chinmen island. recent communist shelling destroyed facilities where supplies and troops landed and debarked. resupply of food hampered and if it were necessary evacuation could not be carried out for estimated 20 days until wharf built. do not expect communists attack chinmen. although government will withdraw troops eventually, no hurry to do so because lack billets taiwan (comment: communist gunfire may interdict beach use for landing supplies from lst and thus necessitate construction wharf outside gun range).
ground forces. now total 410,000 on taiwan and chinmen. some 26,000 able bodied males from civilians on chusans were brought back taiwan and enlisted in armed forces. source believes they will be no military value at time needed. taiwan defenses planned consists of four lines, one on beach, one between beach and railway line, one based along railway lines, and fourth in foothills. only first two lines will be completed. final stage will be retreat into mountains and carrying on warfare from there.
communists. buying laid-up vessels hong kong and singapore. using various methods economic warfare against nationalists such as depressing hong kong gold market, reducing price salt.
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nationalist soldiers. will probably prove willing fight because are convinced mainland holds no living for them now and all information from their homes tells them stay here.
chen cheng. submission of resignation1 not due proposal increase power of sun li-jen (which source says gimo will never agree to) but result of furor created by failure of sos general in chusans (a chen cheng man) to bring out military supplies and equipment; he gave precedence to commercial cargo which he and many associates (also chen cheng men) were trading to and buying from mainland on grand scale. sun li-jen central figure in this discrediting of chen because chusan forces accountable to him for much of equipment and supplies left behind and he is demanding they be made good to him or he has inadequate material for taiwan defense. one of major reasons for recent drop in rice price was loss of chusans which ended easy means trading rice to mainland.