893.00/7–847: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received July 8—3 a.m.]
1479. Following is substance of Taipei’s 113, July 5, 5 p.m. to Embassy:
“Resurgent but less open criticism of Chinese control displacing ‘wait and see’ attitude of Formosans following removal Ch’en Yi. Many persons seized during incident still missing and some new ‘disappearances’ reported; appeals of relatives to new government re whereabouts fruitless. Secret police activities increasing. Military arrests in central Taiwan probably largely for private gain since persons arrested usually released on payment money or goods. Arbitrary actions by outlying military civilian officials contrary orders promulgated Taipei frequently reported. Impression spreading that new civilian government powerless to control military or is giving it free [Page 468] hand. Formosan circles presently agitated by insistent reports that new lists political suspects to be arrested now under preparation.
“Consul informed increasingly gloomy outlook under Nationalist regime is providing willing listeners to Chinese Communist agents, some of whom are now reliably reported active on island. Several Soviet ‘business men’ have arrived for indefinite stay.
“Some sources claim negotiations progressing for transfer Taiwan to United States control in return for new loan to China while rumors of impending United States troop landings increasing. Such reports may doubtless be product of basic unrest but at same time add to discontent of Formosans who feel some major political development pending. Blake.”
Embassy has requested Taipei for further information with regard arrival Taiwan of Soviet “business men”.