Office of the Historian

893.24/3–946: Telegram

Brigadier General Bernhard A. Johnson to Mr. Thomas B. McCabe

[Shanghai,] 9 March 1946.

25226. 1. Referring to your wire of 8 March85 reference Admiral Mar deal. We are sending Major John Edward Bell86 to Washington on 12th March carrying with him tentative draft of contract87 for the sale of the dock-yard equipment on 3c terms88 but carrying the definite option on the part of the United States to take [Page 1075] payment in services and defer all payments. This contract has the approval of Admiral Mar and Admiral Murray,89 Fleet’s representative here.

2. General Marshall and Admiral Cooke stress the importance of this dockyard in future Navy plans. It is recognized that FLC can probably not sell for services, but contract, as now written, places Admiral Mar under contract to furnish services if requested, gives United States right to determine duration of contract. It needs only authorization, statutory or high level decision, to exercise rights given United States.

3. This Mar deal, while at present amounts to but approximately $7,000,000, will grow, in all probability, in size by schedules to $15,000,000. I cannot impress too strongly General Marshall’s and Admiral Cook’s insistence that this deal be consummated as rapidly as possible. Major Bell is briefed on this subject and will answer all questions.

  1. No. 99909, sent by Mr. McCabe to Mr. Howard, not printed. The section of this message dealing with the shipyard transaction is quoted from Departments telegram No. 412, March 6, p. 958.↩
  2. Director of the Sales Division, OFLC Shanghai Office.↩
  3. Not printed.↩
  4. Thirty-year credit at 2⅜% interest. The reference is to section 3 (c) of the Lend-Lease Act, approved March 11, 1941; 55 Stat. 31.↩
  5. Rear Adm. Stuart S. Murray.↩