THE HARBOUR CITY HERALD Sydney's Newspaper of Record

Saturday, 4 December 1943 | Page 1

MILITARY INTELLIGENCE QUESTIONS BHP WAR PRODUCTION

Major Trenholm Leads Audit of Strategic Materials Supply

Defence Department Investigates "Significant Discrepancies" in War Resources

By Robert Fitzgerald, Defence Correspondent

SYDNEY - The Commonwealth Defence Department has launched a comprehensive investigation into irregularities in war materials production after military intelligence identified what senior sources describe as "systematic discrepancies" in strategic resource allocation across multiple industrial facilities.

Major Wallace Trenholm, attached to the Directorate of Military Intelligence, is leading the audit following concerns raised by Allied procurement officials about persistent shortfalls in Australian industrial output reaching military destinations.

The investigation, now in its third week, encompasses the nation's largest industrial concern, Broken Hill Proprietary Company Limited, with particular scrutiny of supply chains linking mining, processing, and manufacturing facilities across three states.

"We have identified patterns in documentation and delivery that require immediate clarification," Major Trenholm stated during a briefing to senior military staff. "The discrepancies are not isolated incidents but appear to represent systematic failures in materials tracking and accountability."

SCOPE OF INVESTIGATION

Defence sources, speaking on condition of anonymity, indicate the investigation spans the entire vertical integration of BHP's operations—from ore extraction at Broken Hill to steel production in Newcastle and smelting operations at Port Pirie.

The audit has revealed tonnage discrepancies that, if accurate, represent thousands of tonnes of strategic materials unaccounted for since the commencement of expanded war production in 1941. Documentation reviewed by intelligence officers suggests these materials left their points of origin but never arrived at military facilities.

Lieutenant Colonel Harrison Wright, Deputy Director of Supply and Transport, confirmed that "irregularities have been identified that impact our capacity to maintain accurate assessments of available war materials." He emphasised that the investigation seeks to determine whether these represent administrative failures or more concerning security breaches.

The investigation has expanded to include railway transport records, shipping manifests, and warehouse inventories across the eastern states. Military police have been stationed at key industrial sites, though officials insist this is purely precautionary.

INTELLIGENCE CONCERNS

While authorities maintain there is no evidence of enemy sabotage, intelligence officers have not ruled out the possibility of sophisticated infiltration of Australia's industrial sector. The consistent pattern of missing materials has raised concerns about potential fifth column activities.

"The quantities involved and the systematic nature of the discrepancies suggest coordination beyond simple black market profiteering," noted one intelligence analyst familiar with the investigation. "This level of organisation requires either remarkable incompetence or deliberate action."

Major Trenholm's preliminary findings, submitted to the Chiefs of Staff Committee, reportedly reference several coded operational matters, including a brief mention of "irregularities potentially connected to records marked 'Ironsand' requiring further investigation." The reference, appearing only once in the report, has nonetheless generated significant interest within intelligence circles.

The designation "Ironsand" does not correspond to any acknowledged military or industrial programme, leading to speculation about undisclosed wartime projects or security classifications beyond standard protocols.

INDUSTRIAL RESPONSE

BHP executives, summoned to Canberra for consultation, have pledged full cooperation with military investigators. The company has provided access to production records, though certain documentation has reportedly been classified beyond the clearance level of regular audit staff.

Mr Charles Thornbury, representing BHP's war production board, stated: "We are confident that any discrepancies will be resolved through proper investigation. BHP remains committed to supporting Australia's war effort with complete transparency within security requirements."

However, this assurance has not prevented the Commonwealth from dispatching additional investigators to BHP facilities, with some sources suggesting parallel investigations are being conducted by separate intelligence services to ensure comprehensive coverage.

ALLIED IMPLICATIONS

The investigation has attracted attention from Allied partners, with American and British liaison officers observing proceedings. The potential impact on Lend-Lease arrangements and Pacific theatre supply lines has elevated the matter to the highest levels of military planning.

General Douglas MacArthur's headquarters has requested regular updates, particularly regarding steel availability for shipbuilding and aircraft manufacture. Any significant disruption to Australian industrial output could affect offensive operations planned for 1944.

SECURITY MEASURES

In response to the investigation's findings, new security protocols have been implemented across defence-related industries. These include enhanced documentation requirements, additional checkpoint procedures, and restrictions on information sharing between industrial facilities.

Workers at affected facilities have been reminded of their obligations under the National Security Act, with penalties for unauthorised disclosure of production information increased to include potential imprisonment.

Major Trenholm is expected to submit his final report within the fortnight, though sources suggest the investigation may extend significantly longer if current leads prove substantial.

The War Cabinet has scheduled an emergency session to discuss preliminary findings, with the Prime Minister expected to address Parliament on the matter should national security permit disclosure.

- Analysis on Page 3: "Industrial Security in Total War"

[Editor's Note: This edition was withdrawn from circulation by order of the Chief Censor. Archival copy retained under security seal.]