The Ambassador in China (Stuart) to the Secretary of State

Sir: I have the honor to enclose for the information of the Department the ozalid copy of Peiping’s despatch no. 25 of July 1, 1947 with regard to a movement among non-Whampoa generals in the Chinese Army looking toward the establishment of a third party in China.

The Embassy has been aware for some time, and has so reported to the Department, that there is evidence of growing dissatisfaction within the Chinese Army arising from the current accelerated deterioration of the military and economic situation of the Central Government. The Embassy does not consider, however, that the state of morale of the Chinese Army has yet reached a point where large-scale organized disaffection is an immediate danger. Furthermore, the Embassy does not share the confidence placed by the Consul at Peiping in the second source mentioned in the first paragraph of the despatch. Information available to the Embassy reveals that this source is regarded by certain responsible American officials as an unreliable person of dubious character.

The despatch is nonetheless of considerable interest as indicative of growing deterioration of Chinese Army morale and decline in support for the Generalissimo, which is becoming apparent not only in military, but also in political, economic, and financial circles.

The Consul at Peiping appears to place more faith in the ability of the purported organization of dissatisfied generals to head a democratic movement than the background of these generals would ipso facto justify.

Respectfully yours,

For the Ambassador:
W. Walton Butterworth

Minister-Counselor of Embassy
[Page 218]

The Consul at Peiping (Freeman) to the Ambassador in China (Stuart)

No. 25

Sir: I have the honor to refer to recent reports, which have undoubtedly come to the Embassy’s attention, of the movement to form a Third Party in China, and to report concerning developments of this movement in Peiping. The two principal sources of these reports are both highly placed Government officials—one a civilian in charge of the Planning Board of the Paoting Pacification Headquarters and the other a Regular Army Colonel who is head of the Foreign Affairs Bureau of the same headquarters—and I firmly believe them to be of the highest integrity. The Embassy is, however, in a far better position to assess these reports and to judge the extent to which this movement has advanced than is the Consulate.

Since the end of the Second World War, and particularly within the last few months, the disaffection of the non-Whampoa generals (the Tsa P’ai) has increased markedly even to the point that many of them, it is reported, are anxious to be rid of the Generalissimo5 in order that civil war may be brought to an end and a coalition government in reality established. The practices of the Generalissimo of transferring these generals away from the troops which they have commanded and whose loyalty they hold; of reducing their commands from an army to a division and from a division to a regiment; and of throwing them in as expendable in the most difficult assignments, have apparently alienated them from the Generalissimo beyond any hope of reconciliation. They are now waiting only for his downfall, and some rather impatiently. Principal among these generals are the following: Fu Tso-yi, Sun Lien-chung, Li Tsung-jen, Ma Hung-kuei, Ma Pu-fang, Yen Hsi-shan, Pai Chung-hsi, Chang Fa-kuei, Liu Ju-ming, Feng Chih-an, and Hsia Wei. Some of the above-named will play ball with Chiang Kai-shek until his removal is an accomplished fact; others may be instrumental in bringing about its accomplishment. They all are reported to be sympathetic with the Third Party movement and are lending their moral support to it. Moreover, they all are expected to unite under the leadership of one man, General Feng Yu-hsiang.

Feng is apparently the one person who combines the necessary qualifications to lead a Third Party movement. First and most important for the present, Feng holds the loyalty of sufficient generals and groups to give the proposed party the necessary military backing, it is stated. [Page 219] It is claimed, for example, that the following generals with the forces indicated would be prepared to back Feng as the leader of the new party: Yen Hsi-shan, 15 divisions; Fu Tso-yi, 6 divisions; Liu Ju-ming, 3 divisions; Feng Chih-an, 3 divisions; Hsia Wei, 4 divisions; Chang Fa-kuei, 1 division; a total of 32 divisions. (Sun Lien-chung is not included in this list as he has under his command hardly enough loyal troops to matter; his influence, however, is counted on to draw others into the movement.) Secondly, and scarcely of less importance, Feng, although by no means pro-Communist in recent years, would probably not be unacceptable to the Communists as a person in whom they could trust and with whom they would be prepared to negotiate. And thirdly, Feng is quite well and favorably known to the foreign world as “the Christian General”, and as such might be expected to mitigate the resentment which would undoubtedly be felt among foreign missionary-influenced groups on the overthrow or resignation of the Generalissimo.

For it is freely and rather openly stated among those who are planning the movement that a third party with any real power would be impossible as long as the Generalissimo and his satraps are in the saddle. They also admit that it would be equally impossible in a Communist-dominated China. Not only would the Generalissimo have to be eliminated but also the Tai Li remnants, the CC Clique,6 the Soongs, and the Kungs. This thoroughgoing housecleaning of the Kuomintang, they state, will be accomplished on the collapse of the present Government by the young, energetic Whampoa commanders of the rank of Major General and below who are almost equally disgusted with the present regime and will form the nucleus for a new Kuomintang—one that would be willing to negotiate with the Third Party group and the Communists to form a coalition government under the mutually acceptable 3–3–3 representation basis.

