893.00/8–1349: Telegram

The Consul at Shanghai (McConaughy) to the Secretary of State

3224. Re Hong Kong telegram 514 [114?], August 11.79 Hong Kong Li Tsung-jen supporters scheme gain place in coalition government to fight Communists’ power monopoly believed closely related to underground maneuverings of pro-Li Shanghai groups, including Yang Hu Green Gang, Kmt remnants and possibly even KmtRC leaders (long well-disposed to Li). Recall that such elements, plus many intellectuals and important banking and business quarters including several leaders such as Li Ming, played major role in bringing about election of Li as vice president and of pro-Li Kmt dissidents to Legislative Yuan. Bitterly anti-Generalissimo, same groups still strongly for Li, the more so in view disillusionment re Communist Shanghai policies. Member Green Gang recently made statements to officer Consulate General revealing (1) intense interest in Kwangsi faction’s prospects for American aid and/or for political-military developments to force Communists make political settlement with Li and (2) inauguration regular secret contact between Shanghai and Li and his Hong Kong supporters. He also indicated sympathy with rural anti-Communist rebellions, such those of Red Spears (with whom Green Gang “has connections”), evidently feeling that any added difficulties harassing Communists will help force them compromise with Li.

While support which Li’s Shanghai followers can give him is negligible in direct effect on military developments, it has some significance in increasing Communist difficulties keeping Shanghai popular support—a factor which might help influence Communists either toward compromise with Li, or more likely the opposite course (assuming Communists regard Li and allies as too undependable elements to permit survival).

Sent Department 3224, repeated Nanking 1759, Canton 1003, Department pass Peiping 259, Hong Kong 190.

  1. Same as telegram No. 531 from Hong Kong, p. 480.