Exporting Arms: The Federal Arms Exports Administration, 1935–1945 9780231881999

Table of contents :
Preface
Contents
I. Background of the Regulatory System
II. The Administrative Machinery Established by the Neutrality Acts
III. Registration
IV. Licensing
V. Reports and Statistics
VI. Enforcement
VII. Co-ordination of Arms Control Activities inside the Department of State
VIII. Interdepartmental Co-ordination of Arms Control Activities
IX. Conclusions
Appendix. Excerpts from Pertinent Statutes and Proclamations
Bibliography
Index

Citation preview

EXPORTING ARMS

MURRAY

STEDMAN

EXPORTING THE

FEDERAL ARMS

ADMINISTRATION,

KINGS CROWN MORNINGSIDE

HEIGHTS 1

947

ARMS EXPORTS 1935 -1945

PRESS • NEW

YORK

C o p y r i g h t 1 9 4 7 by MURRAY STEDMAN Printed in the U n i t e d States of A m e r i c a by V a i l - B a l l o u Press, Inc., B i n g h a m t o n ,

K I N G ' S CROWN

N.Y.

PRESS

is a division of Columbia University Press organized for the purpose of making certain scholarly material available at minimum cost. Toward that end, the publishers have adopted every reasonable economy except such as would interfere with a legible format. The work is presented substantially as submitted by the author, without the usual editorial attention of Columbia University Press.

hms

Published in Great Britain and India by Geoffrey Cumberlege, Oxford University Press, London and Bombay.

Preface T h e purpose o£ this book is threefold: to examine the munitions control organization of the Department of State as a case-study in administration; to evaluate the purposes and accomplishments of munitions control; and to trace the development of munitions control from 1935 to 1945. T h e first purpose is the most important. It should be noted that there are two aspects to the examination of the munitions control organization as a case-study in administration. T h e immediate and narrower aspect is the analysis of the internal functioning of the machinery of the unit; the long range and broader aspect is a critique of Department of State administration, as reflected by the practices of the Department in carrying out the munitions control duties entrusted the Department by Congress. It is in the second or larger sphere of inquiry that the author hopes to make a contribution in administrative analysis both to students of Federal administration and also to the employees of the Department of State. Munitions control has provided an excellent basis for an examination of recent administrative techniques of the Department of State as a whole. T h e reason for this is that munitions control could be viewed from both a vertical and a horizontal approach. V i e w e d f r o m the position of the personnel of the munitions control unit, munitions regulation was seen vertically. Problems arose inside the unit, were studied, and were in turn forwarded with recommendations to an arms-policy committee. Viewed from the position of the four great geographical offices of the Department of State, the problems of munitions control were seen horizontally. Each office ordinarily had its own ideas as to how an arms problem should be handled. These ideas might have been and frequently were in conflict with the views of the other geographical offices and of the munitions control unit. Consequently, an arms-policy committee had to reconcile

vi

PREFACE

conflicting opinions so that a unified policy, satisfactory to all parties, could be achieved. In grappling with the problem of reconciling conflicting views o n munitions control, the Department of State used the same techniques it applied to other problems w h i c h of necessity had to be treated both vertically and horizontally. International resources, petroleum, aviation, passport, cultural relations, and information programs, to n a m e only a f e w , were questions capable of treatment both on the basis of function and on the basis of application to specific geographical areas. In these cases as w i t h munitions control the same general type of problem constantly arose: h o w to create unified policy by reconciling the views of the personnel w h o performed a specific function with the views of the geographical offices and divisions. T h e primary purpose of this study is to examine critically the techniques employed by the Department of State in administering its munitions control obligations. A n analysis of these techniques is an analysis which can be applied to the approach used by the D e partment of State to all problems requiring both vertical and horizontal action. A brief description of the method of analysis used in this w o r k is in order. T h e operations of munitions control have been broken d o w n into several functions, all of w h i c h were operational activities of the munitions control unit for the ten-year period which is analyzed. T h e s e operations have in turn been examined critically f r o m the points of v i e w of purpose, mechanics, and assessment. T h e various arms-policy committees of the Department of State have been examined in the same manner. Finally, the methods of over-all co-ordination have been analyzed and evaluated. F o r the benefit of readers not familiar w i t h the background of munitions control it is appropriate to g i v e at this point a summary of its history. T h e administrative machinery established by Congress to control commercial exports of arms, ammunition, and implements of w a r has been in operation since 1935. A s originally planned by Congress the regulation of the private traffic in arms was one of several phases of an extensive program designed to preserve the neutrality of this country in the event of a foreign war. O n the other hand, although

PREFACE

vii

arms control was provided for in the joint resolution approved A u g u s t 31, 1935, Congress intended such control to be permanent. Therefore, even though other elements of the neutrality program were later discarded by Congress, the arms-control machinery established in 1935 has been retained. T h e agency to regulate the traffic in commercial arms was placed in the Department of State. Some idea as to the importance of this traffic may be gained from the statement that in the peak year of 1941 the agency licensed arms exports valued at more than one billion seven hundred million dollars. T h e system established during the pre-war period naturally had to be modified after this country entered the war. T h e flexibility of the arms-control system in adapting its peacetime methods to wartime emergencies is illustrated in the body of this study. T h e question may arise as to why this study is concerned with Federal arms exports administration. T h e reason is that arms imports have never constituted either in terms of dollar value or in terms of regulation a major problem to this country. Considerable attention has been given the various arms policy-making committees within the Department of State, first, because the committees were important in dealing with the arms-control problems which arose from 1935 to 1945, and, secondly, because certain techniques employed by the Department can be illustrated by an examination of the procedure, authority, and effectiveness of the committees. It should be borne in mind that during the war years the vast majority of the arms, ammunition, and implements of war exported were shipped abroad by agencies of the Federal Government. Consequently, except for a brief period, such articles were not subject to the licensing requirement established by Congress for the regulation of commercial arms exports. T o discuss in detail governmental transactions undertaken during the war is outside the scope of this work. But the relationship between commercial and governmental shipments during that period is shown. T h e emphasis throughout this study is on administration. In 194546 the author was employed in the Munitions Control Section of the Department of State. Through the good offices of Frederick Exton, at that time Chief of the Section, the author obtained official clear-

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PREFACE

ance from the appropriate Department officials to proceed with an administrative analysis o£ arms control. T h e clearance so obtained included the privilege of examining committee reports and documents relating to the regulation of the private traffic in arms. Clearance did not include the privilege of discussing policy decisions, except in general terms. In those cases where it appeared advisable to underscore an administrative problem or relationship, however, the writer has used certain unclassified information as a means to clarify the administrative situation, problem, or technique. One word of caution is in order. In this study several fundamental criticisms are made of the administrative methods used by the Department of State from 1935 to 1945 in the regulation of the commercial traffic in arms. But let the agency which is itself guiltless of administrative inefficiency, either occasional or chronic, cast the first stone. T h e writer is indebted to Professor Arthur W . Macmahon and Professor John D . Millett for giving generously of their time and advice in the preparation of this book. Professor Philip C . Jessup and Professor John N . Hazard contributed valuable suggestions. For any errors of fact or interpretation the author is alone responsible.

Contents I.

II.

Background of the Regulatory System Reasons for and Significance of Regulation Organization of the Control Machinery Constitutionality and Standards

. . . .

i I 12 16

Administrative Machinery Established by the Neutrality Acts Type of Wor\ Performed by the Munitions Control Unit . History of Organization Critique of Method of Organization

19 19 20 31

III.

Registration Purpose Mechanics Evaluation

38 38 40 47

IV.

Licensing 51 Purpose 51 Licensing Procedure 51 Clearance of Arms Export Licenses in View of Federal Laws Intended to Discourage Wars and Civil Wars . 54 Special Provisions Regarding Military Secrets . . . 59 Clearance Under Provisions of the Export Control Act . 61 Modifications in Clearance Procedure as Result of War . 64 The Effect of Lend-Lease upon the Licensing Activities of the Secretary of State 69 Modifications in Licensing Procedure in Order to Facilitate Exportation and Intransit Shipments in the Interest of the National Defense 71 Special Considerations Regarding the Exportation of Aircraft and Aircraft Parts 74 Statistics 78 Evaluation 83

V.

Reports and Statistics Purpose Annual Reports Press Releases Other Reports The Conflict between Reporting Evaluation

Systems

86 86 87 88 89 90 93

CONTENTS

X

VI.

Enforcement The Problem Techniques of Enforcement Appraisal

VII.

Co-ordination of Arms Control Activities inside the Department of State 108 The Problem 108 Methods of Co-ordination no Appraisal 115

VIII.

Interdepartmental Co-ordination of Arms Control Activities . 1 1 8 The Problem 118 Methods of Co-ordination 118 Appraisal 124

IX.

Conclusions Evaluation of Purposes and Accomplishments of Munitions Control Merits and Defects of the Munitions Control Machinery . Administrative Principles and Practices Perspective

96 96 97 106

126 126 128 131 135

Excerpts from Pertinent Statutes and Proclamations . 139 foint Resolution Approved November 4, ¡939; President's Proclamation of April 9, 1942; Excerpt from President's Proclamation of February 14, 194J; Excerpt from the Joint Resolution Approved January 31, 1922

APPENDIX.

BIBLIOGRAPHY

145

INDEX

148

TABLES

I.

Cumulative Total of Certificates of Registration Issued from Inception of Registration in 1935 to Last Day of Year Shown

46

II.

Arms Export Licenses, 1935-1940

78

III.

Arms Export Licenses, 1941-1945

79

IV.

Lend-Lease and Cash (Non-Lend-Lease) Exports of the United States

82

Relationship of Commercial and Lend-Lease Arms Exports to Total Exports of the United States

83

V.

I Background of the Regulatory System REASONS FOR AND SIGNIFICANCE OF REGULATION

Regulation of commercial arms exports on a continuing basis beg a n w i t h an act of Congress approved A u g u s t 31, 1935. 1 T h e regulatory system was one of several features of legislation designed to preserve the neutrality of the United States in the event of foreign wars. In the v i e w of Congress, any attempt to avoid involvement in foreign wars w o u l d have been doomed to failure unless this country took positive steps to regulate the exportation of weapons of destruction. A s a result a system was established whereby manufacturers of arms, ammunition, and implements of w a r were required to register with the G o v e r n m e n t and exporters or importers of such articles were required to possess authorizations in the f o r m of G o v e r n m e n t licenses before transactions could be consummated. T h e establishment of a regulatory system was of great practical significance. It ended our traditional policy of laissez-faire in the armament trade by m a k i n g that trade subject to various control regulations. It enabled the Government, through the Department of State as the operating agency for control over the private traffic in arms, to compile accurate and current information in regard to the exact quantities of arms leaving the country, together with the country of destination of each shipment and the identity of the exporters. Furthermore, through the Secretary of State, the G o v e r n m e n t was in a position to release, and did release regularly, monthly summaries for the press of the exports and imports of arms, ammunition, and implements of war. T h u s , the spotlight of publicity was cast u p o n the principal activities of the arms trade. Another advantage to the regulatory system was that it made easier the enforcement of embargoes imposed from time to time by Congress on the exportation of arms to various belligerent states. 1. 49 Stat. i o 8 r .

2

BACKGROUND

OF R E G U L A T O R Y

SYSTEM

Despite the radical departure f r o m our traditional policy represented by the establishment of a permanent system to regulate arms exports in 1935, it should not be assumed that either the idea or the practice of regulation was entirely new to this country. Professor Elton Atwater has divided A m e r i c a n arms embargo policy into three fairly distinct phases. 2 T h e first of these phases w a s the period of non-regulation of the private export of arms, f r o m 1793 to 1905. W i t h but f e w exceptions during this period the United States G o v e r n m e n t insisted that its citizens were entitled freely to sell and export war materials at all times. T h e exceptions occurred in case of w a r or threat of war. T h e second phase consisted in the regulation of arms exports to promote stability and discourage revolutions in L a t i n A m e r i c a and in China. Beginning inconspicuously with an embargo applied on arms exports to the Dominican Republic in 1905 and more openly in 1 9 1 2 and thereafter, the Government on several occasions restricted the export of arms to certain A m e r i c a n countries and to C h i n a during periods of civil strife in those states. T h e major objectives of the third phase, which began in 1934, were to discourage foreign wars and to keep the United States out of w a r . T h i s policy was first applied in the Chaco embargo and was later generalized in the neutrality acts of 1935 and 1937. Since N o v e m b e r 29, 1935, all commercial arms exports f r o m the United States have been subject to licensing by the Department of State. T h e purposes of United States arms embargoes have been m a n y and varied. T h e objectives have included strengthening the national defense by conservation of war supplies; preventing disorder and revolution in areas where American interests were vitally affected; bringing pressure to bear on certain foreign governments; shortening or terminating foreign wars; keeping the United States out of w a r ; and discouraging certain actions of other states, such as the bombing of civilian populations. 3 It is likewise of great importance at the beginning of this study to 2. Elton Atwater, American Regulation of Arms Exports (Washington: Carnegie Endowment for International Peace, 1941). The phases overlap, of course. The division into phases is used purely for purposes of analysis and illustration. 3. Atwater, op. cit., p. 3.

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SYSTEM

3

distinguish between permanent supervision of all arms exports by means of a governmental licensing system, and the application of embargoes or restrictions on arms exports at particular times and to particular countries. T h i s study is concerned primarily with the administrative aspects of the supervisory system established in this country as a result of the act approved A u g u s t 3 1 , 1935. Y e t , n o useful purpose is achieved by neglecting the fact that regulation of arms exports did take place prior to the 1935 act. T h e U n i t e d States has regulated arms exports to promote stability and discourage revolutions in the following countries: Dominican Republic, 1905; * Mexico, 1 9 1 2 - 1 9 2 9 ; 5 China, 1919—1929; 6 Cuba, 1924 to present; 7 H o n d u r a s , 1924 to present; 8 Nicaragua, 1926 to present; 9 Brazil, 1930. 1 0 4. Authority consisted of several presidential orders. Atwater, op. cit., Part II, Chapt. I. 5. The authority was based on the following acts: Joint resolution of March 12, 1912, 37 Stat. 360, which amended by extensive modification the joint resolution of April 22, 1898, 30 Stat. 739, an act which gave the President discretionary power to prohibit the export of coal and other material used in war from any seaport in the United States. The 1912 resolution was repealed by the joint resolution of January 31, 1922, 42 Stat. 361. This resolution simply restated the provisions of the 1912 resolution and extended them to apply to countries in which the United States exercised extraterritorial jurisdiction as well as to American countries. For text of resolution, see Appendix. 6. The authority was originally the arms embargo agreement of 1919, which included the United States and seven other states. From 1919 to 1922, when the 1922 resolution became effective in regard to China, the Department of State also utilized certain wartime regulations. See Atwater, op. cit., p. 125. 7. The action was based on the following authority: Joint resolution of January 31, 1922; and Convention to Suppress Smuggling between the United States and Cuba, signed March ir, 1926, 44 Stat. 2403. 8. The authority was the joint resolution of January 3T, 1922. 9. Ibid. 10. In principle the 1922 resolution was applicable. But inasmuch as American interests did not appear to be immediately affected, the Department of State was not anxious to apply the act. The immediate situation was the revolution which broke out in October, 1930. When the Brazilian Ambassador requested that the United States establish an embargo on shipments to the rebel faction, President Hoover issued a proclamation under terms of the act. Shipments were still permitted to the recognized government of Brazil. Proclamation of October 22,1930, 46 Stat. 3036-7, cited by Atwater, op. cit., p. 161. The

4

BACKGROUND

OF

REGULATORY

SYSTEM

Another aspect of the background of the regulatory system established by this country in 1935 concerned t w o conventions negotiated during the 1920's. 1 1 T h e first of these w a s the Convention of Saint G e r m a i n of September 10, 1919. T h e United States signed but later refused to ratify this convention. It provided f o r the general regulation of the international traffic in arms under the supervision of the L e a g u e of N a t i o n s . 1 2 W h a t w a s envisaged w a s a system of national licensing and publicity for arms exports. T h e immediate purpose was to control disposition of arms surpluses built up as the result of the First W o r l d W a r . Although no immediate action was forthcoming by the States, the Department of State continued to show interest convention. D u r i n g the summer of 1925 the United States pated in the drafting and negotiating of the Geneva A r m s Convention of J u n e 1 7 , 1925.

United in the particiTraffic

T h i s convention provided f o r a system of national licensing and publicity for the exportation of arms and munitions. T o meet United States objections the 1925 convention contained no provisions for international supervision through the L e a g u e of Nations. T h e convention was not ratified by the United States until June 2 1 , 1935. Professor A t w a t e r attributes this delay to the fact that "popular interest in the subject was apparently not yet great enough or not sufficiently organized in the United States to bring about its immediate ratification." 1 3 D u r i n g the 1920's t w o treaties were negotiated which bound the United States to take action regarding arms exports under certain circumstances. T h e first of these was the Convention to Suppress Pan American Convention of February 20, 1928, also served as a basis for the action of the United States Government. The embargo was lifted on March 2, I93i11. The movement to regulate arms exports in connection with United States neutrality did not become active until 1934-35. For the detailed history of neutrality, see Philip C. Jessup, Neutrality, Its History, Economics and Law (4 vols. New York: 1935, 1936). By the same author, 'The Reconsideration of 'Neutrality' Legislation in 1939" 33 American Journal of International Law (1939), 549-55712. Atwater, op. cit., p. 172. 13. Atwater, op. cit., p. 175.

BACKGROUND

OF

R E G U L A T O R Y

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5

Smuggling between the United States and Cuba, signed on March 1 1 , 1926. 14 The purpose of the convention was originally to prevent the smuggling of liquor from Cuba into the United States. Subsequently, the treaty was utilized to prevent the smuggling of arms into Cuba. Since there appeared to be no legal means by which the American customs officials could withhold clearance in the absence of an embargo proclamation, President Roosevelt issued a proclamation in June, 1934, with the express approval of the Cuban Ambassador, making the exportation of arms to Cuba unlawful and authorizing the Secretary of State to prescribe exceptions and limitations to the prohibition. 15 The practice was at once inaugurated of requiring approval of the Cuban Embassy in Washington before an application for an export license regarding a shipment to Cuba would be approved by the Department of State. Another convention which bound the United States was the PanAmerican Convention of February 20, 1928. The convention, which concerns the Duties and Rights of States in the Event of Civil Strife, prohibits the exportation of war materials to any unrecognized revolutionary groups in the various contracting states. The only formal embargo ever proclaimed under this convention related to the Brazilian case in 1930, although perhaps the convention served as the basis for informal action taken in other cases by the Department of State, notably with regard to Brazil in 1932. 16 From the present historical summary it is evident that general interest in the regulation of arms exports had been increasing throughout the 1920's. Beginning in 1933 a significant growth in interest was felt, apparently as a result of the Geneva Disarmament Conference, the Sino-Japanese War, and the Chaco War. From 1933 to 1935 the number of articles concerning arms and munitions, as recorded in the Readers Guide to Periodical Literature, expanded tremendously. The immediate events which preceded the enactment of the act of August 31, 1935, are treated below. At this point attention is in14. 44 Stat 2403. 15. Atwater, op. cit., p. 147. Administration of the licensing system with respect to Cuba and other countries in terms of the joint resolution of January 3 1 , 1922, is discussed in Chapt. I V .

16. Ibid., p. 163.

6

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OF

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SYSTEM

v i t e d to a tendency in administration w h i c h is revealed by the prec e d i n g historical s u m m a r y . In the light of Professor A t w a t e r ' s analysis of A m e r i c a n arms embargoes, it is clear that o n i n n u m e r a b l e occasions a conflict occurred b e t w e e n f u n c t i o n a n d area in the a d m i n istration of arms control policy. O n the one h a n d arose the q u e s t i o n of p r e v e n t i o n of revolution a n d disorder; o n the other h a n d arose the q u e s t i o n as to w h e t h e r measures calculated to serve such ends should b e universally or specifically applied. T h e general p r o b l e m is illustrated by Professor A t w a t e r ' s reference t o a resolution introduced in C o n g r e s s by Representative T h e o d o r e E . B u r t o n o n D e c e m b e r 5,1927, a bill to a u t h o r i z e an e m b a r g o against aggressor nations w h i c h w a g e d w a r in violation of treaty obligations. M r . A t w a t e r declares: T h e Department of State did not take any active interest in the Burton Resolution, despite the fact that it was then vigorously trying to apply arms embargoes with respect to China, Mexico, Honduras and Nicaragua. It was apparently not convinced as yet of the desirability of any general arms embargo of this character applicable to foreign wars, although it never expressed any open opposition to the proposal as did the W a r and N a v y Department. 1 7 M r . A t w a t e r does not directly discuss internal conflicts w h i c h arose in the D e p a r t m e n t of State in regard to the solution of probl e m s w h i c h could be approached both in a geographical a n d in a f u n c t i o n a l m a n n e r . B u t in the light of w h a t M r . A t w a t e r says, it is r e l e v a n t at this p o i n t to cite examples f r o m the experience of the present writer in order to illustrate specifically the t r e m e n d o u s problem involved. D u r i n g the tour of duty of the writer in the D e p a r t m e n t of State the b r o a d question of policy arose as to w h e t h e r a firm e m b a r g o s h o u l d be c l a m p e d d o w n o n arms exports to C o u n t r y X . T h e o p e r a t i n g pers o n n e l of the M u n i t i o n s C o n t r o l Section, as w e l l as a m a j o r i t y of the m e m b e r s of the W o r k i n g C o m m i t t e e o n A r m s C o n t r o l , f a v o r e d a b r o a d approach to the problem. T h e y argued that an a i r t i g h t emb a r g o should be imposed o n C o u n t r y X a n d that such an e m b a r g o 17. Atwater, op. cit., p. 180. Quoted with special permission of the Carnegie Endowment for International Peace.

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SYSTEM

7

would be justified because o£ considerations of international security, international peace, and national defense. Opposition immediately arose, however, from the specific geographical desk which handled affairs relating to Country X . Opposition also arose from the geographical office of which the geographical division was a part. T h e conflict was between application of a general policy and the making of exceptions which the geographical division concerned felt were necessary. T h e final solution was a compromise which resulted in a toning down of the general embargo policy. Another illustration of the tendency of areal and functional views to clash occurred over the question of limiting the exportation of certain types of combat airplanes. While an important geographical office agreed in principle with the policy committees (which represented all geographical offices in addition to the Office of Special Political Affairs and the Munitions Control Section) to the effect that such exports should be limited, the same geographical office insisted that exceptions to the otherwise acceptable policy had to be made in regard to Country Y . Country Y had threatened to purchase airplanes from other sources if the United States would not make them available. It was pointed out by those divisions concerned with a broad view of international security, without regard to a particular geographical area, that the proposed exception would destroy the entire proposed policy. It was felt that such would be the case because Countries A and Z, neighbors of Country Y , would likewise demand to purchase airplanes. Should all sales have been consummated, one of the great powers might have misconstrued the motives of the United States, charging it with arming states on its periphery. T h e final result was to cancel the proposed sale to Country Y . T h e practical administrative results of the tendency for areal and functional views to clash, and the difficulties of achieving synthesis, are discussed later in this paper. But as the historical summary of this chapter has indicated, the results in terms of policy decisions may be of utmost importance. The chief purposes of the preceding discussion have been to emphasize two points, first, that the idea of arms control through permanent regulation has a fairly long history in the United States, and

8

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OF

REGULATORY

SYSTEM

secondly, that the historical background itself is necessary to understand fully the administrative relationships which developed from the operations of the regulatory machinery established in 1935. It is today perhaps difficult to understand the zeal with which the idea of regulation was advanced in the early 1930's. On practical grounds, it seems evident that the exportation of arms by private concerns and individuals must be controlled in the interest of the national welfare and security. But control based on the proposition that it would tend to discourage participation by the United States in war abroad is more difficult to understand. In addition to the factors which have already been discussed, several additional factors entered the scene in the thirties. One of these factors was of profound psychological importance. A large body of opinion in this country came to regard the alleged machinations of munitions-makers and international bankers as having contributed to our entry into the First World War. It was held that these same groups would, at the earliest opportunity, in order to gain personal profits, again force this country into war. The solution was held to be neutrality legislation designed to keep this country at peace, no matter what issues should be at stake in a war fought overseas. T o the fostering of this impression several authors made powerful contributions. Outstanding among them were H. C. Engelbrecht and F . C. Hanighen, and George Seldes. These writers attempted to show that we had entered the First World War as the direct result of the activities of certain "merchants of death" for the sake of enlarging their profits. It was time, they argued, to expose the ways of these conspirators against international peace in order to prevent a repetition of 1917. Although Mr. Seldes offered more documentation than his competitors, he was outsold in the book market largely because the title Merchants of Death slipped through his fingers and did not adorn his principal work. 1 8 In addition to the writings of various authors, another factor of great importance in building up the impression that we entered the 18. See particularly Helmuth C. Engelbrecht and F. C. Hanighen, Merchants of Death (New York: Dodd, Mead & Co., 1934); by the same authors, One Hell of a Business (New York: R. M. McBride 8c Co., 1934); George Seldes, Iron, Blood, and Profits (New York: Harper & Brothers, 1934).

B A C K G R O U N D

OF

R E G U L A T O R Y

S Y S T E M

9

First World W a r to enrich a f e w manufacturers was the work of the Special Committee on Investigation of the Munitions Industry of the Senate. This committee, commonly named after its chairman, Senator Gerald P. N y e , of North Dakota, began investigations into the armaments industry in September, 1934, and thereafter continued intermittently until February, 1936. T h e committee proved to its own satisfaction that regulation of the arms export trade by imposition of an embargo upon belligerents would go far toward keeping us out of war. Summarizing its conclusions at the end of one of many voluminous chapters of its findings, the committee declared: This chapter indicates the desirability of adopting strong neutrality legislation before war breaks out. It was consistently emphasized by the administration during the last war that it could not impose an embargo on arms during the progress of the war without being accused of favoring one side in the struggle. . . . It seems evident from the present chapter that legislation envisaging an automatic embargo on arms and war supplies imposed upon both sets of belligerents at the outset of a war would constitute an essential part of a permanent neutrality policy. 19 Pressure thus increased both inside and outside Congress for the passage of a bill to guarantee United States neutrality in the event of foreign war. Events external to this country also played a part in creating interest in the establishment of arms regulatory machinery. A s a result of the Chaco conflict between Bolivia and Paraguay Congress passed an act approved by the President May 28, 1934, which prohibited the sale of arms to belligerents to be enumerated in a proclamation issued under authority of the act. 20 Another factor was the ratification by the President on June 2 1 , 1935, of the A r m s Traffic Convention of 1925. T h e United States was obligated under the convention to set up a system of import and export licenses to regulate the commercial arms traffic. Given impetus by the Chaco legislation, by continued pressure from the public and f r o m the N y e Committee, and by ratification of the Arms Traffic Convention of 1925, the movement to regulate arms 19. U.S. Congress, Senate, Special Committee on Investigation of the Munitions Industry, Report on W a r Department Bills S. 1 7 1 6 and S. 1722, relating to Industrial Mobilization in Wartime, 74th Congr., 2nd sess., S. Rept. 944, Part 5, p. 33. 20. 48 Stat. 8 1 1 . Upheld in Curtiss-Wright case. 299 U.S. 304.

10

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exports in the interest of preserving peace g r e w stronger. D u r i n g the year 1935 some 1 5 bills were introduced in Congress, providing in whole or in part f o r various types of restrictions on the exportation of arms. M e a n w h i l e the Department of State had adopted the position that the regulation of the international traffic in arms should be accomplished by legislation separate if possible f r o m any general neutrality legislation. One of the leading advocates of such a bill was Joseph C . Green of the Department's Division of Western European A f f a i r s . M r . G r e e n felt that it was desirable to establish control machinery which w o u l d not be subject to the vicissitudes which might befall any general neutrality legislation. M r . Green's position became that of the Department of State. A s a consequence, separate bills were introduced in both the Senate and the H o u s e calling f o r the establishment of a National Munitions Control B o a r d . 2 1 A c t i n g as the authorized spokesman of the Department of State M r . Green appeared before the H o u s e Committee on F o r e i g n A f f a i r s at hearings held on H . R . 8788. T h e proposed bill provided f o r the establishment of a National Munitions Control Board and for an arms import and export licensing system. T h e bill embodied the proposals of the Department of State and was defended by M r . Green at the hearings held July 1 6 , 1 7 , and 1 8 , 1 9 3 5 , by the H o u s e Committee on F o r e i g n A f f a i r s . M r . G r e e n told the committee that the chief objective of the bill was "to set up administrative machinery to enable the Government to supervise and control the manufacture of and international trade in arms and munitions." 2 2 H e observed that there were three purposes to the bill, as f o l l o w s : 1 . to enable the United States to carry out its international obliga21. See Senate Report 915 and House Report 1602, 74th Congr. 1st sess. The bills were S. 2998 and H.R. 8788. 22. U.S. Congress, House, Committee on Foreign Affairs, Hearings on H.R. 8788, a bill to control the trade in arms, ammunition, and implements of war, 74th Congr. 1st sess., p. 3. The protection of military secrets appears to have been an implied purpose in establishing a permanent regulatory system. Certainly the regulatory machinery gave the Government a superior means of protecting such secrets. See Chapt. IV.

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n

tions under the A r m s Traffic Convention of 1925, ratified by the President June 21, 1935. T h i s convention obligated the United States to set up a system of export and import licenses. 2. to provide the executive branch of the Government, Congress, and the public with full information on the export of arms. T h i s information would serve as a basis for deciding upon future policy and would put to an end the great numbers of false rumors regarding the arms export trade. 3. to carry out the restrictions on the export of arms which were already in effect. These restrictions consisted of those in the joint resolution of January 3 1 , 1922, relating to conditions of civil strife in the western hemisphere or in countries in which the United States exercised extraterritorial jurisdiction, and the joint resolution of May 28, 1934, referring specifically to Bolivia and Paraguay. In the course of his statement Mr. Green admitted that the Department of State had not been able to enforce adequately the restrictions imposed by the act of May 28, 1934, and proclamation pursuant to it of the same date. " T h e administration of those restrictions," he said, "is in the hands of the Department of State. B u t we have found, in the absence of such machinery as is provided for under this bill, that we are totally unable to carry out the restrictions, and there have been flagrant violations of the law." 2 3 H e stressed the political character of arms shipments and the necessity for having fuller information about such shipments. " M o r e and more," he stated, "every single shipment of arms f r o m the United States is of a political character. It is not commerce, pure and simple; it is commerce with a very definite political character. Under the law, there is no way in which we can obtain information in regard to such shipments. W e do not know how much is going, and we do not know where it is going. It is extremely important that the President and the Secretary of State have all that information at hand because of the important international political aspects of the arms traffic." 2 4 Mr. Green made it clear that the bill favored by his Department was not intended to limit arms exports.

23. Ibid., p. 14.

24. Ibid., p. 7.

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As I understand it, this bill is not a bill to limit exports. There is no provision in the bill limiting exports. This bill simply allows us to carry out our international obligations, under a treaty, which we cannot carry out without this bill, and sets up the administrative machinery to enable us to put into execution the restrictions on exports which are now in effect, or which may be put into effect in the future. 25 T h e proposed bill which M r . Green advocated before the House Committee on F o r e i g n A f f a i r s never became law. B u t the essential provisions of H . R . 8788 were incorporated in a consolidated neutrality bill which became the act of A u g u s t 3 1 , 1935. I n the act were t w o main sets of provisions: those setting up an arms registration and licensing system under a National Munitions Control B o a r d ; and those authorizing an impartial embargo on the exportation of arms, ammunition, and implements of w a r to all belligerent states upon the President's finding a state of w a r to exist. T h u s , while the Department of State w a s not able to persuade Congress to separate the arms control bill f r o m a general neutrality l a w , the Department did obtain legislation which authorized the establishment of arms control machinery. T h e operation and the results of that control machinery f o r m the chief concern of this study.

ORGANIZATION OF THE CONTROL MACHINERY

A r m s regulation on a continuing basis thus began with the act approved A u g u s t 3 1 , 1935, and was extended by later enactments. 2 0 U n l i k e the embargo legislation of the same act, the section of the l a w creating a National Munitions Control Board a n d a registration and licensing system was adopted as permanent legislation and was not limited to a six-month period. It should be noted in passing that the Department of State succeeded in obtaining the type of legislation it had originally requested. F r o m the point of view of arms control, the heart of the joint resolution approved by the President A u g u s t 3 1 , 1 9 3 5 , was to be f o u n d in 25. Hearings on H.R. 8788, p. 18. 26. The embargo provisions wdre to expire February 29, 1936, but were extended February 29, 1936 (49 Stat. 1152) and May 1, 1937 (50 Stat 121). The embargo provisions were repealed on November 4, 1939, by Public Resolution No. 54, 76th Congress.

