The word "accessory" shall be construed in its broadest sense and shall include, but without limitation of the generality of the foregoing, automatic chokes, thermostarters, and special carburetor tools, but shall not include fuel filters, speed governors, or boost controls, except when built as an integral part of a carburetor. 4. The licensee will make its own drawings available to Bendix through Zenith, so far as official secrecy permits, and will generally keep Bendix and Zenith in touch with developments made. 5. Zenith and Bendix shall be entitled to the free use of improvements made by the licensee. 6. Bendix will permit visits of engineers of the licensee to its plants for the purpose of studying methods of manufacture. 7. Bendix will communicate to and permit the use by M. A. P. of all improvements made by Bendix in aircraft carburetors during the life of any of the licenses in question. 8. M. A. P. shall have the right to supply the licensed carburetors for the use of the Governments of India, Egypt, Iraq, Sudan, and of the British Dominions and Colonies without further payment being demanded in respect of such supply and use, provided, however, that M. A. P. shall not supply the licensed carburetors for the use of the Government of Canada. 9. M. A. P. shall have the right to export, except to the United States, the licensed carburetors as part of an engine assembly, and spare parts for such carburetors, for the use of any Allied Governments, without further payment beyond the original royalty being demanded in respect of such supply and use. 10. M. A. P. shall have the right to sell in the United Kingdom any surplus carburetors no longer required for the services of the Crown without further payment beyond the original royalty being demanded in respect of such sale. 11. This letter and any licenses granted under the authority thereof are subject to all present and future laws and regulations of the Government of the United States and its several departments. Any undertakings on our part which conflict with such laws and regulations are hereby voided. Yours very truly, BENDIX AVIATION CORPORATION. EXHIBIT No. 627 [Letter from the Zenith Carburetter Co., Ltd., to M. P. Ferguson, Bendix Aviation Corporation, South Bend, Ind., dated April 30, 1941] Original per air mail (February 5, 1941). THE BENDIX AVIATION CORPORATION, South Bend, Ind. (Attention M. P. Ferguson, Esq.) APRIL 30, 1941. DEAR SIRS: We wish to thank you for your letters of the 21st February dealing with the question of licensing arrangements and sales in our territory, under present war conditions, of those articles of your manufacture that are covered by our contract. It must be appreciated that other firms are party to the Bendix-Solex-Zenith agreement, and it is not possible to consult them, and therefore, in order not to prejudice their rights and place ourselves in an invidious position, we cannot agree to any modification to the existing contract or be party to any arrangements that may ultimately affect the interpretation of same. This being clearly understood at the outset, we think the best thing is to deal with the questions one by one as raised in your two letters. 1. We have not concluded any arrangements with the British Air Ministry either as regards the manufacture of Stromberg carburetors in this country under license or the importation of carburetors and parts. We have, however, had some interviews on this matter, at which officials of 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, but that we wish to do nothing which will interfere with the war effort. Consequently, if they wish to manufacture the Bendix-Stromberg injection carburetor in this country, they must adopt one of two positions, either (a) Put in operation war legislation which enables them to use all patents without leave of the patentees, agreeing the amount of compensation payable after the war; or (b) They must pay a royalty, of which 50 percent will go to yourselves and 50 percent to us. This royalty, however, could in respect of actual war transactions, be either a token payment, which we assume would not be acceptable to yourselves, or else a proper commercial royalty of which our 50 percent share would eventually be returned to the British Exchequer as a gift, so that we should not be making profit out of wartime exigencies. Under these circumstances, we cannot authorize you at the present stage to conclude any arrangements with the British Government or any other party that in any way prejudices our undoubted rights under our existing contract. We are willing to study any reasonable proposition to help to introduce and increase the sale and reputation of the Stromberg injection carburetor in this country consistent with the national war effort. Frankly, we are surprised that you should even have furnished the Commission with a letter agreeing to licensing the manufacture in this country without consulting us, and we desire to place it on record that your action is contrary to the letter and spirit of the agreement. We must once more request that all business that affects the sale, manufacture, or dealings with the Bendix-Stromberg carbuertors in this country be passed through ourselves. 2. The question of direct sales by yourselves in Zenith territory surely should not need clarification. According to the leter and spirit of the agreement, all such sales must be made through ourselves, and only the carbueretors and parts imported through the engine manufacturers for service are outside the agreement. It is not to your benefit to take advantage of this, for it it is much better that we handled the whole of the servicing and requirements in this country rather than allow it to be effected piecemeal by each individual engine manufacturer, which means that it will only be done imperfectly to the detriment of good service. We definitely state that you have no right to supply to a purchasing house or commission or to any third party carburetors and parts where it is definitely known they are for export to England, or within the territory defined by the agreement. This business must pass through us. If you require to vary this procedure, then our consent must be obtained by you before making any arrangements, and a definite margin of royalty reserved for us. So far as carburetors which are supplied purely for war purposes, we are prepared to agre to accept a token commission, but such token commissions are not to be taken as an agreement to waive all or any of our rights under the existing contract or to be in lieu of the commissions agreed. 