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

893.515/9–649: Telegram

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

Washington, September 17, 1949—6 p. m.

1909. Treasury advises not possible deviate from instruction Deptel 806 Apr 29 to meet situation urtel 3673 Sept 6. However, Dept advances following alternative courses, for which risks ConGen and private American citizens should be assessed and assumed by ConGen and individuals concerned, respectively.

1. ConGen proposals urtel 3673 and instructions Deptel 806 could be reconciled by ConGen temporary appointment three responsible private American citizens as acting consular agents accordance Regs⁵³ 102.288 to supervise, witness destruction and complete all other requirements Deptel 806 Apr 29 including preparation certificate for deposit with ConGen before boarding Gordon. Treasury states will honor certification submitted by duly authorized representatives ConGen. Treasury will not recognize destruction for account any one individual in excess $2000. Treasury has no authority to make reimbursement except upon receipt of signed certificates of destruction prepared as outlined Deptel 806. ConGen should cable at earliest date full details of certifications delivered to him for action here as American citizens will undoubtedly desire reimbursement upon arrival U.S. Appointments would be confidential and oral in the sense that no appointment papers held by acting agents. Agents would serve without compensation and be bonded with minimum penality $5000 premium $4 or $5 to be paid by them. If you proceed this course, Dept will arrange bonds with Treasury upon receipt report of names acting consular agents and bonding company selected, and statement that premium will be paid by agent.

2. Evacuating American citizens might convert US currency at banks for PN to be turned over ConGen as special deposit with understanding ConGen will utilize to extent feasible for its expenditures and transfers other posts China, payments to be made by Dept in US at exchange rate current when drawn for disbursement. Department should be informed dollar amounts or equivalent taken over from each person for disbursement. Dollar payments in US would be made to accounts individual American citizens on basis to be arranged. ConGen should obtain written acknowledgement from each depositor that such deposits accepted on basis protective custody without any acceptance of responsibility by ConGen or US Govt for conversion into US currency or for loss or decline value resulting circumstances beyond control ConGen. In this instance ConGen would have problem avoiding acceptance deposits of currency arising out of black market operations. This might be accomplished by requiring bank receipts indicating PN purchased with US notes. Dept recognizes that American citizens purchase of and deposit by ConGen abnormal amounts PN might arouse suspicion, but suggests possibility safely employing this means meet pending terminal wage and bonus payments and current operating expenses.

ConGen authorized in its discretion follow course (1) above. Dept desires ConGen not proceed course (2) without prior authorization subject Dept receipt ConGen report re probable magnitude transactions, possibility disbursement, risks involved, etc. However, if ConGen believes course (2) feasible and more desirable than (1) and if time does not allow further consultation Dept, ConGen authorized proceed in its discretion.⁵⁴

Acheson

53. Department of State Foreign Service Regulations.
54. In telegram No. 3914, September 19, 11 a. m., the Consul at Shanghai indicated he would use the Department’s authorization only in grave emergencies (893.515/9–1949).