893.00/11–848: Telegram

The Ambassador in China ( Stuart ) to the Secretary of State

2131. In a conversation with Embassy officer, Generalissimo’s secretary last night confirmed that all Communist armies in Hsuchow area are moving on Nanking and that Hsuchow is being by-passed. He said Pai Chung-hsi is still refusing to accept Hsuchow command on grounds that when he wanted it, it was refused him and that now when the situation is hopeless the Generalissimo is attempting to make him the goat.

He then went on to say Manchuria had been a “shameless debacle”; that only one division was saved at Hsuchow [Yingkow?] and that only four or five were evacuated from Hulutao. The evacuation of Hulutao is now probably completed. He did not know where Hulutao divisions were being transferred, though he understood Fu Tso-yi was trying to get them.

He said Generalissimo much disturbed now because there seems to be a widening gap between China and U. S. The U. S. wants certain performance from China before extending additional aid and China wants aid before giving any commitments on performance. He said Generalissimo does not know how to resolve this difference. The secretary was himself noncommittal as to what should be done but did say the Generalissimo still refuses to admit situation is hopeless.