893.50/11–1447: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received November 14—8:41 a.m.]
2239. We have been informed by participants in the discussions that principal preoccupation of the Generalissimo at the moment is acute shortage of ammunition coupled with the critical currency situation. Black market CN dollars were 95,000 today.
In reviewing our No. 2223, November 10, 4 p.m. and No. 2231, November 12, 6 p.m., we are increasingly inclined to the belief that Arthur Young’s suggestions may offer a peg upon which we may hang an active policy to help China help herself. Our thought is based on the premise that the strategic interests of the U. S. require friendly Chinese control of Manchuria. We seem to be waiting for China to start cleaning house before we offer aid and China seems to be waiting for irrevocable offers of aid before cleaning house.
We wonder whether in these circumstances we might not, through Arthur Young or ourselves to the Generalissimo, persuade Chinese that best solution of their problems lies in offering to us constructive measures such as those proposed by Young coupled with request for U. S. assistance in carrying out program. Contrariwise it might be possible for the Secretary, after due preliminary sounding of Chinese opinion by us, to make a public offer analogous to that made to Europe, the Chinese response having in advance been agreed to be along lines of Young’s proposals. Following the European precedent a conference, bipartite or multipartite, could be held which might evolve an acceptable and workable plan of reconstruction in China which would have sufficient promise of success to justify commitment of American public funds to rehabilitation of China. The alternative seems to be a constantly deteriorating situation ending not only in loss of Manchuria to Communist domination but also in a return to regionalism south of the Wall vulnerable to Communist pressure.
The military situation in Manchuria as in central China has deteriorated as has currency situation and immediate outlook is most gloomy unless something can be done to instill a ray of hope and confidence in Chinese people. There are those who still believe that Chinese should be allowed to “stew in their own juice”; that present Government is doomed beyond redemption and will sooner or later fall of its own utter incompetency and that therefore we should stand aside and let nature take its course. This might be to our advantage were it not for the unavoidable danger which would result to strategic interests of U. S. if Manchuria is long controlled by a Communist government.
[Page 1219]Feeling as we do that the maintenance of at least a salient in Manchuria is in the interest of security of the U. S. and that cost of maintaining such a salient now would be much less than cost of reestablishing a salient at later date we again urge Department’s prompt consideration and evaluation of the possibilities presented by Young’s proposals and would appreciate Department’s urgent instructions.