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ee wk —- we Loy . a . age -— , i . ot \ . em ee ae ee a ee a ea ae ee anal lal, ile Aan NE an a Director, FBI May 1, 1950 GUY HOUTEL, 5aC, Washington Fleld .. 5-4-6 n0 uee > a _ ©. yo-cousra res oF $eATE OREO ena fe CGEAAIEE COMITTEE a oe ee BOE 7 ALLEGATIONS OF SENATOR JOSEPH MoCARTHY ;.° #7". py) : LOYALTY OF GOVERMENT EMPLOYERS J PSS e srge try . Reference previous WFO letter to the Bureau thie date, -. “ym At this point Senator TYDINGS intreduced and read a telegram =~. : from what he described as the American Chamber ef Commerce of « large {." { .. Chinese ofty, dated March 16, 1949, Senator TYDINGS advieed that due te * | .- the fact that he had been asked to keep the signatures te the telerram = in strictest oonfidence, he would not reveal euch at thig tine, but would ~~. maxes them known to mambers of the Cousittes in closed session. Bexnator 5 TYDIKGS further advised soncerning this telegram that he had presented it | following its receipt by him, to the Armed Services Comnittes in secret ~'s session approximately one year ago, Senator TIDINGS read the very lengthy . telerram concerning the United States’ position in China as viewed by mem - bers of the Americar Chamber of Coumerce in this Chinese elty, The tele~ ~ gram indicated that China was primarily interosted in arranging peace nepotiations and that eny attempt to gain influence among the Chineze people would have to be from sourecs other than the “self-interested groups - of the past", ani stated that eontrol of China ourht to be taken out of all | The telegram further declared that, in effect, the Nationalist = — Gorernzent of China, under Chiang-Xai~Shek, had beon corrupt and inefficient ; and had favored a select few and made no effective use of supplies sent te « Ghine from the United States. The telegram further stated that the Nationalist Governmnt never invested one cent of its own money in furthering the nation's Gnterest amd actually sold goods obtained fron abroad to the highest bidders The telegram charged that the Nationalist Government, since YJ Day, had heavily taxed people in Northern China and Manchuria, hed forced armies upen - them and stated that the officers of the troops were chiefly obsessed with a | desire to acquire personal wealth, Yt was further eharged that discipline and the will to fight simply were non-existent in the Chinese Nationalist troops af a result of these conditions, «=. ee ty Ue. . * er - | It was further alleged that warehouses of nition whieh the «= . Nationalist Government would not release to its ow troops were eaonsequentiy | " painlessly transferred to Commmist units in China following surrender or : flight of Hationalist troops. It was further alleged that as a result of the treason of the former ruling Chinese Rationalist Governaent, Connunist troops in China rode in Amnsrican vehicles, ate Anerican food, and were equipped with American arms and ammunition, The advice offered to this Government in the telegram waa that we should withhold aid to China at that —_ 03 279-~ 21-15947 NOT RECORDED” : t gee ee =. amen: