Memorandum of Conversation, by Mr. Philip D. Sprouse42

General Tsai43 called at his request to inform me that he had been recalled from Hsuchow by the Generalissimo to act as a liaison to [Page 668] our Mission and that, as an old friend, he wished to give me frankly his personal views on the situation. The substance of his comments is as follows:

The military situation in Shantung and Manchuria is very grave for the Government. The loss of Manchuria may occur within a few months. The Communists have greater sources of manpower than the Govenment through their organization of the rural areas and are superior to the Government on all major fronts. Their equipment comes chiefly through capture from the Government forces of Japanese, Chinese and US matériel. The Government believes that the USSR is aiding the Chinese Communists in Manchuria but has no direct evidence thereof, except the use of 100,000 Korean Communist troops trained in north Korea. The Communists give money to lower ranking officers and enlisted men captured from the Government and allow them the choice of returning to their homes or of joining the Communist forces. Government policy does not permit the Government to carry out a program of organization of the people similar to that of the Communists, which has won for the latter the support of the poor peasants through division of land seized from the landlords.

The only solution for the Communist problem is a political one. When questioned closely on this point, General Tsai said that such a solution would be sought when the Communists had been driven from the major lines of communications. The chief weakness of the Government forces is their low morale, which causes many desertions. Communist morale is superior. However, Government morale would be equally good if its troops were well fed, well paid and well equipped. The only hope for the Government is US economic and military aid. Without such aid the Government will soon collapse and the Communists will soon control all China. Economic aid would remove the causes of unrest and dissatisfaction with the Government and military aid would enable the Government to defeat the Communists. Military aid would not entail US training of Government troops, but merely the furnishing of equipment. The Government is now beginning a training program under General Sun Li-jen with a view to sending reinforcements to Manchuria, action which might prevent loss of that area. The chief cause of the economic chaos is the corruption of high officials, who have an interest in businesses in Shanghai. A solution of the situation in China must include their elimination through governmental reorganization. When questioned regarding the position of Government military commanders in the provinces, he said that they had no real power but merely carried out the Gimo’s orders. He parried my question regarding [Page 669] their corruption and refused to take the bait regarding the ineptitude of the high military command.

It is interesting to note that, according to Mr. Durdin of the N[ew] Y[ork] Times, General Tsai told him about 6 weeks ago that the Government could not defeat the Communist forces and would be compelled to seek peace through a compromise political settlement.

Philip D. Sprouse
  1. This memorandum and the two following memoranda were submitted by Mr. Sprouse on September 19 to the Director of the Office of Far Eastern Affairs (Butterworth).
  2. Gen. Tsai Wen-chih, Deputy Director of the Chief of Staff’s Office and Aide to Generalissimo Chiang Kai-shek.