893.00/7–1248: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received July 12—10:06 a. m.]
1264. Events of past week involve Government in further difficulties, and, to limited extent, furnish some indications possible pattern future developments. Minister Communications78 and Vice Ministers [Page 349] Foreign Affairs and Education79 reflect growing dismay and defeatism in Government circles by privately volunteered opinion that long continued survival of Government is highly doubtful, and we concur. While outcome much publicized “decisive battle of Honan” is still unclear, it appears likely that large Communist forces may have crossed Lunghai Railroad and that they may be in process isolating Hsuchou. In any event, Government losses are heavy, and no replacements are available for units destroyed in battle. Missionaries report that Communists have been organizing in countryside along railroad north of Pengpu for past month and control all except heavily garrisoned points. Wave of minor strikes and food riots Shanghai and Yangtze delta towns indicative of growing civil unrest, and consequences of killing of Peiping students, bound to be serious for Government, have yet to make themselves felt.
Grave concern of political and military leaders in Nanking over this situation is shared by their counterparts in provinces, where collapse of Nanking Government is confidently expected. Li Tsung-jen last week informed Assistant Military Attaché in Peiping of his belief that Government’s position is hopeless and that growing civil unrest will soon spread to army, whereupon Generalissimo will be forced from office. On 9 July visit to Kunming, officer of Embassy was impressed by prevalent belief there that days of Government are numbered. He was informed by prominent industrialist with close connections top-flight Nanking political circles that emergence of Chang Chun80 as “political leader in southwestern provinces” might soon be expected.
As we have previously reported, response of provincial leaders to deteriorating situation is development of plans for regional political associations, as is case with Chang Chun’s reported intentions. On 7 July, Marshal Li Chi-shen informed officer of the Hong Kong Consulate that Li Tsung-jen is now discussing concerted action for withdrawal from civil war with Fu Tso-yi in Peiping, with Marshal Li to handle truce arrangements with Communists. The Marshal reiterated his intention establish provisional government in southwest China and said that decisive “developments” might soon be anticipated. On 9 July Consul General Hong Kong reported interview with “reliable Chinese source, believed unpolitical, recently arrived from North China.” Source stated both Fu Tso-yi and Li Tsung-jen had told him separately that people of country do not support civil war and that military leaders may no longer ignore responsibility to nation. Both stated their opinion that fighting must be stopped.
Both Fu and Li have, in the past several years, been reckoned as [Page 350] loyal supporters of the Generalissimo. However, this loyalty had in it large element of self-interest, and with the Generalissimo’s power sharply on the wane, neither has anything to gain by continuing to support him. Also, Li has been badly treated by Chiang both during and since his election to Vice Presidency, and both Li and Fu are convinced that Chiang, in recent months, has deliberately withheld from Fu support that he could have provided had he wished. These reasons, coupled with natural desire for self-preservation in grave crisis they envisage as imminent, make us think it likely that Fu and Li are consulting on the manner of their going from the Generalissimo’s camp, having probably already reached the decision to part with him.
As to allegations that Peiping discussions included consideration withdrawal from civil war, in his interview with Assistant Military Attaché, Li Tsung-jen asserted unalterable determination on part himself and other military leaders to continue fighting Communists. While this is seeming contradiction to reports given above, we believe that this stand does not necessarily preclude cessation hostilities on temporary basis, or even participation in a coalition government not dominated by Communists. Popular opposition to civil war mounts throughout Nationalist China, and no government nor leader desirous of popular support can afford to ignore demand for peace. Also, recent military success of the Communists may well serve finally to convince military and political leaders alike that prolonged truce, perhaps within the framework of a coalition government, is required by the anti-Communists in order that they may regroup and reorganize to continue the struggle.
As we review considerations listed above, we see confirmed our estimates that the Generalissimo’s importance as a political factor is diminishing. He is universally condemned for his ineptness and reviled and excoriated for his intransigeance in prolonging civil war, until it is difficult to see what forces keep him in office. At same time, so far as we are aware, he has demonstrated no intention relinquish such power as remains in his hands, though he must be aware that his days are likely numbered. As we have reported before, it is almost certain that the Communists would not discuss coalition with any government which included Chiang and his immediate supporters. Yet the present Government’s ability to resist the Communists further appears nearly exhausted.
We have already reported our belief that new political developments impend, and that these will likely take form of regional governments. It is not now clear just what relations between these governments will be, or whether present Government will survive these changes, [Page 351] either transplanted or limited to circumscribed views, or whether it will vanish.
In this situation we are constrained to consider just what role we shall have to play, and in so considering there are but few factors on which we can seize with certainty. One of these is fact that position of present Government has deteriorated to point where our influence is probably powerless to restore it to status quo, for its credit with people and leaders alike has all but vanished and it does not do what it should and could to help itself. We are generally credited with being this Government’s principal prop. It is held that Chiang could not survive without our support and we have onus for maintaining unpopular regime and are associated with its failure. As we say above, should regional governments appear, this Government must either disappear or become one, and not necessarily the most important, among several governments. Under such conditions, and we repeat that they are highly likely developments, we shall have to come to the decision as to the quality and degree of support we shall afford the various regions, and as to the character of our relations with them. Indeed we would take the appearance of regional governments, as a clear sign that the present Government had run its course, and that if we would, in the future, exercise influence in this country, it must be by different means than in the past. We are already finding resentment with aid to China program purely on basis that it prolongs impasse and delays inevitable collapse National Government.
Foregoing read by Lapham81 who requests Hoffman82 be advised of contents.