The U.S.S. _Corsair_ arrived at Lisbon, Portugal, on December 19, 1917, in need of repairs to make her seaworthy. The matter was taken up with the Portuguese naval authorities by the American Consul-General and the Commanding Officer. An engineer and a naval constructor were immediately sent off to the ship from the Naval Arsenal to estimate and report. The same day the Director of the Arsenal stated that he could and would do the work, and that the ship would be berthed at the Arsenal on the following day. As promised, the Arsenal workmen came on board and started the work, and in the afternoon the ship was moored to the Arsenal dock. An estimate of time and cost was requested. The time was estimated at from one month to six weeks, but the cost estimate could not be given. It was suggested that the cost be made actual for labor and material, plus a reasonable overhead. To this the Director replied that the Minister of Marine had ordered the work done free of charge to the U.S. Government, stating that repairs had been done to British and French Government vessels gratis. The work proceeded rapidly and efficiently. I made periodical calls at the office of the Chief Engineer and Naval Constructor to obtain a cost estimate. This was promised for my information, but never received. Finally I was told that if the Consul-General would write a letter on the subject to the Minister of Marine, the estimate would be given and a basis of payment arranged, but that the money would be turned over to the Red Cross. The reply to the Consul-General’s letter is herewith attached, the substance of which is a refusal on the part of the Portuguese Government to accept payment. I requested the Consul-General to keep at the business of trying to obtain a basis of settlement. Later on, I was informed through the Consulate that the Provisional President, to whom the Minister of Marine had referred the matter, had decided to accept payment. This was the status of the question until January 25th, the day before the _Corsair’s_ departure, when the Commanding Officer, accompanied by the Consul-General, made leave-taking calls upon the Arsenal officials. The Director of the Arsenal at this time stated that he had orders from the President to render no bill to the U.S. Government. As our Government had not recognized the officials in power in Portugal during this time, the American Minister could take no action. The cost of repairs to the U.S.S. _Corsair_ by the Portuguese Government during the period from December 20th to January 25th is a gift to the U.S. Government. A translation of the letter in which the naval authorities of Lisbon, with the most courteous obstinacy, decline to permit the _Corsair_ to pay for the valuable services received, reads as follows: _Office of the Minister of Marine Administration of Repairs and Equipment, Naval Arsenal_