893.00/5–748
The Consul General at Shanghai (Cabot) to the Secretary of State
[Received May 7—7:32 a. m.]
1010. Local observers close to current events and to Chinese popular opinion are pointing out that public interest and encouragement over Li’s20 election and popular expectation of new faces in Govt still run high. They point out that Kmt21 machine has not yet had time to reorganize for repression of reform forces; that Cabinet’s elections and Legislative Yuan seatings are still in making; that many liberals and middle-roaders, undoubtedly impressed by NA22 events, are in favorable mood, ready to be shown that Govt may offer more than Communists [Page 225] after all; that Communist military efforts appear in relatively quiescent stage in process of strategic reorganization and that Communist political leaders, possibly caught somewhat off base, have not yet developed themes [means?] and ways to exploit turn of events to their own propaganda advantage in contest for support of middle-roaders and, probably, in effort to woo Li from Govt fold.
These observers express hope that some American gesture be made now, before this seemingly strategic moment is lost, toward winning, heartening and strengthening forces for reform, keeping them on the Govt side, popularizing and enhancing American aid, and in general improving whole American position in Far East.
Sent Nanking 778, repeated Dept 1010.