J -^- ^ life % \ sBXfXSH mfc&>Y*
July 13 th 1S40*
Mth reference to «y deepsteh S©# 591
of the 7 th June I have the honour to transmit to
Tour uordship herewith the tent of en Aet "to expedite
national defence and for other porpeeee"<*o* 67l#
K*a* te£8), w' ieh received the * resident9 e signature
oo July let*   rise Aet lays down procedure for the
placing, execution end certification of eootreete for
etrengthening of the Ceeet Ouard and for the eequleltl
construction, repair or alteration of novel vessels,
naval aircraft and equipment If necessary without
calle for coapetitive hide*    It redueoe to 8# the
legal ceiling on profite from naval contracts. It
Nkee Mandatory for the period of natloeajeewrgency
declared by the President leet September an S-hour day
or 40-hour week for personnel employed in the execution
of eootreete, end provide* for tactenelon of hours ee
neeeeeery end retee of overtime pay*   It pro v Idee
further for uniformity of these condlttone ee between
the various branches of the services effected* It
euthorieee the ro-*j«pl©y«cot of retired   er, lievy
ttspartaent and Coaat Suord personnel eubject to eertein
eefeguarde in the oaee of personnel relieved of appoint-
•ante In the Interest of national security*   It also
places certain reetrictlone on aliens employed en
confidential ^ovornwent contract**   It raises the limit
on the coet of naval veaaele laid down by the naval
flight itonoorabie appropriation/
The vieeount Hellfex, K*<U
ete* etc* etc*
HP : RVR: OP : HOC: FRHK: CB: GS
appropriation* aot of 1937 and auttoriees such Increases
In peraonnel as may be required for the administration of
the Act.     The Oovernraent la also enabled to provide
building facilities etc. of its own  or take over and manage
private plants where commercial contr eta cannot be arranged.
Title 11 of the Act enaurea the proviaion of aultable
housing of personnel engaged on defence contracta.
2. Section 14 (a) of the Act affects British
interests insofar as it forbids the tranafer of or sale of
any military or naval weapon, ahip, boat, aircraft, munitions,
supplies or equipment, to which the United States has title
in whole or in part or which have been contracted for, unless
the Chief of Neval Operationa or the Chief of Staff aa tha
case may N satisfies himself that they "are not essential"
to the national defence.
This clauae waa not included in the original
bill*    Its addition was suggested by the Senate Haval Affairs
Commltteo, no doubt as the res It of the attention called
to the recant proposal to allow 20 motor torpedo boats on |
order for the United  -tatee Navy to be trat.aferred to Hla
Majesty's Liover.tment (see my telegram Mo. 1129) and of
the publicity given to the recent sales to Hla Majesty's
government of surplus United States Army war material.
Senator 'alsh the chairman of the Committee is no believer
in sending supplies to the Allies, and was bitterly opposed
to - and perhaps largely responsible for preventing - the
sale of the torpedo boata.    The Committee firat proposed
that this additional clauae be inserted in the bill with a
further proviso that no such ships or weapons etc., the
property/
- 3 -
property of the United States Government, ehould be
dispoaed of without the approval of Congress. Thle
proviso was however defeated in the Committee which then
recommended the adoption of a clauae providing that the
ships or weapons etc. should not be disposed of unless
the Chief of Staff hed certified that they were "not
essential to and car.not be used In the defence of the
United States,"
This wording was actually approwed by the
Senate on June 21st and It was not until later in the
same sitting that the veteran Senator Hale from
Massachusetts pointed out that the inclusion of the words
"and cannot be used for the defence of the United States"
would not only debar the sale to the Allies of aircraft
now on order from the United States Government, but for
which the deliveries could safely be deferred, but would
prevent the sale of any surplus material which could
still be used in some way or other for the defence of
the oountry*      ortunately the Senate shared Senator
Hale's views though they may not all have endorsed his
frsnk statement that "It is more Important to help the
British out by supplying them with planes and material
than anything else that we can do" and the words "and
cannot be used in" were finally deleted*
Only experience will show what criterion is to
be applied in determining what material is "essential"
for the purpoee of this section and to what extent there-
a
fore it will impair our ability to obtain transfer to
ourselves of armaments already under order for or in the
possession/
r
- 4 -
possession of the United States Government*
Seetlon 14 U) of the Act reaffirms thw
provisions of the Act of June 15th, 1917, which forbid*
the transfer to any belligerent of any war vessel the
property of the United States when a neutral.   It was
under these provisions, the text of which I also enclose
herein for convenience of reference, that the President,
as mentioned above, was compelled to cancel the transfer
to His Majesty's uovernment of certain motor torpedo
boats.
3. I am sending a copy of this despatch to
the High Commissioner for the United Kingdom at Ottawa.
I have the honour to be,
with the highest respect,
»y Lord,
Your Lordship's most obedient,
humble servant.
. ' - ' - Sd. 'LOTHIAN .--IC'S
During a war in which the United States is a neutral nation
it shall be unlawful to send out of the Jurisdiction of the United
States any vessel built, armed or equipped as a vessel of war,
or converted from a private vessel into a vessel of war, with any
intent or under any agreement or contract, written or oral, that
such vessel shall be delivered to a belligerent nation, or to an
a :ent, officer or citizen of such nation, or with reasonable cause
to believe that the said vessel shall or will be employed in the
service of any such belligerent nation after its departure from
the Jurisdiction of the United States (June 15, 1917, ch.30,title
V, S, 40 Stat. 222.)
Whoever, in violation of any of the provisions of
sections 25, 27, and 31 to 38 of this title, shall take, or
attempt or conspire to take, or authorise the taking of any such
vessel, out of port or from the jurisdiction of the United States
shall be fined not more than §10,000 or imprisoned not more than
5 years, or both; and, in addition, such vessel, her tackle,
apparel, furniture, equipment, and her cargo shall be forfeited
to the United States (June 15, 1917, ch.30 title V.6,40 Stat.222.)