Office of the Historian

893.6363/4–449: Telegram

The Secretary of State to the Consul General at Peiping (Clubb)20

Washington, April 13, 1949—1 p. m.

202. For Tientsin 71. Dept has discussed with Brit and cos here question petroleum shipments (urtel 201 Apr 4) Communist areas No China Manchuria and Korea. Fol is position recommended cos and agreed to: (1) cos should continue supply Commies sufficient keep them coming back for more and avoid charges embargo possibly leading retaliation US Brit interests Commie areas (2) quantities supplied should not exceed and preferably be somewhat below cos estimate normal civilian requirements, excluding Commie mil requirements and possibility stockpiling or transshipment (3) cos use bargaining power these deals reestablish distributing organizations No China and if possible Manchuria, but avoid any implication official US policy (4) products supplied exclude avgas for present or other [Page 1007] products specially adapted mil uses (5) cos use own discretion re disposition stocks already No China, but try follow conservative policy in releases for consumption. Received North Korea, Dept desires shipments any products be discouraged except so far as they result South Korea acquisition from that region valuable products (e.g. fertilizers) in return, land suggested cos that shipments North Korea be handled by distributing organizations South Korea if possible.

In general Dept desires shipments sales Commie areas China be made direct rather than via Hong Kong or North Korea, due difficulty tracing final destination trade moving indirect channels, but Dept not now in position publicly encourage this. Considerations consignee reliability and info re end-use also make it desirable cos themselves distribute products wherever possible and hence Dept desires see distributing organizations reestablished but again cannot publicly encourage such move.

This connection Dept requests comment on feasibility wisdom, in formulating general export control policy, attempting channel bulk permitted exports to Commie areas to North China rather than Manchuria, in view probability Commies latter area more under thumb Russians.

Acheson
  1. Repeated to the Embassy in China as No. 455 and to consular posts at Canton as telCan No. 84, Hong Kong as No. 241, Seoul as No. 238, and Shanghai as No. 646.↩