Office of the Historian

893.00/12–1048: Telegram

The Consul General at Shanghai (Cabot) to the Secretary of State

Shanghai, December 10, 1948—2 p.m.
[Received December 10—9 a.m.]

2727. Based on several ideas expressed to me, following possible course of action recommends itself to me as means for increasing chance of a peaceful turnover of power in Shanghai:

1.
Police and firemen forces, 16,000 and 700 respectively, to be assured that if they maintain order during a turnover, they will be given a bonus of rice and of silver dollars (perhaps 50 to 100 pounds of rice and 10 silver dollars per man).
(a).
ECA to furnish rice free or at nominal cost.
(b).
Foreign business communities to furnish cash, perhaps to be matched by contribution by Chinese business community. Funds should be separate or wholly administered by foreigners in order to assure that foreign pledges are fulfilled and bonuses actually reach individual police and firemen.
2.
I have discussed this proposal informally and confidentially with Lapham,8 Admiral Badger, British Consul General and presidents American and British Chambers of Commerce. All are favorably disposed and Lapham has agreed in principle to provide rice.
3
I believe scheme should include following:
(a).
Undertaking that police would neither resist nor assist Communists’ entry into Shanghai.
(b).
Undertaking that Nationalist soldiers would not resist within perimeter of Shanghai.
(c).
Undertaking from Communists that they will permit Nationalist municipal authorities to leave unmolested with a reasonable interval after turnover and that no reprisal will be taken against police force as a group. Facilities for departure to be provided by foreign authorities if desired.
(d).
Undertaking on both sides that there would be no sabotage, destruction or removal (except of personal effects) of civilian goods and property.
4.
Since some understanding with Communists would be highly desirable if not necessary, I suggest this might be undertaken in Hong Kong. Perhaps British would be in better position than we to undertake this.

I urgently request instructions from Department whether I may explore scheme further and at proper moment discuss it with Mayor Wu. Many details would, of course, have to be worked out and difficulties may prove insuperable. Nevertheless, the scheme does seem attractive considering its relatively small cost compared to the stakes involved. Head of American Chamber of Commerce is discussing it, not mentioning me, with two or three trusted Chinese friends in order to get their assessment of probable reaction of police and firemen. We would not, for example, wish it to become a precedent for repeated blackmail but since scheme presupposes a turnover, we feel this danger is unlikely.

Sent Department 2727, repeated Nanking 2046.

Cabot
  1. Roger D. Lapham, Chief, China Mission of the Economic Cooperation Administration.↩