Marshall Mission Files, Lot 54–D270
Notes on Conference Between General Marshall and Premier T. V. Soong in General Marshall’s Residence, Chungking, 0900, 24 December 1945
M: What time are you leaving this morning?
S: Immediately after my meeting with you.
M: What time did the Generalissimo get in?
S: About 3 o’clock.
M: Did he get sick?
S: No, he was lying down.
M: We had a very good flight.
S: Well, if you have anything on your mind.
M: I have nothing. I talked to the Generalissimo very profusely and frankly. At the present time I am here to learn. I have read a good deal and have listened, but I have got to listen to more. That is my status at the present time.
S: Is there anything I can do to help you. Provide you information about anything.
M: I will be able to go into an interchange of questions a little later, right now I am trying to absorb this mass of pros and cons that I hear. I am fairly familiar with the steps that have been taken and the differences [Page 805] of you with the Communists, your negotiations, the various political things, I have little knowledge of that. “When it comes to the question of the Communist armies I know a little bit more. But still that is all involved in the political so I have a great deal to listen to.
S: Let me know if there is any way that I can help. I want to help you in your mission, because it is not only of world importance, but particularly for China’s concern. Whatever I can do to help you, you can rely on me to do so.
M: While you were speaking I thought of one thing that you might talk to me about right now. There seems to be several of the various groups with various sides. I am familiar with the Communist group and the Kuomintang much more. That is one thing I thought you might help me on. Members of the Democratic League.
S: Stalin asked me the same question in Moscow. Most of the parties are so small and I told him that there frankly were only two parties in China that are worth anything. That is the Kuomintang and Communist parties. The other parties that form the Democratic League have very little to do for this country. One of the parties is called the Youth party. Now I tell you to be very frank with you. We had trouble with the Communists and we selected a man and told him to start the Youth Party. This man was Tseng. He started to function and the party got away from him and got in the hands of a General Li When [Li Wen-hui], a war lord of west part of China and now he is governor of the Sekon [Sikang] province. Its background is militarism. There is another party called the National Socialist Party. The members may be a few thousand men in whole of China. The National Socialist Party was formed by a returned student from Germany by the name of Chang. He is the brother of the former Minister of Communications called Chang Kiang Ngu. The formers were of Nazi Germany. These parties take their chances to have political siding with one or the other party. They together form the so-called Democratic League as against the Kuomintang. Now that is the low down as I understand it and I made a similar presentation to Stalin.
M: Now there is another party which I don’t think you have mentioned. They tried to get to see me in Washington. They claimed to have a membership of six or eight million.
S: There is no side party in China of that membership.
M: Do these parties have leadership here?
S: Yes. There is no party that has a membership of more than 10,000 among the minor parties—that is the low down.
Shepley: The other parties form into the Democratic League? The Democratic League represents all the other parties.[Page 806]
S: Its membership is all the parties. The Communists and small parties.
Shepley: Under leadership of Chang Len [Lan] and he is in Chungking.
M: You have had your conversations with Stalin and I was wondering how familiar are you with the indications and difficulties that we have encountered, for example, in Berlin and in the uniformity of allied control in Germany.
S: I know that by what I read and by my discussions with various people.
M: I asked you that question to determine to what extent do you feel that this procedure differs from the procedure you have encountered in Manchuria?
S: Quite different, for the following reasons. We completed a treaty with Stalin. Everything that was given to him was put down on black and white. What she wants is to participate in the economic development of Manchuria to the extent that they claim everything as war booty. All the fixtures on everything.
