493.53E9/11–1351
The Ambassador in Portugal (MacVeagh) to the Secretary of State
No. 350
Ref: Hong Kong Consulate’s despatch No. 2018 of June 24, 1951, and pgh. 2 of encl. to Embassy despatch No. 322 of October 30, 1951.1
Subject: Reflections on Petroleum Smuggling through Macau
Reports of personal investigation by our Consul General in Hong Kong which have come to my attention prove in very thorough fashion that there is constant passage of petroleum products into Communist China through Macau. They do not seem to show that the quantities involved are so substantial as to make Macau “an important source” of petroleum products for a vast territory like Communist China, but they amply establish the fact that the controls supposed to be exercised by the Macau authorities are being less honored in the observance than the breach.
In considering this undesirable traffic, one may wonder why it should cause surprise. It should be borne in mind that Macau, a tiny peninsula off the Chinese coast, is almost wholly at the mercy of the neighboring mainland as regards the essential requirements of water and food. Between pressure from the Chinese to obtain greater supplies of petroleum products and pressure from the Western Powers for a strict application of controls, the Macau authorities are, in these circumstances, literally between the Devil and the Deep Sea. This uncomfortable situation, rather than “bad faith”, seems the more likely reason for the tergiversations of the authorities (of which the Consul General has complained) in first denying, then attempting to explain, and finally hopelessly admitting the existence of the traffic in question. There are also the further facts that smuggling, to a greater or less degree, is always a factor in the life of a border territory like Macau, and that “corruption” in this connection is an invariable, and so far as all human history goes, ineradicable concomitant of existence in such places.
Accordingly, realism would seem to require that anything like perfect performance in the local control of this traffic should not be expected. One may remember our own experience with the liquor traffic in prohibition days. It should also be taken for granted that little if any remedial action of an effective nature can result from [Page 2048] protests directed to the far-distant Portuguese Government in Lisbon, despite the expressed desire of that Government to “cooperate”. As the Consul General has pointed out, even a drastic shake-up of the responsible colonial personnel, which might be dictated from Lisbon, could not be counted on to eradicate local practices created by opportunity and connived at by custom. The only sure way to exert control on what goes out of Macau would seem to be to control what goes in.
In this connection, the Consul General has stated that “evidence of bad faith” on the part of the Macau authorities is so strong as to call for the immediate suspension of all permits to export goods from the United States to Macau with the exception of those cases “explicitly endorsed” by the American Consulate General in Hong Kong, and that “similar action might appropriately be taken in the case of exports to Macau from Japan and Western Germany.” If properly calculated so as to permit of supplying only the minimum petroleum needs of Macau itself, such a measure would undoubtedly constitute a remedy of some promise, though, in the interests of good relations with Lisbon, it should not be applied explicitly on the basis of “bad faith”, but rather as a cooperative measure owing to the inability of the colonial authorities, under unusually difficult circumstances, to exert normal controls effectively. Furthermore, it should also be realized that any such suspension, if made without adequate control of surreptitious exports from Hong Kong and other sources, could be only partially effective. In this connection, the Consul General has suggested that attention be given to the “corrupt customs service” of Hong Kong and the possibility of using naval patrols, and these suggestions appear decidedly constructive.
In sum, it would seem that a more drastic control of legal importation of petroleum products into Macau, coupled with efficient prevention of illegal shipments reaching the colony’s ever-active and irrepressible smugglers, would seem the most likely way to minimize the relatively small but persistent flow of these products now passing through there to the Chinese communists. Furthermore, this could be done without risk to our relations with the Portuguese Government if our actions were based squarely on the cooperative basis of providing aid to the Macau authorities in implementing a common policy. And finally, the fact that such action was initiated by us would relieve the Portuguese colony of any onus of blame in the eyes of their mainland neighbors, and thus remove the fear of reprisals which is one of the principal factors standing in the way of more efficient local control.
- Neither printed.↩