B A C K G R O U N D

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13

Section 2. This section established the National Munitions Control Board to carry out the relevant provisions of the act. T h e Board was to consist of the Secretary of State, w h o was to be both chairman and executive officer; the Secretary of the Treasury; the Secretary of W a r ; the Secretary of the N a v y ; and the Secretary of Commerce. Except as otherwise noted, the administration of the act was vested in the Department of State. T h e Board was to meet at the call of the chairman and to hold at least one meeting a year. It was to make an annual report to Congress, which report should "contain such information and data collected by the Board as may be considered of value in the determination of questions connected with the control of trade in arms, ammunition, and implements of war." T h e report was to include a list of all persons required to register under the provisions of the act and full information concerning the licenses issued thereunder. 2 7 Section 1 also provided for registration and licensing: Within ninety days after the effective date of this Act, or upon first engaging in business, every person who engages in the business of manufacturing, exporting, or importing any of the arms, ammunition, and implements of war referred to in this Act, whether as an exporter, importer, manufacturer, or dealer, shall register with the Secretary of State his name, or business name, principal place of business, and places of business in the United States, and a list of the arms, ammunition, and implements of war which he manufactures, imports, or exports. Every person required to register under this section shall notify the Secretary of State of any change in the arms, ammunition, and implements of war which he exports, imports, or manufactures; and upon such notification the Secretary of State shall issue to such person an amended certificate of registration, free of charge, which shall remain valid until the date of expiration of the original certificate. Every person required to register under the provision of this section shall pay a registration fee of $500, and upon receipt of such fee the Secretary of State shall issue a registration certificate valid for five years, which shall be renewable 27. Section 12 of the Neutrality Act of 1939 required the Board to make a report on January 3 and July 3 of each year. Publication of reports was suspended during the war under authority of an amendment to Section 12 (h) of the Neutrality Act, which read: "Any reports required by this section may be omitted or dispensed with in the discretion of the Secretary of State during the existence of a state of war." (56 Stat. 19.) The last published report was the Sixth Report, covering the year ending December 3 1 , 1940.

i4

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for further periods upon the payment of each renewal of a fee of $5oo. 28 It shall be unlawful for any person to export, or attempt to export, from the United States any of the arms, ammunition, or implements of war referred to in this Act to any other country or to import, or attempt to import, to the United States from any other country any of the arms, ammunition, or implements of war referred to in this Act without first having obtained a license therefor. All persons required to register under this section shall maintain subject to the inspection of the Board, such permanent records of manufacture for export, importation, and exportation of arms, ammunition, and implements of war as the Board shall prescribe. Licenses shall be issued to persons who have registered as provided for, except in cases of export or import licenses where exportation of arms, ammunition, or implements of war would be in violation of this Act or any other law of the United States, or of a treaty to which the United States is a party, in which cases such licenses shall not be issued. I n order to implement the statutory provisions contained in the act, the Secretary of State w a s ordered to " p r o m u l g a t e such rules and regulations with regard to the enforcement of this section (Section 2) as he may deem necessary to carry out its provisions." T h e President w a s authorized "to proclaim upon recommendation of the Board f r o m time to time a list of articles which shall be considered arms, ammunition, and implements of w a r f o r the purposes of this section." A penalty section w a s provided in Section 7 of the A c t : In every case of the violation of any of the provisions of this Act where specific penalty is not herein provided, such violator or violators, upon conviction, shall be fined not more than $10,000 or imprisoned not more than five years, or both. I n order to m a k e the statute effective, it w a s necessary that the President issue a proclamation defining arms, ammunition, and implements of w a r , for the purposes of the joint resolution. T h i s was done in a proclamation dated September 25, 1935. 2 9 T h e proclamation divided arms, ammunition, and implements of war into six categories and w a s thoroughly in accord with the prevailing international definitions of such articles. Shortly thereafter the Secretary of State 28. The registration fee was lowered to $100 by the Neutrality Act of 1939. 29. 49 Stat. 3471. This proclamation served as the basis for the League of Nations arms proclamation in the Italo-Ethiopian War.

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15

promulgated regulations prescribing in detail the procedure to be followed for registration and licensing. Various amendments to and revisions of the act of August 31, 1935, continued in effect the National Munitions Control Board and the system of arms control through registration and licensing. Section 5 of the joint resolution approved by the President May i, 1937, 30 continued these provisions in force with but slight changes. 31 Section 12 of the joint resolution approved November 4, 1939, the Neutrality Act, 3 2 likewise extended the control system and at the same time lowered the registration fee for all registrants to $100, regardless of the dollar value of their business. T h e Neutrality Act of 1939 is therefore the statute which governed the arms export system of the United States from November 4, 1939, up to the time of writing. Under the laws referred to above, the President issued various proclamations, defining arms, ammunition, and implements of war and increasing the number of items enumerated. Proclamations were issued September 25,1935; April 10,1936; May 1 , 1 9 3 7 ; April 9,1942; and February 14, 1947. 33 Beginning October 10, 1935, the Secretary of State from time to time promulgated regulations to implement the statutes referred to above by outlining in detail the provisions of the registration and licensing system. These regulations were published in a pamphlet entitled "International Traffic in Arms—Laws and Regulations Administered by the Secretary of State Governing the International Traffic in Arms, Ammunition, and Implements of War and Other Munitions of War." As changes in the statutes and in the Presidential Proclamations necessitated changes in the regulations, new editions of the pamphlet were published. T h e regulations in force at the end of 1946 were those issued June 2, 1942. 34 30. 50 Stat. 121. 31. One such change, brought about by the act of May 1, 1937, was the lowering of the registration fee for a person doing less than $50,000 of business yearly from $500 to $100. 32. 54 Stat. 10. 33. 49 Stat. 3471; 49 Stat 3503; 50 Stat. 1834; 7 F.R. 2769; 12 F.R. 1127. 34. Regulations were promulgated October io, 1935; and later in November, 1935; May, 1936; June, 1937; April, 1938; September, 1939; November, 1939; and June 2, 1942.

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In the following chapters the operations of the system to regulate the private traffic in arms are examined. Originally a by-product of neutrality legislation, the arms control system became a permanent part of our national administration.

CONSTITUTIONALITY AND STANDARDS

T h e arms control provisions of the act of August 31, 1935, rested upon firm constitutional grounds. A s has been previously indicated, it was necessary for the United States to establish an arms import and export licensing system in order to fulfill its obligations undertaken as a result of the ratification of the Arms Traffic Convention of 1925. This convention was ratified by President Roosevelt on June 21, 1935. Inasmuch as the Government possessed the authority to enter into the convention, it possessed the power to provide for the fulfillment of the obligations assumed in the convention by the passage of appropriate enabling legislation. T h e question of constitutionality aroused but little anxiety in the minds of the House Committee on Foreign Affairs. During the hearings held on H.R. 8788 the Committee was reassured as to the constitutionality of the bill by the statements of Mr. Green. 86 A n y lingering doubts about the power of the President and of his Secretary of State in the field of arms export control were cleared up in the case of the United States versus the Curtiss-Wright Export Corporation, et a/.36 Speaking for the court, Mr. Justice Sutherland rejected the contention that the joint resolution of May 28, 1934, was invalid because it effected an invalid delegation of legislative power to the executive. T h e act of August 31, 1935, contained only two elements which could be construed as delegation of legislative power to the executive branch of the Government. T h e first of these was the provision authorizing the President to proclaim, upon the recommendation of the National Munitions Control Board, a list of articles which should be considered arms, ammunition, and implements of war for purposes of the act. 35. Hearings on H.R. 8788, p. 30. 36. 299 U.S. 304. For a detailed discussion of the case see Chapt. VI.

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17

T h e second element was the provision authorizing the Secretary of State to promulgate such rules and regulations with regard to the enforcement of registration and licensing as he should deem necessary. In both cases it was the view of Congress that it would be impossible for it to write legislation in sufficient detail and flexibility so that subsequent modifications would not be necessary. Because Congress felt it was advisable to allow flexibility in the system, the act of August 31, 1935, merely stated the main provisions of the registration and licensing system, thus permitting the President and the Secretary of State to fill in the details. The frequent modifications in both the proclamations and the regulations proved the wisdom of this view. In the administration of the act Congress provided for no administrative discretion at all. Every person who engaged in the business of manufacturing, importing, or exporting any of the items enumerated in a proclamation was to register. The Secretary of State was instructed by the law to issue import or export licenses to duly registered persons except in those cases where exportation would be in violation of a law or treaty of the United States. As envisaged by Congress, the registration and licensing system was to operate automatically. Administrative discretion to reject import or export licenses was not given the Administration until passage of the Export Control Act of July 2, 1940. Under that act the authority to reject was exercised, not by the Department of State, but by the Administrator of the act. The standards set by Congress in the act of August 31, 1935, were exact and inflexible in the sense that any person who registered also qualified as an importer or exporter provided the shipment in question did not violate a law or treaty of the United States. 37 The legislative power delegated to the Secretary of State was confined to the drafting and promulgation of rules and regulations necessary to give flesh and blood to the law so that the law could be made workable and enforceable. From the enunciation in 1936 of the opinion of the Supreme Court in the Curtiss-Wright case to the time of writing there was no serious challenge in the courts as to the President's power in the field of 37. The laws and treaties in question are discussed in detail in Chapt. IV.

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arms export control. Probably as a result of the same case the constitutional authority of the President to issue proclamations under the acts of August 3 1 , 1 9 3 5 , May 1, 1937, and November 4, 1939, and the authority of the Secretary of State to promulgate rules and regulations for the arms traffic as a means to securing compliance with those laws, were not challenged in the courts during the same period. This is not to imply that the reasoning of Mr. Justice Sutherland in the Curtiss-Wright ease was accepted as sound by all students of public law. On the contrary, considerable exception was taken to the doctrine of the court that the national government possessed powers in dealing with foreign affairs which were derived not from the Constitution but from the British Crown. Summarizing his own thought on the case, David M . Levitan asserted: " T h e Sutherland doctrine, however, makes shambles out of the very idea of a constitutionally limited government. It destroys even the symbol." 8 8 However, despite his objections to the reasoning employed by Mr. Justice Sutherland and accepted by the court, M r . Levitan agreed that there was ample authority for upholding the constitutionality of the act without resorting to the "inherited" or "extra-constitutional" power doctrine of Mr. Justice Sutherland. 38. David M. Levitan, "Foreign Relations Power: An Analysis of Mr. Justice Sutherland's Theory," 55 Yale Law Journal (April, 1946) 467-497. Mr. Levitan rejected the Sutherland doctrine as historically untrue and observed regarding the significance of the case: "The most significant aspect of the CurtissWright decision is that it gave authoritative and respectable status to the doctrine that the national government possesses powers completely outside of those in any way assigned to it by the Constitution" (p. 490). Mr. Levitan's views are in large measure shared by the following commentators on the case: Patterson, 22 Tex. L. Rev. (1944) 286, 445; Quarles, 32 Geo. L.J. 375, 378; Goebel, 38 Col. L. Rev. (1938) 551, 571-3. For more general discussions of the President's power in the field of foreign relations, see Quincy Wright, The Control of American Foreign Relations (New York: Macmillan, 1922), especially Part IV; and Edward S. Corwin, The President Office and Powers (New York: New York University Press, 1940), especially Chapt. VI. The Supreme Court reaffirmed the Curtiss-Wright doctrine as to the executive control of foreign affairs in U.S. v. Pin\ [315 U.S. 203; 62 Sup. Ct. 552 (1942)].

II The Administrative Machinery Established by the Neutrality Acts T Y P E OF W O R K PERFORMED BY THE M U N I T I O N S CONTROL U N I T

T h e munitions control unit of the Department o£ State performed several distinct arms-control functions. It acted as the registration agency through w h i c h all manufacturers, importers, and exporters of arms, ammunition, and implements of war were required to register w i t h the Federal G o v e r n m e n t . It issued arms export and import licenses for the G o v e r n m e n t . In addition, the munitions control unit acted as a policy-making agency by advising the Secretary of State on arms-policy matters. It was also an agency of supervision, inasmuch as it exercised general supervision over the arms traffic in order that violations m i g h t be reported to the Department of Justice in those cases where court action was deemed advisable. A n o t h e r function of the munitions control unit was that of publicity. D u r i n g the w a r years this function was suspended. T h r o u g h the d r a f t i n g of monthly press releases on arms trade statistics, the unit under normal conditions made available to the public the facts and figures of commercial arms exports and imports. T h e munitions control unit was, then, the control agency for regulation by the G o v e r n m e n t of the private traffic in arms. In carrying out its assignments the unit had to co-ordinate its activities w i t h those of other G o v e r n m e n t agencies. A critique of the means and effectiveness of co-ordination is one of the purposes of this study. It is also important to note the size of the traffic regulated by the munitions control unit. T h e value of arms export licenses issued by the Department of State f r o m the beginning of licensing in 1935 to the last day of 1945 w a s nearly three and one half billion dollars. It is therefore evident that it was desirable f r o m both moral and business viewpoints that the control exercised over the private traffic in arms

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by the munitions control unit should be as efficient and as just as possible. HISTORY OF ORGANIZATION

W h e n the legal basis of the control machinery had been established by statute, proclamation, and regulations, the w o r k of creating an administrative unit began. It was never envisaged that the N a tional Munitions Control Board would p e r f o r m any operating functions. T h e duties of the Board were to review annual reports prepared for it by the Secretary of State and to m a k e recommendations to the President f r o m time to time regarding articles to be listed in proclamations as arms, ammunition, and implements of w a r . 1 T o the Secretary of State, in w h o m was vested by law the administration of the registration and licensing system, fell the responsibility of organizing an agency capable of exercising the functions assigned him by law. Prior to the approval of the joint resolution of A u g u s t 3 1 , 1 9 3 5 , the Secretary had exercised some control over the international traffic in arms through Joseph C . Green, w h o was at that time in the Department's Division of Western European A f f a i r s . T h i s control was persuasive rather than coercive. 2 It consisted primarily of statements in response to queries f r o m exporters as to whether certain proposed commercial transactions would or would not be opposed on policy grounds by the Department. In most cases an exporter would cancel a proposed shipment if the Department informed h i m that it had objections to the consummation of the shipment. A f t e r the joint resolution had gone into effect, the Office of A r m s and Munitions Control was established by Departmental Order N o . 626, dated September 19, 1935. M r . Green was promptly designated head of the Office and was also appointed Executive Secretary of the 1. Similar duties in regard to the exportation of tin-plate scrap and helium were later assigned the Board by Congress. Administration was accomplished by the personnel of the munitions control unit. Special licenses were required as export authorizations. The acts were those of Feb. 15, 1936 (tin-plate scrap) (49 Stat. 1140); and Sept. 1, 1937 (helium) (50 Stat. 886, 887). 2. See Atwater, op. cit., pp. 214-234, for a discussion of the Roosevelt-Hull attempts to achieve persuasive control through the imposition of moral embargoes.

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National Munitions Control Board. T h e choice of Mr. Green was dictated by considerations of his k n o w n interest in munitions control and on the basis of his knowledge of munitions control problems. Mr. Green had appeared before several Congressional committees to argue on behalf of the Department of State in favor of adoption by Congress of regulatory arms legislation. 3 In addition to the instructions requiring it to set up the registration and licensing system, the Office of A r m s and Munitions Control in the same order was instructed to exercise "such supervision of the international traffic in arms, ammunition, and implements of war as falls within the jurisdiction of the Secretary of State under treaties and statutes." 4 Under the direction of Mr. Green the newly organized Office of A r m s and Munitions Control enjoyed great success. T h i s success consisted in the establishment of a working organization, in the development of a capable staff, and in the ability to dispose of difficult problems in a superior manner. T o w a r d Mr. Green his staff showed unusual loyalty, a condition which greatly added to the prestige both of Mr. Green and of his organization. W i t h the addition of other functions the Office became the Division of Controls on November 22, 1938. 5 Mr. Green continued as Chief of the Division of Controls until its dissolution in October, 1941. 6 Administrative work involved in registration and licensing of arms, ammunition, and implements of war was handled with efficiency and judgment. T h e regulations issued by the Secretary of State proved adequate and the Department was not under unusual pressure for arms registration and licensing. Furthermore, there was no element of discretion provided in the acts of August 3 1 , 1935, and May 1 , 1937, so that as long as no law or treaty of the United States was broken, the question of rejection of an application for registration or licensing did not arise. D u r i n g this period, and later, the De3. See Hearings on H.J. Res. 580 (72nd Congr., 2nd sess.); and Hearings on H.R. 8788 (74th Congr., 1st sess.). 4. T h e term "office" as used in the Department in 1935 had a different connotation from the same term as used today. In 1935 it was more nearly equivalent to the present-day "division." 5. Departmental Order N o . 778-A. 6. Departmental Order No. 976. October 7, 1941.

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partment d i d put into effect several so-called "moral embargoes," w h i c h merely consisted of requests by the Department to exporters not to export to certain countries. 7 I n addition to the moral embargoes, the acts of A u g u s t 3 1 , 1935, February 29, 1936, and M a y 1, 1937, all provided for the automatic imposition of an embargo on the shipment of arms, ammunition, and implements of w a r to all belligerents w h e n e v e r the existence of a state of w a r w a s proclaimed by the President. Also prohibited were munitions exports to neutral states for transshipment to belligerents. W h e n , on September 4, 1939, the President proclaimed the existence of a state of w a r between G e r m a n y and Poland, France, G r e a t Britain, India, Australia, and N e w Zealand, the embargo provisions automatically went into effect and as a consequence export licenses could not be issued to consignees in those states. Shortly after the outbreak of war in E u r o p e , Congress passed at special session the act of N o v e m b e r 4, 1939, also called the Neutrality A c t of 1939. T h i s act eliminated the embargo provisions of the neutrality legislation but continued those provisions of previous statutes which created the National Munitions Control Board a n d the system of registration and licensing. U n d e r this law, which substituted "cash and c a r r y " f o r the embargo procedure, the Department of State was obligated to issue export licenses to any and all would-be purchasers, regardless of the nationality of the buyer or the ultimate destination of the arms, ammunition, or implements of w a r involved. 8 7. Atwater, op. cit., p. 161, discusses the moral embargo applied to Brazil in 1932. Ibid., pp. 214-234, for a discussion of such embargoes as applied to Spain in 1936; Japan in 1938; and the Soviet Union, 1939-1940. The question as to whether arms shipments to Germany after approval of the act of August 31, 1935, constituted a violation of the treaty with Germany of August 25, 1921 (42 Stat. 1939), which incorporated by reference Article 170 of the Treaty of Versailles, is discussed in the National Lawyers Guild Quarterly (Sept, 1938), pp. 304-319. Correspondence from Joseph C. Green, of the Department of State, is reprinted in which Mr. Green declared that while the Treaty of Versailles prohibited the importation of arms into Germany, it did not prohibit other countries from exporting arms to Germany. Ibid., p. 319. 8. For a detailed discussion of the principles of cash and carry, see Harold W. Moseley, The Cash and Carry Section of the 1937 Neutrality Act (unpublished Ph.D. dissertation, Harvard University, April 15, 1939).

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F r o m N o v e m b e r 4, 1939, the date of approval of the Neutrality Act, until J u l y 2,1940, the date of approval of the Export Control A c t , the Department of State continued on a modified business-as-usual basis in handling arms exports. Because of the British Blockade the traffic in arms exports was naturally one-sided, but licenses were issued strictly in accordance with the provisions of law. I n principle, the G e r m a n s could have been named as consignees for export shipments. T h i s situation w a s altered by the Export Control Act, 9 w h i c h g a v e discretion to the President, and, acting in his name, the administrators of the act, to approve or reject import and export license applications. O n the same day that he approved the act, the President issued a proclamation and regulations which, a m o n g other things, vested the administration of the provisions of Section 6 of the act in the Administrator of E x p o r t Control and listed certain articles and materials, including arms, ammunition, and implements of w a r , as defined in the President's Proclamation of M a y 1 , 1 9 3 7 , which w o u l d be subject to the licensing requirement under the provisions of the act. T h e Secretary of State was directed to issue or refuse to issue licenses in accordance with rules and regulations or specific directives communicated to him by the Administrator of Export Control. A p plications f o r licenses to export arms were to be rejected in any case in which the Administrator of Export Control should determine that the proposed exportation w a s contrary to the interests of national defense. A f t e r the fall of F r a n c e and the passage of the Export Control A c t in the s u m m e r of 1940, arms export control definitely diminished in importance. T h i s was so f o r several reasons. First, the G o v e r n m e n t acquired as the result of the Export Control A c t authority to control all exports—including arms exports—in the interest of national defense. T h u s it w a s no longer necessary to approve of all proposed commercial arms exports which met the registration and licensing requirements of the acts of August 3 1 , 1 9 3 5 , M a y 1 , 1 9 3 7 , and N o v e m ber 4 , 1 9 3 9 . T h e G o v e r n m e n t could and did prevent arms shipments deemed to be contrary to the national interest. Secondly, all exports— including arms exports—were considered positive weapons in the execution of foreign policy. After the passage of the Export Control 9. 54 Stat. 714.

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Act the Government emphasized support of our friends and repudiated its previous policy of neutrality. Thirdly, commercial arms exports began to fall off in volume and by 1941 the bulk of arms exports consisted of Lend-Lease shipments. As the war continued commercial arms exports formed an increasingly smaller part of all arms exports. Inasmuch as the Export Control Act subjected materials and machinery, as well as munitions, to licensing control, the administration of the act greatly increased the work of the Division of Controls. T h e Department of State found it necessary to expand the staff of the Division from 20 to 150 persons and there was no foreseeable limit to the expansion that might eventually be required. 1 0 Mr. Green felt that export licensing should remain in its entirety within the Department of State. But others, including Herbert Feis, Adviser on International Economic Affairs, took the position that most of the licensing functions should be transferred to the Economic Defense Board, on the grounds that the Department of State was not properly equipped by background or personnel to enter extensively into the field of "operations." T h e views shared by M r . Feis eventually triumphed and all licensing functions, except those pertaining to arms, ammunition, and implements of war, were transferred to the Economic Defense Board in September, 1 9 4 1 . 1 1 A t the same time all stafi members of the Division of Controls, except those primarily concerned with munitions control and related problems, were transferred to the Board. Upon the loss of commodities licensing, the Department of State abolished the Division of Controls and the functions of the Division relating to arms control were transferred to a new organization known as the Division of Exports and Defense A i d . 1 2 T h i s division, which was headed by Charles Bunn, was given the responsibility of administering the munitions control legislation and of handling foreign policy questions relative to the administration of the Export Control, Lend-Lease, and other acts. T h e Export Con10. Clearance of licenses under the terms of the Export Control Act is discussed in Chapt. IV. 1 1 . Executive Order 8900, September 15, 1941. 12. Departmental Order No. 976. October 7, 1941.

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trol Act, approved July 2 , 1 9 4 0 , and the Lend-Lease A c t of March 1 1 , 1941, both required for successful operation direction and co-operation f r o m the Department of State. T h e importance of both acts in munitions control is discussed later. Here it is important to note one practical effect of this legislation upon the munitions control unit itself. M r . B u n n , Chief of the Division of Exports and Defense A i d , and his principal associates, became so busy with the foreign policy phases of E x p o r t Control and Lend-Lease that they were unable to devote much attention to the problems of munitions control. T h u s , absorption of the munitions control personnel into the D i vision of Exports and Defense A i d had two results. First, the munitions unit ended its existence as a separate division of the Department of State. Secondly, the munitions control personnel began to operate as a semi-autonomous organization. It was semi-autonomous in the sense that it failed to receive regular attention and direction f r o m M r . B u n n and his associates and was as a consequence forced to m a k e its o w n decisions. W i t h this semi-autonomy as a part of the Division of Exports and D e f e n s e A i d came a loss of prestige. On organizational charts the munitions control unit was of course listed as an integral part of the larger body. But appearances were deceptive. Actually, the unit became independent in regard to operations and administratively maintained only a nominal connection with its division and office. T h e most severe blow to the prestige of the munitions control organization came, however, not in its absorption into a division concerned with other matters, but in the loss of M r . Green. With the dissolution of the Division of Controls, M r . Green assumed the duties of Chief of the Special Division, thus severing his association with the munitions control unit, which handled the dayto-day operations in the field of arms control. H e continued, however, to be Executive Secretary of the National Munitions Control Board and was appointed a Special A s s i s t a n t 1 3 to the Secretary of State, in which position he acted as the Department's leading authority on matters relating to arms control. Mr. Green was subsequently appointed a member of several committees dealing with arms problems and was made A d v i s e r o n A r m s and Munitions Control in December, 13. Departmental Order No. 982.

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1944. T h e position of Adviser was abolished in the summer of 1946. 14 It is well to note in this place that the munitions control unit, although it had become a subsection of another organization, succeeded in maintaining some continuity and some co-ordination with the rest of the Department by referring to various arms-policy committees. F o r policy decisions it was necessary to refer to these committees, not to the office and division chiefs who were nominally responsible for munitions control operations. Even more important was the continuity which was maintained up to the summer of 1946 because of the peculiar position of Mr. Green as Special Assistant and later as A d viser to the Secretary on A r m s and Munitions Control. It was customary, even after M r . Green's departure f r o m the munitions unit as officer-in-charge, to consult him on all major questions of policy. With the abolition of the Division of Controls, and the transfer of its Chief, Mr. Green, the munitions control unit began a long and apparently never-ending trek from one division to another. 1 5 Although the decisions made by it were more political than economic in nature, the unit was ordinarily assigned to "economic" divisions and offices. That the uncertainty of status caused a loss in prestige and authority became clearly apparent. F o r a few weeks in 1941, E . P. Allen was chief of the munitions control unit, then a part of the Division of Exports and Defense Aid. W i t h his transfer out of the Division in January, 1942, Frederick Exton became chief of the munitions control unit, a position he held until the summer of 1946. 18 In June, 1942, the Division of Exports and Defense A i d was abolished and the functions of arms control were assigned to the Division of Commercial A f f a i r s . 1 7 A little more than 14. Mr. Green's influence in the Department began to wane when he left the Division of Controls. After December, 1944, he worked on various assignments, some not related to munitions control. 15. The unit has been known as an "Office," a "Division," a "Unit," a "Section," and a "Branch." In order to avoid confusion over terminology, the term "munitions control unit" has been used throughout to denote the arms control organization. Occasionally, even the Department of State has become confused in its official orders as to which title fitted the organization. Today, "division" is used to mean a subdivision of an "office." 16. Mr. Exton had been engaged in the export business in France. H e entered the Department of State in 1940. 17. Departmental Order No. 1061. June 18, 1942.

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a year later the same functions were transferred to the Division of Exports and Requirements and the munitions control unit consequently went under new supervision. 18 In November of the same year the Office of Foreign Economic Co-ordination, which included the Division of Exports and Requirements, as well as the munitions control unit, was abolished and the munitions unit was sent to the Office of Charles P. Taft, Special Adviser to Mr. Acheson on Supply and Resources. 19 Under the able direction of Mr. Taft, and particularly because of his willingness to support the members of the munitions control unit in occasional differences of opinion with superior authorities, the unit flourished for a short period. 20 A reorganization of the economic offices took place in January, 1945, one of the features of which was that the War Supply and Resources Division, with its munitions control unit, reported to the Office of Commercial Policy. 21 This title was valid for two months, at which time it was changed to be the Office of International Trade Policy. 22 Though remaining under the authority of the same office, the munitions control unit was placed under the Commodities Division of that office in May, 1945. 23 A similar change, which merely resulted in redesignating the Commodities Division as the International Resources Division, occurred in November, 1945. 24 The Munitions Control Section, as it was officially called, remained under the eventual control of the Office of International Trade Policy and under the Assistant Secretary for Economic Affairs. As a result of these rapid shifts from the jurisdiction of one agency 18. Departmental Order No. 1179. August 7, 1943. 19. Departmental Order No. 1210. November 6, 1943. 20. T h e name of the Supply and Resources Division was changed to War Supply and Resources Division by Departmental Order No. 1293, issued October 1 3 , 1 9 4 4 , and effective three days later. 21. Departmental Order No. 1306, issued January 26, 1945, and effective the same day. 22. Departmental Order No. 1312, issued March 1 , 1945, and effective March 9, 194523. Departmental Order No. 1319, issued April 26, 1945, and effective May 1 , 1945. 24. Departmental Order N o . 1355, issued November 1, 1945, and effective four days later.

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to another, the munitions control unit suffered considerably. T h e worst curse to plague the unit was its unwanted autonomy. U n f a miliar with the problems of arms control and not prepared to delve into a subject which, according to all precedent, would not be their worry for long, succeeding office and division chiefs paid but scant attention to the unit. Each time when it appeared that some headway was in sight and that the division and office chiefs at least were about to learn the names of the personnel of the munitions control unit, the organization was transferred to another agency. In this way, the entire unit was penalized. T h e responsibility for unfortunate decisions fell squarely upon the shoulders of the unit's staff, while at the same time appeals for guidance usually resulted in polite expressions of non-interest. T h e usual reason for the rapid shifting from one agency to another may be stated bluntly. 2 5 A t no time was any division or office chief happy to have under his jurisdiction a specialized unit concerned with problems about which he knew little. Consequently, the division or office chief concerned ordinarily took advantage of the earliest opportunity to recommend that the munitions unit be transferred to a more "appropriate" agency. T h u s the confusion multiplied. T h e administrative vicissitudes may in large measure be attributed to the definitely diminished importance of commercial arms export control after the fall of France in the summer of 1940. Another noticeable result of the autonomous position of the unit was the effect upon its staff. In well integrated organizations it often happens that a capable junior staff member, having proved himself, is promoted within the framework of the larger unit of which his o w n organization is a part. Partly because the possibilities for promotion were so limited in the munitions control unit, particularly since the termination of the recent war, the turnover in personnel was unusually heavy. This, of course, tended to lessen the continuity of policy and of operations within the unit and frequently was the indirect cause of considerable embarrassment and confusion. In order to clarify the status of the unit and to be rid of the curse 25. Information is not available as to what was the effect, if any, of efficiency studies made by the Bureau of the Budget. Some changes may have taken place as the result of such studies.

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of autonomy, Frederick E x t o n , as Chief of the unit, as well as other members of his staff, attempted at every opportunity to push a plan w h i c h w o u l d result in the creation of divisional status for the unit. Several obstacles besides inertia continued to appear, including an unfavorable recollection by certain officials of M r . Green's Division of Controls a n d the fact that t w o Assistant Secretaries in charge of A d ministration resigned immediately prior to the final approval of reorganization plans. W h i l e subsequent events proved the thesis groundless, it was believed in some circles that the creation of divisional status f o r the unit would necessarily result in the loss of certain cherished functions on the part of various other organizations w i t h i n the Department of State. F o r example, it was believed by the Aviation Division that its opinions regarding the desirability of exporting commercial aircraft to certain countries might be overridden by a very p o w e r f u l Munitions Division. It was felt by the Division of International Security A f f a i r s that the drafting of armament clauses in treaties might be assigned to the proposed Munitions Division. A m o n g the numerous reorganization plans relating to the munitions control unit was one advanced by the Office of American Republic A f f a i r s during the summer and fall of 1944. U n d e r the procedure recommended, in order to increase the efficiency of control, it w a s proposed to transfer all policy-making functions of the munitions unit to the Department's geographical offices and divisions, with the munitions unit itself retaining only registration and licensing duties. W i t h the defeat of this proposal, an alternate plan was drafted, reportedly with the approval of M r . T a f t and other high officials, whereby the munitions control unit would be transferred to the Office of Special Political A f f a i r s . Partly because of the objections of D r . L e o Pasvolsky, Special Assistant to the Secretary for International Organization A f f a i r s , this proposal was allowed to linger. A year later, in the last part of 1945, the same proposal was again tentatively advanced in a slightly different form. T h e new plan called for absorption of the munitions control functions, and the staff of the unit, into the Division of International Security A f f a i r s , a part of the Office of Special Political Affairs—a move opposed by the advocates

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of divisional status £or the munitions control unit, including Mr. Green and Mr. Exton. T h e basic argument for absorption into International Security Affairs was that munitions control should properly be considered in conjunction with efforts to secure international peace and disarmament through the Security Council of the United Nations. The attitude of Joseph E . Johnson, Chief of the Division of International Security Affairs, was favorable toward the idea of absorption but the Office of Special Political Affairs again demurred. It was the thought of Alger Hiss, of that Office, that his organization should steer clear of operational duties, if possible, and that the munitions control unit, whether absorbed as a part of the Division of International Security Affairs or as a newly created division, would present many operating difficulties. As a counter-suggestion, he recommended that the munitions control unit be transferred in its entirety to the Treasury, where through the Collectors of Customs it has always had liaison. 26 Meanwhile, drafts of previous plans to establish the munitions control unit as a division in its own right, with added powers over policy-making, were circulated throughout the Department for comment and recommendation. T h e problem was complicated by considerations of personnel, as well as by doubts about the wisdom of giving the munitions control organization, even if it should become a division, any extensive policy-making powers. As an alternative, it was suggested that a high-echelon committee be established, with authority to create policy, while the proposed division would confine itself to registration and licensing and related matters. It was argued that even without additional powers, the munitions unit would be in a better position, as a division, to augment its personnel, obtain better grades for its personnel, and administer the arms control system more effectively. The various plans were fused in a Departmental Announcement of May 20, 1946, which abolished the Munitions Control Section and established a Munitions Division within the Office of Controls. Inside the framework of policy to be established by a newly formed 26. Mr. Hiss, like others, tended to overemphasize the degree of automatic operation of the arms control system. In addition, Mr. Hiss exaggerated the degree of liaison with the Treasury.

