893.00/8–449–: Telegram

The Chargé in China (Clark) to the Secretary of State

Cantel 875. Views and information from Cheng Szu-yuan, Li advisor and Assistant Secretary-General Kmt Supreme Policy Committee, as follows:

1.
Li Tsung-jen trip to Formosa in nature formal return call. Nothing accomplished. Views Li and Generalissimo on military strategy divergent as ever. Generalissimo has sent, is sending more, Liu An-chi troops from Hainan to Canton, but these troops strictly for use around city, not on Kwangtung-Kiangsi border where Cheng says they are badly needed and might do some real good.
2.
Communist forces afraid launch frontal attack on Pai Chung-hsi at Hengyang. Cheng believes Communists instead will try cut in north and south Hengyang for purposes (a) sucking Pai’s troops into small encounters disadvantageous to Pai, and (b) cutting off Pai’s route into Kwangsi. Cheng says Pai’s position heavily dependent on support other Nationalist troops around Taiho–Kanchow and under Sung Hsi-lien in Western Hunan. Next few weeks will tell tale these things.
3.
Kmt Supreme Policy Committee held second regular meeting 3 days running August 1 through 3. No important decision. Only 7 of 12 members present, absentees in Hong Kong or Formosa. SPC did discuss question capital removal but decided government best stay Canton “for time being”. Chungking not ruled out as next site, but everyone well aware Chungking may prove no more secure than Canton. Meantime “dispersal” minor employees and unimportant records will continue.
4.
Cheng says Communist Chinese language broadcast Cheng Chien, former Governor Hunan, “capture” day or so ago, but former not sure whether latter actually captured or willingly went over. In any case, Cheng gave this background information: Pai Chung-hsi deposed Cheng Chien because latter strong advocate “local peace” with Communists. Cheng then went Shaoyang (Southern Hunan) from there back to town near Changsha from which he invited new Hunan Governor Chen Ming-jen come over discuss “local peace”. Chen refused go, so Cheng apparently started back south and was “captured” around Hsiangtan.

Sent Department Cantel 875, repeated Nanking 581, Taipei 94.

Clark