893.515/4–2949: Telegram
The Secretary of State to the Consul General at Shanghai (Cabot)63
806. State and Treas oppose surrender large amounts US currency under Communist foreign currency surrender regulations but believe decision and timing on destroying emergency supply US currency (urtel [Embassy’s] 831 [from] Nanking) should be at discretion of posts concerned with Embassy approval if possible. Communists’ foreign currency surrender regulations at present appear to apply Tientsin only (Tientsin 25364). Peiping telegram 657, April 1965 indicates similar move not yet taken Peiping.
We wish to point out that if post emergency fund is not large, e.g., 50,000 dols, it might be more expedient to surrender rather than destroy since discovery of destruction might be interpreted as act of economic warfare against Communist government. Also regulations (Tientsin 253) apparently permit local currency withdrawals on graduated exchange rate against surrendered dols.
[Page 766]However should post deem it necessary Treas hereby extends authority to destroy by burning currency as recommended urtel [sic] at appropriate time in accordance following instructions:
Currency should be burned in presence of a committee composed of at least three responsible employees designated by head of Consulate or Emb. All currency should be counted and scheduled by class, such as silver certificates, United States notes, Fed Res notes, etc., and by denominations, and in case of Fed Res notes also by banks of issue.
Committee should certify to complete destruction in their presence of currency so scheduled. Upon receipt of certified schedule of destruction by Treasurer of United States in Washington reimbursement for amount of currency destroyed will be made to State Dept or accountable officer concerned.
Use all possible precautions to assure that only genuine currency notes are accepted and that currency is burned to ashes and that no unburned portions remain after burning and to take appropriate steps to safeguard destruction operation. Suggest several destruction schedules be certified for each burning operation so that duplicate available in case any schedule is lost in transit to US.
U.S. Emb and ConGens also authorized when emergency conditions deem it advisable to act on requests of private holders of US currency and destroy their currency in accordance above procedure. Reimbursement will be made to banks specified by owners of such currency.