Foreign Relations of the United States: Diplomatic Papers, 1945, The British Commonwealth, The Far East, Volume VI

740.00119 P.W./6–2845

The Acting Secretary of State to the Secretary of War (Stimson)

Washington, June 28, 1945.

My Dear Mr. Secretary: You will recall that at one of our regular meetings early in May you asked me for an estimate of conditions in the Far East at the close of the war as well as a statement of the objectives and policies of the United States. The attached paper has been prepared in response to your request. It has taken a great deal of time and thought to collect the views of all concerned in this area. As it stands now, the paper is a policy paper representing the considered views of the Department of State as a whole. It is in three parts:

Part I Introduction.

Part II Chapters on Japan; Korea; China; French Indochina; Thailand; Malaya and British Borneo; Netherlands East Indies; the United Kingdom, Australia and New Zealand in the South Pacific.

The chapter on India and Burma has not been submitted in final form pending the outcome of the presently scheduled discussions on the Viceroy’s program for a change in the status of India. As these discussions will have an important bearing on our policy it was thought preferable to reserve this chapter for later submission.⁷⁴

Part III Conclusion. This section contains an estimate of conditions at the end of the war, United States’ policies, the difficulties and problems.

Sincerely yours,

Joseph C. Grew

[Enclosure]

Policy Paper Prepared in the Department of State

[Washington,] June 22, 1945.

An Estimate of Conditions in Asia and the Pacific at the Close of the War in the Far East and the Objectives and Policies of the United States

I. Introduction

When V day comes in the Far East and the Pacific it will be the result in largest measure of the military might and the sacrifices of the United States. In return the American people ask for a reasonable assurance of peace and security in this great area and economic welfare. Peace and security, and economic welfare, however, depend on a number of conditions.

One of these conditions is the right of all peoples to choose the form of Government under which they will live. The United States, therefore, has a definite interest that there should be a progressive enlargement of the political responsibilities, both as individuals and as groups of all the peoples of this region in order that they may be prepared and able to assume the responsibilities of natural freedom as well as to enjoy its rights. To this end we would wish to see in China and in other independent countries governments established on a broader basis of the population, and the elimination, so far as international security conditions and arrangements permit, of those conditions favoring foreign nationals which impair the sovereign rights of those countries; and in the dependent areas in this region we would wish to see the peoples given the opportunity to achieve a progressively larger measure of self-government.

During the past four hundred years the Western Powers—and more recently Japan—by war, threat of war, and exploitation of ignorance on the part of Oriental Governments, extended Western sovereignty, economic and political control, or exceptional semi-sovereign rights over great areas of Asia and the Pacific—areas which produce a substantial part of the world’s supply of many critically important primary commodities and contain more than half of the human race.

In the past half century, however, the rising nationalism in Asia has led to a demand for freedom from this political and economic subjection, and the demand has increased in strength and in insistence, and has been intensified by Japanese propaganda during the present war. The fact that each Far Eastern people was suffering under disabilities maintained by the Western Powers provided the Far Eastern nations with a bond of kinship over and beyond common membership among the peoples of Asia.

Aside from the traditional American belief in the right of all peoples to independence, the largest possible measure of political freedom for the countries of Asia consistent with their ability to assume the responsibility thereof is probably necessary in order to achieve the chief objective of the United States in the Far East and the Pacific: continuing peace and security.

Another condition on which peace and security depend is cooperation among the peace-minded states of the world. One of the foremost policies of the United States is to maintain the unity of purpose and action of all the United Nations, especially of the leading powers. Two of these leading powers are Great Britain and France, each of which has dependencies in the Far East in which there is an insistent demand for a greater measure of self-government than the parent states have yet been willing to grant.

A problem for the United States is to harmonize, so far as possible, its policies in regard to the two objectives: increased political freedom for the Far East and the maintenance of the unity of the leading United Nations in meeting this problem. The United States Government may properly continue to state the political principle which it has frequently announced, that dependent peoples should be given the opportunity, if necessary after an adequate period of preparation, to achieve an increased measure of self-government, but it should avoid any course of action which would seriously impair the unity of the major United Nations.

The United States, also, may utilize either the force of its example or its influence or both. Its treatment of the Philippines has earned a rich reward for this country in the attitude and conduct of both the Filipinos and the nationals of other Far Eastern states. The American Government influenced the British Government to take parallel action with it in the renunciation of extraterritoriality and other exceptional rights in China.⁷⁵

The solution which would best harmonize these two policies of the United States would be a Far East progressively developing into a group of self-governing states—independent or with Dominion status—which would cooperate with each other and with the Western powers on a basis of mutual self-respect and friendship. The interests of the United States and of its European Allies require that the Far East be removed as a source of colonial rivalry and conflict, not only between the Great Powers, but between the Great Powers and the peoples of Asia.

II. Japan

A. Estimate of Conditions at the End of the War

The following conditions will apply whether or not Soviet Russia has entered the war against Japan. The entry of Russia into the war would of course affect the time period before the defeat of Japan but would not materially affect the conditions to be found in Japan at the end of the war.

1. Political and Military

The Japanese people will be faced with a situation without precedence in their experience. They will be faced with surrender or total defeat, which they have been taught is impossible, because of their divine invincibility. They will see the dissolution of their empire, in accordance with the Cairo Declaration, and probably a great increase in the power and influence of the Soviet Union in the Far East. As a result, there will be bitter disillusionment and great mental and emotional confusion among the people. They will consider that the Allies have won an unjust victory solely by means of superior material power and that the Japanese cause of “Asia for the Asiatics” still is a just one. Amenable to direction and inherently obedient, they will probably obey instructions from their accustomed superiors, but will be sullen, resentful and very likely non-cooperative toward the invaders. This resentment may cause frequent attempts upon the lives of members of the Allied Military Government and of the occupying forces.

