File No. 763.72111/1072

The Secretary of State to the Ambassador in Great Britain ( Page )


708. The Secretary of State gave the following to the press this afternoon.

When information reached the State Department that the Fore River Company was planning to build a number of submarines for one of the Allies, inquiry was made to ascertain the facts. As a result of this inquiry Mr. Schwab called at the State Department last week with his attorney and laid before the Department what his company had planned to do, stating that before undertaking the work he had secured the opinion of a number of international lawyers and was keeping within the requirements of neutrality as outlined by them. I stated to him that the President, basing his opinion upon information already obtained, regarded the work as contemplated a violation of the spirit of neutrality, but told him I would lay his statement before the President and then give him a final answer. On Friday I had a conference with the President, and he instructed me to inform Mr. Schwab that his statement only confirmed him in the opinion previously formed that the submarines should not be built. Within a few minutes after my return from the White House Mr. Schwab called me by long-distance telephone and told me that he submitted to the President’s views of the subject and that I could announce that his firm would not build submarines for any belligerent country for delivery during the war. This closes the submarine incident.