At first, it was a simple business deal. Seattle's municipal power system needed six transformers and the city had asked for bids. When the bids were opened on Dec. 16, Britain's Ferranti, Ltd. was low with $571,632. But it had failed to meet specifications, so Seattle threw out the bid—and was shocked to find itself at the center of some international high tension.

British businessmen would not believe —or did not know—that the bid had been rejected on technical grounds. City Purchasing Agent Paul R. Hendricks explained that the British firm had not met the city's engineering and delivery requirements;...

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