711.00111 Unlawful Shipments/2ie: Telegram

The Secretary of State to the Counselor of Embassy in Spain (Thurston)

452. Your 986, June 23, 5 p.m. Licenses were issued between November 1937 and March 1938 to Grumman Aircraft Engineering Corporation authorizing the exportation to Canada of 51 fuselages for Model FF–1 planes valued at $284,000. In the same period, licenses were issued to Brewster Aeronautical Corporation authorizing the exportation to Canada of 70 wing panels, 66 tail units, and a quantity of other parts for the same type of plane to the value of $496,853.60. Most of these articles were exported under these licenses before any doubt arose as to the legality of the transaction. The applicants had stated that the parts were consigned to Canadian Car and Foundry Company, Limited, to be assembled in Canada. Later they informed the Department that the assembled planes were for exportation to Turkey. Investigation revealed that the Turkish Government had not ordered the planes, that the alleged orders were forgeries, and that at least part of the shipments had not been assembled in Canada but had merely passed through Canada en route to France. Outstanding licenses relating to this transaction were revoked and applications for further licenses rejected. The Department and the Canadian Government are pursuing investigations with a view to possible prosecutions.

Your telegram contains the first definite information of the arrival of the planes in Spain. Please report fully by telegram any further information you may be able to obtain.