121.893/9–1947
Memorandum of Conversation, by Mr. Philip D. Sprouse
I called on Dr. Sun75 by appointment on the afternoon of July 30 in order to ascertain his views regarding the situation in China. It is of some interest to note that he is carefully protected by bodyguards and that I had to wait in my car outside the iron gate leading to his residence while my card was sent in. It was not until some minutes later that my car was admitted to the grounds. The conversation began with the usual pleasantries. He was at first noncommittal, slowly warming up to the subject, and at no time during the conversation did he ever speak with the frankness in which he indulged during the war at Chungking. Summarized hereunder are the chief points of the conversation:
The chief problem confronting the Chinese Government is that of inflation. Dr. Sun recommended control measures to combat inflation at the beginning of the war but they were not accepted and Dr. Kung76 even refused to admit that there was inflation in China. A settlement of the Communist problem might have been achieved in 1946 had the Government been willing to take a risk on allowing the Communists to have a veto power in connection with the PCC77 Resolutions. Dr. Sun favored taking this risk, as the veto power would have applied only to changing the PCC Resolutions, but the Generalissimo was unwilling to do so. As a result there was little hope for any settlement with the Communists after April 1946 when the Government returned to Nanking. At present there remains only a slight chance of any settlement with the Chinese Communists and the civil war is likely to continue for two or three years until one side or the other is defeated or until a stalemate is reached. At that point some settlement might be achieved which would result in the Communists’ having control of Manchuria and large parts of north China with the National Government in control of the other areas and remaining at least nominally, the National Government of all of China.
[Page 692]The U. S. should aid the National Government financially and economically to combat inflation and build up a healthy economy in the areas south of the Yangtze. There is ample room for development of this kind. This would tend to strengthen the National Government. Accompanying aid of this kind, the U. S. should encourage the Generalissimo to carry out political reforms through elimination of corruption, strengthening of local self-government on a popular basis in the provinces and general reorganization of the government on a wide basis which would represent the will of the people. This action would eventually serve to attract to the Government the support of all classes and in the final analysis would bring to the support of the Government many Chinese now supporting the Chinese Communists, both civilians and military commanders. There are Chinese among the Chinese Communists who would turn to the National Government, if it were able to offer honest and efficient administration, rather than remain with the Communists and run the risk of becoming Soviet puppets.
In reply to my question regarding his ideas of how the U. S. could assist China, he said that the U. S. could assist in the rehabilitation and reconstruction of the areas south of the Yangtze and in meeting the problem of inflation. He admitted the difficulties of making such aid effective since approximately 90 per cent of the Government’s expenditures were now devoted to military purposes. He said that the Generalissimo would probably not be willing to accept complete U. S. supervision of the implementation of any program for U. S. aid which entailed U. S. participation in Chinese internal administration—that is, in supervising Chinese Government projects or undertakings. He added that this could probably be solved by having U. S. supervision of projects organized as private or semi-official Chinese agencies.
Dr. Sun does not think that the Communists could ever gain control of all of China. He feels that when the Generalissimo dies there will be a struggle for power among the Government military commanders and for that reason there must now be established a strong basis of representative and “democratic government” which will prevent such a struggle. Although at the beginning of the conversation Dr. Sun said that it was impossible for the Government to carry out any political reforms while it was devoting all its energies to civil war, he later stated that the U. S. should “encourage” the Gimo to carry out such reforms.
Dr. Sun concluded that he hoped to have an opportunity to talk with General Wedemeyer during his visit to China.