893.00/3–347: Telegram

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

432. Following message supplements my 390, February 28, 2 p.m., No. 403, March 1, 9 a.m., and No. 415, March 1, 11 p.m.

T. V. Soong had long talk with Generalissimo on afternoon of evening that he handed in his resignation. At any rate the latter interview was not unamicable and the Generalissimo, although urging him to maintain his position as chairman of the Supreme Economic Council, readily accepted his resignation as President of Ex-Yuan and then without much ado the chairman of the Supreme Economic Council as well. My surmise from available information is that Generalissimo propounded to T. V. Soong in the first conversation his military plans for intensification of the civil war which, inter alia, will require in view of recent price increases a rise in pay and supply allotments for the Army in the near future. Hemmed in on the one side by relentless demands of civil war and on the other by increasingly painful limitations which his growing unpopularity was imposing on his freedom of action, he decided to save his reputation—if not his face—by checking in his hand before it was called and he was well smeared.

Until very recently T. V. Soong, although he dealt cautiously with the Generalissimo, was confident of his position because he conceived that the Generalissimo needed him more than he needed the Generalissimo—and he said so. Perhaps, sensing or knowing of his assumption, the Generalissimo refrained from bearing any part of Soong’s public responsibility for the growing economic and financial difficulty, and he let him go without even a published letter of thanks. I therefore found it ironic of Madame Chiang to say, “They made my brother the scapegoat”. Incidentally, she added that she regarded this crisis as the most serious one that China in her experience had faced.

My belief is that the Generalissimo has determined to embark on an all-out military campaign to free as much of China Proper from Communist [Page 51] control as possible to the end that after about 3 months, the Communists would be chastened (where they are now blatantly bumptious) and concentrated in a much smaller area (reEmbtel 357, February 24, 7 p.m.93). My guess is that feeling as he does about Communists, Generalissimo, although nervous about Moscow Conference,94 does not envisage any improvement promising permanency in Soviet-American relations and therefore is not without hope that the US will in due course come in some fashion and to some degree to Government’s assistance. There is no doubt that he is now increasingly concerned about the rate of financial deterioration and the ability of Communists to prolong struggle and create havoc. However, he has made a point of telling Chinese who call upon him that China must stand on its own feet and face the future without American assistance. I have the sense that the CC-clique95 work on him in this wise and, concomitantly, to the effect that he will be getting the worst of both worlds if he weakens himself domestically and fails to achieve compensatory aid from the US. That his mood is exigent and bitter is evident as indicated in today’s speech. As I see it, these next few days are important for the reorganization plans—important in that this fight-it-all-alone-mood should not find reflection in the appointments and powers of the State Council and the Ex-Yuan.

Stuart
  1. Not printed.
  2. For correspondence on this subject, see pp. 609 ff.
  3. Powerful right-wing group in the Kuomintang, headed by the two brothers, Chen Li-fu and Chen Kuo-fu.