M: They did the same thing with us in Germany. Our great difficulty was war booty. I did not realize this. Our greatest trouble in the affairs in Germany was what they claim as war booty. And when they took war booty they practically cleaned the place. Now what you are saying now is what we ran into in Germany. What I am trying to get from you is how does their procedure differ. I believe I better explain a bit to you. We had a written agreement that Germany was to be divided into three quarters, we occupied one quarter and they were drawn on the map. We also agreed a long time before the end of the war on which portion of Germany the French should have. This portion was drawn from the American and British portion and this was fixed and marked on the map. Now when we wanted to go into Berlin this summer on this Potsdam business, we couldn’t get one individual into that place until 10 days before the President arrived. We finally forced the issue to get accommodations for this large number. Then when we got into the discussions we then found this interpretation of war booty and all of our discussions then which related to the various things were being classified on the Russian side as war booty. Something we had not anticipated. Now what you are saying is the identical procedure. In what particulars does their procedure in Manchuria differ from the very procedure we have run into in Germany through other dealings? We have gone into a long interchange for the simple purpose of having our planes fly straight from Berlin to Moscow.[Page 807]
S: I went in Harriman’s plane and they put on a Russian pilot and we went from Moscow to Berlin and they stopped in Berlin to let them drop their pilot.
M: What we wanted to do was to run our plane from Berlin to Moscow, so your flight was very unusual.
S: I seemed to be privileged.
M: Almost nobody made that. What I am trying to get at is different than Russia’s policy in Rumania and Bulgaria. That is an entirely different thing. This thing in Germany was their relation to the British and U. S. Government.
S: There is a difference. In our agreement with Stalin, it was perfectly clear that we would have the principal rail lines in Manchuria. We did not want them to have any part of the economic development of Manchuria as such. They were not to come in as privileged. Now as they come in they are moving everything. There is a difference, in my opinion, in the sense that it difference [differs?] from Berlin. They make the claim that everything that was done in Manchuria is designed for aggression against Russia. Everything that is done they term that way, anything, everything, even the telegraph lines were designed for purpose of aggression against Russia. They have now removed from Manchuria much of the best machinery. They have staked out a claim for economic position in Manchuria.
M: Now you are a little bit away of my approach. You are speaking of Berlin only. They took that part of Germany and classified everything as war booty. They have completely wrecked the economy of Germany. When they went in and claimed war booty they cleaned the place out. They left the thing completely out of balance. The only way we could recover the thing was for the U. S. to supplant that portion remaining to Russia, Evidently they are doing the same thing in Manchuria. The Generalissimo talked to me at length in regard to the action of the Russians, who by their actions are continuing to make it exceedingly difficult for the Central troops in its occupation. It is exactly what we had struggled with. There wasn’t any variance at all. I am not talking about Rumania and Bulgaria where they are setting up governments. That is a different approach to the whole position. Take for example the situation as we came into the operation against Japan. We were trying to arrange to have certain things there. The first thing we wanted weather stations operating in the Sea of Japan. We considered that we must have Americans running the weather stations. After we got the agreements then there was no agreement. Then we had to have a place for our planes to come down. We agreed on certain principles and had them well defined. When we started to put our people in there we were in the same thing. To [Page 808] what degree does that differ from Hulutao where they let the Communists come in. Then we went through the same thing. We put our bombers into Russia. It took us two years. We had every complication known to man. Now to what degree does this thing differ? To what degree does this show unmistakably that this is very plainly the same set up?
S: It is this. No communist troops were to be in Manchuria. When we got there it was manned by Communist troops. According to my information there are now 100,000 Communist troops in Manchuria, 50,000 at Harbin, 10,000 near Mukden and so on.
Shepley: Were they Communist troops from the Yenan Army? Those forces that are in there are under Chang.
S: All the troops now there were Yenan Communists.
M: How many men in the Communist Army altogether?
S: There could not be more than 200,000.
M: If they have 100,000 in Manchuria.
S: There are about 200,000 regular troops, effective troops. There may be about 800,000 altogether.
M: What about Dairen?
S: We wanted to put our troops in Dairen. They refused on the grounds that it was an international port. M: What about Port Arthur.
S: We made an effort and they said no. They were blocking us everywhere. We agreed first of all that we were welcomed. We planned to enter Dairen, and Hulutao and Tsingtao [Yingkow]. We were told that we could not land in Dairen, but however we can send troops to Hulutao and Tsingtao [Yingkow]. A few days later we were told that we could not land troops in Tsingtao [Yingkow]. A week or 10 days went by and we were in agreement that they withdraw from China within 3 months after defeat of Japan. So we are moving, Communists have returned to Tsingtao [Yingkow] and our small copy [body] of troops had to be withdrawn from this block. Proceed to Changchun by over-land. They follow direct and occupy Hulutao and Changchun.
