MUNITION TRADE SECRETS

Greymouth Evening Star, 6 September 1934, Page 7

MUNITION TRADE SECRETS

“MYSTERY MAN’S” EARNINGS U.S.A. REVELATIONS [BY CABLE —PBESB ASSN. —OOPYBIGHT.J NEW YORK, September 4. The “New York Times” Washington correspondent says: The Senate Committee that is investigating the munition trade has had the following evidence placed before it to-day:— That 2,000,000 dollars in commissions were paid to Sir B. .Zaharoff on behalf of the Electric Boat Company of the United States in placing Spanish contracts, and also certain Japanese negotiations. That the Germans had got American submarine secrets from an Austrian firm, to which the Electric Boat Coy. had sold the use of American patents. That a Peruvian Naval Attache in Washington was made its South American representative by the Electric Boat Coy., and that, while in this position, he drew over 300,000 dollars. That the Electric Boat Coy. continued negotiations in an effort to have ships sold to Peru when the United States Navy Department refused such sales, on the ground that these might provoke war between Peru and Chile. That the Vickers Coy. and the Electric Boat Coy. had iron-clad agreements which, ostensibly, were kept secret from the British Government, although this was denied at the hearing to-day. While Zaharoff does not appear on the list of the Electric Boat Coy. shareholders, it was disclosed that he is a stockholder, but not under his own name. The Electric Boat Coy. and Vickers Coy. had divided the world into submarine trade areas, the Electric Boat Coy. reserving exclusive rights for American territory, while the same exclusive privilege was enjoyed by the Vickers Coy. in the territorities under the British flag.

“Large payments were made for the use of American patents on Vickersbuilt submarines for the British Navy. “The officials of the Vickers Coy. feared embarrassment from the disclosure of any details of the working arrangements between the two companies, and they cautioned secrecy. The Electric Boat Company received three per cent, of Vickers Coy’s, profits from the use of the American patents. Due to competition and to depression, there is a difficulty in meeting these payments, and a Vickers official wrote that it might be wise to take steps ‘to freeze out the war-time builders.” The Electric Boat Company tried, after the war, to collect' 17,000,000 doh lars from Germany for the infringement of American patents, but the company was able to collect only 125,000 dollars.

One letter that was placed in as evidence outlined a proviso that large submarines were not ruled out by “Geneva or some other fancy Convention,” and provided that the United States Navy would not. be informed until some time later about the construction of “H.M.S. Clyde.” Royalty paymants made to tbe Electric Boat Company covered remittances from the Mitsushiti Company (Japan) from an unidentified Dutch firm, and an unidentified Austrian firm, licensed through Vickers, and also of 34,048 dollars to a Spanish firm and others. The electric Boat Coy. at certain periods, refused the United States. Government a license to build its type of submarine in the Government Navy yards. The Senate Committee, which will hold a three weeks’ hearing, was surrounded by huge tables that were piled with documentary evidence. The Chairman, Senator Nye,. referring to the documents, said: ‘Those are only samples!”

S. AMERICAN GRAFT. (Recd. September 6, 11 a.m.) WASHINGTON, September 5. Talk of bribery in the sale of submarines to South American countries, mingled with evidence that a Peruvian salesman unsuccessfully sought to serve as delegate to the 1925 Disarmament Conference, was disclosed in the testimony to-day, before the United States Munitions Committee. The officials of the Electric Boat Company, New London, said that they paid commissions for South American business, but claimed it was not bribery. L. Y. Spear, Vice-President of the Electric Boat Company said that in order to do business in South America “you had to grease the ways.” A letter from Spear to an official of Vickers Ltd. said: “We all know the real foundation of South American business is graft.” NAVAL TREATY. TORONTO, September 5. Admiral Sir Roger Keyes said here to-night: “It is very necessary, in my opinion, that Britain should free herself from the London naval treaty. France and Italy had the good sense to walk out on the negotiations, and now they can build as they like. Under the Treaty Britain cannot build cruisers nearly as powerful as the German pocket battleships. The British Navy stands a good chance of falling far behind times.”