851.248/196a
The Secretary of
State to President Roosevelt
[Washington,] April 21,
1939.
My Dear Mr. President: I enclose, for your
information, a copy of a memorandum of a conversation which the
Assistant Secretary of War and the Chief of the Division of Controls
of the Department had on April 20 with Mr. Sol Rosenblatt, in regard
to the project to establish a plant in New Orleans for the
manufacture of military planes of French type.
In this connection, it is of interest that the French Ambassador, in
a conversation with the Chief of the Division of Controls on March
21, stated, in discussing the proposed financial arrangements to
carry out this project, that Monsieur Wertheimer’s plan had been to
arrange to make it appear by ostensible ownership of stock by
Americans that the company to be set up was an American company,
whereas in fact the American company was to be “a straw man” owned
and controlled by French interests.
Faithfully yours,
[Enclosure]
Memorandum of Conversation, by the Chief of
the Division of Controls (Green)
[Washington,] April 20,
1939.
At the direction of the President, the Assistant Secretary of War
and I received Mr. Sol Rosenblatt this afternoon in order that
he might have an opportunity to give us further information in
regard to the project to establish a plant in New Orleans for
the manufacture of military planes of French type.
Mr. Rosenblatt explained the project at considerable length and
in great detail. The project as he explained it differs in many
essentials from the project as it was outlined by Monsieur
Pierre Wertheimer to officers of the War Department in December
and as it was explained by the French Ambassador, by Mr.
Bullitt, and by Mr. Vincent Bendix, President of the Bendix
Aviation Corporation, at the time when it was under discussion
in March. It seemed evident from what Mr. Rosenblatt said that
the plans had been very considerably modified since the visit of
Baron de la Grange and Monsieur Wertheimer to the United States
with a view to eliminating features which might be objectionable
to this Government. The important statements made by Mr.
Rosenblatt may be summarized as follows:
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- (1)
- Ownership—The stock to be
owned: 35% to be divided between Kuhn Loeb and Company
and Newman Harris and Company of New Orleans, the
bankers who are to furnish the capital; 30% to be
divided between Bendix and his associates in the
management of the company; 10% to be divided between
Rosenblatt and two other promoters; 25% to be owned by
the French Amiot company, 55% of the stock of which is
owned by Wertheimer and his brother; the capital to be
furnished by the two banking houses named above, which
would receive $2,500,000 in bonds of the company. Mr.
Rosenblatt categorically denied that any French citizen
or any French company would have any interest, direct or
indirect, in the ownership of the company or any claim
whatever on the profits of the company other than the
25% stock-ownership described above and the royalty
mentioned below.
- (2)
- Management—Mr. Bendix to resign
the presidency of the Bendix Aviation Corporation and to
become president of the new company; Mr. Bendix to
appoint some of his associates to key positions in the
management of the company; no French citizens to
participate in any way in the management.
- (3)
- Operations—The French
Government has already ordered 500 Amiot planes, to cost
$8,500,000, to be built by the company if it is
organized. The company would start business by
constructing these planes, which would incorporate some
improvements on the Amiot type and which would be
renamed “Bendix”. The Amiot company would furnish the
necessary machines, jigs, dies, etc., and would send
over two engineers to install the machines and to assist
in the initial construction; these two French engineers
to be the only French employees and to return to France
as soon as construction of the first 500 planes was well
under way; the Amiot company, in return for furnishing
the machines, jigs, dies, and construction data, to
receive a 3% royalty on the first 500 planes
manufactured; the company to be prepared to construct
thereafter military planes for both the French
Government and the United States Government and
commercial planes, including, if possible, planes for
Trans-Atlantic flights by a French company.
The Assistant Secretary of War and I told Mr. Rosenblatt that the
project as he had described it differed materially from the
project as it had been described to us previously but that,
nevertheless, we did not believe that it would be opportune for
the proposed company to incorporate and begin operations at this
time.
Mr. Rosenblatt stated, with emphasis, that he would take no
further action in regard to this matter for the present beyond
furnishing the Department and the War Department with a
memorandum of what he had said to us, together with copies of
the letters reporting our conversation which he proposed to
address to his associates in this project. He said that he
recognized that, in view of the recent furor in regard to the
purchase of planes by the French, publicity in regard to this
project at this time might be embarrassing to the
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Administration. He
added that he would return in two months or so to discuss the
project once more in the hope that at that time there would no
longer be any reason for official objection to the carrying out
of the project. He emphasized his determination to proceed in
this matter in entire accord with the wishes of the
Government.
The Assistant Secretary of War has seen and approved this
memorandum.
