811.20 Defense (M)/3764: Telegram
The Consul at Shanghai (Stanton) to the Secretary of State
[Received 1:18 p.m.]
1688. Department’s 955, November 10, 5 p.m.80 Estimates of quantities of waste silk in Shanghai range up to 10,000 piculs said to be mostly in Japanese hands with larger quantities up country. Japan military still control exports of all grades of raw silk including waste silk and there is apparently no change in situation whereby permits for export can be secured only if exporter can arrange imports of petroleum or other products desired by Japanese authorities as reported in this Consulate General’s message 1249, September 11, 4 p.m.80 Thus, a virtual embargo is in force on silk and waste silk shipments to United States and a large British exporter states that its silk shipments to the United Kingdom have been dead for the past 2 months for same reasons. Japan holders of waste silk apparently do not wish to ship to Japan, where there is a demand, as price to be realized is not sufficiently attractive. Hence they prefer to hold stocks here hoping some basis for resumption of usual export trade may be found.
This Consulate General will not encourage exporters to make efforts to develop import link deals with Japanese for waste silk exports unless Department so instructs.