3. Concerning direct sales of aircraft carburetors and parts in our territory to others than ourselves, we are willing to accept your suggestion of a commission of 4 percent, but only during war conditions, and this is not to be treated as a precedent for post-war business. 4. Exactly the same remarks apply to direct sales in all parts of the British Empire with the exception of Canada and British West Indies. The parent company, as you term it, has nothing to do with this, which is the sole and exclusive territory of the Zenith Carburetor Co., Ltd. We are not concerned with sales outside the British Empire. 5. We do not understand why you query the capability of our company to undertake the sale anywhere in our territory of carburetors and parts of your manufacture for we are fully capable of manufacturing the entire carburetors and parts of same if necessary, provided you will supply us with all the requisite data, which you have not done up to the present time in spite of our repeated requests and the definite obligations on your part to do under the agreement. We of course realize that the leading American engine companies feel that the performance of the carburetor is tied up with the engine and that consequently it is their job to look after the carburetor, and whilst this is very nice in theory, you know from your own experience that it does not work out in practice and that sooner or later the accessories manufacturer is called upon for service and help. 6. We are not able to pass any comments on the question of whether 4 percent is a fair and proper sum to be paid until the matter has been finally discussed with the Air Ministry, which we hope will be in the course of the next week or so. We much appreciate your sending Mr. Strobridge to help us and he has been of very great assistance and we are working well together. We have never been advised, however, just what is his position and up to the present he has represented himself as from the Bendix Aviation Corporation. All data has been sent by you to him direct, and not to ourselves. We have purchased a car for him and placed it at his disposal and Mr. Strobridge has had the wind screen painted with the words "Bendix Aviation Corporation." Your letter, however, now makes it quite clear that Mr. Strobridge must make it quite clear to all whom he contacts with that he is working through ourselves and not directly from America. This can only be to the good and clears up a rather difficult position. Mr. Strobridge has not withheld any information from us and has given every assistance, but so far he has retained all the data and we have had nothing at all in our own offices. We understand, however, that duplicate sets of this information are on the way to us from Mr. Bunker. We expect Mr. Strobridge has reported to you that we support him in every way, for, as we have already informed you, it is our desire that the injection carburetor should be properly serviced in our territory and such a reputation obtained in this country that business will follow in post-war times. We hope to have the flow bench within a few days now, when we shall start our school for training, first training a number of our own engineers in the handling and servicing of the Stromberg carburetor and then afterward training regular contingents from the Air Force for the same purpose. We ae still woefully short of data of all kinds and it still passes the comprehension of the writer why you seem to be purposely withholding this. May we suggest that you refer to the agreement, where you will see you are definitely under an obligation to supply it. Many of our letters remain unanswered for a long time. 8. This is dealt with in paragraph. 9. It is certainly our wish and will be our endeavor to get the Air Ministry to order all the parts they require through us, for not only is this our right but it is also to the benefit of everybody that there should be a central depot handling the spare parts and the servicing. We are not sure whether the British Air Ministry will agree to this and if they wish to purchase the spares themselves through the British Purchasing Commission, then we should receive the token commission previously referred to. 10. This is dealt with in paragraph 5. 11. W do not seek any rights or privileges other than those provided for by our contract and, therefore, when making arrangements with your customers which affect British territory, our interests and rights must be fully protected in every way. You will always find us ready and willing to help and assist in increasing the business and reputation of your products so there is no reason why we should not be consulted every time you wish to make an arrangement affecting our territory. 12. As mentioned before, our contract very definitely covers the whole of the British Empire with the exception of Canada and the British West Indies. and that being so you must clearly understand that we are not prepared to agree to any variation thereof; moreover, the sale of flow benches and equipment is definitely covered by our contract and all dealings therewith must rank for commission or royalty on the same basis as carburetors themselves. Paragraph 6 of the agreement, to our mind, leaves no doubt on this matter. Here, again, we respect your wish to supply this equipment at the lowest possible price, and therefore we ask for a token payment only in order that the terms of the contract may be fully complied with, and we therefore suggest $1 per flow bench is paid, but there must be some acknowledgment of this kind in order to protect our rights under the agreement. We do hope you will appreciate the spirit in which this letter is written. We must maintain to the fullest degree all our rights and privileges under the contract because, as we have already stated, we are only one party to it and have not the means of consulting the other parties under present conditions. We cannot take any risks which would leave us exposed to litigation, which might prove an expensive business for us. It is possible for both yourselves and ourselves to maintain these conditions without interfering with the war effort on this side or cause any detriment to your own business in America or the reputation of the carburetor, and the best way to do this is to comply fully with the terms of the contract, to pass all business queries which in any way affect British territory, through us. You may rely upon our looking after your interests. 