The Chief of the Division of Far Eastern Affairs, Department of State (MacMurray) to the British Chargé (Craigie)

My Dear Craigie: By way of reply to your note of yesterday,34 I am venturing to submit to you herewith a somewhat fuller statement of the facts in regard to the China Arms Embargo (with particular reference to airplanes) than is contained in the memorandum which you so kindly submitted for my revision. From this somewhat more detailed statement, I hope you can take what you feel necessary in order to lay our views before your Government; and although this is not the manner of comment that you suggested, I hope it will prove as convenient for your purpose.

In addition to the bare recital of the facts as detailed in the enclosed memorandum, I should perhaps say that in the event of any contract being made by an American firm for the supply of airplanes to China, this Government would of course feel obligated to scrutinize the contract itself and the contemplated financial arrangement thereunder, with a view to satisfying itself that the planes were not in fact intended for military uses, and that the arrangements for purchase did not involve any infringement upon the field of activities reserved to the Consortium.

I am returning herewith a copy of the statement which you enclosed with your letter.34

Yours sincerely,

J. V. A. MacMurray


On May 5, 1919, the diplomatic representative of the United States Government at Peking joined with the diplomatic representatives of the other Allied and Associated Governments including Great Britain, France and Japan in a declaration to the Chinese Government that they would restrict shipments of arms and munitions of war to China until it should become apparent that such shipments would not be used merely to continue civil strife in China.35

This Government construed this undertaking to cover all raw materials and machinery that might be used in the manufacture of [Page 538] munitions of war as also such instruments as airplanes which would readily lend themselves to a use wholly military. Under this interpretation of the embargo, airplanes were listed by the War Trade Board as requiring an export license for shipment to China, and no such licenses were in fact issued by it.

On October 1, 1919,—five months later—Messrs. Vickers Limited, a British company, signed a contract with the Ministry of War of the Chinese Government for the supply of commercial airplanes and the construction of the necessary airdromes, hangars, et cetera, in connection therewith. This contract called for a loan of £1,803,300 at 8%; and in the London papers October 14, 1919, was advertised an issue to the public of Chinese Treasury notes securing this loan, under a license of the British Treasury, dated September 18, 1919.

Upon learning the details of the Vickers contract, the Department of State on November 17, 1919, telegraphed to the American Embassy at London36 informing it of the Vickers contract and directing it to make inquiry of the British Government as to the interpretation which it had placed upon the embargo of arms to China in view of the Vickers contract.

In reply to this inquiry the American Embassy at London was informed by the British Foreign Office that the British Government had approved of the contract, inasmuch as it was for commercial aeronautical material wholly unsuited for any military purposes.37 As a matter of fact it appears that some of the airplanes which were delivered to the Chinese Ministry of War under this contract were actually used in the fighting which occurred in the vicinity of Peking during the months of July and August, 1920, between the military forces of the so-called Anfu and Chihli factions, and that General Chang Tso-lin, Military Governor of Manchuria, subsequently captured them and carried them away from Peking.

It appears that in August, 1920, certain American interests entered into negotiations with the Chinese Ministry of the Navy for the sale of a quantity of airplanes. No encouragement was given by this Government to these negotiations, which it understood were never consummated by reason of certain difficulties between the American company interested and the persons acting in its behalf in China; and upon the breakdown of these negotiations no effort was made by this Government to bring to the attention of other American manufacturers the opportunity for obtaining a similar contract. It is further understood that it was this same contract which was thereafter offered to and accepted by the Handley-Page firm, through [Page 539] the action of Captain I. V. Gillis, formerly Naval Attache at Peking, who had been one of those acting in behalf of the American firm to whom the contract had been offered in the first instance.

On September 17, 1920, just one year after the approval by the British Government of the Vickers contract, in consideration of the fact that other Governments had permitted their nationals to enter into contracts with the Chinese for commercial airplanes, this Government instructed its diplomatic representative in Peking38 that it no longer felt warranted in interposing objections to its nationals doing likewise in case the airplanes were for strictly commercial use.

  1. Not printed.
  2. Not printed.
  3. See Foreign Relations, 1919, vol. i, p. 670.
  4. Foreign Relations, 1919, vol. i, p. 672.
  5. See telegram no. 3430, Nov. 22, 1919, from the Ambassador in Great Britain, ibid., p. 673.
  6. Ibid., 1920, vol. i, p. 748.