893.6359 Wolfram Ore/71
The Consul General at Hong Kong (Southard) to the Secretary of State
[Received January 24, 1940.]
Sir: I have the honor to refer to the Department’s instruction No. 176, of September 12, 1939, to the American Embassy in Chungking in regard to the granting of an exclusive sales agency for Chinese wolfram ore to the Pekin Syndicate, Ltd., a British firm, and to give certain information obtained in Hong Kong regarding export sales of this product.
The Foreign Trade Office of the Chinese National Resources Commission situated in Hong Kong which has general charge of sales in behalf of the Chinese Government of all metals exported from China including tin, wolfram, antimony, etc., states that the Pekin Syndicate is acting as a sales agency only in regard to wolfram produced in Kiangsi, Hunan and Kwangtung and not for production in Kwangsi and Yunnan, for which the mentioned office in Hong Kong acts exclusively. The Foreign Trade Office of the National Resources Commission states that it authorizes the minimum price at which all sales of wolfram may be made including those through the Pekin [Page 720] Syndicate, and that the latter is therefore in no sense a monopoly since it controls neither the supply nor the price. The National Resources Commission receives orders directly from New York buyers, executes some of them itself and routes some to the Pekin Syndicate for shipment from the area for which the latter operates. It was further stated by the director of the Hong Kong office of the National Resources Commission that since the outbreak of the European war, New York has been the center of the world market for wolfram; also that sales from China to Germany have been discontinued. When asked whether it is not possible for them to ship to Germany via the Soviet Union the director stated that such a procedure would cause them “far too much trouble” and had been discontinued. He further expressed the opinion that Germany had adequate reserve supplies for the present.
An American metal broker in Hong Kong who usually is reliably informed states that New York buyers work regularly with the National Resources Commission and can get supplies regardless of the Pekin Syndicate. From the view point of continuance of United States supplies, the area for which the Pekin Syndicate acts as sales agent as well as its nationality are both, in his opinion, immaterial.
Respectfully yours,