CO129-580-2 Sino-Japanese War- British policy and reactions in Hong Kong and Malaya 27-7-1939 - 3-2-1940 — Page 19

Copy

(F 171/4027/61)

19

LIMITED DISTRIBUTION.

Cypher telegram to Sir A. Clark Kerr, (Shanghai)

Foreign office.

No. 1267.

IMMEDIATE.

28th December, 1939. 9. 50 p.m.

My immediately preceding telegram (of 28th December :

British policy in the Far East, paragraph 2.

At the

It is as you will appreciate highly important to prevent

supplies of tungsten reaching Germany or the U.S.S.R.

instance of the Export Credts Guarantee Department, therefore,

P.V. Kuo has made tentative enquiries of Dr. Kung as to whether any

of the commodities hitherto supplied to Germany under the Sino-

German Barter Agreement could now be made available for sale to

His Majesty's Government. Our idea at present would be to take

any of these commodities which we need or which we wish to prevent

reaching Germany or the U.S.S.R. and to let China have in return on

a barter basis the wireless and telephone material. If a barter

deal is impossible we would probably supply wireless and telephone

equipment out of the Credit Agreement, but this should not be

mentioned to Chiang Kai-shek.

2. For your own confidential information the goods which we

require from China would be silk waste and tung oil. We have

adequate supplies of wolfram and tungsten, but the French require

some 5,000 tons from China. We do not at present require silk or

tin. Bristles are in short supply here but the lack of them is not

of great consequence.

3.

I suggest that you should ask Chiang Kai-shek without

committing us to any definite undertaking what amounts of tungsten

are now available, particularly those formerly sent to Germany under

the barter agreement and also whether China is able to supply silk

/waste