125.455/8–2649: Telegram
The Consul General at Hankow (Callanan) to the Secretary of State
[Received 1:21 p. m.]
281. Deptel 66, August 23, 7 p. m. Am cautiously informing Americans likelihood closure. Before definite announcement of intention, wish Department appreciate (1) effect on staff and (2) possibility reaction by authorities. Re (1) under existing conditions “local” staff becomes predatory when dismissal looms, outside influence partly blameable. Despite optimism mytel 277, August 22, noon,97 USIS staff reasserts demand 4 months’ severance pay, insisting with some justice because work is scarce and recalling stigma they bear results service with US. Believe they will agree accept not less than granted Shanghai which they still claiming. Same time if closure plan known they will expect basis not less than accorded Consulate staff, though this will be mainly controlled by seniority sliding scale. Assume complete records supplemented by mytel 263, August 15, noon,97 in Department for retirement senior Chinese. Important be able assure prompt payment annuities where applicable and proper severance for senior employees not pensionable. With closure planned, layoffs as per staff reduction not feasible and all will expect pay until closure date. I recommend Richard Lee should be retained reduced basis after closing as overseer equipment and US-owned compound. After actual closure several staff will be retained for final work estimated 2 weeks. October 1 appears good closure date, not earlier.
Movement citizens need have no bearing closure date as we powerless to help them now with anything more than advice.
Re (2), with actual closure radio stops necessarily but no assurances authorities will not move when closure intention known. Presuming confidential files to be burned, I request authority burn noncurrent files now. It should also be kept in mind that when and if I am permitted depart probably will not be permitted carry uninspected accounts or other official documents. Official attitude to Consulate appears hardening. Visitors French Consulate have been frisked and last evening about 9 clerk Huso was refused egress this building, he having apartment herein.
Re dismissals, I want direct and realistic approach. Situation loaded against us and might produce more than much upleasantness and not worth saving few hundred dollars. May say after strain of past months, especially last 3, our nerves unlikely equal to wrangle with staff over separation.
Sent Department 281, passed Nanking 220, Shanghai 122.