893.24/11432/11:Telegram
The Secretary of State to the Ambassador in the United Kingdom (Winant)
3017. The Department desires that you seek an early opportunity to discuss with the appropriate British authorities the question of the transit duties now being levied by the Government of Burma on shipments of American materials consigned to the Chinese Goverment or its agencies and passing in transit through Burma. These shipments now consist almost wholly of “lend-lease” materials and supplies purchased upon the basis of credits extended by the Government of the United States.
The Department considers that the application of these duties to such cargoes is inconsistent with the coordinated policies of the United States, the British Empire and China in meeting Axis aggression in the Orient as well as in the Occident. Although the transit duties are paid by the Chinese the ultimate burden of their payment must be borne by the United States Government because of the dependence of the Chinese Government upon the United States for financial support being rendered in the form of loans. The collection of these duties also results in administrative delays in the clearance of such shipment at Rangoon and at the border.
For the reasons stated above this Government considers that shipments of American materials consigned to the Chinese Government should be totally exempted from the Burma transit duties and requests that necessary steps be taken to that end. In making your representations you may point out that these duties constitute a recently developed and abnormal source of revenue, the loss of which would not deprive Burma of other substantial economic and financial benefits, such as greatly increased Government-owned railway revenues, accruing from the newly developed China transit trade.
Please report the results of your representations to the Department by telegraph.