Memorandum by the State–War–Navy Coordinating Committee to the Secretary of State

SWN 4367

Subject: Security Implications in Manchurian Situation.

Enclosed is a copy of SWNCC 291/1, a report by the State–War–Navy Coordinating Subcommittee for the Far East, which has been [Page 934]transmitted for approval by the State–War–Navy Coordinating Committee.

In view of the Recommendations contained in paragraph 5 a, it is requested that the Department of State transmit, as a matter of urgency, the Conclusions of this paper as contained in paragraph 4 to General Marshall for comment to include his opinion on the advisability of requesting Presidential approval of these Conclusions and that General Marshall’s comments, when obtained, be furnished the Secretariat, SWNCC, for circulation to the Committee for the action contemplated in paragraph 5 b of the Recommendations.46

For the State–War–Navy Coordinating Committee:

H. Freeman Matthews

Acting Chairman

Report by the State–War–Navy Coordinating Subcommittee for the Far East

[SWNCC 291/1]

The Problem

1. To consider implications bearing upon the security of the United States in the present and potential Manchurian situation.

Facts Bearing on the Problem

2. See Appendix “A”.


3. See Appendix “B”.


4. It is concluded that:

Soviet policy may be expected to concern itself increasingly with Manchuria and China during the decades immediately ahead. Encouragement is being given to Communist movements in East Asian countries, especially in China. The technique in all probability will be to control these movements through small groups of nationals who will seek to turn legitimate indigenous liberal programs to Soviet ends, who will infiltrate into government, and who will wittingly or unwittingly guide their nation into the Soviet orbit. Such “fifth column” technique has proved effective in varying degrees in Soviet-dominated areas in Europe, and although conditions in China are, as [Page 935]pointed out in paragraph 4 b below, not identical, the possibility that Soviet methods will be successful in China is one which must be faced.
In Manchuria especially the U. S. S. R. is expected to seek to foster the establishment of an autonomous state dominated by the Soviet Union. Such a state would be receptive to Soviet requests for economic concessions, would eliminate any potential threat to Siberia, and might eventually be absorbed in the Soviet Union. With or without such physical incorporation into the U. S. S. R., a Manchuria integrated into the Russian economy would prove a grave threat to the United States as well as to China. The resulting self-sufficiency of the U. S. S. R. in the Far East would, taken together with her western industries, place under the control of the Soviet Union the greatest agglomeration of power in the history of the world. China without Manchuria would be no effective counter-poise to maintain the balance of power in the Far East.
To counter this probable long-range Soviet program the United States must adopt a policy aimed at the orientation of the people of Manchuria in the direction of China and at the integration of Manchuria into the Chinese economy. The initiation and implementation of such a program must remain a Chinese responsibility, but the United States should inform the Chinese Government of its vital interest therein and of its willingness to assist as outlined below.
A prerequisite to any constructive program to win the allegiance and support of all Chinese groups, not only in Manchuria but also throughout China, must be a broadening of the Chinese Government from a one-party to a multi-party government, representative of all phases of truly indigenous political opinion. It is felt that communism is in opposition to the basic Chinese way of life and that the present Communist party in China has won a following, not because of real devotion of the people to Communist doctrines emanating from Moscow, but rather because of the ability of Soviet-trained leaders to exploit popular opposition to the reactionary and oppressive one-party rule of the Kuomintang. For that reason, the United States should give every encouragement to middle-of-the-road groups, such as the Democratic League and the Left Wing of the Kuomintang, and should continue its efforts to convince the National Government of the vital necessity for broadening its base of participation so that other political elements may secure adequate representation.
The United States should continue to urge the Chinese Government to inaugurate and implement an effective program of reform and reconstruction throughout Manchuria, which would facilitate the adoption of a similar program for the whole of China. Such action would be the best demonstration to the people of Manchuria of [Page 936]the good faith of the Government and would assist materially in the achievement of political peace and the creation of a truly representative coalition government.
