125.9371/5–1749: Telegram
The Consul General at Tientsin (Smyth) to the Secretary of State
[Received May 19—9:39 a. m.]
329. Reourtel 320, May 16.61 If Communists endeavor take over any of our 4 ex-German houses or ex-Jap consular property acquired under [Page 1084] bilateral agreement,62 I feel we should react with some positive action. US has suffered very serious loss of prestige through Communist, confinement our Consulate General staff Mukden [by] Communists which fact is generally known in Communist areas. Throwing us out of houses or taking over ex-Jap property here would involve further aid striking loss of prestige and would make position of Consulate General staff here difficult if not impossible. I believe we should exercise patience with Communists but feel this policy should have limitations.
I recommend that if Communists show intention of taking over any of our houses or ex-Jap property to all of which we have full title, I be authorized to inform Communist authorities that such action would result in prompt closing of our Consulate General office and withdrawal of staff; it should be pointed out to Communists that thus far US Government has placed no restrictions on US trade with North China, but that Communist action in question would place serious obstacles in way of such trade through absence of Consulate General to issue consular invoices; it should also be intimated that any Communist effort in such case to channel trade between Tientsin and US through Hong Kong would not succeed. In view of Communist desire for trade with US it must be made clear to Communists that action in question on their part would result in stoppage of such trade.
We hope Communists will not raise this question but we feel some course of action should be decided on previously in case they do.
Sent Department 329, repeated Nanking 206, Shanghai 228, Peiping 143.