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Policy Committee on A r m s and Armaments, the Munitions Division was instructed to continue the functions theretofore exercised by the Munitions Control Section. T h e Announcement was intended to achieve two objectives: to elevate the status of the munitions control unit of the Department, and to create a more co-ordinated policym a k i n g system for the regulation of the private traffic in arms. It is still too early to evaluate fully the results of the comparatively recent elevation of the munitions unit to the status of a division. O n the positive side, the organization reached a higher echelon within the Department of State, with the result that its staff, decisions, and recommendations naturally carried more weight than in the past. It appeared likely that as budgetary considerations were ironed out, a long over-due enlargement in the staff would be achieved, with consequent promotional opportunities. O n the negative side, there was a very real danger that the Office of Controls ( w h i c h was not related to the former organization of the same name once headed by Joseph C . G r e e n ) , an office including such diverse units as the Passport, Visa, Special Projects, Foreign Activity Correlation, and Investigations D i visions, would not be in a position to assume real administrative responsibility for the Munitions Division. O n l y the test of time can determine whether the administrative changes of 1946 resulted in the correlation of the munitions unit with the other agencies of the D e partment. CRITIQUE OF METHOD OF ORGANIZATION

F r o m what has been related in the previous section, it is clear that the organization of the munitions control duties assigned to the Secretary of State by Congress was haphazard. It is impossible to discover any principle of organization or of administration which could be used to justify the number of changes in office and division which occurred in the case of the munitions control unit. W h e n instructed by Congress to perform the administrative duties connected with munitions control, the Department of State was forced to make a basic decision. T h i s decision was whether to attempt a separation of the more mechanical elements of munitions control (registration and licensing) f r o m arms-policy matters, or whether to combine operations and policy-making in a single agency.

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T h e first alternative w o u l d have required the establishment of a unit with the sole purpose of handling registration and licensing. Policy-making functions w o u l d have been decentralized on a geographical basis, with each geographical office of the Department making decisions concerning the area for which it w a s responsible. In the event of conflict a m o n g t w o or more of the four offices, recourse would of necessity have been had to the Assistant Secretaries or to one of the high-level policy committees of the Department. It was the position of M r . Green, on the other hand, that it would be cumbersome, if not impossible, to achieve a separation between the operations and the policy-making elements of munitions control. E v e n were such a separation possible, he argued that it would be undesirable in practice. It w o u l d have been undesirable because the necessity of consulting high-echelon committees or the Assistant Secretaries w o u l d have caused undue delays in the issuing of arms export licenses. It was recognized by Congress that the relationship between arms control and foreign policy w a s such that arms control regulation should be handled by the Department of State. A c t i n g upon the assumption that arms control and foreign policy were inseparable, the former being tied into the purposes of the latter, M r . Green urged that munitions control be organized in one agency w h i c h would be empowered to carry on operations and at the same time to make whatever policy decisions were necessary. E v e n though discretion to reject arms export licenses was not given the Administration until passage of the E x p o r t Control A c t of 1940, there was in practice considerable influence exercised by the Department in advising exporters that certain proposed shipments were or were not in accordance with G o v e r n m e n t policy. It was greatly to M r . Green's credit that he foresaw that situations would probably arise in which the Department of State f o r policy reasons w o u l d care to influence arms exports, either through moral persuasion or through any future legal sanctions. A s has been noted, the position of M r . G r e e n was accepted by the Department in the organization of the munitions control unit. T h e Office of A r m s and Munitions Control was established in 1935 with

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the authority not only to handle registration and licensing activities but also to advise the Secretary of State on any matters regarding arms control. T h u s , initially, the unity between operations and policym a k i n g was accepted in principle by the Department. It was a sound decision. W h a t , then, occurred in 1941 to bring about in effect the weakening of the munitions control unit by its being made merely a subsection of the Division of Exports and D e f e n s e A i d ? S o m e of the reasons have been implied in the discussion of the organizational history of the munitions control unit. First, it was believed that commercial arms export control had, relatively, lost importance as a function of the Department in comparison to the n e w duties acquired by the Department after the fall of France in the execution of the foreign policy phases of E x p o r t Control and later of Lend-Lease. Secondly, f o r reasons which have never been made public, it w a s decided that M r . Green should be transferred out of the organization which handled munitions control and placed in charge of another agency, the Special Division. T h i r d l y , it was decided not to promote any of the munitions control personnel to high positions within the Division of Exports and Defense A i d but to bring in other people to fill newly created positions. Consequently, it became increasingly more difficult to retain able personnel in the munitions control unit, because promotional opportunities were relatively restricted. T h e effect of loss of able personnel was to lessen the prestige of the munitions control unit. Despite its position as a subsection of a larger division, it was possible that the munitions control unit might have achieved stability if it had remained permanently under the same division. It was possible that the unit might have received frequent directions f r o m M r . Green, not as officer-in-charge, but as a special adviser on arms control, in such a way as not to antagonize the division chief under whose nominal control the unit would have been. Unfortunately, this solution was never tried. Instead the munitions unit continued to move from one division to another. T h e only reason ever given f o r such shifts was that the unit by virtue of its type of work did not fit in with the other activities of a particular division. A s a consequence, even though the w o r k of the unit after the pas-

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sage of the Export Control Act in 1940 was more "political" than "economic" in nature, the munitions control organization kept moving from one economic division to another. Ordinarily, while the division chiefs knew little of munitions control work and cared less, these same chiefs did not readily accept suggestions concerning munitions control policy f r o m Mr. Green. It has been indicated that whatever continuity in policy-making existed stemmed from the position of Mr. Green. This was true whether that influence was exercised by Mr. Green as special adviser on arms policy to the Secretary, or whether as chairman or member of an arms-policy committee. In any event, the relationship was distant and was definitely not so satisfactory as it had been when Mr. Green acted as officer-in-charge of the munitions unit itself. In the summer of 1946 the Department of State partially returned to its original position, that is, that operations and policy-determination in munitions control could not well be separated. With the establishment of the Munitions Division and of the Policy Committee on Arms and Armaments, a previous erroneous decision on organization was acknowledged and the unity of operations and policy-making was partly restored. Whether unity would be altogether restored was a matter of speculation at the time of writing. T h e Munitions Division was instructed to operate within the framework of policy created by the Policy Committee on Arms and Armaments. T h e degree of liaison to be maintained between the Munitions Division and the Committee was therefore the core of the problem of unity. By using the Munitions Division as the secretariat of the Committee, a high degree of liaison could have been established. In this way all matters pertaining to armscontrol policy submitted by the geographical offices for the consideration of the Committee could have been cleared through and co-ordinated by the Munitions Division. Unfortunately, the secretariat of the Committee was not placed in the Munitions Division, so that the problem of liaison was made more difficult than it might have been. In addition, no provision was made for regular representation of the Munitions Division at the meetings of the Committee. Consequently, it appeared to the writer that the degree of co-ordination between the Division and the Committee was dependent upon the personal rela-

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tionship between the Division chief and the Committee chairman. Such an arrangement was, to say the least, capricious. If, in principle, the method of organization of the munitions unit was poor, what can be said as to the practical results of such organization? T h e refusal of the Department from 1941 to 1946 to grapple directly with the problem of adequate organization resulted in the dismaying trek of the munitions unit from one agency to another. T h e results may be summarized as follows: T h e unit lacked proper direction from above. It suffered a loss of prestige from which it would probably take some time to recover. Capable personnel transferred out of the unit because its isolated position and low echelon made promotions within the unit difficult and limited the extent and range of promotions. Morale declined and a general atmosphere of defeatism and frustration pervaded the thinking of the personnel. These were the external aspects of poor organization. Internally, factors existed which in various degrees were common throughout the Department. It is appropriate to summarize them at this point. Taken individually these factors were not serious. Taken collectively they help to explain the low state of morale which permeated the munitions control unit from 1941 to 1946. Briefly, these factors were as follows: irregular working hours, illustrated by the fact that certain members of the staff arrived at varying hours for work; poor assignment of clerks and typists, exemplified by the fact that some officers had more typists than necessary while some on occasion had no typists at all; failure to use modern office equipment, such as dictaphones, and failure to use modern filing methods; failure of the Finance Division to forward on time war bonds purchased by employees on a deduction-from-pay basis; crowded rooms with poor lighting systems. These factors, taken collectively, did much to create a poor state of morale. Only aggressive leadership could have minimized the harmful effects of some of them and could have completely eliminated others. T h e factors which have been listed will not, of course, determine the future of the munitions control unit. T h e future of the unit depends primarily upon the future policy of the Department of State on arms export control. T h e policy of the Department will in turn be contingent upon events quite external to the Department itself.

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Nevertheless, some valuable conclusions m a y be derived f r o m the present study of the history of the munitions control unit. It may be stated that the history of the unit offers conclusive evidence that an undue, exaggerated separation of operations and policy leads to harmf u l results. T h i s is not to say that policy-making and operations cannot be carried on in two separate departments or agencies. T h e record of the F o r e i g n Economic Administration shows that a physical separation (between F E A and State in regard to operations and certain policy-making functions) may on occasion be perfectly feasible. But it is necessary that the chain of responsibility be clear in the minds both of operational and of policy-making personnel if difficulties are to be avoided. F r o m 1941 to 1946 great confusion existed in the Department of State regarding areas of precise responsibility in the formulation of policy decisions f o r regulation of the commercial traffic in arms. It may also be stated that the evidence demonstrates that stability is necessary to the success of an agency, whether that agency is primarily operational or policy-making or combines both functions. One final point deserves great emphasis. Administration cannot be successful merely because it is mechanically perfect. T h e h u m a n element, the role of personality, is at least as important as methods of organization. It has been shown that the personality of M r . Green was a factor of great importance in munitions control during the tenyear period considered in this study. M r . Green developed great personal loyalty a m o n g the members of his immediate staff. Such loyalty made his o w n role as administrator and adviser easier to fulfill than might otherwise have been the case. B u t there is another side to the picture. In his dealings with Department personnel not members of his o w n organization or not intimately concerned with munitions control, M r . Green had a tendency to be brusque and at times even obstinate. A s a consequence great antagonism arose f r o m time to time directed not only against M r . G r e e n but also against the entire munitions control organization. Personal opposition tended to become organizational opposition. T h i s opposition continued long after M r . G r e e n had relinquished operational responsibilities over munitions control. T h e r e is thus a negative reaction which may be inspired by a com-

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bative personality. Such a reaction was evident d u r i n g the p l a n n i n g stages which preceded the establishment of the present M u n i t i o n s Division. Several ideas were opposed by various officials not primarily on the g r o u n d that those ideas were necessarily bad but because M r . Green h a d t h r o w n his support, directly or indirectly, t o w a r d them. T h i s is not to imply that in the opinion of the writer M r . G r e e n was invariably correct. Frequently subsequent events failed to vindicate positions he had adopted with great intransigence. F o r this attitude the m u n i t i o n s control unit itself was frequently penalized. T h i s discussion is intended to underscore the fact that the role of personality in administration has not only a positive but also a negative side. O n occasion the latter may be extremely h a r m f u l .

Ill Registration PURPOSE

The law required that every person who engaged in the business of manufacturing, exporting, or importing any arms, ammunition, or implements of war as defined in a proclamation issued under authority of the law should register with the Secretary of State his name, or business name, principal place of business, and places of business in the United States, and a list of the arms, ammunition, and implements of war which he manufactured, imported, or exported. The purpose of this part of the law was to enable the Government to have in its possession current records which described the status of the firms engaged in the arms trade. In these records was contained much information of use to the Government. This information included the location of arms producers, importers, and exporters. It also included the types of articles, broken down by the groupings to be found in the proclamations, which each firm manufactured, exported, or imported. The knowledge of the identity and location of firms engaged in the arms trade proved of great practical value during the war years in enabling the Government to place orders for arms and munitions. It was also possible in many cases by virtue of the information obtained from registration, coupled with embassy reports from various parts of the world, to decide which firms should be viewed with suspicion from the point of view of the war effort. Firms which had been found to be shady in character were carefully examined before they were permitted to engage in the wartime exportation of arms. Even in peacetime the information supplied through registration had its uses. The most obvious use was the tendency of exporters contemplating illegal shipments to re-examine their intention by knowledge that the Department of State had in its possession certain facts

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concerning them. In the event of failure to register the matter was of course turned over to the Department of Justice. In peacetime another practical use of the registration information was illustrated by the following situation: Suppose that an individual wished to export one of the articles enumerated in the proclamation and at the same time he was not engaged in the export business as a profession. H e might call at the Department to find out which individual or firm near his place of business had been registered with the Department for export purposes. While refraining from taking the responsibility for making any recommendation, the Department would ordinarily inform the inquirer of the address of the firm or person located nearest his place of business who was registered and who might therefore apply to the Department for an export license. Cases similar to this arose several times daily in the munitions control unit. Information obtained from registration was carefully filed. First, the application for registration itself was filed in chronological and alphabetical order. Secondly, the name of the registrant and the categories of arms in which he dealt were filed in a card filing system. These cards were brought up to date as the status of any registrant changed. Thirdly, when the cards indicated the termination of the five-year period during which the certificate of registration was valid, the Department notified the registrant whose certificate was about to expire of that fact by mimeographed letter and advised him that if he were still engaged in the private traffic in arms it would be necessary for him to renew his registration in the manner provided by the appropriate regulations. It is of interest to note that at the time of registration no check was normally made upon the accuracy of the information supplied by the applicant for registration. On the other hand, in exceptional cases where the Department had reason to be suspicious of the applicant, it might arrange an interview between the applicant and the registration officer. At the interview the officer would frankly inform the applicant that his previous record was not above reproach and that the Department had full authority to revoke a license in the event that a law of the United States would be broken should any particular shipment be consummated. The effect of interviews of this type was generally felt by the Department to be salutary.

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Before the passage of the Export Control A c t of 1940 the Department lacked a legal weapon to wave in the eyes of a potential registrant of whose business ethics it disapproved. Under authority of that act, however, the Department was able to guarantee to any particularly stubborn individual that he was wasting $100 by registering inasmuch as no arms export application submitted by him would ever be approved. There was no check made by any enforcement agency or by the Department, except in rare cases of suspected or known criminals, upon the accuracy of any information supplied in an application for registration. However, the discovery by the Department that incorrect information had been reported on the application for registration was on several occasions later used to justify refusal by the Department to issue an arms export license. T h e discovery of such inaccuracy depended upon investigation made at random by the registration officer, by the Department of Justice, or by any other agency of the Government. T h e finding of inaccuracies in registration was mostly by chance and there was no regular procedure by which applications for registration were examined for correctness.

MECHANICS

Because the Government did not have in its possession accurate information as to those persons or firms liable to registration under the provisions of the act approved August 3 1 , 1935, the Department of State resorted to the unusual expedient of writing known manufacturers, exporters, and importers. T h e description of this event as told by Joseph C . Green is of interest: At the time of the passage of the Neutrality Act of August 3 1 , 1935, no department of the Government was in possession of accurate information in regard to the number of companies engaged in the manufacture and exportation of arms, or in regard to the type of arms manufactured by or dealt in by those who were known to be engaged in their manufacture. In October, 1935, the Secretary of State addressed letters to 817 persons and companies, enclosing a copy of the pamphlet [the pamphlet listing the regulations promulgated by the Secretary of State], inviting attention to Section 2 of the Neutrality Act, and calling upon them to

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4i

register in case the business in which they were engaged came within the scope of its provisions. 1 O n December 3 , 1 9 3 5 , it was revealed in the Department's press release that 86 companies and persons had registered. N a m e s of firms and persons believed to be delinquent were sent to the Department of Justice in January, 1936, but little coercive action proved to be necessary to secure registration of parties required by l a w to register. Because of the unusually aggressive action of M r . G r e e n in having sent out under the name of the Secretary of State letters to persons or firms w h o were believed liable to registration, the entire registration system got off to a good start. It was, of course, the responsibility of manufacturers, importers, and exporters to be familiar with the l a w and to register of their o w n initiative with the Department of State. B u t recognizing that n e w firms might not be familiar with the provisions of law, the Department continued w h e n possible the practice inaugurated by M r . G r e e n of n o t i f y i n g firms just beginning to e n g a g e in the arms trade of their liability to registration. Consequently the first contact a manufacturer, importer, or exporter of arms, ammunition, or implements of w a r was likely to have with the Department of State was receipt of a letter calling to his attention his liability to register with the Department, as provided f o r in the basic law. F o r his convenience, the Department usually sent with its letter to h i m a copy of the pamphlet entitled, "International T r a f f i c in A r m s , " which contained the regulations promulgated by the Secretary of State relative to the commercial traffic in arms. T h e procedure for registration, as outlined in the regulations as well as in practice, w a s fairly simple. A l l persons engaged in the business of manufacturing, exporting, or importing any of the arms, ammunition, or implements of war enumerated in the most recent Presidential Proclamation, 2 had to register with the Secretary of State by duly filling out and transmitting to the Secretary an application f o r 1. Joseph C. Green, "Supervising the American Traffic in Arms," Foreign Affairs, Vol. 15 (July, 1937), p. 736. Quoted by special permission of Foreign Affairs. 1. For text of the proclamation of April 9, 1942, and changes brought about by the proclamation of Feb. 14, 1947, see Appendix.

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registration. Applications were notarized and transmitted to the Secretary with a registration fee of $100 in the form of a money order or certified check. 4 T h e money order or check was forwarded through administrative channels to the Treasury. T h e registration officer of the munitions control unit was never required by the Department to be bonded. Upon receipt of an application for registration, accompanied by the registration fee of $100, the Department issued to the applicant, as a receipt, a certificate of registration signed for the Secretary of State by the officer in charge of the munitions control unit, and sealed with the Department's seal. 5 Every person registered was required to notify the Secretary of State of any change in the information set forth in his application for registration. If the change involved a revision of the list of products, or a change of name, the registrant submitted a new application requesting an amended certificate of registration including this information. Upon receipt of the application, the Department issued, free of charge, an amended certificate of registration which remained valid until the date of expiration of the original certificate. 6 T h e regulations provided that manufacturers, exporters, and importers of component parts of the articles or units enumerated in the President's Proclamation of April 9,1942, but not of a complete article or unit listed in that proclamation, were not required to register under the joint resolution of November 4,1939. Such major items, however, as aircraft wheels and aircraft propeller blades made the manufacturer or dealer liable for registration. 7 Forgings, castings, and machined bodies for any of the articles enumerated in the President's Proclamation, which were substantially complete as major items, but which lacked some accessories, were considered to constitute arms, ammunition, or implements of war for the purposes of Section 12 of the Neutrality Act of 1939. 8 Production of items enumerated in the President's Proclamation, when such production was for experimental or scientific purposes and was not followed by sale, was not considered manufacture for the purposes of Section 12 of the joint resolution. 9 Persons who might make or receive occasional ship3. Regulations of June 2, 1942, par. 201.1. 4. Par. 201.2. 5. Par. 201.3. 6. Par. 201.4. 7. Par. 201.5. 8. Par. 201.6. 9. Par. 201.7.

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43

ments of arms, ammunition, or implements of war were not required to register. However, licenses for such shipments had to be obtained in accordance with the regulations of the Secretary of State. 1 0 T h e period of validity of a certificate of registration was five years. If the Department of State learned that a registrant was no longer engaged in the activity for which his registration was required, it might ask him to return the certificate. If the registrant desired to renew a certificate which had expired because of the passage of five years, he might, upon request, be issued a new certificate of registration. In this event, however, he was required to pay the usual fee of $100. W h e n a certificate of registration was issued, the registration officer sent the registrant the signed and sealed copy and filed a duplicate copy in the Department's files. Upon expiration, if not renewed, the registrant was requested to return his certificate to the Department. Inasmuch as one of the purposes of sending the registrant a certificate was to give him a receipt for payment of his fee of $100, this procedure in effect was equivalent to surrendering the receipt upon expiration of the certificate. Although the relevant acts of 1935, 1937, and 1939 gave the Secretary of State no discretion in the matter of registration, a certain amount of discretion was present by virtue of the necessity of making interpretations of the regulations. T h e problem of registration was raised in regard to an item not listed in the President's Proclamation. Rockets, rocket-launchers, guided missiles, drone airplanes, and dozens of other weapons developed in the last few years were not included in the enumeration. In such cases, the registration officer of the munitions control unit, after consultation with his chief, decided whether the manufacture, exportation, or importation of such items was manufacture, exportation, or importation of arms, ammunition, and implements of war, in the sense of the President's Proclamation of April 9, 1942. It was then necessary arbitrarily to decide into which of the seven categories of the proclamation the item was to be listed. Once a precedent had been established, the system worked satisfactorily. It was generally agreed within the Department of State at the end »o. Par. 201.8.

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of 1945 that a revised President's Proclamation w a s past due. T h e envisaged new proclamation would have included rockets, robots, landing craft, self-propelled artillery, guided missiles, propulsion units of all types f o r aircraft, and various new explosives developed d u r i n g the w a r . Considerable unnecessary correspondence often occurred between manufacturers, exporters, and importers on the one hand, and the Department of State on the other, both in regard to the liability of the dealers to register and in regard to the proper categories of registration. Inasmuch as applications for export licenses also had to list the items to be exported under one or another of the categories of the President's Proclamation, considerable delays in shipping frequently resulted f r o m a misunderstanding as to the placing of items under the correct category. It was felt that a new President's Proclamation would certainly have eliminated many of the delays by m a k ing much of the correspondence unnecessary. Ordinarily, any established firm or company w o u l d accept a ruling by the Department that it was liable to registration by virtue of the products it made, imported, or exported. B u t some confusion arose in regard to persons or firms which occasionally engaged in importi n g or exporting. A c c o r d i n g to the pertinent regulation, 1 1 registration under such circumstances w a s not required. O n the other hand, if approached for advice, the Department usually advised registration on the ground that complete coverage, f r o m the point of view of the regulations, was preferable to running the risks of embarrassment and legal action which could conceivably have occurred in the case of involuntary violation of the regulations. L i k e any other G o v e r n m e n t agency, the Department of State w a s disposed to m a k e strict interpretations of its own regulations. T h e arg u m e n t was that a legitimate business m a n would prefer to pay the $100 fee in order to avoid any possible future difficulty and that the records of the Department w o u l d naturally be more complete if all borderline businesses were registered with the munitions control unit. If any person or firm refused to register, it eliminated itself, of course, f r o m the possibility of securing an import or an export license. D u r i n g the early years of the w a r , the munitions control unit, in collaboration f r o m time to time with the Departments of Justice, W a r , 11. Par. 201.8.

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45

and N a v y , kept records listing all known data regarding persons and companies of dubious antecedents and practices who were engaged in any capacity whatsoever in the international traffic in arms. With the ending of the war, however, it was found impracticable, because of resignations and transfers of personnel, to maintain the records in their entirety. It was the hope of the Munitions Division established in 1946 that in the future the record system inaugurated during the war, and then abandoned, could be enlarged and maintained. Such a file would have the added advantage of making available both to the new Armaments Committee and the Department at large detailed information concerning the activities of certain persons in cases where their activities might have to be curtailed or forbidden because of policy considerations. A s an example of frustration of activity contrary to the national interest, it may be stated that at various times certain unscrupulous individuals attempted by transshipment through a third country to export airplanes to countries which had been considered undesirable recipients of such machines. T h r o u g h cablegrams and telegrams to the United States embassy in the third country, in addition to an accurate record system in Washington which detailed the past record of certain suspected persons, many such schemes inimical to the national interest were frustrated. In a rough way, the increase in the commercial exports of arms, ammunition, and implements of war, f r o m the establishment of the regulatory system in 1935 up to 1946 can be illustrated by the increase in the total number of persons and firms registered with the Department of State. T h e registration figures include manufacturers and importers, as well as exporters. Commercial imports of munitions into this country have always been insignificant, both in terms of quantity and of dollar value. While no breakdown is possible showing the actual numbers of exporters, importers, and manufacturers by years, the figures showing registration totals are available. These figures tend to illustrate the fact that the exportation of arms, ammunition, and implements of war has always been a brisk business in this country. During the war years the great increase in the number of registrants resulted more from the increase in the number of manufacturers making arms, ammunition, and implements of war than in

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46

any great increase in the number of exporters. It will be recalled in this connection that after October i, 1941, although arms export licenses were not required from the Secretary of State as authorization for Lend-Lease shipments, all manufacturers of articles enumerated in the President's Proclamation, as enlarged by the interpretation of the Department of State in regard to newly developed weapons, continued to be liable to comply with the registration requirement. The increase in the production of war materiel during the war years is graphically illustrated by the table below. Before Pearl Harbor only 400 persons and firms had registered with the Department of State. By June, 1944, the total had grown to 1500. Although figures were not available, it was known that the number of registrants actively engaged in the arms trade fell off sharply after August, 1945. Many of the firms engaged in munitions and arms work during the war returned their certificates of registration, explaining that they had resumed production of civilian goods. On the other hand, the export trade itself continued to be brisk, despite a falling off in the TABLE I

Cumulative Total of Certificates of Registration Issued from Inception of Registration in 1935 to Last Day of Year Shown Year 193 6 1 937 1938 1939 1940 (June) 1940 (December) 1941 1942 x 943

1944 J 945

Number 149 200 233 302 376 522 857 1.367 1,481 1,639 I »759

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number of manufacturers. With the termination of Lend-Lease, and with the eventual termination of Surplus Property Disposal, it appeared that most arms, ammunition, and implements of war exported from this country would again be exported as commercial, non-governmental shipments. Table I shows the cumulative total of persons and firms registered at the end of the years indicated. It should be borne in mind that the totals given are not the totals of active registrants at the end of each year. For example, while the total number of registrations from the inception of registration in 1935 through the last day of 1944 was 1639, only 1547 certificates of registration were in force on the last day of that year. EVALUATION

The basic purpose of requiring registration was undoubtedly sound. Before approval of the act of August 31,1935, no Government agency had adequate information about those persons and firms engaged in the private traffic in arms. By virtue of the machinery established by the Neutrality Acts the Department of State since 1935 has had in its possession reasonably complete information. That this information proved of practical value, both before and during the war years, has been demonstrated. It should also be of great value in the years to come inasmuch as it was generally recognized that some form of export control needed to be maintained over arms exports, whether under the terms of the Export Control Act, as amended, or of similar legislation. The information gained from the registration applications, coupled with additional information regarding the activities of certain firms and individuals, tended to put the registration officer in a key spot in making recommendations to the licensing officer as to whether certain applications for export licenses should be honored or rejected. In actual practice the recommendations of the registration officer carried great weight. The mechanics of registration was handled smoothly. The aggressive spirit shown by Mr. Green in the fall of 1935 when he called to the attention of the firms and persons engaged in the arms traffic

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their liability to register with the Department of State was continued by his successors. In the discussion of the mechanics of registration it was pointed out that the Department had been forced to abandon its plan of accumulating in detail all facts regarding persons and firms in the arms traffic. The reason was lack of adequate personnel to examine all sources of data—Government reports, newspaper articles, magazine accounts. It was the hope of the munitions control personnel to have in their possession all known facts regarding the private traffic in arms in this country. Under the regime of Mr. Green great progress was made in this direction. It was highly unfortunate that a shortage of qualified personnel made continued accumulation of such data impossible during the war years. This fact-finding and fact-gathering function of the munitions control unit was implied in the basic legislation and was in fact expected by the Department of State. Only on the basis of accurate and detailed information could the Munitions Division and the Armaments Committee have been expected to arrive at correct judgments. The most glaring defect to the registration system was not connected with its mode of operation. This defect was that the Department of State did not initiate action to revise the President's Proclamation so that the proclamation would list the new as well as the old weapons of warfare. T h e proclamation of April 9, 1942, did not include many of the weapons of great importance in present-day warfare. Yet it remained in effect until February 20, 1947. Why the proclamation was not rescinded and a revised one proclaimed can be easily explained on practical grounds. One reason was to be found in the reluctance of the Department of State to take action, through the Secretary of State, to convene the members of the National Munitions Control Board during wartime. T w o additional reasons, both more basic than the first, help to explain the hesitation in revising the proclamation. In the first place, the protection of military secrets during wartime might have been jeopardized by publication of a current and accurate listing of items considered to be arms, ammunition, and implements of war. In the second place, the jealousy which existed between the Department of State and certain other Departments represented on the National Munitions Con-

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trol Board might have served to curtail any enthusiasm on the part of the Department of State to take action to revise the proclamation. In any event, the proclamation was not revised until February 14, 1947, at which time certain modifications and additions were included in a new proclamation. 1 2 T h e s e revisions concerned principally commercial aircraft, which w e r e excluded f r o m the licensing requirement if unclassified and if u n d e r 35,000 pounds empty weight, and pilotless aircraft and guided missiles, w h i c h were included in the licensing requirement. T h e delay which occurred f r o m the ending of hostilities to the issuance of a new proclamation caused considerable confusion in the minds of applicants f o r registration certificates and f o r export licenses. In order to arrive at the proper categorization of items not listed in the 1942 proclamation persons engaged in the arms trade had to carry on lengthy correspondence with the Department of State. T h i s caused delays in the shipment of arms exports. In such cases the firms and persons involved often felt w i t h some justice that they had been made the victims of Government inefficiency and red tape. T h e delay in revising the proclamation affected G o v e r n m e n t as well as private operations. T h e Office of F o r e i g n L i q u i d a t i o n was reported-to have had considerable difficulty in the preparation of proposals for settlement of Lend-Lease accounts because the proclamation of A p r i l 9, 1942, did not include m a n y items of an apparent military nature which were being sent abroad under the Lend-Lease program. T h e general theory was that military items did not require repayment to this country but were to be held by the f o r e i g n country subject to recall by the United States. Conversely, items suited f o r civilian use would become the property of the foreign government and would require eventual repayment. It was thought in the Office of Foreign Liquidation that an obvious means of distinguishing between the two classes of supplies w o u l d be to refer to the proclamation of April 9, 1942. 12. Proclamation of February 14, 1947. 12 F.R. 1127. Text may also be found in Department of State Bulletin Vol. XVI, No. 399 (Feb. 23, 1947), pp. 327, 328, 367. The principal changes concerned aircraft. For revisions in text brought about by the February 14, 1947, proclamation, see Appendix.

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But the narrowness of the proclamation prevented such reference, for it would have meant that this country would not be in a position to reclaim some articles which were essentially military and to ask for repayment on a number of items which were essentially civilian in nature. T h e absence of an up-to-date proclamation caused the Office of Foreign Liquidation not only inconvenience but also anticipation that some critics who knew of the proclamation might feel that the Office of Foreign Liquidation was not properly listing items of military equipment and non-military equipment in such a way that repayment could eventually be demanded of a maximum number of items. Subsequently, the Office of Foreign Liquidation, to avoid further difficulties, drew up its own list in consultation with the War and N a v y Departments. This list included many items not listed in the President's Proclamation. Issuance of the revised proclamation of February 14, 1947, therefore materially assisted in clearing up a situation which had become increasingly muddled. Clarification was welcomed both by Government agencies and by the munitions and aircraft industries.

IV Licensing PURPOSE

In establishing a licensing system to control the private exportation of arms, ammunition, and implements of war Congress had two objectives. T h e first objective was to make sure that arms could not be exported in defiance of laws and embargoes of the United States. Implied in this purpose was the protection of military secrets of the A r m y and N a v y . T h e second objective of the legislators was to enable the Government, through the National Munitions Control Board, to publish elaborate statistics on the arms trade in order that the spotlight of publicity might be cast on the arms business itself. Back of the desire to publicize the activities of "the merchants of death" was the assumption by many legislators and by a considerable body of public opinion that publicity would tend to correct any excesses and abuses in which the arms merchants might otherwise be likely to engage. In addition to these two original objectives of the licensing system another objective arose with our entry into the war. This was to control arms exports in order to aid our own national war effort and the efforts of our Allies. T o this end, under authority conferred on the Government by the Export Control Act of 1940, as later amended, the Department of State was legally empowered to prevent shipments and transshipments of arms from reaching enemy states and to prevent shipments to consignees w h o were listed on the Proclaimed List of Certain Blocked Nationals. T h e techniques by which these purposes were executed and the degree of success in achieving these purposes are discussed later in this chapter. LICENSING

PROCEDURE

T h e licensing function of the arms control system was performed by a licensing section within the munitions control unit. Together

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with the registration section, the licensing officials carried out most of the operational duties entrusted to the Secretary of State by the act of August 3 1 , 1 9 3 5 , the act of May 1 , 1 9 3 7 , and the Neutrality Act of 1939. T h e licensing section handled all matters pertaining to licenses authorizing the commercial exportation or importation of arms, ammunition, and implements of war, including when necessary clearance within the Department of State and during the war clearance with various war priorities agencies. Licensing of arms exports, which was the principal function of the section, was not unique to the United States nor did it begin in the United States with the act of August 3 1 , 1935. In 1920 the Department required licenses to export 20 different types of war materiel to Mexico. In the Geneva Convention signed June 17, 1925, were listed the arms, ammunition, and implements of war, the exportation of which should require export licenses. Most of the principal exporting countries of the world used this list as the basis of their own enumerations of war matériel the exportation of which required licenses. T h e Geneva list served as the basis for the President's Proclamations issued from time to time in this country, and included both military and commercial aircraft. W h e n a permanent regulatory system was established in this country in 1935, we were merely putting into effect a system similar to that used by most other arms-producing countries. 1 T h e United States procedure for licensing was clearly outlined in the regulations promulgated by the Secretary of State, the most recent at the time of writing being those of June 2, 1942. T o import or export articles enumerated in the President's Proclamation, a person was required to have in his possession a specific authorization in the form of a license issued by the Secretary of State. In regard to export 1. F o r detailed listings of w a r materiel by categories and f o r discussions preceding the establishment of categories, see the f o l l o w i n g : 1921 Report of the Temporary Mixed Commission on Armaments to the League of Nations ( G e n e v a : September 1 5 , 1 9 2 1 ) ; 1924 Report of the Temporary Mixed Commission for the Reduction of Armaments to the Assembly of the League of Nations ( G e n e v a : July 30, 1 9 2 4 ) ; Reduction of Armaments: Supervision of the Private Manufacture and Publicity of Manufacture of Arms and Ammunition and Implements of War ( G e n e v a : September 4, 1 9 2 8 ) .

