893.00/10–1849: Telegram
The Chargé in China ( Strong ) to the Secretary of State
[Received October 18—1:54 p. m.]
Cantel 1165. Herewith our Cantel 1165 sent by hand to Hong Kong October 5, 6 p. m. This telegram written October 2.
Tillman Durdin of New York Times had interview with Li Tsung-jen October 1, notes from which Durdin at once turned over to me. Durdin’s article will probably include all major points made by Li who now apparently feels it necessary go to press for expression of views previously presented privately. It is noteworthy that Durdin claims Li embarrassed by question regarding assets on Taiwan, merely stating he doing his best to get hold of them. Asked regarding relations with Generalissimo, [Li] admitted there were difficulties but he trying to solve them.
[Page 553]Following interview Chu Chang-wei, apparently instructed by Li, followed up on many points Li not willing discuss personally. He complained that, although Generalissimo agreed move two more of Liu An-chi’s divisions from Hainan to Canton area, Generalissimo has failed provide necessary money and ships. Same thing regarding troops of Hu Lien at Tinghai which Generalissimo promised send Canton.
Chu reviewed old complaint that Soong Hsi-lien13 and Hu Tsung-nan14 draw inordinate portion of resources as compared with Pai Chung-hsi. He revealed Generalissimo was overruled on his order that Liu An-chi should withdraw from area Kwangtung; that Generalissimo gave his reason for order his opinion Nationalists too strung out and must be concentrated; that, in opinion of Li-Pai camp, Generalissimo desires undercut Pai of whom he is jealous.
With regard Taiwan gold, Chu said Generalissimo not control it personally, but controls persons and agencies through which it must pass to reach Canton. Said Yen Hsi-shan’s statement in reply to Connally15 about Generalissimo and funds was drafted Taipei and Yen was virtually ordered to issue it. In original form was bitter and scornful of US but Yen toned it down; Yen felt had to issue it because was on point of approaching Generalissimo in Chungking for more money; Yen is old and tired and not able stand up to Generalissimo on politics and appointments. Chu claimed Li and his government were hurt seriously by Connally statement since it convinced Generalissimo that Washington is against him and he thus more reluctant than ever to release money; Washington preference for Li makes Generalissimo’s own survival more than ever dependent on his keeping the money. Hsu Kan’s resignation,16 according to Chu, forced by Generalissimo who dissatisfied with him. (Foreign Office officials state Kuan Chi-yu appointed by Yen Hsi-shan, has been in charge of Tibetan and Mongolian affairs and “shows great courage” in stepping in as Minister Finance; normally a taciturn man, “he will have to do some shouting”.)
Chu concluded situation getting desperate; troops not yet paid for September; Generalissimo gives in driblets and in way to favor own forces; struggle for control Hainan in progress; Li recognizes its importance and trying keep it through Governor Chen Chi-tang who “at the moment” is loyal to Li; Li’s main dilemma caused by Washington which says must be unity in Nationalist camp but at same time show dislike of Generalissimo; Li cannot maintain army and get rid of Generalissimo; also Washington says Li must make good before aid [Page 554] forthcoming, but we cannot under present circumstances make good without aid; Li’s position like that of sick man who cannot be told “get up and walk and then we shall give you medicine”; medicine must come first, at least a glass of milk and a couple of pills; Li can make good only by striking out on his own but he cannot do so because Generalissimo has the money.
Foregoing passed on to Department [in] view Embassy lack knowledge how much of Chu’s remarks Durdin will include. Although portion is repetition of previous Embassy reports, some new information is included. Most interesting is fact reporter given such plain statement by Chu with no limitation on what he may print so far as Embassy knows.
Impasse seems to be real and basic and although real crisis exists between Li and Generalissimo now, prospects are that it will deepen until something snaps, doubtless with serious consequences.
Sent Department Cantel 1165; repeated Taipei 184; Shanghai 556; by hand to Hong Kong unnumbered.
- Deputy Director of Military and Political Affairs for Central China.↩
- Pacification Commissioner for Shensi.↩
- Senator Tom Connally, Chairman of the Senate Committee on Foreign Relations. In a debate in the Senate on September 7, 1949, Senator Connally spoke of Generalissimo Chiang Kai-shek having “absconded” to Formosa with Chinese Government funds; Congressional Record, vol. 95, pt. 10, p. 12636.↩
- As Chinese Minister of Finance.↩