893.50 Recovery/4–948: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received 11:30 p. m.]
638. Gimo spoke for 90 minutes this morning before packed session of National Assembly. His speech, given from notes rather than prepared text, was delivered with vigor and drew frequent applause from delegates in sharp contrast to his uninspiring address at opening ceremony of assembly. He discussed economic situation in detail and [Page 188] gave statistics on China’s overall foreign exchange position, specifically including funds to be made available under American China aid program. Also gave detailed analysis of military situation on each front, Stressing importance of organizing local defense in each hsien, and expressing conviction that Communists can be contained and eventually destroyed, though it may be necessary to make strategic withdrawals from some points. By concentrating Nationalist forces and attacking Communists Gimo stated latter will be eliminated as military factor south of Yellow River within 6 months.
Noteworthy section of speech blamed “foreigners” for present discouragement among Chinese, asserting that talk by foreigners of imminent collapse of Government had affected people’s morale. He pointed out that aim of Communists is to bring about economic collapse and urged delegates not to be influenced by Communist propaganda directed toward this end. His detailed report on present economic situation apparently designed to prove to delegates that Government is not about to collapse.
Purpose of address appeared to be to strike at defeatism which has infected Nationalist China and urge delegates and thru them the people to greater effort.