711.00111 Armament Control/Military Secrets/647
Memorandum by the Chief of the Office of Arms and Munitions Control (Green)
Mr. E. R. Leonard, Manager of Sales of the Bethlehem Steel Company, and Washington representative of the Bethlehem Shipbuilding Corporation, Limited, called at my office this morning, accompanied by Mr. A. B. Homer, Assistant Vice President of the Bethlehem Shipbuilding Corporation, Limited. Mr. Leonard referred to our conversation on April 17, in regard to the proposed contract between the Carp Export and Import Corporation and the Bethlehem Shipbuilding Corporation, Limited. He said that no progress had been made in connection with the proposed transaction since that conversation, but that the representatives of the Carp Export and Import Corporation were still pressing for a contract, offering to make any modifications in the contract which had been originally proposed which might be necessary to meet the objections of the Government.
[Page 472]I told Mr. Leonard and Mr. Homer that the objections of the Government were clear and specific, and could apparently be met by minor modifications of the proposed contract. I permitted them to read the letter addressed by the Secretary on March 26 to the Secretary of the Navy.
Mr. Homer handed me the attached letter of May 3 from the Bethlehem Shipbuilding Corporation, Limited,31 which he said had been written with the idea of obtaining a clear statement in writing of the objections of the Government to the proposed transaction.
I told Mr. Homer that it was contrary to the practice of the Department to express “approval” of proposed commercial transactions, and that the reply to this letter would probably follow closely the text of the letter to the Secretary of the Navy which he had just read.
Mr. Homer and Mr. Leonard said that such a reply would be entirely satisfactory to the Corporation, They expressed the opinion, however, that they would not be able to carry out the proposed contract unless the Navy Department were willing to adopt the same attitude toward it as that which had been adopted by the Department of State, and they expressed anxiety lest the strong prejudices of certain influential Naval officers against all commercial transactions with the Soviet Government, and particularly transactions involving the sale of arms, might result in the Navy Department’s creating such a series of difficulties and inspiring such unfavorable publicity for the Corporation that it would be impossible to carry out the contract. They said that they proposed to discuss the matter further with Admiral Leahy in the hope that they might prevail upon him to clarify the position of the Navy Department.
- Not printed.↩