Destroyer HMS Onslow laid down.

Minesweeping trawler HMS Deodar commissioned.

Destroyer HMS Garth commissioned.

FRANCE: The government moves to the spa town of Vichy, where the empty hotels are suitable new homes for government departments.

The U.S. Ambassador to France meets privately with the President of the French Council of Ministers, Marshal Henri Petain. Regarding the French Fleet, Petain states that orders have been given "to every captain of the French Fleet to sink his ship rather than permit [it] to fall into German hands." The Ambassador also has an interview with Admiral Darlan and is told that if the Germans demand the fleet, it had orders to sail for Martinique and Guantanamo Bay, Cuba to join the USN.

GERMANY: U-88 laid down.

SPAIN: U-52 refueled from the German supply ship Bessel in Vigo.

ROMANIA: Bucharest: Oil-rich Romania, the chief source of Hitler’s oil supplies, today renounced the Anglo-French guarantee of its frontiers and sent "important emissaries" to Berlin.
These moves confirm the Allied fears that King Carol would look to the Nazis for protection following Russia’s occupation of the provinces of Northern Bukovina and Bessarabia.
For the moment all is quiet in the capital, although there are reports of clashes between troops and workers at the port of Galatz.

U.S.S.R.: Soviet submarine SC-137 launched.

LIBYA: Marshal Rodolfo Graziani succeeds the late Italo Balbo as commander-in-chief of Italian forces.

JAPAN: Rationing of sugar, matches and other goods is introduced.

U.S.A.: US President Roosevelt sign another naval construction bill. This provides for the construction of 45 more ships and provides 550 million dollars (US) for this and for other projects.
Effective this date, a new law passed by the U.S. Government places a two cent tax on movie theater tickets to help pay for increased defence spending.

Ben Turpin, the cross-eyed slapstick comedian of the silent movies, dies in Santa Monica, California, of heart disease. He was 65. He began his career as a burlesque comedian and entered films in 1907 but failed to attract attention and went back to burlesque. He returned to films in 1914 and his big break came in 1915 when he played opposite Charlie Chaplin. The two did not get along and Turpin moved on to another studio; Mack Sennett found him in 1917 and he went on to become a leading comedy star and insuring his eyes with Lloyds of London against uncrossing. He appeared in over 160 films until sound came in and then appeared in cameo roles in 18 films until his death.

The 7th "Bayonet" Infantry Division of the United States Army is activated. (Marc James Small)

Light cruiser USS Cleveland laid down.

ATLANTIC OCEAN:  Two German U-boats are sunk today:

- The crew of U-26 scuttles their boat about 282 nm (522 km) west of  Brest, France. The RN corvette HMS Gladiolus had dropped eight depth charges damaging the U-boat in an attack yesterday. Today, a Sunderland Mk. I, aircraft "H" of No. 10 Squadron, RAAF, based at Mount Batten, Devonshire, England, sights the boat on the surface and drops two sticks of four 250-pound (113 kg) bombs further damaging it and preventing it from diving. Recognizing their situation, the crew scuttles the boat to prevent capture by the British and all 48 crewmen are picked up by the sloop HMS Rochester. (Alex Gordon)

- After sinking a 5,219 ton merchant ship in Convoy SL-36 (Sierre Leone to U.K.), U-102 is sunk about 238 nm (440 km) west of Brest, France, in position 48.33N, 10.26W, by depth charges from the British destroyer HMS Vansittart. All 43-hands in the U-boat are lost. (Alex Gordon)

At 1155, the Clearton in Convoy SL-36 was torpedoed and damaged by U-102 about 180 miles west of Ushant. At 1325, the now straggling vessel was again torpedoed by the U-boat and sank 042° 240 miles from Smalls. Eight crewmembers were lost. The master, 24 crewmembers and one gunner were picked up by HMS Vansittart, which had sunk U-102 shortly after the last attack and brought the survivors to Plymouth.

SS Damastos sunk by U-29 at 46.20N, 14.30W.

At 0023, U-30 attacked Convoy SL-36 about 300 miles west of Ushant and claimed the sinking of one ship with 7900 tons. This claim is not confirmed by Allied reports. At 0400 hours, the U-boat attacked again and sank the Beignon. The Beignon had picked up 84 survivors of the Avelona Star, which had been torpedoed by U-43 in the same convoy at 2227 hours on 30 June. Three crewmembers and three survivors were lost. The master, 29 crewmembers and 81 survivors were picked up by HMS Vesper and Windsor and landed at Plymouth

At 1351, the Amstelland in Convoy OA-175 was hit by a torpedo from U-65 about 380 miles SW of Lands End. Stockhausen claimed to have sunk his victim, but she remained afloat for two days, before HMS Marauder took the ship in tow. HMS Calendula escorted the damaged vessel to Falmouth, where they arrived on 5 July.