611.9331/3–1549: Telegram

The Consul General at Peiping (Clubb) to the Secretary of State

415. ReDeptel 121, March 12. In view basic strength business position, [it is] believed direct approach re consular functions warranted as first step. Noting previous approach re Mukden (Contel 367, March 894) has already presumably cleared way somewhat, recommend new approach same lines be made re position our consular offices generally Communist areas. It could well be noted that Communists publicly advertised their desire that foreign business firms, missions and individuals, even Consulates, should carry on as usual instead of evacuating before Communist occupation, that foreign lives and property would be protected, that some foreigners left but many stayed, that Communists understood not opposed in principle to foreign contacts whether social or commercial, that position and functions consular officials are part of whole complex [of] official and commercial relationships which make requisite provision facilities for travel, banking, consular invoices, passports and visas, protection foreign lives and property. Re frequently orally asserted (but unpromulgated officially) policy “nonrecognition” consuls, there could be emphasized pointed [Page 914] arguments Mukden case that US Govt is assured on basis international law [and] practice no question recognition involved. There could finally be requested restoration to American consular representative normal facilities for performance their recognized functions, facilities to include usual contacts with local authorities, confidential commercial telegrams, registration motor vehicles, travel both private and official personnel including couriers.

Believe presentation matter these lines would be most effectively done Peiping as site governmental authority more nearly central in character, but parallel approach in commercial center Tientsin would add weight. Also believe that démarche would be stronger if at least British95 and probably other consuls would make parallel moves as in case call on mayor (Contel 322, February 2896). French Consul97 already has standing instruction make representations high Communist authority re communications, particularly for Mukden, Tientsin. Note Communist request Hong Kong–Shanghai Bank to act as finance agent (Contel 364 [264] March 15 to Nanking98) offers reason discuss matter with British now. Opine this general procedure least complicated and least dangerous of any alternatives now offered and also logical as first step.

If this procedure not adopted, re Dept proposals suggest as second alternative direct approach Communists Peiping, Tientsin re both consular invoices and communications including confidential telegrams at such time as first exports shipments USA may be undertaken. This would effectively be done indirectly through shipping agents if direct approach undesired or infeasible. If Communists still prove obdurate, retributive action along lines suggested, even arranging block finance channels potential Communists imports would undoubtedly give force to argument. Communists would probably, I believe, consider this economic warfare as suggested third paragraph reftel.

Re questions penultimate substantive paragraph reftel (which Tientsin in better position answer than Peiping), note Communists economically weaker than outward appearances indicate and cannot forego commerce with outside world without grave consequences their regime. Although Communist regimes often follow policies to their economic detriment for political reasons, personal opinion is CCP99 will be forced compromise under economic pressures. Political decisions this regard seemingly still hanging in balance with CCP estimate time left before third world war most determining factor. [Page 915] Developments Peiping, Tientsin areas so far seem to show definite wish at least obtain needed foreign goods whether in direct trade or via Shanghai. Goods are primary consideration. Believe at present; stage thinking might even prefer obtain them under barter arrangement, it being evident they have still failed set up smoothly functioning customs and foreign exchange facilities. Latter presumably however regarded as necessary evil. Believe that even in such circumstances issue consular functions could probably be advantageously brought up directly now when CCP uncertain re future foreign trade but already feeling economic pinch and when also (1) coordination foreign interests in early stages development most readily achieved and (2) still uncertain whether necessary apply economic sanctions, which had better be avoided if possible achieve ends by other means.

Peiping issued since Communist occupation only one consular invoice February 8 covering 132 cases Chinese furniture and antiques. Believe advisable continue regular issuance if demanded since actual performance consular functions naturally tends strengthen de facto position consulates.

Tientsin by hand. To repeat Nanking, Shanghai, Hong Kong, Taipei.

Clubb