811.20 Defense (M)/9996b: Telegram
The Secretary of State to the Ambassador in China (Gauss)
1017. Metals Reserve advises that it and the Board of Economic Warfare have discussed several times with Yin of the National Resources Commission amending contract for purchase of tin under which company would accept delivery at a point within China. A letter has been addressed to Yin in the following sense.
As air transport facilities from China to India will tend to increase, Metals Reserve has desired to make arrangement which will increase quantities tungsten ore delivered at Kunming airport and which will provide basis for settling for such tin metal as may utilize plane space not required for tungsten.
To attain these objectives company is prepared amend contract as follows:
- 1.
- Increase price for tungsten ore of standard specifications to $21.00 per short ton unit delivered at warehouse at places named by company’s representatives in China from present price $19.50 per unit: also provide for initial payment of 75% instead of 65%.
- 2.
- Establish base price for tin metal standard quality (99.8%) of 53 cents per pound f. o. b. planes Kunming. However, it would be provided that company may decline to accept tin in excess of 50% of tonnage of tungsten deliveries in any one month.
- 3.
- If Chinese prefer company would be willing to negotiate contract for delivery of tin f. o. b. steamer at Indian ports, and the Chinese National Resources Commission would pay any actual expenses in transport from Kunming.
Yin’s initial reaction has not been favorable. He appears to desire arrangement for 60 cents per pound for tin f. o. b. planes Kunming, asserting that China should receive treatment equal to that given Bolivia. As Bolivian tin is being bought at available ocean ports Metals Reserve believes that even if desirable it would not be possible [Page 668] to make arrangement for delivery at Kunming which would in every sense be equivalent to the treatment accorded to Bolivia.
Embassy will note that company has voluntarily stated willingness to increase price of tungsten and also to pay higher proportion of the value of the tungsten when notified that the metal has been delivered.
If it is felt desirable Embassy may give foregoing information to National Resources Commission. However, whether or not matter is discussed with members of the Commission, Metals Reserve would appreciate Embassy’s comments. Furthermore company would like to have regular reports of any information obtained in regard to the trend of production of tungsten.