The Consul General at Shanghai (Cabot) to the Secretary of State
[Received July 7—9:27 a. m.]
2643. At 9:30 last night police patrol came to Consulate General and were admitted. They wished immediately to discuss matter with Consulate General representatives and leaders of ex-Navy employees, intimating that otherwise they would withdraw. I reiterated that under no circumstances would we talk to employee representatives while they maintained blockade of building but that I would be glad to inform police regarding case. They agreed. Two-hour talk followed, during which we explained case and they asked numerous and generally pertinent questions. We pointed out that we were acting solely as intermediaries, were not directly involved in dispute, could only give what Navy wishes, expected protection from violence in accordance with International Law and Mao Tse-tung’s eighth point and that if we were officials we should have special protection, if private citizens as they claimed we clearly had nothing to do with the dispute. They pointed out that many of men still unemployed and consequently suffering, that it was desirable to settle case on basis of local custom, and that further violence might occur if it weren’t settled. What they said showed that they had been fully informed since yesterday of developments in matter, hence guards Tuesday. Note that delay their coming yesterday was deliberate. We finally agreed to send a representative tomorrow to Foreign Affairs Section to discuss but not to arbitrate matter. At midnight police finally dispersed men peaceably and staff went home. Police courteous and generally helpful. However, in talking to men, police said no further violence while negotiations in progress, leaving intimation violence permissible if we do not agree to settlement satisfactory to workers.
I am planning a strong protest to Foreign Affairs Bureau tomorrow (today is holiday).[Page 1201]
Department will appreciate that situation now more difficult than ever. Men’s tempers inflamed by long delays and not improved by 12 hour vigil in rain. Authorities almost certain to put pressure on us and to wash hands of any violence if we prove intransigent despite any representation on our part. As reported in mytel 2462 ,94 although I believe authorities concerned at bitterness of labor disputes, they seem afraid to take firm hand even in flagrant cases of violence and even connive with them to some extent. Men’s appetites growing as each further case of violence brings further successes. Pattern followed yesterday if [of?] long delay in appearance of police is so similar to that in other cases as to reflect definite policy. It is this atmosphere that we must consider what to do.
Only bright spot is that we have found an April 1948 Navy payroll which will enable us to divide men fairly accurately into categories of more or less than a year’s service. We are urgently working on this now. I propose at meeting tomorrow to offer pay on basis present offer on fixed day next week and to transmit further messages to Navy if they reject offer. I frankly doubt that this will satisfy many.
I frankly find it difficult to recommend course of action to Department. Rough estimates indicate that we have some balance in Navy fund with which to increase present offer. I hesitate to increase present offer because (a) it is more than equitable under regulations men agreed to when employed, (b) I do not like to yield to violence, (c) I doubt men would accept even increased offer.
Only other suggestion I have to offer despite obvious objections is that Navy send team of labor experts here to negotiate. I should not like to undertake mission for Navy but (a) it would get Consul General out of a mess which is Navy’s responsibility, (b) it would put Communist authorities on spot re acceptance.
I would greatly appreciate urgent instructions.
Sent Department, repeated Nanking 1463.