893.00/7–2248: Telegram
The Consul General at Canton (Ludden) to the Secretary of State
[Received July 23—11:52 p. m.]
140. In conversation with Governor this morning he expressed concern with regard overall deterioration situation in north and stated categorically that reform from within Kmt can not be expected [Page 375] even though party congress for that expressed purpose may be held at Lushan shortly.
Soong castigated Legislative Yuan for unreasoned attacks on present administration and ineptitude in current “soak the rich” campaign. Soong expressed himself as in favor of forced capital levies but only if Government demonstrates that condition can be created in which victims of such levies have reasonable hope of recouping; otherwise, nothing but bitter and powerful enmity could be expected.
Soong went on to say that now is the time for strong and ruthless government, amounting to dictatorship, wherein best brains of country, particularly from business and financial circles, who, he stated, are more than willing to assume leadership, would be granted power and authority to act in what he characterized as a “desperate” situation. He went on to add that even though Gimo’s prestige has been seriously damaged of late it is still necessary to make use of Gimo’s unique position in China. I asked Soong if it could be expected that Gimo would delegate authority such as he envisaged. Soong replied vehemently that Gimo “must undertake such action, and allow competent administrators to act without interference otherwise there was no hope of salvaging situation.[”]
As in previous conversations, Soong reiterated his opinion that Li Chi-sen was not currently an important figure. Soong stated that in event total collapse Government, Li could possibly assume position of power in resulting scramble but believes he is not capable of rallying sufficient political support to establish pretender regime except as Communist stooge. Soong does not believe that Li would accept latter role. Soong observed rather cynically that Li would find that many of his former subordinates, upon whom he may be relying for support, would be found to be people with very short memories when day of action arrived.
In course conversation Soong confirmed Embassy’s information to effect that Li emissaries have been in contact with Fu Tso-yi and Sze-chuan and Kwangsi leaders. Soong of opinion, however, that Fu Tso-yi is in too dangerous a military position for any extracurricular adventuring; Szechuan group not united and Kwangsi elements too clever to become involved at this time with his obviously Communist support.
Soong expressed firm belief that he can maintain stability in southeast, provided there is no major crossing of Yangtze by Communists.
Sent Nanking, repeated Department.