Memorandum by the Chief of the Division of Controls (Green)4

This memorandum summarizes briefly, for convenient reference, the principal developments which have occurred since February 22 in connection with the sale of surplus arms by the War Department.

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The Department on February 26, at the request of the War Department, informed the Brazilian Ambassador that the Secretary of War was prepared to deliver 90 6-inch guns to the Brazilian authorities. The War Department, feeling that the shipment of such a number of guns could not possibly escape public attention and fearing that distorted accounts of the transaction might appear in the press, issued on March 5, after consultation with this Department and with the President, a press release in regard to the matter. At the time the release was issued, an officer of the War Department, without consultation with this Department, permitted representatives of the press to make notes from a list of arms declared surplus. This list had not theretofore been communicated to anyone. The press stories relating to the sales to Brazil contained also partial and inaccurate copies of this list.

The publication of this list in various forms in different papers resulted in urgent requests from the Argentine, Colombian, Cuban, and Mexican Embassies and the Salvadoran and Dominican Legations that they be furnished with authentic lists with a view to possible purchases, and the Panamanian Embassy expressed interest in this matter, particularly with a view to the possible purchase of rifles. It was decided that fairness to the possible purchasers required that these requests should be complied with as representatives of Chile and representatives of Brazil had already been permitted to negotiate for the purchase of surplus arms. Therefore, officers of RA5 and of Co,6 acting under instructions, furnished copies of the list to the missions which had requested it. These missions were informed that some of the arms listed had already been offered to other governments and that those governments had first claim upon them. They were further informed that the Secretary would prefer that no negotiations with a view to purchases be initiated until after the return of the Under Secretary. In view of the probability that several of the governments referred to will wish to open negotiations for purchase as soon as possible, the Secretary and the Secretary of War agreed upon a procedure for dealing with these purchases.

In the meantime, every effort was made to expedite Señor Bianchi’s7 consideration of possible purchases of surplus in order that other governments might be definitely informed of what surplus supplies were available and not spoken for. Mr. Duggan8 and I, at the direction of the Secretary, presented Señor Bianchi to the Secretary of [Page 4]War, and he has had several further conversations with officers of the War Department in which he has been furnished with a full list of all arms declared surplus, together with a list of prices. Officers of the War Department have made it clear in conversations with us that that Department would be most reluctant to add any items whatever during the present calendar year to the list of surplus which has been prepared or to reduce prices below the figures which it has now fixed. It feels that to do so would adversely affect the interests of the national defense and might seriously affect the relations between the War Department and Congress. Señor Bianchi has been asked by the War Department to prevail upon his Government to decide, if possible, before April 15 what surplus arms, if any, it desires to purchase. The fixing of a date seemed necessary in view of the publication of the list and in fairness to other possible purchasers.

In addition to the list of surplus and the prices at which the arms can be furnished, the War Department has given Señor Bianchi a list of approximate prices at which what he terms the “minimum requirements” of the Chilean Army could be supplied by American manufacturers. The War Department fixes the approximate value of these arms at $6,029,500. Señor Bianchi has expressed the hope that his Government may be able to purchase some of these arms from this Government if the bill “To authorize the Secretaries of War and the Navy to assist the governments of American Republics”, etc., were enacted. That bill has again, within the last few weeks, be[en] passed over as a result of objection by Senator Vandenberg.

Mr. Duggan, Mr. Chapin,9 and I, acting under instructions, also presented Señor Bianchi to Captain Collins with the Department’s recommendation. Señor Bianchi handed Captain Collins his list of the “minimum requirements” of his Government and requested that he be informed whether the items listed could be obtained from American manufacturers and, if so, at what prices. Captain Collins referred this request for information to the Army and Navy Munitions Board, with officers of which Señor Bianchi has been dealing direct. They have attempted to prevail upon him to state which items on the list his Government might have serious intentions of purchasing in the hope that the Board may be spared the labor of preparing answers to questions which may not prove to be of practical importance.

The list of arms which Señor Bianchi hopes to purchase (1) from the War Department in case the bill mentioned above is enacted or (2) with the assistance of Captain Collins from American manufacturers would involve, as stated above, an expenditure estimated by officers of the War Department at approximately $6,029,500. This is exclusive of airplanes and aeronautical equipment as well as such [Page 5]purchases as may be made from War Department surplus which, if added to the list, would considerably augment that amount. It is understood that Señor Bianchi has $1,000,000 available immediately and that certain additional sums will become available from the allocation of taxes. He seems to be under the impression, however, that this Government is in some way committed to the making of arrangements which will enable his Government to obtain the arms desired.

The only representatives of foreign governments other than those of Brazil and Chile who have thus far been permitted to negotiate with the War Department for the purchase of surplus arms are the representatives of Sweden and Finland. The former have decided to make no purchases. The latter are on the point of completing an agreement for the purchase of 200 75-mm field guns, 32 8-inch howitzers, and a small quantity of howitzer ammunition.

Joseph C. Green
  1. Addressed to the Secretary of State and the Under Secretary (Welles).
  2. Division of the American Republics.
  3. Division of Controls.
  4. Manuel Bianchi, Chilean Ambassador to Spain on special mission in the United States to purchase military supplies.
  5. Laurence Duggan, Chief of the Division of the American Republics.
  6. Selden Chapin of the Liaison Office.