The Acting Secretary of State to the Secretary of the Navy (Forrestal)
My Dear Mr. Secretary: I share your thought that the Interim Program, as a part of our policy to promote the Inter-American defense of the Western Hemisphere, has assumed added significance by virtue of the failure of the 79th Congress to pass H. R. 6326.26
Since receiving your letter of 20 August 1946,27 I am informed that certain progress has been made with the Maritime Commission as a result of your letter to the Commission’s Chairman. I am also informed that the Naval Division, Office of the Field Commissioner for Military Programs, has made considerable progress with the Maritime [Page 100] Commission and that they are jointly preparing to offer a number of vessels over 1500 gross tons to other American Governments at prices that are quite close to the Interim Program formula. I am further informed that a large number of vessels upon which the Commission has established or is about to establish fixed prices can be sold, and plans are presently being formulated to accomplish this.
It would seem that the prospect of early acceleration of the Program is much brighter since greater cooperation has been developed between the Maritime Commission, the Navy Department, and the Department of State.
Discussions with representatives of the other American Governments have emphasized that notwithstanding the unsatisfactory condition of vessels due to material demobilization, only fully militarized, operable vessels will meet the requirements of the purchasing countries. To meet these requirements a most liberal and concerted effort should be made to improve the condition of vessels. It is felt that this contribution can only come from the Navy. Accordingly, the Department of State prefers to negotiate transfers on an “as is” basis and recommends that the matter of replenishment of allowances or spares and reconditioning be a direct transaction between the prospective purchaser and the Navy Department.
Delivery dates are dependent upon completion of indoctrinal programs, as stated in your letter. Since indoctrination is a matter under your own cognizance, work schedules and dates should be matters of direct agreement between the prospective purchaser and the Navy Department.
Your letter suggests that prospective purchasers be limited to inspection of operational craft when establishing their requirements, if any, of that type. This is a matter of your own cognizance as these determinations are made during the period in which the Navy Department is establishing what is to be included in the Interim Program. When the requirements are approved for inclusion in the Program, bow numbers are assigned by the Navy Department. Inspections conducted by the Office of the Field Commissioner for Military Programs are made to determine the condition of a specific vessel for the purpose of pricing it. These inspections must be made, of necessity, on the specific vessels the Navy Department has allocated to the prospective purchaser.
I will appreciate receiving a copy of such instructions as you may issue to the Naval establishment.