he Special War Problems Division of the U.S. State Department ran a small group of its own internment facilities during WW II. “Special war problems” included diplomats and consular corps staff, as well as executives from Axis owned businesses, from both the U.S. and Latin American countries.
These prisoners were housed in hotels pending repatriation. Many were very elegant resorts, like the Greenbrier Hotel in White Sulphur Springs, West Virginia, and the Grove Park Inn in Asheville, North Carolina, which overlooks the Blue Ridge Mountains. Federal agencies controlled the Grove Park Inn property from 1942 to 1946, during which time the State Department used the Inn as an internment center for Axis diplomats. 155 Germans and 63 Japanese from Latin America were housed here. (Kashima, 280, note 72.)
In Virginia, the Homestead Hotel and the Cascade Inn, both in Hot Springs, were used. The Homestead was originally built in the 18th century; Japanese Latin Americans were interned here, while German diplomats were housed at the Ingleside Hotel, in Staunton, Virginia. The Shenvalee Hotel in New Marken also housed internees. Everyday operations of these facilities were handled by the INS.
A State Department memorandum in 1942 reported that 785 people were interned in these hotels. …”363 Japanese, 212 Germans, 113 Italians, 71 Hungarians, 16 Bulgarians, and 10 Romanians. Of this number, 655 diplomats, officials, and dependents actually resided at internment hotels from December 1941 to early September 1942.” The last internment hotel closed in 1944. (Tetsuden Kashima, Judgment without Trial: Japanese American Imprisonment during World War II, Seattle: University of Washington Press, 2003, 180-182.)