867.113 Jones & Lamson Machine Co./3

The President of the Jones & Lamson Machine Co. (Ralph E. Flanders) to the Secretary of State

Dear Mr. Secretary: The Jones and Lamson Machine Company of Springfield, Vermont, of which I am president, has been associated with a group of machine tool builders in an endeavor to obtain from the Turkish government orders for machinery and equipment which that government will place somewhere within the next few weeks.

To make it possible for us to accept these orders we will have to be financed for a certain percentage of the total amount in value, which approximates $1,000,000. The financing is of a type for which ordinary banking facilities are not available, but which come definitely within the scope of Export-Import Bank No. 2. The conditions surrounding this business seem to be satisfactory on the whole to the [Page 966]management of that bank, with one exception. The machinery we propose to supply is to be used in this instance for the repair and maintenance of artillery and small arms for the Turkish government. In view of prevailing interest in matters of this sort, and as an item of established policy, the Export-Import Bank is unwilling to give any assurances of financial assistance without a favorable ruling from the State Department, on this proposed transaction, from the standpoint of governmental policy, as relates to the armament trade. This letter is a request for such a ruling.

We would urge that a favorable ruling be given on the following grounds:

A.
The project was not instigated or fostered by ourselves or by fellow nationals, but was developed in its entirety by the Turkish government before we were informed as to the existence, let alone the scope, of the programs undertaken. We therefore cannot be accused on any grounds of having fomented or encouraged an increase in armament.
B.
Proposals from English, German and French manufacturers have been in the hands of the Turkish government for some time past, covering the complete project. Our American proposals are somewhat late in the field, and the opening of bids has been delayed out of courtesy to permit us to enter into this competition. It is therefore evident that our success or failure in obtaining this business is incidental so far as concerns carrying out the project; other nationals are prepared to do so and will do so; our action will not increase or diminish armament activity.
C.
Price competition will be so keen on this project that profits will be absent or inconsiderable. Its useful effect for ourselves and the country lies in expanding the abnormally small volume of employment in a depressed industry, that of building machine tools. Therefore, we urge your favorable action from the standpoint of recovery.
D.
The machinery we propose to furnish is not itself armament or ordnance, but is one remove therefrom, being employed in the repair and maintenance of war material. Only a fraction of the machines ordered, (not over 2% in value) are specialized machines for armament manufacture. The balance consists of standard machinery used generally for the manufacture of a wide range of peace time products, such as motor cars, electric refrigerators and the like. There is nowhere near so direct a connection with armament as exists for instance, in recent large shipments of cotton, constituting the primary and principal basic material for the manufacture of war explosives. The proposed transaction therefore seems to be outside accepted categories of war material as defined on a peace-time basis.
E.
Our own country is dependent on a variety of imported materials for the construction of armament for our national defense. It would seem therefore, that we cannot consistently put prohibitions in the way of other nations which, on their own account and without our solicitation, seek for themselves, protection of a comparable sort.

In view of the above considerations, we urge a favorable ruling in this matter.

Yours respectfully,

Ralph E. Flanders