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. We cannot say how much we appreciate the effort that America is making to help us and how grateful we are to know that it is the means of bringing our two peoples closer together in the future to the benefit not only of our individual peoples but of that of the whole world. The writer also takes this opportunity of sending to you all his best wishes and kindest regards and to assure you once more that no effort will be spared on our part to provide efficient service for the Stromberg carburetors in this country, and to prepare the ground for post-war business. Yours sincerely, THE ZENITH CARBURETTER CO., LTD., EXHIBIT No. 628 [Interdepartmental memorandum from R. P. Lansing, Bendix, to N. B. McLean, Bendix, dated January 2, 1940; and Mr. McLean's answer written by hand on same page] INTERDEPARTMENTAL BENDIX-NEW JERSEY Date: January 2, 1940. Subject: Blueprints mailed to Bosch, Germany. How do we send mail (blueprints ) to Bosch, Germany? By air (?). I assume you know boat mail was capture and showed up in England. [Handwritten:] R. P. LANSING. 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 weght 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. MCLEAN. EXHIBIT No. 629 [Quotation from letter to Thurman Arnold, Department of Justice, dated May 27, 1941, from an official of Bendix Radio Corporation. Available in committee files] EXHIBIT No. 630 [Interdepartmental communication from F. A. Stanton, Bendix Aviation Corporation, to R. P. Lansing, Bendix Aviation Corporation, dated September 12, 1940] To: Mr. R. P. Lansing. ce: W. T. Hunt. BENDIX AVIATION CORPORATION, I have received several communications from Mr. O'Hanrahan, the earliest being dated August 5 to August 26, mailed from various parts of France, to wit, Bordeaux, Paris, Brassac, and Megecoste. I enclose copy of communication No. 229 dated August 6 from which I have deleted some extraneous matters. In a communication dated August 11 from Paris, Mr. O'Hanrahan amongst other things writes: "None of the three factories are operating to speak of although all of them have personnel therein. I'm speaking of CW's, Jojo's, and BB's factories in Paris. For example BB's factory has a personnel of about 150 who work 3 hours per day, 2 weeks in the month. CW's factory has a lot of draftsmen therein designing an engine for a motorcyclette. No one here can see for the moment what there is for CW to build. The Germans are going to take over the factory at Blois and operate it themselves, but what they are going to manufacture therein is not yet clear. "Jojo's factories in Issoire and Brassac are big enough to furnish all France with the products that he manufactures and he would like to close down Paris more or less, since his labor costs at Issoire and Brassac are inferior to Paris. Whether he will be able to do this remains to be seen since much depends on the regulations that are applied to the occupied territory by the Germans. The automobile factories are for the most part in the occupied territory, and it is not sure that it will be permitted to ship products from the unoccupied to the occupied territory and vice versa. "We are in a quandry as to what attitude to take in talking with the Germans with respect to the three factories. It has been held out to them that the Clichy factory is American but not much has been said relative to the others. I am seeing the Irish banker tomorrow and some others in an effort to determine what position to take. Some of the machines from CW's factory have already been taken out to be sent to Germany. If the position were taken that this and the other company were American controlled, it might put a damper on the Germans for the time being, but it might be worse in the long run, depending on what the United States does." In another communication dated August 12 he writes: "Unfortunately, the company which would seem to be most affected by the events is that one for which we cannot show a control, namely CW's company, for the Germans have already taken out of the Paris plant some machinery and as at present informed, they will take over and operate the plant in Blois, but. as indicated in another communication, it is not known what they will manufacture therein. "Jojo has an operating company at Brassac and Issoire, and a goodly portion of his machinery, etc., is in these two places. He has, however, considerable machinery in Paris, but it consists of old machines and as yet it has not been meddled with by the Germans. They have, however, taken stock of his raw material, of which he has a great amount of brass. "CW's company, which has always bent itself backwards as much as possible in endeavoring to disavow any connection with America is now bending itself as much in the other direction, endeavoring to show its connection with America, since this seems to be the best policy for the moment, not only for the purpose of saving the factory, but also to obtain some business from our American friends in Germany." Again, under date of August 14 from Paris he states: "It is probable that Eugene will purchase a certain quantity of airplane starters from CW's company and envisages also the purchase of certain gears for starters. This raises a question which should be given attention in the United States and, if possible, we should like to hear from you with respect thereto. Obviously, CW is not authorized under his contract to sell to Eugene. Furthermore, in what country is the royalty to be collected? At the present time. it would seem from conditions here that it is preferable that the royalties be collected from Germany. At the present moment, it is impossible to pay royalties to America from France. It is not known how long this condition will last. The arrangement you have with Germany permits building up a credit at least. It is difficult to determine which is the better, a credit in France or a credit in Germany. The mark is worth practically zero and it would seem that the franc is not worth much more than that, but there are no quotations in francs, and as indicated, it is impossible, even though such quotations did exist, to obtain authorization to pay moneys in foreign currency or even in francs, at the present time, from the occupied zone. Kindly therefore determine what your preferences are as far as royalty payment of these starters is concerned. "Eugene also envisages the purchase of some de-icing equipments and perhaps some compressors for the power brakes manufactured in Germany by Eugene's |