Memorandum of Telephone Conversation, by the Deputy Director of the Office of Chinese Affairs (Freeman)


Subject: Cessation of POL Shipments to Communist China

Participants: Mr. H. A. Graves, Counselor, British Embassy
Mr. Freeman, CA

I telephoned Mr. Graves this morning and informed him that the Department was today approaching the two principal American oil companies, Caltex and Stanvac, with respect to shipments of petroleum products to Communist China. I stated that we were requesting both companies to suspend all shipments of petroleum products to Chinese Communist ports for the time being as well as discontinue all discussions of contracts or additional shipments with the Chinese Communist consignees. I indicated that we were quite confident that the oil companies would act in accordance with our request and suggested that the British might wish to take up the matter similarly with Shell.

Mr. Graves said that he would report our action immediately to his Government as well as the suggestion that Shell be similarly approached and would inform me as soon as a reply was received.

In response to his question whether he might state that we would “bring pressure” to bear on the American companies to act in accordance with our request, I told Mr. Graves that, although I was quite confident that no pressure would be needed, I had no objection to his stating that we might apply pressure if such was necessary.