893.00/5–749: Telegram
The Consul General at Shanghai (Cabot) to the Secretary of State
[Received May 8—3:33 a. m.]
1549. While Generalissimo’s intentions re staging real fighting for Shanghai remain unknown, it seems increasingly clear that his immediate objectives include at least (1) fleecing of city of last available dollar and (2) greatest possible removal of transportable equipment and other assets as well as personnel useful to Communists. Latest economic financial measures which Tang’s garrison command striving ruthlessly enforce seem designed to bring quick profits and hard money to Nationalist military authorities which they can ship or take from Shanghai; and behavior Tang’s forces and other evidence strongly suggests build-up for bigger shake-downs of city. Personnel whom, according several good sources, Generalissimo has ordered to leave city include particularly economic specialists and “big city bosses” whose huge local investments and widely ramified power make them natural organizers for peaceful turnover. Those of first category who have already left Shanghai include virtually all top financiers such as Chang Kia-ngao, K. P. Chen, Li Ming, Hsi Teh-mou, et al. In second category there have departed not only Tu Yueh-sheng but also number of his chief lieutenants as well as Chien Yung-ming.87
While some of these economic and civic leaders have probably left by desire, others understood to have only gone under pressure. Middle-ranking personnel also affected with many hundred bankers, et cetera ordered leave and majority attempting evade compliance. Important bosses still left but under pressure to leave include Yang Hu, Wang Hsiao-lai88 and other Chamber Commerce leaders. Generalissimo’s special pressure on city bosses together with reliable reports that W. W. Yen,89 who is generally regarded as most likely front for an interim regime, is being pressed to leave (and feigning hospitalization in order to stay) seems indicate that Generalissimo determined prevent peaceful [Page 296] turn-over of intact city to Communists. These and other ruthless measures being enforced by Tang under undoubted order of Generalissimo, as dispersal of part populace to countryside, increasing resort to terrorism (arbitrary arrests, executions, et cetera), seizures and forced evacuations of private properties and leveling of buildings—all indicating utter disregard for Shanghai populace and defiant rejection of any thought of staining loophole for settlement with Communists on other than battle basis—seem to constitute strong evidence that Generalissimo really does intend fight at least until city’s stripping been completed. Hectic preparations and Generalissimo’s attempts to bolster troops’ failing morale with rash promises of American aid and third world war (see reftel) would also seem justify such conclusion. There is nevertheless possibility that instead of an intention to stage serious fight all these manifestations represent gigantic bluff with double purpose of (a) inducing Communists to delay their advance on city—thus giving Generalissimo more time for rehabilitation work—and (b) frightening Shanghai populace into generous response to last big shake down which Nationalists may demand as price for withdrawal without fight. As indicated, however, Generalissimo’s intention leave city emptied if not a wreck (if reported intentions to carry out demolitions are correct) is certainly no bluff.
See my next numbered telegram.90
Sent Nanking 864; repeated Department, OffEmb Canton 417.