CO537-4999 — Page 179

TOP SECRET CYPHER TELEGRAM

WARNING The text of this message must be thoroughly paraphrased if it is to be

published or otherwise communicated to persons outside the British or U.S. Government Service. If re-transmitted unparaphrased, the originator must mark it to be sent in "O.T.P.” (One-Time Pad).

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The Communists could, however, should they so wish, amass a much larger force in the area of Hong Kong. We estimate that using the Hankow-Canton railway and allowing for the collection of rolling stock and no demolitions they could, in the worst čase, transport the following numbers of men with stores and guns to the Canton area, 50,000 in 10 days, 100,000 in 15 days, and 200,000 in 25 days.

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The morale, discipline and standard of training of the Communist armies is of a high order and their Commanders possess sound taiçal principles and are able to execute complex plans. Their armament includes a high proportion of automatic weapons and artillery up to 105mm. Their tanks are few, old and small. They have virtually no motor transport.

7.

Any air threat to the Colony, is considered to be likely to be short lived, badly conceived and lacking in determination. 21 aircraft comprising Liberators, Mustangs, Mitchells and Dakotas have been identified. There are undoubtedly many others including those left behind by the Nationalists in an unserviceable condition. They will have to rely mainly on captured Nationalist troops and civil air companies to make these serviceable. As yet, however, the Communists have not used aircraft operation- ally.

8.

The morale of the Communist air forces, particu- larly of those aircrew who have defected from the Nation- alists is considered to be low.

9.

There are some further 450 modern aircraft under the Nationalist air forces in Formosa and the transfer of these to the Communist forces would undoubtedly be a condition of a peace treaty.

10.

At the time of the Yangtze crossing the Nation- alist Navy consisted of 6 Destroyers, 4 Destroyer escorts, 12 Escort vessels, 11 Minesweepers, 3 Patrol boats, 12 Submarine Chasers and some 37 Landing Craft.

Some of

these are ex-Japanese and are not yet re-armed, one destroyer and probably six more vessels have surrendered to the Communists and some will have been sunk or damaged in recent fighting. A proportion of these must be expected to take part in an attack on Hong Kong, having either surrendered or been captured. The Communists will, however be incapable of operating these vessels together efficientl or of organising any amphibious operation on Western lines.

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A copy of our full appreciation being despatched by air bag.

CIRCULATION.

D.C.O.R.

Mr. W.C. Hayter, Foreign Office.

D.N.I. Admiralty.

D. M. I. War Office.

A.C.A.Ş. (I) Air Ministry

General Sir Stewart Menzies.

Sir Percy Sillitoe.

Director, J.I.B.

Chairman, JS/JTIC TOP SECRET

Mr. Seel, Colonial Office.

TOO 231610A

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