File No. 894.85/44

The Ambassador in Japan ( Morris) to the Secretary of State


No. 16. I am preparing final draft of contracts covering shipbuilding programme in accordance with your telegram of April 12, 4 p.m. Will execute them as agent for United States Shipping Board. Contracts will cover about 35 ships, including 3 steamers mentioned in my No. 4,2 and will aggregate approximately 287,000 tons dead weight. On signing of contracts there will be payable immediately 20 per cent of total purchase price, or approximately $10,000,000 and export licenses for approximately 27,000 tons of old steel and agreement by United States Shipping Board to deliver [Page 646] 130,000 tons of new steel f.o.b. San Francisco at rates as by your telegram March 20, 7 p.m. Please advise at once how new steel is to be contracted for and how far I can bind Shipping Board, as to times and amounts of steel deliveries; also please advise terms of payment for this steel; also, terms of payment of balance for ships. Japanese ship builders will give American bankers’ guarantee for steel payments, and local guarantees acceptable to me for faithful performance of contract.

  1. Not printed.