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licenses the proviso existed that licenses w o u l d not be issued if the exportation of arms, ammunition, or implements of w a r for which any license was applied w o u l d have been in violation of a law of the United States or of a treaty to which the United States was a party. 2 T h e 1942 regulations took cognizance of the E x p o r t Control A c t 3 and provided that no export license should be issued in any case when it was determined under the authority of the President that the proposed shipment w a s contrary to the interest of national defense. Licenses were not transferable and, if not revoked, were valid f o r one year f r o m the date of issuance. Shipments might be made through any port of exit in the United States. N o alterations could be made except by the Department of State or by collectors of customs or postmasters acting under the specific instructions of the Department of State. Licenses which had been revoked or which had expired were to be returned to the Department. T h e country of ultimate destination was to be n a m e d on the application for an export license. In the event that at the time of application the ultimate destination could not be ascertained, the applicant was required to explain the facts clearly and to inform the Secretary of State as soon as the ultimate destination of the shipment had been learned. 4 T h e Secretary of State could refuse to grant an application f o r an export license until he had been i n f o r m e d of the country of ultimate destination in order that he might assure himself that the license could legally be issued. T h e original of an export license was required to be presented to the collector of customs at the port through which the shipment authorized by the license was being made. 5 In the event the shipment was made by parcel post, the license was to be presented to the postmaster at the post office at which the parcel was mailed. A s a practical matter, however, it was never advisable for an exporter to use parcel post, because most postmasters denied that arms shipments could be made through the mails. Articles in transit through the territory of the United States f r o m 2. Regulations of June 2, 1942, par. 201.12. 3. 54 Stat. 714. The Act was approved July 2, 1940. 4. Par. 201.16. 5. Par. 201.19.

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one point to another in Mexico, or from one point to another in Canada, did not require licenses.® Arms, ammunition, and implements of war transferred as defense aid under Section 3 of the Act of March 11, 1941 (Lend-Lease) , 7 were exempted f r o m the licensing requirements of Section 12 of the joint resolution of N o v e m b e r 4, 1939, as of October 1, 1941. F o r a brief period f r o m March 11, 1941, until October 1, 1941, arms licenses issued by the Department of State were required for Lend-Lease shipments. T h e regulations listed specific provisions regarding certain component parts requiring licenses, as well as aircraft, arms more than 100 years old, arms for the individual use of the person to w h o m consigned, and arms for sporting or scientific purposes. It was the usual practice of the licensing section of the munitions control unit to request that applications for licenses to export be forwarded in three copies, with a fourth copy to be retained by the applicant. U n l i k e the situation in regard to applications for registration, where the application for registration and the certificate of registration were t w o different forms, the application for an export license was itself used as an export license, after h a v i n g been duly approved, signed, and sealed. T h e applicant was sent the original of the license which he, upon having made the shipment authorized thereon, surrendered to the appropriate collector of customs. In turn the collector returned the used license to the Department of State. T h e second copy of the license was sent to the statistics section of the munitions control unit; the third copy was used whenever necessary for circulation a m o n g other Government agencies in cases where clearance was necessary before the license requested could actually be issued to the applicant.

CLEARANCE OF A R M S EXPORT LICENSES I N V I E W OF FEDERAL L A W S INTENDED TO DISCOURAGE I N T E R N A T I O N A L W A R S AND C I V I L W A R S ABROAD

W h i l e the procedure as thus outlined is the one w h i c h was habitually followed in the issuing of licenses, clearance of licenses naturally varied with the passing, amending, and repealing of various statutes. It is generally understood that the administration of any 6.

Par.

201.29.

7- 55 Stat.

31.

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55

given law is, in so far as possible, to be consistent with previously passed and unrepealed legislation. This point was specifically stated in the Neutrality Act of 1939, Section 12 ( f ) of which read in part: Licenses shall be issued by the Secretary of State to persons w h o have registered as herein provided for, except in cases of export or import licenses w h e r e the export of a r m s , ammunition, or implements of w a r w o u l d be in violation of this joint resolution or any other l a w of the United States, or of a treaty to w h i c h the United States is a party, in w h i c h case such licenses shall not be issued.

Certain legislation intended to discourage international and civil war abroad through the method of imposing an embargo upon the exportation f r o m the United States of war materials was still in effect at the end of 1946. T h e joint resolution approved January 31, 1922, provided that W h e n e v e r the President finds that in any A m e r i c a n country, or in any country in w h i c h the United States exercises extraterritorial jurisdiction, conditions of domestic violence exist, w h i c h are or w h i c h m a y be prompted by the use of arms or munitions of w a r procured from the United States, and makes proclamation thereof, it shall be u n l a w f u l to export, except under such limitations and exceptions as the President prescribes, any arms or munitions of w a r f r o m any place in the U n i t e d States to such country until otherwise ordered by the President or by Congress. 8

Pursuant to this joint resolution several Presidential Proclamations were issued. A t the end of 1946, the following such proclamations remained in effect: Proclamation N o . 1621, issued on March 4, 1922, by President H a r d i n g with respect to C h i n a ; 9 N o . 1689, issued March 22, 1924, by President Coolidge with regard to H o n d u r a s ; 1 0 N o . 1783, issued by President Coolidge on September 15, 1926, with regard to N i c a r a g u a ; 1 1 and N o . 2089, issued on June 29, 1934, by President Roosevelt, with regard to C u b a . 1 2 T h e Secretary of State permitted the commercial exportation of arms, ammunition, and implements of war to these countries only when the Department had been informed by the embassy in Washington of the country concerned that it was the desire of the gov8. 42 Stat. 361. 10. 43 Stat. 1942. 12. 49 Stat. 3399.

9. 42 Stat. 2264. 1 1 . 44 S t a t 2625.

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ernment of that country that the exportation in question be authorized. W i t h regard to C u b a , the question of treaty obligations arose by virtue of Article I I of the convention between the United States and C u b a to suppress smuggling, signed at H a b a n a , M a r c h n , 1926. T h i s treaty imposed upon both signatories an obligation to enforce the laws of the other relative to shipments of certain articles when the importation o£ those articles was prohibited by the laws of the country for which the shipment was destined. 1 3 T o assure fulfillment of these treaty obligations with Cuba, the Secretary of State permitted exportation of arms, ammunition, and implements of w a r listed in the President's Proclamation only when applications f o r license to export these articles bore the stamp of approval of the C u b a n E m bassy in W a s h i n g t o n . T h e other basis f o r control over the arms trade with C u b a was a proclamation issued under authority of the act approved January 3 1 , 1922. H a v i n g f o u n d that conditions of domestic violence existed in C u b a , President Roosevelt on June 29, 1934, issued a proclamation attesting that fact. T h e s e conditions, he said, were or might be promoted by the use of arms procured f r o m the United States. U n d e r authority of the act of January 3 1 , 1 9 2 2 , he therefore proclaimed that arms might not be exported to C u b a except under such conditions as he might prescribe. T h e s e conditions were the same as those which have been described in connection with the execution of the provisions of the treaty signed at Habana, March 1 1 , 1926. Exports were permitted only after the applications f o r export licenses had been stamped by the C u b a n Embassy to indicate approval of the proposed shipment. A s was the case with earlier proclamations dealing with other countries, Proclamation N o . 2089 concerning Cuba contained the f o l l o w i n g sentence: " A n d I do hereby delegate to the Secretary of State the p o w e r of prescribing exceptions and limitations to the ap13. Treaty Series 739. 44 Stat. 2403. The Habana Convention of 1928 on the Duties and Rights of States in the Event of Civil Strife, ratified by the United States in 1930 (Treaty Series No. 814), appears not to have been a factor. See Atwater, op. cit., pp. 120, 157, 161-163.

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plication of the said joint resolution of January 3 1 , 1922, as made effective by this my proclamation issued thereunder." Under authority of this clause, the Secretary imposed the limitation referred to above, namely, that the commercial exportation of arms, ammunition, and implements of war would be permitted only when the embassy of the country concerned had informed the Department of State that it was the desire of the government of that country that the proposed exportation be authorized. O n the other hand, the delegation of authority to the Secretary of State was so all-inclusive that he could have ordered an embargo on commercial arms shipments to the countries in question, if that had been the desire of the Administration. Another type of rejection of arms export licenses occurred in cases where embargoes were applied against exportation to certain countries. Under authority of the joint resolution approved May 28, 1934, the President issued a proclamation on the same day, making it unlawful to export arms, ammunition, and implements of war to Bolivia and Paraguay. A specific list of articles the sale of which for exportation to the two countries was forbidden was issued by the Secretary of State in April, 1935. T h e President's Proclamation of September 24,1935, the first under the act of August 3 1 , 1935, contained a more complete list of such articles. However, on November 14, 1935, the President revoked his proclamation of the previous year, inasmuch as he had found "the prohibition of the sale of arms and munitions of war in the United States to Bolivia or Paraguay will no longer be necessary as a contribution to the re-establishment of peace between those countries." T h e President took this action in view of the fact that the Peace Conference at Buenos Aires formally adopted on October 28, 1935, a resolution declaring that the war between the two nations had come to an end. During the Italo-Ethiopian War the President issued a proclamation on February 29, 1936, placing an embargo upon shipments of arms and munitions intended for Italy or Ethiopia. Because of the Ethiopian collapse, the proclamation was short-lived and was revoked on June 20,1936.

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A similar situation arose in 1937 in regard to Spain. In a joint resolution approved January 8, 1937, Congress made it illegal to export to Spain arms, ammunition, and implements of war as defined in the President's Proclamation No. 2163, of April 10, 1936. Licenses issued theretofore under existing laws were deemed to be cancelled. Five months later, in the joint resolution approved May 1, 1937, amending the joint resolution approved August 3 1 , 1935, the President was empowered, upon finding the existence of a state of war between foreign nations or a civil strife of such magnitude as to endanger the peace of the United States, to proclaim such fact and thereafter it would be unlawful to export arms and munitions to, or for the use of, such foreign states or factions. It was further provided that the President should by proclamation enumerate the arms, ammunition, and implements of war the exportation of which was prohibited by the act, and that such enumeration should include those articles listed in the President's Proclamation No. 2163 of April 10, 1936, but not raw materials or other articles not of the same general nature. Pursuant to the provisions of the joint resolution approved May 1, 1937, the President on the same day issued a proclamation applying the embargo provisions of the act to exportations of arms and munitions to Spain. T h e proclamation expanded the number of articles previously listed, including the addition of 13 poison gasses not previously listed and 17 explosives. For reasons of administrative convenience, the National Munitions Control Board recommended, successfully, that the enumeration of items under Section 1 of the act (the section providing for the issuance of a list of items the exportation of which was prohibited in time of foreign war or civil war to belligerents) and under Section 5 of the act (the section keeping in effect the system whereby certain defined articles of arms, ammunition, and implements of war could not be exported without an export license) should be identical. H a d the lists been at variance with one another, great confusion might have resulted. T h e embargo against shipments to Spain was kept in effect until after the termination of the Spanish Civil W a r . F r o m the present discussion, it will be seen that clearance of arms export licenses prior to the passage of the Export Control Act of

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July 2, 1940, i n v o l v e d three c o n s i d e r a t i o n s : w h e t h e r t h e application f o r a n export license was p r o p e r l y e x e c u t e d ; w h e t h e r the proposed exportation w o u l d be in v i o l a t i o n of a l a w of the U n i t e d States o r of a treaty to w h i c h the U n i t e d States w a s a p a r t y ; w h e t h e r the proposed exportation w o u l d be in v i o l a t i o n of a n e m b a r g o a u t h o r i z e d by C o n gress u p o n the finding by the P r e s i d e n t that a state of w a r existed.

SPECIAL PROVISIONS REGARDING M I L I T A R Y SECRETS

I n accordance w i t h the provisions of the N e u t r a l i t y A c t of 1939 a n d of the p r e c e d i n g acts of 1935 a n d 1937 that export licenses w o u l d not be issued in violation of a n e x i s t i n g l a w of the U n i t e d States, the Secretary of State p r o v i d e d in the regulations g o v e r n i n g

the

international traffic in a r m s that w h e n issuance w o u l d h a v e been in violation of the E s p i o n a g e A c t of June 15, 1 9 1 7 , 1 4 a r m s export licenses w o u l d not be issued. T h u s the preservation of military secrets acted as a limitation, both in w a r a n d peace, u p o n the authority of the Secretary of State to license the exportation of arms, a m m u n i tion, a n d i m p l e m e n t s of w a r . T h e k e y section of the E s p i o n a g e A c t , Section 2 ( a ) , reads as follows: Whoever, with intent or reason to believe that it is to be used to the injury of the United States or to the advantage of a foreign nation, communicates, delivers, or transmits, or attempts to, or aids or induces another to, communicate, deliver, or transmit, to any foreign government or to any faction or party or military or naval force within a foreign country, whether recognized or unrecognized by the United States, or to any representative, officer, agent, employee, subject, or citizen thereof, either directly or indirectly, any document, writing, code, book, signal book, sketch, photograph, photographic negative, blueprint, plan, map, model, note, instrument, appliance, or information relating to the national defense, shall be punished by imprisonment for not more than twenty years. . . . T h e regulations issued b y the Secretary of State o n June 2, 1942, p r o v i d e d that a license will not be issued by the Secretary of State authorizing the exportation of any arms, ammunition, or implements of war considered 14. 40 Stat 217.

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by the Secretary of W a r or by the Secretary of the N a v y as instruments or appliances included among the articles covered by those terms as used in Sections I and 2, Title I, of the Espionage Act if, in their opinion, they involve military secrets of interest to the national defense. 1 5 T h e procedure f o r clearance of articles w h i c h m i g h t fall within the categories so established was described in the same regulations. Prospective exporters of articles falling within the categories set out in par. 204.1 which may possibly involve military secrets of interest to the national defense, or persons desirous of transmitting abroad information concerning such articles should communicate with the Secretary of State in advance of the proposed transaction in order that he may be in a position to ascertain for the interested person whether or not military secrets are, in fact, involved therein. 1 6 A f t e r the act of A u g u s t 3 1 , 1935, the Secretary of State ordinarily cleared articles involving military secrets a n d intended f o r exportation through the munitions control unit of the D e p a r t m e n t . Requests f o r transmission abroad of articles, i n f o r m a t i o n , and patents, subject to the provisions of the E s p i o n a g e A c t , w e r e cleared through G - 2 of the W a r Department G e n e r a l Staff and the Office of N a v a l Intelligence of the N a v y Department, both of w h i c h agencies checked w i t h their o w n technical services. If there w a s no objection f r o m a military point of v i e w , the proposed release m i g h t be approved. W h e n inventions were submitted to the Secretary of State, i n f o r m a t i o n concerning them was passed on to the munitions control unit, w h i c h again acted as the clearing house f o r such types of i n f o r m a t i o n . T h e munitions control unit sent the i n f o r m a t i o n supplied it by the inventor to the N a t i o n a l Inventors' C o u n c i l

( d u r i n g the w a r , fre-

quently to the Office of Scientific Research and D e v e l o p m e n t ) f o r an appraisal. If transmittal abroad w a s desired by the inventor or owner of the patent, clearance w a s secured f r o m the W a r and N a v y Departments f r o m the point of v i e w of military interest. If an article was not classified by the military or n a v a l authorities, and if a patent concerning a particular process or article w a s not listed on the Secrecy L i s t of the Patents Office, and if the material w a s of no interest f r o m a secrecy point of v i e w to the A r m y or N a v y , 15. Par, 204.1,

16. Par. 204.3.

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clearance was usually obtained f o r issuance of a n export license. A c o m p l e t e file of cases s u b m i t t e d to the Secretary of State f o r d e t e r m i n a t i o n as to w h e t h e r a proposed exportation w o u l d

have

violated the military secrets provision of the E s p i o n a g e A c t

was

m a i n t a i n e d by the m u n i t i o n s control o r g a n i z a t i o n of the D e p a r t m e n t of State.

CLEARANCE UNDER THE PROVISIONS OF THE EXPORT CONTROL ACT

It has previously been pointed out that n o discretionary authority to reject applications f o r export licenses w a s entrusted to the Secretary of State by the acts of A u g u s t 3 1 , 1 9 3 5 , M a y 1 , 1 9 3 7 , or N o v e m b e r 4 , 1 9 3 9 . W i t h the e n a c t m e n t of the act of July 2,1940 ( p o p u l a r l y a n d g e n e r a l l y called the E x p o r t C o n t r o l A c t ) , authority w a s g i v e n the President f o r the first t i m e to curtail the exportation of arms, amm u n i t i o n , a n d i m p l e m e n t s of w a r , as w e l l as m a c h i n e r y , tools, and other supplies, w h e n such c u r t a i l m e n t w a s "necessary in the interest of the national defense."

17

T h e President w a s authorized to issue a

p r o c l a m a t i o n p r o h i b i t i n g or curtailing s u c h exportation, "except under such rules a n d r e g u l a t i o n s as he shall prescribe." O n the same day that the act w a s a p p r o v e d , the President issued a p r o c l a m a t i o n a n d regulations, vesting the administration of the provisions of Section 6 of the act in the A d m i n i s t r a t o r of E x p o r t C o n t r o l , and listing certain articles a n d materials, i n c l u d i n g arms, a m m u n i t i o n , a n d i m p l e m e n t s of w a r , as defined in the Proclamation of M a y 1 , 1 9 3 7 , the exportation of w h i c h w o u l d be subject to the l i c e n s i n g r e q u i r e m e n t of the act. T h e President also a u t h o r i z e d the Secretary of State to issue or refuse to issue licenses in accordance w i t h rules a n d regulations or specific directives c o m m u n i c a t e d to h i m b y the A d m i n i s t r a t o r of E x p o r t C o n t r o l . I n k e e p i n g w i t h the provisions of the act, as a m e n d e d , the A d ministrator of E x p o r t C o n t r o l , and his successors, f r o m time to time issued directives to the D e p a r t m e n t of State, w h i c h directives inf o r m e d the D e p a r t m e n t of various c h a n g e s w h i c h w o u l d take place in the licensing p r o c e d u r e , and placed e m b a r g o e s o n and r e m o v e d 17. Section 6 of the Act of July 2,1940; 54 Stat 714.

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embargoes from the exportation of war materiel to various countries. By amendment approved June 30, 1942, Section 6 of the Export Control Act was amended to read as follows : (a) The President is hereby authorized to prohibit or curtail the exportation of any articles, technical data, materials, or supplies, except under such rules and regulations as he shall prescribe. (b) Unless the President shall otherwise direct, the functions and duties of the President under this section shall be performed by the Board of Economic Warfare. 18 A s broadened in scope by the 1942 amendment, the Export Control Act was extended to June 30, 1944, to June 30, 1946, and to June 30, 1947. 1 9 Discretion in the rejection of license applications stemmed f r o m the Export Control Act, as amended. In cases where the Department of State, through its munitions control unit, wished to reject a license application, concurrence in the rejection and actual power to reject was obtained from the agency administering the E x port Control Act. Agencies administering the act up to the fall of 1945 had included the Economic Defense Board, the Board of Economic Warfare, and the Foreign Economic Administration. With the dissolution of the Foreign Economic Administration in the fall of 1945, the export control functions derived from Section 6 of the Act of July 2, 1940, as amended, were transferred to the Department of Commerce. 2 0 Export control functions, including the discretionary authority to reject license applications for the exportation of arms, ammunition, and implements of war, were thenceforth exercised by the Office of International Trade (Operations Division) of the Department of Commerce. In view of the fact that the functions of F E A were themselves distributed partly between the Department of State and the Department of Commerce, it is difficult to understand why the Department of State, at the time of the dissolution of F E A , did not insist that the discretionary authority in regard to rejection of arms licenses be transferred to its own munitions control unit. 18. 19. 20. 1943.

56 Stat. 463. 58 Stat. 6 7 1 ; and P.L. No. 389, 2nd sess., 79th Cong. The F E A was established by Executive Order No. 9380, September 25, It was dissolved by Executive Order No. 9630, September 29, 1945.

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Interviews with munitions control personnel inside the Department of State failed to reveal any reason for the failure of the Department to take advantage of the dissolution of F E A in order to supplement its own powers in the arms control field. One is forced to the conclusion that the dissolution order took the arms control personnel by surprise and that consequently no effort was made at the time to obtain the discretionary authority to reject license applications. W h e n it was known inside the Department of State, particularly in the munitions control unit, that the transfer of F E A functions had been completed and that the licensing rejection authority had been assigned to the Department of Commerce, there were mixed expressions of surprise and bitterness. It appeared altogether probable at the time of writing, however, that such discretionary authority would, sooner or later, be given the Secretary of State by Congress. T h e procedure for requesting rejection of a license application was simple. T h e licensing officer, in the Department of State, having determined to his own satisfaction that a proposed exportation was inadvisable, telephoned the agency exercising authority to reject applications, asking concurrence in and approval of the proposed rejection. In requesting rejection the licensing officer merely stated that the proposed exportation had been found by the Department of State to be contrary to the war effort or the national interest. T h e grounds for such a decision could be one or any combination of the following: falsification of information supplied on the application for registration; falsification of information supplied on the application for an export license; suspicion that because of a previous shady transaction the applicant was not to be trusted; presence of the name of the intended consignee on the Proclaimed List of Certain Blocked Nationals; information from any one of the priorities agencies to the effect that certain articles were in short supply and could therefore be sent only upon approval of one of the military agencies; refusal of the military agencies to authorize commercial shipment of certain articles. In virtually all cases where the Department of State requested that an application for an export license be rejected, the agency exercising

LICENSING the authority to reject applications promptly complied with the request of the Department. T h e Department of State's letter to rejected applicants read, during the war, that the application had been rejected because it was "contrary to the war effort." A f t e r the cessation of hostilities, the language was changed to read, "contrary to the national interest." It should not be assumed f r o m what has been said that the number of license applications rejected was large. O n the contrary, both in terms of numbers and of dollar values of the proposed exportations, the total was surprisingly small. In the year 1941, there were 35 rejections; in 1942,48; in 1943, 17; in 1944,10. N o figures were kept for the year 1945, but it was k n o w n that very f e w cases of rejection arose.

MODIFICATIONS IN CLEARANCE PROCEDURE AS THE RESULT OF W A R

Even before Pearl Harbor, the impact of war in Europe made advisable certain new clearance activities calculated to preserve scarce supplies which might eventually be required by the United States in the contingency of our entry into the war. Because of the authority conferred on the President by the Export Control Act, such additional clearance procedures could legally be established to operate within the framework of the general arms control system inaugurated by the act of August 31, 1935, and continued by the acts of M a y 1, 1937, and November 4, 1939. A c t i n g on its o w n initiative, but in accordance with prevailing Government policy, the Department of State began to obtain military and naval clearance from the proper authorities before issuing arms export licenses for certain war materiel believed to be in short supply. Action to reject applications was based, when necessary, upon the provisions of Section 6 of the Export Control Act. Articles pertaining to A r m y Ordnance were consequently cleared with the W a r Department before issuance of an export license by the Department of State. Similarly, articles of interest to the N a v y Department were cleared through that organization. W h e r e it appeared that an applicant was prepared to manufacture in order to export, the procedure finally worked out required clearance through the W a r Produc-

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tion Board. Applications to obtain export licenses relating to the exportation of airplanes were referred to the Munitions Assignment Committee ( A i r ) , and for airplane parts, to the Joint Aircraft Committee. F r o m the foregoing discussion it can be seen that the assumption by the Government of authority to reject export license applications, even though the rejection authority was vested in agencies outside the Department of State, greatly increased the duties of the munitions control unit. T h e most important consideration, immediately prior to, during, and after the war, was political clearance within the Department itself. In cases where it was dubious whether an applicant for an export license should or should not be rejected, the practice was for the licensing officer to send the application, together when possible with a background memorandum describing the previous activities of the applicant, to the appropriate geographical desk of the Department. T h e decision made by the geographical desk in specific cases was binding, of course, upon the licensing officer of the munitions control unit, and dictated whether the license was or was not granted. Another technique put into effect as the entry of the United States into the war approached was the prohibition of commercial shipments of arms, ammunition, and implements of w a r to unsatisfactory consignees or consignees on the Proclaimed List of Certain Blocked Nationals. It became obligatory for the Department of State to examine applications for the exportation of arms and munitions from the point of view of determining whether the proposed consignees were upon the official black list. Actual rejection of applications for this reason began on July 17, 1941, under authority of the Export Control Act and of various directives derived f r o m that act. T h e Department of State had recommended on March 22, 1941, to the Administrator of Export Control, that it be authorized to reject applications for licenses authorizing exports to Latin America where the consignees were not regarded as satisfactory. 2 1 As a result the Administrator, in Directive N o . 261, April 7, 1941, provided that the Department would be furnished names of unsatisfactory consignees. On July 1 7 , 1 9 4 1 , the President, under the authority conferred on him 2 1 . File No. 881.20(d) Regulations/35Q2z. Copy in Munitions Division files.

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by the acts of October 6, 1917, and of July 2, 1940, 2 2 and by virtue of the existence of an unlimited national emergency, 2 3 issued Proclamation N o . 2497, 24 authorizing a Proclaimed List of Certain Blocked Nationals and controlling certain exports. Section 3 of this proclamation provided that the exportation to any person whose name appeared on the list, of any military equipment or munitions or component parts thereof, is hereby prohibited under Section 6 of the Act of July 2, 1940, as amended, except ( 1 ) when authorized in each case by a license as provided for in Proclamation No. 2413 of July 2, 1940, or in Proclamation N o . 2465 of March 4, 1941, as the case may be, and ( 2 ) when the Administrator of Export Control under my direction has determined that such prohibition of exportation would work an unusual hardship on American Interests. T h e outbreak of war in Europe added new limitations on the commercial exportation of arms, ammunition, and implements of w a r w i t h the immediate establishment of the British Blockade and the system of navicerts, or authorizations issued by the British permitting shipments through the Blockade. It is neither within the scope of the subject of arms control nor permissible to discuss in detail the measures taken by the Department of State, and other Government agencies, to co-operate with the Blockade. B u t it is a matter of record that the Administrator of Export Control, in Master Directive N o . 491, of N o v e m b e r 28, 1941, required that applications f o r licenses to export certain materials, including arms, ammunition, and implements of war, to Unoccupied France, Portugal, Sweden, Switzerland, and T u r k e y be accompanied by a copy of the British navicert. T h e arrangement was of course the result of a mutual understanding between the Governments of the United States and the U n i t e d Kingdom. A f t e r Pearl Harbor, the Blockade became a joint A n g l o - A m e r i c a n activity. In the commercial exportation of arms, a procedure w a s set up where the munitions control unit of the Department of State cooperated with the Board of Economic Warfare, and its successors, 22. 40 Stat. 415; 54 Stat. 714. 23. Declared by Proclamation No. 2487, May 27, 1941. 6 F.R. 2617. 24. 6 F.R. 3555. The List was withdrawn June 8, 1946. 11 F.R. 7567.

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in assigning Blockade control numbers to shipments destined for neutral countries. Only shipments bearing the approved control numbers could be cleared through the United States collectors of customs. Much of the internal legislation relating to the establishment of a priorities system regarding war and other materials affected the licensing function performed by the Department of State. Usually the effects were felt indirectly but in certain cases, notably with reference to the Priorities Acts, additional clearance became necessary before commercial exportation of arms, ammunition, and implements of war could be authorized by export licenses. Section 2 (a) of the act approved June 28, 1940, provided that "all naval contracts or orders and all army contracts shall, in the discretion of the President, take priority over all deliveries for private account or for export." 2 5 T h e same section of the act was amended by the act approved May 3 1 , 1941, 2 6 which extended the priorities provisions and broadened the authority of the President to retain articles in this country. T h e provisions of the two priorities acts were later restated and strengthened by Title III of the Second W a r Powers Act, approved March 27, 1942. 27 T h e cumulative effect of these acts with regard to the licensing for exportation of commercial shipments of arms, ammunition, and implements of war was to require clearance from the various priorities agencies before authorization for shipment could be made through an export license. During the war it was therefore the practice of the Department of State to issue no export licenses in cases where a preference rating or priority clearance was required without first ascertaining that the preference rating had been assigned or the priority clearance obtained. T h e initiative in regard to informing the personnel of the munitions control unit of changes in priority clearance procedure lay outside the Department of State. T h e Department merely passed down to its operating echelons instructions and directions received from the various relevant war agencies. Many examples could be cited to illustrate the manner in which the war agencies directed the over-all co-ordination of the private 25. 54 Stat. 676. 27. 56 Stat. 177.

26. 55 Stat. 236.

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traffic in arms and munitions with that of our trade and general economic aims, but a f e w cases will suffice to illuminate the technique employed. T h e Economic Defense Board, in emergency meeting the evening of December 7 , 1 9 4 1 , decided to publish immediately a Japanese Supplement to the Proclaimed List of Certain Blocked Nationals and directed that all outstanding export licenses for delivery to Japan and its possessions be revoked at once. As Acting Chief of the Division of Exports and Defense Aid, in the Department of State, Charles Bunn issued instructions the next day, directing that the Board's decision be applied immediately to arms export licenses. A similar memorandum from the same Division, based on a parallel decision of the Economic Defense Board, ordered on December n , 1941, immediate cancellation of all export licenses, including arms export licenses, to persons of German or Italian nationality anywhere throughout the world. On December 12, 1941, the Economic Defense Board, in Directive N o . 706, declared, among other things, that " T h e Department of State will reject applications and will revoke outstanding licenses which are disapproved by the A r m y and N a v y Munitions Board or the Joint Aircraft Committee." This directive was addressed specifically to the Division of Exports and Defense Aid, Department of State. In this fashion general policy instructions were issued to the munitions control unit of the Department of State from time to time throughout the war by the Economic Defense Board and its successors. T h e instructions so issued were rarely detailed and consisted for the most part of high-echelon decisions, binding upon all export licensing agencies of the Government. With the cessation of hostilities in August of 1945, followed by the dissolution of the Foreign Economic Administration, the Department of State was left a relatively free hand in regard to commercial arms exports. T h e Secretary of State, through his own agencies and committees, and in collaboration with his colleagues of the State-War-Navy Co-ordinating Committee, again became the dominant personality in determining which countries should be blacklisted for purposes of arms shipments. Although at the end of 1945 the authority to reject arms export license applications legally rested in the Department of Commerce, in prac-

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tice that D e p a r t m e n t merely c o n c u r r e d w i t h w h a t e v e r course of action the D e p a r t m e n t of State, t h r o u g h its m u n i t i o n s control unit, h a d elected to f o l l o w .

THE EFFECT OF LEND-LEASE UPON THE LICENSING ACTIVITIES OF THE SECRETARY OF STATE

T h e primary purpose of establishing a m u n i t i o n s control unit inside the D e p a r t m e n t of State w a s to regulate the exportation of arms, a m m u n i t i o n , a n d i m p l e m e n t s of w a r in the interests of k e e p i n g the U n i t e d States f r o m i n v o l v e m e n t in f o r e i g n wars. T h e regulation the legislators intended w a s regulation of the private traffic in arms, the selling f o r profit of w e a p o n s of w a r f a r e by private persons and

firms

to f o r e i g n g o v e r n m e n t s , their corporations, a n d their nationals. It is consequently s o m e w h a t a m u s i n g to note that f r o m

March

1 1 , 1 9 4 1 , to O c t o b e r 1, 1941, the Secretary of State, t h r o u g h the m u n i tions control u n i t of his D e p a r t m e n t , continued to issue export licenses a u t h o r i z i n g the exportation of arms, a m m u n i t i o n , and implem e n t s of w a r transferred under the L e n d - L e a s e A c t . 2 8 D u p l i c a t i o n of licenses existed for a period of six and a half m o n t h s because both the D e p a r t m e n t of State and the L e n d - L e a s e authorities required export licenses, the f o r m e r pursuant to Section 12 ( d ) of the N e u t r a l i t y A c t of 1939, and the latter pursuant to the L e n d - L e a s e A c t of 1941. In order to end this duplication of licenses, the Secretary of State e x e m p t e d , effective O c t o b e r 1, 1941, arms, a m m u n i t i o n , a n d i m p l e m e n t s of w a r transferred to f o r e i g n g o v e r n m e n t s under the terms of the L e n d - L e a s e A c t f r o m the r e q u i r e m e n t of licensing by the D e p a r t m e n t of State. 2 9 T h e question naturally arises as to w h y it took six and one half m o n t h s to end the duplication in export licenses. W h i l e no official explanation has ever been offered, it is not difficult to understand why

under the circumstances the c o n f u s i o n w a s not

eliminated

sooner. Prior to L e n d - L e a s e the D e p a r t m e n t of State had been the only G o v e r n m e n t a g e n c y w h i c h licensed the exportation of arms a n d m u n i t i o n s sold c o m m e r c i a l l y . W h e n the L e n d - L e a s e machinery 28. 55 Stat. 31. 29. Par. 201.30 of the Regulations of June 2, 1942, reiterated this exemption.

