893.00/6–3047: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received 11:09 p.m.]
Unnumbered. Following from Shanghai to Nanking, 1141, June 26, 3 p.m.:
From statements made privately to members staff by various Chinese (including important officials and businessmen) and from other indications, it is evident that general spirit of defeatism and hopelessness has developed rapidly here in last 2 weeks. Feeling evidenced is that Manchuria and very likely North China areas good as lost (some quarters even tending to opinion that they should be abandoned without a fight); that Communists cannot be defeated; that present regime cannot cope with economic and political crisis or create conditions needed for American aid. While expressions of this feeling are probably in some cases related to intense efforts to obtain American loan by June 30 deadline which have been reflected in press editorials depicting China as bastion for global anti-Communist front, it is believed that feeling of despair is no less genuine and that current agitation for American help probably reflects general conviction that with situation deteriorating so rapidly American aid may become less likely if it is not obtained now.