ARMAMENT FIRMS

Wanganui Chronicle, Volume 77, Issue 211, 6 September 1934, Page 5

ARMAMENT FIRMS

AMERICAN INQUIRY DEALINGS OF AGENTS HUGE COMMISSIONS PAID INTERESTING DISCLOSURES (By Telegraph—Press Association—Copyright! Received Sept. 5, 5.5 p.m. NEW YORK, Sept. 4. The New York Times’ Washington correspondent says that the Senate Munition Investigating Committee had the following evidence pjaced before it to-day:— Two million dollar commissions were paid to Sir Basil Zaharoff, the European man of mystery, on behalf of the Electric Boat Company of the United States in placing Spanish contracts, and in certain Japanese negotiations. That the Germans got American submarine secrets from an Austrian lirm, to which the Electric Boat Company had sold the use of American patents. That the Peruvian naval attache in Washington was made South American representative by the Electric Boat Company, and that while in this position he drew over 300,000 dollars. That the Electric Boat Company continued negotiations in an effort to have ships sold to Peru when the United States Navy Department refused such sales on the ground that it might provoke war between Peru and Chile. That Vickers and the Electric Boat Company had ironclad agreements which ostensibly were kept secret from the British Government, although this was denied at the hearing to-day. While Sir Basil 'Zaharoff does not appear on the list of the Electric Bo at Company shareholders, it was dis- i 1 closed that he was a stockholder, but not under his own name. The Electric Boat Company and ‘ Vickers had divided the world into submarine trade areas, the Electric Company reserving exclusive rights for American territory, while the same exclusive privilege was enjoyed by Vickers in territories under the British flag. Business in Patents. Large payments were made for the use of American patents on Vickersbuilt submarines for the British Navy. Officials of Vickers feared embarrassment from a disclosure of the details of the working arrangements between the two companies, and cautioned secrecy. The Electric Boat Company received 3 per cent, of Vickers’ profits from the use of American patents. Due to competition and the depression, there was difficulty in meeting these payments, and a Vickers official wrote that it might be wise to take steps “to freeze out the wartime builders.” The Electric Boat Company tried after the war to collect 17,000,000 dollars from Germany for infringements of American patents, but was able to collect only 125,000. A letter placed in as evidence outlined in detail what contracts Vickers expected from the British Government, provided large submarines were not ruled out by “Geneva or some other fancy convention,” and that the United States Navy would not be informed until some time later about the construction of H.M.S. Clyde. Royalty payments to the Electric Boat Company covered remittances from Japanese interests, an unidentified Dutch firm and an unidentified Austrian firm licensed through Vickers, and of 34 048 dollars to a Spanish firm and others. The Elect tic Boat Company, at certain periods, refused the United States Government a licence to build its type of submarine in the Government navy yards. The committee, which will hold a three weeks' hearing, was surrounded by huge tables piled with documentary evidence. The chairman, Senator Nye, referring to the documents, said: “Those are only samples.”