894A.24/12–3049
The Counselor of the British Embassy (Graves) to the Director of the Office of Chinese Affairs (Sprouse)
777/46/49
Dear Phil: I mentioned to you on the telephone on the 23rd December that I would give you the full story about the thirty demilitarised Sherman tanks which, you pointed out to me, had been shipped from the United Kingdom direct to Formosa. As you were able to note at the time the information took me by surprise. The explanation is, in the language of the message from the Foreign Office, as follows:—
“The position is that in March of this year various departments of His Majesty’s Government were approached by an applicant who wished to sell 100 demilitarised Sherman tanks to the, Chinese Nationalist Government. When the necessary permission was refused the applicant asked if the tanks could be shipped to the United States. [Page 469] He made no effort to conceal the fact that the intention would be to endeavour to arrange for their onward shipment from the United States to Formosa. The usual procedure for the shipment of military equipment to the United States is that Export Licences are granted provided that copies of the necessary United States Import Licences are produced. After consultation with the United States Embassy, who gave us to understand that it was very unlikely that United States Import Licences would in fact be forthcoming, the Foreign Office advised the departments directly concerned that there seemed no reason to vary the usual procedure in this case.
We heard recently from Formosa that tanks destined for Formosa were said to be awaiting shipping in the United Kingdom. On investigating the position we ascertained that United States Import Licences had in fact been granted, and that United Kingdom Export Licences for shipment “to Formosa via the United States” had also been granted. We at once arranged for all outstanding licences to be cancelled.
It is unfortunately true however that 30 tanks had already been shipped on the S.S. “Ocean Side” which sailed on October 20th. On receipt of your telegram under reference we enquired into the movements of this ship and ascertained that she did not in fact go to a United States port but proceeded to the Far East via Suez. Although she was scheduled to make no stop between Aden and Kobe, she is understood to have called at Koshun in South Formosa on December 12th. We learn that it was originally intended to have the tanks re-conditioned and re-equipped in the United States and they must therefore have reached Formosa in their present demilitarised condition.
We are looking further into the question whether any breach of the regulations has been committed, but in the meantime you will no doubt wish to explain the position to the State Department.”
2. You will note that the tanks were in a demilitarised condition when they arrived in Formosa.
3. Immediately on receipt of this message we telegraphed to ask whether we could give you an assurance that steps had already been taken to see that the remaining 55 tanks should not leave the United Kingdom for direct or indirect shipment to Formosa. We have had a reply to the effect that this assurance can be given.
4. Now that this particular episode has been presented may we get back to the choric song—that is, the memorandum I left on the 6th December? I have of course passed on the list of light armoured vehicles and outstanding aeroplane procurements which you gave me on the 21st December but if you could let us know what your attitude is to our suggestion that the flow of arms might be stopped or restricted I should be very grateful.
Yours sincerely,