893.50 Recovery/3–1149: Telegram
The Consul General at Shanghai (Cabot) to the Secretary of State
[Received March 11—5:59 a. m.]
846. From Merchant. It would clearly be desirable defer any ECA action beyond pre-project stage now nearly completed Formosan reconstruction, until Chen has been replaced or his tenure confirmed by Acting President and such Government has given assurances we desire. I recognize, however, pressure April 3 deadline and advantage camouflage lumping Formosan with selected South China projects approval when ECA given green light. Still regard Chen unreliable, hence reluctant recommend start talks which implicitly will encourage him and strengthen his position on island.
I will cable recommendation promptly from Nanking where due March 12, hopeful securing relevant information. [Merchant.]