611.9331/3–1849: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received March 19—3:33 a. m.]
603. Access to code communication in exchange for invoice certification by ConGen Tientsin we consider too limited objective and furthermore might have undesirable result of focusing Communist suspicion on reasons behind our desire use codes. (ReDeptel 333, March 127). We feel that so long as Communists refuse permit execution normal Consular functions including shipping services, use of codes and access to local authorities for purpose protection American interests, our Consular Officers should take position they have been incapacitated from performing usual services including those which [Page 918] would facilitate trade between Communist-occupied China and US. American firms expressing desire trade with Communist areas or ships proceeding there should be warned that due to attitude Communist authorities they cannot expect usual assistance, protection given by Consular Officers. Opportunity should then be sought to bring home to Communists Peiping, Hong Kong, Tientsin, that while American firms have expressed interest in trade with Communist areas we have felt compelled warn them they cannot expect assistance and protection normally accorded them by US Consular Officers in other parts of the world, so long as Communists refuse permit consulates perform normal functions.
We consider refusal certifying invoices not as device but as matter of policy and precedent. Assuming Communist desire foreign exchange exports, certification invoices without Communist agreement to general performances Consular functions would amount to performing only those functions of benefit to Communists. Question will be much more important with Communist occupation Shanghai and essential set precedent now. If Communists to reap benefits foreign trade, must also assume responsibilities which include permitting representatives foreign governments deal with local authorities. Obviously Communists could bypass Tientsin Consulate by transshipping to US from other port but this would be expensive and inconvenient and would at least not be in position facilitating direct trade. British cooperation would of course greatly increase our leverage.
Position our Consulates only part of broader question American interests in Chinese [China?]. We agree to inadvisability at this stage creating impression US adopting pressure tactics, yet when Communists themselves resort to unwarranted pressure (as in case our Consulate’s part in Mukden) failure our part to react other than verbally encourages Communists in their course. In view strong possibility increasing use by Communists of pressure to minimize American influence in China, US Government should carefully consider instruments available to us for opposing such pressure. Suggest consideration shipping and export controls this connection. Effort should be directed toward developing two-sided program. On one hand use every possible means convince Communists of advantages to them of continuing trade and cultural relations with US but on other hand demonstrate when necessary that discrimination against American interests will be met with concrete retaliatory measures.
Sent Department 603, repeated OffEmb [at] Canton 170, Shanghai 275, Hong Kong 17, Peiping 90, Tientsin 23.