M: The Communists are there. The leading elements are still not in Mukden.
S: Not to my knowledge. I talked last night by [with?] the Generalissimo since that agreement had been reached that our troops could fly to Changchun this next week. There came to me a message from the Foreign Office that your Embassy here has a telegram from Moscow asking that if you have wait [sic] for any objection to advisory commission on the same procedure.
M: I don’t know what on.
S: The advisory commission to have a superior position.[Page 809]
M: They will have power over General MacArthur?
S: There will be some announcement on that finally.
M: The telegram is not here.
S: The Generalissimo being away, I made a decision that we agree.
M: What number have you on that commission.
S: We have three men. The Military Attaché, Major General Chu and then I am sending a man from China that is a man who knows something about the economic position in Japan and our requirements from Japan. Three people.
M: Let me ask you something quite apart from this. What is the status in Formosa ?
S: The situation in Formosa is moving. Our men are removing the Japanese step by step.
M: How many Japanese?
S: There are still about a quarter of a million.
M: You have only two divisions there?
S: Two armies—one in the north and one in the south; six divisions.
Byroade: I think the figure is about 62,000 men.
S: That is working out all right.
M: What do you get out of Formosa? Do you intend to evacuate all the troops from there?
S: All the Japs except a few technical men. We will get sugar from Formosa. Sugar to supply for all of China.
M: Where has the sugar been coming from?
S: We grow some in Canton, Amoy. This provides quite a great deal, but we mostly imported a great deal through the British. Formosa provides rice, sugar, rice, camphor.
M: You export that, don’t you?
S: We only export that. From Formosa, that has been exported to the U.S. There is the cash question. Next year will not be so good. This year is not so good because of frequent bombings, and the Japanese help not operating in addition. Artificial fertilizer is the greatest need. The Japanese imported into Formosa 750,000 tons of nitrate. The Japanese put into effect a form of economic peonage in farming the rice and the natives didn’t want to change from the old way. They wanted to do it the Japanese way.
M: Where does your rice come from?
S: Normally rice comes from Siam and Indo-China. We also export rice to the United States. That is a high grade. Import Siam rice and export our good rice.
M: What is your situation here in China concerning cotton mills?
S: During the war years 4,000,000 spindles were made in China. Of that 1,750,000 belongs to the Japanese. The government has a hold of that. Our most serious shortage is inland transportation. [Page 810] Boats that will come up the Yangtze and [to] Kwangsi. Then there is a shortage of rolling stock. The rails have been destroyed. Telephone and telegraph lines came down. So the question of recovery of China is largely by inland transportation, also transportation on the coast. Larger shipping.
M: Have you a capacity to produce small vessels?
S: We produced some boats at our docks in Shanghai. They had a capacity to produce 10,000.
M: What sort of shipping for river shipping?
S: Large draft boats. Any boats that will be below 12 or 14 feet draft.
M: Gasoline driven boats all right?
M: What about Diesel?
S: There are some people that are familiar with Diesel, but not large number.
M: Will LST’s, LCI’s, LCT’s?
S: All of these boats would be very useful to China for two or three years for temporary measures.
M: What about Liberty ships? Liberty ships would be good for coast shipping.
S: Large ships could go to Tsingtao, Chefoo, Chinwangtao, Shanghai and up to Nanking and Canton, but they normally go to Kowloon.
M: As to rolling stock. Have you arrived at any calculations as to what you need?
M: Very roughly what do you need in freight cars?
S: There is a shortage of practically everything. We have figures, our Minister of Communications has figures.
S: There is a shortage even of rails. These people have pulled up the rails and taken them away.
M: What about the railroad buildings on that line? All right?
S: They are all right.
M: What about motor transportation? Your roads do not permit, do they?
S: We have a part of west China is almost entirely supplied by road transport.
M: Where do you get coal?
S: There are two large coal mines in Hankow, Changsha, just south of the lakes.