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was established, there was some doubt in the minds of the Department of State officials as to whether Lend-Lease licensing was to include the licensing of commercial arms exports. In addition to this consideration is the fact that commodities licensing under the Export Control Act was inaugurated by the Division of Controls of the Department of State. It will be recalled (see Chapter I) that a difference of opinion existed inside the Department as to whether it should or should not remain in the field of commodity licensing. T h e ultimate decision was, of course, to transfer all licensing functions, except those pertaining to commercially exported arms, ammunition, and implements of war, to the Economic Defense Board. A f t e r this fundamental decision was made in September, 1941, the rest of the problems were easy to solve. T h e Division of Controls was abolished; the functions of that Division relating to arms control were transferred to the new Division of Exports and Defense A i d ; and the Secretary of State exempted arms and munitions transferred under the terms of the Lend-Lease Act f r o m the requirement of licensing by the Department of State. T h e rapid increase in Lend-Lease operations throughout the war resulted in a decrease in the private and commercial exports of arms, ammunition, and implements of war licensed by the Secretary of State and exported pursuant to arms export licenses. Since the great mass of arms exports were governmental and fell within the category of Lend-Lease aid, it was natural that the commercial exports would fall off in volume. D u r i n g the war years the private trade in arms and munitions was, relative to the ever-increasing volume of Government exports, proportionately small. T h e necessity of having to issue licenses for Lend-Lease arms exports for six and one half months in 1941 placed a great strain upon the munitions control unit of the Department of State. T h e greatly increased volume of work resulted in the giving of less attention to each individual transaction. W i t h the termination of dual Government licensing of Lend-Lease arms exports, the munitions control staff was able to give more careful scrutiny to each individual application for an arms export license. Consequently, greater control

LICENSING

7i

was exercised over commercial arms exports after October 1, 1941, than f r o m M a r c h 11 to October 1 of that year. F o r reasons of continuity a statistical comparison of the dollar value of arms exported under Lend-Lease and under export licenses issued by the Department of State is not g i v e n in this section. T h e comparison will be f o u n d in the latter part of the present chapter. See Tables III, I V , and V .

MODIFICATIONS IN LICENSING PROCEDURE IN ORDER TO FACILITATE EXPORTATION AND INTRANSIT SHIPMENTS IN THE INTEREST OF THE NATIONAL DEFENSE

Shortly after the entry of the U n i t e d States into the war, it became clear that certain modifications in procedure were necessary in order to expedite intransit shipments w h i c h had originated in C a n a d a for shipment through the United States to various parts of the British Empire. Since October 2, 1941, the regulations of the Secretary of State relating to the international traffic in arms had required that an import and an export license be used for such intransit shipments. Because of the large volume of intransit shipments of this character originating in C a n a d a , the system had become unworkable and had caused intolerable delays in the shipping of needed arms and munitions to our British Allies. Since the shipments were commercial in nature (that is, they did not consist of materiel o w n e d by the United States G o v e r n m e n t ) , it was necessary to comply with the provisions of the Neutrality A c t of 1939 in regard to records and licenses. Furthermore, it was desirable to have accurate information as to the quantities and types of articles being shipped intransit. W i t h the dual aim of expediting such shipments and of continuing the Department's control over them U n l i m i t e d License U A B

(Un-

limited A r m s British) was issued A p r i l 6, 1942, to the British Purchasing Commission, authorizing the importation and exportation as intransit shipments of arms, a m m u n i t i o n , and implements of war originating in C a n a d a and consigned by the Canadian Government or an agency thereof to the British Ministry of W a r Transport in the U n i t e d States for exportation to any country of the British Empire,

72

LICENSING

the Soviet Union, or to British armed forces in whatever country they might be stationed. Unlimited License U A B also covered intransit shipments originating in any country of the British Empire and consigned to the Canadian Government or any agency thereof, or to the British Ministry of War Transport in the United States, for exportation to Canada. In order to comply with the provisions of law that the name of the purchaser and the terms of sale must be known to the Secretary of State before exportation could be authorized, an ingenious device known as a "release certificate" was put into effect. T h e British Purchasing Commission sent the original of the release certificate, a form obtained from the Department of State, to the collector of customs at the port of exit, with all pertinent details relating to the shipment filled in. A duplicate was sent to the Department of State. Eventually, the collector of customs concerned sent the original of the release certificate to the Department, where the two copies were compared in the preparation of the necessary statistical records. By eliminating the formality of applying for licenses, the munitions control section was saved the time and expense of issuing from 200 to 300 licenses per month and of preparing from 400 to 600 letters per month. A similar method was used with Unlimited License U M B (Unlimited Marine British). This license was granted the British Purchasing Commission April 27, 1942, to facilitate in the arming in ports under the jurisdiction of the United States of merchant vessels of the United Nations for their defense against submarines. T h e license authorized the importation and exportation, as intransit shipments, of arms, ammunition, and implements of war enumerated in the relevant President's Proclamation, for the purpose of mounting or installing such equipment carried by a merchant ship operated by the United Nations to another merchant ship operated by or on behalf of the United Nations. Release certificates were issued and processed in exactly the same way as those used under Unlimited License U A B . But while the number of U A B release certificates was high (662 in 1942), the number of U M B release certificates was extremely low (three in 1942). Both unlimited intransit licenses served their purpose by eliminating delays which had previously occurred in the carrying out of im-

LICENSING

73

portant arms and munitions transactions necessary to the common war effort of the Allies. T h e technique employed, in addition, scrupulously followed the provisions of the Neutrality Act of 1939 in regard to records of terms of sale, the name of the purchaser, and the destination of the shipment. Another series of efforts was made by the Department of State to expedite the exportation to Canada and the importation from Canada by appropriately registered persons of arms, ammunition, and implements of war. On December 5, 1941, the President approved a declaration of policy adopted by the Joint W a r Production Committee of the United States and Canada, Point 6 of which read as follows : Legislative and administrative barriers, including tariffs, import duties, customs, and other regulations or restrictions of any character which prohibit, prevent, delay or otherwise impede the free flow of necessary munitions and war supplies between the two countries should be suspended or otherwise eliminated for the duration of the war. In line with the declaration of policy of the Joint W a r Production Committee, the Secretary of State, on June 2, 1942, amended the regulations which had required an import and an export license for shipments from one point in Canada through United States territory to another point in Canada by providing in paragraph 201.22 that such shipments "will not be considered as imported or exported within the meaning of Section 12 of the joint resolution if such articles are consigned from any place in a state whose territory is contiguous to that of the United States to any other place in the same state." As a result, after June 2,1942, such intransit shipments through United States territory did not require licenses, either import or export. O n the other hand, licenses were still required for the exportation of arms, ammunition, and implements of war to Canada or for the importation of such materiel from Canada. T o improve the situation further, the Secretary of State adopted on December 10, 1942, an addition to the regulations of June 2,1942, which provided that when the Secretary had determined that the issuance of unlimited export and import licenses would materially aid the war effort, he would issue such licenses to appropriately registered persons authorizing

74

LICENSING

the exportation or importation, or both, of arms, ammunition, and implements of war, subject to specific terms imposed by him. T h i s addition became Paragraph 201.41 of the regulations and was published in the Federal Register December 15, 1942. 3 0 Under this regulation the Department of State issued Unlimited License U A C (Unlimited A r m s Canadian) January 15, 1943, to all registered importers and exporters of arms, ammunition, and implements of war. T h i s action was taken to expedite the flow of war materials across the Canadian border, in line with the policy of cutting through all normal customs barriers in the interest of the joint war effort. Release certificates were required in connection with this license, but they were submitted directly to the Department instead of to the collector of customs. A s a result, there were no licensing formalities to be complied with at the Canadian border. T h e original of the release certificate notified the Department of the purchaser and the terms of sale, while the duplicate informed it of the date of exportation or importation and the quantity and value of the materials. Since about 45 per cent of the licenses issued by the munitions control unit of the Department of State during the year 1942 were for Canadian shipments, it is easy to understand why the use of Unlimited License U A C relieved the munitions control unit personnel of much routine work.

SPECIAL CONSIDERATIONS REGARDING T H E EXPORTATION OF AIRCRAFT AND AIRCRAFT PARTS

It has previously been pointed out that commercial as well as military aircraft, when offered for exportation as commercial sales, were subject to the licensing provisions of the Neutrality Act of 1939, in the same way that they were subject to licensing under the earlier acts of 1935 and 1937. T h e wisdom of the licensing of commercial aircraft was open to debate. There was little or no difference of opinion regarding the advisability of licensing military airplanes. In fact, the only question which arose was why the United States, of the great manufacturing states, was the last to require licenses for the exportation of military aircraft. 30. 7 F.R. 10424.

LICENSING

75

In order to justify the action of Congress in requiring licensing of commercial aircraft, the National Munitions Control Board, in its First Annual Report, went into considerable detail to point out that other countries required licensing and that other countries had found it difficult, if not impossible, to distinguish effectively between the commercial and the military categories of airplanes. 31 The Board cited the Convention for the Supervision of the International Trade in Arms and Ammunition, signed at Geneva on June 17, 1925. This Convention was ratified on June 21, 1935, by the President of the United States with the advice and consent of the Senate. It established a widely accepted international list of articles to be considered arms, ammunition, and implements of war, including under category I V : 1. Aircraft, assembled or dismantled; 2. Aircraft engines. The Board referred to similar understandings and various laws of other governments which, taken in conjunction with other Geneva reports and documents, indicated conclusively that most governments considered commercial aircraft of potential military value and consequently were by logic impelled to require export licenses for their exportation. It could therefore be argued, with considerable conviction, that commercial aircraft exports should be licensed on the ground that the airplanes might be misused and the peace of the world imperilled. After the act of August 31, 1935, the United States required export licenses before permitting the exportation of commercial aircraft. On the other hand, it also required the licensing of certain aircraft parts. It was not generally felt, even within the Department of State, that there was much merit in licensing the exportation of aircraft parts, unless in particular cases such parts were intended for certain countries considered undesirable recipients by the diplomatic, military, and naval agencies of this country. In practice several interesting situations arose. If an American plane was flown to Mexico and then returned to this country, requiring a "major overhaul" at an American factory upon its return, the Department of State required an export license before the plane might again fly to Mexico. But with a company such as Pan Ameri3 1 . First Annual Report of the National Munitions Control Board, pp. 34-39.

76

LICENSING

can, which did its o w n repairing at its own shops in the United States, no export license was required, even if a "major overhaul" were involved. If a foreign plane was flown to this country and returned without major repairs having been done in the United States, no export license was required by the Department of State. On the other hand, should a major repair, the installation of a new engine, or the overhauling of the original engine, have been required, the reverse situation was true: an export license had to be obtained befor the plane could be flown out of the United States. Pressed by the writer for an explanation of the seemingly favorable status of Pan American, the Department of State officials gave the somewhat unscientific reply: " W e have great confidence in Pan American." While the regulations of the Secretary of State did not use the terms "major overhaul" or "major repairs," the terminology arose by virtue of the President's Proclamations. Category III of the Proclamation issued April 9, 1942, covered "aircraft unassembled, assembled, or dismantled, both heavier and lighter than air, which are designed, adapted, and intended for aerial combat. . . ." Category V read in its entirety as follows: ( 1 ) Aircraft, unassembled, assembled, or dismanded, both heavier and lighter than air, other than those included in Category III; (2) Propellers or air-screws, fuselages, hulls, wings, tail units, and under-carriage units; (3) Aircraft engines, unassembled, assembled, or dismantled. T a k i n g an extremely strict interpretation of the proclamation, the Department of State frequently insisted on export licenses for the exportation of such items, either attached to a plane or unattached, as pontoons, landing tires, and similar articles. T h e determination as to whether an export license was or was not required when a foreign airplane needed repairs in the United States or an American plane returning from abroad needed repairs was actually made by the appropriate collector of customs. In cases of doubt, the collector telephoned the licensing officer of the Department of State for instructions. It should not be inferred that the strict interpretation of the rules and regulations regarding the exportation of aircraft parts and the

LICENSING

77

provisions calling for arms export licenses in order to export commercial aircraft were universally accepted inside the Department of State. On the contrary, a direct clash of interests occurred between the munitions control organization and the Aviation Division. T h e clash was more than a difference of professional opinion. It was the result of the realization by the munitions control personnel that the abandonment of the licensing system for exports of commercial aircraft and aircraft parts would have meant a reduction in the volume of work performed by that organization and in all probability a consequent cut in the number of personnel assigned to munitions control. There was on the other hand a tendency within the Aviation Division to feel that the licensing requirement, which treated the exportation of commercial aircraft as arms exports, discouraged the exportation of airplanes, to the detriment of the Division and of the industry. F o r these reasons the Aviation Division took a dim view of the procedure whereby the exportation of commercial aircraft was subject to the arms licensing requirement. If licensing had to be retained, it was argued, it would have been preferable to issue general licenses to well known firms and individuals, with the legal power to revoke the licenses and invoke criminal penalties in the event of wilful abuse. Remedial action was not taken until issuance of the proclamation of February 14, 1947. Under this proclamation categories III and V of the former proclamation were combined to form a new category III. The new category included both military and civilian aircraft, but excluded from the licensing requirement unclassified civilian airplanes having a weight empty less than 35,000 pounds. It consequently appeared as though the proclamation of February 14, 1947, met the principal objections raised against the 1942 proclamation by the Aviation Division of the Department of State and by the aircraft industry itself. The effect may be expected to be the freeing of the Department and of the industry from considerable paper work. The scope of the problem and the importance of it to the munitions personnel up to 1947 were evident from official estimates giving the relationship of aircraft export licenses to all arms export licenses. It was estimated by the licensing officials of the Munitions Division

LICENSING

78

that during the first half of 1946 about 60 per cent of all licenses issued were for the exportation of aircraft, both military and civil, and of aircraft parts. Of the licenses relating to aircraft, about half were for aircraft parts alone. STATISTICS

It is useful in an examination of the private traffic in arms to illustrate the extent of that traffic by appropriate tables. Both Tables II and III below were compiled from Department of State sources. Because it was necessary to modify the licensing system during the war by the issuance of intransit and unlimited licenses, it is convenient to summarize the available statistics in two separate tables, one covering the period up to 1941, the other covering the period from 1941 to 1946. Several observations can be made on the basis of these tables. TABLE II

Arms Export Licenses,

Value of commercial arms export licenses in millions of dollars Value of actual commercial arms exports in millions of dollars Number of licenses issued f

1935-1940

1935*

1936

1937

1938

1939

1940

1-5

24

46

84

143

488

Unknown

Unknown

Unknown

Unknown

102

329

350

4051

5297

4959

3977

4800

• Although the provisions of Section 2 of the joint resolution of August 31, 1935, did not become effective until November 29, 1935, export licenses authorizing proposed shipments of arms, ammunition, and implements of war were issued before the latter date as a matter of convenience to exporters. T h e first export license was issued on November 6, 1935. t T h e number of licenses issued has been revised by deducting licenses which were revoked, expired, or cancelled.

LICENSING

79

Greater value was always shown for authorized exportations

than

f o r a c t u a l e x p o r t s . T h i s w a s c a u s e d by several f a c t o r s . D u r i n g t h e c o u r s e of a n y y e a r s o m e licenses e x p i r e d w i t h o u t h a v i n g been used. O t h e r s w e r e c a n c e l l e d at the r e q u e s t o f the p e r s o n to w h o m issued.

TABLE I I I Arms

Value of arms export licenses issued in millions of dollars Value of actual exports in millions of dollars Value of exports to Canada, notified by release certificates U A C , in millions of dollars Value of export licenses and release certificates authorizing intransit shipments and transshipments in millions of dollars Number of export licenses issued Number of release certificates U A C Number of export licenses and release certificates authorizing intransit shipments and transshipments

Export

Licenses,

1Ç41-1945

1941

1942

1943

1944

1945

1,641 •

834

83

16

46

808

600

74

13

16

None

None

75

489

213

86

5.796

3.073

964

1,098

None

None

1.533

891

745

915

1,101

638

213

81

10.5

8.4

5-5

57 I

.7I9

* Includes Lend-Lease shipments with a total license value of $82,000,000 from March 11, 1941, to October 1, 1941, which were licensed for exportation by the Department of State. Lend-Lease shipments were not commercial shipments but were subject to the licensing requirement applicable to commercial arms exports during that period.

8o

LICENSING

I n still other eases licenses were revoked by the Department of State without notice when the exportation of the shipments described therein had become illegal after the issuance of the licenses and before the exportation had been completed. Such illegality could occur in a number of ways. W h e n major changes took place in the character or destination of a proposed shipment after the issuance of a license, the license was returned to the Department of State for revocation. If a new license was applied for, it was issued. In other cases illegality might arise by virtue of the putting into effect of an embargo, the discovery that the licensee had previously falsified information contained in his application for a license, or the obtaining of information which indicated that the proposed exportation was not in the national interest of the United States. In the event of any of these circumstances, outstanding licenses might be revoked. It should be stressed that the number of revocations of licenses on the grounds of illegality was very small. F r o m the point of view of publicity greatest attention was focussed upon those few cases where exporters attempted to complete a shipment immediately following imposition of an embargo upon arms shipments to certain countries. But the most important factor in revocations due to illegality arose from the problem of ultimate destination of a shipment. It occasionally happened that an exporter had given as the ultimate destination of a shipment a location which was in fact merely intended as a convenient place from which to arrange transshipment. Such a situation would have occurred, for example, if an exporter had tried to arrange for shipment to Honduras, without the approval of that government, of machine guns and ammunition by means of shipping those articles to Mexico with the intention of later slipping them surreptitiously into Honduras. T o guard against such incidents the Department of State would frequently cable the United States embassy in the country named as the ultimate destination on the export license, asking the embassy to investigate the local reputation of the consignee. If the consignee turned out to be a notorious arms smuggler or an individual of questionable ethics, the Department in Washington was so informed and the export license was immediately revoked. T h e problem of determining whether the ultimate destination named was intended in fact to be

LICENSING

81

the ultimate destination of a shipment was one of the most vexing problems to face the munitions control staff. Examination of the tables printed above also reveals that with the exception of the year 1945, the dollar value of arms, ammunition, and implements of w a r exported f r o m this country as commercial shipments declined f r o m shortly after the time the United States actively entered the w a r . T h e decision by the Secretary of State to revoke the requirement that Lend-Lease materials be licensed by the Department of State meant that the bulk of war matériel exported during the w a r was not licensed by the munitions control unit. A s the war progressed, the commercial exportation of w a r materiel steadily became proportionately less important to the over-all total of w a r materiel exported. E a r l y in 1946 the Bureau of the Census declassified its export figures f o r the w a r years. 3 2 T h u s a comparison is possible between commercial exports and L e n d - L e a s e exports of arms, ammunition, and implements of w a r f o r that period. T h e pre-war yearly average of commercial arms exports amounted to approximately 54 million dollars. T h e yearly average of all arms exports, commercial and Lend-Lease combined, f o r the period 1942-1944 was approximately 4.7 billion dollars, with a peak value in 1943 and 1944 of about 5.6 billion dollars. A r m s exports, which had composed less than 2 per ccnt of the United States pre-war foreign trade, advanced to a position where they accounted f o r approximately two-fifths of the total exports during the w a r years. T h e relationship during the w a r between commercial and Lend-Lease arms exports is shown by the fact that f o r the peak year 1944 Lend-Lease shipments formed 97 per cent of all " m i l i t a r y " exports. W h i l e this figure is unquestionably somewhat high in v i e w of the fact that the Bureau of the Census 32. The Bureau of the Census figures were released in an article by Grace W. Witherow, "U.S. Trade in the Year of the Great Transition," Foreign Commerce Weekly, XXII, No. 13 (March 30, 1946). The figures were based on other sources than those of the Department of State, notably export declarations and Lend-Lease reports. Lend-Lease reports included by the term "military equipment" many items which were not subject to the licensing requirement of the Department of State under the Neutrality Act of 1939. Nevertheless, the figures and tables, adapted from the Census figures, are extremely illustrative.

82

LICENSING

figures, based on export declarations and Lend-Lease reports, cluded trucks and other articles and machinery not listed in President's Proclamation and therefore not subject to licensing by Secretary of State, the figure nonetheless illustrates the great portance of Lend-Lease shipments.

inthe the im-

W h a t has been said can be shown in another manner by tables giving the relationship between commercial arms exports and LendLease exports of w a r materiel. Tables I V and V , adapted f r o m the Census figures, dramatically describe the relationship. 3 3 T h e general conclusions f r o m the tables presented in this section may be summed up as follows: Commercial exports of arms, ammunition, and implements of w a r rose steadily in value through the year 1941. A s the Government began to export w a r materiel in unprecedented quantities through Lend-Lease and as Lend-Lease began to account for more and more of the war matériel sent abroad, commercial exports declined in value. W h i l e before the w a r cash

TABLE

IV

Lend-Lease and Cash (Non-Lend-Lease) States

Exports of the United

(In millions of dollars) 1941 Total Lend-Lease exports Military equipment Non-military equipment

242 60 182

1942-44 annual average

!945

8,855 4.3i8 4.537

5,542 1,826 3,7i 6

2,814

4,046

Annual average 1939-41 Total Cash (Non-LendLease) exports Military equipment Non-military equipment

3»784 455 3.329

403 2,411

33. Source of Bureau of the Census figures is Witherow, op. cit.

83 3,963

LICENSING

83

sales of war materiel had never played a particularly large part in our export trade, during the w a r years commercial exports of such materiel formed an increasingly smaller percentage of our commercial export trade. F r o m the end of the war to the time of writing the quantity and value of commercial arms exports rose steadily.

TABLE

V

Relationship of Commercial and Lend-Lease Arms Exports to Total Exports of the United States (Percentage of total U.S. exports) 1939-41 annual average Lend-Lease exports Military equipment Cash exports Military equipment

6.0

1.4 94.0

11.3

1942-44 annual average

1945

75-9 37-0

57.8

24.1

42.2

3-5

19.0

•9

EVALUATION

Licensing was the most important single function performed by the munitions control unit of the Department of State. A n evaluation of licensing involves three problems: D i d licensing fulfill its original and acquired purpose? W a s the mechanical operation performed with sufficient flexibility and imagination to make the system work adequately during emergency as well as during normal times? D i d the system operate sufficiently well in terms of purpose and in terms of operations to justify its continuance? T h e last problem naturally leads to inquiry as to what elements of the machinery as it existed at the end of 1946 could be improved in order that the purposes of licensing might be accomplished to a greater degree in the future than in the past. T o this writer it is indisputable that licensing admirably served the purposes for which it was intended. T h e Government was in a

84

LICENSING

strong position to control commercial arms exports so that laws, treaties, and embargoes of the United States were respected. In a succeeding chapter the problems of enforcement are discussed in detail. Y e t it is clear that the Government's principal objective in establishing licensing—to establish control in order that laws of the United States should be observed—was achieved. T h e secondary purpose of licensing, to obtain data from which to publicize the arms trade, was also achieved. Criticisms of the methods of publicizing the facts are made in a later chapter. O n the other hand, the collection of data by the Government, in regard to types, dollar value, and destinations of arms shipments, was made possible by the existence of the licensing system. D u r i n g the war years emphasis shifted to a more positive concept of control, that is, control not merely for the purpose of enforcing the laws of the United States, but control for the purpose of aiding our war effort and that of our Allies. F r o m the narrative of the preceding sections there can be only one conclusion, that the control achieved during the war by licensing of commercial arms exports was extremely effective. O n e phase of the licensing system is especially worthy of comment —its flexibility. After the entry of the United States into the war, the flexibility of the system was demonstrated by the utilization of the ingenious technique of issuing unlimited licenses in order to speed up arms shipments to the British and Canadians. T h i s technique assured accumulation of all the information required by legislation and at the same time expedited shipments by eliminating much routine procedure that had become standard in peacetime. It is greatly to the credit of the Department of State that it not only successfully adopted new procedures but adapted the old procedures to meet changed conditions. Despite the need for minor changes in the regulations, the great advantages of the licensing system undoubtedly mean that it will continue to be an integral part of this Government's control of commercial arms exports. T h a t control should be continued is now generally accepted. However, in one aspect of regulation through licensing the D e -

LICENSING

85

partment of State let opportunity slip through its fingers. Authority to reject arms export licenses should have resided in the Department of State, not in the Department of Commerce. While there were no court challenges either of the licensing system in general or of the right of the Government .to reject arms export license applications, it was the view of several members of the legal staff of the Department of State that the Government's position in a suit involving the right to reject a license application would have been stronger if the legal authority, as well as the actual decision to reject, had existed within the Department. Legality aside, there were practical objections against permitting the power to reject to rest in the Department of Commerce. T h e chief objection was that the Department of Commerce could have overridden the Department of State in specific cases. Inasmuch as the power to reject was used primarily as an instrument of foreign policy, the result of the situation imagined would have been in fact the m a k i n g of a foreign policy decision by the Department of Commerce. Another objection arose purely from personal grounds. In the event of personality differences between Department of State licensing officials and similar officials in the Department of Commerce, needless bickerings could have occurred which would needlessly have irritated both parties in addition to the exporter who happened to be caught in the middle. T h e Department of State therefore should be criticized, not only for its failure at the time of the dissolution of the F E A to request assignment of rejection authority to itself, but also for its subsequent failure to revive the issue in order to correct its previous mistake. If the control over commercial arms exports was indeed a proper function of the Department of State as the Government's principal agency for carrying out foreign policy, the Department of State was also the proper repository of the authority to reject applications for arms export licenses.

V Reports and Statistics PURPOSE

Reports and statistics of the international traffic in arms were prepared periodically for the National Munitions Control Board by the munitions control unit of the Department of State. Both legal and practical considerations made the preparation of such data imperative. T h e statistics and explanatory information were used as material for the various reports and as references in the answering of inquiries directed to the munitions control unit by other sections of the Department of State and by other interested G o v e r n m e n t agencies. T h e legal necessity for such w o r k arose from Section 12 ( h ) of the joint resolution approved N o v e m b e r 4, 1939, and f r o m equivalent sections of the acts of A u g u s t 31, 1935, and M a y 1, 1937. A l l three acts provided that the National Munitions C o n t r o l Board should m a k e reports to Congress containing "such information and data collected by the Board as may be considered of value in the determination of questions connected with the control of trade in arms, ammunition, and implements of war, including the n a m e of the purchaser and the terms of sale made under any such license." T h e Board was also required to "include in such reports a list of all persons required to register under the provisions of this joint resolution, and f u l l information concerning the licenses issued hereunder, inc l u d i n g the name of the purchaser and the terms of sale made under any such license." T h e acts of 1935 and 1937 provided for the submission of yearly reports to Congress. H o w e v e r , the Neutrality A c t of 1939 provided f o r reports January 3 and July 3 of each year. B y a m e n d m e n t 1 to Section 12 ( h ) of the Neutrality Act, approved January 26, 1942, the requirement on reports was changed as follows: " A n y reports re1. 56 Stat. 19.

REPORTS

AND

STATISTICS

87

quired by this section may be omitted or dispensed with in the discretion of the Secretary of State during the existence of a state of war." A N N U A L REPORTS

T h e first annual report of the Board was issued for the year ending November 30, 1936. Yearly reports continued until 1940. T h e Fifth Report was issued for the period January i , 1940, to June 30, 1940. T h e Sixth Report covered the year ending December 31, 1940. Thereafter the publication of reports was suspended for the duration of the war. D u r i n g the war some material was collected, including statistical data, for eventual publication in the form of yearly reports, or of one large consolidated report, depending upon the judgment of the members of the National Munitions Control Board. In the published reports of the Board were to be found extensive statistical tables for the years 1935-1940, giving an accurate accounting of the commercial arms transactions handled by the Department of State for the preceding twelve months. In addition to statistics, the names of all registrants and licensees, and the value of all exported war matériel, broken d o w n by country of destination and category, were reported. Besides arms matters, the information included certain material w h i c h related to helium and tin-plate scrap exports. H e l i u m exports were licensed by the munitions control unit of the Department of State under authority vested in the National Munitions Control Board and the Secretary of State by Public L a w N o . 411, 75th Congress, first session, September 1, 1937. Tin-plate scrap exports were licensed by the same organization under authority of Public L a w N o . 448, 74th Congress, approved February 15, 1936. N o export licenses authorizing the shipment of tin-plate scrap were issued after December 31, 1940. Relatively few shipments of helium gas were ever made. Such shipments as were made were reported, through 1940, in the published reports of the National Munitions Control Board. T h e reports and statistics section of the munitions control unit was responsible for the drafting of the text and for the preparation of the statistical tables of the reports of the National Munitions Control Board. Before 1941, after the chief of the unit had approved the draft

88

REPORTS

AND

STATISTICS

of a report, it was sent to Joseph C . Green, Executive Secretary of the Board, and chief consultant of the Secretary of State on arms problems. U p o n approval by M r . Green and the Secretary of State, the latter, as chairman of the National Munitions Control Board, submitted the report to the other members of the Board. In due course the approved report was forwarded with a letter of transmittal to the Speaker of the House of Representatives, and was printed and distributed in the manner of other reports transmitted to Congress.

PRESS RELEASES

In compliance with the intention of Congress as expressed in the neutrality laws to give fullest publicity to commercial dealings in arms, ammunition, and implements of war, the Department of State from January i, 1936, to September 30, 1941, regularly issued press releases concerning the arms transactions supervised by the munitions control unit. A f t e r September 30, 1941, the type of information covered in the previous releases was classified by the Department of State and was consequently not available for public consumption. A s this country approached active participation in the war, a gradual evolution was noticeable in the form and content of the press releases. O n the release dated March 31, 1941, and thereafter, arms exports to all British countries were listed as a combined total under the heading "British C o m m o n w e a l t h of Nations." Meanwhile, a "Confidential" monthly report, g i v i n g a breakdown of the British Commonwealth by country, value, and category of arms exports, was prepared by the munitions control unit and circulated by the Department of State to interested Government agencies. A further restriction in the amount of information given to the press began with the press release of A u g u s t 3, 1941, w h e n and after which the only commercial arms export totals released for publication were those summarizing exports by the various general categories of arms, ammunition, and implements of war as listed in the President's Proclamation. Countries of destination were mentioned only in a "Confidential" report not available to the press or general public. T h e last press release was dated September 30, 1941. From that date to the time of writing no press releases listing commercial

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arms export statistics were authorized, despite the ending of the war. T h e argument for not resuming press releases was that, should releases be resumed, Congress m i g h t request of the National Munitions Control Board copies of the annual reports covering the war years. It was felt by the Department of State officials responsible for the preparation of the annual reports that the reports could not be made available for some time. A t the end of 1945 there was no disposition within the Department to expedite the publication of reports for the w a r years. Legally, the reports could be dispensed with altogether as long as the existence of a state of war continued. H o w e v e r , upon the ending of a state of war, the National Munitions Control Board w o u l d be compelled, by the Neutrality A c t of 1939, to resume publication of reports twice yearly. A t the end of 1946 it appeared probable that even before such publication was again undertaken, the practice of issuing monthly press releases concerning the international traffic in arms w o u l d be reinstituted. T h e intention of Congress has been, since 1935, to expose under the light of publicity all commercial dealings in weapons of war.

