393.11/652: Telegram
The Minister in China (MacMurray) to the Secretary of State
[Received May 25—11:45 a.m.]
588. Your 226, May 18, 6 p.m. was referred to the commander in chief who has replied as follows:
“0024. Your 1920–1300 was referred to commander Yangtze Patrol, for comment and he replied in part as follows:
‘Your 0023–1020 and American Minister’s 1920–1300. The Shanghai office of the Standard Oil Company has not stated the case correctly to the New York [Page 301] office. At Changsha there is no French consul nor French businessman. At Chungking one consul, two businessmen.
One French gunboat at Chungking and two at Ichang to complete evacuation of nationals. Consul held up by missionaries reluctant to evacuate. Consider resumption of business inadvisable, unwise, and premature. Areas concerned are not accessible to gunboats, center at Changsha and only possible place accessible. Military and political situation precludes resumption.’
I regard any attempt on the part of Standard Oil Company to resume business above Hankow as inadvisable at the present time. 1600.”
American consul general at Hankow has also commented as follows:
“May 23, noon. Your unnumbered May 21, 6 p.m. French business interests in Changsha, Ichang and Chungking, according to the French consul general, constitute one man at Ichang and two at Chungking, the three being connected with an exporting firm and shipping company, the latter more Chinese than French. French business interests at the three ports are practically nil and the gunboats which were recently sent up river were principally for the purpose of evacuating large communities of French Catholic missionaries, many of whom, however, are declining to leave although advised to do so by consular authorities here.
I do not consider the up-river situation to have cleared sufficiently to justify the immediate return of the Standard Oil Company to Ichang and Changsha to reopen business, because, if the company resumes under the protection of gunboats, similar authority to return must of course be granted to Yangtze Rapids Company and other American concerns and to missionaries.
A general reopening of the upper river at this time when the war lords are contesting for control is premature. Military events of the past 10 days at Ichang and Shasi support this view. A drive against Yang Sen28 by Nationalist troops is even now impending and the necessity of an early evacuation of the Standard Oil Company stock under naval protection is now under consideration by naval authorities and is being discussed with company officials.
No American company in Hankow including the Standard Oil Company is selling goods except for foreign bank notes and big money and these companies are, accordingly, doing little business. Similar conditions as regards money and exchange doubtless prevail at Ichang and Changsha and it is not understood how the company could successfully transact business there under such circumstances. Admiral Hough concurs in the above. I am not prepared to comment on the physical phases of rendering naval protection but Admiral Hough states that gunboats cannot go above Ichang in the summer; that he could render no protection to Yangtze Rapids ships above Ichang and to navigate these vessels ‘without escort would surely bring about their being commandeered by Chinese and would involve a necessary use of force which at the present time it is so desirable to avoid until the situation at present existing is cleared up by an expression of our Government’s policy.’ Water stores and [Page 302] fuel problems are serious considerations for permanent maintenance of naval vessels both at Changsha and Ichang. Consul Adams29 is arriving in Seattle today and if this matter is referred to Department it is suggested that he be consulted.”
I concur fully in the views of the naval and consular authorities as above outlined.