Memorandum by Mr. Augustus S. Chase of the Division of Chinese Affairs80

The following aspects of the Chinese situation gathered from recent reports (attached)81 will be of interest to you:

Chinese liberals, stimulated by American press criticism, have continued to urge democratic reforms and reconciliation with the “Communists” though the disappointing results of the recent Kuomintang [Page 456] Central Executive Committee meeting indicate that their efforts are still of potential rather than immediate benefit. In successive speeches before Kuomintang and other bodies, Dr. Sun Fo has attacked the Kuomintang’s “fascism”, “personal dictatorship”, participation in landlords’ oppression of peasants, Nazi youth training methods, and suppression of “political and economic freedom”. In the one speech which the Chungking press ventured to publish (with unfortunate results for the editors) Dr. Sun praised the Soviet Union’s “economic freedom” and stressed the danger of China’s premature industrialization and “precipitation of another world war” by fighting for foreign markets as Japan did. The Federation of Democratic Parties held an open forum meeting, addressed by Dr. Sun, and issued a published statement which reiterated demands for democracy and Kuomintang cooperation with the “Communists” and minority political parties, welcomed foreign criticism, recognized America’s “preeminent” position, and emphasized the need of conciliating the U. S. S. R. Kunming papers ventured to criticize the rigorous press censorship and an influential Chungking paper voiced high regard for the United States, appreciation of helpful American criticism of China, and suspicion of British criticism. Able Dr. Quo Tai-chi, former Chinese Minister for Foreign Affairs, who is presently inactive as a result of difficulties with the Generalissimo, privately praised “fair” American criticism and “hoped” that Vice President Wallace would bring a message from President Roosevelt urging unity and democracy in China. The important, though recently declining, “Political Science Clique” of the Kuomintang is said to have commenced advocating Kuomintang–” Communist” cooperation.

It is reported that at a recent meeting of the Executive Yuan Dr. H. H. Kung complained of “unfair” foreign criticism aimed at him and urged more active refutation by Chinese diplomats of such criticism in order to halt deterioration of Sino-American relations; and that T. V. Soong heatedly defended American criticism, opposed Kung’s proposal and said that official Chinese propaganda in the United States and publication of Kuomintang textbooks for Chinese youth in the United States should be stopped. Soong informed Ambassador Gauss that he may soon resign as Foreign Minister out of boredom with inactivity. Meanwhile Soong’s loss of economic power is reflected in this country by the replacement of Soong’s men in the Bank of China by Kung appointees and the projected reorganization of China Defense Supplies on July first.

The possibility that Pai Chung-hsi, Deputy Chief of Staff of the Chinese Armies, might lend his important support to the movement developing among Chinese groups dissatisfied with the Kuomintang [Page 457] rule appears to be dispelled temporarily in view of Pai’s return to Chungking from Kwangsi at the request of the Generalissimo.

General Tai Li, China’s powerful “Gestapo” chief, who has been organizing underground Kuomintang warfare against the “Communists” in north China, recently stated that “the Communist question is of more importance than Japan in so far as China is concerned” and indicated the “importance” of winning over puppets to the Central Government by promises of forgiveness. Of 685 students recently trained for service as interpreters with Allied forces, 100 have been assigned to Tai’s secret police.

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  1. Forwarded to the Under Secretary of State by the Director of the Office of Far Eastern Affairs with a covering memorandum summarizing its contents.
  2. Not attached to file copy of memorandum.