740.00116 European War 1939/172
Memorandum by the Assistant Chief of the Division of Controls (Yost)
After the receipt of Mr. Moffat’s memorandum of January 10 of his conversation with the Soviet Ambassador in regard to what the Ambassador described as “a unilateral breaching of contract” in connection with the requested withdrawal of 15 Soviet engineers from the plant of the Wright Aeronautical Company and since it appeared that this withdrawal was a result of the control exercised by the War and Navy Departments over visits by foreigners to American armament plants rather than a result of the “moral embargo”, I asked Mr. Moseley50 to ascertain the pertinent facts from the War or the Navy Department. Mr. Moseley spent the morning of January 13 at the Navy Department and obtained the following information.
[Page 248]On December 26, 1939, the Inspector of Naval Aircraft at the factory of the Wright Aeronautical Corporation, under instructions from the Navy Department, addressed a letter to the corporation requesting that “all authorizations extended heretofore for visits by Russian technicians and representatives be canceled, and that such representatives be no longer admitted to the company’s factory in accordance with Article XV of the Agreement between the Wright Aeronautical Corporation and Stalin Plant of U. S. S. R.” A copy of this letter is attached hereto.53 It will be seen that the Navy Department objects to the presence of such a large number of foreign engineers in the Wright plant for the reason that “it operates to permit needless opportunity for observation of our production and development of military engines at a time when it is particularly to the best interest of the United States Government to exercise the utmost vigilance to prevent such observation”. It may be added that the authority under which the Navy Department restricts visits of foreigners to armament plants is its constitutional authority to safeguard the interests of the national defense, as specifically implemented by the United States Naval Regulations of 1920, a copy of the pertinent section of which is attached hereto.53
It should also be noted that the Naval Inspector makes it clear in the third numbered paragraph of his letter that the intent is not to cut off altogether visits of foreigners to the Wright plant, but merely to reduce the number and duration and to limit them in general to visits made in connection with the actual purchase of American aircraft matériel.
In connection with Mr. Oumansky’s reference to a “breaching of contract”, attention is invited to the excerpts from the Wright–Soviet contract in question attached hereto.53 It will be observed that the contract provides that Soviet technicians shall be stationed at the Wright factory only when the United States Government permits and shall be withdrawn whenever the United States Government shall refuse to grant such permission. The action taken by the Navy Department on December 26 was therefore foreseen and provided for by the contract and could not be considered to be a violation of the contract.