893.00/12–2049: Telegram
The Consul at Taipei (Edgar) to the Secretary of State
[Received December 20—8:24 a. m.]
857. Provincial political crisis has developed over Wu appointments in new Government. What he calls his “social revolution” for Taiwan is encountering expected difficulties (see mytel No. 858 dated December 20, 1949 for published details).
K. C. Wu tells me privately he cannot make changes now and maintain dignity. Also still believes Chiang Wei-chuan is best representative of people although unpopular with intellectuals and Taiwanese vested interests. Latter have control of PPC. Wu suspects C. C. Huang’s group of causing alarming recent rise in black market rate [Page 448] citing their control local banks and newspapers. Also suspects Chen Cheng of fostering resistance. States lack of time precluded fuller advance negotiations which would have resolved differences.
C. C. Huang tells me he has attempted be mediator in fight. Has high hopes for Wu administration but concurs in dislike of Chiang Wei-chuan, and Ju Peng Teh. To avoid charge of PPC revolt against Nationalist Government, he had PPC pay respectful call on Generalissimo after passing resolution. Generalissimo urged cooperation and continuance of session but members failed reassemble this morning as scheduled. At PPC call on Chen Cheng yesterday, Chen suggested compromise plan including seating of new government and early resignation of objected commissioners. Chen presented this to Wu late last night. Wu’s reaction still unknown although morning press suggests general acceptance.
Wu tells me he has received calls by leaders of local laborers, dock workers, et cetera pledging support and expects to win out over vested interests of doubtful probity, intellectuals, and local reactionaries.
Wu has had 2-hour talk with Craig and Tarring on local economic problems and both parties came away well impressed.