Office of the Historian

893.918/7–149: Telegram

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

Shanghai, July 1, 1949—3 p. m.
[Received July 2—3 p. m.]

2597. ReConGentel 1417, July 1, repeated Department 2580.78 Gould of SEP79 negotiated with his ex-employees in his office from 3 p. m. until 7:30 p. m., July 1. R. T. Bryan as attorney and Charles Miner as Treasurer, Starr interests, also participated. Committee of 8 represented workers. Ninety-three additional workers appeared in corridor about 3:30 p. m. and blocked doors making it impossible for Gould to leave until they voluntarily dispersed at 11:30 p. m. Gould considered that he was being coerced but nevertheless (offered June settlement of 72 basic units, 20 percent more than May. Gould pressed workers to submit definitive severance pay proposal which he could transmit to Starr. Workers flatly refused to make any severance proposal, insisting paper could not liquidate and that in any event full pay must continue indefinitely. Asserted only present issue was amount of June pay. They held out for 144 basic units, double Gould offer. Workers refused acknowledge validity Starr’s cabled instructions, saying Starr misinformed by Gould, therefore not able make competent decision. Workers revealed they had access to all messages at government cable office. Consulate endeavored unsuccessfully from 8 to 11 p. m. induce police and FAB80 to afford safe conduct besieged Americans. [Page 1193] Both parties refused on grounds Gould had rejected good offices People’s Government authorities, therefore they washed hands of whole matter and Gould would have to accept consequences his intransigent attitude.

Gould thinks pressure may shift temporarily to Miner who has Treasury controls funds. However, Miner has no authority to override liquidation decision which Gould says is final. Gould considers he is prisoner here, predicts he will not be permitted leave Shanghai unless settlement satisfactory to new regime is made. Impasse seems complete. Gould maintains every foreigner here who employs labor is now virtually hostage, believes hostage idea accounts for continued delay issuance exit permit regulations for foreigners.

Regardless basic merits issue, Gould’s handling of workers has been highly inept and his tactics needlessly provocative. This complicates problem securing protection for him and increasing risk further aggravation situation.

Sent Nanking 1432; repeated Department, OffEmb Canton 847.

Cabot
  1. Not printed; it reported that Randall Gould had received instructions from C. V. Starr to close the Shanghai Evening Post and Mercury.↩
  2. Shanghai Evening Post.↩
  3. Foreign Affairs Bureau.↩