893.00/2–648: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received February 6—8:44 a. m.]
238. We are by no means convinced that general breakdown of law and order in Shanghai is imminent although we believe further sporadic civil disturbances probable (Shanghai’s 248, February 4, 11 a. m.). There is as yet no indication that Communists are so organized as to be capable of creating and controlling state of chaos at Shanghai. As we have already reported in our 232, February 5, 8 p. m., we continue to believe that basic causes civil disturbances at Shanghai are economic rather than political and must be dealt with by economic measures in conjunction with determined police control. It seems to us that Government is well aware of need to maintain itself at all costs in the lower Yangtze valley and at this time we can see no serious threat to its position in this area. However, fact remains that Government control of Shanghai is likely to be endangered by policy of extremist elements in Government in using party secret police to suppress even legitimate dissatisfaction caused by maladministration and thus solidify discontented elements into organized opposition. In such situation advantage is thrown to Communists. Moderate elements who would prefer to deal with situation by firm but rational methods are handicapped by lack of unified administrative control. For example, Mayor of Shanghai has no authority over garrison command or over party secret police. Mayor Wu has requested such authority and we are very informally supporting his request with Generalissimo, pointing out that deterioration Shanghai situation seems to call for firm measures and centralized authority. We consider this feasible because of competence of Mayor, his loyalty to Generalissimo and high regard in which latter holds him.
[Page 84]In situation prevailing at Shanghai there is reason for concern but no immediate cause for alarm. In fact, manhandling of Mayor Wu and apprehension of some leaders may have sobering effect. Shanghai foreign community has long tended to panic over relatively insignificant political developments. This tendency is infectious and inevitably contributes to general unrest and feeling of insecurity.
We do not wish to minimize potentialities of situation at Shanghai but for time being we feel Chinese Government can retain control over situation. Furthermore, there are factors in situation, such as pending American aid, which will undoubtedly have substantial effect on public morale thus tending to stabilize at least temporarily.
Sent Department 238, Shanghai 109.