893.00/9–1649: Telegram
The Chargé in China (Strong) to the Secretary of State
[Received 9:27 p. m.]
Cantel 1113. Chu Chang-wei yesterday stated Communists concentrating almost exclusively against Pai Chung-hsi forces in effort destroy Pai or force him out of Hengyang. Entire Li Tsung-jen faction apparently considers major crisis in its fate is now nearing. Chu tried impress me with immediate urgency of US aid.
Chu claimed Generalissimo has ordered troops under his control north of Canton to fall back on city. All commanders involved are [Page 528] said to regard this as suicidal and have so far indicated intention disobey. Chu attributes Generalissimo order to jealousy over recent Pai successes and ability to stand ground; to prevent Pai from gaining favor with US on basis his firm resistance, Generalissimo seems willing destroy Nationalist position north of Canton in order ruin Pai and continue myth that Generalissimo is only man able save China. Generalissimo also said to have transferred to Chungking for [from?] Hengyang, without notice to Pai, three CAF bombers on which Pai was depending for destruction of bridges to hamper Communists’ supply and troop movements.
Yen Hsi-shan, according to Chu, made recent trip to Chungking to request more funds from Generalissimo since Canton Government flat broke. Central Bank said to have no funds. Yen apparently unable present specific details when Generalissimo said he knew Canton Government still had money. As result Hsu Kan going to Chungking to present accounting and beg for remittance from Taiwan; incidentally, Chu said Senator Connally’s remarks reference Generalissimo absconding with funds would have been more effective [if] he had cited true facts of Generalissimo’s illegal control over government resources. Chu continued that no one in Canton accused Generalissimo of using government foreign exchange for own benefit.
Regarding Yunnan, Chu stated President Li sending an army from Kweichow to that province to assure maintenance of Nationalist control. He said Canton Government considers Nationalist influence very tenuous and temporary, apparently feeling repressive measures and paper currency will cause strong reaction in support of autonomy under Lu Han or Lung Yun.
Sent Department Cantel 1113, repeated Taipei 168, Hong Kong by hand.