711.00111 Armament Control/Military Secrets/431
Memorandum by the Chief of the Office of Arms and Munitions Control (Green)
Mr. Morris Wolf, an officer of the Carp Export and Import Corporation, 220 Fifth Avenue, New York,8 registered with the Department as exporters of arms, called at my office this morning accompanied by Mr. M. H. Thompson and Mr. J. B. Rhodes. It is my impression that Mr. Thompson is a retired officer of the Army and that Mr. Rhodes is a retired officer of the Navy. It is my impression that the Corporation represented by these gentlemen has been set up to act as purchasing agent for the Soviet Government in connection with the transactions concerning which Mr. Wolf came to see me.
Mr. Wolf referred to his conversation with Mr. Moore, recorded in Mr. Yost’s memorandum of November 6, 1936,9 in regard to his proposal to sell warships to the Soviet Government. He handed me the attached letter of December 29 and said that he was prepared to sign it if it was sufficient for the purposes he had in mind.
I told Mr. Wolf that the letter seemed to be sufficient for his purposes. I added that the question of his obtaining designs, plans, working drawings, and specifications of United States naval vessels was a matter which would have to be referred to the Secretary of the Navy,10 and that the Secretary of State would act entirely upon the recommendations of the Secretary of the Navy. I added further [Page 459] that it was contrary to the policy of the Department to express “approval” of such transactions as he proposed to enter into, and that probably the only reply which he would receive to his request for an expression of approval would be a statement to the effect that the proposed transactions would not appear to be in violation of any existing statute or treaty.
Mr. Wolf said that he understood perfectly that the question in regard to specifications would have to be referred to the Navy Department. He said that he and the gentlemen who were accompanying him had already discussed that phase of the matter with Admiral Standley and with General Embick. He said that he would be entirely satisfied with such a statement as I had suggested in lieu of any expression of “approval”, but that if the proposed transactions were legal but at the same time contrary to the policy of this Government, I had only to tell him so and he would immediately withdraw.
I told Mr. Wolf that the proposed transactions would not appear to be in violation of any established policy of this Government. I warned him, however, that I could speak only on the basis of existing laws and policies and on the basis of the present situation, and that he should take account of the fact that if the U. S. S. R. were to become a belligerent, the exportation of naval vessels from this country to the U. S. S. R. would undoubtedly be prohibited under the provisions of Section I of the Neutrality Act.11
Mr. Wolf replied that he had carefully studied the provisions of the Neutrality Act and that in order to avoid the possibility that the Carp Export and Import Corporation might be prevented from delivering the ships which it intended to contract to sell to the U. S. S. R., it was planning to export them not as battleships but in separate parts to be assembled upon their arrival in the U. S. S. R. Mr. Wolf seemed to consider this plan extremely ingenious.
I invited Mr. Wolf’s attention to the fact that the list of arms, ammunition and implements of war proclaimed by the President was subject to change and that it might be changed in such a way as to prevent the exportation to belligerents of unassembled warships.
Mr. Wolf stated that he had carefully studied all the pertinent laws and regulations; that he was aware of the risk to which I had referred; that the Corporation would do absolutely nothing in violation of any law or policy of this Government, but that if it were able to obtain the necessary plans and specifications, it would enter into the proposed transactions which would aggregate several hundred million dollars.