Memorandum of Conversation, by Mr. Robert N. Magill of the Division of Chinese Affairs

  • Participants: Mr. Hubert Graves, Counselor of the British Embassy
  • Mr. Philip D. Sprouse19 —CA
  • Mr. Fulton Freeman20 —CA
  • Mr. Robert N. Magill—CA

Mr. Graves called this afternoon by appointment under instructions from the British Foreign Office to present and discuss an Oral Communication (copy attached)21 with regard to problems currently facing our two Governments in China.

In discussing the question of our diplomatic representatives at Nanking, it was pointed out to Mr. Graves that the Department does not consider its recent action in authorizing Ambassador Stuart to return to Washington for consultation at some time in the future as constituting a departure from the position previously adopted by joint decision of certain foreign powers in Nanking to retain top representation during a Communist take-over. Mr. Graves was also informed that the Department appreciated the desirability of acting in concert with other interested powers in matters of this nature, and it was suggested that Mr. Graves might wish to ascertain whether the British Government was giving consideration to taking similar action to that contemplated by the Department. Mr. Graves stated that he had not as yet received any indication that his Government was planning to recall the British Ambassador for consultation but that he would forward a discreet inquiry and inform the Department of any reaction received.

With regard to the question of stationing foreign warships in the Yangtze and the Whangpoo, Mr. Sprouse assured Mr. Graves that our reports indicated that there had been continuing and extended consultation between the United States and British representatives in Shanghai and Nanking on this subject. Mr. Sprouse also pointed out that all United States Naval vessels have now withdrawn from the Whangpoo to a point in the mouth of the Yangtze east of Woosung and that reports indicated that the British were adopting a similar course of action.22

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Mr. Graves was assured that no decision had been made to cut off ECA23 supplies from Shanghai because of the impending Communist takeover; that ECA intended to continue the importation of petroleum for utility and other essential requirements and of the United States cereals contribution under the rationing program until Communist control of the city had taken place. It was pointed out that we wished to keep to a minimum the quantity of such commodities that would fall to the Communists, and that ECA’s diversion of cotton shipments should be considered in that light. Mr. Sprouse explained that the recent China aid legislation makes it mandatory that ECA shipments cease as soon as the Communists gain control of Shanghai, but that the United States Government would not attempt to stop the importation of petroleum and other commodities through private channels thereafter.24

In response to Mr. Graves’ queries regarding the present commodity stock position in Shanghai, it was stated that according to our latest information (1) cotton stocks were at a 2–1/2 month level since the fall of Wusih, (2) ECA was maintaining ten-day stocks for its share of the ration program, and (3) Shanghai Power had about a two weeks’ supply of petroleum.

With regard to paragraph numbered 6 of the attachment, Mr. Sprouse indicated that the question of what might be stated to the Communists by United States and British officials when they come into Shanghai is a matter he would have to discuss with other officials of the Department, and that we would give it immediate attention.

  1. Chief of the Division of Chinese Affairs.
  2. Assistant Chief of the Division of Chinese Affairs.
  3. Infra.
  4. For documentation on this subject, see vol. ix, pp. 1098 ff.
  5. Economic Cooperation Administration.
  6. For documentation regarding economic aid, see vol. ix, pp. 599 ff.