Working hand in glove with Feng in leading the new Third Party will be that inveterate insurgent, Li Chi-shen, who is now on the brink of being expelled from the Kuomintang for the second time and is living in “retirement” in Hong Kong. Li, it is planned, will assume the political leadership of the Party while Feng will be the military leader. Li is also considered as a possible successor to the Generalissimo, and it is reported that Feng Yu-hsiang and his followers would accede to such a move. Feng, it should be remembered, was associated with Li in the abortive “People’s Government” of Foochow in 1933–34, of which Li was Chairman and in which Feng had his representatives. Between the two of them, they will have considerable influence among [Page 220] the Tsa P’ai generals: Feng will have direct influence over Sun Lien-chung, Liu Ju-ming, and Feng Chih-an, all of whom are his old subordinates; he is expected to have influence over Yen Hsi-shan by virtue of their former association against the Generalissimo and over Fu Tso-yi through Yen; Li Chi-shen can be expected to rally the support of Li Tsung-jen and Chang Fa-kuei when the time is ripe.

It is understood that tenuous channels of communication between the persons organizing the new Third Party and the Communists have already been established and that a request has already gone forward for the Communists to send a delegate to Peiping for direct parleys. It is the intention of the persons concerned to keep the Communists informed of general plans for the Third Party movement so that they may be forewarned and prepared to cooperate when those plans are realized. These same sources state that they have the assurance of the Communists that the latter are far from prepared to take over the administration of China on the inevitable collapse of Chiang Kai-shek and the Central Government as trained, experienced personnel are in far too short supply. On the contrary, they state that the Communists would much prefer to participate on a 3–3–3 basis with a liberal third party and a re-vitalized Kuomintang.

The Democratic League, it is expected, would become an integral part of the proposed Third Party, membership in which would be open to all liberals and progressives.

When asked exactly what procedure might be expected in effecting the removal of the Generalissimo, one source stated that in his opinion it might be brought about in any one of the following three ways: (1) A declaration of independence from the Central Government by one of the above-named generals with sufficient troops to support his action. This would be the “first bombshell” which would be followed successively by similar action on the part of other generals. Fu Tso-yi might conceivably be the first to take this step. Under these conditions the Generalissimo’s resignation and probable withdrawal from China would, it was felt, be inevitable. (2) A second “Double Twelfth”. This, of course, alludes to a repetition of the Sian incident in 1937.7 The object this time, however, would not be to convince the Generalissimo to take any particular course of action other than to depart from the country peaceably. Precisely who might be in a position to carry out such a plan was not disclosed. (3) Strong attacks by Communist forces on the Shanghai–Nanking railroad and defense sector which might seriously threaten the capital itself. It was felt that in the face of such an eventuality the Generalissimo would voluntarily [Page 221] withdraw for reasons of safety and thus give the signal for the return to China of General Feng and Li Chi-shen. The source further stated that he personally favored the first of these three procedures and thought that it was the most likely to occur. With regard to the time factor, it was felt that the overthrow of the Generalissimo would take place sometime before the end of the year at the outside, but that such factors as additional Communist victories might considerably shorten that period.

It should be pointed out that the overtures which led to several thorough discussions of this matter were made entirely by the Chinese officials concerned, with the reported concurrence (or at least tacit consent) of their superiors in what would appear to be a bid for approval by the American Government of their plans. Their stated desires of our Government were three in number: first, moral support for their aims, even though such moral support were in the form only of secret, verbal assurances to the concerned parties that the United States Government was in sympathy with their declared objectives; second, the withholding of all military and financial aid to the Central Government, the granting of which might postpone action to form the Third Party as well as serve as a temporary prop to a regime which is destined to fall; and third, forthright and public assurances of support by our Government on the actual emergence of the Third Party.

It is my opinion that the Third Party movement as outlined above offers the first gleam of hope in a perilously dark situation. If it actually has the support (both positive and passive) which its advocates claim, it is believed that it would offer the one course of action which would receive the wholehearted acclamation of the American people and provide the basis for a China which might in reality assume its place as one of the “Big Five” as well as bolster the democratic form of government throughout the world. The realization of such a movement would also provide our Government with a workable and mutually beneficial solution to the present dilemma—that is, by indicating a course to be steered between the extremes of withholding assistance from the Central Government and allowing China to fall prey to the Communists or of supporting a corrupt, intransigent, fascist-type government which makes a practice of suppressing the very liberties for which the Second World War was fought.

As was suggested in the opening paragraph of this despatch, it is almost impossible for the Consulate locally to corroborate the statements made with regard to the extent to which the Third Party movement has progressed. It is strongly recommended, however, if the Embassy finds that the movement has actually advanced to the point [Page 222] indicated and that there exists a real possibility of fruition, that immediate and serious consideration be given to the question of extending some form of official encouragement to those concerned in the movement. For if, as it would appear, this movement carries with it the promise of the establishment in China of the type of democratic government which we have long been advocating, it would be criminal if it should fail for want of the blessing of the American Government.

Respectfully yours,

Fulton Freeman
  1. Generalissimo Chiang Kai-shek.
  2. Powerful right-wing group in the Kuomintang, headed by the two brothers, Chen Li-fu and Chen Kuo-fu.
  3. For forcible detention of Generalissimo Chiang Kai-shek at Sian on December 12, 1936, see Foreign Relations, 1936, vol. iv, pp. 414455, passim.