811.20 Defense (M)/6437: Telegram

The Secretary of State to the Ambassador in China (Gauss)

427. From Defense Supplies Corporation:

“With further reference to the subject matter of our telegram of May 15, 1942, No. 391, Defense Supplies Corporation has purchased 4,000 cases ex-warehouse Chungking and 1,000 cases ex-warehouse Kunming of No. 27 assortment black Chungking bristles at $3.40 per pound Chungking and $3.50 per pound Kunming.

Agreement has also been reached with the China National Aviation Corporation under which latter agree to undertake transportation of these bristles by surface means to the China terminal of an airline and from there by air to a point outside China where suitable facilities for onward transportation are available. At latter point Waddell will take possession for Defense Supplies and arrange for further transportation.

Defense Supplies Corporation will make disbursement of 75 percent of purchase price upon receipt of advice from American Embassy or Consul that he has warehouse receipts covering cases in question. In this connection Defense Supplies is anxious that check be made to make sure that each case is as represented. They request you contact Jardine Matheson and ascertain what their charges would be for their certificate that each case contains the No. 27 assortment. Payment of their charges would be made in the United States upon receipt of cabled advice from Embassy or Consul that he has their certificate. If this plan feasible, Embassy or Consul should obtain certificate and warehouse receipt simultaneously and cable advice, to that effect. Defense Supplies Corporation would then authorize release warehouse [Page 656] receipts to China National Aviation Corporation in return for latter’s receipt, it being contemplated that CNAC would request warehouse receipts as transportation became available. CNAC would pay incidental expenses for account of Defense Supplies for which they would receive reimbursement along with payment of transportation charges.

Your immediate attention to this matter is especially requested and Defense Supplies would appreciate your early comment regarding practicability of above as well as your suggestions.”

Hull