893.516/747: Telegram
The Consul General at Shanghai ( Lockhart ) to the Secretary of State
[Received 2:30 p.m.]
329. Department’s 175, March 18, 5 [6] p.m. The Department’s views were informally and discreetly communicated to the heads of the two leading local American banks who will in turn convey the information to the Chinese clearing house officials. It is pointed out, however, that the terrorism there [threatened?] by the Chungking agents here and the counter terrorism perpetrated over the week-end by the Nanking régime as mentioned in my 321, March 22, 1 p.m. and 328, March 24, 1 p.m.,20 have forced many responsible officials of the Chinese Government Banks here as well as some of the leading commercial [Page 615] bankers into hiding, as they are not only fearful of their lives but wish to avoid being captured and held as hostages.
Four of the staff of the Bank of Communications, Shanghai Branch, were seized yesterday and are being held by the regime. Hence the situation, it is feared, has gone too far for representations such as those suggested by the Department to have any effect. It is believed that Chinese bankers and clearing house officials will not be in position to continue to refuse as things now stand.
One American banker believes American Embassy should exert its influence with the Chungking authorities to induce them to cease terroristic acts in Shanghai which can only result in counter-terrorism and in speeding the very results which the Chungking financial authorities apparently desire to avoid.
It would appear the welfare of the whole community here, Chinese and foreign, would best be served if terroristic acts on both sides should cease as a very serious situation has arisen.
Sent to the Department, repeated Peiping, Chungking, code text by air mail to Tokyo.
- Neither printed.↩