(The letter quoted from was marked "Exhibit No. 621" and appears on p. 2386.)

Mr. MARTIN. Siemens informed Bendix on April 20, 1940, that it would be impossible for them to supply the drawings with the instruments it desired.

In August 1936, we had contacted the Kreiselgeräte G. m. b. H. in this matter, and at that time they advised us that they might later let us have their drawings for you. When we recently inquired again, the Kreiselgeräte G. m. b. H. advised us that they were unable to let us have these drawings for transmission to you. We were told by this firm that the reason for their refusal is that the Askania-Werke Aktiengesellschaft, in the meantime, have obtained control over their patent and copyright holdings and this company, in turn, is tied up contractually with the Sperry Gyroscope Co.

(The letter quoted from was marked "Exhibit No. 622" and appears on p. 2387.)

Mr. MARTIN. In May 1940 Bendix confesses its inability to manufacture the automatic pilot without the Kreiselgeräte gyro:

In view of the fact that Siemens are unable to obtain drawings of these gyros from the company from whom they buy them because of their connection with Sperry, we will be unable to manufacture these instruments. * *

(The letter quoted from was marked "Exhibit No. 623" and appears on p. 2387.)

Mr. MARTIN. Siemens was not backward in using the Bendix agreement as a political and military instrumentality against enemies of the Nazis. By the terms of the Siemens agreement, Bendix had been granted the United States and Canada as its exclusive territory for the sale of aircraft parts and accessories of the Siemens design. Immediately following the outbreak of war in 1939, Siemens asked that Bendix refuse to sell certain instruments in Canada, territory granted to Bendix under the agreement, and Bendix did so. An exchange of letters between the two firms virtually modified the original agreement, denying to the Canadian war effort Bendix products of Siemens design and resulting in the loss of Canadian sales territory to Bendix.

On Ocober 25, 1939, Captain Altvater, of Siemens, wrote to Charles Marcus, vice president of Bendix, requesting the latter to withhold from Canada all Bendix instruments built under Siemens' licenses:

Under our agreement, your geographical contract territory includes the United States, its territories and Canada. A state of war exists, at the present time, between Canada and ourselves.

Notwithstanding the war, we are, of course, willing to live up to the agreement as far as possible. However, we would appreciate receiving your assurance that the records which you will receive from us within the scope of our agreement will not be given to Canada for the duration of the war, and that you will supply no instruments, built under a license, if you know that they are destined for our enemies.

(The letter quoted from was marked "Exhibit No. 624" and appears on p. 2388.)

Mr. MARTIN. Mr. Marcus acquiesced in the following letter:

As regards the drawings sent over you may rest assured. As regards fabrication

* * we will arrange, to the best of our ability,

(The letter quoted from was marked "Exhibit No. 625" and appears on p. 2388.)

The CHAIRMAN. That is another example of how the Germans used an American company as a tool in its campaign of economic warfare? Mr. MARTIN. Yes. The Bendix Aviation Corporation also entered into a series of licensing arrangements, starting in 1933, with the principal European manufacturers with regard to the manufacture and sale of both automotive and airplane carburetors. One of the results of these agreements was to create a shortage of aircraft carburetors in England.

By the terms of the agreements, Bendix was not allowed to sell its carburetors in the British market. The French companies, Société Anonyme Solex and Société du Carbureteur Zenith, parties to these agreements, had furnished aircraft carburetors to the British market from their French factories and had maintained principally sales and servicing agencies in England. With the fall of France, Britain was shut off from its main source of supply of Zenith-Solex products. There was an immediate shortage in England of this type of aircraft equipment. Even then, however, the British subsidiaries of the French companies sought to maintain their exclusive patent hold on the carburetor supply.

On January 6, 1941, Mr. J. E. Keel, of the British Air Ministry in Washington, addressed a letter to Mr. Marcus, of Bendix, seeking Bendix' acquiescence to the manufacture of "injection carburetors by others than Zenith in the United Kingdom." On February 4, 1941, Mr. Marcus replied, stating royalties and other terms by which Bendix might agree to such an arrangement. Marcus presumed that the "Ministry of Aircraft Production are in accord with the Zenith Carburetter Co., Ltd.," the British agency of the French parent company, regarding such outside manufacture.

(The letter quoted from was marked "Exhibit No. 626" and appears on p. 2389.)

Mr. MARTIN. Unhappily, this was not the case, for on April 30, 1941, almost a year after Dunkerque, Mr. T. L. Turner, of British Zenith, addressed a strong letter of protest to Mr. Ferguson, of Bendix, in which he stated, in part:

The Ministry suggested they would prefer to manufacture the carburetors themselves and asked us to waive all our rights in this matter.

We have told them plainly that we are not prepared under any circumstances to agree to this or to alter one item of our contract with you.

* * *

You know that we have got to win the war if we are going to survive and it is because we know we shall win and survive that we are anxious that post-war business should not be complicated by departing from the conditions of the contract in the meantime and under the excuse of war conditions

*

(The letter quoted from was marked "Exhibit No. 627" and appears on p. 2390.)

The CHAIRMAN. In other words, lives be damned, but save the business. There is an English company which is more concerned about the post-war competition than it is in winning the war for its country. Mr. MARTIN. That seems to be the inference.

The CHAIRMAN. You haven't seen a German corporation that was willing to risk the loss of the war to save post-war business.

Mr. MARTIN. I don't think I have seen that at all.

The Bendix Aviation Corporation therefore under the agreement could not comply with this British Air Ministry request.

