Foreign Relations of the United States Diplomatic Papers, 1941, The Far East, Volume V

811.20 Defense (M)/3496

The Chinese Ambassador (Hu Shih) to the Adviser on International Economic Affairs (Feis)

Washington, September 17, 1941.

My Dear Dr. Feis: In pursuance of our telephone conversation the other day, I am sending you three copies of a memorandum containing the information I told you on the subject of importation of minerals from China to this country.

I take this opportunity to thank you for the pleasant and friendly chat we had in your office last week.

With kindest regards [etc.]

Hu Shih

[Enclosure]

The Chinese Embassy to the Department of State

Memorandum

With reference to the subject of importation of minerals from China to the United States, the following data are given by the New York Office of the National Resources Commission:

Tungsten ore:	4,500	tons have been delivered
	1,200	tons are on the way
	400	tons are awaiting shipment
Tin:	1,200	tons have been delivered
	800	tons are on the way
	400	tons are awaiting shipment
Antimony:	300	tons have been delivered

In a telegram from the Minister of Economics, Chungking, dated September 11, 1941, it is stated:

1) Tungsten ores shipped to the United States have now reached an amount sufficient in value to fulfill the requirements for the first year under the loan agreements with the United States.

In the case of antimony, on account of difficulties of transportation and the prevailing low price, it is found not feasible to ship greater quantities for the time being. We are now endeavoring to ship more tungsten and tin to the United States.

2) The Chinese Government has on three occasions increased the purchase price of tungsten ores, commensurate with the general increase in commodity prices. The present price seems high enough to stimulate production, and output has increased month by month since April. At the same time, the National Resources Commission has taken such measures to lower the cost of production and to improve the living conditions of the miners, as the low-interest loans to the producers and workers, the sale of rice and other daily necessities at low prices, and improvements in sanitation and educational facilities.

3) With regard to the smuggling of tungsten in Kwangtung Province, this formed the subject of negotiation last year between the Ministry of Economics and the Government of Hongkong, as a result of which it was decided that all tungsten ore shipped to Hongkong from China, other than that of the National Resources Commission, is considered privately smuggled goods and is to be purchased by the Government of Hongkong. This decision has been put into effect since June of this year, and consequently no tungsten can be shipped from Hongkong to Japan. As to the territories near Hongkong, the Chinese Government has telegraphed instructions to local military authorities to enforce strict measures of inspection for the prevention of smuggling.