the enemy in Scandinavian countries against the sinking of neutral ships 
sailing alone in the North Sea without warning, indicate that the enemy is 
staking everything to maintain the greatly endangered imports from Scandinavia 
by endeavoring to offer security to the Scandinavian shipowners, and by 
inciting propaganda and resistance to our war strategy. 

No decisive transfer of Scandinavian exports to other countries or sea routes, 
nor indeed any cessation of this traffic has been detected. 

Operations against the traffic to Great Britain must therefore continue to be a 
primary task in our offensive strategy in the North Sea, 



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C0NFIDENTIAL 



3i j sn- 1940 confidential 



Shipping. Losses ; 

The Greek steamer AHOEa (4,652 tons} ran aground in an unidentified position 
(apparently re-floated again later). 

The steamers GIHALDA (2,200 tons; and EAKCHIS3T (4,500 tons) were sunk during the 
air attacks on 30 Jan. 

The Danish steamer VIDA (1,400 tons) sank 120 miles east of the Fentland Firth. 
The British stenmer IJCYAL CitCuN (4*400 tons) drifted ashore after her engine 
room had been destroyed in air attacks. 



Own Situation: 

Atlantic : Nothing to report. 

North Sea ; 

Surface forces: Nothing to report. 

X Air Corps carried out armed reconnaissance off the east coast of 
Britain. Nothing special to report, 

Baltic Sea; 

The K0ENIGIN LUISE reports that there is no shipping from the Aaland 
area as far as Landsort. 

The PR2US3EN, HANSESTADT DANZIG, and three boats of the 13th patrol 
Flotilla scheduled for operations against merchant shipping are being 
transferred to Pillau for further operations because of the ice 
situation in Swinemuende Bay. 

Ice Situation; slight improvement. 

Covering of ice in the Great Belt with open places in the channel, 
Sound: main channel and Flint Channel free of ice; 

Somewhat heavier shipping traffic in the Sound; ferry traffic in the 
Gedser Channel. Two icebreakers have broken an easily navigable channel 
in Swinemuende Bay, 



- 173 - CONFIDENTIAL 



31 Jan* 1940 CONFIDENTIAL 



Submarine Situation: 

Atlantio s 

Submarine U "25" carried out operation "Moro" undetected and according 
to plan* The boat has been informed of French reconnaissance off 
Cape St.Yincent and of the intended movements of German steamers lying 
in Vigo, and was ordered to operate outside a radius of 50 miles from 
Vigo until 5 Feb*, and after 6 Feb. against the patrol vessels there, 
in order to assist the sailing of the German steamers from Vigo. 

Submarine U "25" off the west coast of Spain. 
Submarine U "55" western approaches to the Channel. 



Submarine U "48" Route Two. 

Submarine U "41" west of the Hebrides. 

On return passage : 

Submarine U "31" Route "Blau". 
Submarine U "34" west of the Orkneys. 
Submarine U "51" west of Ireland. 
Submarine U "44" southwest of Ireland. 

Loss of a submarine in the Atlantic i 

mi ii mim ■!! it ■ ~ -n it - - r ii t- - - «i~ - t — im — i > ~nr — in- 

Referring to the destruction of & German submarine announced by Chamberlain in 
a speech on 31 Jan., the Air Ministry says that the submarine was ohased and 
depth charged by esoort vessels after sinking the British steamer VACLITE 
(5,026 tons). A flying boet later sighted the submarine proceeding surfaced 
and attacked with bombs, one of which exploded on the starboard side. The 
submarine, which returned the fire, was obviously unable to submerge , as 
the result of damage suffered previously. When the surfaoe forces summoned 
by the flying boat arrived, the submarine had already sunk. Some of the orew 
were picked up out of the water and from a rubber dinghy. 

After this very exact and detailed announcement, one boat must definitely be 
counted as lost. This can only be submarine U "55* (Lieut. (s«g») Heydel)© 

North Sea i 

In the operational areai submarines U "13", U n 21 TI , U "24", U "56", U "56"" . 
On passage? submarine U "59" southern North Sea (making for the 

operational area in the Hoofden)t 
Submarine U "17" oentral North Sea. 



-174- 

CONFIDBNTIAL 



31 Jan. 1940 CONFIDENTIAL 



On return passages submarines U "lO", and *20". 



Merchant Shippinsi 

Own Shipping : Nothing to report • 

Foreign Shipping * 

Traffic proceeding through the Flint Channel experienced a record increase 
during 1939. In 1939 no less than 11,697 vessels passed the lightship lying 
in the southern entrance to the Flint Channel, while the figures for the 
preceding years weret 

1934: 7,755; 1935: 8,703; 1936i 7,668; 1937i 7,900; 1938t 7,513. 

Heavy increase i in prices are reported from British shipping markets, 
which suggest that freight capacity is becoming soarcer The 
Norwegian tanker CREDO of 7,210 tons, built in 1915, for which 
b 38,250 was paid in December 1936, was sold a short time ago for 
approximately is 72,000. 

The "Telegraph* reports that British and French shipping companies have 
chartered 50 ships from Norwegian shipowners. These ships, which are mostly 
small, are to be used primarily to transport coal from Great Britain to France. 

ft************************* 



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