M: How far have they been opened?
S: They have just been opened.
M: Is it on the river?[Page 811]
S: On the railway between Canton and Hankow in Hunan. Then we have one in Angwan[?] Province which had an output of 1,500 tons a day.
M: Is that able to run now?
S: About 1,000 tons. In the Shansi Province coal mines you have the best coal in China for heating. Then we go up north to Keilin [Kailan] mines. Two of the places where we have coal. They are now approximately about 8,000 tons a day. About 3 million tons a year.
M: What is the trouble now?
S: The trouble has been largely transportation. Eight trains a day. Then there is the question of wood props for mining. They came from Japan. We are just getting some from Japan. Dynamite is easy to obtain here. Formosa also produces coal. Something in the neighborhood of a quarter million tons a month.
M: Taking all these things into consideration, it would appear that after about four to six months of work in the various fields, your economy in many respects will be coming back to practically a normal position.
S: That is right. The other thing is now our currency is in very bad shape.
M: Have you developed any scheme?
S: We have a scheme.
M: How are you going to handle all the Japanese money?
S: Two hundred dollars equal to one dollar our money. In northern China, Japanese currency which we have $5 to one. They turn in within a specific time our currency. Two hundred to one was too high in Shanghai. We learned a lesson from that and made it 5 to 1 in north China.
M: What have you behind your currency?
S: We have some foreign currency abroad. Largely U. S. shares.
M: What have the Communists done in the way of things like coal?
S: They have done nothing of the sort.
M: I want to ask you about Japanese stocks. Wedemeyer told me they had quite a stock in blankets and things of that sort.
S: I went up to Shanghai. The Army was taking one thing, the Navy was taking over, and city governor was taking over some things. I had them turn in all the records. I told the local people to study and see how these military things should be divided. Things were moving pretty well until three weeks later and I found the Navy was not turning over the goods. I gave them specific orders within 24 hours that they were to turn everything over. Control of every single thing. I want to go to north China to start the same thing there.[Page 812]
M: This was not the question of the people giving it over. The difficulty was finding someone to take over. Here was the thing that he was interested in immediately, because a decision had been made and orders had been given to organize a very elaborate naval program for the movement of these troops immediately and it is a very difficult thing to delay of [sic] them because of the terrific pressure back home. Now when I was talking to General Wedemeyer and his staff, the divisions were earmarked for movement then things began to crop up like one blanket for every two men. I am immediately concerned as to delay of shipping. General Wedemeyer said that his trouble was that they couldn’t get them to take them over. He would not have the Marines on an issue depot. It is an elaborate procedure to pick up these divisions and move them up to Manchuria to throw them away. There are shortages of blankets. These things exist in available stocks.
S: I am going up to settle that question. Regularize procedure.
M: What I am going to say is that I can’t make a statement. How long will you be gone?
S: I plan to be back in week or so.
M: Have you really recovered large quantities of valuable supplies from the Japanese.
S: Largely machinery.
M: They were getting ready to move it.
S: 1,750,000 spindles of cloth were in one place.
M: Any depots.
S: Some. Quite large quantities.
M: Are you going to find the Japanese civilians trying to stay here rather than go back to their own country. You know Japan is pretty well burned out. They are going back to great hardships. The Army families did not come, did they?
S: No. One of the great difficulties in handling the Japanese is our own military strength. We send a number of divisions to watch over them, we don’t have anything.
M: But you feel that you have the rice supply for next three months.
S: To middle of February.
M: Of course, it is better if we remove them right away. There is a shipping capacity of about 500,000 a month. Did you hear anything about the Philippine puppet Government.
S: They got them in Japan and took them to the Philippines.
M: You know, those fellows had quite a time. They took them to Formosa and to Japan and then we got them.
S: One of our puppets went to Japan and became a monk. When we got hold of him and brought him back a monk.[Page 813]
M: That’s pretty good. Brought him back a monk. You know it’s difficult for those fellows. They have no place to go.
S: The only place might be Spain or Argentina.
M: I don’t think Spain would [agree?] to take them.