893.911/7–1449: Telegram
The Consul General at Shanghai (Cabot) to the Secretary of State
[Received July 15—12:34 a. m.]
2773. ReConGentel 2740, July 13, 3 p. m. Evening Post and Mercury dispute, Charles Miner locked in office and threatened bodily harm by workers all afternoon and part of evening. Not allowed visit bathroom adjoining his office. Finally allowed go home on promise he would appear at Labor Affairs Bureau this morning. At Labor Bureau he was met by two Communist Army officers who upbraided him severely for not having reached settlement and called both Gould and himself “scoundrels”. Officers would not listen to Miner’s attempted defense and would not permit him to bring R. T. Bryan, local attorney appointed by Starr as liquidation agent. Officers stated no lawyer could intervene in any dispute and Starr could not designate any agent other than personnel now representing his interests Shanghai. Officers disregarded Miner’s statement he was not authorized by Starr settle Evening Post dispute with workers.
Officers stated wages workers would be fixed on basis 4.8 shen rice about 20% more than had been offered. Payment wages in arrears must be made July 15. Would rice continue indefinitely at this rate regardless fact plant not operating. Officers stated enterprise cannot liquidate without permission. Application for permission liquidate would have to be made formally in writing and go through prescribed procedure with no indication as to what action might eventually be taken.
Miner urged he be allowed sell part equipment plant in order raise funds pay wages. Officers refused, indicating fixed assets plant could not be impaired.
Miner endeavoring obtain remittance from Hong Kong cover payment required for tomorrow. If this fails he may be in for bad time. Undoubtedly this is instance of extortion practiced by Communist authorities. Gould in hospital taking rest cure. Has asked ConGen for advice. Both he and Miner feel they are at end of their rope, particularly since Starr has telegraphed no more funds will be remitted from US. Starr insists enterprise be liquidated at once and his representatives withdrawn. Starr and some other executives now US apparently do not realize it is impossible American representatives here extricate themselves from bad labor situation simply by closing down, writing off loss and washing hands entire matter. Department may wish remind principals American firms with interests here that their Shanghai representatives are virtual hostages held personally responsible by Communist authorities for continued operation their [Page 1231] enterprises or at least their payrolls unless liquidation arrangements have full approval Communist authorities. Such approval most cases undoubtedly difficult obtain at best. Meanwhile American representatives at mercy authorities and their own employees.
I must emphasize this is but first of many similar episodes which almost bound to happen. Department will appreciate need for early decision re repatriation of Americans and re control of remittances, particularly former.
Sent Department; repeated Nanking 1558.