693.9431/7–2149: Telegram

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

507. Dept has reviewed (urtels 1130 July 7; 1148 July 9; 1223 July 21; unnumbered [1221] July 21, 4 pm92) your series tels re Sino-Jap trade. Appears two different groups interested making proposals to SCAP: (1) San Yang–Yung Sheng group, which claims have letters commitment from Manchurian regime (urtel 1063 June 23 [22]93), and (2) Yuan Tung Development Co, which proposes trade behalf North China regime but has no definite contract or agreement (urtel 1223 July 21). Your unnumbered [1221] July 21, 4 pm indicates San Yang financially weak, reliability unknown, due circumspection required. Your 1063 June 23 reports info Yuan Tung North China affiliate Wah Chang Corp, New York.

In view uncertain status these two groups Dept unwilling suggest to SCAP that he regard their offers seriously. Dept fears large number firms have been attempting enter this trade without firm contracts or offers from either side, hoping obtain commitments from one side in order obtain orders from other, and believes SCAP correct in adopting cautious attitude.

This connection, request your evaluation info re China Mutual Trading Co supplied by these contacts. Dept believes possible they may have been deliberately trying prevent deal; quite possible of course China Mutual itself playing same game, trying get commitment from SCAP in order obtain contract from Manchurian regime.

Received travel to Japan (urtels 1148 July 9; 1223 July 21 and unnumbered [1221] July 21, 4 pm) Dept cannot urge SCAP approve entry. Dept understands under long-standing policy foreign businessmen entering Japan for commercial reasons must be sponsored by respective govt missions; in circumstances SCAP cld not approve entry without sponsorship of Chi Mission. Dept willing consider suggesting to SCAP alternative means contact and negotiation, but prerequisite is some clarification applicants’ status and assurance seriousness their offers. [Page 994] How they can give such assurances problem for them, but you shld be satisfied their offers legitimate and firm, their ability to complete any transaction entered into reasonably certain. Suggest you convey to them substance this para.

Re Yuan Tung and its connection with Wah Chang, Dept will investigate. This connection, info from Hong Kong indicates a Yuan Tung Steamship Co of that place is agent for ships now engaged trade with Tientsin and Yingkow from Hong Kong. Any info you can discreetly obtain re possible connection North China Yuan Tung this firm will be helpful.

  1. Nos. 1130, 1223, and 1221 not printed.
  2. Not printed.