Office of the Historian

393.1115/8–1649: Telegram

The Consul at Shanghai (McConaughy) to the Secretary of State

Shanghai, August 16, 1949—6 p. m
[Received August 16—8:31 a. m.]

3264. ConGentel 3241, August 15, transmitting Chamber Commerce memo. ConGen regards memo as somewhat overdoing immediacy threat of labor violence and of general danger foreigners. Some foreign and objective Chinese observers whose views are not tensioned by tremendous problems and justifiable anxieties which beset American business circles feel there has been definite easing in authorities’ manifested attitude and treatment local foreigners in past 2 weeks and we can perhaps derive some slight encouragement over:

1.
Somewhat less immoderate tone in general press treatment of foreigners and foreign affairs with distinct lessening violence of vituperation.
2.
Decrease in serious incidents involving foreigners.
3.
Apparent serious intention of authorities discipline labor with limitations (however bad such limitations may be from foreign standpoint).
 
Believe, however, this factor does not alter essential correctness picture presented by memo or justification for opinions expressed therein in view facts:
1.
Improvement thus far indicated, while definite, is very light.
2.
Urgent economic pressures blockade [and] air raid effects, [Page 1299] Commies’ desperate need cash, food, materials, their insoluble problems and population dispersal tasks, with Moscow’s pressure and continuing basic hostility American, British Government policies not only remain but may be expected mostly to increase as major impelling factors. Present improvement can only be regarded as precariously temporary, likely change for worse any moment.
3.
Very fact of Commies’ apparent new determination discipline labor (especially re forcing it accept factory dispersal program) creates new danger explosive disturbances which, if extensive, would certainly further endanger position foreigners already jeopardized by popular resentment over belief we responsible for blockade and other factors causing economic misery.

Sent Department 3264, repeated Nanking 1778, Embassy Canton 1016.

McConaughy