Specific points which such a program should embrace are the following: (1) removal of undesirable civil servants and appointment in their stead of able administrators who understand the Northeastern Provinces; (2) release of political prisoners, (3) effective land reform, (4) moderation of taxes, (5) elimination of usury through the creation of agricultural banks and cooperatives, (6) introduction of an effective agricultural program, including experimental stations and work in animal husbandry, (7) improvement of working conditions in a program for industrial rehabilitation, (8) establishment of adequate medical centers, (9) a broadened system of education, and (10) maintenance of strict control over the armies stationed in Manchuria, to eliminate depredations which in the past have alienated the people.
The United States should seek to convince China of the absolute necessity for such a program by making further U. S. assistance to China contingent upon the adoption of a reform program. The United States should be prepared (1) to make further loans through the Export-Import Bank for the rehabilitation of existing railroads in Manchuria (except those controlled by foreign interests), and for other projects, (2) to furnish trucks and road construction equipment, (3) to furnish farm equipment and fertilizers, (4) to give vigorous support to the transfer from Japan of factories and machinery on China’s reparation account, (5) to undertake immediately a program to make available to China as many trained technical assistants and advisers as possible, and (6) to support a request from China for the carefully safeguarded, temporary retention in Manchuria of Japanese technicians for utilization in the industrial rehabilitation program. In furthering this program, all aspects of an educational program for China, including the training of civil administrative and technical students, should be carefully considered.
While encouraging China on a positive program as outlined above, the United States should by all diplomatic means at its disposal and by judicious use of publicity counter every effort of the U. S. S. R. to expand its sphere of influence and economic control in Manchuria. This would mean that the United States should win and hold the confidence of the Chinese Government so that the United States Government would be kept informed of any and all agreements which the U. S. S. R. might desire to enter into with the Chinese Government.
  • The United States Government should continue firmly to maintain its position that industrial plants and equipment formerly owned by Japanese in Manchuria represent Japanese external assets which should be allocated to China and the reparations settlement, and cannot be recognized as “war booty” legitimately subject to removal by the Soviet forces. It should insist that any such removals should be reported by the U. S. S. R. and be debited against the Soviet share of reparations from Japan. It should refuse to approve any allocation of Japanese reparations to the U. S. S. R. which fails to take account of such removals within the total reparations apportionment of that country, and it should, if necessary, use any other reasonable means of pressure in an endeavor to make it clear to the Soviet Government that the U. S. Government will not accept the Soviet Government’s point of view on this question. Any modification of the above position which might be considered desirable in the future should be made only under specific instructions from the Secretary of State.
  • j.
    The United States should support the Chinese Government in holding the U. S. S. R. to the strictest possible interpretation of the Sino-Soviet Treaty of August 14, 1945.48 The Chinese should be encouraged to counter any attempt by the U. S. S. R. to broaden the privileges granted under this treaty by the knowledge that their protests will be strongly endorsed by the United States.
    The position of the United States vis-à-vis China and Manchuria is exceptionally strong, for the United States will be continuing its historic policy of insisting upon the territorial and administrative integrity of China, upon non-interference in China’s internal affairs, and upon the equal opportunity of all nations in China’s commerce and economic development. This traditional policy coincides with the vital interest of the United States that Manchuria remain an integral part of China and not be utilized by Russia to create a powerful force in Eastern Asia that would constitute a grave threat to the United States.


