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Vice Admiral William S. Sims, Commander, United States Naval Forces Operating in European Waters, to Admiral William S. Benson, Chief of Naval Operations

<August 15, 1918.>      

From:     The Force Commander.

To the Navy Department (Chief of Naval Operations)

Subject:  Repair Facilities for United States Vessels in European Waters; Compensation to Great Britain.

References:    (a) Cablegram No. 8963, July 24, 1918, from the Chief of Naval Operations.1

(b) My cablegram No. 4550, February 28, 1918.2

(c) Cablegram No. 3641, March 8, 1918, from the Chief of Naval Operations.3

(d) Cablegram No. 3770, March 12, 1918, from the Chief of Naval Operations.4

(e) My letter No. 19727-40.3.2A, June 1,1918.5

     1.   In accordance with the Department’s cablegram, reference (a), I have informed the British Admiralty that the United States Navy Department is unable to agree in the principle of compensation in kind for the repair facilities in the United Kingdom placed at the disposal of the United States Naval Forces operating in European Waters.6 Unless the Admiralty feel it is necessary to make further representations in regard to this matter, no further action is necessary at the present time.

     2.   In view of the cablegram from the Secretary of the Navy, Simben No. 5, July 24, 1918,7 it appears desirable to set forth at some length the negotiations in regard to repair facilities in the United Kingdom, and the reasons why it appeared necessary to enter into discussions involving the principle of compensation in kind, of which the Department has expressed its disapproval.

     3.   In the Spring and early Summer of 1917, when American Destroyers and other vessels were first assigned to operation in European Waters, their numbers were small, and the provision of adequate facilities for their docking and re-fit did not present a serious problem. The Admiralty at once put at our disposal in Government dockyards and private plants, sufficient facilities to cover our existing and immediately prospective needs in this respect. Furthermore, these arrangements were made prior to the Russian collapse in November 1917, and therefore prior to the time when a shortage of British manpower became a question of absorbing national importance.

     4.   In January and February of the current year, after the Department’s building program of destroyers, submarines, Eagle boats, and mine sweepers had been settled upon, and was well under way, it became necessary to prepare plans for the maintenance of the large number of new vessels which will eventually be based in European Waters. It was planned to provide for the current upkeep, during active operations, by means of the Repair Ships already put in hand by the Department, supplemented by small semi-portable shops on shore, together with barracks for a sufficient number of men to provide for the operation of Repair Ships and shops twenty-four hours a day. These arrangements did not, however, provide for periodic docking, together with items of overhaul, requiring a longer period than that available during the active operation of the vessels, nor for the repair of major casualty damages, requiring the extended use of docks. The responsible Admiralty officials, charged with the upkeep and maintenance of the British Fleet, were then consulted in regard to this phase of the necessary arrangements.

     5.   Although their docks and repair facilities were already overcrowded with work, and torpedoed ships were actually awaiting docks before their repairs could be put in hand, and their program of new construction was falling seriously in arrears on account of the ever growing necessity for repairs, the Admiralty was favorably inclined to my proposals for using British Dockyard facilities for extensive repairs and periodic refits, recognizing the propriety and efficiency of the proposed arrangements. They, however, felt it necessary to have <to call attention to the adverse effect which such an arrangement would have> on the question of British manpower, which was, at that date, becoming a pressing one. I accordingly put forward to the Department the outline of these plans, in reference (b) above, drawing particular attention to the manpower question. Referring to a possible adjustment of this question, I stated that it was “probable that it (this arrangement) would necessitate the withdrawal from British Army of artisans to furnish additional dockyard labor needed and this would involve United States making up the drain on British Army”. In this connection, it should be noted that the British Government had already publicly committed itself to the policy of withdrawing skilled shipyard mechanics from the army for the prosecution of their building program (about 12,000 have been withdrawn for this purpose) I also understood, at that time, that the President8 had already given approval to the incorporation of American battalions in British brigades, although this policy had not yet been announced either in Washington or in London. The Department, however, in reference (c), disapproved this policy, and reiterated its disapproval in reference (d). I was therefore forced to the conclusion that either the President had withdrawn his approval of brigading American troops in the British Army (the policy was, however, announced and put into effect only a few weeks later), or the matter was considered too confidential to be mentioned, even in discussions with the Admiralty. was therefore precluded from making use of the logic of this policy in my discussions with the Admiralty. It was, unfortunately, just at this juncture, that the Admiralty’s failure to maintain the estimated output of merchant tonnage was made a national issue, and very strong attacks were made, both in Parliament and in the press, on the Government for this failure, resulting eventually in fundamental changes in the internal organization of the Admiralty, and in the control of merchant shipbuilding. In view of this strong expression of public feeling, the Admiralty officials naturally were unable to commit themselves to a proposal involving the eventual utilization of 4,000 or 5,000 skilled shipbuilding mechanics, without first exhausting every possibility of a different solution. It was then that the Admiralty put forward, in a letter dated March 26, 1918, the proposal that the United States should build, equip, and operate with American labor, a docking and repair plant in the United Kingdom, as quoted in paragraph 1 of reference (e).

