[104-10173-10134.pdf — page 72]
-2-## CONFIDENTIALcompletely with an article headed "I Break with Stalinism." This gave a candid elucidation of the Communist financial backing of the "Voice of China" and if anyone either in or out of official life had previously suffered any illusions as to its nature, Issacs' article-published elsewhere than in the "Voice", of course-certainly should have dispelled them.7. The Granichs seem to have lived quietly in Shanghai and were little known, which under the circumstances was hardly surprising since they were running an obviously Communist organ. Chiang Kai-shek's forces could not meddle with them openly, for at that time Shanghai was an international city operated under extraterritoriality. That the Nationalist secret police did create some trouble for the "Voice" and then Consul-General Clarence E. Gauss was allegedly reprimanded by the State Department in 1937 for not doing more to help them as Americans. Technically they were entitled to full American protection but Gauss, now with the import-export bank in Washington, D. C., was a sort of Old Curmudgeon of the Shanghai American community and it seems that he thought it his moral obligation to let them fry in any trouble they might get into as Communist agents. Gauss can't have suffered greatly for this in the eyes of his superiors, for he was later promoted to ambassador both to China and to Australia.8. This background has some present importance since an American magazine is being operated today in Communist Shanghai, which tolerates no criticism or opposition. Originally pro-Nationalist under the late J. B. Powell, it has been friendly toward the Communists under his son, John William Powell, and it stayed on after most other American enterprises-including the daily Shanghai Evening Post and Mercury, edited by myself-had shut down and American officials had left Red China.9. Before they departed, these officials had reason to compile an extensive file on what is now the China Monthly Review. One incident which is known to have irked them was the Review's treatment of the case of William Olive, American consular official, in the summer of 1949 soon after the Communists had taken over. Clive blustered into a traffic conflict with the Communist police, was taken to first one and then a second police station, and in the course of several days' imprisonment he was severely beaten with fists and gunbutts, kicked and otherwise maltreated. Powell's Review blandly professed to have little information on the matter but gave an account unfavorable to Clive. Then consular officials asked Powell to come to the consulate and look Olive over and get the full story, he failed to show up. This and other matters were recorded in some detail but in view of the background of American intelligence operation, one may question whether those details will ever be hauled out of the files.10. More recently, copies of the Review have been slanted strongly against the Americans and the United Nations cause in Korea and one issue editorially spoke of the United States as "the enemy." It should not be difficult to preserve continuity in following such a case of American pro-Communist activity abroad, though nothing could be done to Powell unless