Assuming that there will be no general revolution in Japan which would eliminate the relics of feudalism, including the institution of the emperor, it can be expected that the present emperor, or a successor, will be able to command the respect and obedience of the people, although he will have lost some of his prestige and influence because of the failure of his “august virtues” to prevent the defeat of Japanese arms. It is provided in the draft of the proclamation to be issued to the Japanese people by which the emperor announces the transference of his powers and authority to the supreme allied commander, that he instructs the administrative officials to remain in office and to continue their duties under the direction of the Allied Military Government, and it is expected that most of the officials will obey. However, the Japanese administrative officials will probably be found to be inefficient and confused because of the disruption of the normal command channels and in many cases may be unwilling to cooperate fully with the Military Government because of the factors previously mentioned as affecting the Japanese people in general. It is not believed that any Japanese Government which may be in existence at the time of unconditional surrender or total defeat will have sufficient prestige and power greatly to influence the general situation, but this fact is unimportant, as the Allied Military Government will supplant the Japanese Government as soon as possible after the surrender or defeat.

Even after the unconditional surrender of Japan or the occupation of the country after collapse of organized resistance, some army units may continue sporadic and isolated resistance, probably in the mountainous interior. Some of these army units may escape to the Asiatic mainland to continue resistance with Japanese armies there, where it is probable that a considerable body of troops may refuse to cease resistance.

2. Economics

Large areas of the principal cities will have been almost completely destroyed, public utilities in many cases will have ceased to function and communications will have been seriously damaged or destroyed due to the long-sustained bombing from the air and the fighting within the home islands, which it is expected will be necessary to bring Japan to unconditional surrender or to collapse of resistance and passive acceptance of defeat without formal surrender. There will probably be an acute shortage of foodstuffs because of the destruction of accumulated stores, insufficient internal transportation and the effective blockade, which it is expected will have been established after the Japanese navy has been destroyed or rendered impotent and which will prevent importation from abroad. Many millions of persons will have been displaced by forced evacuations, by destruction of their homes and businesses, and by the failure of food supplies. Many industries supplying consumer goods will have ceased to function, but it can be expected that the peasants will continue to till their fields (except where combat operations have interfered) and the fishermen will continue to set their nets.

B. International Relations

As most countries of the world have either declared war on or have broken diplomatic relations with Japan, the close of the war in the Pacific will find Japan maintaining relations only with the Japanese puppet regimes of Asia, the neutral states of Europe, and the Vatican, Afghanistan and possibly Soviet Russia. Immediately after the defeat of Japan the Allied Military Government will take charge of Japan’s international relations.

C. United States Policies

1. By the instrument of unconditional surrender the emperor of Japan renounces his power and authority and the supreme allied commander acquires supreme legislative, judicial and executive authority over domestic and foreign affairs of the Japanese empire. If there should be no emperor in Japan to acknowledge the unconditional surrender, or if he should refuse to sign, the supreme allied commander announces his assumption of authority by proclamation. All instrumentalities of state which participate in the formulation or consideration of national policies will be suspended, pending the achievement of the objectives of occupation, and their functions will be assumed by the Allied Military Government, which, although predominantly American in composition, will contain representatives of all countries which have actively participated in the war against Japan. The emperor will be taken into protective custody and placed in seclusion at a detached palace. The Military Government will utilize, so far as practicable, the Japanese administrative machinery, at the same time purging the machinery of exponents of militant nationalism.

2. The general political objectives of the Allied Military Government in Japan will be:

a) the abolition of militarism.

b) the strengthening of democratic tendencies and processes.

c) the encouragement of liberal political elements and the creation of conditions which will facilitate the emergence of a government with which the United Nations can deal.

3. After a relatively short period of complete occupation, during which stern but just measures will be taken to achieve the above objectives, the Allied Military Government might be replaced by another supervisory agency to usher in a period (of indefinite length) during which the emergence of a Japan properly discharging its responsibilities in the family of nations would be encouraged.

III. Korea⁷⁶

A. Estimate of Conditions at the End of the War

1. Political

There will undoubtedly be considerable confusion and chaos in the political, economic and social affairs of Korea when Japanese rule ends. During the Japanese control of Korea for the past thirty-five years the Koreans have been given virtually no measure of self-government, while Japanese interests have controlled the economy of the country.

The Japanese population in Korea, more than half of which is engaged in government service or employed in Japanese monopolies, will, no doubt, be subject to attack by Korean revolutionists and rioters when Japanese authority is relaxed. The majority of the farmers are tenants who have been subject to extortionate treatment by Japanese and Korean landlords. Between a third and a half of the farming land in Korea is owned or controlled by Japanese landlords. With the liberation of Korea the tenant farmers will undoubtedly expect sweeping agrarian reforms and may take definite steps to destroy the control of the landlords, both Japanese and Korean, with resulting chaotic social conditions. Disorder may become general, for the police force is over two-thirds Japanese.

In accordance with the Cairo Declaration to which China, Great Britain and the United States, but not Soviet Russia, are signatories, Korea is to become free and independent in due course, but there is no Korean regime now in existence or likely to emerge before the termination of hostilities which might be considered really representative of the Korean people or qualified to undertake the duties and obligations of an independent government. The Koreans who have had experience in government service are limited in number and have mainly been employed in minor positions.

2. Economic

The chaos resulting from the collapse of Japanese political control in Korea will simultaneously affect economic conditions in the country. Korean agriculture which occupied over two-thirds of the population will probably not be seriously disturbed prior to or at the time of the termination of hostilities.

In regard to transportation the situation in Korea will depend primarily on the extent of damage caused in the course of military operations. The railroads of Korea with their alternate main lines, have been constructed and used, to a large extent, for military purposes and for transporting the economic resources of the continent to Japan. The partial destruction therefore of the railway network will not greatly affect the internal economy of Korea, although complete disruption of rail service might result in serious temporary problems. In view of the fact that a large proportion of the technical personnel employed in the railway system is Japanese, it may be necessary to employ western experts or temporarily to retain the services of suitable Japanese technicians in order to maintain even the basic needs in transportation.

