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so. A consideration, however, of the strength of the Russian 
forces, the distances over which withdrawal is possible, 
and the magnitude of the supply problems which would 
confront the advancing German armies, leads us to the 
conclusion that Russian resistance cannot be crushed in 
1942 unless tactical errors lead to the the risking of too 
great a share of Russian manpower and materiel in 
stubborn and unsuccessful defense of fixed positions.

If this is the German view, the question which will 
confront the High Command is, how much of an 
advance on the Central and Northern front will it 
be profitable to make? The further the advance, the 
weaker the enemy becomes in terms of materiel, 
productive capacity, and manpower but the longer 
become the German supply lines and the greater the 
cost in expended manpower and materiel.

If Leningrad and Moscow can be taken without an exorbitant 
wastage of resources - and this seems to us probable - it 
will be done. But the German advance will fall short of 
decisive results. If this reasoning is correct, it follows 
that Germany will be confronted at the end of 1942 with 
its eastern enemy still in the field - though in a seriously 
weakened state - unless, in the meantime, peace terms 
can be negotiated. (1)

(b) _By Peace Negotiations_

It is clear that Stalin is fighting his own war, not that 
of the Anglo-Saxon powers. If at any stage the 

___________________

1. A factor which is difficult to evaluate in the possibility 
that the Japanese will be able and willing to attack in 
Siberia if Hitler gives the word. Clearly the final 
neutralization of Russia can be accomplished jointly 
by these Axis powers much more readily than by one alone.

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advantages to Russia of a negotiated peace outweigh those 
of continuing the war, Stalin will negotiate. It is difficult 
to see, however, that anything short of the expectation by 
Stalin that Germany will be able (a) to crush the Russian 
armies completely and (b) to hold off indefinitely the Anglo-
Saxon powers in the west, would lead to a balance in favor 
of peace for Russia.

There can be no doubt that Germany would welcome the 
opportunity to free its hands of Russia for the struggle 
in the west and would be prepared to pay highly for it _if_ 
she could be sure thereby of neutralizing Russia. But the 
only safe way of neutralizing Russia would be by disarming 
her and it is more than doubtful whether a peace based on 
Russian disarmament would be acceptable to Stalin unless 
he were convinced that the struggle is hopeless. Since it is 
our opinion, on existing evidence, that the crushing of armed 
resistance in Russia is beyond Germany's strength in the 
period before the Allies are ready to engage Germany 
extensively in the west, it follows that we regard the 
neutralization of Russia by peace negotiations as unlikely.

It is worth emphasizing, however, that Russian strength and 
will to resist may be heavily influenced by the margin of 
supplies that Britain and the United States succeed in 
transporting to the Russian Front.

GERMAN CONTROL OF THE MEDITERRANEAN

The events of the past year in North Africa may well be 
interpreted by Hitler to indicate the feasibility of a push 
to the Suez Canal and the elimination of the British fleet 
from the Mediterranean with forces no larger than can be 
spared from the Russian campaign.

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The shipping shortage has apparently made it thus far 
impossible for the Allies to assemble in Egypt a force 
sufficient to drive the relatively small Axis concentration 
from Libya. In the meantime, the Far Eastern conflict is 
diverting shipping and war supplies which might otherwise 
have gone to Egypt. The circumstances therefore appear 
propitious for an Axis drive on the Suez Canal, accompanies 
by heavy air attack on British fleet units in the Mediterranean. 
Such an operation would require an extensive air and troop 
concentration and would tax severely Axis shipping facilities; 
but it does not seem out of the question even in conjunction 
with heavy engagements in Russia.

The advantages to the Axis of control of the Mediterranean 
and of the African approaches to Europe are very considerable. 
Egyptian cotton would remedy the serious Axis textile 
shortage. Cobalt, olive oil, and phosphate fertilizer, now 
flowing irregularly from French North Africa, would move 
unimpeded. Turkey, cut off, like Sweden, from intercourse 
with other powers, would undoubtedly export chrome, wool, 
tobacco, and foodstuffs overland to Germany. Hitler would 
thereby have brought Turkey into the German economic orbit 
without having risked the uncertainties of a difficult campaign.

