893.00/15410
The Ambassador in China (Gauss) to the Secretary of State
[Received June 12.]
Sir: Referring to the Embassy’s despatch No. 2368 of March 28, 1944, in regard to the Kuomintang-Communist situation, I have the honor to enclose a copy of a memorandum59 of conversation between Dr. Y. C. Koo, Acting Vice Minister of Finance and General Manager of the Farmers Bank, and the Commercial Attaché,60 reporting Dr. Koo’s comment on the Kuomintang–Communist problem and democracy in China.
Summary of Memorandum. Dr. Koo stated that the Chinese Communists are much more “dictatorial” than the Kuomintang and that, [Page 433] with one or two exceptions, the former have no leaders capable of participating in the Government. He admitted that there were reactionaries in the Kuomintang, some of whom were animated by desire for personal gain, but insisted that the hope for good government in China rested with the liberal elements in the Kuomintang, especially those educated in the United States and Great Britain. He felt that China could not have real democracy until education was more widespread, but that the liberal elements in the Kuomintang would work toward democracy as rapidly as possible. End of Summary.
Dr. Koo is said to have been appointed Acting Vice Minister of Finance through the Generalissimo but it is rumored that he has of late perhaps lost the confidence of General Chiang. He is enough of a politician to be in the Ministry of Finance without being a “Kung” man and is believed to have a better background in financial matters than does Mr. O. K. Yui, the Political Vice Minister of Finance. Dr. Koo is generally considered to be pro-American and is friendly and approachable to foreigners. His comment on the Communist problem is of interest as coming from an American-educated official who, while in the Government, is not identified with any particular faction.
Respectfully yours,