811.20 Defense (M)/9000: Telegram
The Secretary of State to the Ambassador in China (Gauss)
854. With reference to your no. 1032 of September 14, 9 a.m. Metals Reserve refers to the increase in available plane space from Kunming and to the possibility of its exceeding tungsten ore ready for shipment, Company desires to have your comments and those of Mr. Fritz as to any measures that might serve to increase the incentive for the National Resources Commission to move tungsten ore to Kunming.
If the available plane space is as great as indicated Metals Reserve assumes that some tin will be shipped as production of tungsten ore is presumably not at present running at an annual rate of 12,000 tons. However, the tungsten is so much preferred to tin that the company wishes to insure that all available tungsten is moved. Any suggestion for action by the Metals Reserve will be very much appreciated. In particular do you think that tungsten supplies could be increased (1) if the price were raised to $22.60 a short ton unit instead of $19.50 (price would probably have to be limited to this maximum because of commitments to other countries) (2) if the percentage paid for tungsten ore in warehouses were increased from the present 65% to say 80%.
Thus far as stated in the Department’s 823 of September 11 company has informed National Resources Commission that it is not prepared to modify contract regarding purchase of Chinese tin. This contract provides for payment only after tin is delivered at New York.
However, Combined Raw Materials Board has recommended that Chinese tin be allocated to India to the extent of 1,100 tons per annum or to Russia. Therefore tin contract probably should be modified so as to provide for payment F. O. B. Dinjan. In as much as the air freight from Kunming to Dinjan on CNAC planes is almost as much as the value of the tin, it would be preferable if tin were not transported on commercial planes but only by planes of the army.
Metals Reserve Company will appreciate your early comments.