894.24/1605
The Financial Counselor of the British Embassy (Stopford) to the Assistant Secretary of State (Acheson)
Dear Mr. Acheson: In Mr. Hall’s absence I am writing to give you some information which we have received from London upon our policy with regard to China.
It has been decided that to prevent the Japanese benefiting from our exports to occupied China, it is necessary to control by licensing all exports to China except those going via the Burma Road. To avoid injury to legitimate Chinese interests pending the making of detailed arrangements, it is intended to grant licenses freely within the limits of normal trade for exports other than—
- (a)
- those not available for supply reasons
- (b)
- those contained in the annexed list which has been called the “Nil List”.36
- (c)
- any specific consignments where there are strong reasons for refusing on grounds of economic warfare.
Action on the above lines is being taken forthwith by the United Kingdom and the Colonies. India, Burma and the Dominions are being invited to take similar action. The Government of Hong Kong, however, is being given some latitude in the application of the above-mentioned policy.
It will be appreciated that although the same export licensing machinery is being used both for China and Japan it is intended to apply the machinery to China in accordance with the principles of giving assistance to China, which has already been declared.
It is intended to tighten up the procedure mentioned above without injury to friendly interests. It is proposed to collect as much information as possible about the trustworthiness of the individual consignees so that exports may be confined to those of which, so far as may be judged, the potential advantages to free China are likely to outweigh the danger of leakage to Japan. In particular, it is intended to take advantage of the advice of friendly banks in Shanghai who are being asked to avoid (where possible in conformity with the policy of U. S. banks) any financial transactions likely to benefit Japan. In the interim period until the necessary administration machinery [Page 868] can be organized, we propose that Empire Governments will issue licenses without reference in cases where the danger of leakage to Japan does not seem to be over-riding and where delay must be avoided in order to prevent trade being brought to a standstill.
In addition to the consignee control on the lines mentioned above, it is suggested that it may be desirable to super-impose quantitative control of exports of particular commodities. Trade in such goods is to be separately examined in the light of the quantities generally required by reliable consignees, and their value to Japan if they were seized.
The arrangements mentioned in this letter do not apply to petroleum products.
I am sending a copy of this letter to Mr. Cochran37 for his information.
Yours sincerely,