893.00/4–1046: Telegram
The Counselor of Embassy in China (Smyth) to the Secretary of State
[Received April 10—5:02 p.m.]
655. Meeting PCC Steering Committee yesterday ended in stalemate. Discussions bogged down on provincial autonomy questions largely because this question cannot be separated from present Manchurian situation. Prior to meeting, considerable doubt Kmt representatives would attend; fiery opinions expressed in discussions indicated further discussion constitutional issues and governmental reorganization futile when large scale hostilities Manchuria appear probable and Kmt-Communist mutual distrust of each other’s ultimate intentions is increasing. Future Steering Committee meeting suspended temporarily. Democratic League representatives have offered mediation and full Kmt-Communist representation PCC will meet with League delegates tonight (without Youth Party and nonparty groups) in effort to resolve differences.
As Embassy has reported previously (Embtel 464, March 1131), political scene has been dominated by obscure situation Manchuria and it is now becoming more evident that unless political-military problems posed in Northeast can be solved no lasting agreement affecting over-all situation China possible. During last ten days press recrimination with regard Manchuria has been intensified. Generalissimo addressed closing session PCC April 1 and evidently expressed doubt of Communist good faith and established Government position that there would be no discussion of political problems Manchuria until sovereignty had been reestablished by Central Government. On April 7 at Yenan, Chieh Fang Jih Pao published vituperative personal [Page 168] attack on Gimo (republished by Communist daily Chungking April 8) accusing him of fostering civil war Manchuria for selfish reasons. Government press replied to Communist blast April 9 charging reason [treason?], similar anti-Communist press attacks, openly charging Communist-Soviet link, are continuing. Embassy has now been informed that interview granted by Gimo to Miles Vaughn, Far Eastern manager United Press, for publication in America this morning and release here tonight, will express Gimo’s conviction of Soviet-Communist collusion Manchuria and urge United States adopt firm stand against spread Communism. None of foregoing developments has tended ease tense situation Northeast or foster progress toward internal unity.
Regardless of legality of Communist position in Manchuria, which is hardly defensible, their presence there is stern fact which must be faced. Thus far Central Government forces appear to have experienced no serious military resistance in taking over points in South Manchuria. With superior military force available, Central Government may be expected to turn [take?] over major urban centers and main lines communication, but control of hinterland may well remain Communist hands indefinitely, resulting in situation analogous to Communist position North China during Japanese occupation.
How far Soviet assistance to Chinese Communists has extended beyond tacit support has not been established and still remains a matter of conjecture. If there is no firm understanding in Manchuria between Communists and Soviet Union, present problems are probably capable of solution without resort to arms.
In final analysis Communist ambitions would appear to be political rather than military so that concrete steps to implement PCC agreements to broaden Government would probably go far to meet their demands and make the necessary compromise possible. If, however, Central Government proposes to create spurious national defense issue in hope of using uneasy Russo-American relations to obtain American material and financial support while it reneges by commitments limiting Kmt control of Government, civil war would seem inevitable, and international dangers inherent therein are obvious. Chinese Communists seem convinced that Gimo harbors such intention and Democratic League only slightly less so.
Present situation may also be interpreted as assumption by both sides of extreme positions in anticipation of negotiations following return of General Marshall. Reliance on American mediation is powerful factor and all groups and parties have expressed desire for early return of General Marshall. In this connection member Democratic League called at Embassy yesterday to express hope for early [Page 169] return General Marshall and to voice deep concern over developments since his departure.
Embassy now considers that there has been serious deterioration of situation, but there is still ground for hope inasmuch as it seems unlikely that either side would at the time risk an open break and the onus for renewed hostilities on a broad scale.