Memorandum by the Director of the Office of Far Eastern Affairs (Hornbeck)

Reference, Chungking’s telegrams 105, 106 and 108, January 16, reporting on conversation with Chiang Kai-shek regarding financial question.

[Page 844]

We find ourselves in a position similar to that of Ambassador Gauss and Counselor Atcheson when they say: “Not being informed on commitments or military and other plans, we cannot suggest how far if at all pressure might be brought on China …”39

It is not clear to us just what the Embassy, in recommending that this Government “should maintain a firm position” envisages as the best course to be pursued in the premises. We do not assume that the Embassy means that regardless of antecedents or of possible consequences this Government should stand pat on proposals which it has made and should decline to consider the views which Chiang has advanced.

We are convinced that the issues in the matter under reference are of tremendous importance and that from decisions made and action taken in regard to this matter there will flow consequences of extraordinary import to the United States, to China, to the war effort, to the peace effort and to the postwar world. We believe that the issue presented in this situation calls for exercise of statesmanship of the highest order on the part both of the American and of the Chinese Governments—especially the former.

The Embassy rightly suggests that we should decline to be “coerced by threats and petulant gestures.” We should, of course, decline to be coerced in any situation. We should, however, in determining our course in the presence of “threats” and “gestures”, if made, assess the intention which underlies and goes on with them. In our reading of what the Embassy reports Chiang to have said, we gain the impression that Chiang was speaking with conviction as regards the situation in China and the capabilities of the political and economic instrumentalities which are at the disposal of the Government of which he is head. We believe that, rightly or wrongly as regards method, Chiang has clearly declared his position and his intention. We believe that this puts squarely up to the American Government the necessity for considering seriously the alternative which Chiang presented.

Whatever may be the facts, regardless whether it be considered that Chiang was making “threats” or was “gesturing”, it is our belief that this Government should, in approaching the problem presented, look upon that feature of the proceedings as merely incidental. There is involved and there is going on a major “negotiation” between China and the United States. If by chance Chiang is threatening and gesturing, he is doing so in the mood and after the manner of a man who, confronted with tremendous difficulties, is convinced that certain types of consideration and assistance are due him from fellow-men with whom he is associated in a common cause and who feels [Page 845] that such consideration and assistance are being given to others of the associates and are being withheld from him. The American Government should approach the problem and meet the issue on the merits of the case and regardless of possible errors by the Chinese in the method or the manner of their presentation of their case.

Among the indisputable and incontrovertible facts are these: China has been for six and one-half years subjected to the many weakening and disheartening effects of the Japanese invasion, and the Chinese Government and people, ill-prepared to do so, have for six and one-half years resisted, spiritually and physically, that invasion; the Chinese are very tired and their economic situation is very bad and daily becoming worse; the United States has given them psychological encouragement and some financial and military assistance; that China has been able during the past four years to continue her resistance to Japan is due partly to the grit and partly to the hope that have animated the Chinese people by and large; expectations have been held out to Chiang and Chiang has held out expectations to his people; many responsible observers of various nationalities were during the early months and the early years of China’s resistance all too certain that collapse on China’s part was “just around the corner”; many such observers gradually abandoned that concept, and many such observers have ultimately adopted a view that collapse on China’s part cannot happen and are all too prone complacently to rest on that assumption; the Chinese know that the United States is utterly committed to the military defeat of Japan, they believe that the United States is not enduring toward the now common objective such burdens and sufferings and sacrifices as China is enduring, they are convinced that the United States could assist China in greater measure if it chose to; they have certain problems which are peculiar to them and which they believe they best understand and best know how to deal with; they feel that they have been and are being on the one hand neglected and on the other hand talked down to; and they reason that the practical thing for them to do under these circumstances is to “Let Nature take its course”.

The Embassy is unable to “suggest how far if at all pressure might be brought on China”. We are in the same position. We are, however, more concerned with the question how far pressure should be exerted if at all beyond the point to which the conflicting thrusts of various pressures have already brought the situation (in which China is only one of several powers concerned). That question can usefully be considered only where it is known what commitments have been made, and it will, of course, be dealt with in the light of such knowledge. It calls, also, for full consideration of objectives, both short-swing and long-swing, and for envisaging of all reasonably conceivable [Page 846] eventualities, immediate and remote. All that we are in position to offer is a fervent plea that this Government go the whole way in fulfillment of any commitments which may have been made and that it go at least half way in meeting Chiang in any effort that may be possible toward averting a breach or even the appearance of a breach between China on the one hand and this country and others of the United Nations on the other hand.

Should such a breach take place, the fact of its having taken place might make the differences (a) immediately, between a gradual increase in China’s usefulness and a gradual decrease in China’s usefulness as an ally toward defeat of Japan, and (b) a few years hence, between a world in which the Chinese nation is effectively aligned with the United States and other peace loving nations in an effort to maintain peace and a world in which the Chinese nation is effectively aligned in a nascent and potentially powerful grouping of the colored races banding and banded together in and for a struggle against the domination or fancied domination of the earth by the white races.

S[tanley] K. H[ornbeck]
  1. Omission indicated in the original memorandum.