Memorandum by the Chief of the Office of Arms and Munitions Control (Green)
The Chinese Ambassador called at my office this afternoon by appointment. Mr. Hamilton of FE31 was present.
I explained to the Ambassador that although under the regulations in effect prior to October 10, 1935, export licenses were required to cover proposed shipments to China of military aircraft and engines and accessories for the same, no export licenses were required for aircraft engines and accessories when they were presumably intended for non-military uses. I pointed out that under the new regulations which became effective on October 10, no distinction was made on the basis of presumptive use in respect to aircraft engines and accessories, and that export licenses were now required to cover proposed shipments of all aircraft and aircraft engines and of certain specified parts. I pointed out that, in respect to proposed shipments to China, licenses were not granted until the Department had been informed by him that the Chinese Government desired that the shipment be authorized; that this procedure would appear to conform entirely to the interests of the Chinese Government; and that it enabled the Chinese Government to exercise control over all importations of aircraft into China from this country. I said that recently representatives of the Bendix Products Corporation and the Kinner Airplane and Motor Corporation and also the President of the Aeronautical Chamber of Commerce of America had called at the Department to complain of difficulties encountered by American exporters of aircraft in obtaining authorization to import into Canton aircraft engines and accessories for non-military uses. I said that from their statements, it appeared that the Cantonese authorities applied regularly to the Central Government for huchaos to cover the importation of aircraft for military uses, but that they had on occasion been refused huchaos to cover importations of aircraft for non-military uses and had, therefore, decided not to make further applications for such huchaos. I pointed out that the apparent failure of the Chinese authorities to bring their procedure in regard to the granting of huchaos into conformity with the new American export regulations was having the unintentional result that American exporters were discriminated against in favor of exporters from other countries which did not apply export restrictions to aircraft intended for non-military uses. I told the Ambassador that Mr. Leighton W. Rogers, President of the Aeronautical Chamber of Commerce of America, had informed me that when he was in China, [Page 559]he had had a conversation with Dr. Kung, in regard to this matter, and that Dr. Kung had told him frankly that the Central Government had used applications for huchaos made by the Cantonese authorities as trading points in its dealings with those authorities, but that Mr. Eogers had gained the impression that there would be no difficulty in regard to the granting of JmcJiaos requested by the Cantonese authorities in the future.
The Ambassador said that he would communicate with his Government, but that the answer would probably be to the effect that the Chinese Government would put an end to the difficulties complained of if the American Government would cease to publish monthly statements of exports of arms to China.
I told the Ambassador what I had told him in my conversation with him on March 23,32 viz: that we were considering the possibility of ceasing in the near future to issue monthly statements of exports of arms and of substituting quarterly statements for the monthly statements heretofore issued.
The Ambassador replied that if the statements were issued quarterly they would probably not result in the embarrassments of which his Government had complained.
The Ambassador repeated that he would communicate with his Government, requesting that some arrangement be made to obviate the difficulties which the Cantonese have had in obtaining huchaos for aircraft presumably for non-military uses.
The Ambassador suggested that a communication direct from Mr. Rogers to Dr. Kung might be more effective in the premises than anything which he might be able to do.
Mr. Hamilton stated that we were hardly in a position to suggest to an American citizen that he communicate directly with the Chinese Minister of Finance in regard to such a matter.
After the Ambassador’s departure and after consultation with Mr. Hamilton, I called Mr. Rogers by telephone. I told him briefly of our conversation with the Ambassador and that the Ambassador had said that he would communicate with his Government. I suggested that if representatives of the American aircraft industry in China were to take up the question simultaneously with Dr. Kung, such action might serve to expedite a solution of the difficulties.
Mr. Rogers thanked me for the suggestion and said that he would immediately telegraph to the committee of representatives of the American aircraft industry which had its headquarters in Shanghai, and that undoubtedly the Committee would communicate immediately with the appropriate Chinese authorities.