Taipei, March 30, 1962, 3 p.m.
658. For Harriman. Embassy, US military and CAS continue receive indications that serious preparations for attack on mainland are steadily proceeding. Press campaign, which reached high pitch at time your visit, has abated only a little and will be again stimulated by President Chiang's Youth Day message (Embtel 657).1Dated March 29. (Ibid., 793.00/3-2962) Members country team are concerned that campaign may be acquiring momentum of its own which would make it increasingly difficult for Chiang to apply restraint should he wish to do so. We are particularly concerned as to effect campaign may be having on state of mind of officer corps and are urgently seeking information this subject. Top economic officials whom Yager saw during visit here expressed guardedly and obliquely, but unmistakably, their deep disquiet over increasing threat to economic stability arising from very large advances being made to military for undisclosed purposes.2Despatch 363 from Taipei, March 27, reported that Director of the Office of East Asian Affairs Joseph A. Yager met on March 23 with Finance Minister C.K. Yen and Economic Affairs Minister C.T. Yang. It reads in part as follows: “Both these officials spoke quite frankly of the economic consequences of plans underway for some kind of operations against the mainland. Minister Yang also indicated that loss of confidence by mainlanders in U.S. policy toward China, rising in part out of last year's UN debate and the Outer Mongolia issue, has caused those responsible for the government to hasten planning for mainland recovery at the expense of Taiwan's economy. Feeling that U.S. economic aid and political support are no longer assured, these people believe they must move while they yet can. Meanwhile, what happens to the local economy is not significant.” (Ibid., 611.93/3-2762)
There is no clear indication as to timing of possible action against mainland. Current evidence of GRC thinking points to early fall as most likely target date, but we doubt Chiang has reached any decision. US attitude likely have important influence on decision. On one hand we should avoid encouraging GRC in preparations for early overt military action against mainland. On other hand, we should avoid such flat opposition to GRC proposals and objectives which create serious risk of unilateral desperate lunge to take advantage of conjunction of circumstances which Chiang almost certainly regards as unique and most unlikely to recur. This likely prove extraordinarily difficult balancing act, for we believe Chiang to be deadly serious in his determination to take action and he can be expected to try to edge us steadily in direction of agreeing to larger operations, threatening unilateral action if we do not go along. Nevertheless, he is not reckless man and recognizes only too clearly how dependent he is on US support. So long as he is satisfied US Government is fundamentally in sympathy with his objectives, has no intention of changing its China policy and shows willingness to at least study plans for action against mainland, I think it unlikely, for the next few months at least, that he would resort to unilateral assault. Of course, substantial uprising on mainland would change situation entirely and create enormous pressure on him to act immediately.
Believe following courses of action would be appropriate US response to present situation:
1. Take steps to discourage excessive press publicity on mainland attack theme. Yager has already spoken to Vice Premier, CAS to Chiang Ching-kuo and political counselor Deputy Secretary General of Kuomintang on this. Recommend I be instructed take up with Foreign Minister, pointing out dangers of building up premature expectations in Taiwan, of tipping hand to ChiComs, and unnecessarily alarming other countries to detriment of GRC international position.
2. Have CAS examine in detail and discuss with GRC proposal for 200-300 man drops or alternative smaller clandestine operations against mainland. Cline will have discussed this thoroughly on current visit to Washington.
3. Request opportunity for US military to make detailed examination GRC planning going beyond clandestine operations. Chiang's offer in conversation with you to make details his planning available could be used as basis for request. Admiral Smoot much concerned at extensive GRC planning and preparations now going on which his officers have no access, but which might have profound effect on combined planning for defense of Taiwan and Penghus for which he bears responsibility. We believe US scrutiny GRC offensive planning would inject greater realism into thinking on this subject and ultimately would affect Chiang's own thinking. Admittedly, US-GRC study and discussion of GRC offensive planning might be taken to imply degree of US commitment to offensive concept. There would have to be clear and unmistakable disclaimers of any such US commitment. If time should come, as it well may, when we have to express flat opposition to a proposed GRC offensive action, we would be in far better position to do so on basis of unrealistic nature their plans, which we had studied in detail, rather than solely on basis of our differing judgments of likely mainland response.
4. Make demarche on economic situation, aimed in first instance at seeking more information on military spending, but expressing concern at threat to stability of economy if it continues. We will send separate cable shortly containing more detailed recommendation.
5. Consider urgently in Washington proposing to GRC a program of substantially increased [less than 1 line of source text not declassified] probing activity against mainland to produce better intelligence on state of Chinese Communist controls and to increase chances for perfection. Program should cover as broad of a spectrum as possible, [5 lines of source text not declassified].
Believe foregoing series of actions, while it would exert only limited initial restraining influence on GRC preparations for mainland attack, would serve at least to postpone any decision for unilateral action and would place us in better position to oppose such action later.