893.00/7–2747: Telegram

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

1596. Following is Shanghai’s 1299, July 23, 7 p.m. to Embassy.

“High Chinese army officer very close to Generalissimo today told Paul Meyer38 (who has had long personal friendship with the officer) that military situation in Shantung ‘where Nationalists have been supervised by Generalissimo himself’ is extremely critical and may well develop in manner so disastrous as to endanger Chiang’s political position. If outcome of present engagement should be unfavorable informant believes Communists could capture Hsuchow without difficulty. He is extremely pessimistic and personally considers military situation in Shantung hopeless. Signed Davis.”

Foregoing message is of interest largely as indicative of continued stifling of initiative of Government field commanders and growing pessimism and defeatism with regard to military situation. Embassy has no information that situation in Shantung is currently “extremely critical”. In southwestern Shantung Communist forces continue possess capability of cutting communications north of Hsuchow but capture Hsuchow itself would presuppose complete success of a major Communist offensive. It is impossible at this time to predict how situation will develop within next few weeks, but Government strength is largely intact and no major military disaster for Government appears imminent. Military Attaché concurs.

  1. Consul at Shanghai.