893.50 Recovery/4–2249: Telegram

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

1308. ReDeptel 696, April 20, 5 p. m.3 Merchant and Parker urgently called Nanking. Following reply therefore preliminary comment:

Toeca paragraph 1: Although it cannot now be foreseen how and when Communists will come into effective control Shanghai, I greatly doubt it will be difficult determine when this has in fact occurred and to order diversion ECA cargoes thereafter. Continued supply ECA rice, oil and cotton until moment takeover is essential if law and order are to be preserved in Shanghai.

Toeca paragraphs 2 and 3: I agree that Nationalist collapse appears inevitable in absence massive foreign aid; and that barring unlikely wholehearted teamwork between Generalissimo and Li Tsung-jen collapse may come quickly.

Toeca paragraph 4: In view seizure ECA supplies in Peiping and Tientsin, I see no reason leave any yarn and cloth here which can be moved.

Toeca paragraph 5: See ConGentel 1296, April 21, 8 p. m.4

Toeca paragraph 6 first sentence: Question evacuating ECA head office must rest primarily with ECA. ConGen has made clear its hope ECA head office will be moved at early date since many other questions will arise during emergency period of takeover and ConGen would like move to Glenline Building before emergency period starts.

Paragraph 6 second sentence and paragraph 7: I do not agree. Communists have virtually interned our personnel Mukden,5 seized ECA supplies Peiping and Tientsin, said in their propaganda they [Page 638]would not accept American aid with conditions and implied aid agreement6 was one of “treaties of national betrayal” which they would abrogate. They have moreover carried on vitriolic and insulting campaign against “American imperialism”. Under circumstances I feel Chinese will fit shoe on right foot in fixing responsibility for stoppage ECA aid and if they do not I doubt situation would be much improved by continuing aid. On contrary I feel Communists must be made realize at most inconvenient moment for themselves they will have great need for normal relations with western nations and that their course heretofore has not conduced to such relations. Firmness now may well produce less strained relations later on. Sent Department 1308, repeated Nanking 755.

Cabot
  1. Not printed; it requested comments of the Embassy and Consulate General on Toeca No. 1368, supra.
  2. Not printed.
  3. For correspondence on this subject, see vol. viii, “Problems of United States Consulates in areas occupied by the Chinese Communists” chapter I.
  4. July 3, 1948.