Foreign Relations of the United States, Diplomatic Papers, 1941, The Far East, Volume V

893.154/364: Telegram

The Ambassador in China (Gauss) to the Secretary of State

Chungking, August 15, 1941—noon.
[Received August 17—3:11 p.m.]

350. Reference my 348, August 15, and 349, August 15, 11 a.m.⁶⁷ After careful consideration of the Burma Road situation since my arrival at Chungking, I am reluctantly of the opinion that Baker has not shown himself capable of dealing with the problem. He is not a motor transportation expert. At the same time he has not had full powers, nor, in my opinion, full Chinese support, due partly to the fact that from the very beginning he did not insist thereon.

I would prefer that the managing director of the road be an American but I admit frankly that all independent information regarding Holmes⁶⁸ and his qualifications fully support the recommendation made by Arnstein⁶⁹ and his associates.

I am not [convinced?] that the Chinese authorities are prepared definitely to accord a managing director the full powers recommended by Arnstein, but success in that direction may be achieved by placing the matter squarely and forcefully before the responsible Chinese officials. At the same time, however, I am convinced that no director of the road can function effectively unless in addition to full powers he is given efficient and adequate police or military assistance unquestionably at his command to enforce, where necessary, his directions as managing director and to supply the vitally necessary policing and patrols, enforce discipline and suppress all interference from whatever sources with the efficient operation of the road. He should also have virtual financial autonomy.

I am of the opinion that some distrust of the British must play a part in the Generalissimo’s opposition to Holmes. In appointing as managing director a man who is now a Burma official the Generalissimo may feel that there are implications of the extension of Burma authority into Chinese territory. It is also entirely possible that Holmes’ forthright methods in dealing with the Southwest Transportation Company and other government organs to enforce efficiency has engendered hostility which has come to the notice of the Generalissimo. I understand from Arnstein that the Generalissimo indicated that American approval of Holmes would not alter his opposition.

The Naval Attaché, who is well informed on the whole subject, concurs in the foregoing opinions.

I understand that the Arnstein report is being translated into Chinese, after which Arnstein and his associates will again confer with the Generalissimo.

Please inform Currie.

Gauss

67. Neither printed.
68. A Canadian, control officer for the Burma Government at Lashio, Burma, in charge of all Burma trucks operating into China.
69. Daniel G. Arnstein, American motor transport expert who went to China in June, at the invitation of the Chinese Government, to look Into ways and means of increasing traffic on the Burma Road.