893.00/7–149: Telegram
The Minister-Counselor of Embassy in China (Clark) to the Secretary of State
[Received July 2—2:26 p. m.]
Cantel 677. Survey present overall picture Nationalist China leads to inescapable conclusion situation continues normal pattern of deterioration and that nothing really effective is being done by present Kmt leadership to prevent eventual Communist control of all China. Generalissimo apparently has released just enough treasure to keep government alive to maintain resistance on mainland. Nevertheless, there is only continued planning, no action. Only really positive effort is by each clique or section seeking its own safe haven. Cabinet seems weak and incompetent. Four weeks premiership doddering Yen Hsi-shan was marred in initial stage by Yen’s pitiful efforts to scrape together cabinet which is still incomplete because of inability to find Foreign Minister or Minister National Defense. Yen himself has had assume latter post in what he calls his “fighting cabinet”. His “fighting cabinet”, however, has nothing effective with which to fight. Its troops are undisciplined, untrained and unpaid and Generalissimo has the money. Finance Minister has been going back and forth to Taiwan seeking funds from Generalissimo, but has only partially succeeded. It seems fantastic, yet it is true, that even though Generalissimo is in “retirement”, government can only function at his will. “Fighting cabinet” has thus far accomplished nothing except attempting clever move “close” Communist-held ports and decision to bomb Communists strategic-objectives. Even bombing and strafing of Anchises, interception of Star of Suez, and abduction of Yangtze pilots in advance of “closure” deadline, only further emphasizes disintegration and indicates Canton government has no real control even over its own instruments when stationed on Taiwan under influence Generalissimo. “Supreme policy” committee so ardently sought by C–C clique, and finally agreed to by Li when Yen cabinet was set up, is still to be organized. It was so important to so many, yet nothing has been done.
Process of fragmentation continues. Some time ago Sinkiang declared its practical autonomy from Nationalist Government and now Yunnan has done likewise. Outraged howls of protest greeted proposals send troops Yunnan and provincial government has ceased forward to Canton any revenue, even that from maritime customs. Kweichow has issued formal notice that retreating troops and other [Page 404] refugees would definitely not be admitted within its borders. Szechuan shows increasing restiveness under threat move government Chungking and each province, including even Kwangtung, is setting up its own currency. Taiwan, of course, offers shining example of inability “central government” exercise its influence. Li Tsung-jen has toyed with idea unseating Taiwan Governor Chen Cheng, but, failing, we gather, to obtain unqualified promise of support from Sun Li-jen, has given up idea. They say Sun is not sufficiently forceful.
Li and Generalissimo are no closer together. From hill top at Kaohsiung and with occasional sallies to Taichung and Taipei, Generalissimo continues call turns through never-ending series conferences and visits leading officials from mainland. Generalissimo has made it known through emissary that he stands ready come Canton “when needed” and there is strong pressure from right-wing Kmt circles that he do so. We gather there are many party matters of importance that Generalissimo alone can decide. Bickering seems to have developed and Generalissimo’s presence needed restore order. Li Tsung-jen told us several days ago in this connection that decision had not yet been taken, but that, if Generalissimo did not come Canton, he and Yen would go interior [instead?] and see Generalissimo. Knowing well that differences between him and Generalissimo are unbridgeable, Li nevertheless seems determined avoid any basis charge he unwilling cooperate. This attitude of subservience to Generalissimo may please right-wing Kmt, but it is alienating others. Am told authoritatively, for example, that resignation Chang Fa-kwei as ground forces commander was due solely to his disgust with Li’s continued willingness compromise with Generalissimo.
Defeatism and despair continue. Public statements promising “final victory”, “defense of South China”, “fight to death”, etc., still abound, but sound more hollow than ever and Yen Hsi-shan is reported have taken same suicide oath—minus poison—as in Taiyuan. Central Government continues issue periodic statement denying any move to Chungking or Taipei, yet its organs have already begun move both places by bits and pieces under guise of “establishing regional offices”. Locally Hainan Island is fast becoming “little” as troops evacuated mainly from Tsingtao pour in with mission of eradicating Communists and establishing base of operations for Kwangtung provincial government which will evacuate Canton “when situation warrants.” It is possible some futile attempt hold Canton may be made, but present developments indicate more likely central government will split and move part to Chungking and part to Formosa and that Nationalist troops will scatter or defect in time avoid Communist fire. Prize illustration of general attitude toward setting up central government in Chungking found in figures of departing legislators: Of [Page 405] well over 200 who left Canton, about 150 proceeded Taiwan, less that 10 Chungking.
Li-Communist deal? We suspect there is more to Liu Fei’s interview with Li in Canton and Chu Chang-wei’s two recent visits to Hong Kong, where three former peace delegates including Huang Shao-hsiung and Chang Shih-chao now staying, than polite inquiries into conditions in Peiping, but we lack proof any deal is in prospect. Both Li and Chu deny emphatically that any thing is in air. It seems conceivable nevertheless that in extremity Li and Pai Chung-hsi might consider agreement giving them temporary peace and security in Kwangsi. Li insists that lesson of Fu Tso-yi49 has been taken to heart, but who knows? Li has mentioned to us Communist offer Pai during peace negotiation of command even more troops than he now possesses and Pai may not forget this offer when his troops have withdrawn to the confines of Kwangsi. It would be in Chinese pattern to recognize the inevitable and make the best of it.
Sent Department Cantel 677, repeated Nanking 453, Shanghai 390.
- Chinese commanding general in North China who remained in Peiping upon its occupation by Communists.↩