893.50 Recovery/8–348: Telegram

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

1113. Dept advised Stanvac93 and Caltex94 currently moving approx 3 million gals avgas China which should relieve shortage. ASPB95 indicates no Far East stocks available tankers or storage for diversion to China. Re problems indicated by AAG96 (1) OIT97 advises China export quota has not been exhausted. Dept recommending approval additional 7 million gals avgas for CAF,98 (2) refineries entire production 100 octane gasoline apparently not allocated since Stanvac and Caltex have export applications on file OIT for large quantity for China, (3) Dept has approved contracts CAF job No. 9070 for payment. Commerce policy generally to grant export licenses on historical basis and problem may arise with regard Sterns, Inc. obtaining quantities specified in contracts. Furthermore, indicated contract cost $3,700,000 for 7 million gals is more than double estimated bulk unit cost avgas. Dept understands this due largely proposed shipment drums rather than bulk which Chinese Govt justifies on basis drums reqd for CAF distribution within China.

Dept would appreciate receiving info which would explain critical need since (1) it has reed no indications critical supply situation was developing, (2) China fell 60,000 bbls short of using up its second quarter quota of 160,000 bbls.

  1. Standard-Vacuum Oil Co.
  2. Calif ornia Texas Oil Co.
  3. Armed Services Petroleum Board.
  4. Army Advisory Group.
  5. Office of International Trade.
  6. Chinese Air Force.