GASOLINE SALES TO COMMUNIST CHINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83-00415R008400080013-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 14, 2016
• Document Release Date: March 7, 2002
• Sequence Number: 13
• Publication Date: June 20, 1951
• Content Type: REPORT

Approved For Release 2002/08/15 : CIA-RDP83-00415R008400080013-6
CLASSIf I~V~ A~ [~ Vii Sl';Ci T/Cu.7 RG1 - U.S. QF~IGIALS ONLY
nw.V no CENTRAL INTELLIGENCE AGENCY REPORT NO.
INFORMATIO14 REPORT CD NO.
NTR? China/hoci 19.ong-/i.:acao
2 5X1 C
ACQUIRED
OTEOF
aNFO.
DATE DISTR.
NO. OF PAGES 3
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MITTED W ITHU, 'II_E uNii'11' -EDB Ea`ifGl_S.
OIi LE r ONL ,._ L BO.,., l:ii3
NITL STATLS, WITROII
XPkESS I'Ef.M SS1ON OF
SING OFFICE T~UF'PI 1=NNO. TO
.
1. Gasoline prices in lions; kioag vary uoooraing to the source of the gasoline,
faliint, roughly into three oaa.teguries:
a. .long Kong.; black market gasoline delivered locally with the original
seals on the drum oonumads a somewhat different price frcm that for
gasoline delivered to Shench'uan (114-08, 22=32) from filling stations
within Hong Kong territory, without seals on the drum caps, The
official lion;, Koni: price is about US 420 per drum, calculated at US .?. v5
plus a tax of UK 0.66 per gallon. In November 1950 the black market
price in Hong Kong was US 440 to US 42 per drum; in April 1951 the
price had risen to US : 52 to US .54.
b. Gasoline delivered in '.jiacao is generally sold by a central group made up
of is acao agents of the three big oil companies., Standard-Vacuum, Caltex
and Shell.2 The.>e companies get their supplies from Bong Kong under
government-approved licenses for 2,000 drums each month, the licenses
being approved about the 20th of each month. Some of the gasoline sold
in. iraoao is smuggled out of Huk territory in the Philippines. Black
market prices for gasoline in Laoao were US X48 to US 50 per drum in.
November 1950, US 80 in kebruaxry and i-arch, and US x`'65 in April 1951.,
o. Indent orders on cargo afloat or alrouc,y- o ff=loaded at a foreign neutral
port were sold in L ovember 1950 at US 033 per drums and in. April 1951
at US , 46 per drum.
2. In April 1951 specific sources of gasoline were as follows:
a. Cargoes ?a lreaay afloat, generally in bulk. it was estimated that the
c uaatity available was about 100,000 drums,
b. Cargoes off-loaded in transit, such as the 10,000 drums of gasoline
be loaning to the Thailand tinistry of Sational llefense, 3 which is able
to sell 5,000 to 10,000 drums a month from the 50,000 they receive
from the United States, as well. as lubricating oils to the value of
US 400,000 each month.
5X1A
25X1X
25X1A
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25X1A
CA JTRAL IlTaLIGJ'N CE AGb;N CY
2..
o.
d.
e.
Cargoes sai%6led out of the Philippines.
Stocks from agents of the big oil companies in neighboring areas,, such
as Cacao. In Burma the oil companies do not permit export? but private
merchants who buy from these companies can export the oil.
Stocks on hand in production centers in Borneo and Java, estimated at
300,000 drums,4
f.
g.
h.
1.
Transshipments from the United States through South American countries.."
Odd lots from European countries.
Unimao? s negotiations for 200,000 drums. 6
An American supplier, pc.ssibly involving EGA funds, who ships the
7
j.
gasoline through Taiwan indented for the nationalist Government.
The National rroduction Administration of the United States, which
allegedly is willing to barter gasoline for bristles08
3. Gasoline sales are usually financed by a full letter of credit through
Switzerland or a bank guarantee against inspection upon arrival in iuacao.
Lost banks involved are Portuguese, French, Dutch and Belgian. The policy of
the Chinese Communist government is to have the shipments delivered to
Chinese ports if possible, and they are willing to pay substantially more to
cover the added risk. The difference in price for gasoline delivered in
ivacao and gasoline delivered in China is from 25 to 50 percent.
4. in China, the usual quality and standard gasoline is reserved for governmM.3nt
and army use. The poorer grades from, Yumen (97-13, 40-.15) are for public user.
The most urgent need on the mainland is for empty drums..' Chinese Communi3t
representatives in iiong Kong have been trying; to buy 3/32=inch steel shee-s
and to build factories capable of producing 2,000 drums in an 8-hour period.
They have oontaoted the Yu Tung Tai Company9 regarding the d:.siga and cos of
such a faotoryg George CHIM, representative of the Northwest China kilitary
and Administrative Committee, is handling the negotiations.
5. Those active in the gasoline trade, or who are attempting to get into the
trade, are as follows:
a. Smugglers from (long Kong New Territories to Shench4 uan, Kwa ngturag, who
average from 1,000 to 1,500 drurris per month.
b. Agents of the three big oil companies in iiaosoy these are active.
c. A. F. Bailey, Columbia Export Company, :lational. City Bank Building. Since
Bailey has backed out of the gasoline deals in which he has bee:a involved
and canceled his contracts? the Chinese Communists are trying to revege
themselves by making contact with him, oflerin; a contract, and then
canceling it at the last moment so that he will suffer a great financial
loscs,10
d. Lobi~n ('s) and Johann t`1ONG, unimac, Dina House, 1 udaell Street, hoag; Kong.
o. henry TUG, 420 Union builaiag, reader street, Seven Seas Corporation.11
25X1A 1?
25X1A
Comment. These figures are higher than those reported in
which conform more closely to those for indent gasoline.
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CENTTAL INTELLIGr;NCE i3CENCY
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.s, Comment. As of a>ay 1951 the sale of the first 10,000 drums ;lad
UOT en completed; see
25X1A
25X1A
4. Comv:ent. I I reported the arrival in 25X1A
4~' shipment o d;aso ine from rsoraeo in .larch 1951.
5. 1 -1 Cc,Ment
dated JETy--lEi-50.
reported transactions of this type,
G. Comment. In September 1950 Unimao was trying to negotiate a
~ot for~200,000 drums of gasoline from a South Americas source;
0
7. Comment. LI Ching-wu of the Sunrise :Development Company said
a e was in a position to obtain gasoline from this source; see
B. 'omment. has previously reported that an alleged
oicial of the National xroduotion Administration ::as working with
the Sunrise Development Company,
10. Coaenent. I I reported Bailey as representing the
se er a gasoline transaction is September 1950; a later report
stated that bailey had canceled all his contracts in
11. Comment. ?or daaling of the Seven Seas Corporation, which has
been reported as represented by it. F. bailey, see 25X1A
Henry TUiG has in the past been connected with gaso, ine
transactions involving the Cathay Pacific Company, which was mentioned
in
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