893.2553/12–1950
The Assistant Secretary of State for Far Eastern Affairs (Rusk) to Colonel E. P. Kavanaugh of the California Texas Oil Company, Limited
My Dear Colonel Kavanaugh: This is to confirm the understanding reached and the guidance supplied you on December 12 when you met with representatives of the State and Commerce Departments to [Page 684] discuss the Ear Eastern operations of the California Texas Oil Company Limited.
We informed you that shipments of all petroleum products from the United States to Communist China, Hong Kong, and Macao will be subject to licensing control. As you are aware, since June, licensing of all petroleum products has been suspended for shipments to Communist China. Since December 3 when all U.S. exports to Communist China were placed under control, exports of petroleum products to Hong Kong and Macao have been suspended. However, a procedure for licensing petroleum products for Hong Kong and Macao is now being developed.
With respect to petroleum shipments to Communist China, Hong Kong and Macao from off-shore sources, the Departments of State and Commerce believe that you should continue to apply the general principles which have governed your shipments to Hong Kong and Macao since June. We stress, of course, the importance of seeing that no shipments whatever be made to Communist destinations. Shipments to Hong Kong and Macao should be confined to amounts hitherto considered to be within the limits of Hong Kong local use and approved transshipment. We approve of the continuation of the restrictive ninety-day levels you have considered to be a maximum for your stock position, but caution you that even this limit may be, at an early time, considered excessive.
The Departments of State and Commerce accept your offer to give us notice of shipments of all petroleum products to Hong Kong and Macao, but do not, for the present, believe that it is necessary for us to give prior approval of individual shipments.
Sincerely yours,