793.94/16705: Telegram
The Counselor of Embassy in China (Butrick) to the Secretary of State
[Received 10:15 p.m.]
Please refer to Peiping’s 129, June 4, 4 p.m.1 In a recent periodic report to his superiors, person mentioned2 in Peiping’s despatch 3075, April 163 states that Japanese have suffered defeat with heavy casualties in southern Shansi due largely to belated but active cooperation of Communist Eighteenth Route Army with Chinese regulars. Communists lost 8000 of their best trained soldiers in the severe fighting.
He reports Communist leaders as seeing these possible developments in China: (1) General Chiang through the mounting hardships of continued resistance and the pressure of his own associates will be forced to a compromise with the Japanese, (2) General Chiang through accepting aid of America and Britain will be dominated by those powers with the net result of a China divided into three parts; namely pro-American-British, pro-Communist and pro-Japanese (i. e. Wang Ching-wei régime); and (3) strengthened resistance against Japan through the close cooperation of the Chinese Government and the Communists (i. e. a revival of the “united front”), with aid coming from the friendly countries.
[Page 513]He advocates on our part continued aid to Chungking, tactful pressure on Chinese Government to come to an agreement with Communists and avoidance of any appearance of an A. B. C. (American-Britannic-Chinese) alliance.
He repeats substantially what Chou En-lai told Drumright, Service4 and me at Chungking on May 30 that the Chinese Government is withholding financial, military and even medical aid to the Communists.
It occurs to me that it might assist in attaining the third possible development if even at the expense of reiteration the Department at an opportune time would issue a statement referring to our announced engagement to end extraterritoriality5 and adding that the United States (and Great Britain) seek no territorial gains in China but only the establishment of a free and united China governed by its people and actuated by the four essential freedoms.
Sent to Chungking. Repeated to the Department and Shanghai. Code text by air mail to Tokyo.