711.00111 Armament Control/Military Secrets/544a
The Secretary of State to the Ambassador in the Soviet Union (Davies)
Sir: The Department transmits herewith, for the confidential information of the Embassy, copies of various documents17 relating to recent activities of Soviet purchasing agencies in the United States with regard to the construction or purchase of battleships, submarines, and armor plate. It would appear from these documents that the Soviet Government is embarking upon an extensive program of rehabilitation and expansion of its naval forces. The attention of the Embassy is invited in particular to the activities of the Carp Export and Import Corporation, the subject of Embassy’s despatch No. 2150 of December 18, 1936,18 which has apparently been established principally for the purpose of facilitating the purchase by the Soviet Government of military and naval equipment in the United States.
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The United States Steel Products Company and the Crucible Steel Company have been informed by the Department that there are no treaties or statutes which would prevent American companies from manufacturing or selling for export armor plate manufactured in accordance with specifications furnished by the prospective purchaser or his agents, and that, accordingly, this Government would have no objection in principle to the transactions outlined. The attention of both companies was invited to the provision of law set forth under Section V of the pamphlet International Traffic in Arms. In view of that provision of law, American manufacturers entering into contracts to furnish armor plate for export would, if they were at the same time engaged in manufacturing for this Government, be obliged to abide by such rules and regulations designed for the preservation of military secrets of interest to the National Defense as the competent authorities of this Government might find it necessary to prescribe.
An examination of the files of the Office of Arms and Munitions Control indicates that the principal Soviet purchases of arms and munitions in the United States since the establishment of that office have been aircraft, including land and sea planes, propellers, landing gear, motors and accessories, as well as lesser amounts of trench mortars [Page 463] and shells, demolition bombs, machine guns and ammunition of various kinds.
Very truly yours,