811.20 Defense (M)/6437: Telegram

The Chargé in China ( Vincent ) to the Secretary of State

488. 1. Reference paragraph 5 of Department’s 258.16 British Embassy has been notified by London that they are not to compete with us in buying bristles. However, there are more bristles on the [Page 648] market and in prospect than mentioned in the Department’s reference and the Universal Trading Corporation does not control all stocks. The Russians are also in the market for bristles. British Embassy suggests that unified policy of efficiency might be achieved if trained persons in Jardine Matheson’s office here were charged with the task of procuring bristles for all Allies under the direction of the Embassy.

2. Reference paragraph 6 of Department’s 258 [and] 3 of its 295.17 The silk stocks so mentioned come from various parts of China and are not of uniform grade. Jardine Matheson on behalf of British authorities has already purchased 1000 bales of silk, is negotiating for another 1000 and plans to take all of this year’s crop that is acceptable. The silk mentioned in Embassy’s 251, March 20, is included in the foregoing stocks.

3. Embassy knows of no decision that only materials owned by the United States Government would be carried on transport planes to Assam. In fact when the matter of transport was discussed with General Stilwell (paragraph 1 of Embassy’s 251) it was understood that transported stocks would be property of Chinese Government agency until arrival at Indian ports. The discussion was then in regard to strategic metals, but it is not believed that a different rule would apply ex-British owned silk.

4. Paragraph 6 of Department’s 295. The transport planes insofar as Embassy is informed will be operated by the United States Army under General Stilwell who has indicated that if charges are to be made arrangements therefor should be made in Washington. The Embassy concurs in the opinion that China should bear transportation costs to points alongside planes and purchaser bear costs thereafter. (See paragraph 4 of Embassy’s 425, April 17 and its 466 of April 26.)

5. After careful consideration of all factors and circumstances, including attitude of interested Chinese authorities, Embassy has come to the conclusion that solution of the problem lies in formation of joint purchasing agency in China with a limited but technically proficient personnel to operate in behalf of all Allies. This agency should be headed by someone experienced in dealing with Chinese officials. Embassy might be able to obtain the services of a qualified American businessman now in China. Under the agent there should be a technician to supervise purchase of metals (Embassy has suggested Lavrov as qualified) and a technician to supervise purchase of silk, bristles and possible tung oil (local staff of Jardine Matheson is qualified for this task). The purchasing agent would conduct negotiations with the Chinese for purchase of materials and their forwarding to places for air transport and maintain close contact with American military authorities in control of transport planes. Appointment of [Page 649] agent as officer of this Embassy might facilitate his work. The British Embassy approves this suggested organization and would give the agent full cooperation. The Soviet Embassy might wish to have representation in the organization or at least maintain liaison with it.

6. It is obvious that the course of military events in Burma will have a decisive bearing on the transport problem. However, even should transport out of China be impossible for a time it is believed that materials should be purchased and held in storage until transportation is possible.

Vincent
  1. April 4, 7 p.m., p. 642.
  2. April 18, 3 p.m., p. 645.