693.9431/5–2749: Telegram

The Acting Secretary of State to the Consul General at Peiping (Clubb)75

331. SCAP has responded Dept’s proposals Deptel 285 May 13 to fol effect as regards role ConGens China: SCAP agrees desirability resumption active trade with China and utilization thereof to maximize benefits fon interests in China. Does not intend take initiative development Japan’s trade with Commie China, and will use every opportunity channel info on commercial transactions through ConGens where expedient. Believes, however, that rigid limitation of trade negots through U.S. Consular channels undesirable because (1) [Page 986] might drive trade into other channels and defeat objectives sought, (2) not practicable require info from ConGens on grounds short supply or competing demands unless these conditions actually exist, and (3) may be opposition by Allied Powers to exclusion their consular reps or private trading firms.

Dept agrees rigid procedure not desirable and had intended language proposed numbered para 5 Deptel 285 May 1376 as elicitation Commie use ConGens rather than as exclusion direct negots between private firms in China with SCAP or private firms in Japan. Dept recognizes, however, that probably impractical expect SCAP divert trade negots to ConGens China when they have already been initiated directly with SCAP or private firms in Japan. Important, nevertheless, that you should capitalize inquiries already made ConGen Peiping with definite response and offer facilities. ConGen authorized, therefore, respond previous and subsequent inquiries as follows: SCAP willing consider specific trade arangements; ConGen authorized transmit concrete proposals to SCAP and prepared facilitate handling initial negot.

Dept believes this position consistent SCAP’s response. We intend point out to SCAP importance end-use info to exercise of controls over 1A and 1B list items, usefulness U.S. ConGens where this info necessary. Dept does not expect adverse reactions by powers, other than Soviet bloc, to SCAP’s utilization U.S. ConGens for end-use info. Propriety use U.S. ConGens in China and elsewhere for SCAP’s trade operations probably taken for granted, as indicated approaches already made ConGen Peiping.

  1. Repeated to the Embassy in China as No. 645, to the Embassy Office at Canton as telCan No. 251, and to the Consulates General at Shanghai and Tientsin as Nos. 1070 and 119, respectively.
  2. For paragraph numbered 5, see telegram No. 88278, May 7, p. 977.