Marshall Mission Files, Lot 54–D270: Telegram
Colonel George V. Underwood 66 to Colonel Marshall S. Carter 67
2089. Information herein, which is based on discussions with General Gillem, may be of interest to General Marshall.
General Yeh,68 in a spirit of unusual frankness inspired by the dismantling of Executive Headquarters, recently stated to General Gillem that inactivation of Executive Headquarters was logical, since there no longer was any hope of success through mediation. He held that the problem in China was not simply one of composing internal [Page 39] differences, but that settlement of China’s internal difficulties was keyed to the larger problem of improvement in relations between the United States and Russia. Yeh regarded the situation in China as hopelessly stalemated until there were clear indications of rapprochement between the US and Russia. He speculated that the Moscow Conference might possibly provide new opportunities for resolving the China situation. In this connection, Wang Ping-nan, in an apparently unguarded moment at lunch at the Ambassador’s, stated that Stalin69 could be expected to discuss China at the Moscow Conference. He appeared to have made a slip and hastened to weasel on his statement.
At any rate there are strong indications that the Communists, buoyed by withdrawal of American Forces, withholding of American loans, and accelerated economic decay are in no mood to negotiate and intend to pursue a campaign of harassment.
It is interesting to note that Yeh’s views above are strikingly similar to those advanced on earlier occasions by National Government people here and in Washington.