811.20 Defense (M)/6205: Telegram
The Secretary of State to the Ambassador in China (Gauss)
Washington, May 2, 1942—10
p.m.
349. Your 425, April 17 and 466, April 26.
- 1.
- With respect to tungsten, Metals Reserve Company is prepared to consider favorably modification of its agreement with the National Resources Commission so as to provide for payment against delivery alongside planes at Myitkyina or Yunnanyi or such other points as may be agreed upon. Such modification should be for the time being only and should be subject to reconsideration by Metals Reserve Company when transportation conditions become more normal.
- 2.
- Metals Reserve Company is not prepared at present to agree to a similar modification with respect to the tin and antimony contracts. It is understood that of the estimated potential tin production of 10,000 tons (see your 425, paragraph 2), 6,000 tons per annum have been allocated by the Combined Raw Materials Board in Washington to Russia and will be delivered direct to Russia. A proposal to allocate the entire production of Chinese tin to Russia is being examined, but a decision has not yet been made. In the meantime please inform the Department (a) whether an agreement to accept tin against delivery alongside planes would increase the amount of tin which would be delivered to the Metals Reserve Company, assuming the allocation of the balance over 6,000 tons per annum to Russia does not take place; (b) if so by how much estimated tonnage per annum; and (c) whether there is any preclusive factor in making such an arrangement, namely, whether such an agreement would divert to Metals Reserve tin which might otherwise go to the enemy.
- 3.
- It is not likely that Metals Reserve Company will agree to accept delivery of and make an agreement for antimony alongside planes at Chinese points. However, the matter is under consideration and you are requested to give the same information with respect to antimony as is requested in paragraph 2 above with respect to tin.
- 4.
- Metals Reserve has accepted in principle your suggestion that two representatives be employed by Metals Reserve to handle the acquisition and shipment of Chinese strategic materials. Metals Reserve is consulting Maritime Commission as to McKay’s qualifications and will, of course, rely considerably upon the recommendations set forth in your 425. Metals Reserve does not know anything of the qualifications of Abrav [Lavrov] except as recited in your 425. Please telegraph more fully with respect to the qualifications of Abrav [Lavrov] including your suggestion as to persons whom Metals Reserve might consult in the United States as to his qualifications.
- 5.
- Metals Reserve Company will take up immediately with the National Resources Commission Foreign Trade representative in New York the proposed modification of the tungsten agreement. You probably will wish to inform the Chinese Government of these negotiations.
- 6.
- We have noted your suggestion that the National Resources Commission will provide personnel for handling forwarding through India. We consider it desirable not to take advantage of this offer until the two Metals Reserve specialists referred to in paragraph 4 above have been chosen. In this connection you are informed that Mr. John E. Waddell, representative of Metals Reserve Company, is now in India, his address being care of American Mission, New Delhi. Mr. Waddell is in charge of handling transportation problems for Metals Reserve Company in India, and McKay or whoever else is chosen will no doubt wish to establish communication with Waddell to arrange for storage and transportation of tungsten and other Chinese materials.
Hull