711.00111 Armament Control/Military Secrets/547

The Secretary of State to the Secretary of the Navy (Swanson)

My Dear Mr. Secretary: I have given careful consideration to the various questions dealt with in our recent correspondence25 in regard to the proposal of the Carp Export and Import Corporation to obtain in this country designs, material, and equipment for use in the construction of a battleship in the Union of Soviet Socialist Republics and particularly to those aspects of the proposed transaction which were first brought to my attention by Admiral Leahy in his conversation with me on March 16. On the basis of my present information in regard to this proposed transaction, it would appear that the carrying out of such a contract as the Carp Export and Import Corporation has proposed to the Bethlehem Shipbuilding Corporation would not violate any existing statute or treaty. The material and equipment which would be assembled for export under such a contract would constitute to all intents and purposes a disassembled vessel of war and an export license would therefore be required to authorize its exportation. Barring unforeseen changes in existing treaties or statutes or unforeseen developments in the international situation, I would direct that the necessary export license be issued.

In stating that the carrying out of such a contract as is contemplated would not violate any existing statute, I am not unmindful of the provisions of the Espionage Act of June 15, 1917,26 in regard to the revelation of military secrets of interest to the National Defense. I have assumed that it would be possible for the Navy Department to arrive at some such agreement with the Bethlehem Shipbuilding Corporation [Page 468] in regard to the construction of this battleship as the agreement for the safeguarding of military secrets recently entered into between the Navy Department and the Electric Boat Company in connection with the carrying out of a similar contract relating to the construction of a submarine in the Union of Soviet Socialist Republics.

In dealing with questions relating to the international traffic in arms, I seldom express objection on grounds of foreign policy to a proposed transaction which would not contravene the pertinent treaties and statutes. I express such objection only in exceptional circumstances and in the case of proposed transactions which would definitely and demonstrably interfere with the carrying out of my obligations in the conduct of our foreign relations.

There are two features of this proposed contract to which I feel that I must express objection on the ground of policy.

It is my understanding that it is proposed that the Bethlehem Shipbuilding Corporation furnish for export to the Union of Soviet Socialist Republics 16-inch guns to be intalled on the contemplated battleship. In view of the recent discussions, with which you are familiar, with foreign governments in regard to the maximum caliber of guns to be installed on battleships and in view of the uncertainty as to the ultimate decisions of other Powers and as to the international agreements which may be reached in regard to this subject, I feel that the exportation at this time of 16–inch guns for installation on a battleship of any foreign Power might create a situation which would be definitely inimical to American interests.

Furthermore, it is my understanding that the Bethlehem Shipbuilding Corporation could not manufacture and deliver to the agents of the Union of Soviet Socialist Republics guns and armor without having those articles tested and inspected before delivery and that the United States Navy is the only agency in this country which could carry out the necessary tests and inspection. Thus, if my understanding is correct, the proposed contract could not be completed without the active participation of the Navy. With my letter addressed to you on November 30, 1935,27 I transmitted a copy of a circular instruction,28 in regard to the exportation of arms, ammunition, and implements of war, which I addressed to all diplomatic and consular officers. That instruction embodied a long-standing policy of the Government to disassociate itself from the promotion of the export trade in such articles. It would seem that, if the Navy were to take the active steps necessary to test and inspect the guns and armor designed to be exported for use in the construction of a battleship for a foreign Power, such action might well be considered to be in contravention of this established policy of the Government.

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In this letter I have set forth fully some of the considerations which will guide me in the drafting of any further correspondence which I may have on this subject with the Carp Export and Import Corporation or the Bethlehem Shipbuilding Corporation. I should appreciate it if you could find it possible to be guided thereby in any further communications which you may have with either of those companies, and I suggest that they should be informed of the two specific grounds on which objection is made to the proposed contract. Should these two specific grounds be removed by modification of the proposed contract, I do not, on the basis of my present information, feel that the Government should interpose further objection.

I shall keep you fully informed of any further developments in this matter and I should appreciate it if you would inform me of the substance of any further correspondence or conversations concerning it which you may have with either of those companies.

Sincerely yours,

Cordell Hull
  1. Not printed.
  2. 40 Stat. 217.
  3. Not printed.
  4. Not printed in this volume.