893.85/11–2445
Memorandum by Mr. Huntington T. Morse, Assistant to the Administrator of the War Shipping Administration, to Mr. Henry L. Deimel of the Shipping Division
Reference is made to your teletype of October 29th11 transmitting confidential dispatch from the American Embassy, Chungking, No. 1878 of October 27th. In this connection, and confirming telephone conversation, the War Shipping Administration has submitted to representatives of the Chinese Government a list of vessels presently in Eastern waters which are privately-owned by American citizens. Upon receipt of advices from the Chinese as to the suitability of these vessels for their purposes, the Commission’s Division of Vessel Disposal and Government Aids will confer with representatives of the Chinese in an effort to consummate arrangements incident to the acquisition of the vessels by the latter.
In order to meet bulk cargo movements on the Chinese coast, principally of coal and rice, the War Shipping Administration is making available five Libertys and the Ministry of War Transport is making available six equivalent ships already in the Chinwangtao coal program, and hope to be able to provide additional tonnage to meet the balance of the program which it is estimated will require twenty ships all told.
In addition to the above, the Ministry of War Transport advises that they aim at making available one hundred thousand gross tons of coastal shipping for the China coast, of which fifty thousand should be achieved by the end of the year and the remaining portion by May of next year.
The Maritime Commission has authorized offering ten N–3 type vessels for sale under competitive bid, under conditions which will permit United States citizens and foreign interests to submit bids.
Recently officials of the War Shipping Administration were called upon by J. Z. Huang, Attaché of the Chinese Embassy, in respect to the requirements for coastwise tonnage for China, who referred to [Page 609] representations made by His Excellency, T. V. Soong, to the President in respect to the possible rapid transfer of vessels urgently needed by China under some emergency procedure. In this connection, I understand that the Foreign Economic Administration had been approached with the thought that such transfer could be accomplished under Lend-Lease. However, our explorations here indicate that it does not appear feasible at this juncture, so far as the Maritime Commission and War Shipping Administration are concerned, to take any other action than that heretofore indicated, and we have so advised Mr. Huang.
Representations in respect to Chinese requirements for shipping have been received by the Maritime Commission and the War Shipping Administration from various sources, including the Chinese Supply Commission, the Chinese Embassy, representatives of C. N. R. R. A.11a direct from Chungking, and it would appear most desirable to have the State Department ascertain and advise us in respect to the proper channels through which our discussions and any possible negotiations with the Chinese Government should be pursued in connection with the purchase of vessels.