(1) Chiang Kai-shek’s internal and external circumstances allow him only to adopt an offensive-defensive posture, engaging in much fanfare but little real fighting. Therefore, it would be advisable to reply by way of delay, putting off a final decision until the end of January.

(2) Hu Zongnan shows absolutely no inclination to fight; the same can be said of other Central Army units. Even Bai Chongxi has begun to soften his stance. In this situation, it is up to the opposing side itself to change course.

(3) The He Yingqin faction and the Xixi clique are eager to take up arms—they are both pro-Japanese—but if the Central Army and the Guangxi forces refuse to fight, the pro-Japanese elements will be powerless. It is hoped that every possible effort will be made to inform the commanders of the Central Army and the Guangxi army about the pro-Japanese faction’s sinister plot to stir up chaos at all costs.

(4) Nan Hanchen has already done some work in Xi’an. Hu and his subordinates hosted Nan at banquets on four separate occasions, accorded him every courtesy in greeting and seeing him off, and openly stated that they had no desire to engage in combat.

(5) Based on available intelligence, Tang Enbo’s forces also show very little interest in fighting. As for the Guangxi army, so far only four regiments of the 138th Division are deployed east of the Huai River, scattered in utter disarray. The 1711th Division remains stalled near Shou County, while the other four divisions are stationed in Huoqiu, Lu’an, Shangcheng, and Gushi, with no word yet of any advance eastward. Although Li Xianzhou is preparing to move toward Dangshan, there is still no definite information as to when he will set out.

(6) Fighting in northern Jiangsu has now come to a halt. It is requested that Liu Weizhang be informed and urged to order Li Xianzhou and Mo Dehong to cease their eastward advance; otherwise, a major clash will be unavoidable.

(7) My 115th Division’s 345th Brigade has already arrived in northern Jiangsu. It is currently undergoing concentrated training and reorganization alongside the units of Huang Kecheng and Chen Yi, with a view to standardizing its organization. After another month or two, its combat effectiveness will undoubtedly be greatly enhanced. At that point, the main force will advance westward to teach the Guangxi army a lesson. It is suggested that Bai Chongxi be given notice: if he wishes to maintain friendly relations, he should withdraw the Mo Division.

(8) Yang Dezhi’s brigade will be able to reach northern Anhui within a month, and three regiments from southern Anhui are also moving north, which should suffice to repel any attack by Chiang and the Guangxi forces. As long as Chiang does not surrender, a large-scale offensive is out of the question; all that can be expected is more noise than action.

(9) Wang Shiying has returned to Yan’an from Yan Xishan’s headquarters. According to reports, the staff members of our liaison office and the radio station who had been detained by the Central Army have been released and transferred to eastern Shanxi to join Yan Xishan. The cipher materials were not compromised. This incident originated from what was described as an attack by our forces on Taiquan Village. In fact, on the evening of the seventeenth of last month, four cattle belonging to a local household were grazing and making their way home as dusk was falling, their shapes becoming indistinct in the growing darkness. Troops of the 61st Division, mistaking them for an assault by our cavalry unit based in Linzhen Town, opened fire along the entire front line. The cattle charged forward, causing more than one company of defenders manning pillboxes along the Yunyan–Taiquan line to rout and flee toward Yichuan City, creating a great uproar throughout the town. In a panic, Commander Zhong ordered the detention of our liaison office personnel. Fortunately, Wang Shiying happened to be at Yan Xishan’s headquarters at the time and thus avoided arrest. Subsequently, recognizing the matter as a misunderstanding, the division held them for four days before releasing them and issuing a public statement to that effect. Such incidents reveal that the Central Army has virtually lost all morale and is therefore incapable of fighting. The affair continued to reverberate in Xi’an and Chongqing, yet it ultimately came down to nothing more than an “attack” by four yellow oxen. O().