-2-                             
 
 
Altogether, putting things together it seems
quite clear that Germany will have a fleet of new 
airplanes numbering about 2500 at the completion of 
their present air drive. This ought to be about one 
year from now. This means that Germany will be armed 
in the air and under the protection of this air armament 
can proceed more slowly to build up her land and sea 
forces. Progress in these other directions is somewhat 
slower than in the air army, but a good deal is going 
on nevertheless, for example, two weeks ago I was 
informed by the export manager of the Ludwig Loewe 
company of Berlin, mm~ufacturers of machine tools, that 
they had some export orders, including one from Yugoslavia, 
for 30 million marks worth of machinery for making machine 
guns, that they are unable to fill because the German 
army authorities had forbidden the export of such machinery, 
saying that they needed themselves all that could be made here. 
The German firm was trying to get in touch
with American machine tool manufacturers Pratt & Whitney, and 
eventually met a director of that firm who happened to be in 
Berlin at that time. The order will either go to this firm 
or to Vickers in England.
 
 
From my conversations with the American aviation 
representatives it seems that they are able to get 
payments in foreign exchange for shipments of airplane 
parts, whereas ordinary business firms are suffering 
the most severe difficulties and in many cases they 
are practically embargoes on the import of goods from 
the outside. It seems evident that Goering has got the 
right of way with his air armament program and has first 
call on what foreign exchange the Reichsbank can get together.
 
 
Very truly yours,
 
 
 
Douglas Miller 
Acting Commercial Attache.