     6.   I felt that a development of such magnitude under existing  conditions was totally inadmissible, and I could not conceive that it would in any way meet with the Department’s approval. A very rough estimate of the magnitude of the undertaking is contained in Appendices A and B of the “memorandum in re. repair Situation” dated March 28, 1918, which was forwarded as an enclosure with reference (e),9 indicating that a cost of ten to twenty-five million dollars, and the employment of 4,000 to 5,000 men were involved. I therefore felt in necessary to take up the question, as one of military policy, with the highest authorities in the Admiralty, and for purposes of examining the question from all points of view, the memorandum of March 28 was prepared by a member of my Staff, and was subsequently given by me to the Admiralty Board. In paragraph 6 of this Memorandum, reading as follows: “This last point, however, is a purely national one which could be met by an agreement on the part of the United States to turn over to Great Britain an amount of new tonnage, either Naval or Merchant, which would be equivalent to the amount which would have been turned out in any given period by the number of men employed, on repair work for United States vessels”. Was contained the first mention of the principle of “compensation in kind”, of which the Department has expressed its disapproval.

     7.   At this time, the United States Government had assigned to, and was then operating in the service of various Allies, several hundred thousand tons of American shipping. Compensation for munitions supplied to the United States Army by France and England, by the replacement of material involving the assignment for the purpose of a considerable tonnage of American shipping, had already been approved by the United States Government, In view of these policies, which involved the utilization for an extended period, if not the actual sale, of American ships, I cannot feel that I initiated a general policy of international character <in> is suggesting that I might submit to my Government for approval a proposition involving the sale to Great Britain of a few ships of American register. In this connection also, it should be noted that the ships involved would still have been utilized in war service as fully under the British flag as under the American. Furthermore, with the present shortage of skilled shipbuilding labor both in Great Britain and the United States, the utilization of large numbers of men for repair work must result in a corresponding decrease in output of new tonnage, and this fact applies equally to the United States and Great Britain. If there-fore, it became necessary to undertake the docking and periodic refits of all of our vessels operating in European Waters in the United States, instead of in Great Britain, there would inevitably be a decrease in the output of new ships in the United States equivalent to the number which it would have been proposed to sell to Great Britain in recognition of their assumption of their burden of our repair work with the corresponding decrease in their own output of new tonnage.

     8.   Referring to cablegram Simben No. 9,10 I understood at the time that approval of the proposal would require the concurrence of the United States Shipping Board, and I, therefore, consulted the Vice Chairman of that board, Mr. R. B. Stevens,11 who, being in active touch with conditions here, fully concurred in my recommendations on this matter, and concurrently with my letter to the Department, reference (e), wrote to the United States Shipping Board stating the reasons for the desirability of this course.

     9.   In assenting to my proposals for the docking and refitting of our vessels in British Yards, the Admiralty, in their letter, copy of which was enclosed with reference (e), stated that it appeared to them not unfair to ask that compensation, in kind for these facilities be extended by the United States. As stated in paragraph 4 of reference (e), I simply replied that I felt sure that my Government would give sympathetic consideration to such proposals. I then made full report of these negations to the Department in my letter, reference (e). It should be noted, however, in this connection, that that portion of paragraph 4 of reference (e) which refers to the commandeering of British ships building in American Yards, was simply for the purpose of bringing to the attention of the Department a matter on which it seemed that they should be informed, and which might be of contingent interest in connection with the subject in hand, but did not form a part of my proposals and is a subject on which I have never had any discussion, formal or informal, with any British official.

     10.  It does not appear to me that the Department can be fully cognizant of the aroused state of public feeling in Great Britain on the subjects of utilization of manpower and the constantly decreasing tonnage of the British Merchant marine, which affects the every day life of every individual in this country by creating the necessity for compulsory rationing of food, fuel and transportation facilities. These factors cannot, however, be ignored by responsible officials of the British Government, and must influence very largely their attitude and action on any proposals affecting their shipbuilding program. I regret that the Department has not been able to approve a procedure which appears to me so eminently fair and just.

Source Note: Cy, DNA, RG 45, Entry 517B. Document reference: “R-2-40.3.2A. 29469” and in columnar fashion, “1/3/J/6.”

Footnote 1: See: Daniels to Sims, 24 July 1918.

Footnote 5: Sims’ let of 1 June 1918, has not been found.

Footnote 8: President Woodrow Wilson.

Footnote 9: The referred to enclosures were not attached to the document.

Footnote 11: Raymond B. Stevens.