811.20 Defense (M)/230: Telegram

The Ambassador in China (Johnson) to the Secretary of State

399. Department’s 138, August 10, 2 p.m.,38 and 140, August 10, 4 p.m. I have received two replies from Wong Wen-hao, Minister of Economic Affairs, summarized as follows:

The situation as described in his letter of August 5 has changed. The local Soviet trade representative a few days after agreeing that China still owned the Selenga cargo and might sell it to the United States, said he had received notification from Moscow that it must be shipped to the Soviet Union. Wellington Koo has been informed. Wong expressed the view that the Vichy Government would not release this cargo unless the Soviet Government consented.

Instructions have been telegraphed to K. C. Li to ask for the consent of the American Government to reduce the original amounts contracted for sale or to allow the Chinese to make up the shortage later. He greatly regrets the inability of the Chinese Government to carry out the agreement as made. With respect to the tin he confirms that an option to purchase the 318 tons remaining after 100 tons included in the Selenga cargo are deducted will be offered to the American Government, which option will be open for 2 months after the arrival of the tin in the United States. Wong asks that the American Government take immediate steps to effect release of this cargo.

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