Foreign Relations of the United States, 1949, The Far East: China, Volume IX

693.0031/3–1649: Telegram

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

Shanghai, March 16, 1949—7 p. m.
[Received March 16—7:06 a. m.]

903. Consulate General doubts advisability withholding consular invoices prior inauguration North China export trade as device reopen confidential radio communications with Tientsin as suggested Deptel 470 to Shanghai¹ apparently as bluff or threat since earlier Consulate General study indicated several flaws (Deptel 470, 1 March 12). Most export letters credit do not call for consular invoices for bank clearance, but if required banks will customarily waive upon amendment of letter credit on approval buyer and seller. Omission invoices from letter credit requirements due Chinese floor price requirements and risk falsification invoices. Shippers generally aware invoices not required for informal customs entry and that usual bond cost US $5, if document unobtainable in 6 month. Moreover, Consulate General doubts if courts would sustain customs forfeit bonds for full value shipments on grounds such as Communist withheld telecommunications from American Consulates General Tientsin, Peiping. Trends toward improved telecommunications and shipping services with north visible, altho cannot forecast when code traffic with Mukden, Tientsin resumable.

See ConGentel 875, March 14 re shipping Hong Kong-Taku Bar and 868, March 14 re North China customs.²

Consulate General Shanghai has certified several Tientsin invoices for goods shipped here prior Tientsin fall but none since and knows no valid grounds refusal certification here.

Irrespective merits invoice approach per se, its use and limited confidential telecommunications seems inadequate in view larger problem US consular rights and treatment personnel at Mukden and lesser degree Tientsin. Believe very dubious British cooperation obtainable in applying economic controls, much less suspension or limitation Hong Kong traffic with North China merely on question use codes but British might be receptive proposals concurrent action on broader issues.

Continued isolation Mukden staff and possible mistreatment personnel there sets most unfortunate precedent which cannot possibly be overlooked here, especially should Communist influence be extended Shanghai. Also press information re treatment Consul General Tien-tsin, for example re consular seals and possible lowering flag at Communist insistence, seems evident attempt humiliation. Further understand British, also French Mukden Consuls³ recently sent personal messages their Embassies Nanking, [re] obvious discrimination against Ward.⁴ Merchant approved above in draft.

Sent Department 903, repeated Nanking 533, Canton 166, Peiping 79, pouched Hong Kong 43.

Cabot

1. See footnote 91, p. 911.
2. Telegram No. 868 not printed; it reported reopening of the Chinwangtao customs (693.006/3–1449.)
3. Walter G. C. Graham and M. Giovangrandi.
4. Angus Ward, Consul General at Mukden. For correspondence on this subject, see vol. viii, “Problems of United States Consulates in areas occupied by the Chinese Communists”.