At the time that the memorandum of 4 March 1936 was drawn up Power Jets did not consider that it had any interest in the military field as the Air Ministry held the military rights. It was not then contemplated that the first 100 engines would be wanted for military purposes. BT-H has stated that they lack the capacity for quantity production, and the placing of military orders is not within Power Jets' control.

Hence he argues that BT-H has no grounds for a claim for compensation. Either they must concede that their rights under the memorandum do not extend to the military field, in which case they will remain unaffected by the present situation, or if they claim that their rights do extend to the military field, they will be unable to undertake the quantity production. Any claim for compensation then made by BT-H would be problematic and their rights on any subsequent manufacture would lapse. He suggests that it is in BT-H's interest to accept Power Jets' interpretation, and, if they agree, he requests to be told as soon as possible.

He has been asked by the Air Ministry to obtain a formal understanding with BT-H as soon as possible. 'Your Company's attitude with regard to the manufacture of Engine W.2. renders the matter urgent, and the position is such that uncertainty might be the cause of considerable delay.'

He was under the impression that at the meeting on 21 February HNS's views corresponded to the proposals made above.