711.00111 Armament Control/Military Secrets/799

Memorandum by the Chief of the Office of Arms and Munitions Control (Green)

Mr. Scott Ferris, attorney for the Carp Export and Import Corporation, called at my office yesterday afternoon to discuss further the difficulties encountered by his clients in their attempt to purchase in this country plans, specifications, equipment, material and armament for a battleship to be assembled either in an American shipyard or in the U. S. S. R. He handed me four applications—photostatic copies of which are hereto attached41—for license to export various listed items required in the construction of a battleship, and a quantity of ammunition. He said that he did not suppose that the information on some of these applications was sufficiently complete to enable the Department to grant export licenses, but nevertheless he was leaving them with me in the hope that at least some of the applications could be granted.

I told Mr. Ferris that I would examine the applications with care and would submit them to the Navy Department for its consideration. 1 explained that the only possible obstacle to the issuance of the licenses applied for would be the possibility that some of the items listed were described in such general nontechnical terms that it would be impossible for the appropriate authorities of the Government to ascertain whether or not military secrets of interest to the National Defense were involved therein.

Mr. Ferris then said that he wished to explain to me very frankly why it was that his clients had not been able to enter into contracts with any American designers or builders of naval vessels. He said that they understood thoroughly the procedure which I had suggested, viz: that they should purchase complete plans and specifications and then submit applications for license to export, assembled or unassembled, a battleship built or to be built in accordance with those plans and specifications. He said that they understood further that if such plans and specifications were presented to me, I would transmit them to the Navy Department with a view to ascertaining whether military secrets were involved, and with a view to the elimination of any features of the projected battleship which might involve such secrets, and the substitution of other plans and specifications for those features. He said that with this procedure clearly in mind, his clients had approached the New York Shipbuilding Corporation, the Bethlehem Shipbuilding Corporation, Limited, and Gibbs and Cox, Incorporated—marine architects—, [Page 481] and offered to pay cash for complete plans and specifications on the understanding that these plans and specifications were not to be communicated to the purchasers until the Secretary of the Navy had ascertained that they contained no military secrets, or until any features which the Navy Department considered to contain military secrets had been eliminated from the plans and specifications. Mr. Ferris said that Carp had not as yet received a definite reply from Gibbs and Cox, Incorporated, but that, notwithstanding the utmost efforts of his clients to persuade the New York Shipbuilding Corporation and the Bethlehem Shipbuilding Corporation, Limited, to sell them plans and specifications, these companies had refused to do so, and had explained their refusal by saying that although the position of the Government in respect to the proposed transaction had been made clear in various letters from the Department, nevertheless, officers of the corporations had been told by several naval officers in the Navy Department, some of whom he named, that they disapproved of the proposed transaction. Mr. Ferris said that Mr. Gilmore, President of the Sperry Gyroscope Company, Incorporated, from whom the Carp Export and Import Corporation had attempted to purchase plans and specifications for fire control apparatus to be installed on the proposed battleship, had been so impressed by the opinions adverse to the proposed transaction expressed by certain naval officers, that he now refused even to communicate with the Department of State or to request information as to whether there was any objection, on the ground of military secrecy, to the exportation of the fire control apparatus in question. Mr. Ferris quoted naval officers as having made to representatives of the two shipbuilding corporations and to Mr. Gilmore various remarks, such as that notwithstanding the official position of the Navy Department they should not make any contract with Carp. One officer was quoted as having said that as long as he occupied his present position, he would prevent the carrying out of the proposed transaction if he possibly could. Mr. Ferris said that the representatives of the three companies mentioned had interpreted the remarks of some of the naval officers with whom they had discussed the proposed transaction as representing to such a degree the opinions of important naval officers, that they feared that if they entered into contracts with Carp, the Navy Department would make “reprisals” against them, and that as the Navy Department was their principal customer they could not afford to take the risk. He said that they felt that as some of the naval officers referred to—whom they credited with strong aversion to any dealings by American arms manufacturers with agents of a communist government—occupied such key positions in the Navy Department that notwithstanding the official position of [Page 482] that Department, they could and would place obstacles in the way of future contracts with that Department if their warnings were ignored.

This morning Mr. Ferris returned to my office, accompanied by Mr. Carp and Mr. Morris Wolf of the Carp Export and Import Corporation. Our conversation was almost a duplicate of that which I had with Mr. Ferris yesterday. Mr. Wolf reported at length alleged statements to him by representatives of the New York Shipbuilding Corporation and the Bethlehem Shipbuilding Corporation, Limited, in regard to conversations with naval officers, but added little to what Mr. Ferris had already told me. The only new piece of information which I obtained in the course of the conversation was that the Soviet Government had become so impatient at the delays and the inability of the Carp Export and Import Corporation to close the necessary contracts, that Messrs. Carp and Wolf thought it probable that their agency would be cancelled unless they were able to report progress very shortly.

Mr. Ferris expressed the hope that the policy of the Government in regard to this matter might be made so clear to all officers in the Navy Department whose duties related to such matters that the objections which had been expressed to representatives of the shipbuilding corporations and the Sperry Gyroscope Company, Incorporated, would be emphatically withdrawn so that the companies would feel free to proceed to enter into contracts, and he added that he hoped that I might be able to do something to bring about this result.

Joseph C. Green
  1. Not reproduced.