811.20 Defense (M)/5083: Telegram
The Ambassador in China (Gauss) to the Secretary of State
[Received January 16—3:45 a.m.]
40. Department’s 14, January 10, 3 p.m.
1. The information contained in my No. 9, January 2, 3 [2] p.m., was obtained direct from Wong Wen-hao, Minister of Economic Affairs who is concurrently Chairman of the National Resources Commission.
2. Upon being informed of K. C. Li’s estimate regarding the production of tungsten, Wong gave the following explanation: a new agreement has been made within the past few days between the Government of China and the Import-Export Bank whereby China agrees to supply 15,000 tons of tungsten to the United States during 1942. This agreement was made by H. H. Kung4 acting on behalf of the Chinese Government in his capacity as Vice President of the Executive Yuan. Following an exchange of telegrams between Kung and Li and T. V. Soong,5 the National Resources Commission was instructed to increase the production of tungsten and that a minimum of 15,000 tons will be available for the United States this year and to endeavor to supply 20,000 tons for the United States. Consequently the National Resources Commission has had to revise its entire [plan] for mineral production during 1942. Figures given by Li certainly are far over optimistic. They were supplied to him by Kung and not by the National Resources Commission.
We doubt that tungsten production in 1942 will be on a scale to make available 20,000 tons for shipment to the United States and 15,000 tons seems a high figure.
3. Wong who is himself a mining engineer did not respond favorably to the suggestion that American experts be sent to China in an endeavor to increase production. He claims that mining methods are so primitive that American engineers could do nothing to assist but added that such experts would be received well if we care to send them. I agree that American experts could do little to increase production but believe it might be advisable to send out one or two such engineers for the purpose of estimating the amount of tungsten that can actually be produced. I regret to say that I do not think we can rely on any figures given by the Chinese Government.
4. Wong now claims to have been misinformed about [gasoline] and was under the impression that an additional 2½ million [Page 637] dollars [gallons] were required but has since been advised that sufficient [fuel] will be available. Tin is the only mineral transported by coolie back and that for short distances only.
5. A more detailed report follows by airmail.6