Presidential Papers, Doc#1669 To Aksel Nielsen, 23 December 1955. In The Papers of Dwight David Eisenhower
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Document #1669; December 23, 1955
To Aksel Nielsen
Series: EM, AWF, Name Series
The Papers of Dwight David Eisenhower, Volume XVI - The Presidency: The Middle Way
Part IX: "Concerning my political intentions"; December 1955 to April 1956
Chapter 18: On "an almost normal schedule"

 

Dear Aks: Herewith a report the Secretary of Defense made to me on the basis of the recent letter you sent me.1 The Secretary's letter is, of course, not to be seen by anybody but you.2 However, none of the information in it is confidential, and you are free to use it in any way or place that you think useful in order to promote true understanding of the facts.3 The only reason the letter itself is not to be shown to anyone is because it is a communication between one of my Department heads and myself.

Please return the letter to Mrs. Whitman when you have read it. Incidentally, I have no objection whatsoever if you make notes from the information contained in the letter so that you are as fully informed as to the matter as you deem desirable.

With warm regard, As ever

1 On December 8 Aksel Nielsen had written Eisenhower regarding rumors in California that the contract to build a Forrestal class aircraft carrier had been awarded to a New Jersey firm rather than to one on the West Coast (AWF/N). For background on the attempt by Californians to win the contract for the aircraft carrier at the San Francisco Naval Shipyard, see correspondence in WHCF/OF 3-B-21. Nielsen said that in his opinion the actual ship construction costs would exceed the amount specified in the contract by over $280,000,000. The cost overruns, he said, might result in "another Dixon-Yates type of investigation" (see no. 985).

2 On December 13, Eisenhower had written to Wilson (AWF/N, Nielsen Corr.), quoting at length from Nielsen's letter and requesting the "facts on the situation so that I can set my friend straight." Wilson had responded on December 22 (AWF/A) with a five-page, single-spaced report on the contract to build the aircraft carrier Kitty Hawk.

3 According to Wilson, the New York Shipbuilding Corporation, a subsidiary of Merritt, Chapman and Scott, with a quote of $119,841,034 had underbid its only competitor by approximately $7,000,000. Since federal law required the Navy "to build the carrier in a private shipyard unless the President should find such action to be inconsistent with the public interest," and since there were no private yards on the West Coast possessing sufficient drydocks, the Defense Department had awarded the contract to New York Shipbuilding. The firm was to be responsible for building a new drydock, and the Office of Defense Mobilization authorized New York Shipbuilding to accelerate amortization (for tax purposes) by 80 percent of the cost of the dock over a five-year period.

Wilson concluded that the cost for the carrier, including the contract price, the cost of government-furnished material, ordnance, and all other items, would be approximately $183,000,000, not the $400,000,000 quoted by Nielsen. The Kitty Hawk would be commissioned by the Navy on April 29, 1961, at a cost of $250,000,000 (see New York Times, June 11, 16, 1961). After sea trials, however, the Navy would charge New York Shipbuilding with "extremely poor" construction. For more on the troubled history of the Kitty Hawk see New York Times, June 15 and Aug. 6, 10, 1961; on Merritt, Chapman and Scott's other dealings with the Administration, see no. 1748 and Frier, Conflict of Interest in the Eisenhower Administration, pp. 115-29.

Bibliographic reference to this document:
Eisenhower, Dwight D. To Aksel Nielsen, 23 December 1955. In The Papers of Dwight David Eisenhower, ed. L. Galambos and D. van Ee, doc. 1669. World Wide Web facsimile by The Dwight D. Eisenhower Memorial Commission of the print edition; Baltimore, MD: The Johns Hopkins University Press, 1996, http://www.eisenhowermemorial.org/presidential-papers/first-term/documents/1669.cfm

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