Created: 10/6/1944

OCR scan of the original document, errors are possible

Ofnci or



The foil owing report, forwarded by the OSfl representative Inwas writtenell Informed and generally reliable (non-OSS) American observer who has livedong time in China:

During the past feweries of military and political events In China havr shaken Ihe Chungking rrgimr to Its foundations. The HonanerkM of Chinese military defeats In April and. involved such sdmlnistraUve inefficiency aad corruption that the peasants turned against their own soldiers- The Hunan campaign, which followed Immediately, was characterisedaralysing conflict inauthority, aa well as by eft-retire Japanese use of Chnatwc Fifthandeparatist movement among military and political leaders In the Southeast. At the same time the Communist problem remained menacing. Russian military progress In Europeto the Central Oorernment thai, should Russia light Japan, she would do so in cooperation wllh the Chinese Communists now In control of the vital area of North China. The Central Oorernmentompromise, but Ihe Communis is, realising their greater bar paining power, amplified their demands, askinguch greater military establishment than they had previously requested, and fordernocraiitation and liberatsa Hon of the present government These events took placeackground ofatedsystem, the ta* in kind, and other domett* problems, and combined toave of bitter Internal criticism, not only among Chinese Intellectuals but within the Kuomintang itself With the war In the Firpproaching the stage for critical fighting on the Asiatic mainland, tha political position of Ihe Kuomintang now depends upon its ability lo solve ihe problems of admlnistmUve Inefflciency and military dtsorgan bullion and make an agreement with the Communists which can mobilize Free China's total Ugh ling power for creditable action against the Japanese

The Honan Campaign

In the Honanapanese striking force which at no time numbered moreen utterlyumber of Chinese troops thought to be more than five times as large. The campaigneries of military disasters: defensible passes left undefended, theIn chief absent from his command at the moment of greatest urgency, many officers panic-stricken. Incompetent and outroaneuvered, Ihe troops underfed and undernourished.


The great political rut ol the campaign was that the an try turned on their own army and fought against It on the side of tne invader. The pennantserrible hatred Tor the army During last year's famine In IIoiuui. rapacious aitny officials exacted the grain tax and forced labor with complete disregard lor the (tc* per ate condition of the starving peasants. This treatment of the farming population had continued far two years when the Japanese struck

Moreover. In Honan no decent man would Join the army who could buy his way out. The usual pnre of draft exemption0 Chinese dollars, and anyone who could afford it wouldubstitute or pay the draft officials Thus the army drew largely upon the most depressed econonuc levels, and lacked the strength of an army recruited from all Classes Of tbe population

At the beginning of thefrucks at theof the 1st War tone Command reportedly were taken by array orncers and civilian official* fee the evacuation of their commercialtheir household gauds, and families To meet the Army'sneeds, the local cuvermrirnt commandeerid oxen and ox-cartsrdvd by the peasantry As the Japanese drove into the cotBstfjaMt and Tang En-po's army disintegrated. Ihe infuriated peasants began to disarm Individual soldiers one by one, then ganged up Ui roving bands looking for small troop units, and finally wereoldiers0 nfle* are estimated to hair been itrncd from the Chinese soldiery by the peasants Despite two anti-Chungking peasant slogans"Belter the soldiers of Japan than Ihe aotdtnr* of Tangndha* two sorrowsthe Yellow Hirer and Tangthey were not pro-Japanese nor were they In organized revolt. The Honan campaign simply demonstrated that administrative inefficiency might result in basic disaster to the regime

Hunan Campaign

Scon afterwards came the Hunan campaign. In the face of the power the Japanese massed against the city perhaps Changsha could never have been held. Bui the defense of the elly Itself was foredoomed to failureispute between tbe general commanding the artilleryto beieces, the bulk of General Hsueh Yueh'8the genera] commanding the Infantry. Communications were so disrupted in the sampalgn that Hsueh Yuen, the commander in chief, could not be reached by phone or telegram to adjudicate. This was followederies of disagreements on campaign strategy between Hsueh Yuch and the Chungking Military Council. Decisions all the way down fromto Hengyarig were made and countermanded

Politically this campaign was accompanied by two majorThe first was the intensive use by the Japanese of roving band* of Chinese fifth columnists paid at the rate0 Chineseaymen armed with grenades and tommy guns, who knew the terrain


perfectly Second and more Important, the campaign stimulated openouthern separatist movement, led by Marshal Li Chi-shen Meat of the Kwangtung and Kwsrurat generals had been eery cool to the CenL-al Oo'Tramen'.ong time and had been ptotllng against II. When the success of tbe Japanese campaign to open thecorridor seemed Imminent, they began to rush plans for theirseparation from the Central Oovemment and the establishment of an Independent military and political council in the South

Fear of Russia

The millrogress of the Russians in Europe has suggested to Chungkingapience erf ideas which Uwy find diajuletlng: When the wcr in Europe ends. Rusks may move across the border of Manchuria or even north China to strike the Japanese The Russians might make local agreements with the Chinese Communists, who have undisputed power In large areas adjacent to Japanese-occupiedirect understanding between Russia and tho Chinese Communists could mean that north China and Manchuria, the most Important and mostprovinces, would be controlledowerful, well-equippedarmy after they had been liberated from the Japanese

The Kuomintang has gambled on being able to preaerve the status quo until America breaks Japan's blockade Then with American supplies, pouring In from the South and the Japanese being driven back. Central Government troops, the Kuomintang hoped, could drive out theguerrillas along with the Japanese. However, should Russia come in to support the Communists before US aid arrives or should separatist movements spill off from the government and force the US to make Ureal agreements with warlords along the seaboard, the odds would beagainst the success of the Kuomintang gamble.

