893.00/4–2247: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received April 22—1:05 a.m.]
864. Minister-Counselor and I had appointment to see President of Executive Yuan designate42 but, as it worked out, I had to accompany Admiral Denfeld,43 CominPac, to see Generalissimo at same hour.
General Chang Chun told Minister-Counselor that he expected after the preliminaries of the State Council to be able shortly to submit his Cabinet. He expatiated on the enormity of his task and used the same simile as employed by Foreign Minister (Embtel 775, Apr. 10, 2 p.m.44) and by the Governor of Central Bank (Embtel 809, Apr. 15, 9 p.m.) to the effect that China was like a sick man who needed a blood transfusion, and he made it clear that in his opinion the transfusion had to come from the US. Minister-Counselor led the conversation into the problems of effective rationing and the pressure on prices resulting from the rapidly mounting note issue due to extension of the civil war and indicated that cure for the major ills of China lay in the hands of Chinese. Gen. Chang Chun admitted that civil war was the root of China’s troubles, explaining that was why he had personally favored a peacefully negotiated settlement; so that was for the moment out of the question, all that could be hoped for was speedy and successful military action. He went on to say that if the reverses to Govt forces at Shantung had not occurred, the situation would have been better by now but that in any case the next 3 months would be determining ones.
[Page 1105]In all the circumstances it seemed unwise and inappropriate to lead him into any detailed loan discussion such as acting upon Dept’s 445, Apr 17, 5 [6] p.m.45 would have inevitably entailed, the third paragraph of which will be dealt with otherwise.