893.6359 Wolfram Ore/62
The Ambassador in China (Johnson) to the Secretary of State
[Received June 13.]
Subject: Sale of Wolfram produced in China.
Sir: I have the honor to refer to my despatch No. 196, of April 29, 1939,34 on the subject “Protest against granting to a foreign firm of an exclusive sales agency for Chinese wolfram”.
There is enclosed a translation of a reply from the Minister for Foreign Affairs, dated May 18, 1939,34 to the note of protest of April [Page 669] 28, 1939, reported in that despatch. Salient information in the reply includes the following: A wolfram export trade agency contract was concluded in November, 1938, by the Chinese National Resources Commission with the Pekin Syndicate, a British firm, constituting the Syndicate the Commission’s agent for the export of wolfram from the Provinces of Kiangsi, Hunan and Kwangtung and for the sale of wolfram on behalf of the Commission; the Syndicate does not itself make purchases nor engage in speculation in wolfram for its own gain; the Commission retains authority to set the prices, quantities and selling methods involved in sales of wolfram; the Commission also reserves the right to purchase and ship wolfram in exchange for other products and to use wolfram as security for loans; there is, therefore, no discrimination between nations desiring to purchase wolfram, except in the case of the nation now invading China, sales to which are to be stopped; otherwise sales will be conducted in accordance with the terms of existing treaties; for more than three years the sale of Chinese wolfram has been under the control of the Chinese Government and in that time a Wolfram Control Administration and a Foreign Trade Bureau have been established and are handling internal and foreign trade in this commodity.
I venture to express the opinion that in the circumstances now existing, when China is mobilizing the entire human, natural and economic resources of the nation to resist invasion on a stupendous scale, it would be unreasonable and probably futile to insist on withdrawal of government control of the wolfram industry. At the same time it would be well to face the probability that Government control of basic industries in China has come to stay, the Chinese Government being of the opinion that such control is essential to the economic development of the country and having adopted it as a national policy.
Respectfully yours,
Counselor of Embassy