Modern industry and mining in Korea have been developed mainly since 1937 for war purposes under Japanese monopoly control. Much of the industrial plant will probably suffer from military operations and the surviving portion will be shut down pending conversion to peacetime production. The maintenance of certain key industries, such as the manufacture of synthetic fertilizer, will possibly require technical personnel not available among the Korean population.

There will undoubtedly be a mass unemployment problem involving half a million Koreans previously engaged in war industry, who, with their families constitute a population of some two million persons. Unemployment will be aggravated by the probable early return to Korea from Japan of well over one million Korean laborers and their families. These unemployed Koreans will probably include more than 10 percent of the population.

B. International Relations

In as much as Korea is under Japanese sovereignty, it has at present no international relations. Military occupation, however, will necessarily entail the establishment of a fully integrated and well-staffed military government in Korea. Occupation and military government may be under a single power, or under two or more powers acting jointly, or it may be zonal in character with responsibility for military operations and civil administration partitioned among several allied powers. If military operations and occupation are jointly undertaken, nations participating will probably include China, Great Britain, the United States and Soviet Russia. As soon as practicable, military government will probably be replaced by an international interim authority composed of representation from the same four powers.

The Soviet Union will probably enter the war in the Far East and Soviet forces will probably occupy all or part of Korea. Such military activity may or may not be carried out jointly with other United Nations. The Soviet Government will, no doubt, establish military government in the portion of Korea under its control and may subsequently wish to establish a Korean regime friendly to the Soviet Union composed at least partially of Korean leaders groomed in the Soviet Union. Some 300,000 Koreans, including those of Soviet citizenship born in Russia, are known to be residing in Siberia, and 20,000 to 30,000 Russian citizens of Korean ancestry are reportedly in the Soviet Army.

The economic and political situation in Korea would be conducive to the adoption of communist ideology and although the average Korean is not favorably disposed toward Soviet Russia, the policy and activities of a Russian-sponsored socialist regime in Korea might easily receive popular support.

C. United States Policy

The declared objective of this government is embodied in the Cairo Declaration and has been reiterated on a number of occasions, namely, that “in due course Korea shall become free and independent”. The relinquishment of Japanese sovereignty over Korea, involves the transfer to Korea of Japanese public and semi-public property and possibly the expropriation of a large proportion of Japanese private property in Korea, the continued retention of which might endanger Korean security or be considered an impediment to the indigenous development of Korean economy.

The United States Government seeks to obtain prior agreement and joint action through consultation among the major powers concerned, i.e. China, Great Britain and Russia, in matters concerning the political future of Korea. It is the policy of this Government that the United States should participate in both the military government and the interim administration of Korea.

Furthermore, it is the intention of this Government to assist the Korean people in the early establishment of a strong, democratic, independent nation.

IV. China⁷⁷

A. Estimate of Conditions at the End of the War

Political

The close of the war in the Far East will probably find China politically and militarily disunited. The Kuomintang-controlled National Government will be found exercising control over western China and portions of northwestern, central, eastern and southeastern China, but the existence therein of certain local, semi-independent military elements will circumscribe the degree of control exercised by the National Government. The National Government’s control of Sinkiang (Chinese Turkestan) will probably be impaired and may be completely lost.

The Chinese Communists will probably be exercising control over substantial areas of northern, northeastern, central and eastern China. Their control of areas lying north and east of the Yellow River to the vicinity of the Great Wall and in that portion of Kiangsu Province lying north of the Yangtze River is likely to be relatively secure. The Communists will also be found occupying enclaves of varying strength in portions of Anhwei, Honan, Hupeh, south Kiangsu, Chekiang and Kwangtung. On the relaxation of Japanese control the Chinese Communists will occupy Manchuria and then may also seek control of Inner Mongolia and Sinkiang.

Failure of the Kuomintang and the Chinese Communists to unite will in all probability lead to the formal establishment of two distinct political and military entities in China, with the Kuomintang controlling one and the Communists the other. The result of this division of China into two separate spheres of power is likely to be internal strife—probably after the defeat of Japan. Since neither of the two contending groups appears to enjoy preponderant military supremacy, a long, devastating and perhaps indecisive struggle is likely to develop.

Economic

China will probably be economically sapped and financially prostrate. It will be enmeshed in the throes of virulent inflation and possessed of a worthless currency. China’s nascent industry and communications and her trade will be utterly dislocated and largely destroyed. However, in her primitive agricultural economy which has suffered immensely, though not irreparably, from the ravages of war, China will possess the firm basis on which her economy can be rehabilitated and developed. Substantial external assistance and guidance will be required if China’s agriculture, industry, communications, trade, and monetary system are to be rehabilitated and modernized. Political and military instability will of course seriously hinder, if not render impossible, the economic rehabilitation of China and can lead only to the further disintegration and dislocation of China’s economy with disastrous results to the Chinese people.

B. International Relations

The elimination of the Japanese threat will alter but not basically affect China’s security. China’s problems of attaining external and internal security are closely intertwined. To achieve these objectives China must put her own house in order, establish a stable, unified, effective government, rehabilitate and develop her economy and create a modern and effective military organization. But a prerequisite to the attainment of these objectives is a long period of peace and an understanding on the part of other powers having vital interests in the Far East not only to respect China’s independence and territorial integrity and to refrain from intervention in her internal affairs, but to give actual assistance. China may be expected to seek security through the instrument of an effective international security organization or, alternatively, through a regional security organization. Should either of these means fail, China will probably seek security by way of an agreement with the United States, Great Britain and the Soviet Union and, failing that, by agreement with one or more of the above-mentioned powers. China will also seek implementation of the terms of the Cairo Agreement, participation in the post-war administration of Japan and Korea, and modification of discriminations applied against overseas Chinese.

As in the past, the National Government of China will doubtless look primarily to the United States for support of China’s position as a major world power and for assistance in the maintenance of China’s security and in carrying out internal reconstruction.

