Foreign Relations of the United States, 1949, The Far East: China, Volume IX

893.5151/7–2149: Telegram

The Secretary of State to the Ambassador in the United Kingdom (Douglas)

Washington, July 21, 1949—8 p. m.

2536. Since occupation Shanghai by Chinese Communists ConGen Shanghai has cited numerous cases local authorities attempt seize, mobilize foreign exchange balances ChiGovt, even bringing pressure on American, other foreign bankers, businessmen transfer foreign balances favor reorganized Bank China Shanghai, and in at least one instance giving impression such foreign nationals hostages until compliance Communist orders realized. Disposition US Govt at this time not block any category Chinese assets US already conveyed ConGen Shanghai, but some elements American community Shanghai favor strong positive action U.S. Govt imposition financial controls.

This connection ConGen Shanghai reports⁴⁴ Manager Hong Kong [and] Shanghai Bank feels Brit Govt should institute some blocking procedure jointly with US Govt in order protect their nationals [from] duress and possibly personal danger. Emb London therefore requested undertake discreet inquiries determine whether Brit Govt contemplating any action this subject, including use for this purpose controls presently operated Brit Treas. Emb should avoid giving impression US Govt has determined upon any course action other than that implied by fact US Govt has not to date blocked any Chinese assets US. UK Govt undoubtedly appreciates any US decision block Chinese assets would be preceded by minimum understanding cooperation other powers primarily UK. Dept not at present prepared initiate such understanding or cooperation. This position of course subject change light fluid situation China.

Acheson

44. Telegram No. 2812, July 18, 4 p. m., not printed.