893.00/2–1449: Telegram

The Consul General at Hankow (Callanan) to the Secretary of State

38. Following more approaches last few days by persons connected with Pai to Consul General and AMA regarding possibility US aid (mytel 27, February 7), Pai’s aide called on AMA urgently last night, stating Pai and Li position deteriorating rapidly due lack funds (remytel 32, February 942) and troops and requesting US Government immediately issue statement favorable to Li government. Today Pai personally reiterated plea for statement of US support asking AMA pass on to Ambassador Stuart.

Pai admitted showdown with Generalissimo faction must occur very soon but maintains Generalissimo cannot possibly come back. He continues claim support Kwangtung and other areas mentioned mytel 27. Also feels Li and Sun Fo differences relatively minor and can be ironed out, thus, uniting Nationalist China. He again stressed hopelessness of defending Yangtze line under present conditions, urging immediate US financial aid to stabilize currency and thus win support people. Also stressed need military aid.

Pai plans proceed Nanking shortly meet with Li and Ho Ying-chin try consolidate power Li government. Therefore, desperately needs US Government nod of approval soonest in order convince waiverers [that] his group firmly in saddle. Indications US willingness extend financial assistance of particular import. Judging by urgency recent appeals here Nationalist position truly critical and lack of response US Government may result complete breakdown.

Sent Department 38; repeated Nanking 31, Embassy Canton 7.

Callanan
  1. Not printed.