To a lesser extent, the National Government of China is likely to look to Great Britain. When deemed expedient China may be expected to press for the restoration of Hong Kong and for the relaxation of restrictions on overseas Chinese in British colonial areas. Great Britain, for its part, will probably see fit to link its over-all policy toward China to that of the United States, but it will probably move slowly if at all toward retroceding Hong Kong. Great Britain will strive to restore her prestige, influence and trade in China.

The National Government of China will seek to clarify and cultivate amicable relations with the Soviet Union with a view to obtaining Soviet commitments to respect China’s independence and territorial integrity and to accept and observe the terms of the Cairo Declaration. As a specific item of policy, the National Government will doubtless seek a pledge from the Soviet Union to refrain from supporting the Chinese Communists and from propagating Communism in China. It is also likely to seek an understanding with the Soviet Union in regard to the scope of Soviet interests in Manchuria and the status of Outer Mongolia and Sinkiang.

Recent Soviet policy toward the National Government of China, while formally correct, is essentially one of growing criticism. While there is no definite evidence that the Soviet Government has in recent years granted material assistance to the Chinese Communists, it has recently, through the instrument of the Russian press, afforded the Chinese Communists moral encouragement. There are various indications that the Soviet Government will seek an appropriate opportunity to participate in the Far Eastern war in order to safeguard its interests and share in the post-war settlement. In the probable event of Russian involvement, Soviet forces will invade Manchuria and perhaps occupy Inner Mongolia and north China and thus forge a direct link with the Chinese Communists. The Soviet Union may be expected in such contingency to accord material assistance to the Chinese Communists, assist the latter in the establishment of a “friendly” government in north China and Manchuria, and support the Chinese Communists in their endeavors to obtain political and military control of the whole of China.

A China rent with internal strife obviously cannot take its place as one of the major stabilizing powers of the world. On the contrary, internal instability in China will invite external intervention which will in turn threaten the peace of the world. It seems clear that a decision on the part of the Soviet Union to assist and support the Chinese Communists while the United States and Great Britain are assisting and supporting the National Government will lead to a situation pregnant with explosive possibilities.

C. United States Policy

United States short-term policy is directed to the effective joint prosecution of the war against Japan, while long-term policy is directed toward the development of a strong, independent, united, peaceful China with a government enjoying the support of the people and able effectively to discharge its internal and external responsibilities. In pursuance of these policies, the United States continues to support the existing National Government, headed by Chiang Kai-shek, as the central authority offering the best hope for unification, reconstruction and avoidance of chaos. At the same time, the United States is urging upon the National Government the imperative need of instituting thorough-going reforms to increase its administrative and military efficiency and broaden its base. A major purpose of United States policy is to promote internal unity, including reconcilement of Kuomintang-Communist differences. However, in view of the weakness of the National Government and its possible disintegration, United States policy aims at maintenance of a degree of flexibility to permit cooperation with any other Chinese leadership which may give greater promise of achieving United States policy toward China.

In pursuance of its policy toward China, the United States seeks the active aid, understanding and cooperation of other interested nations, particularly the Soviet Union and Great Britain. In view of the gravity of the problems likely to arise between the Soviet Union and China, the United States proposes at an early date to seek an opportunity to explore these problems with the Soviet Government and, if possible, to reach an understanding with and enlist the cooperation of that Government in the implementation of a common policy toward China along the lines espoused by the United States. Such an approach would of course be made with the knowledge and approval of China and Great Britain.

V. French Indochina⁷⁸

A. Estimate of Conditions at the End of the War

1. Political

At the end of the war, political conditions in Indochina, and especially in the north, will probably be particularly unstable. The Indo-chinese independence groups, which may have been working against the Japanese, will quite possibly oppose the restoration of French control. Independence sentiment in the area is believed to be increasingly strong. The Indochinese Independence League, representing some ten different native political groups, is thought to carry substantial influence with between one-quarter and one-half million persons. The serious 1930 insurrection, in which over 100,000 peasants, actively participated, and similar insurrections which took place in the fall of 1940 indicate that the supporters of independence are neither apathetic nor supine and are willing to fight. It is believed that the French will encounter serious difficulty in overcoming this opposition and in reestablishing French control. What effect the Japanese declarations of independence for Annam, Cambodia, and Luang Prabang will have in the period immediately following the war cannot be estimated at this time, but clearly these declarations will make the French problem more difficult.

The French government recognizes that it will have very serious difficulties in reestablishing and maintaining its control in Indochina, and its several statements regarding the future of that country show an increasing trend toward autonomy for the French administration. Even the latest statement, however, shows little intention to give the Indochinese self-government. An increased measure of self-government would seem essential if the Indochinese are to be reconciled to continued French control.

2. Economic

Economically, Indochina has so far suffered least of all the countries involved in the war in the Far East. Bombing and fighting before the close of the war will probably, however, have resulted in the destruction of some of its railway system, key bridges, harbor installations, and the more important industrial and power plants. This will probably intensify already existing food shortages in the north and lack of consumer goods throughout the area.

Pre-war French policies involved economic exploitation of the colony for France. Indochina had to buy dear in the high, protected market of France and sell cheap in the unprotected markets of other nations. The French realize that this economic policy, which was very detrimental to Indochina, must be changed. They have pledged tariff autonomy and equality of tariff rates for other countries. There is no indication, however, that the French intend to pursue an open-door economic policy.

B. International Relations

French policy toward Indochina will be dominated by the desire to reestablish control in order to reassert her prestige in the world as a great power. This purpose will be augmented by the potent influence of the Banque de l’Indochine and other economic interests. Many French appear to recognize that it may be necessary for them to make further concessions to Indochinese self-government and autonomy primarily to assure native support but also to avoid unfriendly United States opinion. Chief French reliance, however, will continue to be placed upon the United Kingdom, which is almost as anxious as the French to see that no pre-war colonial power suffers diminution of power or prestige. Friction between France and China over Indochina will probably continue. The Chinese government, at least tacitly, is supporting the Independence League and is thought by the French, despite the Generalissimo’s disclaimer of territorial ambitions, to desire to dominate, if not annex, northern Indochina. French economic policies interfered with all nations trading with China through its access to the sea at Haiphong. China particularly will look for a complete reversal of French policy in this respect.

