893.6363/12–2748: Telegram

The Acting Secretary of State to the Consul General at Shanghai (Cabot)

2282. ConGentel 2897 Dec 2713 helpful second oil co Conf Dec 28. Cos indicated willingness cooperate reduce bulk stocks approx 6–weeks level and luboils to 6 months. Stan Vac now transshipping some kerosene and cos appear willing consider withdrawing some luboils. Stated most other items near 6 weeks level which can be attained by deferring shipments.

Cos emphasize removal luboils not wholly effective unless license control applied U. S. exports, and consideration being given such measure. Cos also point out proposal released portion major co stocks for small importers China undesirable under present circumstances since conducive speculation and resale Soviet.

Dept emphasized discussion exploratory and that further consideration necessary before requests, if any, made Cos. Stanvac suggested preferable handle problem on present informal consultation basis and Dept concurs.

Dept discussed subject Dec 24 Brit Emb suggesting desirability cooperation and similar approach this problem but views Brit Govt not yet received. Suggest ConGen and Emb keep Brit ConGen and Emb informed developments emphasizing desirability cooperation.

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