File No. 103.95/344b
The Secretary of State to the Ambassador in Japan ( Morris)
Yesterday Japanese Embassy delivered us cable containing offer of Japanese shipbuilders to deliver us ships at rate of one and one-half tons deadweight for each ton steel bought by them at high prices hereinafter called old steel and ships at rate of two tons deadweight for each ton steel delivered them at our present Government price hereinafter called new steel. Total ships to be delivered 300,000 tons during this year. Deliveries to commence five months after receipt by them of steel. This proposal is entirely unsatisfactory both as to time of delivery and amount of tonnage. We have become convinced that it is impossible to continue negotiations by cable or to deal with representatives of shipbuilders here. Please take up negotiations there.
- Your effort should be directed to having shipbuilders secure for us ships now in water for immediate delivery our ports. For all such (provided total tonnage shall be not less than 200,000 and [Page 633] all delivered prior to April 30 complete) you may agree to pay shipbuilders $265 a ton and deliver to them at our ports one ton of old steel for each ton and a half deadweight ships. These ships must be not less than 5,000 tons each nor more than two years old and have speed of at least ten knots.
- For such new ships as they can deliver at our Pacific ports on or before May 31 or ships in water as above (provided they shall have agreed to 1 above and the total tonnage under this clause be not less than 200,000 complete) you may agree to pay shipbuilders $265 a ton and deliver to them at our ports one ton steel for each ton and half ships.
- For such new ships as they can deliver at our Pacific ports on or before June 30 (provided they agree to 1 and 2 above and that the total tonnage delivered under this clause be not less than 200,000 complete) you may agree to pay them $225 a ton and deliver to them at our ports one ton steel for each ton and half ships (old steel until contracts exhausted and then new steel) completed.
- For such new ships as they can deliver at our ports during July, August and September (provided they agree to 1, 2 and 3 above and that the total tonnage each month be not less than 100,000 complete) you may agree to pay them $200 per ton and deliver them our ports one ton new steel for each two tons ships.
The figures we have given you both price and steel are maximum and within them you will use your own judgment in trading. As you know the shipbuilders are now grouped and must be dealt with as a body. In asking that they secure ships in the water for immediate delivery we have in mind that the steel and price we are authorizing you to offer may induce them to buy ships from owners. We have never made them any offer better than $225 a ton and delivery of one ton steel for two tons ships. Highly important you keep us fully advised your progress in negotiations. We shall do nothing more here.