711.00111 Armament Control/Military Secrets/660
Memorandum by the Chief of the Office of Arms and Munitions Control (Green)
At the garden party at the British Embassy yesterday, I had a conversation with Admiral Leahy, Chief of Naval Operations. The Admiral told me that at a dinner the other evening the Soviet Ambassador had taken him aside and expressed his dissatisfaction at what he understood to be the attitude of the Navy Department toward the proposal of the Carp Export and Import Corporation to obtain in this country material and equipment for a battleship to be assembled in the U.S.S.R. The Ambassador said that he had been informed [Page 473] that the Navy Department was preventing the agents of his Government from obtaining the materials for the battleship, and he expressed surprise at this alleged attitude of the Navy Department, as he said that the battleship if constructed would be used in the Pacific and would tend to act as a balance to the Japanese Navy.
To these remarks of the Ambassador, Admiral Leahy said that he had replied that the Ambassador was entirely mistaken, and that the Navy Department was placing no obstacles in the way of the proposal of the Carp Export and Import Corporation.
The Admiral told me that he understood that the proposition was dead as the Bethlehem Shipbuilding Corporation did not desire to enter into the contract.
I told the Admiral that I thought he was mistaken; that it was my impression that the Bethlehem Shipbuilding Corporation would be glad to enter into the proposed contract if it could be assured that the Navy Department would not place obstacles in the way of its carrying out the proposed transaction; that representatives of the Corporation had called at my office last week to discuss the matter further; and that a letter to him was now in course of preparation setting forth once more the attitude of the Department of State in regard to the matter. I said that apart from the two specific objections referred to in the Secretary’s letter of March 26 addressed to the Secretary of the Navy, I could see no reason why the Navy should place any obstacles in the way of the proposed transaction as long as it was conducted in such a way that no treaty or statute would be violated.
The Admiral said that he entirely agreed with me, and that he would make his position clear in any further conversations he might have with representatives of the Bethlehem Shipbuilding Corporation.