"
16
Even if Japanese claimed what are believed to be their
nearer objectives their approximate territory would still be
bounded by a line running from Paotou to Changsha and thence to
position covering only about one-fifth of the country(excluding
Tibet and Sinkiang) enormous forces would be necessary and
enormous risks have to be taken if they were to proceed further.
Let us assume every vestige of central government control gone
in occupied area even including the port of Canton: Japanese
in full control of customs, salt eto: a crash of the entire
financial structure based on revenues reserves and credit of
central government. Even then I do not rule out possibility
of a central government under leadership of Kuangsi group
continuing to function effectively (by Chinese standard) in the
rest of China. I think they might well succeed in"rational
organisation" of this remaining territory maintaining a fighting
force which while 2 gps. omitted effective attack would
make establishment of peaceful government by Japanese puppets
in neighbouring provinces exceedingly difficult. so long as
there is an effective Chinese government in any part of
the country claiming to be the government of China it must
attract better elements and prevent drift towards any bogus
organisation.
If I am right in this view then whether or no we
supply Chiang Kai-shek with arms and financial assistance and
whether or no we discourage its will to fight there will still
remain a central government in lineal succession to
government which we have recognised and in more or less
effective control of four-fifths of the country. If arms and
financial assistance were available government would be by
so much stronger. I do not suggest we should provide
this government with any special facilities but I do not
agree