File No. 195/87

The Chief of the British Special Mission ( Balfour ) to the Secretary of State

Dear Mr. Secretary: I send you a copy of a letter which I have addressed to Mr. Denman to-day.

Yours very sincerely,

Arthur James Balfour
[Page 598]

The Chief of the British Special Mission ( Balfour ) to the Chairman of the Shipping Board ( Denman )

Dear Mr. Denman : As was arranged the other morning I write to place on record the results of our conference in regard to the possibility of increasing the output of shipping in the United States.

I understand the problem to fall under three heads—(1) wooden ships, (2) fabricated steel ships, and (3) ordinary steel ships. As regards the first and second heads I understand that General Goethals’ arrangements are now well in hand, but that, pending the grant of appropriations by Congress, he is not in a position to make a final statement on all the points involved in his programme.

As regards the third head, General Goethals is, it appeared, of opinion that it might be possible to expedite the completion of certain ships already laid down or contracted for. He counts on being able to speed up the production of steel, and hopes to be able to speed up its transportation in such a way as to make it possible for the yards to work with two or even three shifts in the twenty-four hours instead of the one shift, which, according to the enquiries of the experts, is all that the rate of delivery of steel makes possible at the present moment in the majority of cases. He also counts on being able to organise the supply of engines, winches, anchors and other parts of the completed ship so as to bring all parts of the ship to a state of readiness at the same earlier date as the hulls. By this means General Goethals hopes to turn out 3,000,000 tons in the next eighteen months. By the end of that time or even before it should be possible to have erected new yards which will render possible a material increase in the rate of output.

On behalf of the British Government I stated that our sole desire was to secure that as much tonnage as possible should be constructed and put in active operation in trades essential to the successful prosecution of the war in the shortest possible time. I asked whether General Goethals in the course of his energetic enquiries has obtained any information tending to show that the contracts placed for account of His Majesty’s Government with yards in this country were in any way an obstacle. He replied that he was not prepared to say this, as his only information was that certain builders had stated in general terms that if the ships at present on their slips could be more rapidly completed their yards would be freer to deal with his new programme. I then stated that, as regards the question of the ownership of the ships for which contracts had been placed by the British Government, [Page 599] and as regards the question of the flag under which they should eventually be launched, we were not called upon to make a decision and we would make no claim. These questions were primarily ones for the consideration of the Government of the United States. If that Government, after full consideration, were to inform us that they could only arrange for the speediest possible construction and putting into commission of the maximum number of ocean-going ships, which we agree to be the paramount object to be attained, by taking over, varying or cancelling any contract or contracts now in existence, His Majesty’s Government would certainly not stand in their way and would only ask that the grounds on which the technical advisers of the United States Government had formed this opinion should be communicated to, and, so far as reasonably possible, deliberated upon with, the technical advisers of His Majesty’s Government. Similarly, if the United States Government were to inform my Government that it was desirable on broad grounds of national policy that any or all of these ships should be owned in the United States and should fly the American flag, my Government would unhesitatingly bow to the decision so conveyed to them. His Majesty’s Government therefore can only await an official expression of the views of the Government of the United States through the usual channels and meanwhile I would draw your attention to the official assurances and statements which I had the honour to convey to the Secretary of State in my memorandum enclosed in my letter to him of May 15.

I am forwarding a copy of this letter to the Secretary of State and General Goethals.

Believe me [etc.]

A. J. Balfour