893.00/10–1549
Dr. Kan Chieh-hou, Personal Representative of the Acting President of China, to President Truman 63
My Dear Mr. President: Your kind reply of October 5th is acknowledged with thanks.
I have received instructions from Acting President Li to inform you of the following important developments in the situation in China:
The financial resources at the disposal of the Government having been completely exhausted, the Government has reached the stage where it is unable to defray any of its civilian and military expenditures. At the same time, the suggestion has emanated from certain quarters that the mainland should entirely be abandoned and that all efforts should be concentrated on the defence of Formosa. These factors [Page 723] account for the recent military withdrawals from our original positions in Central and South China.
It is General Li’s desire that the mainland must not be abandoned, and that a line of defence covering the southern part of Kuangtung Province, including Kuangchowwan, and the whole of Kuangsi Province, must be held, so as to serve as a bastion against the infiltration of the Communists into the territories of China’s immediate neighbors, Indo-China, Burma and Thailand.
In order to carry put this plan, the Chinese Government stands in urgent need of the wherewithal to pay its troops. In the near future, it will also require a given quantity of light arms and ammunition. For these purposes, I am instructed to make an urgent appeal to you for the immediate allocation of the funds already voted for by Congress64 and for your immediate release of these funds.
With highest esteem [etc.]