893.50 Recovery/3–149

Memoramdum of Conversation, by the Chief of the Division of Chinese Affairs (Sprouse)

Participants: Mr. Blaisdell, Assistant Secretary of Commerce
Mr. Butterworth, FE
Mr. Sprouse, CA

Mr. Butterworth and Mr. Sprouse called at Mr. Blaisdell’s office this afternoon by appointment to discuss with him the question of the issuance by the Department of Commerce of export licenses covering lead purchased by the Chinese Government under the $125 million grants in the light of the President’s decision concerning further deliveries of military aid supplies to China.

Mr. Butterworth explained the manner in which this decision had been reached and pointed out that the military equipment purchased by the Chinese Government from the $125 million grants was going forward in accordance with the President’s decision which had indicated that such shipments should not be but that no effort should be made to expedite them. Mr. Butterworth continued that action along similar lines, within the allocations available for China, seemed appropriate in the case of lead.

Mr. Blaisdell said that the Department of Commerce took the position that this item was in short supply and that China should be treated in the same manner as other countries, emphasizing at the same time that in view of the likelihood that such materials would not be used [Page 499]for the purpose intended they should not be made available to the Chinese Government.

Mr. Butterworth explained some of the background of the thinking with respect to continued deliveries of military aid supplies to China and said that it appeared consistent with the President’s decision that allocations of lead be made to the Chinese Government on a basis of its capacity to use such materials and that such allocations be made on a monthly basis. He further suggested that it would be advisable to request American officials in China to furnish an estimate of the Chinese Government’s actual requirements of lead which would serve as a basis for the allocations.

The conversation ended on this note without any indication from Mr. Blaisdell of the action that the Department of Commerce might take.