811.20 Defense (M)/131: Telegram

The Acting Secretary of State to the Chargé in France (Murphy)

147. With further reference to your 136, July 23, 7 p.m. The Department is now informed that the Sino-Soviet agreement covering goods shipped by China provided that the title to such goods remained with China until they reached the Soviet frontier. This would check with information given you by the foreign office that the Selenga cargo was “on consignment”. The Department understands that both the French and British Governments have been informed of this fact by the Chinese Government.

In view of this fact and of the action of the French Government in releasing these ores in connection with a contract signed between the [Page 656]Chinese Government and a French citizen on June 10, later cancelled, it is assumed that the French Government does not challenge the Chinese title. This Government is at a loss therefore to understand how the French Government can contemplate releasing these ores to anyone other than the United States since this Government has purchased them from the Chinese Government and the Chinese Government has dealt with no one else.

Welles