OTHER REPORTS

In addition to the preparation of annual reports for the National Munitions Control Board and the preparation of monthly press releases, the reports and statistics section of the munitions control unit was required f r o m time to time to prepare special weekly and monthly reports for the use of other Government agencies. W i t h the suspension of the regular press releases, it became necessary to distribute information of interest to other Government agencies on a regular and continuing basis. A so-called " W e e k l y Report" was accordingly circulated, which contained a summary by category and by country of licenses issued during a given week for the exportation of arms, ammunition, and implements of war. A similar but somewhat more detailed summary entitled "Monthly Report" was circulated after the statistics had been prepared for the preceding calendar month. Both reports were classified "Confidential" and were sent regularly

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d u r i n g the w a r to the L e n d - L e a s e , E x p o r t C o n t r o l , a n d military a n d naval authorities interested in the c o m m e r c i a l exportation of arms, a m m u n i t i o n , and i m p l e m e n t s of war. A f t e r the e n d i n g of the w a r interest in the t w o reports outside the D e p a r t m e n t o f State w a n e d , although the W a r D e p a r t m e n t continued o n the distribution list. I n addition to the accumulation and evaluation of statistics a n d t h e drafting o f texts for the various reports, the reports a n d statistics section of the m u n i t i o n s control unit f r o m t i m e to time p e r f o r m e d other functions, m i n o r i n nature, but i m p o r t a n t to co-ordination a n d accuracy in the fulfillment of its duties. T h e section drafted instructions to the collectors of customs regarding the return to the D e p a r t m e n t of licenses a n d m o n t h l y reports o n partial shipments. It was the practice to s u b m i t draft instructions to the B u r e a u of C u s t o m s , T r e a s u r y D e p a r t m e n t , for review a n d distribution as B u r e a u

of

C u s t o m s C i r c u l a r Letters. Liaison was m a i n t a i n e d w i t h the D i v i s i o n o f F o r e i g n T r a d e Statistics, B u r e a u o f the Census, D e p a r t m e n t of C o m m e r c e , in order to receive revised copies o f f o r m s such as export declarations a n d in order to compare a n d attempt to co-ordinate the classification system of the President's P r o c l a m a t i o n d e f i n i n g a n d classifying arms, a m m u n i t i o n , and i m p l e m e n t s of war with S c h e d u l e B of the c o m m o d i t i e s classification used by the D e p a r t m e n t of C o m merce. THE CONFLICT BETWEEN REPORTING

SYSTEMS

It was rather ironic that within the G o v e r n m e n t there existed t w o different statistical compilations of c o m m e r c i a l a r m s exports, the first, based u p o n export licenses returned by the collectors of customs to the D e p a r t m e n t o f State, a n d the second, based upon export declarations returned to the D e p a r t m e n t of C o m m e r c e . I n both cases the figures reported w e r e correct, but the basis o f classification and of reporting was different. T h e D e p a r t m e n t

of

State c o m p i l e d tentative figures f r o m the copies it retained of a r m s export licenses issued, and later corrected those figures against actual shipments as reported on the original o f the a r m s export licenses after the originals had been returned by t h e collectors of customs. T h e export declarations sent to the D e p a r t m e n t o f C o m m e r c e were, o f course, actual reports by the exporters a n d the collectors of customs

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at the time of exportation. T h e discrepancies arose f r o m the fact that the D e p a r t m e n t of State reporting system was based u p o n the classification of arms, a m m u n i t i o n , and implements of war enumerated in the seven categories of the President's Proclamation, while the D e p a r t m e n t of C o m m e r c e classification was defined by the comm o d i t y classification of Schedule B. E f f o r t s went on for years, at irregular intervals and with irregular enthusiasm, to standardize and co-ordinate the two lists. In practice it p r o v e d to be a n impossibility. T h e D e p a r t m e n t of State system was based u p o n seven categories and various sub-categories, with each c o m m o d i t y described by words. F o r example, an airplane was described simply by placing it in the appropriate category, military or civil, a n d by giving the manufacturer's nomenclature for the particular model. U n d e r the C o m m e r c e system all commodities were listed by code n u m b e r s and the use of nouns and adjectives was therefore unnecessary. In principle, each item which m i g h t be exported was assigned a code n u m b e r and the entire reporting system was based u p o n the use of code numbers instead of on words. W h e n tabulations were eventually made f r o m the export declarations, the D e p a r t m e n t of C o m m e r c e , by using automatic machinery, determ i n e d readily h o w m a n y articles by types were exported for any given period. It appeared that the D e p a r t m e n t of State system could have been fitted into the C o m m e r c e method by the assignment of certain blocks of code n u m b e r s to cover certain of the categories of the President's Proclamation. But the inexactitude of the categories of the President's Proclamation m a d e such matching up difficult if not impossible. T o complicate the situation further, it was f o u n d that for some exportable commodities there did not appear to be a Commerce classification of sufficient exactitude to differentiate between various types of military e q u i p m e n t . T h e munitions control unit statisticians, for example, were never able to differentiate between corvettes and minelayers by referring, for purposes of experiment, to the Commerce classification. Such a difficulty could, of course, easily have been overcome, if the incentive had existed, by a d d i n g additional n u m b e r s to the C o m m e r c e classification. T h e r e was n o d o u b t that the Commerce system of compiling statis-

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tics in which each item w a s designated by a code n u m b e r was more accurate and more standardized than the Department of State worddescription method. B u t a change-over to the more detailed numerical system w o u l d have entailed considerable initial disadvantages. T h e President's Proclamation would have had to be revised and elongated, and the numerical system employed w o u l d have had to be co-ordinated with the system in use by the D e p a r t m e n t of C o m merce. Inasmuch as manufacturers, importers, and exporters were accustomed to using the category system established in the various President's Proclamations, and the statistical filing system of the munitions control unit w a s based upon the seven categories and subcategories of those proclamations, the inconveniences of changing to the numerical system w o u l d have been m a n y . T h e biggest disadvantage to the system used by the Department of State was the embarrassment caused the G o v e r n m e n t by conflicti n g statistics of arms exports. W h i l e the Department of State reported only those items which required licenses for export under the terms of the Neutrality A c t of 1939 and of the President's Proclamation, the Department of C o m m e r c e reported as "military equipment exports" m a n y articles the exportation of which did not require licensing by the Secretary of State. B y adopting the C o m m e r c e classification for exports on arms export licenses, the Department of State w o u l d still have been in a position to report exports with the same degree of accuracy as was maintained under its o w n system. B u t the Department of C o m m e r c e , in issuing its breakdowns of arms exports, could by the use of automatic machinery have listed arms exports under t w o different headings: " A r m s exports licensed by the Secretary of State" and " E x p o r t s of military equipment." T h e latter heading would have included many items the exportation of which was not licensed by the Secretary of State. If standardization between the two systems could be brought about, it appeared that it might occur largely at the insistence of the Bureau of the Budget of the Executive Office of the President, which w a s k n o w n to be dissatisfied with the existence of two different sets of arms export statistics based upon two different reporting systems. If agreement were finally reached, the President's Proclamation w o u l d of necessity have to be altered and the Secretary of State would have

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to circularize all persons and firms registered as manufacturers, exporters, or importers of arms, ammunition, and implements of war, calling to their attention the change in system and supplying them with a detailed list of code numbers applicable to weapons of war. Eventually, however, the same commodity code numbers would appear on export licenses and on export declarations. Thereafter reports issued by the Bureau of the Census regarding commercial arms exports should coincide exactly w i t h those released by the Department of State. Furthermore, in order to prevent duplication of effort, the statisticians employed by the Department of State to tabulate arms statistics could, if desired, be transferred to the Bureau of the Census. T h e main disadvantage to such a transfer was considered to lie in the possible embarrassment to the Department of State in not being able to release readily current statistics on the arms export trade without having first to refer to the Department of Commerce.

EVALUATION

O n e of the objectives of Congress in establishing the National Munitions Control Board was to set up machinery which would publicize the activities of those engaged in the private traffic in arms. T h e r e was almost universal agreement as to the desirability of attaining such an objective. H o w well was the objective achieved from 1935 to 1945? T h e Reports of the National Munitions Control Board (issued yearly up to 1940 and twice yearly thereafter until suspended by the war) presented a very complete picture of the commercial arms business. W h i l e it is true that the Reports were poorly organized and were so factual as to make exceedingly dry reading, they were of great use to the members of the Board, the Department of State, and scholars and organizations interested in keeping the arms trade under observation. In all the Reports interpretative material was lacking, with the result that a reader not familiar with the Government style probably had difficulty in separating the wheat from the chaff. But the information was available to any one w h o wished to take the trouble to dig it out. T h e desirability of resuming publication of the semi-annual Reports has been pointed out. T h e chief obstacle to the resumption of

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publication at the end of 1946 was the lack of qualified personnel to assemble the facts which had to be included in the documents. It would have been difficult to bring the Reports up to date in any event inasmuch as the statisticians of the munitions control unit were running eight months behind in preparing statistical data for the "annual tables" of the Reports. Because of the shortage of qualified statisticians in the munitions control unit it was not possible to prepare the statistical data with enough speed to meet the dates of publication set by Congress for the Reports—January 3 and July 3 of each year. This was a personnel difficulty which could have been corrected either by increasing the number of statistical workers allocated to the munitions control unit or by devising some scheme whereby co-operation could have been obtained from time to time from some other agencies of the Department of State. The latter solution was never attempted; the former failed because of budgetary difficulties. Compared with the Reports of the National Munitions Control Board the press releases of the Department proved to be of little practical value except to experts on the arms trade. The releases had practically no text and consisted overwhelmingly of figures. Unless a special story arose with regard to whether a particular country had recently received arms from the United States, the press association men covering the Department tended to ignore the releases. One of the reasons for the dullness of the releases was that they were written, not by professional publicity men in the Press Section, but by the statistical staff of the munitions control unit. Another reason was probably the desire of the Department not to play up arms exports, especially after 1939. This desire is likely to persist. For the duplication of arms export statistics there was no excuse. The reasons for which the Departments of State and Commerce issued different sets of statistics have been discussed. Standardization may some day be achieved through insistence by the Bureau of the Budget. But there is no reason why the Department of State could not itself have inaugurated action designed to achieve uniformity. Even should the only eventual solution be the adoption by the Department of State of the Commerce commodity classification system, the effort would be worthwhile in terms of embarrassment saved

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both Departments and the Government at large. U n t i l standardization is achieved some confusion will of course continue to exist as to which figures are more nearly correct. As has been explained above, both sets of figures were correct, but were built on different bases.

VI Enforcement THE PROBLEM

T h e p r o b l e m of e n f o r c e m e n t of the a r m s c o n t r o l laws a n d regulations was two-sided. O n the one h a n d arose the q u e s t i o n of o b t a i n i n g accurate i n f o r m a t i o n o n evasions; o n the o t h e r h a n d was actual prosec u t i o n in the courts. W h i l e prosecution was not always so vigorous as it m i g h t have been, it was simpler t h a n the process by w h i c h inform a t i o n could be accurately compiled r e g a r d i n g actual or potential evasions. T h e g a t h e r i n g of i n f o r m a t i o n s h o w i n g that a n evasion had occurred presented great difficulty. T h e reason for such difficulty lay in the fact that it was often impossible to d e t e r m i n e w h e t h e r the ultimate destination listed on an a r m s export license was in fact the intended final destination of a s h i p m e n t . 1 C l u e s w h i c h led to the suspicion that a n evasion was probable s o m e t i m e s existed inside the D e p a r t m e n t in the f o r m o f records detailing the past aberrations of certain firms or individuals. I n such cases the D e p a r t m e n t was in a position to w e i g h the chances o f a repetition o f the original offense a n d to decide w h e t h e r to approve or reject a particular a r m s export application. B u t the best m e a n s of c h e c k ing in advance o n the probable legality o f the action intended by the shipper was to cable the U n i t e d States embassy in the country listed as the ultimate destination. T h e embassy was asked to investigate the local reputation of the consignee f r o m the point of view of s m u g g l i n g , g u n - r u n n i n g , and related activities, a n d to cable his findings back to W a s h i n g t o n . I n virtually all cases i n v o l v i n g unusually large shipm e n t s , even w h e r e the consignee was felt in W a s h i n g t o n to be above suspicion, routine practice called for f u r t h e r investigation of the consignee t h r o u g h the U n i t e d States embassy. B y its very nature, however, the d e t e r m i n a t i o n of u l t i m a t e destinai, See Green, op. cit.

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tion w a s of the ex post facto variety. W h e r e transshipment not authorized by the original export license occurred, the chances o£ detection by the United States embassy were directly related to the size of the shipment involved. It w a s almost impossible to trace a shipment consisting of small quantities of small arms. Since, however, a shipment of airplanes or tanks ordinarily attracted public attention, the problem of tracing the transaction was far easier, so that a consignor attempting such a transaction illegally ran a considerable risk. U p o n receiving notification by the embassy that such illegality had occurred, the D e p a r t m e n t in W a s h i n g t o n was able to blacklist the erring consignor and consequently eliminate h i m from the arms export business. It was also possible that court action might ensue, provided the G o v e r n m e n t felt it could prove prior intent to transship illegally. Evidence to support such a charge was always difficult and costly to obtain. Because of the nature of illegal arms shipments, it was nuc possible to determine the a m o u n t of arms which left this country without licenses. It is this writer's estimate that the amount was small and that it was confined largely to minor s m u g g l i n g by isolated individuals.

TECHNIQUES OF ENFORCEMENT

Enforcement is one of the most interesting aspects of the regulation of the private traffic in arms. Enforcement was not only a question of court action to prosecute violators of l a w ; it was also a matter of supervision, persuasion, and at times positive action to frustrate acts which, if consummated, w o u l d be illegal. F r o m both a chronological and a legal viewpoint, it is advantageous in examining the problem of enforcement to analyze the leading court decision w h i c h upheld the constitutionality of certain phases of commercial arms export control, namely, the Curtiss-Wright port Corporation

Ex-

case.

E v e n before the passage of the act of A u g u s t 31,1935, and the consequent establishment within the Department of State of a registration and licensing unit for the control of the commercial traffic in arms, a challenge arose w h i c h threatened, if successful, to undermine

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any legislative efforts to keep the United States from involvement in foreign conflicts by utilization of the embargo technique. This challenge occurred in the case of the United States versus the CurtissWright Export Corporation, et al., as a result of the neutrality legislation dealing with the Chaco conflict. It was specifically charged by the Government that the corporation had conspired to sell in the United States certain arms of war, to wit, fifteen machine guns, to Bolivia, a country engaged in an armed struggle in the Chaco. This transaction was alleged to be in violation of the joint resolution of Congress approved May 28, 1934, and the provisions of a proclamation issued on the same day by the President pursuant to authority conferred by Section 1 of the resolution. In pursuance of the conspiracy certain overt acts were alleged, which are not important enough to warrant reciting in detail. On November 18, 1935, a special grand jury of the United States District Court for the Southern District of New York was empanelled and witnesses were subpoenaed and examined. On January 17, 1936, this grand jury found an indictment against the Curtiss-Wright Export Corporation and certain subsidiaries and officers of the corporation. The defendants demurred to the count of the indictment that pertained to the charge of selling in the United States fifteen machine guns to Bolivia in violation of the joint resolution and of the proclamation issued thereunder. The District Court on March 24, 1936, rendered an opinion sustaining the demurrers upon the ground that the delegation to the President by Congress of the power to find "that the prohibition of the sale of arms and munitions of war in the United States to the countries now engaged in armed conflict in the Chaco may contribute to the re-establishment of peace in those countries" was an invalid delegation of legislative power. The demurrers were reargued and the court on April 18,1936, filed a supplementary opinion adhering to the view expressed in the original opinion, and on April 20 judgment was entered sustaining the demurrers. The claim that the joint resolution of May 28,1934, was invalid was of great importance to the Government, not only because of the violations of law charged, but also because such a claim challenged the en-

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tire neutrality program of the United States. A holding of unconstitutionality of the 1934 act would probably have resulted in a similar holding of unconstitutionality of the joint resolution of January 3 1 , 1922, 2 upon which were based executive proclamations prohibiting the exportation of arms and munitions of war to certain A m e r i c a n Republics and to C h i n a w h e n the President had f o u n d that a condition of domestic violence existed in those countries which was promoted by the use of arms and munitions of w a r procured f r o m the United States. In addition, certain provisions of the joint resolution approved A u g u s t 3 1 , 1935, 3 w o u l d likewise have become invalidated in the event the 1934 legislation had been f o u n d to be unconstitutional. Upon appeal f r o m the lower court, the Supreme Court of the United States took jurisdiction over the case and on December 2 1 , 1936, M r . Justice Sutherland delivered the majority opinion of the court, sustaining the Government's position and enunciating principles of great importance with respect to the conduct of the foreign affairs of the United States. 4 In consequence of the favorable decision of the Supreme Court, the Government prepared the case f o r trial. Subsequently, fourteen indictments were f o u n d against certain of the Curtiss-Wright companies and their officers. F o u r of these indictments went to trial in the District Court for the Southern District of N e w Y o r k on January 16,1939. T h e trial terminated on February 1 0 , 1 9 3 9 , in a disagreement of the jury, after deliberations lasting fifty hours. O n February 1 5 , 1940, fiTe of the twelve defendants in the case pleaded guilty, and total fires were levied amounting to $282,000. Indictments against f o u r other defendants were nolle prossed, because defendants had 2. U.SC., title 22, sees. 236-237. 3. U.S.C., title 22, sees. 2458-2451. 4. 299 U.S. 304. For a critique of the reasoning of Mr. Justice Sutherland in the Curtss-Wright case, see David M. Levitan, op. cit. In an earlier article the same auihor analyzed the legal authority for executive control of the foreign relations of the United States. Mr. Levitan mustered overwhelming evidence to show that the decision of the court in the Curtiss-Wright case followed the views of most authorities in asserting that the executive properly exercised far wider pewers in regard to external than in regard to internal affairs. See David M. Levitin, "Executive Agreements: A Study of the Executive in the Control of the Fjreign Relations of the United States, 35 Illinois Law Review (Dec., 1940), P). 365-395. especially 390-395.

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been included for technical reasons only. T w o defendants had left the country and were outside the jurisdiction of the United States. In several cases related to the Curtiss-Wright case, arising out of violations of the joint resolution of May 28, 1934, and the proclamation issued the same day regarding Bolivia, the Government succeeded in obtaining convictions. The Curtiss-W right case was the only serious challenge on constitutional grounds to the embargo element of the neutrality legislation. Other cases arose from time to time involving less important aspects of the system for the regulation of the commercial exportation of arms, ammunition, and implements of war. In most instances the issue at stake was violation of the licensing requirement by illegal shipments of arms to certain American Republics. Where the Government seriously prosecuted in such cases, convictions were usually obtained. In a typical case, Anthony Armatos was charged with unlawfully attempting to export from the United States small arms ammunition to Mexico in violation of the act of August 31,1935, and of the President's Proclamation of April 10, 1936. He pleaded guilty and was sentenced to three months in the Federal penitentiary on July 10, 1936. The sentence was suspended.5 A similar case occurred when Melecio Guno, on November 6,1937, was arrested in New York City on the charge of attempting to export small arms ammunition to Colombia without first having obtained an export license. On November 26 he pleaded guilty and was sentenced to five days in jail.6 A further illustration is the case of the purser of the United Fruit Company liner, Platano, an individual named Duncan Pierce. Pierce was indicted in May, 1936, for an attempt to export ammunition to Honduras without an export license. He pleaded guilty when the case was called for trial on April 18, 1940, and was fined $200.7 5. First Annual Report of the National Munitions Control Board, p. 71. The Armatos and other secondary cases referred to were not reported in the Federal Supplement and were consequently not listed in the Federal Digest. There were no appeals from the judgments of the district courts concerned. Very few cases ever came before the courts. Where convictions were obtained the sentences were extremely light. 6. Second Annual Report of the National Munitions Control Board, p. 77. 7. Fifth Report of the National Munitions Control Board, p. 156.

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Enforcement through prosecution before the courts continued up to the time of the entry of the United States into the war, after which time the Department of Justice lost interest in prosecuting violations of the statutes, proclamations, and regulations under the authority of which the regulatory system operated. As late as the fall and summer of 1941 the Department of Justice did follow through in the prosecution of violators. On April 4,1941, an indictment was returned in the Eastern District of Louisiana against Edward Pacin, who was charged with attempting to export ammunition without a license. Pacin pleaded guilty and on April 30 was sentenced to a day in jail. 8 In the Western District of Texas, Augustin Contreras and Mario Jaquez were charged with conspiring on April 24, 1941, to export, and Contreras was also charged with attempting to export without a license, 3200 rounds of cartridges from the United States to Mexico. Both defendants entered pleas of guilty and on July 1, 1941, received the following sentences: Contreras—eight months in jail; Jaquez—sixty days in jail. 9 From the cases summarized above, which were representative of the cases prosecuted by the Department of Justice, it can be stated that the licensing requirement established by statute, proclamations, and regulations was enforceable before the courts. Another method of enforcement, which may best be entitled "supervision" of the private traffic in arms, was also widely used by the Department of State. 1 0 T h e essence of supervision was close scrutiny of activities of dubious legality and a steadfast refusal to issue arms export licenses until the applicant for a license had convinced the licensing officials as to the legality of the proposed shipment. The practical result of supervision was the frustration of certain attempted practices the execution of which night have led to results conceived to be contrary to our national interest. A n iLustration of the technique of supervision in operation was presented by the Bellanca Aircraft Corporation case. T h e corporation had attempted to export to Greece 22 airplanes apparently in8. Sou-ce: Department of State records. 9. Sou-ce: Department of State records. 10. "Sipervision" has two advantages as a term: it was used by the Department of State and it did not imply court action.

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tended for transshipment to Spain. This attempt was frustrated by the refusal of the Department of State to name Greece as the country of destination of the shipment. In October of 1938 the corporation tried to obtain permission to export the same airplanes to a French company which the Department knew to be engaged in the business of smuggling arms to Spain. Again the Department refused to issue the export license without which the airplanes could not have left the United States. A new approach was attempted in January of 1939, when the Amtorg Trading Corporation applied for a license to export the same airplanes to the Soviet Union. But when the Soviet Union refused to give the customary assurance that the planes would not be transshipped to another country, no export license was issued. Finally, the airplanes in question were sold to Mexico, in March of 1939, after the Spanish Civil W a r had ended, and by which time it was learned that the airplanes had legally been the property of the Spanish Loyalist Government from the beginning. A license authorizing exportation of the machines to Mexico was issued and the case was considered closed. 11 Vigilance on the part of the licensing officials had prevented the exportation of the airplanes to a country which, by statute and by Presidential Proclamation, was not entitled to be a recipient of them because of the existence of a civil strife. T h e system of supervision, as illustrated by the Bellanca case, became even more important during the war years. After the summer of 1941, the Department of Justice lost interest in the prosecution of small violators despite the fact that the Department of State reported suspected violations to it. N o prosecutions under Section 12 of the Neutrality Act of 1939 were reported for the years 1942, 1943, 1944, or 1945. Despite this lack of interest, the Department of State continued to report violations, attempted violations, and suspected violations to the Department of Justice. Inasmuch as the registration officer of the munitions control unit was in a key position to collect data and background information relating to the private traffic in arms, he was assigned the duty of calling violations or attempted violations to the attention of the proper Department of Justice authorities. T h e system eventually established called for dossiers dealing with all past known violators of law and 1 1 . Fourth Annual Report of the National Munitions Control Board, p. m .

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of all suspected violators of law. Information obtained through registration and completed case studies was supplemented from time to time by reports obtained from the Department of Justice, the F . B J . , and, during the war, from G-2 of the War Department General Staff and the Navy Department's Office of Naval Intelligence. Transactions suspected of being directed at circumvention of the law were followed in considerable detail, with the aim of recommending to the Department of Justice prosecution in the event of any overt offense. As illustrations of the enforcement procedure during wartime, several interesting case studies were available. 12 Even where prosecution was not undertaken and consequently no convictions were obtained, it may be assumed that the knowledge that their activities were being scrutinized must have acted as a deterrent to persons contemplating violations of the statute, proclamations, and regulations governing the private traffic in arms. At the request of the Department of State, the Stafford Ordnance Corporation was investigated by the Department of Justice during the latter half of 1942. The corporation had been formed under N e w York laws with the stated purpose of disposing of more than 450 Vickers machine guns and parts, with a stated value of $575,000. T h e guns had originally been purchased as scrap from the Government at an auction in 1935 for a nominal sum as World War I surplus. Some 350 of the guns were sold to the Chinese Government in 1938 and the remainder were being reconditioned for sale to other customers. It was learned by the F.B.I, that the corporation was negotiating for sale of the guns to the Lend-Lease authorities. Inasmuch as some of the principals of the corporation were known to have been engaged previously in the sale of war materials to South America and to Spain, a thorough investigation was made and it was found that no Federal violation had occurred. Consequently, no charges were made against the corporation. Another interesting case study, involving a suspected violation of the provisions of the Neutrality Act of 1939 requiring registration, occurred in the investigation of the Van Karner Ordnance Corporation. Upon receiving word from the Department of State that the corporation had failed to register with the Department pursuant to 12. Illustrations are taken from Department of State records.

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the provisions of Section 12 of the Neutrality Act, the Federal Bureau of Investigation launched an inquiry. So on November 16, 1942, the Metals Reserve Corporation, acting in conjunction with Department of State and F.B.I, representatives, requisitioned all machine guns and parts in the possession of Joseph V a n Karner, president of the corporation. Removal of the guns and parts was carried out under the supervision of an A r m y Ordnance officer. After having been threatened with a subpoena if he did not turn over his records, M r . Karner finally surrendered them to the Government representatives for inspection. A l l that was learned was that the corporation had failed to register. On November 1 5 , 1 9 4 3 , the Criminal Division of the Department of Justice informed the Department of State that prosecution of the V a n Karner Ordnance Corporation was not feasible and that the case should therefore be considered closed. The Department of Justice did not elaborate upon the reasons for its refusal to prosecute. T h e most dramatic enforcement activity initiated by the Department of State during the war years concerned the so-called "Machine G u n Cases." O n November 16, 1942, fifteen locations in and around N e w Y o r k City and Philadelphia (including the site of the V a n Karner Ordnance Corporation) were visited by Federal representatives and 160 tons of obsolete ordnance materiel, mostly in the form of machine guns and parts, were requisitioned from ten firms. T h e guns and parts had been disposed of by the United States A r m y in 1932. Although all the guns had been mutilated so as to prevent further use as weapons, some were reconditioned and were offered for sale by various firms and individuals. With the outbreak of hostilities in Europe and in the F a r East, the Department of State, as well as the A r m y and N a v y , became concerned as to the possible illegal uses to which the guns could be put. T h e matériel was consequently requisitioned by the Metals Reserve Corporation on November 16, 1942, pursuant to a requisition order based on Executive Order N o . 8942 and N o . 9040. While several of the former owners immediately filed suit against the United States in the Court of Claims for sums running into hundreds of thousands of dollars, the Government had achieved its purpose. T h e machine guns and machine gun parts had been taken oiï the market before

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sale to an unsuspecting friendly government could occur, and the consequent bad feelings that such a swindle would naturally have provoked were avoided. So f a r as can be ascertained, no award w a s made, or was likely to be m a d e in any considerable amount, as remuneration f o r the weapons s e i z e d . 1 3 A s has been illustrated in the machine g u n cases, whenever, in the view of the Department of State, no violation of l a w occurred but a firm or individual w a s attempting to defraud foreign purchasers through the sale of obsolete, inferior, or unserviceable arms, a m m u n i tion, or implements of w a r , the Department of State immediately investigated, with the co-operation as necessary of the Department of Justice. Usually the t w o Departments succeeded in finding grounds f o r restraining the firms or individuals attempting to negotiate such sales before any real harm had been d o n e . 1 4 F r o m the illustrations given in this discussion, it is obvious that the licensing provisions of the arms control system were enforceable. O n the other hand, the intimation of the V a n K a r n e r Ordnance case is that registration was not enforceable during the w a r years. A n examination made in the munitions control unit of the Department of State supplied fairly conclusive evidence that this was the situation. T h e r e was little doubt that convictions could have been obtained in those instances where persons had refused to register with the Secretary of State, as w a s required by Section 1 2 (b) of the Neutrality A c t of 1939. T h e l a w included in the registration provisions references to "exporters," "importers," "manufacturers," and "dealers." W h i l e the w o r d " d e a l e r " was not defined, it was clear that it referred principally to the other three categories of persons engaged in the arms traffic and did not refer to a person or firm engaged purely in the local sale of finished arms or munitions to persons living in the United States. On the other hand, the term "dealer" might have been applied to a person w h o , like V a n K a r n e r , was engaged in the business of reconditioning weapons f o r eventual sale abroad. 13. For an interesting account of the machine gun seizures, see James M. Ludlow, "Control of the International Traffic in Arms," Department of State Bulletin, X, No. 261 (June 24, 1944), pp. 576-583. 14. See Ludlow, op. at., p. 582, for an amusing account of an attempt by several promoters to sell Lee-Enfield rifles which did not, in fact, exist.

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The reason registration was not in practice enforceable during the war years was not because of any inadequate language in the basic statute or the lack of a clear definition of any term. Rather it was because the Department of Justice habitually refused to prosecute in cases where failure to meet the registration requirement had been brought to its attention. It was highly understandable that during the war years the Department of Justice did not, in view of the enormous increase in its own duties during the war, wish to become involved in prosecutions relating to what were, from the point of view of the war effort, minor violations of law. It could safely be assumed at the end of 1945, however, that from then on the Department of Justice would be in a position to prosecute in certain key registration cases where it was desirable to establish precedents. So far as was known in the Department of State, no exporter ever challenged in court the authority of the Secretary of State, after the Curtiss-Wright decision in 1936, to issue arms export licenses as provided for in the statutes, proclamations, and regulations. Nor was there any case on record of a court challenge of the authority of the President, exercised through the administrators of the Export Control Act, to refuse to issue an export license authorizing the commercial exportation of arms, ammunition, or implements of war.

APPRAISAL

From what has been said in the preceding section it is clear that court prosecution was not the chief element in enforcement. Court prosecution was a final weapon, a last resort to be used by the Government when other devices to compel compliance with Government policy failed. Certainly in the case of registration court action was not the main incentive in obtaining compliance. It has been shown that in practice, at least up to the end of 1945, registration—while probably enforceable—was not enforced in fact by the courts. The main element in forcing compliance with the laws and regulations was what has been defined as supervision. Supervision depended for its effectiveness upon adequate information. The point has been previously established that the original concept of Mr. Green to accumulate all known data on the private trade in arms was not car-

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ried out after his departure from munitions control operations in 1941. T h e result of the abandonment of Mr. Green's program was the failure of the Department to accumulate an adequate amount of information to the end that supervision could have worked with maximum effectiveness. T h e reasons for abandoning the information-collecting phase of munitions control have been explained before. Briefly, they consisted of the shortage of qualified personnel to maintain a detailed factgathering system, the absence of specific orders from the management of the munitions control unit to the effect that the system be continued and expanded, and the failure to develop and utilize modern filing methods so that the information, once catalogued, could be utilized readily. T h e abandonment of information-collecting was serious because it was fundamental to the problem of munitions control. Since experience had shown that adequate factual background information about persons engaged in the arms trade was necessary for adequate supervision of that trade, most outside observers assumed that the Department emphasized the information-gathering function. Unfortunately, this was not the case. The reverse of the situation was more in accord with the facts, because the information previously accumulated was not kept up to date and was consequently becoming progressively less useful.

VII Co-ordination of Arms Control Activities inside the Department of State THE PROBLEM

T h e essence of the problem of co-ordination of arms control matters inside the D e p a r t m e n t of State was the relationship between operations and policy-making. Prior to the dissolution of the D i v i s i o n of Controls in 1941, no dichotomy was apparent between operations and policy-making. T h e Division of Controls co-ordinated these arms control activities by virtue of the fact that M r . Green was responsible for both functions. W h i l e it w a s true that M r . Green reached basic decisions on the basis of personal consultations w i t h various geographical office and division chiefs, and that before the passage of the Export Control A c t no discretionary authority existed to reject applications for arms licenses, the fact remained that M r . G r e e n symbolized in his person the unity of the t w o functions. T h e dissolution of the Division of Controls meant that the munitions control unit was to handle and be responsible for operations, w h i l e the division or office chief under w h o m the unit operated was to be responsible for policy-decisions and policy co-ordination. F o r reasons which have previously been explained, the division or office chief w h o was responsible rarely paid m u c h attention to munitions control. Consequently policy was in fact made with great reluctance by the personnel of the munitions control unit. Policy, that is to say, w a s made by default. It was made by persons w h o did not and could not possess the qualifications of M r . Green. Because of his special position, w h i c h has been described, M r . G r e e n was able to give some continuity to arms policy. Nevertheless, he was technically, as Special A d v i s e r , outside the chain of comm a n d . H i s function w a s to advise the Secretary on arms policy matters. M r . Green did in fact, h o w e v e r , advise the munitions control

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unit directly. Later, as a m e m b e r of t w o arms-control committees, he was in an even stronger position to recommend adoption of certain policies. B u t the difference in his position, first, as head of the Office of A r m s and Munitions Control and later of the Division of Controls, and secondly, as special adviser and committee member, was the difference between director and adviser. T h e efforts of the Department to co-ordinate operations and policym a k i n g through the establishment of committees are discussed below. B u t it was not until 1943—a gap, that is, of two years—that these efforts were begun. It is therefore understandable that the separation was great between operations and policy-making during that period. W h e n viewed broadly, co-ordination between operations and policy-making is a problem of h a r m o n i z i n g functional and areal approaches to a given subject. T h e intrinsic difficulties of reconciliation have been discussed by P r o f . A r t h u r W . Macmahon in his essay, " F u n c t i o n and A r e a in the Administration of International A f f a i r s . " 1 A s Prof. M a c m a h o n observed, " T h e reconciliation of the conflicting claims of functional and areal divisions is a universal problem of organization." 2 W h i l e the problem arises in many types of organizations, it is perhaps most clearly apparent inside the Department of State. Illustrative of the problem was the history of munitions control. Primarily operational in character, the munitions control unit ordinarily followed the procedure of m a k i n g recommendations f o r action to various policy-making committees. Policy recommendations tended to have their origin inside the munitions control unit, but action to transform recommendations into policy decisions had to be made by committees. T h e s e committees were dominated by the geographical offices in keeping with the Department's policy to maintain the supremacy of the geographical offices over the functional offices, divisions, and sections. I n actual practice the easiest method of harmonizing functional and 1. Arthur W. Macmahon, "Function and Area in the Administration of International Affairs," one of several essays in New Horizons in Public Administration (University of Alabama Press, 1945), pp. 119-145. See especially pp. 121-128. 2. Ibid., p. iig.

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areal approaches is by representation of both points of view on a committee. Munitions control furnished illustrations of this technique in operation. It should be borne in mind, however, that the committee approach did not automatically guarantee positive results. T o quote P r o f . M a c m a h o n again, "Synthesis is the high task of the geographical offices." 3 But if the geographical offices failed in any specific instance to achieve synthesis through committee action, w h a t was to be the next step ? W o r d e d differently, the question becomes: W h o was to co-ordinate the co-ordinators ? T h e efforts made by the D e p a r t m e n t of State to resolve this question in munitions control matters are examined in the following section.

