Door Bolted

Franklin Delano Roosevelt locked the barn door last week and ordered a searching party out to look for the horse. The President with quick strokes of a pen affixed his signature to an order freezing all Axis assets in the U.S., along with those of all other European countries not yet frozen.

By so doing, he took a long-considered step toward war that he had long hoped could be avoided. Only a fortnight back, Secretary of the Treasury Henry Morgenthau, who for months had urged the President to take the step, virtually conceded that his freezing plan had been abandoned. Pressed to explain, he said it was too late: "The barn is empty. The horse is gone." Asked whether it was "a very big horse," Mr. Morgenthau sadly answered: "Well, it was larger than a Shetland pony."

Ever since increasing U.S. aid to Britain began to show which way the wind was blowing, Axis interests in the U.S. have been in a frantic flurry of cleaning house, transferring cash and bank deposits to Latin-American nations, hiding stocks and bonds and patent rights in dummy accounts under U.S., Swiss or Swedish names. In Washington it was generally understood that, while the Administration knew this flight of Axis funds was going on, the State Department did not feel the U.S. was yet ready to crack down, risk possible Axis reprisals.

All that was changed last week. The Robin Moor sinking, and the defiant statement with which Nazi officials followed it up, made it clear that Axis reprisals were coming. So Franklin Roosevelt took the step.

Though Mr. Morgenthau's horse had been spirited away, the barn was not completely empty. Washington estimated that Germany and Italy together still had investments amounting to some $300,000,000 in the U.S., not counting hidden assets (see p. 75).

The Treasury will also take a census of all foreign-owned property in the U.S., whether controlled by countries whose assets are frozen or not. Aliens will be required to list any U.S. property worth more than $1,000 which they own now or have acquired since last June.* Thus it may be possible to track down the maze of transfers whereby Germany and Italy have concealed their actual holdings.

The President's order was not only an opening gun in the long-expected economic duel between the U.S. and her totalitarian enemies. It was also an important counter-espionage measure. Spying is a costly business, must be paid for in hard cash. Cutting off Axis funds, said the White House statement, will "prevent the use of the financial facilities of the United States in ways harmful to national defense. . . ."

Italy this week took up the President's challenge. In a frankly retaliatory order, the Italian Government tied up all assets of U.S. citizens in Italy. Germany was expected to follow suit. "The best-informed Italians," said the New York Herald Tribune's Rome correspondent. Allen Raymond, "are expecting a break of diplomatic relations with the United States, and would not be surprised at a state of declared war. . . ."

* Not affected by the freezing regulations are resident aliens who entered under quota provisions.

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