693.1111/6–1746
The Secretary of State to the Embassy in China
The Secretary of State refers to telegram no. 641, April 14, 3:00 p.m. from the Consulate General at Shanghai8 reporting that a visa has been issued to Chang Fu-Kong and stating the view of the Consulate General that the Central Trust is taking this method of establishing channels for Government purchases and sales, thus circumventing private trade channels, and to Embassy’s telegram no. 834, May 20, 6 p.m.8 from Adler9 to the Secretary of the Treasury10 with respect to possibility the Chinese Government intends to canalize imports of machinery purchased with the proceeds of Export-Import Bank loans through official channels. The Consulate General believes that it may expect further applications for visas by Chinese commissioned to purchase and sell for the Chinese Government and requests the Department’s instructions in this regard.
The policy of this Government with respect to the restoration and maintenance of private trade channels in international trade has been emphasized recently to all the Governments with purchasing missions in this country, including China. A copy of a press release of May 4, 1946 regarding the discussions with those Governments is attached.11 Also, there is attached a copy of a memorandum of conversation on this subject between officers of the Department and Dr. T. C. Liu, Assistant Commercial Counselor of the Chinese Embassy and Dr. S. C. Wang, Chairman, Chinese Supply Commission, together with an aide-mémoire handed them during the conversation. An officer of the Embassy declined an invitation to the meeting.
The Embassy will note that the Chinese representatives were requested to inform the Department in writing of the views of the Chinese Government on this Government’s purchasing mission policy and to indicate its plans for future action in this connection. However, for the Embassy’s confidential information, some of the comments [Page 1399] made after the meeting by Dr. Wang and Dr. Liu led the Department to believe that Dr. Wang would make the reply and that it would represent only his personal views. In an interview between officers of the Department and the Chinese Ambassador on May 9,12 the Department’s interest in this matter was further discussed and the Ambassador’s attention called to the conversation with Dr. Liu and Dr. Wang; the Ambassador was informed that the Department would be very interested in his Government’s reply. On still another occasion, an officer of the Department indicated to Mr. T. L. Tsui, First Secretary of the Chinese Embassy, that the Department expected the reply to come from the Embassy. The enclosed reply signed by Dr. Wang dated May 18, 1946,13 was finally received. For your confidential information, an officer of the Department was informed by the Acting Commercial Counselor several days before it was received that he and the Ambassador had seen Dr. Wang’s draft reply. Furthermore, it is understood that the question was referred to Nanking before the reply was made, but to what agency is not known. The Department has the impression that the Embassy does not undertake to exercise any real authority over Dr. Wang.
The Department feels that the reply from Dr. Wang is not completely responsive. For example, there is no indication as to the period of time it is believed will be necessary to complete the work of the Supply Commission. (The Embassy will note that in the course of the conversation in the Department Dr. Wang stated his belief that two or three years of purchasing commission activity might be necessary.) Also, there is no indication as to whether the Government is purchasing or expects to purchase through the Commission for the account of private firms.
The Department would appreciate receiving any comments the Embassy may have with respect to the exchange of views regarding the future of the Purchasing Commission. Also, the Embassy may feel that it would be desirable for it to take advantage of the earliest appropriate opportunity to inform the Ministry of Foreign Affairs of these conversations.
With further reference to the telegram from the Consulate General of April 14, the Department would appreciate being kept currently informed of any other Chinese who, in the opinion of the Consulate General may buy or sell in the United States for the Government. The Department also desires to be informed of purchases made by the Chinese Purchasing Mission for private account or of sales to private individuals or firms by the Chinese Government of items acquired by it through the Chinese Purchasing Commission.