893.00/5–1848: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received May 19—6:21 a. m.]
893. During last few days following information has been reported to Embassy from generally reliable sources. Although Embassy cannot guarantee its accuracy in all details, it is reported as “straws in the wind” and as being consistent with general trend of developments as we see it here.
- (1)
- O. K. Yui is resigning as Finance Minister because of his conviction that reactionary elements will continue to control Government, thereby preserving its impotence in face of growing unresolved problems. It is possible that Chang Kia-ngau will assume the post concurrently with his present responsibilities in Central Bank.
- (2)
- During his recent visit to Nanking, T. V. Soong stated Generalissimo would give him authority over Fukien and Kwangsi, in addition to Kwangtung, and that he expects same authority over Hunan, plus military jurisdiction over Hainan. This could be another step in the organization of the “Southern Soong Dynasty”.
- (3)
- Generalissimo has decided on creation of special pacification command for 7 Central China provinces. Apparently Cheng Chien49 will take command of headquarters in Hankow, but military headquarters in Chengchow and Hsuchow will remain under direct control of Generalissimo. For practical purposes this would deprive Cheng Chien of any considerable body of troops. Another report states that Li Tsung-jen asked Generalissimo to give Pai Chung-hsi50 command in northwest, vice Chang Chih-chung.51 [This] would give Pai an area in which to operate and troops of his own.
Generalissimo refused and indicated he might name Pai as deputy to Cheng Chien in Hankow. Pai is reported to have refused this and may replace Ho Ying-chin as Chinese representative on military committee of United Nations. Whatever the accuracy of these details, principal import seems to be that Pai is to be punished for his failure to follow Generalissimo’s instructions during vice presidential election. These reports are also disturbing because they additionally confirm our fears arising from appointments of Ku Chu-tung and Yu Han-mou, whose primary utility to Generalissimo is that they are safe men. Generalissimo’s continued preference of personal loyalty as against military capacity further deepens gloom of military outlook for National Govt. One objective of Generalissimo seems to [Page 242] be neutralizing growing influence of Kwangsi clique under leadership of Li.
Despite convincing evidence that CC clique had scored great victory in election of members to Legislative Yuan, there was much educated opinion in Nanking which increasingly believed that success of party rebellion at National Assembly forecasts similar course of events in election of president and vice president of Legislative Yuan. This conviction was reinforced when Legislative Yuan refused to allow party nomination of candidates, when estimated 300 members announced their intention of blocking Chen Li-fu for vice presidency, and when there were no speeches in favor of Sun Fo for president. Actual vote impressively deflated these hopes. Sun Fo received all but some 50 votes for the presidency and Chen Li-fu was elected by a fairly narrow margin. Li has stated privately that he still hopes to impose his reform through Legislative Yuan with votes of 45 percent minority which opposed Chen Li-fu, plus possible CC defection votes. It seems likely that Chen Li-fu’s election was made possible by an understanding between CC and Political Science Group. Chang Chun, knowing that Executive Yuan must be confirmed by Legislative, may have decided to take the easy course and make his peace with CC, which will have an important, if not necessarily majority voice.
It seems increasingly evident that Generalissimo and reactionary forces, rather than attempting to accommodate themselves, are determined to meet challenge of Li Tsung-jen and his followers; and that they are confident of their ability to remain in power and defeat Communists. Paradoxically, Generalissimo remains supremely optimistic that he has everything under control; and CC clique and other reactionary elements seem to prefer destruction to the relinquishment of any part of their control. It yet remains to be seen whether Li can rally the opposition to reverse the increasing sense of impending doom and to counteract disintegration of anti-Communist elements in the country.
The only bright spot in an otherwise gloomy picture is some evidence of vacillation in mind of Generalissimo. He is apparently disturbed by inability of Chang Chun to provide forceful leadership as Premier. Despite his earlier insistence that Chang Chun must remain in office he now seems not yet to have made up his mind definitely, and is seriously considering appointment of T. V. Soong as Premier. Soong could, on the basis of his record, at least be counted on for a determined and ruthless effort to revitalize the Government.