It appears unlikely that the Axis, in control of the North Africa 
littoral, from Suez to Tunis, would experience serious political 
or military difficulties in occupying Northwest Africa. With 
the whole North African coast in its hands the most feasible 
bridgeheads to Europe would be denied to the Allies, and important

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new bases for attack on Allied shipping could be brought to bear.

On the whole, the advantages to the Axis of control of the 
Mediterranean would seem to justify a large-scale expenditure 
of resources. And since offensive operations against Russia 
can not begin until April, a Mediterranean campaign, immediately 
undertaken, need conflict little with the later offensive.

THE MIDDLE EAST

The Middle East - Iran and Iraq - plays a complex role in the 
German strategic position. It is, first, a major source of oil. 
But if the Caucasus is successfully occupied by Germany, the 
oil fields of the Middle East will not then be an economic 
objective of immediate importance. Second, the Middle East 
represents a potential base for attack on Europe. If Hitler 
acquires the Caucasus and the Mediterranean, however, its 
importance in this respect will be virtually neutralized. But 
the oil fields of the Middle East serve also as a major source 
of supply to Allied naval and merchant vessels operating in 
the Indian Ocean. The loss of this source, if combined with 
the loss of Far Eastern oil supplies, would weaken the 
blockade in the area, facilitate trade with the Far East, 
where Japan now holds rubber and tin supplies badly needed 
by Germany, and isolate China and India after the manner of 
Turkey. It is, then, as part of a pincer movement on Allied 
oil supplies in the East that Germany is most likely to 
undertake a campaign against Iran and Iraq.

The German arm of this pincer is not likely to be attempted, 
however, until the Mediterranean and Caucasus campaigns 
are completed and new bases consolidated. It

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involves, at least, extended and tenuous lines of 
communication as well as long and vulnerable flanks. It is not 
a campaign essential to the German plan as outlined earlier. It 
hinges on the success of previous German and Japanese operations.

CONCLUSIONS

It is judged to be Hitler's aim in 1942 to master an area as 
impregnable as possible to Allied attack, and capable of 
maintaining a continuously high war potential. This end 
can be virtually achieved by (a) the conquest of the Ukraine 
and the North Caucasus; (b) a further considerable advance 
on the North and Central fronts in Russia, which would, at 
the same time, seriously weaken Russian strength and willingness 
to resist; and (c) the conquest and occupation of the areas 
bordering on the Mediterranean.

The results of such an achievement by the Axis would be so 
disastrous to Allied interests as largely to nullify the 
advantage in armed strength expected in 1943. Aggressive 
measures are imperative at the earliest possible moment.

Our alternatives, like Hitler's, are two:

(1) To strive for decisive victory in 1942.

(2) To prevent Hitler from achieving his goal of impregnability 
this year.

We cannot wait for out increased war production to become 
effective in 1943 and thereafter.

The first alternative could be accomplished only by successful 
invasion of the European continent. This is regarded as 
impossible by American and British military authorities. 
It is therefore essential that Allied strategy be focused on 
achieving the second alternative.

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The general priority of Allied counter-action would appear to be:

1. Quickly effective aid to Russia. The quantities of immediately 
useful military supplies sent to this area should be limited 
only by the capacity of Russian ports to discharge and dispatch 
cargo. The existence of an eastern front in 1943 is essential to 
Allied success.

2. The maintenance or acquisition of bridgeheads to Europe 
on the North African coast. If Egypt can be held, the conditions 
for an Allied offensive in Europe are immeasurably improved.

3. Aid to China and to the Dutch, in an effort to prevent 
the denial of Far Eastern oil to the Allies and the opening 
of commercial shipping lanes between Japan and German 
controlled areas.

Only the immediate contemplation of a large-scale 
offensive in the west would justify the continued 
shipment of men and materiel to Britain at the present 
time in competition with the program indicated above.

The importance of shipping to above objectives is obvious. 
Equally clear is the need to give ship-building high priority 
in our production program.



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