COLLAPSE IN CHINA NEAR

Chronicle (Levin), 14 January 1949, Page 5

COLLAPSE IN CHINA NEAR

(N.Z.P.A,

—Reuterj,

Country Faces Military And Financial Bankruptcy

Copvrtght)

Received Friday, 11.45 a.m. NANKING, Jan. 13. The National Government is approaching both military ' and financial bankruptcy at a speed which may cause a coilapse without a direct Communist attack on uhe capital, says the Associated jPress correspon'dent. Tnis situation was accurately forecast three» years ago by General Geo'rge Marshall, when he told the National leaders during his efforts to bring peace, "You must quit , fighting and disband . your armies, or fade "bankruptcy." The lack of ready funds is affecting not only attempts to remove ofiicials and property to places of greater safety, but is preventmg a continuance of the normal processes of Government, adds the correspon'dent. The actual Government functions are ^apidly being shifted from Nanking to the provincial and country .eaders, whose ability to . coliect taxes and control territories is growing as President Chiang Ka.c,hek s strength ebbs. It is learned from. reliable sources that not even a'personal order from Presi-* dent Chiang is certain to produce money from the Central Bank because, in their words, "there just isn't any money." The Ministries, m most cases, have exhausted tne money given them for expenses because of the rapid d-rop in the value of the gold yuan. They are now frantically seeking funds with which to continue operations on even a skeleton basis. Reuter's c orrespondent says a shoot to kill order against lawbreakers who use violence in the capital was issued today by the Nanking garrison eommander. Communist Thrust Renewed A Nationalist military ^spokesman announced that Communist forces have thrust again into the Kwai River area, northwest of Pengpu in Nanking's outer defence screen, about 100 miles north of the capital. Unconfirmed reports said that General Chieng-yi is now moving 15 Communist column's towards the river for the expected battie for Nanking before tne end of January. Breaking the long lull, the Comrnunists besieging. Peiping today opened up with artillery against the deiehces in the imme'diate outfkirts of the city, according to .private reports filtering -through the: strict North China censorsbip. Tnis is said to be the first time the Communists have used big guns against the ancient capital since surrounding the city. •• Reuter reports that members of tlie Control Yuan, the highest' supervisory organ of the Kuomintang, have decided to confer with China's three most prominent psace advocates and interview the Big Four Ambassadors in another attempt to reach peace with the Communists. They met Generals Chang Chih-Chung and- Chang Chun, ' Ministers of the inner Cabinet, and Mr. Shao Li-Tse, former envoy at Moscow, and will meet the' Ambassadors later to emphasise the people's desire for peace.