Foreign Relations of the United States, Diplomatic Papers, 1940, The British Commonwealth, The Soviet Union, The Near East and Africa, Volume III

700.00116 M.E./305

Memorandum by Mr. Harold W. Moseley of the Division of Controls

[Washington,] June 6, 1940.

At Mr. Yost’s request I attended a meeting today at the office of Mr. Herbert Gaston, Assistant Secretary of the Treasury, in regard to the proposed embargo on machine tools. Mr. Huntington Cairns of the Treasury legal division, Mr. Basil Harris, Commissioner of Customs, and Captain Almy, of the Navy Department, were present.

The principal problem discussed was the requisitioning of machine tools which had been purchased by the Japanese and the Soviets and which were either on the docks or in vessels ready to leave. There were two Japanese vessels and one Soviet ship which were being detained in New York pending the requisitioning of machine tools by the Navy Department. On the West Coast the Soviets have a considerable quantity of machine tools ready for export although they have not yet succeeded in arranging for their transportation. Mr. Gaston stated that it was most desirable to expedite the departure of these vessels as the Japanese and the Soviets were not only complaining of discrimination but it was costing them $25,000 a day to hold the vessels there. Captain Almy said that he already had naval officers going over the cargo and that they would remove as quickly as possible those machine tools which the Navy had decided to requisition. This apparently solved the immediate problem of permitting the early departure of these ships. With regard to the Soviet shipments Mr. Gaston stated that Amtorg was apparently fairly cooperative²⁴ and was anxious that the Navy speedily decide which machines it wanted and permit the early departure of those that were remaining. It was further decided that the procedure for the requisitioning of machines and machine tools on which title has already passed to a foreign purchaser should be that the customs officials in all ports of exit would inform the Navy Department when shipments of this type were ready for export. The Navy Department in turn would send one of its men to the port to requisition the material which it felt was needed.

I raised the question of discrimination and inquired whether it was planned to requisition machine tools which were going to France and England. The gentlemen present agreed that at least a gesture should be made to prevent the charge of discrimination and that a few non-consequential items such as grindstones might be requisitioned from shipments destined to the Allies. I stated that the Department had been besieged with inquiries from machine tool makers during the past two days who wished to learn if the newspaper accounts of an embargo on machine tools were true. I asked Mr. Gaston if he had any suggestions to make as to how we should reply to these inquiries. He said that it was quite proper to inform the machine tool makers, as we have been doing, that there was no embargo on the export of machine tools at the present time, but he thought that in all fairness they should be informed of the pending legislation which would give the President power to proclaim an embargo. Mr. Gaston stated that the proposed legislation in question was being taken up by the Senate today and that there was a very good possibility of it becoming law within the next few days.²⁵

H. W. Moseley

24. A marginal notation by Mr. Loy W. Henderson reads: “Navy says Amtorg has not been cooperative.”
25. The Export Control Act, approved July 2, 1940; 54 Stat. 712. Proclamation No. 2413 setting up the necessary controls under this act was issued by the President on July 2; for text, see Department of State Bulletin, July 6, 1940, p. 12.