893.50 Recovery/10–1248: Telegram
The Consul General at Tientsin ( Smyth ) to the Secretary of State
[Received October 12—8 a.m.]
284. I understand from Mr. Cleveland47 that ECA is reconsidering plans for North China as result letter from Army Department recommending against such assistance to North China on basis Army’s estimate military situation.
Plans for three projects in North China (Kailan Mines, power command [company and] railway) were publicly announced by ECA and lifted local morale. If these plans are canceled or it becomes known that stop orders have been issued, it will be considered in North China as a definite breach of faith by United States; no explanation, no matter how plausible, would convince people in North China to contrary. North China, which already feels neglected by its own Govt, will then feel deserted by us. This might have serious political repercussions in China. It would adversely affect American interests and also make position of Americans in North China difficult.
Any such action would provide effective propaganda for Communists who would be expected to make good use of “US breach of faith” not only in China but quite possibly elsewhere.
I therefore urge that publicly announced plans be carried forward and that any serious modification which might become public be deferred until such time as we could not reasonably be accused of breach of faith.
We hope there is no thought of cancellation or modification at this time of ECA plans to send food to North China. In present mood of people, already bitter over sharply rising prices and food shortage, stoppage of ECA food supplies would make position of Americans here not only difficult but dangerous, as wrath of hungry people could be diverted from China authorities to American citizens.
With regard to military supplies, Chinese in North China would find it difficult to understand why US military supplies should be given Nanking, whose top generals have by repeated incompetence (most recently at Tsinan) allowed countless American arms fall into Communist hands, rather than to Fu Tso-yi, only top Govt general with proved ability and willingness to fight Communists. Chinese here feel if North China falls to Communists, all China will inevitably follow.
Respectfully suggest this telegram be brought attention Mr. Lapham48 in Washington and Mr. Cleveland in Shanghai.
Sent Nanking 514, repeated Department 284.