METHODS OF CO-ORDINATION

Several examples of co-ordination inside the D e p a r t m e n t of State with regard to the issuance or rejection of arms export licenses have already been discussed. So far as the munitions control unit was concerned, the final word on clearance of a specific application for an export license ordinarily came from the geographical office which was responsible for handling detailed activities concerning the area or country the name of which the particular office bore. I f there was doubt, for example, that a particular export license should be issued permitting the exportation of certain items to France, the question was referred for decision to the " F r e n c h d e s k " of the Department. In the event that the authorities handling F r e n c h matters could not arrive at a decision, the matter was referred by them in turn to their superiors in the Division of Western European Affairs, which was a part of the Office of European Affairs. W h e n it was decided by the D e p a r t m e n t of State that rejection of a license application was desirable, permission to reject was obtained in the manner previously described from the Administrator of the E x p o r t Control Act. Before passage of the Export Control Act, rejection of a license application could occur only if a statute of the U n i t e d States or a treaty to w h i c h the United States was a party would have been violated by the exportation authorized by a license. A s a general rule, however, there was a distinct difference between 3. Ibid., p. 125.

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routine clcarancc of an export license inside the Department of State and clearance involving a basic decision or the establishment of a new policy. It was in this connection that the term "government by committee" had application to the Department. This was true of arms control problems, as with many other types of problems. A hierarchy of committees was from time to time established for the purpose of passing on various questions relating to arms control. While many of the committee decisions necessarily went beyond the scope of the subject discussed in this work, it is of interest to examine the modus operandi of the committees in order to throw light upon the procedure by which the more difficult arms control problems were considered. T h e basic committee for deciding arms cases, most of which concerned arms exports, was the Working Committee on Arms Control. T h e committee was organized in accordance with a recommendation of the Policy Committee of the Department of State (since changed to the Co-ordinating Committee), an organization that consisted of approximately 40 men, including most of the high-ranking officials of the Department. A s a result of the recommendation of the Policy Committee, the Working Committee on Arms Control was established in October, 1944. Charles Taft was named chairman, with Frederick Exton as recording secretary. Representatives of the four geographical offices and the Office of Special Political Affairs were assigned to the new committee. In addition, it became standard practice to have representation from the Aviation Division of the Department, in view of the fact that a large percentage of the cases considered by the Working Committee related to aircraft. T h e Working Committee was given authority to call into conference representatives of other divisions, of the services, and of the other Government agencies concerned, whenever necessary to work out the solution to an arms problem. When any question of arms policy came up in any area, the geographical office concerned was expected to notify Mr. Exton, who was charged with notifying all other members of the committee and of securing their comments and recommendations. The procedure was established whereby all documents and correspondence relating to the arms traffic should clear through the munitions control unit of the Department, of which Mr. Exton was chief.

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T h e Working Committee was instructed to meet whenever necessary for co-ordination of policy, but continuing responsibility for current action continued to rest with the geographical office concerned. Immediately after organization, the W o r k i n g Committee began to meet regularly. Mr. T a f t was eventually succeeded by M r . Exton, w h o became Acting Chairman, and the position of recording secretary was assigned to an officer of the munitions control unit. T h e secretariat of the Working Committee was thus retained within the munitions control unit, a move which tended to centralize administration of arms problems. Besides deciding upon the releasability of certain weapons to various countries, the Working Committee also concerned itself with control and liaison problems. A n example of this was the Committee's successful effort to obtain for the Department of State representation on the Munitions Assignment Committee ( G r o u n d ) . T h e W o r k i n g Committee, through Department channels, initiated a communication to the Secretary of W a r requesting such representation. O n May i i , 1945, the Secretary of W a r invited the Secretary of State to send an observer to the Munitions Assignment Committee ( G r o u n d ) . Subsequently, the Working Committee authorized the munitions control unit to send an observer whose function was to represent the Department of State and to report back developments of interest. Despite initial success in dealing with arms problems, the W o r k i n g Committee ran into various obstacles which tended to increase rather than diminish in difficulty. Typical of the obstacles was the tendency of the Aviation Division to use the committee as a board to ratify action already agreed upon through a commitment undertaken for the Department by that division. Other obstacles were purely personal and resulted f r o m various personality conflicts and incompatibilities. Joseph C . Green, a member of the committee by virtue of his position as Adviser on Arms and Munitions, tended to see problems in different terms f r o m those of the geographical offices. Mr. Green took exception with the geographical offices for their attitudes of promotion or encouragement of arms activities in the areas they represented. It was Mr. Green's position that the geographical offices from time to time pursued policies which were inconsistent with the over-all problem of arms control and per-

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haps in conflict with ultimate plans of arms limitation and disarmament. A t a meeting held in December, 1945, the Committee, at the instigation of Mr. Green, forwarded a resolution to the Assistant Secretary of State in charge of Organization and Administration, Donald S. Russell, calling his attention to the lack of co-ordination in the administrative machinery dealing with arms control matters. T h e Committee particularly had in mind the fact that communications frequently were acted upon directly by the geographical offices without referral to the W o r k i n g Committee on A r m s Control. It was the original intention of the Policy Committee, in establishing the Working Committee on A r m s Control, to have the W o r k i n g Committee act as a working group of a more powerful, higher echelon committee. Such a committee was organized by Under Secretary of State Dean Acheson in October, 1944, at the insistence of the geographical offices, in order to give the offices a method of appeal on arms cases. N a m e d the A r m s Policy Committee, this organization included both Mr. Acheson and M r . Green among its membership. So far as is known, the A r m s Policy Committee never met and it was abolished by verbal instructions in January, 1946. T h e reason for the failure of the Committee to meet is not definitely known, but it is likely that the geographical offices decided it would be superfluous. However, another committee, known as the Armaments Committee, had been organized in the last part of 1943, largely at the request of Mr. Green. It was charged with the consideration and formulation of the Department's policy on all long-range problems relating to the control of armaments and of the international traffic in arms. T h e personnel of the committee consisted in large measure of the same representatives who later met as members of the Working Committee on A r m s Control. Mr. Green was named chairman of the Armaments Committee, while M r . Exton acted as recording secretary and executive assistant. T h e committee met only sporadically and after October, 1944, found itself duplicating in many ways the work of the Working Committee on A r m s Control. Under the chairmanship of Mr. Green, the Armaments Committee attempted to forward its communications directly to the Co-ordinating Committee of the Department, but was frequently frustrated by Mr. T a f t who, as chairman of the Working Committee on A r m s Control, held that decisions of

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the Armaments Committee were a matter of direct concern to and warranted comment by the Working Committee. Under such conditions, the Armaments Committee was ineffective and its recommendations carried but little weight. Consequently, the Working Committee in fact performed many of the long-term planning functions for which the Armaments Committee had been intended. In the reorganization of the entire arms control organization of the Department of State in May, 1946, a completely new Armaments Committee was established. It was a combination of the features of the old committee headed by Mr. Green and of the still-born committee to have been headed by Mr. Achcson. K n o w n officially as the Policy Committee on Arms and Armaments, the new Armaments Committee was made responsible for the co-ordination of Department of State policy with respect to all aspects of arms and armaments, including commercial arms exports. Membership consisted of the Assistant Secretary for Occupied Areas, General John H . Hilldring, who acted as chairman; and representatives of the Assistant Secretary for Economic Affairs, of each of the four geographical offices, of the Office of Special Political Affairs, of the Office of Controls, together with a deputy chairman and an executive secretary, chosen by the chairman. As chairman of the Armaments Committee, General Hilldring was empowered to invite to meetings as observers representatives of offices who did not hold permanent membership, when matters of special interest to such offices were being considered by the Committee. T h e chairman was also authorized to take the initiative in submitting to the State-War-Navy Co-ordinating Committee, or to any appropriate subcommittee thereof, such policy matters as might require consideration by the three departments. H e was also authorized to place arms control matters on the S W N C C agenda for consideration and to recommend to the chairman of S W N C C candidates to represent the Department of State on any S W N C C subcommittee. T h e creation of the new Armaments Committee, under General Hilldring, represented the passing of an era in the administrative machinery inside the Department of State for the control of the arms traffic. Joseph C. Green who, for ten years, exerted a tremendous influence upon arms control, was not appointed a member of the Arma-

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ments Committee. T h e chairman of the new committee was given virtually a free hand in dealing with arms matters, including control over the munitions control unit, renamed the Munitions Division. This division was instructed to operate within the framework of policy to be established by the Armaments Committee. While it will not be possible for several years to assess accurately the value of these recent changes in Departmental organization in matters relating to arms control, there is every reason to believe that the new committee was placed in a more powerful position than any of its predecessors to supervise adequately the international traffic in arms. T h e confusion of committees with overlapping and ill-defined jurisdiction was abolished; the powers of the new Armaments Committee were made, within the field of arms control, omnipotent; and the Secretary of State gave the committee powers which appeared to be adequate to co-ordinate the arms control functions established by the basic statutes within the Department of State.

APPRAISAL

T h e Department of State approached the problem of arms policy co-ordination in four ways. T h e initial approach was to rely upon one individual, Joseph C. Green. A s chief of the munitions control unit Mr. Green was given well defined operational responsibilities. H e was also able to harmonize the views of his own unit (which tended to be functionally expert but with a broad, global perspective) with the views of the geographical offices (which tended to be nonexpert in munitions matters and areal in perspective). Mr. Green achieved harmony as the result of personal consultations with the chiefs of the geographical offices and divisions. Following the departure of Mr. Green in 1941 from the field of munitions control operations, the Department largely ignored both the munitions control unit and the problems of arms policy co-ordination. It was difficult for the munitions control unit to make policy recommendations with any certainty of success because the channels through which recommendations could be forwarded were not clearly defined. During this period the policy decisions which were made were in many cases made simply by default. Decisions were often

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made by low-echelon personnel of the munitions control unit because no one else would assume responsibility for making decisions. The third method of co-ordination was employed from 1943 to the spring of 1946. It consisted of co-operation between the munitions control unit and the geographical offices through mutual representation on policy-making committees. Despite defects occasioned by the ill-defined jurisdiction of the committees, the method had the merit of providing channels through which recommendations could be forwarded by the munitions control unit and also provided committees in which it was possible to reach final decisions. It has been pointed out that only two of the three committees established to formulate arms policy ever met. In the case of both of the functioning committees co-ordination was improved by utilizing the personnel of the munitions control unit to form the secretariats of the committees. The fourth and most recent method of arms policy co-ordination began with the establishment of a new Armaments Committee in 1946. The establishment of a new committee and the raising of the status of the munitions control unit definitely strengthened the functional elements of the munitions control machinery. Supremacy of functional over geographical representation, of course, was not established, because the Department of State very properly operated on the assumption that the geographical offices should rule supreme. However, it was made likely that functional representation was strengthened vis-à-vis geographical representation on the Armaments Committee. The chief problem of the future will undoubtedly continue to be the old question of achieving the ideal degree of harmony between the munitions control unit and the geographical offices and divisions. Where unanimity was achieved in the past through committee action, it was not difficult to formulate arms policy. But because it was always assumed that unanimity was the sine qua non of successful committee action, the question as to what should be done in those cases where unanimity could not be achieved constituted the chief stumbling block. The result on frequent occasions was therefore the lack of any decision at all. Government by committee thus led at times to a culde-sac of inaction.

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T h e problem facing the Armaments Committee was the same problem which faced its predecessors—that of finding a superior body to enforce co-ordination when the committee was hopelessly deadlocked. In the past a deadlock was often created by the inability of the munitions control unit to agree with the geographical offices, but the most serious and common cause of deadlock was that the geographical offices themselves were often not in agreement. T h e Armaments Committee established in 1946 was authorized on appropriate occasions to make recommendations to the State-WarN a v y Co-ordinating Committee. This approach did not solve the problem as to what was the channel of appeal by the chairman of the Armaments Committee in those situations where the committee was hopelessly divided. It was not clear whether appeal was authorized to the Co-ordinating Committee of the Department. If such appeal was authorized, it was not clear from precedent that the Co-ordinating Committee would take any other action than to refer the matter under discussion back to the Armaments Committee until such time as unanimity had been achieved. Under similar conditions in the past delays, confusion, and inactivity had tended to bog down the entire business of creating positive arms policy. A t the time of writing it was therefore not possible to predict whether the Armaments Committee would be able to solve problems where unanimity was lacking. T h e absence of a superior body or individual to enforce co-ordination appeared to be a defect which might plague the Armaments Committee as it had its predecessors.

VIII Interdepartmental Co-ordination of Arms Control Activities T H E PROBLEM

T h e essence of the problem of co-ordination between the Department of State and other agencies in matters relating to arms control lay in the presence or absence of a superior body to enforce co-ordination in the event of disagreement on any particular question. It has been shown that the Department of State did not satisfactorily solve the problem of enforcing co-ordination on the part of its own arms-control committees. Government by committee is satisfactory so long as the committee can arrive at a decision concurred in by all or by the principal parties. Government by committee breaks down when the inability to arrive at a decision results in no action at all. T h e solution to the inability of a committee to arrive at a decision lies in the power of a superior body to enforce co-ordination. T o an examination of this question the next section is devoted. METHODS OF CO-ORDINATION

In previous chapters reference has frequently been m a d e to interdepartmental co-ordination with respect to clearance of arms export licenses. O n a higher, policy-making level a similar method of coordination was employed from time to time, not for the clearance of a specific license, but for the establishment of policy which would guide the Secretary of State, the various committees, and the munitions control organization of the Department of State. T h e best example of such co-ordination was to be f o u n d in the State-War-Navy Co-ordinating Committee Subcommittee for Military Information Control. T h i s committee was established as the working level agency to control Government releases of classified

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military information to foreign governments and foreign nationals. 1 Before the establishment of this subcommittee as the governmental agency for authorizing releases of military information, requests for releases had been handled in several ways. If a foreign government directed a request for technical information to a United States concern, that concern invariably referred the request to the service for which the product was being manufactured. Whichever service received the request, A r m y or N a v y , would consider it in the light of the policies prescribed by its own Intelligence agencies, the Joint Chiefs of Staff, and what was believed to be current Department of State policy. After reaching a decision, the service concerned would inform the manufacturer of its action. Another method of approach was for the government concerned to submit the request directly to an agency of the United States Government—usually the State, W a r , or N a v y Department—which in due time informed the foreign government of the action taken regarding the request which had been submitted. Still a third situation arose when an American firm or individual, for various reasons, wished to export either a product or information relating to methods of use and manufacture of a product, to a foreign government or foreign nationals. Before entry of this country into the war, requests to obtain classified military information were less frequent than during and immediately after the war. T h e dual facts of the existence of the Espionage Act of 1917, which required clearance by the services before military secrets could be considered for exportation, and the civilian character of our industrial output, served to keep such requests to a minimum. Upon the outbreak of war, the number of requests began to increase and eventually reached sizable proportions. With three principal Government agencies—State, War, and Navy—concerned in passing judgment on such requests, the diversity and inconsistency of decisions became highly objectionable to all three agencies. On February 14, 1945, the Secretary of State communicated with the Secretaries of W a r and N a v y , recommending the establishment of an interdepartmental agency for passing on requests for release of 1. The classifications were "Restricted," "Confidential," "Secret," and "Top Secret." Ordinarily, information in the last category was not released to foreign governments or their nationals.

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classified military information. T h e Secretaries so addressed replied affirmatively on February 23 and March 9. Consequently, at the instructions of the three Secretaries, and in conformity with an earlier recommendation of the Joint Chiefs of Staff, at the fifteenth meeting of the State-War-Navy Co-ordinating Committee it w a s decided to establish a subcommittee entitled Subcommittee for Technical Information Security Control. T h i s committee, called T I S C , was instructed to pass on requests for release of classified military information, subject to the established policy of the three departments and of the Joint Chiefs of Staff. 2 I n line with previous efforts to centralize the arms control function of the Department of State, Frederick E x t o n , Chief of the Munitions Control Section, was named chairman of the subcommittee. Representatives were also named f r o m A r m y Service Forces, A r m y A i r Forces, the N a v y , and later, f r o m G - 2 of the W a r Department General Staff. A t the invitation of the subcommittee consultants were appointed by the Civil Aeronautics Board and by the Civil Aeronautics Administration. Meeting weekly, and following a simple procedure, T I S C operated with great success. Requests referred to any of the three Departments were forwarded to the subcommittee for its action. A f t e r consultation with representatives of all Departments, a decision was made on each case and the Munitions Control Section of the Department of State, acting as the secretariat of the subcommittee, informed the originator of the request of the decision. T h e average time f o r clearance of routine requests was approximately three weeks, although more difficult cases involving examination at the w o r k i n g level of each Department frequently required considerably more time. It was not customary to refer applications f o r arms export licenses to the subcommittee, but the clearance of information which might involve military secrets and the clearance of military information for release, formerly administered in three different ways, became standardized and efficient. Committee action had the added advantage of dividing the responsibility for decisions by m a k i n g them a joint undertaking and of creating a backlog of precedents by which the committee could guide its future decisions. O n March 18, 1946, the name 2. Announcement of the establishment of TISC was made May 8, 1945.

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of the subcommittee was officially changed from T I S C to the Subcommittee for Military Information Control, a title more in keeping with the actual duties of the organization. In passing, it may be advisable to add a few words regarding the State-War-Navy Co-ordinating Committee itself, one phase of the activities of which has been illustrated in the operations of T I S C . T h e committee, usually called S W N C C , was set up at the assistant secretary level to represent the three Departments on problems where each had an interest. T h e S W N C C secretariat consisted of approximately seven persons, w h o were responsible for the preparation of papers, distribution of committee documents, and similar tasks. T h e Executive Secretary of the committee had for some time been Lt. Col. Virgil F . Field, General Staff Corps, W a r Department, under whose extremely able direction the detailed work was actually performed. S W N C C was probably one of the best illustrations of a successful technique of interdepartmental co-ordination yet devised inside the Federal Government. As has been noted before, the chairman of the Armaments Committee of the Department of State was given authority to place arms control matters for his Department on the S W N C C agenda. Most problems discussed by S W N C C had nothing to do with arms control, but the channel was open for the Department of State, through the chairman of the Armaments Committee, to present relevant questions of arms control before S W N C C when a joint decision of the three Departments was necessary in order to decide basic policy. Another example of interdepartmental co-ordination was the procedure set up for the handling of requests to purchase what was called "nondemilitarized combat materiel." While it was true that such materiel was Government owned, the disposal of the materiel was handled as a commercial transaction and is therefore of interest in a discussion of commercial arms exports. Furthermore, the procedure illustrated the role played by the munitions control organization in the Department of State in transactions involving several Government agencies. T h e Department of State entered into the question of the disposal of nondemilitarized combat materiel by virtue of the provisions of Part II of the Executive Order which ended the Foreign Economic

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Administration and which also abolished the Office of A r m y - N a v y Liquidation Commissioner and transferred the functions of that Office to the Department of State. 3 T h e objective w a s to u n i f y the disposition of foreign property owned by the United States in foreign areas under a single agency in conformity with the foreign policy of the United States and with the Surplus Property A c t of 1944. E f f e c tive as of October 20, 1945, the Department of State acted as the operating agency as well as the policy organization with respect to the disposal of overseas surpluses. 4 T h o u g h supported with legal authority, the Department of State ran into numerous difficulties in the administration of surplus property disposal, particularly with regard to nondemilitarized combat materiel. A s a result, an ad hoc S W N C C committee was set up to recommend a procedure which would expedite clearance of requests for and actual disposal of such materiel. T h e procedure recommended by the ad hoc committee was accepted by S W N C C in December of 1945 and January of 1946. T h e procedure recognized the central position inside the Department of State of the Munitions Control Section and utilized the offices of that Section to act as the Department's clearing-house and policy-relaying agent. T h e W a r and N a v y Departments were instructed to request concurrence of the Department of State on policy grounds before authorizing the Department of State to dispose of the property declared by Theater C o m m a n d e r s to be surplus. T h e disposal of the property was accomplished by the Department of State through its own agency, the Office of Foreign Liquidation C o m m i s sioner. Inside the Department of State clearance was handled by the munitions control unit, which consulted the geographical offices to see whether on political grounds any objection existed to a proposed sale. U p o n notification that all three departments by joint decision had agreed to authorize a sale, the munitions control unit notified the 3. Executive Order No. 9630, September 27, 1945; 10 F.R. 12245. 4. Departmental Order No. 1347, October 20, 1945. A report for the year ending December 31, 1946, from the Secretary of State to Congress, indicated that combat surplus sales had to that date netted the Treasury more than Sio,ooo,ooo. Department of State Bulletin, Vol. XVI, No. 399 (Feb. 23, 1947), pp. 322-327.

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Office of Foreign Liquidation Commissioner of the proposed action. W i t h the exception of requests for aircraft, which were handled by the Aviation Division and by the Working Committee on Arms Control, the munitions control unit took care of all clearances. If the matériel had been demilitarized, the munitions control unit had no concern with it, and requests for such materials arriving at the Department of State were referred to other agencies, especially the Department of Commerce. W h e n the procedure was established, control over the disposal of captured enemy equipment was not included within the machinery. O n the other hand, in January, 1946, S W N C C advised the munitions control unit that requests for the disposal of captured enemy matériel should be processed in the same way as other requests. Inasmuch as many of the requests were for aircraft, weapons, ammunition, and other items of military equipment the commercial exportation of which was normally licensed by the Department of State under the provisions of the Neutrality Act of 1939, it was natural that the function of clearance of requests for nondemilitarized combat matériel overseas would be assigned to the munitions control organization. It was equally obvious that the system in operation fell heir to various defects that should properly have been anticipated. T h e definition of "non-demilitarized combat matériel" was very elastic, and certainly included articles not included in the various President's Proclamations defining arms, ammunition, and implements of war, the exportation of which required an export license. A t various times announcements appeared in the press, under foreign dateline, of sales of surplus military equipment, under such circumstances that it seemed clear that the Department of State officials in Washington knew little, if anything, about the transactions in advance of the press announcements. In order to protect itself, it appeared that the munitions control organization, known after May 20, 1946, as the Munitions Division, would probably sooner or later request that S W N C C establish a subcommittee composed of representatives of the three Departments, for the purpose of clearance of requests to declare surplus for purchase

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nondemilitarized surplus combat materiel overseas. If established, such a subcommittee was expected to follow the patterns previously created by the Subcommittee for Military Information Control.

APPRAISAL

In the operations and in the structure of the Subcommittee for Military Information Control was found an excellent solution to the problem posed at the beginning of this chapter—the problem of enforcing co-ordination in the event of committee disagreement. Because it was established as a subcommittee of S W N C C , M I C was in a position to report disagreement as well as agreement to S W N C C . In the event of disagreement, majority and minority reports were forwarded to the superior body which itself attempted to work out the ultimate solution. While disagreement was rare in the deliberations of M I C , it sometimes occurred. For example, if one of the services represented on M I C refused to accept as final a majority decision of the committee, the only solution lay in forwarding a complete report as to the areas of agreement and of disagreement to S W N C C . T h e record of S W N C C in bringing about eventual reconciliation of differences of this type was excellent. In the event of disagreement at the M I C level among G-2 of the W a r Department, the A r m y A i r Forces, and the A r m y Ground Forces, the problem was somewhat more difficult. Co-ordination of opinion in such circumstances should have been achieved inside the W a r Department itself. H o w e v e r , on several occasions M I C was used as a sounding board for the expression of differing opinions offered by the three agencies of the W a r Department. In several cases of this type where disagreement was reported by the chairman of M I C to S W N C C , the superior body returned the problems to be solved to M I C for further discussion until such a time as agreement had been reached. Referral of questions of this type back to M I C only occasionally resulted in reconciliation of conflicting opinions by the representatives of the three W a r Department agencies. T h e position of the chairman of M I C in such circumstances was awkward, inasmuch as he—as the

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representative of the Department of State—could not force the W a r Department representatives to agree among themselves. It was obvious that disagreements of this type should never have arisen, and that if they did, they should have been settled speedily by conferences inside the W a r Department. In any event final decision should have been made by the W a r Department representative on S W N C C , so that internal differences in his Department could not hamstring action completely. In general, however, the principles underlying the operations of M I C were sound. T h e same procedure could have been applied to problems relating to the disposition of nondemilitarized surplus combat matériel. It might with profit be applied to any other arms-control problems where joint action by the State, W a r , and N a v y Departments should prove to be necessary.

IX Conclusions EVALUATION OF PURPOSES AND ACCOMPLISHMENTS OF M U N I T I O N S CONTROL

Munitions control was established as a part of the program to keep the United States f r o m involvement in foreign wars. In this respect, of course, munitions control failed to achieve its purpose, as did the entire neutrality legislation program. But w h i l e munitions control was established by the original neutrality legislation, it was not thought of by its sponsors in the Department of State exclusively as a means for preventing involvement in foreign wars. It was also considered a necessary means for controlling the international traffic in arms. T h e objectives of such control were to enable the United States to set up a system of export and import licensing in conformity w i t h the obligations incurred by ratification on June 21,1935, of the G e n e v a A r m s Traffic C o n v e n t i o n of 1925, to provide the Government and the public w i t h full information on the commercial exportation of arms, to carry out those restrictions on the exportation of arms w h i c h were in effect before the passage of the act of A u g u s t 31,1935, and to discourage the outbreak of minor wars by eliminating our industrial plant as a source of w a r supplies. T h e r e can be no doubt as to the success of munitions control in achieving these objectives. Persons and firms engaged in the commercial exportation and importation of arms were forced to comply w i t h the arms-control regulations. Because of the control so assumed over the arms trade, the G o v e r n m e n t was able without undue difficulty to force compliance w i t h embargoes and w i t h other legislation and treaties regulating the arms, traffic. A f t e r approval of the Export C o n trol A c t in 1940 the Department of State, through its munitions control unit, was able to control commerical arms exports in terms of na-

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tional policy. Control during the years of our participation in the w a r was made easy by the existence of the control machinery which had been established in 1935. In retrospect it may some day appear that the most important contribution of munitions control consisted in establishing a framework which—when broadened—enabled our Government to co-operate effectively with other governments to bring about uniformity by all nations in dealing with the private traffic in arms. 1 It is clear that adherence of the United States to any international agreements designed to control the trade in arms in the interests of international peace has been made more feasible by the existence in the Department of State for some years of a functioning arms-control organization. This is to say that the information and experience gained since 1935 should prove to be of great value in the future. Trained personnel are on hand. Precedents and procedures have been developed for dealing with problems raised in the regulation of the commercial traffic in arms. T h e characteristics of the persons and firms engaged are known to the Department of State. On December 14, 1946, the General Assembly of the United Nations, meeting at L a k e Success, N e w Y o r k , unanimously adopted a resolution which urged the nations of the world to work out means of achieving universal disarmament. 2 T h i s resolution was referred by the General Assembly to the Security Council of the United Nations on the same day. T h e Security Council accepted the resolution on January 9, 1947, and referred the matter to a subcommittee. T h e subcommittee was instructed to explore the question of disarmament and to report its detailed recommendations back to the Security Council. Although it is not possible to foresee the ramifications which may eventually result from any action taken by the Security Council on the disarmament resolution, 1. It should be noted that atomic energy has introduced novel problems of regulation which have not been faced in the past by the officials of the Department of State concerned with munitions control.

2. For text see Department of State Bulletin, Vol. XV, No. 390 (Dec. 22, 1946), p. 1137; also, Journal of the United Nations, No. 75, supp. A-64, add. 1, p. 827. Text of Security Council resolution may be found in Department

State Bulletin, Vol. XVT, No. 399 (Feb. 23, 1947), p. 321.

of

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it is clear that the question of arms exports must be considered as one phase of the problem. In the light of future action by the Security Council t w o possibilities present themselves. T h e first is that international machinery to supervise arms limitations and reductions may be established. Such machinery would have to be implemented by national control organizations in order to achieve effective regulation. T h e second is that a n e w international agreement may be drafted in which each signatory will pledge itself to observe certain principles and regulations governing the manufacture, importation, and exportation of weapons of war. In either event the existing arms-control machinery of the Department of State could be utilized to assure fulfillment of any commitments assumed by the United States. Such a procedure would call for active instead of passive control over arms imports and exports. By a change in emphasis the present control machinery of the D e partment of State could easily be adjusted to fit into this broader pattern of active control. W h e t h e r co-operation among the nations is achieved through the drafting of a new convention to improve upon the Geneva A r m s Traffic Convention of 1925 or through some instrumentality of the United Nations is immaterial. T h e problem is international, not unilateral. Given the incentive and given agreement on the objective the nations of the world can control with great effectiveness the traffic in arms. Because of the experience it has gained in regulating the exportation of arms from this country, the Department of State is in an excellent position to promise and give full co-operation with other states equally interested in effective control over the traffic. In such a manner our Government can help prevent the commercial traffic in weapons of war from being a cause of misunderstanding, turmoil, and possibly conflict among nations.

MERITS AND DEFECTS OF THE MUNITIONS CONTROL M A C H I N E R Y

T h e principal merit of the munitions control system in operation was its flexibility. T h e Department of State showed initiative and

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imagination during the war by adopting the ingenious technique of issuance of unlimited licenses. Without the adoption of unlimited licenses it is difficult to see how regulation could have been accomplished as provided by law without at the same time creating serious interferences in the shipment of badly needed arms and munitions to our Allies. W i t h the imagination shown in accepting the device of unlimited licenses it is hard to reconcile the slowness of the Department of State to take steps to bring up to date the President's Proclamation of April 9, 1942. T h e defects of that proclamation have been analyzed in detail. A t this point it is only necessary to observe that a new and revised proclamation, including in its categories newly developed instruments of warfare, was sorely needed for some years. T h i s defect was corrected by issuance of the proclamation of February 14, 1947. It is also necessary to point out that the Department of State was backward in recognizing the special conditions which existed in the exportation of commercial aircraft. T h e disagreement inside the Department has been discussed; but the important factor is that no corrective measures were taken until 1947. T h e February, 1947, proclamation removed both needless irritation and paperwork. It was welcomed by the Aviation Division and by the aircraft manufacturers. A signal defect of the munitions control machinery was the fact that discretionary authority to reject arms export license applications lay in the Department of Commerce. If the assumption was accurate that arms control was a function of the Department which was responsible for the execution of foreign policy, then it followed that the authority to reject license applications should also have been placed in that Department. In actual practice munitions control was not impeded by the necessity of securing formal consent from the Department of Commerce before rejecting applications. But it was conceivable that a w k w a r d situations might arise in which the two Departments failed to agree as to the desirability of approving a particular shipment. T h e only solution was for the Department of State to institute the necessary action to have the President by executive order transfer discretionary authority to reject arms export license applications from the Department of Commerce to the Department

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of State. T h e problem was more one of creating an impetus for such action inside the Department of State than it was of obtaining presidential approval. It has been indicated that while the Reports issued by the National Munitions Control Board before the war were adequate, the press releases issued before the war by the Department of State lacked interpretation and imagination. T h e reason for such defects was found to lie in the manner in which the releases were prepared. Instead of being rewritten by the professional public relations personnel in the Department's Press Section, the releases were prepared simply as statistical data by the statisticians of the munitions control unit. While it was true that the minimum information required by law and by the National Munitions Control Board was thus made available to the press, it was also true that the releases were so uninteresting and dry as to be almost useless to the representatives of the press. T h e duplication which existed in arms export statistics has been examined. It was ridiculous that two conflicting sets of figures were published by the Government on the arms export trade. Standardization was desirable and was not impossible of achievement. It appeared likely, however, that the initiative toward such standardization would have to come from the Bureau of the Budget. T h e Departments of State and Commerce were able to make little progress in solving the problem by themselves. A much more serious criticism of the munitions control machinery was the failure of the Department of State to keep up to date its files on the private traffic in arms. T h e essence of adequate supervision as a phase of enforcement was the accumulation of factual information. F o r this information there were many sources—departmental cables and reports, investigations by the Department of Justice, magazine and newspaper articles. T h e task of evaluating the information so accumulated and of filing the most important information should have been of supreme importance. It was not possible for the Munitions Division or the Armaments Committee of the Department of State to make recommendations satisfactorily unless those recommendations were based on the most adequate information available. T h e failure of the Department to stress the information-gathering phase of mu-

C O N C L U S I O N S

nitions control was therefore a f u n d a m e n t a l defect in its arms-control system. T h e methods of co-ordination employed in m a k i n g arms policy are s u m m a r i z e d in the next section. It will suffice to observe at this point that the D e p a r t m e n t of State did not develop f r o m 1935 to 1945 adequate means of co-ordination inside the Department. C o n versely, interdepartmental co-ordination, thanks principally to the S t a t e - W a r - N a v y Co-ordinating C o m m i t t e e , w a s very satisfactory. In the first case, there w a s no superior body to enforce co-ordination; in the second, such a body existed and for the most part fulfilled its co-ordination function in a superior manner.

ADMINISTRATIVE PRINCIPLES AND PRACTICES

M u n i t i o n s control is a convenient point of departure for an examination into recent practices of administration throughout the D e partment of State. It is a convenient point of departure because, like the problems of the A v i a t i o n or Passport Divisions, the problems of the munitions control unit must be approached from both a vertical and a horizontal direction. F r o m the horizontal point of v i e w each of the four great geographical offices of the D e p a r t m e n t w a s responsible for the execution of policy within its o w n sphere of influence. T h e tendency of each geographical office to assume that its o w n problems were unique and therefore required u n i q u e solutions has been commented on. 3 T h i s tendency w a s as strong w h e n the problems were those of munitions control as it was in other cases. M a n y of the problems of munitions control could, however, only be successfully approached f r o m the over-all point of view. T h i s was the point of v i e w w h i c h the munitions unit itself usually took and for w h i c h the arms-control committees ought to have striven. It is easy to see h o w the munitions control unit could have pushed a proposed program u p to the A r m a m e n t s C o m m i t t e e only to run at that point into headlong conflict w i t h any one of the geographical offices w h i c h 3. F o r g e n e r a l i z e d illustrations see C h a p t . I of this study. Specific illustrations cannot be g i v e n because of D e p a r t m e n t of State security regulations.

