Foreign Relations of the United States: Diplomatic Papers, 1945, The Far East, China, Volume VII

893.00/2–1745: Telegram

The Ambassador in China (Hurley) to the Secretary of State ⁸⁷

Chungking, February 17, 1945—7 p.m.
[Received February 17—6:10 p.m.]

238. Part 3. Kmt⁸⁸–Communist negotiations.

1. In a telegram dated January 10 from Captain Evans,⁸⁹ then at Honan [Yenan], to Colonel Dickey⁹⁰ of G–2, headquarters, for Wedemeyer “eyes alone” (ReEmbstel No. 18 [180], February 7, 8 a.m., paragraph 16^90a last two sentences), Evans stated that he had been given valuable and important information by General Chou En-lai for Wedemeyer eyes alone [who?] should decide its disposition in the United States. Evans quoted Chou as stating specifically that “General Hurley must not get this information as I don’t trust his discretion”. This information, Evans stated, was a precise, definite story of negotiations between the National Government and the Japanese for a sellout of American interests. He also stated that part of the story was documented by copies of correspondence of high authority and that the negotiations involved some of the highest military and civilian personages in Government. Evans concluded that the story was the “gravest charge against responsible Ally I ever heard from any responsible person”.

In reciting this I wish you to be convinced that Captain Evans was sincere. He was honestly of the opinion that he was being given the foundation documents that would prove that the National Government of China had entered into an agreement with the Government of Japan. It is on the documents submitted by Evans that all the reporting concerning an agreement between the Chiang Kai-shek Government and Japan have been based. They have all been directed toward one purpose which is to discredit the National Government in China. In saying this, please understand that I am not condemning either the diplomatic or military reporters for having been misled by the rumors. As my telegram above referred to will indicate to you, my own opinion from the beginning was that the rumors were too unrealistic to be true.

Twenty-two [2. Three] documents were recently brought from Yenan to General Wedemeyer who handed them to me in the strictest confidence for inspection and I have since returned them to him after, however, microfilm copies of the originals were made for the files of the Embassy. The first document consisted of the so-called “proof” of negotiations between the National Government and the Japanese, and second was entitled “project and budget for destroying and bringing over puppet forces during 1945” [both?] prepared by the Communists and submitted under covering letter addressed to Wedemeyer by General Chu Teh, Commander-in-Chief of the Chinese Communist Forces.⁹¹ The former document, written in Chinese on unheaded paper without signature, origin, CFU [sic] seal on date, stated in summary as follows:

Chou Fu-hai, Vice President of the Executive Yuan and Minister of Finance of the puppet Nanking Government, went to Japan in August 1944 to discuss peace terms. Koiso⁹² indicated to Chou at that time that he would welcome Chiang Kai-shek’s mediation between Japan and the Allies. In September 1944, Shibuyama, Jap Vice Minister of War, proceeded to Nanking to continue the talks and presented following 5 principles for discussion: (1) Both Japan and Nanking Government to have equal standing in negotiations; (2) United States and Jap forces to withdraw from China; (3) respect to be paid to Chungking Government’s opinion as to future relations with England and United States; (4) guarantee for withdrawal of Jap forces from China to be [decided on] after attitude of Chungking Government made clear; and (5) relations between Nanking and Chungking Governments to be settled between themselves. In October Chou Fu-hai sent representatives to General Ku Chu-tung, Commander of Third War Area, with a series of peace proposals from the Generalissimo which included above mentioned five points. It was also stated that if peace with China not obtained, Japan will move capital to Hsinking or Kalgan, give up islands and carry center of war to Chinese continent—thus threatening to destroy Chinese economy, giving upper hand to United States Army and giving Communists an opportunity to expand. Chungking was urged to declare neutrality before American troops landed on coast and Chou requested that Chungking send a high ranking official to reside in Shanghai or Nanking to maintain contact with both Japs and puppets. In November General Ku sent letter to Chou approving of proposals, offering an exchange of information and volunteering no [to] attempt to bring Nanking and Chungking together. [Tsai Pei], puppet Ambassador to Japan, on his return to Nanking urged one Li Shih-hao to proceed to Chungking to discuss matters with Chiang. Li reportedly sent his son, Li Yin-shu, formerly Assistant Manager of the Central Trust in Hong Kong, in his place and Li Yin-shu left for Chungking in December 1944. “It is possible that Li will see [Chen Pu-lei?] (a relative) after he arrives in Chungking.” End of Summary.

