The Secretary of State to President Roosevelt

My Dear Mr. President: I enclose, for your information, a copy of a memorandum of a conversation which the Assistant Secretary of War and the Chief of the Division of Controls of the Department had on April 20 with Mr. Sol Rosenblatt, in regard to the project to establish a plant in New Orleans for the manufacture of military planes of French type.

In this connection, it is of interest that the French Ambassador, in a conversation with the Chief of the Division of Controls on March 21, stated, in discussing the proposed financial arrangements to carry out this project, that Monsieur Wertheimer’s plan had been to arrange to make it appear by ostensible ownership of stock by Americans that the company to be set up was an American company, whereas in fact the American company was to be “a straw man” owned and controlled by French interests.

Faithfully yours,

Cordell Hull

Memorandum of Conversation, by the Chief of the Division of Controls (Green)

At the direction of the President, the Assistant Secretary of War and I received Mr. Sol Rosenblatt this afternoon in order that he might have an opportunity to give us further information in regard to the project to establish a plant in New Orleans for the manufacture of military planes of French type.

Mr. Rosenblatt explained the project at considerable length and in great detail. The project as he explained it differs in many essentials from the project as it was outlined by Monsieur Pierre Wertheimer to officers of the War Department in December and as it was explained by the French Ambassador, by Mr. Bullitt, and by Mr. Vincent Bendix, President of the Bendix Aviation Corporation, at the time when it was under discussion in March. It seemed evident from what Mr. Rosenblatt said that the plans had been very considerably modified since the visit of Baron de la Grange and Monsieur Wertheimer to the United States with a view to eliminating features which might be objectionable to this Government. The important statements made by Mr. Rosenblatt may be summarized as follows: [Page 516]

Ownership—The stock to be owned: 35% to be divided between Kuhn Loeb and Company and Newman Harris and Company of New Orleans, the bankers who are to furnish the capital; 30% to be divided between Bendix and his associates in the management of the company; 10% to be divided between Rosenblatt and two other promoters; 25% to be owned by the French Amiot company, 55% of the stock of which is owned by Wertheimer and his brother; the capital to be furnished by the two banking houses named above, which would receive $2,500,000 in bonds of the company. Mr. Rosenblatt categorically denied that any French citizen or any French company would have any interest, direct or indirect, in the ownership of the company or any claim whatever on the profits of the company other than the 25% stock-ownership described above and the royalty mentioned below.
Management—Mr. Bendix to resign the presidency of the Bendix Aviation Corporation and to become president of the new company; Mr. Bendix to appoint some of his associates to key positions in the management of the company; no French citizens to participate in any way in the management.
Operations—The French Government has already ordered 500 Amiot planes, to cost $8,500,000, to be built by the company if it is organized. The company would start business by constructing these planes, which would incorporate some improvements on the Amiot type and which would be renamed “Bendix”. The Amiot company would furnish the necessary machines, jigs, dies, etc., and would send over two engineers to install the machines and to assist in the initial construction; these two French engineers to be the only French employees and to return to France as soon as construction of the first 500 planes was well under way; the Amiot company, in return for furnishing the machines, jigs, dies, and construction data, to receive a 3% royalty on the first 500 planes manufactured; the company to be prepared to construct thereafter military planes for both the French Government and the United States Government and commercial planes, including, if possible, planes for Trans-Atlantic flights by a French company.

The Assistant Secretary of War and I told Mr. Rosenblatt that the project as he had described it differed materially from the project as it had been described to us previously but that, nevertheless, we did not believe that it would be opportune for the proposed company to incorporate and begin operations at this time.

Mr. Rosenblatt stated, with emphasis, that he would take no further action in regard to this matter for the present beyond furnishing the Department and the War Department with a memorandum of what he had said to us, together with copies of the letters reporting our conversation which he proposed to address to his associates in this project. He said that he recognized that, in view of the recent furor in regard to the purchase of planes by the French, publicity in regard to this project at this time might be embarrassing to the [Page 517] Administration. He added that he would return in two months or so to discuss the project once more in the hope that at that time there would no longer be any reason for official objection to the carrying out of the project. He emphasized his determination to proceed in this matter in entire accord with the wishes of the Government.

The Assistant Secretary of War has seen and approved this memorandum.

Joseph C. Green