The Acting Secretary of State to the Minister in China (Johnson)

No. 1123

Sir: With reference to the Department’s instruction No. 974 of January 16, 1933, in regard to the export of arms and munitions of war from the United States to China, there are enclosed two copies of a statement under date June 30, 1933,76 which, while in no way altering the basic views of the Department in regard to the subject under discussion, affects certain changes in the regulations pertaining thereto.

In this connection it should be noted that the regulations outlined in the Department’s instruction No. 974 of January 16, 1933, remain substantially unaltered with the exception that certain minor changes have been made in the list of articles for which export licenses are required and with the further exception that the Department no longer requires, as a condition precedent to the issuance of export licenses, that it shall have received, through authorized channels, a request for such action from the Chinese Government—a situation which eliminates the provisions of section (b), fourth paragraph, page 3 of the Department’s instruction under reference.

The changes outlined above are deemed advisable due to the fact that by demanding, as a condition precedent to the issuance of export [Page 565]licenses, positive action on the part of the Chinese Government in making known to the Department in each instance its desire that shipments under consideration be permitted to go forward, the Department, in effect, placed under a serious handicap American commercial interests attempting to serve the markets of China. American exporters, in attempting to comply with such regulations, have been forced, in many instances, to incur heavy cable charges and to experience costly delays while attempting to cause the Chinese Government to issue the necessary instructions to its Legation at Washington. Furthermore, and of primary importance, these difficulties have proved so irksome to buyers in China, particularly in South China, that valuable orders have been lost to the American trade for no reason except that the Chinese Government is negligent and other governments apparently do not insist upon any such procedure.

In this connection it also may be stated that, by eliminating the provisions of the afore-mentioned section (b), the resulting procedure in regard to export trade with China conforms to the procedure which prevails in regard to the export trade, where restricted, with certain of the Central American countries, in regard to the export from the United States of arms and munitions of war.

The Department desires that a circular instruction based on the foregoing be issued to all consular officers in China and to the Consulate General at Hong Kong, and that a copy thereof be sent to the American Embassy at Tokyo for its information. The Department also desires that there be emphasized in such circular instruction the fact that except for the modifications mentioned herein, the Department’s views, as outlined in its instruction No. 974 of January 16, 1933, upon which was based the Legation’s circular instruction No. 204 of February 18, 1933,77 remain unchanged.

Very truly yours,

William Phillips
  1. Supra.
  2. Not printed.