893.00/9–2747: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received September 27—10:14 a.m.]
1994. Following is Shanghai’s 1587 of September 21.
“Two separate good sources (Chinese banker and head of Texaco China quoting statements just made to him by ‘top-ranking Chinese business leaders’) told us yesterday that T. V. Soong, finding CC Clique too strong to oppose and Political Science group too weakened to be worth bargaining with, has come to definite terms with CC and joined forces with them against Political Science. Second source named ‘subsources’ as further stating as unquestioned fact that Soong had hoped to handle all ‘negotiations’ with General Wedemeyer and had Gimo’s approval therefor; and that Soong’s move to CC is definitely related to his failure to persuade Wedemeyer to deal with him on such basis. According to both sources, Soong’s recent gift of [shares] to Kmt cause and appointment as governor Kwangtung are part of bargain with CC and one informant said a way would be found to give Soong military strength without which his governorship would be meaningless. Recent editorials in local papers controlled by H. H. Kung73 lavishly praising Soong’s public spirit and patriotic conduct business affairs (sample summarized in Contel 1578, September 17; repeated Department 227774) seem clear evidence of Kung–Soong rapprochement which presumably involves Kung’s association with bargain reached between Soong and CC.
According to statements made to us by several Chinese, prominent in intellectual anti-Kmt circles, Government’s current anti-American show was decided upon at least 2 weeks ago at insistence of rightist elements, especially CC which finds such move timely and effective for weakening Political Science.…
We have impressive evidence here of extent to which CC has been increasing its power, spreading its political and economic tentacles and dominating, with help of other reactionary elements, Kmt’s unscrupulous and ruthless election preparations to ensure that electees comprise only elite party supporters plus such few political beggars as it may seem expedient to accept as window dressing. Will report further on this.”
Embassy comments on foregoing message follow.75