893.00/1–3048: Telegram
The Vice Consul at Mukden (McKelvey) to the Secretary of State
[Received January 30—9:32 a. m.]
57. For Butterworth for [from] Ward. Little change since mytel 49, January 24.12 Major military development Communist capture Hsinlitun which affords Communists ideal base operations attack Hsinmin, Fuhsin, Chinchow and continue disruption Mukden–Peiping rail line. Communists now massing Kowpangtze–Tahushan area. These troops in position either move northwards attacking Hsinmin or southwards attacking Chinchow. Probably main immediate purpose Communist massing prevent juncture Fan Han-chieh13 troops reportedly Chinchow area with Government troops Hsinmin area. Government presently entirely on defensive. Only Government hope future victory appears to be that time may work in favor through anticipated American aid, over-extension or over-confidence Communists, or major Government victory astra-[intra-?]mural China permitting large Government reinforcement northeast. Present Government strategy pointed entirely opening and maintaining corridor Mukden-Peiping. Wei Li-huang proceeding cautiously and slowly. Only public statement made to date to effect did not believe Communist situation would be too difficult to deal with. Believed Wei presently engaged formation [Page 66] staff capable circumventing jealousies and friction within military organization, which were reaching danger point immediately prior Wei arrival. Unverified rumors PNEH as such will be reactivated. Verified reports personnel PNEH will be greatly reduced in number. Political and military situation Mukden very quiet as Chinese New Year approaches. No rumors or indication rioting may occur. Black market demand US dollar remains weak. Average exchange rate US dollars for TP past 7 days 20,000 tungpei per one US.
No distribution this radio from Mukden. [Ward.]