893.6463/7–1648: Telegram

The Consul General at Tientsin (Smyth) to the Secretary of State

206. Re Shanghai 1245, July 9 to Nanking,34 repeated Tientsin as 166 delayed in transmission here. We understand Eximbank35 refused to reallocate to Tientsin and Peiping 2 turbo generator sets each 5,000 kws. originally destined for Sian, apparently on ground military insecurity this area. In this connection please see my 372, July 14 to Nanking, repeated Department as 204,36 Shanghai as 339, re feeling of Chinese in North China that National Government is making deliberate effort to create impression with American authorities that North China is lost and should not be considered in American aid plans.

Fact that Eximbank refused reallocate generators North China generally known here and has resulted in impression that American authorities have joined Central Government in writing off North China. It seems to us North China is more secure than pictured by Central Government, particularly if fair share of ECA aid is to be given North China. Furthermore, General Fu Tso-yi and military leaders this area have been conducting operations against Communists with more competence and success than other areas. Allocation generators to Tientsin-Peiping would have very favorable effect on North Chinese morale and would at same time help to alleviate critical electrical power shortage in each of these two cities. Statement on urgent need for generator handed to Mr. Stillman in Tientsin July 9 by C. T. Ku, [manager] power company here.

Sent Nanking as 374, repeated Department as 206 and Shanghai as 341.

  1. Not printed.
  2. Export-Import Bank of Washington.
  3. Vol. vii, p. 355.