893.00/9–1844: Telegram
The Ambassador in China (Gauss) to the Secretary of State
[Received September 19—2:05 p.m.]
1576. 1. Following is summary Central Press account [of] Generalissimo’s speech to PPC 16th: To increase China’s fighting power three things must be done. Firstly, there must be a unified military command. All armies must observe laws and decrees of Government and National Military Council. Secondly, treatment of officers and men must be improved. Livelihood of soldiers must equal that of people in rear. To achieve this, Government intends to disband troops of poor quality and allot military expenses thus saved to other units and urge rich to contribute surplus rice of between 20 and 30 million piculs to army. Thirdly, Join the Army Movement among educated youth will be vigorously promised [promoted?] in order to strengthen lower grades of army.
Necessary to strengthen cooperation among U.S., Britain, U.S.S.R. and China. Since Moscow, Cairo and Teheran Conference[s] Chinese Government has been doing best to promote Sino-Soviet relations. Now that Government has removed what regarded as obstacles to closer Sino-Soviet friendship it is hoped that relations between two nations will take turn for better. Government has decided to give PPC power of making preliminary examination of national budget and increased right of investigation and is considering earlier conclusion of political tutelage.
Government has recently come to realization that financial and economic policies should be coordinated. This is being carried out [Page 576] and National Mobilization Council is exercising strict control over commodity prices.
Regarding Communist question, Government has consistently followed policy decided upon in September of last year that political questions should be settled by political means. Basis for political settlement lies in support of national unity and observance of national laws and decrees. Government has accepted most of concrete demands of Chinese Communists. One problem still to be solved is that of 18th Group Army which Government will permit to be reorganized into 10 divisions or if military and political unit is maintained Government will not mind organizing one or two more divisions. 18th Group Army troops reorganized in accordance Government instructions will receive same treatment as other armies. Government has made clear repeatedly that it insists upon unified military command [and?] political unity. While it means to accord equal treatment of 18th Group Army, it demands equal observance of law and discipline.