841.248/813

The Secretary of the Treasury (Morgenthau) to the Secretary of State

Dear Cordell: At a conference held in your office on December 23rd, at which were present Secretary Stimson, Secretary Knox, and I, there was discussed the allocation of the 300 extra Curtiss P–40 pursuit planes to be produced this spring over and above those already on order.

As the United States Army Air Corps was understood not to be interested in this extra production, it was generally agreed that the bulk of these planes should go to the British—say 150 to 200. Suggested destinations for the remainder included China, Greece, and South America. However, after considerable discussion it was agreed that the allocation should be limited to China and Great Britain: that Great Britain should give up 100 planes to the Chinese out of her January, February, and March deliveries and receive in compensation 300 in May, June, and July—a net gain to her of 200 planes.

This proposal was presented to the British Government and has been agreed to by them as a basis of operations. Likewise the Chinese Government is prepared to receive its alloted number of planes in this and the next two months. In view of these decisions, none of the 300 Curtiss P–40s discussed is now available to other purchasers.

Sincerely,

H. Morgenthau, Jr.