893.00/3–2947: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received March 29—5:50 a.m.]
689. In interview with Generalissimo, he began by explaining that reorganization which he had confidently hoped would have been completed [Page 90] was again delayed by new demands from Youth Party, but that Social Democrats had agreed to join, although Carson Chang personally would not take office. He asked eagerly what Americans were saying both locally and in reports reaching me, especially whether I was receiving any messages from you. I replied that in general Americans were waiting to see name lists in the expected reorganization, that this was true also of myself and that I was ready to inform you as rapidly as decisions were made known. Without explicitly asking as to possible financial aid, he obviously had this in mind. I told him this could not be considered while there was civil war and unless there were clear indications of trend towards democratic reforms, or in other words that problem continued to center here rather than in Washington.
I reminded him of his declared intention that when the vital railway zones had been recovered there would be another opportunity given Communist Party to join the Government, to which he assented. He said that the military operation could be concluded by September at latest, more probably August, and added that he had more than once made same forecast to both of us. He promised to inform me as soon as reorganization was fairly completed. (See immediately following telegram.)
I then referred to Formosan situation. He insisted that this was not so serious as reported, the casualties fewer, et cetera. I asked if he would be interested in reading a summary of our reports which was being prepared especially for him, and he replied with alacrity that he would. In discussing the pressing need for better and cleaner government, I broached the possibility that the great economic resources of the island be exploited with an adequate staff of American technical advisers, adding that this would require willing cooperation of the islanders, and that export profits might somehow be employed for repayment of or guarantee for any future American loans. He was emphatic in his endorsement and asked me to proceed to work out concrete proposals (see my despatch 588, March 26, 1947). He remarked at least twice that it would be impossible for China to achieve this without American help. I suggested that something of the same sort might be worked out for Hainan and he showed himself equally ready to undertake it.
Needless to say, I should be grateful to receive any guidance you may care to give me.
We discussed President Truman’s proposal regarding Greece and Turkey and bearing of this on China, I explaining the official and other American comment. I then took up with him latest strafing of a group of UNRRA workers on Yellow River project and the [Page 91] interference of a Chinese official in efforts to rescue the American airmen from Lolos near Tibetan border, to both of which he promised his personal attention.
Sent to Department as 689, also to be repeated to Moscow for Marshall as 5.