893.01/7–1348: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received July 13—4:24 a. m.]
1269. As we have recently reported, there appears strong likelihood that KmtRC will in near future move to set up provisional government in China proper. It is our belief that Marshal Li will not make this move unless certain of support at least in province where government established, and probably in one or more adjacent provinces. If these assumptions are correct and we believe them highly likely, this provisional government may well have some degree of permanence, particularly since the Nationalists have in past 2 weeks committed their last remaining reserve division to battle and have no regular units which could be used against provisional government.
Under these conditions we are giving consideration to advisability stationing observer with KmtRC provisional government after its emergence. We would of course defer making final decision and [Page 354] recommendation until of opinion new government stable and with some reasonable likelihood survival. However, presence observer during formative stages would be highly useful in interest providing information for our own planning and for provision such liaison as might be desirable. In view of his long contact with Marshal Li and other KmtEC leaders if decision reached to assign observer, we feel post could best be filled by Hong Kong Vice Consul Richard Service. Also Military Attaché considers it desirable to assign military observer and communications equipment should decision be reached take steps outlined above.