The Thai consider the territory acquired from Indochina in 1941 as theirs by legal and historic right,⁷⁹ but they have indicated they will accept any border determined by an Anglo-American commission. The French consider the territory theirs and there will doubtless be border conflict unless a fair settlement is reached which eliminates causes for serious discontent.

C. United States Policy

The United States recognizes French sovereignty over Indochina. It is, however, the general policy of the United States to favor a policy which would allow colonial peoples an opportunity to prepare themselves for increased participation in their own government with eventual self-government as the goal.

VI. Thailand⁸⁰

A. Estimate of Conditions at the End of the War

1. Political

At the end of the war the government in Thailand will probably be made up from the personnel of the People’s Party and be guided in policy by the civilian element, led by the Regent, Luang Pradist. In the postwar period, the military group in the Party may be led by the Chief of Police, Adul Adul Detcharat, who has agreed, at least for the time being, to cooperate with the Regent. Politically, the Thai people are in transition from a state of feudalism. The process of modernization has gone on since the turn of the century, has been greatly accelerated since 1932, and will continue at a rapid rate.

2. Economic

Thailand will probably be found again in the post-war period within the British economic sphere of influence with its currency tied to the pound and its chief trade with British markets.

There has not been extensive military destruction within Thailand. The chief bombing objectives have been railroad machine shops, two or three bridges, the oil refinery, the cement works, and the electric power station near Bangkok. To offset the destruction of rail communications, an extensive network of highways has been developed which more than makes up for any loss of transportation facilities. As the war front approaches Thailand, many of the dams and locks in the agricultural canals are being destroyed from the air. This may result in there being very little rice available for export. A shortage of food for local consumption is not expected, however. The chief shortages in consumer’s goods will be in clothing and medicine.

Reports have indicated that 50,000 teak logs will be available in Bangkok and that considerable stores of rubber and tin have been purchased by the Thai Government and will be ready for sale. The production of rubber can attain its pre-war capacity within a year because the trees are standing ready to be tapped. The resumption of tin production may require more time because most of the tin was dredged and the dredges are in disrepair. The teak industry cannot be revived for three or four years.

B. International Relations

Thailand is afraid of British ambitions inasmuch as Great Britain has made no statement of policy toward Thailand, continues to regard Thailand technically as an enemy, and has indicated interest in the Kra Isthmus for security reasons. The Thai authorities have stated that the territories unilaterally transferred to Thailand by the Japanese in 1943 from the Malay and Shan states will be returned to the British.

The Thai do not fear the French in Indochina because they seem to feel that their future security rests with Great Britain and the United States rather than with Great Britain and France, as in the past. Thai leaders have indicated their intention to pursue a good neighbor policy toward Indochina. The territory gained by the Thai in 1941 from Indochina is considered by the Thai to be a natural part of their nation. However, Thai authorities have indicated that in the postwar period they will request that an international commission be established to study and render a decision on the Thailand–Indochina border, and that they will accept such a decision.

The Thai are fearful of Chinese intentions and interests. They recognize that after the war formal relations will be established with China, that a Chinese Legation or Embassy will be established at Bangkok, and that the Chinese within Thailand might become a dangerous element if unfriendly relations exist between them and the Thai. The Thai authorities are relaxing their program of discrimination against the Chinese who are permitted to engage in some thirty professions which had previously been denied to them and to live in certain parts of Thailand from which they had been excluded. The Thai will almost certainly endeavor for their own security to maintain friendly relations with China.

The Thai authorities regard the United States as their refuge in a turbulent postwar world and will look to the United States to protect them from undue extension of British and Chinese influence over Thailand.

B [C]. United States Policy

It is the policy of this Government to favor reestablishment of a free, independent and sovereign Thailand in the postwar period with the same boundaries which existed in 1940 subject to adjustments or changes effected by peaceful means. It is to our interest to foster friendly relations with Thailand, as the only independent nation among the 150,000,000 peoples in Southeast Asia among whom there is an increasing demand for self-government. Adoption in these areas of an ideology contrary to our own or development of a pan-Asiatic movement against the Western powers would seriously affect our future security and interests.

In the economic field, it is United States policy to favor the “open door” in Thailand, as in other areas, and equality of treatment by Thailand of all nations and their nationals.

VII. Malaya and British Borneo

A. Estimate of Conditions at the End of the War

1. Political

At the end of the war, if they have not been able to bring in adequate food and other necessaries, the British will probably face considerable unrest in Malaya. Even if economic conditions are improved, this unrest—after a possible quiescent period—will probably develop because of the British (and white) exodus before the Japanese, and because of the differing interests of the oriental ethnic groups whose pre-war relationships have been shattered under Japanese control.

The British will have relatively little difficulty in dealing with either the Malays or the Indians.

The Chinese, however, will not willingly accept their pre-war subordinate position in Malaya, but will seek a larger role in its politics and will actively resent any British attempts to favor Malaya at their expense. A million of them or more regard themselves as permanent residents of Malaya. The Chinese generally have suffered most at the hands of the Japanese. Whether of Kuomintang or “Communist” sympathies, of merchant or laboring class, they have kept organized, have given the Japanese more trouble than any other group, and have provided the backbone of guerilla activities so that some of them will end the war with arms and a semi-military organization. It will be the Chinese who will make most difficult the British attempt either to control the heterogeneous population of Malaya or to institute a form of government more representative of the population’s interests.

