893.00B/9–1149: Telegram
The Consul at Shanghai (McConaughy) to the Secretary of State
[Received September 11—4:13 a. m.]
3777. Re ConGentel 3706, September 8, conversation with Keswick. Reference penultimate paragraph “he did not expect Americans fare [Page 1292] well under Communist regime”, while we have no direct evidence Mayor Chen Yi made this remark to Keswick ConGen is satisfied Mayor did intimate something along this line; otherwise Keswick would not have mentioned it in his conversation with ConGen officer. He would hardly have invented this as bluff to frighten away American competitors. Such remark would tally with known Communist tactics as they have come attention ConGen. On several occasions members ConGen staff have been told by minor Communist officials various requests we have made (permits move residence, travel by rail, transfer gasoline stocks, et cetera) could be acted on more expeditiously if interest involved were not American. It seems be settled Communist practice harass and heckle American citizens especially American Government employees at every turn as means provoking minor incidents which can be used in anti-American propaganda campaign and by discriminatory treatment undermining any tendency toward united front among various western communities Shanghai.
Clearly we would merely be playing into their hands by giving vent to exasperation at petty annoyances put in way of Americans. Large measure forbearance is called for and in general is being displayed by American community.
It would appear reasonable assume Chinese Communists are up to their old device of playing off one group foreigners against another. This borne out by conspicuous absence direct and pointed attacks on British over past 3 or 4 weeks. Bitter anti-British propaganda following escape Amethyst quite suddenly ceased after tremendous 3- or 4-day build up. Other indications of attempted contacts between British representatives and Chinese Communists have been previously reported in my telegrams and also telegrams from Peiping and Tientsin.
Divergence British [and] American business interests Shanghai has been apparent for some time with former more inclining to compromise and to hear [bear] current losses in slim hope of recouping in future. Divergencies based partly on different orientation basic policy two governments but principally on difference economic position two business communities with British less able to afford a [to] pull out account their deeper involvement Chinese trade and industry and their inability to reestablish selves in their own country.
British Ambassador coming Shanghai September 12 with intent discuss united front with British, US consular and business representatives during course of week. In view presence Washington high British officials, Department may wish raise this matter and pass on for our guidance in these talks any available information.
[Page 1293]Sent Department 3777, repeated Nanking 1976, OffEmb Canton 1103.