Therefore II has become increasingly necessary for the Centralto solve all these problems immediately Within the next two or three months some agreement must be arrived at with the Soviet Unionthat any collaboration in the Orientollaboration with theGovernment and not the Chinese Communists During the past few weeks, the rigidly controlled press has published many laudatory articles about the tkrvlels and their successes There Is also talk ofoodwill mission to Moscow, perhaps headed by T. V. Soong Moreover, Shcng Shlh-lsal. whom the Russians reportedly dislike, has recently been removed as governor of the border state of Stnkiang

The Communist Problem

However, the only real wayo-Sonetiens can be Improved is through solution of the Communist problem, and the Chungking Gov eminent has at last realized that it must settle the question once and for all. Bui the Communists, aware that the Central Government urgenUyuick settlement, have made their price far higher than before.


The military and political power of the Corrmunlsts in rtlaUon to the Kunmtriliing Is rapidly rising When the Kuomlntang blockaded the CommunlsUhe Oovcmraenl believed that they could bo crushed economically.0 and 1MI the Communists were in greatbul they succeeded In rrorganlilng the We of the arras Uvey con-trolkd, stressing complete srlf-suftVirncy. They found that by raising agricultural and industrial produrUon they could almost dispense with Central Oovernment suppliea Except for some medicine* andll necessities could be made locally. The journalists returning from Yenan report that the standard of livingfood, clothing, etclahigher In the Communist area* than In adjacent aorcrnment areas. This self-sufficiency has permitted the stiffening of the Communist altiiuda

Msanwhile, the Communists are attempting to prove to allIn China thatruly democratic government can meet China's futurehat they are democratic, and that they look to America as much a* to Russia for future friendship and guidance Therealist their own growing itrenglh. the aeeaenrigthe Koorain-tang. and the Kuooaintangs fear of Russian support for the Chinese Communis is The government ha* offered the Communist* arm* and supplies for ten divisions, lifting of the blockade, and recognition of their border government about Yenan. While theae demands might have served to satisfy Ihe Communist*hey are not enough for the lar more vigorous Chinese Communist Party4

The Communist counter demand* are divisible into threeFirst are strictly militaryifting of the blockade:Government maintenance of sixteen divisions, and permissionCommunists to keep additional troops under arms; supply ofand munition*hare in all arm* given to theby other allies The political demands include frveihauthe press, and the individual, freedom from unwarrantedof politicalegalf all political part Ma. andof democracy. The third and final demand Is theChungking of local self-government* behind thectuallyerected by the Communist* stretch from Bhenslall the way through Hopcl. Shantung, north Ktangsu. andHupeh They Include underground* In such cities as TtenUUi.and Hankow. Should the Chungking regime meet thiswould yield not only the Yellow River Valley but also the CentralValley Possibly the Communists stressfor bar-

gaining purposes.

Crirt* Within the Kuomintang

These developments have transpired against the background orChinese life In wartime: Inflation, tho conscript inn system which Ihe peasants haleorruption and cruelty, and the lax In kind. The result has been waves of unpreccdentedly bitter internal criticism, not

rTfSfiE T

only frofD the intellectual* and the university prrjeaaors but also from within the Kasenlntang.

The Kuomintang has certain great aaaeU right now It has Americanecord ol opposition to the Japanese Invasion, the symbolic personality ol Chiangonopoly on the technical,and Industrial personnel of the country If these assets were backed by party unity and clean administration they would be snnVtent tothe Kuomintang in open cornnetJtion with tbe Communists. Bui an Internal struggle for power Is aow going on. and there are actually two Kunmintangs:oalition led by Sun Fn which ranges from extreme left-wing liberal* to Shanghai businessmen, and whichhorough overhaul of government; the other the reactionary nationalist *'CC" clique Hd by the Chen brothers

Today this straggle within ths Party focuses on the Oencraliaalrno Tha Ocncrallsslmo must either clean out his party aitd government or go down wilii it.ot enough to say that he Is too busy, or that he Is the captive of the machine. Be must either change lt or bear it* risBQSj Oratory.

The two wing* of the Kuomintang cannot see eye to aye on the Com munisU. Both would agree to grant the Communists part IX not all of their military demands (or the sake of settling the Russian problem. Hut they split on the political demands. The Kuomintang liberals want civil liberties and honest; and efficiency rn the government aa much as the Communists do The liberal* argue that basic governmental decencycorrecting the abuses of the pain tax. conscription, and proper supply of tha armyla necessary for Its own sake, and tor the sake of gaining International approval Moreover, they know that If they accederee press and free Communist propaganda tbe only way they can remain IB control of China is through offering the people good government On the other side, the group now controlling the Kucenintang wants nothing that wUl shake Its grip on ths machine.

It Is sUll too early to surmise what would happeneorganization of the Kuomintang and the government could be effected. Such aKuocuntang could come to an agreement with the Communist* on both political and military issues Ho Kuomintang can come towith ths Communist Party on the basis of recognition of theirseit-governments all through China without cutting ita own throat, and no Kuuminlang member of the opposition, not even Sun Fo. would go that far Buturged Kuomintang. tbe Communists might forego that demand aadoratrasrve agreement, and there couldebirth of both the Chinese war effort and the Chinese people.

Original document.

Comment about this article or add new information about this topic: