File No. 894.85/9
The Ambassador in Japan ( Morris) to the Secretary of State
[Received 6.15 a.m.]
Shipbuilders today in each case accepted your first proposition, that is, for twelve ships on terms as specified your [my] telegram of March 15, 8 p.m. All twelve ships over 6,000 tons except one 12-knot steamer of 5,000 tons which on recommendation of naval attaché I included and hope you will approve.
Am I authorized to execute formation [formal?] contract and will you authorize employment of counsel? Maritime shipbuilders would appreciate payment on account of purchase price at time of signing contract and suggest 20 per cent. I would recommend that some payment be made at that time if possible.
Shipbuilders urgently request that following provisions may be included in formation [formal?] contract but these together are not conditions of acceptance:
- Clause 1. Shipbuilders to have the privilege of selecting the kinds or classes of materials to be taken over under this arrangement.
- Clause 2. License for shipment covering the materials (plates, shapes) to be issued immediately on conclusion of the contract to agents of Asano Company and Suzuki Company in the United States.
- Clause 3. Tonnage of steel materials corresponding to the tonnage of any particular ship offered, to be delivered to builders at a United States port to be designated by them, at the latest not later than the time of sailing of that steamer from Japan. Materials already at a port to be shipped immediately.
- Clause 4. Bankers confirmed credit to be issued guaranteeing that the payment will be duly made in New York.
- Clause 5. Delivery of the ships to be made, magazine iron cased [in good order?], at a port on the Pacific coast of the United States (including Vancouver) or on the Atlantic coast of the United States at deliverer’s option.
- Clause 6. Twenty per cent of the total purchase money to be paid on signing of the contract.
- Clause 7. License for shipment covering pig iron, tubes, furnaces, chains, etc., required for completion of these specific ships to be issued; also facilities to be given in Korea [regard to?] purchase of the same. These materials cannot be obtained in Japan at any price.
- Clause 8. Contracts to be made and signed separately by each of the shipbuilders.
Shipbuilders are working on your second offer for 200,000 tons to be built and expect to report to me Wednesday. Some yards are not [Page 642] equipped to build 6,000 tons ships (as herein). Could you reduce basis to 5,000 tons and speed to basis of 10 knots?