893.00/7–2449: Telegram
The Minister-Counselor of Embassy in China (Clark) to the Secretary of State
[Received July 28—7:42 p. m.]
Cantel 812. After long and rather frank talk with Chu Chang-wei, political advisor Li Tsung-jen and Secretary-General office President, [Page 454] gather that, although visit Generalissimo Canton did not settle everything, much good was accomplished. Chu says that as might be expected, direct talks between Li and Generalissimo proved beneficial, as did general discussion around table among Kmt leaders. Differences still exist, but there is better understanding of reasons therefor and less inclination continue bickering which, in large measure, was responsible for Generalissimo’s visit. Generalissimo, for instance, agreed with Li on desirability appointing Pai Chung-hsi as Minister National Defense, yet was able persuade Li, [that] Pai’s services more needed at present in command his armies and promised that the Generalissimo would suggest appointment Pai at proper time.
The “office of Director General Kmt” which Generalissimo has established Taiwan to assist him function as leader Kmt will, according Chu, have eight sections headed by luminaries Generalissimo regime on scale which (although Chu did not say so) indicates to me that Generalissimo plans much more active participation in government affairs. Chu says little real importance was attached to newly-created Supreme Policy Committee of Kmt and little use would be made of it. Li and Yen Hsi-shan would discuss matters and, by-passing committee, communicate direct with Generalissimo. Li realizes he cannot act without Generalissimo’s approval and is reconciled full collaboration with him.
Chu says Li still plans his tour as Acting President and will in near future, accompanied by Chu Chia-hua, Vice Premier, and others, visit Amoy, Taiwan and Yunnan. Chu did not know whether Generalissimo would in fact visit Szechuan.
Almost giving impression he was “whistling in the dark”, Chu said he felt Communist successes had reached “high water mark”. As basis, however, for this statement he could only remark that they now controlled sufficiently large sector China; that realization would soon be borne in among them of the insoluble problems of government they have inherited.
In next breath he went on to say government anticipates strong drive by Communist armies: (1) Into Fukien and down to East River area; (2) a three-pronged attack on Kiangsi, Hunan front in effort annihilate Pai Chung-hsi’s forces; and (3) a two-pronged attack on Szechuan in effort obtain rice crop. He insists Canton defenses are being strengthened and that Pai will fight to finish. He admitted, however, that there was no evidence of revived will to fight among National troops and of the need for such revived will to fight if resistance was to be successful.
Also belying his confidence that “high water mark” Communist successes had been reached was his admission that all was not well in [Page 455] Szechuan or in Yunnan. He admitted that Chang Chun40 had “prestige but no authority” in Szechuan and that Governor Wang41 and other military leaders Szechuan were proving difficult to handle Also, he said government had positive information that Governor Lu Han of Yunnan, using former Governor Lung Yun as intermediary was discussing terms with Communists. Central government troops however, still control situation in Yunnan and government is sending military officer there investigate situation.
On balance, I should say Generalissimo’s visit has served as temporary stimulant only; that nothing fundamentally has changed; that nation lost will to resist is no better than it was; and that Communists continue capability occupying any part China they choose, There indications at moment of major Communist effort southeast China and probably Szechuan, Yunnan as well.
Sent Department Cantel 812, repeated Nanking 538, Shanghai 457, Taipei 77. By pouch to Chungking 38, Kunming 10.