Memorandum, State Department Summary of Telegrams

DEPARTMENT OF STATE OFFICE OF THE SECRETARY WASHINGTON November 26, 1948 SUMMARY OF TELEGRAMS CHINA Ambassador Stuart reports that Chinese leaders are now con- sidering the formation of a war cabinet in an all-out effort to contain the Communists north of the Yangtze River. This plan envis- ages the withdrawal of the Generalissimo from active participation in the government, though retaining the nominal status of president; the formation of a war cabinet with full emergency powers under some nat- ional figure like Hu Shih; the abandonment of north China and full concentration of nationalist defenses along the Yangtze. Stuart com- ments that the success of such a plan depends upon the willingness of the Generalissimo to step out and that from a purely military stand- point it is still doubtful whether the national government is capable of containing the Communists north of the Yangtze. ITALY The French have informed Ambassador Caffery that they would like to see the early inclusion of Italy in both the Western Union agreement and the proposed North Atlantic Pact. Italian Prime Minister de Gasperi had expressed interest in joining these two agree- ments during his recent conversations in Paris. The British, however, are understood to still oppose the inclusion of Italy because of objec- tions raised by the military. In response to comments made by the Italian Ambassador on the serious political repercussions within Italy of our present position on the Italian colonies, we stated that the Italian request for postpone- ment of the whole colonies question for another year would be referred to our delegation in Paris for consideration in the light of all factors involved. YUGOSLAVIA Our Embassy in Rome has received information from a usually reliable source, which it is otherwise unable to confirm, that Marshal Tito has sent word to the Italian government that, all things considered, he feels he has more to gain at this point by turning toward Italy than by seeking rapprochement with the USSR. As a result Tito is said to have requested a settlement of minor out- standing issues between the two countries. DECLASSIFIED E.O. 12065, Sec. 3-402 State Dept. Guideline, June 12, 1979 By NLT- HC NARS, Date 11-13-16