611.9331/2–449: Telegram

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

390. In view apparent refusal Communist authorities in Tientsin and Mukden have anything to do with Consulates there,82 in absence recognition, I consider it vital we should have most effective possible means force them deal with us in Shanghai after they take city. I suggest for this purpose it might be advisable make clear no import or export trade between Shanghai and US will be permitted except [Page 907] after recommendation from this Consulate that it should be. I assume this could be done under existing control and allocation powers appropriately revised. Since it would be very grave blow to Shanghai if international trade were crippled I feel such step would practically force Communists deal with US. They would practically have to obtain numerous products including oil, food and cotton.

I am apprehensive in absence some such policy Communists will obtain needs by dealing with individual companies which may be eager to try save their own skins at expense over-all American interests. Success of scheme would probably depend on British cooperation which I believe they would be disposed to give. Their cooperation would have to include Hong Kong.

My thinking is when Communists enter, a clear understanding with them will be necessary on numerous points. For example, entrance American merchant ships and commercial planes, withdrawal marines, future stationing warship in river, respect for commonly accepted diplomatic and consular prerogatives, protection American citizens and their property. If Communists realized they could not get what they needed until they had given clear undertakings above points, it would greatly facilitate our task here.

Would appreciate Department’s reaction.

Sent Department 390, repeated Canton 13, pouched Nanking 288.

Cabot
  1. For correspondence on the difficulties experienced by American consulates in areas held by Chinese Communist forces, see vol. viii, “Problems of United States areas occupied by the Chinese Communists”.