Such is the “documentary proof” cited by Captain Evans that there have been negotiations between the Chungking Government and the Japanese.

In part 5 of my telegram to the Department dated December 23 [24], 1944,⁹³ I stated that certain American diplomatic and military officers believed that the Generalissimo had made a deal with Japan and that without such a deal his Government would collapse. I also stated that I was not impressed by such stock arguments of imperialists, the Chinese Communist Party and other opponents of a united China but that I was recounting them for the record [apparent omission] in the document as true it would still fail to prove anything of the nature reported by our diplomatic agents and our military intelligence officers. The purpose of attempting to show an agreement between the Chinese National Government and the Japanese is indicated more fully in the analysis of the documents given below.

3. The second document referred to was received from the Communists at the same time and states in summary as follows:

There are at present approximately 900,000 puppet troops in China including 410,000 regulars and 490,000 local troops. During 1944 Communist forces won over 34,167 puppet soldiers (or approximately 3.8% of the total puppet strength in China) and 20,850 rifles, side arms, mortars, field pieces, et cetera. It is estimated that with American financial help the former figure could be increased during 1945 to 90,000 men or 10% of entire puppet force. Budget is divided into 2 parts: (1) expenses for political and financial measures for buying over puppet soldiers and officers together with their arms and (2) reserve fund to be used for sabotage and demolition work to be carried out behind Jap lines by the puppet troops. End of Summary.

In his covering letter to Wedemeyer dated January 23 General Chu Teh requested that the United States Army lend the Communist army $20,000,000 United States currency for this undertaking and stated that his army would assume full responsibility for repayment following victory over Japan.

4. These two documents apparently have a real connection in that the proposal for making a loan of $20,000,000 to the Communists suggested in the second is predicated on acceptance by us of the “proof” of the bad faith of the National Government presented in the first document. The injunction contained in the telegram to military headquarters to the effect that the documents not be shown to me together with the other advice given indicates clearly that the Communist leaders were fearful that I might penetrate their scheme; it also indicates clearly that the Communist Party hoped to bypass this Embassy as well as the National Government to obtain financial assistance and arms through our military establishment without the knowledge of the Government of China or this Embassy.

While financial assistance of the type requested by General Chu might in the end prove to be more economical than importing a similar quantity of arms and ammunition from the United States for use against Japan, I am of the firm opinion that such help would be identical to supplying arms to the Communist armed party and would therefore be a dangerous precedent. The established policy of the United States to prevent the collapse of the National Government and to sustain Chiang Kai-shek as President of the Government and Generalissimo of the armies would be defeated by acceptance of the Communist Party’s plan or by granting the Lend-Lease and monetary assistance requested by General Chu Teh.

General Wedemeyer and myself have been working in closest cooperation on this subject. He has finally instructed his officers to refrain from participating in political discussions at least until we have reached a decision in the controversy now pending between the Chinese Communists armed party and the National Government of China.

Copies of documents referred to herein are going forward to you by pouch.

Hurley

87. This telegram is part 3 of an extensive report; part 1 is telegram No. 141, January 31, 6 p.m., p. 192; part 2 is telegram No. 180, February 7, 8 a.m., p. 205; part 4 is telegram No. 242, February 18, 11 a.m., p. 223.
88. Kuomintang.
89. Capt. W. K. Evans, U. S. Army Observer Section.
90. Col. J. K. Dickey.
91. Paragraph beginning “The result was that the following two proposals”.
91. The complete text of each of these was forwarded to the Department by the Chargé in China, in his despatch No. 170, February 23, not printed.
92. Gen. Kuniaki Koiso, Japanese Prime Minister.
93. See unnumbered telegram of December 24, 1944, from the Appointed Ambassador in China, Foreign Relations, 1944, vol. vi, p. 745.