893.113/118
The Department of State to the British Embassy
Memorandum
The Department of State has received the memorandum (No. 218) of the British Embassy of March 14, 1921, with reference to the subject of the embargo on the shipment of arms to China and notes that the Japanese Government has addressed a note to the British Ambassador at Tokyo urging the difficulty of its position vis-à-vis Japanese merchants who are desirous of obtaining, or of carrying [Page 554] out, contracts for the supply of arms and munitions to China; and making reference, in connection therewith, to alleged sales by Americans of machinery for manufacturing arms to the Canton Government, to the Vickers contract for the supply of commercial airplanes, and to rumors of a contract entered into with the Handley-Page Company for the supply of seaplanes.
It is noted, with reference to the alleged sales to the Canton Government by Americans of machinery for manufacturing arms, that an investigation of certain shipments of machinery which reached Canton from the United States, and which appear to have been used in the rehabilitation of the arsenal at Canton, developed the fact that the machinery in question left the United States consigned to the Kwan Nam Shipbuilding Company of Canton, and that there appears to have been no indication that the machinery was for other than commercial uses.
With reference to the rumored contract with the Handley-Page Company for the supply of seaplanes, and to reports that this contract would be transferred to Americans in view of the refusal of the British Government to approve it, it should be added that the American Legation at Peking has been instructed that it does not seem advisable to encourage the Chinese Government to enter into a contract which, in the present circumstances of that Government, would appear to be merely prodigal; and that, in view of the serious effect that such a contract might have upon Chinese credit abroad, the Secretary of State would not feel warranted in giving his acquiescence thereto.