British plans for Malaya have not been announced, but there will obviously be substantial changes in government structure. While the British will probably continue to recognize the sultanates and work through them in local matters, they will doubtless institute a more centralized federal structure for the various political units, including the anomalous administrations of Sarawak, Brunei and British North Borneo which will probably be incorporated into the government of Malaya. The administration of Malaya will require major reconstruction, since most government social services—education, information, health, welfare, public works and utilities, police, and the judiciary—are already badly disorganized or Nipponized.

2. Economic

The economy of Malaya, largely dependent upon export-import trade, will be badly disrupted. The production of rubber and tin has been practically at a standstill. Plans are under way for prompt production of native-grown rubber with government aid, and plantation rubber, more dependent on foreign private enterprise, should soon follow. Rehabilitation of the tin industry will be slower because of the greater destruction or deterioration of equipment, especially dredges. Large stockpiles of smelted tin and some usable rubber may be left by the Japanese.

The production of rice, iron, bauxite, some steel and other manufactured goods, formerly of little importance but encouraged by the Japanese to make Malaya more self-sufficient, will probably be continued.

The importation and distribution of consumers’ goods have broken down, but the Chinese middleman commercial organization will still be almost intact when imports can be brought in. British business interests may be expected to exert pressure on government to support their own early reestablishment in priority to other nationals and Chinese and Indian subjects seeking business advantage in the area.

The Japanese have been unable to maintain either the quantity or quality of railway and shipping communications which existed before the war; much of the trackage of the east coast railroad has been ripped up. Road communications, however, have apparently been kept in good repair.

Labor conditions in general will be deplorable. The Japanese have subjected workers to a forced draft, reduced standards of living, forced migration, and inhuman conditions of work. Important movements of population have occurred, particularly from estates, mines and urban centers to agricultural regions. These were largely forced and there will probably be a demand for relocation after the war. Malnutrition and other health problems may well be more serious in Malaya than anywhere else in Southeast Asia.

B. International Relations

The chief international problem confronting the British in Malaya will be with China. Many of the Chinese in Malaya will look to the Kuomintang and the Chinese Government for support in any conflict they may have with British interests. Not even the possibility of allowing the Chinese a choice of either Malayan or Chinese citizenship can offer more than a partial solution of this problem.

Sumatra was incorporated into Malaya by the Japanese and administered from Singapore. The problem of undoing this arrangement as well as of repatriating laborers imported from the East Indies into Malaya will presumably be amicably settled.

Thai authorities have expressed their willingness to return to British control the Unfederated Malay States which were incorporated into Thailand, but the British will probably endeavor to extend their influence in fact—if not in form—up the Malay Peninsula.

C. United States Policy

The United States is following a policy of noninterference in any British possession but we favor a policy which would allow colonial peoples an opportunity to prepare themselves for increased participation in their own government with eventual self-government as the goal. The United States favors a policy of equal economic and commercial opportunity for all nations.

VIII. Netherlands East Indies⁸¹

A. Estimate of Conditions at the end of the War

1. Political

At the conclusion of the war there will probably be a generally quiescent period in the relations between the Dutch and the native population of the Netherlands East Indies. Although admired for not fleeing before the Japanese, the Dutch have lost some prestige because of their defeat and because the liberation of the Indies will be accomplished primarily by Australian and British forces. However, the great mass of the natives will welcome the expulsion of the Japanese and the return of the Dutch to control. Only in some areas, as in sections of Sumatra, will the Dutch face a difficult problem because of anti-Dutch sentiment and the shortage of Dutch manpower.

The Netherlands Indies Dutch are fully conscious that the old days cannot be restored and that greatly increased native participation in government is a foregone conclusion. A major political struggle will be between the Netherlands Indies Dutch who desire substantial autonomy and the home government which may wish to limit it. There will also be a struggle for control between the island Dutch and the native populations. These struggles will probably not arise until the imperial constitutional convention which has been pledged and from which it is anticipated that Indonesia will emerge with substantially a dominion status in the Dutch Commonwealth. In the relations between the native population and the island Dutch, it is anticipated that the Dutch will make substantial concessions to native desires but that in fact they will continue to control the Indonesian government only slowly losing ground as the native population becomes more politically sophisticated.

2. Economic

The self-sufficient native economy can probably be revived in full volume very shortly after the cessation of hostilities. Recovery of the export economy, however, will take longer. Not only will there have been substantial destruction of the equipment necessary for the production of oil and tin, but also many of the plantations of rubber, sugar, coffee, quinine, kapok, tobacco and other agricultural products have deteriorated or have been abandoned under the Japanese policy of developing only products which they required. Plans, however, have been developed and equipment purchased for the prompt rehabilitation of rubber, and oil experts will be ready to repair the oil wells within a short period of the recapture of the islands. Even at the expense of domestic markets and rates of consumption, satisfactory to the natives, the Dutch will probably try to keep wages of native workers low in order to subsidize the islands’ export trade.

Inter-island communication will be seriously interrupted through the destruction of ships, and rail communications may also have been seriously injured in the fighting.

B. International Relations

The Dutch will almost certainly collaborate in international security arrangements for the Pacific, constructing and maintaining necessary bases in their own territory but resisting any attempt by other powers to secure any foothold in the Indies.

Dutch relations will probably continue friendly with Britain, France, and the United States. Friction may develop, however, with the Australians whose “northern defense arc” embraces part of the Netherlands Indies and who are anxious to secure Portuguese Timor and possibly the entire island of Timor as a military and political base.

Also, there will probably be some friction between Indonesia and China over the Indonesian immigration laws, the status of Chinese in Indonesia, and the Chinese desire to extend their influence among the overseas Chinese.

In the economic field, although the Dutch will for a period resort to Government control of imports and exports, it seems probable that, when the necessity for this procedure is over, they will revert to the “open door” policy which existed prior to 1935.

C. United States Policy

The United States policy is one of non-intervention in the Indies but favors, in principle, the granting to colonial peoples of an opportunity to prepare themselves for progressively greater participation in their own government, with eventual self-government as the goal. Traditional Dutch policy is in agreement with the view of the United States which favors equal economic opportunity for all nations and their nationals.

