DEAR MR. MOLINE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75-00662R000200150064-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: December 9, 2016
• Document Release Date: February 13, 2001
• Sequence Number: 64
• Publication Date: July 20, 1951
• Content Type: LETTER

Approved For Release 2001/03/02 : 5-00662R000200150064-7
*?l FOR U.S. WFICULS ONLY
Mr, Edwin G. Moline
Acting Chief
Economic Defense Staff
Department of State
Washington 25, D. C.
Reference is made to your letter of 2 July regarding the reports
of other governments to the Additional Measures Committee of the Jnited
Nations, Which were submitted in response to the General Assembly
Resolution of 18 May 1951. That resolution recommended a stratep;ic
ealraxgo against C ursist thins and !forth Korea. It is noted that the
Economic defense Staff at the Department of State will coordinate the
analysis of these reports with relation to United. States policies and
objectives in the economic field and as to the adequacy of the snsures
described in the reports, and that cent is requested regarding infor-
mation in the reports related to the interests of the Central Intelligent
Agency.
In the limited time and with the limited information regarding
a of the controls of the various countries, it is not possible
an adequate or coordinated study of the reports. The following
however, are offered for what they may be worth.
The resolution of 18 May does not prescribe it form for the report
re ded in paragraph 1(*). Consequently, the replies of the various
countries are not comparable as to the extent of the embargo and the
compliance with the other recommendations in the resolution.
With reference to paragraphs l(et) and l(b) of the resolution, it
is obvious that there are varying interpretations of what constiti to
'items useful in the production of arms, amunition, and implemonts of
wstr." None of the important trading countries has saes embargo as caon-
prehensive as that of the iJntted States. France, Netherlands, and the
tiE attached embargo lists, but even these are not sufficiently specific
for comparison with the US lists or the COCOM lists. Some items shipped
to China are considered by the exporting country as "non-strategia,"
since they are not included on the COMM embargo list. Items not on
IL-I include certain materials and equipment in the following categories:
steel plate and angle bars, machinery, seamless boiler tubes, ball anal
roller bearings, milling machines. steam turbines, dyestuffs, steel
wire, motors, centrifugal pumps, cranes, and electric power cables.
Shipment of such materials by Western powers reduces the effectiv-eries g
of the embargo of the items specifically included in the resolution
of 18 May. If the embargo of Co unist China and North Korea is to
FOR U.S. OFFICIALS ONLY
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 Approved For Releases 2001/02~:#:I&Wq,2R000200150064-7
be effective, a liberal interpretation of paragraph 1(a) of the
General Assembly Resolution is Important because Chinese indus-
trialization does not necessarily require items of the most advanced
technology.
Way of the governments did not refer specifically to the measures
taken in response to paragraphs l(c) and l(d). Intelligence indicates
that there have been substantial transshipments through both European
and tar Eastern ports. With the restriction of trade with Hong Kong
and the West, there is evidence that the Chinese have resorted to new
sources and new channels for procurement (clandestine and otherwise'i
of items of strategic significance. Karachi, Bombay, Calcutta.
Singapore, Manila, and Macao are being developed further as trans-
shipment points to by-pass the trade controls at Hong Kong. Prcaaneat
in the traffic reported are tires, motor vehicle parts, electron{ice,
petroleum, and antibiotics. In the ease of India and Pakistan,
attention is called to the fact that these countries produce prrsc-
tically the entire world supply of raw jute, of which there is
presently a world shortage. India also has a large industry in g;oois
manufactured from jute. Gunny sacks and other jute pr odiucts are
critically essential to the Asiatic countries as packaging materiel
for military and civilian supplies. They also have other importix t
military uses, such as sandbags, camouflage material, and cordage.
From the outbreak of 'arid 'gar I I, raw jute and Indian-made jute
goods were strictly controlled by the British as highly strategic
materials.
i Chinese are notoriously successful traders and smugglers,
having a far-flung network of overseas connections. it is reported
that they have established the China Hzport Corporation in. the soviet
gone of Germany for the purpose of placing orders in 'Meostern Europe.
Any embargo of Commuinist China, to be effective, must be supported by
parallel action by the nations of the free world. Interruption of the
trade at any one point or through any one channel has resulted in st-
tempted diversion through other routes. Consequently, any embar o.
to be effective, will require concerted action and diligent enforce-
ment beyond that indicated in most of the reports.
Sincerely yours,
25X1A9a
AMP-5 8
Cleared with the A?)/RR, D/?t, D/Z
and UGC (rIIr. Pforzheimer) )
D/A:SFC:pph
Distribution
Ori -Addressee
1 - AD/RR
1 D/R
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