811.20 Defense (M)/13271: Telegram

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

779. For McCamy6 and Rosenthal,7 BEW, from Fowler:8 China Transport Company, a subsidiary of Ministry of Communications, has informed me they can transport 2 to 3,000 tons wolfram monthly from Chinchengchiang to Kutsing if given return cargo on eastbound trip by Army, but request we pay them direct CN dollars 15,500 per ton, equal at fixed exchange to U. S. dollars 775, but if not given eastbound cargo cost would be 50% more and these charges subject to change each month dependent on their cost for fuel, labor and repairs. They say they will not transport for National Resources Commission because they are not paid, that NRC unpaid account to them is CN dollars 6 million.

Embassy cabled State Department May 89 after consultation with Minister of Economics recommending increase transportation and production charges; assume you have copy.

I consider this a matter to be settled between Chinese Government departments and have so informed CTC. Also that paying additional U.S. dollars 775 per ton makes cost to us exorbitant and furthermore it is entering wedge for continual requests for increased charges and I believe Chinese request was made as result of increase granted on tea and bristles; further any amount paid in U. S. dollars is not helping their currency problem.

I have suggested to CTC that if it costs them CN dollars 15 million monthly for fuel from a semi Government agency to transport above tonnage they arrange for CN dollars to be paid direct to them by Ministry of Finance as subsidy if necessary. Minister of Economics stated that while Ministry of Finance had repeatedly refused to advance enough CN to meet requirements, they have advanced some extra currency.

Expect discuss with NRC officials along same line. Do you agree? Also would like comments on prices Chinese and other wolfram to guide me in conversation here.

Please [send?] copy to Currie.10 [Fowler.]

  1. James L. McCamy, assistant to the Executive Director, Board of Economic Warfare.
  2. Morris Rosenthal, Assistant Director, Board of Economic Warfare.
  3. Walter W. Fowler, Special Representative of BEW in China.
  4. Telegram No. 670, May 8, 11 a.m., not printed.
  5. Lauchlin Currie, Administrative Assistant to President Roosevelt.