Evening star., 1941-06-16
Freezing Axis Funds

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to snare more than a small proper
tion of the assets which Germany
and Italy had in this country at the
outbreak of the war, the Presidents
order freezing funds of all CONT
mental Europe and providing for a
comprehensive inventory of the
worlds investments in the United
States nevertheless constitutes
telling blow to the totalitarian bel
ligerents. The Treasury for some
time has been urging such measures,
but the State Department, it is said,
had been reluctant to approve so
drastic a procedure until now. Sec
retary of the Treasury Morgenthau,
when asked recently why Axis funds
had not been frozen, remarked that
the barn is empty" He was speak
ing relatively, of course, for it is
estimated that the Nazis and Fascists
still have about S300,000,00 of direct
assets in the United States. Un-
known millions additional have been
taken out of the country in recent
months, presumably in anticipation
of the order just issued. An unde-
termined amount undoubtedly has
been converted into indirect, under
cover assets-and it is primarily
against holdings of this nature, plus
German royalties from patent rights
and from industrial investments,
that the unprecedented stock-taking
survey is aimed
The Department of Justice has
revealed some of the astounding
ramifcations of German patent con-
trolls, extending even into vital Amer
lean defense industries. This prepos-
ferrous situation will come to an end
under the order immobilizing Axis
funds. The Presidents order, more
over, will deliver a double-barreled
blast at fifth column activities in
this country. Funds which openly
have been used to finance German,
Italian and Russian propaganda
agents and agencies registered for
this purpose with the State Depart
ment will come under our control.
And the investigation of all foreign
economic tie-ups should aid in smok-
ing out underground financing IA
cilities on which spies, Saboteurs and
other secret agents depend for sup
port. While the assets of Germany
and Italy are frozen unconditional
ly, there is provision for relaxation
of restrictions on Russia, Portugal,
Spain, Sweden, Switzerland and Fin
land. In the case of Russia, it is safe
to assume that the monetary club
will be used to strike at the heart of
Moscow-inSpired Communist agita-
ton here. The order does not affect
Japan, due perhaps to current hopes
that relations between that country
and the United States may take a
turn for the better. The imminent
threat of monetary breakdown,
coupled with the existing threat of
an embargo on oil; gasoline and other
materials, should have salutary eff
feet at Toxic.
Warnings already are coming from
Axis sources that retaliatory measures
! against American holdings will be
taken in Germany and Italy. These
assertions must be discounted, how
ever, in the light of the fact that
American investments in the Axis
countries are virtually frozen now.
The totalitarian economic system,
rigidly controlling currency exports
and foreign exchange, has had the
effect of depriving American owners
of any real interest in their European
investments. Protests from Berlin
and Rome were to be expected, for
America has dealt the Axis a fiscal
blow that hurts.