893.00B/5–1249
The Consul General at Peiping (Clubb) to the Secretary of State
[Received May 13—7:28 a. m.]
825. ReContel 808, May 11. As distinct from initial successes administrative field, Commies are encountering difficulties as regards carrying out economic policies Peiping. Basically many local entrepreneurs are also land owners and with full knowledge what happened countryside and towns Manchuria have little faith in declared objectives new democracy economy. Many took action in advance of event as shown by flight capital and removal southward business activities beginning last year. All remaining adopted policies curtailment or liquidation, preferring reduce risks and wait see before making new positive commitments. Result is general trade inactivity.
Communists attack such fears and skepticism through meetings with entrepreneurs and workers for mutual explanations. That is purpose symposia reported currently by ConGen. Peng Chen is one main CCP leaders charged with task soothing fears and interpreting CCP policy “benefits to both labor capital” in such manner as to remove skepticism. Pertinent reports indicate full sympathy and “understanding” entrepreneurs still far from achievement. If private entrepreneurs still do not show open hostility, there is nevertheless large measure pessimism and peaceful non-cooperation on their part.
Long years experience local population under many different rulers has given both petty capitalists and labor deep fund common sense and practical sophistication. CCP [garble] Peiping will be able obtain [Page 313] full sympathy population only insofar as Communists can show results in terms people understand.
Sent Department; repeated Nanking 524, OffEmb Canton 111, Shanghai 550.