811.91293/8–949: Telegram
The Consul at Shanghai (McConaughy) to the Secretary of State
[Received August 9—3:12 a. m.]
3082. Follows a substance information given by Randall Gould to ConGen August 6:
At meeting August 4 workers first demanded severance pay each employee one and one-half year’s wages, later reducing this to 8 months’ pay for workers, 7 months’ for staff, aggregate payment approximately US $100,000. Gould feels that this excessive but in principle took notice of fact that majority workers had given long service and relatively their wages among lowest” their group in Shanghai. In light these facts he considers their demands by no means unreasonable.
Following August 4 meeting Gould immediately sent message to Starr reporting workers’ demands and asking for immediate reply. To date no word. Gould went to plant August 6 informing workers he deeply regretted delay; again made it clear he cannot bind Starr or guarantee anything. Reiterated offer apply own and wife’s resources to utmost if necessary. Workers manifested patience. Evidently expecting deal go through, they promised no more lock-ins.
Gould said if Starr does not approve terms he fears worst for himself and wife without whose moral support he would have already collapsed; he realizes he is temperamently unsuited take type punishment he has experienced; he has almost reached limit his endurance; and rather than suffer more such experience he would almost welcome being jailed. Jailing might have wholesome effect making people back home realize seriousness his predicament.
Position Miner representing all Starr interests including American Asiatic Underwriters Bank, Reliance Motors, Metropolitan Motors, Metropolitan Land even worse than Gould’s. While Starr may agree to workers’ terms for Evening Post, corresponding problems other five Starr organizations developing rapidly and thus far with no basis of hope for settlement. All five organizations in deep water financially, probably forced suspend operations. Workers all five organizations demanding not less than 7 months’ severance pay (apparently accepting inevitability closure). Starr’s Hong Kong representative has refused consider workers’ demands, offered no more than one and one-half month’s pay. Miner in impossible position, workers pressuring local authorities to deny him exit visa. Workers [of] Reliance Motors which in particularly bad financial state are extremely tough crowd. Payment of claims of workers of five organizations would total about US $500,000 in addition to US $100,000 for the Post.
Gould said Post has additional problem meeting many claims which could probably be paid off by selling some of plant’s properties. As [Page 1269] indication of impossibility operating newspaper in Shanghai under present conditions, he stated Post’s pay roll alone would total about US $16,000 per month compared former US $3,500; higher pay roll, other increased expenses would involve net loss probably not less than US $10,000 per month.
Gould expressed appreciation McConaughy for what ConGen had done to assist him. Would appreciate if pertinent points of above information were transmitted to Dept—with suggestion, if thought proper, that Dept contact Starr’s Washington representative G. M. Rosse, % Paul V. McNutt, with view reemphasizing to Starr seriousness Gould’s and Miner’s position and grave need acceptance Post workers’ terms if further persecution Gould is to be avoided.
Gould pointed out that if USA dollar did not have extremely unrealistic local value wage disputes could be settled fraction cost now indicated.