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believed that exceptions to the general program should have been m a d e in its case. Because so many of the divergent tendencies within the Department of State were illustrated in the execution of the munitions control duties entrusted the Secretary of State by the neutrality laws, a careful examination of the problems of munitions control throws considerable light upon the recent administration of the Department as a whole. F r o m the study which has been made three very definite conclusions regarding administration have emerged. T h e first of these is the necessity of preserving some measure of unity between policy-making and operations. T h e results of lack of unity, as shown in the history of munitions control, have been listed. In practice the chief result of an unnatural dichotomy between policy-making and operations was a lack of continuity in both policy-making and in operations. Under such conditions one of the results was often the formulation of policy by default, either from the impossibility of making decisions in the first place, or from the fact that decisions were actually made at such a low level in the administrative hierarchy as to carry but little weight. In any situation where the separation between policy-making and operations is great, some of the d a m a g e can be repaired if the personnel in charge are willing to exhibit outstanding qualities of leadership and of willingness to assume responsibility. T h e extent to which Joseph C. Green was able through his personal efforts to bring about a large degree of harmony between policy-making and operations has been demonstrated. But the defects inherent in such a situation came to light when an administrator of the capabilities of Mr. Green was not present. T h e n the structural defects made themselves felt with a consequent loss of continuity and a consequent drop in prestige of the organization. T h e easiest solution is to provide through the administrative machinery itself the proper degree of harmony between policymaking and operations, inasmuch as the chances of finding administrators and leaders of the qualifications and talents of Mr. Green are not ordinarily great. A corollary to the principle of harmony of policy-making and operations is the proposition that the authority to approve and the authority to reject should lie in the same department of the Govern-

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ment. It was not necessary to successful administration of the armscontrol program that the authority to reject arms export license applications should have been in the operating levels of the munitions control machinery. It was quite possible that it might have been advantageous for this review power, as it were, to rest in the Armaments Committee or in one of the special advisers to the Secretary of State. But it was highly unwise that the authority to reject was entrusted to an agency of the Government outside the Department of State. A second principle which has emerged from this study is that of stability. B y stability is meant that an administrative agency, such as the munitions control unit, should not be moved repeatedly and illogically from one superior division or office to another. It has been easier to show the results of instability than to demonstrate the merits of stability. A n examination of the results of instability as applied to the munitions control unit revealed a loss in prestige, lessened morale on the part of the personnel, and a general decline in the ability of the unit to perform the work assigned to it. Unless the desirability of stability for an administrative agency is recognized and a large measure of stability is achieved in practice, the duties of that agency cannot be performed in the most efficient manner. T h e inability or neglect of the top administrative officials of the Department of State to grapple with the problem of the creation of stability led to very serious results in the Department's ability to carry out its munitions control functions. It can be assumed that wherever in the Department this same failure occurred, the same results took place. Creating stability is essentially a task of planning and coordinating. Stability stems from vitality, which comes from confidence in the importance of performing a particular function or mission. T h e implications to be drawn from lack of stability may therefore be grave. A third principle which as been illustrated by this study is that co-ordination is not automatic but must be enforced. T o harmonize the differing opinions on arms-policy matters caused by the presentation of opinions on both vertical and horizontal levels, the Department of State rightly established committees to reconcile the various views. So f a r as this idea went it was sound. But the question which

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immediately arose was this: In the event of failure of a given committee to reach a decision, what was the next step to be taken? In practice the usual step was to lay aside the question until such time as unanimity was reached, or to refer the question to a subcommittee. In either event the result was inactivity in the sense that no policy was created. If the head of a committee happens to be a strong individual who does not mind hurting people's feelings and w h o is willing to use pressure when necessary, it is sometimes possible for a committee to function in spite of the fact that no appeal channel is provided. In the history of munitions control, however, the situation was not so simple. T h e Working Committee on Arms Control and Mr. Green's Armaments Committee actually clashed from time to time on such fundamental questions as jurisdiction. Occasional appeals to the Co-ordinating Committee to straighten out the question of jurisdiction produced no positive results. T h u s the strange situation existed whereby two arms-control committees were on occasion working at cross-purposes with each other. It was consequently no wonder that certain papers drafted with the aim of defining this Government's arms policy did not reach either the Co-ordinating Committee or its superiors for periods up to 24 months. Under these circumstances agreement on policy matters was extremely difficult and often impossible. E v e n the establishment in 1946 of a new Armaments Committee, and the abolition of the other arms-control committees, did not really solve the problem. Happily, the question of overlapping jurisdiction of competing committees was cleared up. But the problem of which superior body, if any, was to enforce co-ordination in the event the Armaments Committee was unable to agree on any basic question was not solved. It was not desirable in practice for any committee to admit frequently that it was unable to reach agreement and to refer the matter to an Assistant Secretary or to the Under Secretary. T h e natural reaction of such authorities was to refer the matter back to the committee until the problem could be agreed on and the committee could forward a unanimous recommendation. Some regular channel to which the Armaments Committee could appeal and which could enforce co-ordination when necessary had therefore to be established

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before it was reasonable to expect correctly functioning arms-policy machinery. T h e solution to the problem was actually relatively simple. It has been shown that in its interdepartmental phases munitions control enjoyed a great measure of success. T h e reason for such success by the Subcommittee for Military Information Control was the possibility of appeal to and the power of enforcing co-ordination by the State-War-Navy Co-ordinating Committee. While machinery for the settlement of all differences of opinion within M I C was not perfect, that machinery could well serve as a guide to the Department of State in the solution of its arms-control problems. Without a body to enforce co-ordination the committee system is subject to grave difficulties and is not likely to operate with maximum possible effectiveness. It has been shown in the course of this study that the Department of State, at least in regard to the performance of its munitions control duties, did not fully recognize the desirability of collecting all information available and did not handle its publicity releases in the most effective manner. But these defects could have been corrected easily. However, to insure good administration in arms control or in any other of its functions, the Department of State must observe the three fundamental principles critically analyzed in this work. These principles are the harmony of policy-making and operations, 4 the necessity of stability in organization, and the necessity of establishing superior authorities which can and will enforce co-ordination should policy-making committees be unable to arrive at decisions.

PERSPECTIVE

T h e basic importance of this study lies in the fact that it illustrates the desirability of constant re-examination of the original grounds 4. " U n i t y " would be too strong a word here. T a k e n literally it might prove to be an unworkable ideal. T h e principal point to the argument is that a large degree of harmony between policy-making and operations is not only desirable but necessary. Experience alone can determine to what extent this harmony or unity should be carried. During the w a r it proved to be practicable f o r the Foreign Economic Administration to handle operational phases of certain problems while the Department of State handled the policy-making phases of the same problems.

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which justified the creation of an administrative agency to the end that modifications in procedure and authority may keep abreast of changing conditions and circumstances. It is not inherently difficult to establish an agency to carry out a function created by Congress. It is extremely difficult, once that function has been translated into terms of a living organization, to inquire again into basic assumptions to determine whether and in what ways improvements may be brought about. Yet, as the history of munitions control shows, critical re-examination of original assumptions must be made periodically if efficient administration is to be characteristic of the Federal Government. T h e tendency to continue an activity without much scrutiny to determine whether continuance is justified, and if so, in what terms, has been illustrated in this study. Paradoxically, such a tendency may exist in a Government department even when it is desirable that an activity be continued. Prior to the outbreak of w a r the munitions control unit carried out a function of great importance to the Department of State. But after the fall of France the regulatory function performed by the unit was largely neglected and became relatively unimportant. T h e various administrative vicissitudes which befell the unit after the summer of 1940 attest this fact. Nevertheless, the unit itself was never abolished. It was shifted from one agency to another and was frequently humiliated. But it continued to exist. W h y ? T h e reason is that the Department of State, despite its neglect of munitions control during the war years, believed that regulation of the commercial traffic in arms would regain its importance in the post-war era. That such was the thought of the Department was shown by the elevation of the munitions control unit after the war to the status of division and by the creation of an Armaments Committee with much greater authority than its predecessors possessed. Assuming that the regulation of commercial arms exports is likely to regain its former importance, what is the perspective in terms of organizational possibilities? There appear to be three distinct possibilities, each of which is capable of considerable alteration. T h e first of these is that the Munitions Division will remain under the general

CONCLUSIONS

137

supervision of the Office of Controls or of one of the economic offices but will possess considerable autonomy. This has been the historic pattern. One of the difficulties of such a pattern is the problem of co-ordination with the geographical offices through the committee mechanism. Another is the tendency to achieve too great a separation between the operations performed by the munitions unit itself and the policy decisions made by a supervisory committee. A second possibility is the integration of the Munitions Division with the Office of Special Political Affairs. Under such an arrangement the munitions control personnel would be working in close collaboration with those persons in the Department of State who are responsible for the formulation and presentation of United States policy to the Security Council and the General Assembly of the United Nations. In this way emphasis would be placed upon control of the private traffic in arms as one aspect of achieving international security through disarmament and through arms limitation.5 The chief advantage would lie in the fact that those concerned intimately with the problems of regulating the arms traffic would tend to think of those problems as one phase of over-all international commitments. Vis-à-vis the areal outlook of the geographical offices and divisions the Munitions Division would find its position strengthened if it were a part of the Office of Special Political Affairs, sharing with that Office the general concern for obtaining international security through international co-operation. A third possibility is that the operating duties of the munitions control unit may eventually be assigned to an over-all export control administration, with the Department of State merely retaining the function of making policy on arms problems.6 Such an arrangement might have distinct advantages if the Munitions Division were a part of the Office of Special Political Affairs, which has shown itself unwilling to assume operational duties. There is, however, one great potential disadvantage to this proposal: the separation between policy5. Such an arrangement might tie in advantageously with the work of the Trusteeship Council of the United Nations, as provided for in the United Nations Charter, Articles 75-91. 6. Public Law No. 389, 2nd sess., 79th Congr., approved May 23, 1946, extended the Export Control Act, as amended, to June 30, 1947; Public Laws No. 145 and No. 188, 1st sess., 80th Congr., to Feb, 29, 1948.

i38

CONCLUSIONS

making and operations (registration and licensing) might become so great that the Department o£ State would only learn ex post facto what had already been done by the administrators of the Export Control Act (or similar legislation).7 In this connection it is well to recall that this country since 1935 has considered arms exports to be in a very different category from that of ordinary commercial exports. It has not been national policy per se to encourage arms exports as a method of assisting American business generally. Should control over arms exports be taken from the Department of State and placed in a department or agency which had a strong desire to build up the volume of American exports, it is possible that we might unwittingly return to the conditions existing in the arms export trade prior to I 935In order to prevent the materialization of such a possibility munitions control should be retained in its entirety within the Department of State. At the same time efforts to improve the arms control machinery should be undertaken. In this way the regulation of the private traffic in weapons of war may be seen in its proper perspective as one phase of the tremendous problem of creating international security and peace. 7. T h e argument is that assigning of the operational duties of munitions control to an agency outside the Department of State is incorrect in principle. This is no reflection upon the Department of Commerce, which has administered the Export Control Act since the abolition of the F E A .

APPENDIX

Excerpts from Pertinent Statutes and Proclamations J O I N T RESOLUTION APPROVED NOVEMBER 4, 1 9 3 9

Section 12

1

There is hereby established a National Munitions Control Board (hereinafter referred to as the "Board"). The Board shall consist of the Secretary of State, who shall be chairman and executive officer of the Board, the Secretary of the Treasury, the Secretary of War, the Secretary of the Navy, and the Secretary of Commerce. Except as otherwise provided in this section, or by other law, the administration of this section is vested in the Secretary of State. T h e Secretary of State shall promulgate such rules and regulations with regard to the enforcement of this section as he may deem necessary to carry out its provisions. The Board shall be convened by the chairman and shall hold at least one meeting a year. (b) Every person who engages in the business of manufacturing, exporting, or importing any arms, ammunition, or implements of war listed in a proclamation referred to in or issued under the authority of subsection (i) of this section, whether as an exporter, importer, manufacturer, or dealer, shall register with the Secretary of State his name, or business name, principal place of business, and places of business in the United States, and a list of the arms, ammunition, and implements of war which he manufactures, imports, or exports. (c) Every person required to register under this section shall notify the Secretary of State of any change in the arms, ammunition, or implements of war which he exports, imports, or manufactures; and upon such notification the Secretary of State shall issue to such person an amended certificate of registration, free of charge, which shall remain valid until the date of expiration of the original certificate. Every person required to register under the provisions of this section shall pay a registration fee of $100. Upon receipt of the required registration fee, the Secretary of State shall issue a registration certificate valid for five years, which shall be renewable for further periods of five years upon the payment for each renewal of a fee of $100; but valid certificates of registration (including amended certificates) issued under the authority of section 2 of the joint resolution of August 31, 1935, or section 5 of the joint resolution of August 31, 1935, as amended, shall, without payment of any additional registration fee, be considered to be valid certificates of registration is1. 54 Stat. 10; 22 U.S.C. 452.

i4o

STATUTES

AND

PROCLAMATIONS

sued under this subsection, and shall remain valid for the same period as if this joint resolution had not been enacted. ( d ) It shall be unlawful f o r any person to export, or attempt to export, f r o m the United States to any other state, any arms, ammunition, or implements of w a r listed in a proclamation referred to in or issued under the authority of subsection ( 1 ) of this section, or to import, or attempt to import, to the United States f r o m any other state, any of the arms, ammunition, or implements of w a r listed in any such proclamation, without first having submitted to the Secretary of State the name of the purchaser and the terms of sale and having obtained a license therefor. ( e ) A l l persons required to register under this section shall maintain, subject to the inspection of the Secretary of State, or any person or persons designated by him, such permanent records of manufacture for export, importation, and exportation of arms, ammunition, and implements of w a r as the Secretary of State shall prescribe. ( f ) Licenses shall be issued by the Secretary of State to persons w h o have registered as herein provided for, except in cases of export or import licenses where the export of arms, ammunition, or implements of w a r would be in violation of this joint resolution or any other law of the United States, or of a treaty to which the United States is a party, in which cases such licenses shall not be issued; but a valid license issued under the authority of section 2 of the joint resolution of A u g u s t 3 1 , 1 9 3 5 , or section 5 of the joint resolution of August 3 1 , 1935, as amended, shall be considered to be a valid license issued under this subsection, and shall remain valid for the same period as if this joint resolution had not been enacted. ( g ) N o purchase of arms, ammunition, or implements of w a r shall be made on behalf of the United States by any officer, executive department, or independent establishment of the Government from any person w h o shall have failed to register under the provisions of this joint resolution. ( h ) T h e Board shall make a report to Congress on January 3 and July 3 of each year, copies of which shall be distributed as are other reports transmitted to Congress. Such reports shall contain such information and data collected by the Board as may be considered of value in the determination of questions connected with the control of trade in arms, ammunition, and implements of war, including the name of the purchaser and the terms of sale made under any such license. T h e Board shall include in such reports a list of all persons required to register under the provisions of this joint resolution, and full information concerning the licenses issued hereunder, including the name of the purchaser and the terms of sale made under any such license. 2 1. Section 12 (h) was amended by S.J. Res. 124 approved January 26, 1942, 56 Stat. 19, as follows: "Any reports required by this section may be omitted

STATUTES

AND

PROCLAMATIONS

( i ) T h e President is hereby authorized to proclaim upon recommendation of the Board from time to time a list of articles which shall be considered arms, ammunition, and implements of war for the purposes of this section; but the proclamation Numbered 2237, of May 1, 1937 (50 Stat. 1834), defining the term "arms, ammunition, and implements of w a r " shall, until it is revoked, have full force and effect as if issued under the authority of this subsection.

Section 753 In every case of the violation of any of the provisions of this joint resolution or of any rule or regulation issued pursuant thereto where a specific penalty is not herein provided, such violator or violators, upon conviction, shall be fined not more than $10,000, or imprisoned not more than two years, or both.

PROCLAMATION 2 5 4 9 OF APRIL 9, 1 9 4 2

4

Enumeration of Arms, Ammunition, and Implements of War By the President of the United States A

PROCLAMATION

W H E R E A S section 12 ( i ) of the joint resolution of Congress approved November 4, 1939, entitled "Joint resolution to preserve the neutrality and the peace of the United States and to secure the safety of its citizens and their interests," provides in part as follows (54 Stat. 1 1 ; 22 U.S.C. 452 (0= T h e President is hereby authorized to proclaim upon recommendation of the Board from time to time a list of articles which shall be considered arms, ammunition, and implements of war for the purposes of this section. . . . N o w , T H E R E F O R E , I, F R A N K L I N D . R O O S E V E L T , President of the United States of America, acting under and by virtue of the authority conferred upon me by the said joint resolution of Congress, and pursuant to the recommendation of the National Munitions Control Board, declare and proclaim that the articles listed below shall, on and after April 15, 1942, be considered arms, ammunition, and implements of war for the purposes of section 12 ( i ) of the said joint resolution of Congress:

or dispensed with in the discretion of the Secretary of State during the existence of a state of war." 3. 54 Stat. 1 1 . 4 - 7 F.R. 2769.

142

STATUTES

AND

PROCLAMATIONS

CATEGORY I

( 1 ) Rifles and carbines using ammunition in excess of caliber .22, and barrels for those weapons; ( 2 ) Machine guns, automatic or auto-loading rifles, and machine pistols using a m m u n i t i o n in excess of caliber .22, and barrels for those weapons; machine-gun mounts; ( 3 ) G u n s , howitzers, and mortars of all calibers, their mountings and barrels; ( 4 ) A m m u n i t i o n in excess of caliber .22 for the arms enumerated under ( 1 ) , ( 2 ) , and ( 3 ) above, and cartridge cases or bullets for such a m m u n i t i o n ; shells and projectiles, filled or unfilled, for the arms enumerated under ( 3 ) above; ( 5 ) Grenades, bombs, torpedoes, mines and depth charges, filled or unfilled, and apparatus for their use or discharge; ( 6 ) T a n k s , military armored vehicles, and armored trains; armor plate and turrets for such vehicles. CATEGORY II

Vessels of w a r of all kinds, including aircraft carriers and submarines, and armor plate and turrets for such vessels. CATEGORY III

( 1 ) Aircraft, unassembled, assembled, or dismantled, both heavier and lighter than air, w h i c h are designed, adapted, and intended for aerial combat by the use of machine guns or of artillery or for the carrying and dropping of bombs, or w h i c h are equipped with, or w h i c h by reason of design or construction are prepared for, any of the appliances referred to in paragraph ( 2 ) below; ( 2 ) Aerial g u n mounts and frames, bomb racks, torpedo carriers, and bomb-release or torpedo-release mechanisms; armor plate and turrets for military aircraft. CATEGORY IV

( 1 ) Revolvers and automatic pistols using ammunition in excess of caliber .22; ( 2 ) A m m u n i t i o n in excess of caliber .22 for the arms enumerated under ( 1 ) above, and cartridge cases or bullets for such ammunition. CATEGORY V

( 1 ) Aircraft, unassembled, assembled or dismantled, both heavier and lighter than air, other than those included in category III; ( 2 ) Propellers or air-screws, fuselages, hulls, wings, tail units, and under-carriage units;

STATUTES

AND

PROCLAMATIONS

( 3 ) Aircraft engines, unassembled, assembled, or dismanded. CATEGORY VI

( 1 ) Livens projectors, flame throwers, and fire-barrage projectors; ( 2 ) a. Mustard gas (dichlorethyl sulphide); b. Lewisite (chlorvinyldichlorarsine and dichlordivinylchlorarsine); c. Methyldichlorarsine; d. Diphenylchlorarsine; e. Diphenylcyanarsine; f. Diphenylaminechlorarsine; g. Phenyldichlorarsine; h. Ethyldichlorarsine; i. Phenyldibromarsine; j. Ethyldibromarsine; k . Phosgene; 1. Monochlormethylchlorformate; m . Trichlormethylchlorformate (diphosgene); n. Dichlordimethyl ether; o. Dibromdimethyl ether; p. Cyanogen chloride; q. Ethylbromacetate; r. Ethyliodoacetate; s. Brombenzylcyanide; t. Bromacetone; u. Brommethylethyl ketone. CATEGORY VII

( 1 ) Propellent powders; ( 2 ) High explosives as follows: a. Nitrocellulose having a nitrogen content of more than 1 2 % ; b. Trinitrotoluene; c. Trinitroxylene; d. Tetryl (trinitrophenol methyl nitramine or "tetranitro methylaniline"); e. Picric acid; f. Ammonium picrate; g . Trinitroanisol; h. Trinitronaphthalene; i. Tetranitronaphthalene; j. Hexanitrodiphenylamine; k. Pentaerythritetetranitrate (penthrite or pentrite); 1. Trimethylenetrinitramine (hexogen or T 4 ) ; m. Potassium nitrate powders (black saltpeter powder); n. Sodium nitrate powders (black soda powder); o. Amatol (mixture of ammonium nitrate and trinitrotoluene); p. Ammonal (mixture of ammonium nitrate, trinitrotoluene, and powdered aluminum, with or without other ingredients); q. Schneiderite (mixture of ammonium nitrate and dinitronaphthalene, with or without other ingredients). Effective April 15, 1942, this proclamation shall supersede Proclamation 2237, dated May 1, 1937, entitled "Enumeration of Arms, Ammunition, and Implements of W a r . " IN WITNESS WHEREOF, I have hereunto set my hand and caused the Seal of the United States of America to be affixed. DONE at the city of Washington this ninth day of April in the year of our Lord nineteen hundred and forty-two, and of the Independence of the United States of America the one hundred and sixty-sixth. FRANKLIN D .

By the President: SUMNER

WELLES

Acting Secretary of State

ROOSEVELT

144

STATUTES

AND

PROCLAMATIONS

EXCERPT FROM PROCLAMATION 2 7 1 7 CATEGORY

OF F E B R U A R Y ,

14,

I947

5

III

( 1 ) Aircraft (piloted), both heavier and lighter than air, unassembled, assembled, or dismanded: ( a ) classified from the standpoint of military security; or ( b ) especially designed for warlike purposes; or (c) having a weight empty greater than 3 5 , 0 0 0 pounds; ( 2 ) Non-piloted aircraft and guided missiles, unassembled, assembled, or dismanded; ( 3 ) Any part, component, accessory, or device, of or pertaining to an aircraft either heavier or lighter than air, whether shipped alone or in an unassembled or assembled aircraft: ( a ) which is classified from the standpoint of military security; or ( b ) which ( 1 ) is not in general use in commercial aircraft and ( 2 ) is either especially designed for warlike purposes or adaptable substantially to increase the efficiency or performance of aircraft for warlike purposes.

EXCERPT F R O M T H E J O I N T RESOLUTION APPROVED J A N U A R Y 3 1 ,

l35

Bellanca A i r c r a f t C o r p . , 101

A i r c r a f t , 7 , 42-45. 4 9 - 5 ° . 54. 74-78, 1 2 9

Bolivia, 9, 1 1 , 57, 98, 100

A m e r i c a n Republic A f f a i r s , Office of, 2 9

B r a z i l , 3, 5, 22n

A m t o r g T r a d i n g C o r p . , 102

British B l o c k a d e , 66, 67

123,

Armaments Committee, 1 1 3 - 1 1 4 , 134

B u d g e t , B u r e a u of t h e , 28n, 9 2 , 94, 1 3 0

A r m s , classification o f , 1 4 - 1 6 , 42-43, 49-

B u n n , C h a r l e s , 24, 2 5 , 68 B u r t o n , R e p . T h e o d o r e E., 6

50, 52, 58, 7 5 , 90-93 A r m s control

acts, A p r i l

22, 1898,

3n;

Mar. 12, 1 9 1 2 , 3 n ; O c t . 6, 1 9 1 7 , 6 6 ;

C a n a d a , 54, 7 1 - 7 4 , 84

Jan. 3 1 , 1922, 3n, 1 1 , 5 6 - 5 7 , 99, e x -

C h a c o conflict, 2, 5, 9, 98

cerpt, 1 4 4 ; May 28, 1 9 3 4 , 9, 1 1 , 57, 9 8 ;

C h i n a , 2, 3, 6, 55

Feb. 29, 1 9 3 6 , i 2 n , 22; Jan. 8, 1 9 3 7 ,

Civil Aeronautics Administration,

58; M a y 1, 1 9 3 7 , 2, I 2 n , 18, 2 1 - 2 3 , 43,

C o l o m b i a , 100

58, 6 1 , 74, 86; A u g . 3 1 ,

C o m m e r c e , U . S . D e p t . of, p o w e r to reject

ground,

1935, b a c k -

1-3, 12-18; enforcement,

97,

120

a r m s licenses, 62-63, 68, 85, 129, 1 3 8 ;

100; m a c h i n e r y established by, 20-23;

classification of arms, 90-93, 130

and licensing, 57, 6 1 , 64, 7 4 - 7 5 ; and

C o m m e r c i a l Affairs, Division o f , 26

registration,

C o n t r o l s , D i v i s i o n of, 2 1 , 29, 108-109

43,

47;

reports

required

by, 86; Neutrality A c t of 1939, b a c k -

Controls, Office of, 3 0 - 3 1 ,

ground,

Co-ordinating Committee, i n ,

13-15,

18;

enforcement

of,

1 0 2 - 1 0 5 ; machinery established by, 2 2 23; and licensing, 6 1 , 64, 7 1 - 7 4 ; and registration,

43;

reports

required

by,

86, 89, 9 2 ; excerpts, 1 3 9 - 1 4 1 A r m s E m b a r g o A g r e e m e n t of 1 9 1 9 , 3 A r m s exports, v o l u m e of, 81-83 A r m s and Munitions C o n t r o l , Office o f , 20-21, 32-33,

137 113,

C u b a , 3, 5, 55-56 D o m i n i c a n Republic, 2-3 E c o n o m i c A f f a i r s , Assistant Secretary for, 27

109

A r m s Policy C o m m i t t e e , 1 1 3

E c o n o m i c D e f e n s e Board, 24, 62, 68, 70

A r m s trade, 40-41, 45-46, 78

E c o n o m i c W a r f a r e , Board o f , 62, 66

/\rmy-Navy

Enforcement,

Liquidation

Commissioner,

11,

14, 39-40, 44-45, 96-

1 0 7 , 130

Office o f , 122 A r m y and N a v y M u n i t i o n s Board, 68

E n g e l b r e c h t , H . C „ cited, 8

A r f n y . U.S., 120,

Espionage A c t of 1 9 1 7 , 5 9 - 6 1 , 1 1 9

124

117,

134

Ethiopia, 5 7

INDEX European Affairs, Office of, n o Explosives, 44 Export Control Act, 34, 47, 106, I37n; administration of, 24-25, 138; and administrative discretion, 17, 23-25, 32, 40, 61-62, 108, n o , 126; and licensing, 58-59, 64, 70; blacklisting, 51, 66 Exports and Defense Aid, Division of, 24, 26, 33, 68, 70 Exports and Requirements, Division of, 27 Exton, Frederick, 26, 29, 1 1 1 - 1 1 3 , 120 Feis, Herbert, 24 Field, Virgil F., 121 Foreign Economic Administration, 36, 62-63, 1 2 1 - 1 2 2 , I35n, I38n Foreign Liquidation, Office of, 49-50, 122-123 France, 22, 66 Geneva Arms Traffic Convention of 1925, 4, 9, 1 1 , 16, 52, 75. 126-128 Geneva Disarmament Conference, 5 Germany, 22-23, 68 Great Britain, 22, 66, 71-72, 84, 88 Greece, 1 0 1 - 1 0 2 Green, Joseph C., 40-41, 88, 108-109, 1 1 2 - 1 1 5 ; before House Foreign Affairs Committee, 10-12, 16; as head of munitions control unit, 20-22; as munitions adviser, 25-26; administrative policies of, 106-107, 1 3 2 Guided missiles, 43-44, 49 Habana Convention of 1926, 3-4, 56 Hanighen, F. C., cited, 8 Helium, 2on, 87 Hilldring, John H., 1 1 4 Hiss, Alger, 30 Honduras, 3, 6, 55, 100 India, 22 International Resources Division, 27 International Security Affairs, Division of, 29-30 International Trade Policy, Office of, 27 Italo-Ethiopian War, I4n Italy, 57, 68

149

Japan, 5, 22n, 68 Jessup, Philip C., cited, 4n Johnson, Joseph E., 30 Joint Aircraft Committee, 65, 68 Joint Chiefs of Staff, 119-120 Joint War Production Committee of U.S. and Canada, 73 Justice, U.S. Dept. of, 19, 39-41, 44, 1 0 1 106, 130 Landing craft, 44 Latin America, 2, 65 League of Nations, 4, I4n, 52m Lend-Lease Act, 25, 69 Lend-Lease Administration, and arms exports, 24, 46-47, 49; and licensing, 54, 69-71; statistics, 79n, 81-83 Levitan, David M., 18, 99n Licenses, country of ultimate destination, 53, 81, 96-97; statistics, 19, 78-83 Licensing, 13-14, 51-85 Liquor, trade in, 5 Ludlow, James M., iosn Machine Gun Cases, 104 Machinery, 61 Macmahon, Arthur W., 1 0 9 - 1 1 0 Metals Reserve Corp., 104 Mexico, 3, 6, 52, 54, 100-102 Military Information Control, Subcommittee for, 1 1 8 , 1 2 0 - 1 2 1 , 124-125, 135 Military secrets, ion, 48, 5 1 , 59-61, 1 1 8 125, 135 Munitions Assignment Committee, 65, 112 Munitions Control Section, 27, 30, 120, 122 Munitions Division, 29-31, 34, 45, 1 1 5 , 123, 130, 136-137 National Inventors' Council, 60 National Munitions Control Board, founded, 10-16; functions, 20; and Presidential Proclamations, 48-49; and licensing, 51, 58, 75; reports of, 86-89, 93-94, 130 Navy Dept., U.S., 45, 60, 64, 103, 1 1 9 , 122, 125 New Zealand, 22

150

INDEX

Nicaragua, 3, 6, 55 Nyc, Sen. Gerald P., 9 Pan-American Convention of Feb. 20, 1928, 4n, 5, 56n Pan American World Airways, 75-76 Paraguay, 9, 11, 57 Pasvolsky, Dr. Leo, 29 Poland, 22 Policy Committee on Arms and Armaments, 3 1 , 34, 45, 1 1 4 - 1 1 7 , 1 2 1 , 130136 Portugal, 66 Presidential Proclamation, Mar. 4, 1922, Mar. 22, 1924, and Sept. 1 5 , 1926, 55; Oct. 22, 1930, 3n; June 29, 1934, 5, 55-56; Sept. 24, 1935, 57; Sept. 25, 1935, 1 5 ; Feb. 29, 1936, 57; Apr. 10, 19î6> j 5> 58, 100; May 1, 1937, 15, 23, 6 1 , 66n; Apr. 9, 1942, 15, 43, 48-49, 129, text, 1 4 1 - 1 4 3 ; Feb. 14, 1947, 15, 49-5°. 77. I2 9> excerpt, 144; Priorities Acts, 67 Proclaimed List of Certain Blocked Nationals, 5 1 , 63-68 Registration, 1 3 - 1 4 , 38-50 Rockets, 43-44 Russell, Donald S., 1 1 3 Saint Germain, Convention of, 4 Scientific Research and Development, Office of, 60 Second War Powers Act, 67 Seldes, George, cited, 8 Soviet Union, 22n, 7 1 , 102 Spain, 22n, 58, 102-103 Special Political Affairs, Office of, 7, 2930, i n , 137 Stafford Ordnance Corp., 103 State, U.S. Dept. of, history of arms administration, 19-37; arms policy func-

tions, 19, 34, 43, 62, 68-69; co-ordination of arms administration, 1 0 8 - 1 2 ; ; arms control personnel problems, 28, 33> 35i 48, 94, 1 3 2 ; see also Arms and Munitions Control Office, Controls Division, Munitions Control Section and Division State-War-Navy Co-ordinating Committee, 68, 1 1 4 , 1 1 7 , 120-125, 1 3 1 . 1 3 5 Surplus Property Disposal, U.S. matériel 47, 1 2 1 - 1 2 4 ; enemy matériel, 123 Sutherland, Justice, 16-18, 99 Sweden, 66 Switzerland, 66 Taft, Charles P., 27, 29, m - 1 1 3 Tin-plate scrap, 2on, 87 Treasury Dept., U.S., 30, 90 Turkey, 66 United Nations, 30, 127-128, 137 U.S. v. Anthony Armatos, 100 U.S. v. Augustin Contreras, 101 U.S. v. Curtiss- Wright Export Corp., gn, 16-18, 97-100, 106 U.S. v. Meiecio Guno, 100 U.S. Mario Jaqucz, 101 U.S. v. Edward Pacin, 101 U.S. v. Duncan Pierce, 100 U.S. v. Pink, i8n Van Karner Ordnance Corp., 103-105 Versailles Treaty, 22n War Dept., U.S., 44, 60, 64, 90, 1 0 3 , 1 1 9 125 War Production Board, 65 War Supply and Resources Division, 27 Western European Affairs, Division of 110 Working Committee on Arms Control,6, 1 1 1 - 1 1 4 , 1 2 3 , 134