893.00/6–1049: Telegram

The Consul General at Shanghai (Cabot) to the Secretary of State

2188. Respectfully reiterate to Department recommendation I made in Yugoslavia re great desirability legislation permitting executive take measures control immigrant remittances from US.

Number of Communist Governments derive from such remittances resources vital to execution of their programs. This pattern presumably to be followed in China. At moment we are seeking means convince Chinese Communists we have will and means curb their more obnoxious activities; it seems to me clear no field is more promising because less subject to retaliation than control immigrant remittances. Other western nations might join us in establishing control measures to give weight to their own representations.

Principal objection I foresee is that immigrants making remittances might demur. I feel this could be met by pointing out normal effect of control measures would be to ensure recipients received full value remittances, in Yugoslavia 80% in effect in Government.

We are confronted locally—and elsewhere in China, notably at Mukden—with unilateral action by Communists very detrimental to our interests. I do not feel we can afford overlook such golden opportunity for action on our part to show Communists unilateral action in China is two-edged sword. I do not suggest this legislation as basis for immediate sanctions but rather as means to ensure fair treatment for remitters in US and as warning to Communists we really have means to be disagreeable if they carry some of their present theories too far.8

Sent Department; repeated Nanking 1147, Embassy Canton 674.

  1. The Department replied in telegram No. 1214, June 16, 7 p. m.: “Dept giving careful consideration urtel 2188 Jun 10 which involves complex legal questions as well as far-reaching policy implications.”