The Bendix Aviation Corporation also entered into a series of agreements with Robert Bosch G. m. b. H., leading German manufacturer of aviation components and accessories. These agreements provided that Bendix should supply Bosch with complete designs and manufacturing information on each of the products covered, principally starters for aircraft and Diesel engines. Bendix observed these provisions and gave Robert Bosch the designs and information it required, "at least as late as 1940."

In 1939, Bendix' transmission of information to Robert Bosch was interfered with by British naval action, and Bendix was concerned with how it could circumvent the British blockade so as to get blueprints to Robert Bosch. It is not known when Bendix ceased sending designs and information to Robert Bosch. Apparently information was sent subsequent to the British seizure, for an interdepartmental memorandum from R. P. Lansing to N. D. McLean, dated January 2, 1940, gives the modus operandi:

How do we send mail (blueprints) to Bosch, Germany? By air (?). I assume you know boat mail was captured, and showed up in England.

Mr. McLean replied:

1. All license data is sent straight mail and is routed on Italian boats through Italy, Switzerland to Germany.

2. We use air mail wherever weight of info or data permits.

3. Post office routing officials for foreign mail advise "there is nothing you can do about mail seizures except protest as did Secretary Hull today."

4. I believe best we continue to mail data if we are to receive royalties.

(The document was marked "Exhibit No. 628" and appears on p. 2396.)

Mr. MARTIN. Bendix received royalties from Robert Bosch almost up until the time the United States entered the war. The payments increased as the war increased in intensity. After the outbreak of war in September 1939, Robert Bosch paid over one-quarter of a million dollars in royalties to Bendix, mostly in American dollars. Robert Bosch continued to make royalty payments to Bendix as late as March 1941 in which month it made a payment of $50,000.

The CHAIRMAN. Isn't it strange that Bosch, evidently with the consent of the German Government, was paying out all this much-needed foreign exchange at this time?

Mr. MARTIN. Here again, it was paying it out in dollars, which were a scarce commodity from the German viewpoint.

During the latter part of this period in which the Germans were making these substantial payments, the French affiliates of Bendix cooperated with Robert Bosch to supply Nazi war needs. The Bendix Co. itself, speaking through one of its officials, said:

** *

The Bendix Aviation Corporation is still receiving from Germany approximately a quarter of a million dollars annually representing royalty payments, and I am unable to convince myself of any good reason why this should be so our foreign interests include several plants in France making automotive and/or aviation devices. The belief is held by some within the corporation that the quarter million is being paid to keep our officals in the proper frame of mind so that the acquisition of these plants by German interests will be more readily accomplished. Bearing in mind that the German interests do not need to own the plants in order to have them operate, or that the matter of plant acquisition in occupied France by the German under the guise of legality seems to be easily accomplished, it does not appear to me that this reason is sound for such a large payment from an unfriendly country short of foreign exchange.

(The document was marked "Exhibit No. 629," and appears on p. 2393.)

Mr. MARTIN. The Bendix plants in France referred to above were the S. A. Air Equipment, S. A. Bendix and Etablissements Ducellier, S. A. The events preceding these payments were as follows:

On July 6, 1940, immediately following the military defeat of France, Bosch cabled Bendix that problems confronting the Bendix French companies by reason of the "new economic alignment" could be more advantageously handled if Bendix and its associated French companies should take a common stand in France. Bendix immediately assented, asking Bosch to approach the officers of the Bendix French companies and Mr. Edmund O'Hanrahan, French representative of Bendix, then in Paris.

Mr. Eugene Dipper, a Bosch representative who had arrived in Paris, immediately established contact with Mr. O'Hanrahan and the officers of the Bendix French companies. The object of the negotiations was to have the Bendix French companies manufacture the Bendix line of products for Robert Bosch and other companies in Germany for ultimate use by the German Air Force and other branches of the German military service. Mr. O'Hanrahan's job was to procure all the orders possible for Bendix French companies from the Germans.

On August 14, 1940, Mr. O'Hanrahan was able to report to Bendix that Robert Bosch was planning to purchase from Air Equipment a quantity of starters, gears for starters, power brake compressors, and deicers.

(The document was marked "Exhibit No. 630" and appears on p. 2393.)

Mr. MARTIN. By September 1940, collaboration between the Bendix representatives in France and the German occupying forces was in full operation. In a memorandum dated September 6, Mr. O'Hanrahan of Bendix in France describes the visit of Eugene Dipper, director of Robert Bosch, and their mutual efforts to step up the production of Bendix factories in France for the benefit of Germany. O'Hanrahan suggested that:

* * I think it will be most fitting that a letter be written to him thanking him most warmly for the efforts that he has made in behalf of the three companies.

(The document was marked "Exhibit No. 631" and appears on p. 2396.)

Mr. MARTIN. O'Hanrahan assured Bendix that

we have definitely shown to Eugene that we are doing everything possible to cooperate with him

*

(The document was marked "Exhibit No. 632" and appears on p. 2396.)

Mr. MARTIN. By March 27, 1941, Air Equipment had orders from Mr. Dipper for 15,000 sets of aviation gears and 2,000 sets of diesel engine gears "thanks to Ned O'Hanrahan's relations with

(Robert Bosch)."

* * *

(The document was marked "Exhibit No. 633" and appears on p. 2397.)

The CHAIRMAN. Thank you, very much, Mr. Martin.

We will recess until 2:30 this afternoon. Mr. Adams of the same department will be the witness.

(Whereupon, at 12: 14 p. m. the hearing adjourned to reconvene at 2:30 p.m. the same day.)