Foreign Relations of the United States, 1948, The Far East: China, Volume VIII

893.50 Recovery/12–1448: Telegram

The Consul General at Shanghai (Cabot) to the Economic Cooperation Administration

Shanghai, December 14, 1948—4 p.m.
[Received December 16—8:06 a.m.]

Toeca 621. [For] Davis⁹⁹ Peiping and Ivy¹ Tientsin from Lapham. Following instructions your marching orders pending arrival final instructions from me or ECA Washington:

a. During an interim period following possible abandonment your area operations Nationalist Government authorities and prior to takeover such area by other forces:

1. ECA should not in absence of serious danger to its personnel terminate its operation prior such takeover.

2. In preparation for such interim period cotton, medical supplies and food stocks should immediately be housed to extent feasible in non-Chinese warehouses.

3. To extent permitted local conditions without jeopardy safety your staff continue presently scheduled operations regarding rationing.

b. Subsequent to takeover your area you should not attempt repossess or remove commodities from area. You should in close cooperation with Consulate General seek immediate understanding with de facto local authorities on following terms under which ECA commodities already landed or in Taku Harbor will be discharged or distributed. It should be made clear that no question even of implied diplomatic recognition involved. There should be no written agreement, only memorandum given de facto local authorities stating conditions under which ECA assistance may continue. Conditions as follows:

1. Freedom of inspection by American or non-American staff ECA to determine whether stocks of such commodities are in fact being used and distributed for purposes and in manner stipulated by ECA.

2. Freedom of movement of American and non-American personnel of ECA within geographic area within which such commodities being distributed and used.

3. Freedom of ECA American and non-American personnel, personal effects, vehicles, living and office space, and equipment used by them from search or seizure.

4. Granting of such local publicity, newspaper coverage, radio, posters and signs or packaging as necessary or desirable, identify clearly source of supplies and fact they being provided by US dollars for benefit Chinese people. It of course clearly understood that no such public statements will contain any incitement to public disorder.

5. Local authorities shall provide local currency required for administrative purposes on your certification of need. End of terms.

Distribution of these goods should be carried out even if Nationalist Government remains in existence other regions. Established distribution procedure should be continued as far as feasible. Prior to takeover by Communist or coalition group utmost protection should be afforded CUSA associates. Presumably after [arrival] de facto authorities it will be advisable by-pass CUSA and deal directly with de facto representatives in cooperation with Consulate.

In event above terms not accepted or having been accepted [are] violated, you should withdraw any participation in distribution remaining stocks and inform ECA Shanghai. Preparations should then be made remove staff from area and make clear statement through all media public information available reasons for withdrawal. If withdrawal necessary, custody all ECA equipment to Consulate General and local staff terminated.

c. Present plans call for continued shipment of all ECA commodities to principal ports to which previously earmarked if de facto authorities agree certain conditions. Will inform you re this.

d. Keep ECA Shanghai constantly informed status personnel, supplies and negotiations if and when Nationalists abandon area.

e. Keep close touch Davis and Smyth² (Ivy and Clubb) and if conditions permit, Davis should negotiate for both offices.

f. Do not inform de facto authorities re c above beyond giving personal view further aid may depend on performance new authorities immediate future. Paragraph c now being referred Washington for final clearance.

g. Hoffman’s press statement in Shanghai being airmailed immediately.³

Sent ECA Peiping 347, repeated ECA Tientsin 238, Washington Toeca 621. [Lapham.]

Cabot

99. Ritchie G. Davis, Special North China representative of the Chief, ECA China Mission.
1. James T. Ivy, Regional Director, ECA China Mission.
2. Robert L. Smyth, Consul General at Tientsin.
3. Not found in Department files.