Stilwell’s staff, reported to Gauss that the consequences of a Nationalist collapse in central China would be severe for the Chinese war effort. The loss of the rice-growing provinces of Jiangxi and Hunan, a new refugee flow, the need to support large armies on ever poorer land in western China, and the influx of Japanese puppet currency would worsen the already soaring inflation in Nationalist China. The collapse of the National Government, he concluded, “might become only a matter of time.”36 This assumption would lead Service to draw daring conclusions about the alternative to the
...more