IX. India and Burma

Note:—This section will be presented at a later date.

X. The United Kingdom, Australia, and New Zealand in the South Pacific

A. Estimate of Conditions at the End of the War

1. Political

The United Kingdom will continue to maintain through its Colonial Office its strong interest in the security and welfare of British island possessions in the South Pacific.

In both Australia and New Zealand, there is no prospect of significant change in political conditions. Both will remain small, young, vigorous parliamentary democracies, intensely proud of their separate membership in the international community and in the British Commonwealth. Both will continue to pursue their policies of excluding non-white immigrants. Both will assert their right to be consulted about every major Pacific problem. In both, Labor Governments are likely to be in power at the close of the war. Both will pursue similar foreign policies based on (1) strong support of the world organization, (2) an endeavor to develop a joint system of regional security appropriately linked to the world system, (3) further development of defense industries, (4) closer cooperation with the United States, and (5) continued but somewhat less intimate cooperation with the United Kingdom.

2. Economic

The war has very gravely dislocated the economy of the South Pacific region. Recovery for Australia, New Zealand, and the islands will be long and hard. Australia considers herself the Dominion most hurt by the economic consequences of both phases of the war. Despite an inevitable increase in their economic contacts with the United States, the two Dominions will remain linked to the United Kingdom in currency and trade matters, and the tendency will be for their former close economic relationship with the mother country to re-establish itself. It would not be safe to predict that the defeat of Japan will quickly usher in a period of prosperity or economic stability for either Dominion.

B. International Relations.

Under the assertive leadership of Dr. H. V. Evatt,⁸² Australia is determined to play as large a part as she can in the Pacific settlement and is to a large degree carrying New Zealand along with her. In the Australia–New Zealand Agreement of January 1944,⁸³ both governments asserted, among other things, a right to full participation in all armistice and post-war arrangements in the Pacific, demanded that no territorial changes be made without their concurrence, favored the establishment, within a general system of world security, of a regional zone of defense “stretching through the arc of islands north and northeast of Australia to Western Samoa and the Cook Islands”, and proposed the formation of a regional commission to deal with the welfare of native peoples in the South Seas. During the past year the misgivings to which the abrupt conclusion of this Anzac agreement gave rise in London and Washington have been somewhat allayed, largely through the efforts of New Zealand statesmen to pour oil on the troubled waters. Nevertheless, British officials remain disturbed by Dr. Evatt’s intention of pressing at a suitable opportunity his plans for transferring British colonial territories adjacent to Australia from British to Australian administration. They are also disturbed at the wholehearted endorsement which the Australian and New Zealand governments gave at their second conference in November 1944 to the principle of a strengthened mandates system and the extension of international supervision to “colonies proper” as distinct from mandates. British statesmanship is, therefore, likely to assert itself strongly in the South Pacific after the war and will by no means leave the field free to the framers of the Anzac Agreement.

C. United States Policy

In its policy toward Australia and New Zealand in general, the United States is guided by a desire to deal with them as two separate nations—members of the British Commonwealth—with each of which the United States has the closest ties of friendship and common interest in the Pacific. The United States will endeavor to persuade both Dominions to follow a broadly balanced post-war economic policy which would include a liberal non-discriminatory trade policy and would discourage the development of uneconomic industries in either Dominion.

In its policy toward territorial problems in the South Pacific, the United States desires chiefly to prevent the somewhat expansionist tendencies which have their roots mainly in Australia rather than in New Zealand from unduly complicating the relations of the United States with the United Kingdom, France, and the Netherlands.

The United States expects through negotiation to determine the status of several small Pacific islands claimed by both the United Kingdom and the United States. The question of transfer to Australia (or New Zealand) of islands governed by the United Kingdom primarily concerns the relations inter se of His Majesty’s governments in the United Kingdom, in Australia, and in New Zealand. The United States would regard it as unfortunate if any impression were to be created anywhere, and especially in Australia, that such a project of transfer would receive American support. The United States would not favor the assignment to other powers of the “C” mandates south of the equator at present administered by Australia and New Zealand, and would, therefore, presumably not object to any arrangement whereby the anomaly of the “British Empire” mandate for Nauru were done away with and the island assigned as a “mandate” or “trustee” territory to Australia which administered it prior to Japanese occupation. The United States is giving serious consideration to taking part in an advisory regional commission of the type suggested by the Australian and New Zealand governments to further the social and economic welfare of dependent peoples in this region.

XI. Conclusion

A. Estimate of Conditions at the End of the War

After the unconditional surrender or total defeat of Japan, the military power which has for many years disturbed the Far East will cease to threaten the security or the interests of the United States. Conditions and problems in Eastern Asia, however, will cause concern to the American Government. China will probably be disunited. The Soviet Union, after entering the war against Japan, may be in military occupation of Manchuria, and, possibly, of Korea and parts of north China. Soviet ideology will be a rising force throughout the entire Far East. The Korean nationalists will be insisting on immediate independence. The great dependencies, especially India and Burma, will be demanding a greater measure of self-government, and will be receiving the moral support of the United States, China, and probably the Soviet Union, while the colonial powers will be attempting to satisfy these demands by such minimum concessions as will not threaten the loss of these imperial possessions.

The entire area, which has a dense population and a low standard of living, will be suffering from the results of the war. A shortage of consumer goods will exist throughout the entire Far East. A strong demand will be made for relief and assistance, and in several countries, especially in China, for industrial and communications equipment and loans from the United States.

B. United States Policies

In this great area, as elsewhere, the basic objectives of the United States foreign policy are enduring peace, security and economic welfare. The aims of the United States in the Far East and the Pacific include the territorial and administrative integrity of all Far Eastern countries, the opportunity for dependent communities to achieve an increasing measure of self-government, the strengthening of the fundamental principles of democracies, the equality of commercial opportunity and of access to raw materials, and the creation of an era of constantly expanding production and consumption, and of rising standards of living.

