Office of the Historian

693.419/7–2649: Telegram

The Ambassador in the United Kingdom (Douglas) to the Secretary of State

London, July 26, 1949—6 p. m.
[Received July 27—10:30 a. m.]

2956. Deptel 1382, April 22 and later telegrams re application R–procedure to exports to Communist China.

1. Foreign Office states that, although still subject to confirmation by other interested departments, final form of reply to US proposals will be broadly on following lines (quoted from Foreign Office memo):

  • “a. We share anxiety of US Government to see flow of strategic goods and materials to Communist China and North Korea, and thence to USSR, kept under control, but we do not feel justified in extending control at present exercised in UK over export of list 1(A) items to cover transshipment in Hong Kong and Singapore until definite assurances have been obtained from Belgians, and from French and Dutch in respect of both their metropolitan and their Far East colonial territories, that similar controls will be instituted by them. We assume that US Government would also be able to assure us that SCAP exercising similar controls in respect of Japan. When these assurances have been obtained we are prepared to cooperate by extending control at present exercised over export of list 1(A) items from UK to cover transshipment in Hong Kong or Singapore.
  • “b. We are not at this stage prepared to institute control system over selected list of 1(B) items, as suggested by Americans. We are not convinced that such control, which would involve us in considerable political and administrative difficulties, would be effective. We shall, [Page 867] however, watch flow of these items to Chinese and we are prepared to exchange information with Americans as is done in case of Eastern Europe. We are also prepared to enlist cooperation of Hong Kong and Singapore Governments in this regard. In any case, position will, of course, be reexamined from time to time.
  • “c. In our view it is of particular importance to ensure that China does not import oil in excess of quantities needed for her own civilian requirements. It is considered that our position could be adequately safeguarded if UK, US and Netherlands oil companies were to decline to enter into any large-scale or long-term contracts for supply of oil to China, and confined themselves to supplying normal civilian requirements on short-term basis. As temporary measure, pending decision on future policy, British oil companies have already been asked to do this. If US Government and Netherlands Government would agree to take similar action, it is considered that oil companies of three powers would be in position to inform their Governments if at any time it appeared that Chinese Communists were acquiring oil supplies in excess of normal civilian requirements. Any further necessary measures could then be considerd. It would also be necessary to watch oil traffic into Soviet Far East for any signs of developing re-export traffic into Communist China. If US Government agree with these views we hope they will agree to join us in similar approach to Netherlands Government.”

Douglas