The situation in Manchuria has deteriorated to such a degree that prompt action is necessary to prevent that area from becoming a Soviet satellite. The Chinese Communists may soon gain military control of Manchuria and announce the establishment of a government. Outer Mongolia, already a Soviet satellite, may then recognize Manchuria and conclude a “mutual support agreement” with a _de facto_ Manchurian government of the Chinese Communists. In that event, the Soviet Union might accomplish a mutual support agreement with Communist-dominated Manchuria, because of her current similar agreement with Outer Mongolia. This would create a difficult situation for China, the United States and the United Nations. Ultimately it could lead to a Communist-dominated China. The United Nations might take immediate action to bring about cessation of hostilities in Manchuria as a prelude to the establishment of a Guardianship or Trusteeship. The Guardianship might consist of China, Soviet Russia, the United States, Great Britain and France. This should be attempted promptly and could be initiated only by China. Should one of the nations refuse to participate in Manchurian Guardianship, China might then request the General Assembly of the United Nations to establish a Trusteeship, under the provisions of the Charter. Initially China might interpret Guardianship or Trusteeship as an infringement upon her sovereignty. But the urgency of the matter should encourage a realistic view of the situation. If these steps are not taken by China, Manchuria may be drawn into the Soviet orbit, despite United States aid, and lost, perhaps permanently, to China. The economic deterioration and the incompetence and corruption in the political and military organizations in China should be considered against an all-inclusive background lest there be disproportionate emphasis upon defects. Comity requires that cognizance be taken of the following. Unlike other Powers since VJ-Day, China has never been free to devote full attention to internal problems that were greatly confounded by eight years of war. The current civil war has imposed an overwhelming financial and economic burden at a time when resources and energies have been dissipated and when, in any event, they would have been strained to the utmost to meet the problems of recovery. The National Government has consistently, since 1927, opposed Communism. Today the same political leader and same civil and military officials are determined to prevent their country from becoming a Communist-dominated State or Soviet satellite. Although the Japanese offered increasingly favorable surrender terms during the course of the war, China elected to remain steadfast with her Allies. If China had accepted surrender terms, approximately a million Japanese would have been released for employment against American forces in the Pacific.