In the realization of these aims which the United States considers as requisite for the maintenance of peace and for its own security, the United States is convinced that they can only be achieved through the establishment of an adequate international machinery capable of insuring not only respect for the rights of others, but cooperation with other powers having a common interest in the progressive solution of their problem.

The United States is prepared to do its utmost to bring about the adoption of forward-looking programs and to see that they are not merely hollow promises but are calculated to bring results. This Government should continue to exert its influence to make the western powers realize that their own larger security interests and influence, including that of the United States, will lie in close relationship with, rather than political domination over, the peoples of the Orient, Care, however, must be exercised in the formulation of the policies of this Government to make certain that they are pertinent to this objective; that their long range consequences can be gauged; and that they will not undermine the influence of the West. If such care is not taken, the consequences of such policies could be destructive to the peace and security of the area and might result in American withdrawal to a policy of isolation with its disastrous effect on our own interests and on the future peace of the world.

To implement its general policies in the Far East and to assure its own security, the United States aims to obtain such military and naval bases as it may need in the Pacific, especially in the Japanese mandated islands, and to maintain such control over these bases as may be necessary for security purposes. In Japan the United States desires the creation of conditions which will insure that Japan will not again become a menace to the peace and security of the world. In regard to China, the foremost objective of the United States is the development of a strong, independent, united, peaceful and friendly nation. Thailand should be restored as a free and sovereign state, and Korea should be independent “in due course”. India, Burma, Indo-China and other dependencies should be given an increased measure of self-government. A trusteeship system should be established for the supervision and protection of peoples which are not yet able to stand by themselves. In its policy toward Australia and New Zealand, the United States is guided by a desire to cooperate with them as independent nations; it does not favor Australia’s expansionist tendencies, nor does it intend to regard the south Pacific as an exclusive Anzac sphere.

C. Difficulties and Problems

In its effort to achieve its objectives in the Far East and the Pacific the United States faces difficulties and problems due in part to the policies of other powers.

The Soviet Union offers the most perplexing problem. It is not certain to what extent, if at all, United States and Soviet objectives in the Far East are in conflict. The future Soviet course of action can only be surmised. From 1924 to the close of 1927 the Soviet Union took an active part in China’s affairs and gave military and other support to the Chinese Nationalist Government which during those years included the Chinese Communists. From 1928 to the present there is no evidence that the Soviet Union has given material assistance to the Chinese Communists, although the Russian press has recently given moral encouragement to them. If the Soviet Union enters the war against Japan, it may cooperate with the Chinese Communists in setting up governments in Manchuria, north China and possibly Korea, under the influence if not complete control of the Soviet Union. Such a unilateral course would be in line with present Russian procedure in Europe, and would violate one of the most strongly held traditional policies of the United States: the maintenance of the territorial and administrative integrity of China.

In view of this possibility the most hopeful course for the United States Government would be to attempt to reach an agreement with the Soviets by which the Soviet Union would promise inter alia to respect the integrity and independence of China and to refrain from any intervention in China’s internal affairs. The attitude of the Soviets and the action which they take in regard to China may depend in large measure on the character and conduct of the Chinese National Government. If it should become genuinely representative of the Chinese people and should adopt liberal policies, especially in economic matters, the chief cause—or excuse—for possible Soviet interference would no longer exist. In the meantime, the United States should continue its efforts to induce the Chinese National Government to adopt essential reforms, in order to remove any occasion for Soviet intervention, and to make possible some agreement between Chungking and the Chinese Communists which would eventuate in the unity of China.

British policy in the Far East is in harmony with United States policies in many respects, but in certain other respects it is at variance. In regard to China and Japan, the British Government will in general probably go along with the United States, although the emphasis of their policy will be different. British sentiment against Japan is neither so unanimous nor so strong as is American opinion. The British Government, although anxious to avoid friction with the Soviet Union, supports the Chinese National Government and opposes the Chinese Communists more unreservedly than does the United States. The apparent unwillingness of the British Government to grant to its dependencies as early and as adequate an increase of self-government as is favored by American opinion presents the major issue with the United States. Great Britain will not support Australia and New Zealand in all of their ambitions as expressed in the Anzac Pact. As to a number of small islands in the central Pacific, British and American claims conflict. Above all, the chief problems for the British Empire and the United States, in view of their global entente, especially for the maintenance of mutual security and world peace, is to reach some understanding in regard to the issue of dependencies in the Far East.

French policy in the Far East presents a similar problem to the United States: to harmonize support of France in Europe with support of a greater measure of self-government in Indo-China. Australia and New Zealand will seek to play a major role in the settlement of general Pacific questions. Canada, while always desirous of exerting a moderating influence in any conflict of policy between the United States and the United Kingdom, is likely in the last analysis to accept the American view of any major issue because of its dependence on the United States for security.

As to bases, no state appears likely to oppose the essential claims of the United States, although some difference of opinion may develop as to the exact legal title by which the bases may be held.

74. For documentation on India, see pp. 249 ff.
75. See treaties signed on January 11, 1943, Department of State Treaty Series No. 984, or 57 Stat. (pt. 2) 767, and British and Foreign State Papers, vol. cxlv, p. 129. With regard to negotiations leading to the signing of the treaties, see Foreign Relations, 1942, China, pp. 268 ff.
76. For documentation on Korea, see pp. 1018 ff.
77. Documentation regarding relations of the United States with China is schedule for publication in Foreign Relations, 1945, vol. vii .
78. For documentation on French Indochina, see pp. 293 ff.
79. See Foreign Relations, 1941, vol. v, pp. 1 ff., passim.
80. For documentation on Thailand (Siam), see pp. 1240 ff.
81. For documentation on the Netherlands East Indies, see pp. 1158 ff.
82. Australian Minister for External Affairs since 1941.
83. Signed at Canberra, January 21, 1944; see telegram 12, January 22, 1944, from Canberra, Foreign Relations, 1944, vol. iii, p. 169.