    5. It is recommended that:

    SWNCC request that the Conclusions of this paper be transmitted urgently by the State Department to General Marshall for comment, including his opinion on the advisability of requesting Presidential approval of the paper, prior to final consideration by SWNCC; and
    Upon receipt by SWNCC of General Marshall’s comments, [Page 938]SWNCC consider the Conclusions of this paper as a matter of priority, in the light of these comments, and upon approval by SWNCC, submit the paper to the President for approval as definitive U. S. policy.

    [Subenclosure 1]

    Appendix “A”

    Facts Bearing on the Problem

    The historic American policy toward China, enunciated originally by John Hay49 in the Open Door notes50 at the turn of the century was embodied at the time of the Washington Conference of 1921–22 in the Nine-Power Treaty51 guaranteeing “the sovereignty, the independence, and the territorial and administrative integrity of China.” This formed the basis for the protests of the United States against the Japanese aggression in Manchuria in 1931. Throughout the period of Japanese occupation of Manchuria the United States consistently refused to recognize the Japanese puppet state of “Manchukuo” maintaining that territorially and administratively Manchuria was an integral part of China.
    The United Nations Charter,52 to which Russia, China and the United States have adhered, pledges members to refrain from the threat or use of force against the territorial integrity or political independence of any member state, or in any manner inconsistent with United Nations purposes.
    At the conclusion of the Cairo Conference in December 1943 President Roosevelt, Generalissimo Chiang Kai-shek, and Premier Churchill issued a statement declaring that “all the territories Japan has stolen from the Chinese, such as Manchuria, Formosa, and the Pescadores, shall be restored to the Republic of China.”53
    At the Yalta Conference in January 1945 the United States agreed to use its good offices to effect a Sino-Soviet agreement which would restore railroad and naval base rights which Russia possessed in Manchuria prior to the Russo-Japanese War of 1904–05.54
    The Potsdam Declaration of July 1945, signed by President [Page 939]Truman, Attlee and Stalin,55 affirmed that “the terms of the Cairo Declaration shall be carried out.”
    The Sino-Soviet Treaty of August 14, 1945, with accompanying agreements,56 provides that Russia shall have a half interest, for the ensuing thirty years, in ownership and operation of Manchurian trunk railways, joint use of Port Arthur as a naval base with the right of maintaining armed forces in a specified area thereabout and creates a free port at Dairen with a Russian harbor master and Russian lease of one-half of all installations and equipment. Russia expresses its readiness to extend moral and military aid to the Chinese National Government, as the legal government of China, and clearly recognizes Chinese sovereignty over Manchuria.
    In an exchange of notes relating to the treaty there occurs the following clause: “In the course of negotiations on the ports of Dairen and Port Arthur, also on the joint operation of the Chinese–Changchun Railway, the Soviet Government regarded the Three Eastern Provinces (Manchuria) as part of China and again confirmed its respect for China’s full sovereignty over the Three Eastern Provinces and recognition of their territorial and administrative integrity.”
    The United States at the time of the negotiation of the Sino-Soviet treaties received oral assurances from Stalin that the U. S. S. R., would make a public statement expressing support in China, including Manchuria, of the Open Door policy, such a statement to be made in conjunction with a similar pronouncement by China.57 No such announcement has since been made.
    By the terms of capitulation of Japanese forces in Manchuria on September 2, 1945, Russia accepted the surrender in the name of the Allies, including China,58 and asked no specific benefits for herself.
    United States policy toward China was outlined in a document given General Marshall in December 1945,59 and substantially reiterated [Page 940]in a public announcement by the State Department, December 15, 1945.60 This policy states the firm belief of the United States Government that a “strong, united and democratic China is of utmost importance to the success of the United Nations organization and for world peace,” affirms the necessity of restoring all China, including Manchuria, to effective Chinese control, states the presence in China of United States armed forces, including Marines, to be for the purpose of assisting the disarmament and evacuation of Japanese troops in liberated areas, and acknowledges the necessity for governmental reforms in China under a unified Chinese National Government along with the effective integration of all Chinese armed forces into the Chinese National Army.
    The State Department on February 9, 1946 reaffirmed the Open Door Policy in identical notes to the Governments of China and the U. S. S. R.,61 protesting the reported negotiation of agreements which would lead to exclusive Sino-Soviet control of industrial enterprises in Manchuria, and further protesting the reported removal by the Russians, as war booty, of industrial equipment in Manchuria. In replying to this note, the Chinese Government stated that the U. S. S. R., claimed all industrial equipment which had contributed to the support of Japanese forces, as war booty, but had offered to turn a part of this over to the Chinese, the remaining heavy industry enterprises in Manchuria to be jointly operated by China and the Soviet Union. The Chinese Government note further stated that these proposals had been found unacceptable. The Russian reply was unsatisfactory in arguing that Open Door principles would not be violated, since only a portion of former Japanese industry in Manchuria would be operated by Chinese-Russian stock companies, and unsatisfactory in that it reaffirmed the “war trophy” character of all industrial enterprises which contributed to support the Japanese Kwantung Army. The situation remains unchanged, despite subsequent and stiffer U. S. protests, to which the Soviet Union replied as before.
    Withdrawal of Soviet troops from Manchuria, originally scheduled for three months after the defeat of Japan and then for December 3, 1945, was twice delayed at Chinese request, the Chinese finding it impossible to send their troops rapidly enough or in sufficient strength to take over. This was in part a result of the Soviet refusal to permit the use of Dairen as a point of debarkation for incoming National Government troops.
    In January and February 1946, all political elements in China had agreed, with General Marshall acting as mediator, (1) to reorganize and broaden the National Government to include Communist party, Democratic League, and non-party groups, (2) to redraft the Constitution for presentation to constituent assembly of May 5, and (3) to reorganize the existing armies in China into a truly National Army.
    The situation deteriorated rapidly in March and April, however, as irreconcilable elements within the Kuomintang and Communist party made their influence felt and as the Communists exhibited a determination to prevent the National Government from assuming control in Manchuria. The National Government garrison in Changchun fell to the Communists on April 18 shortly after the Soviet withdrawal from the city. Harbin was occupied by the Communists without opposition on April 25, the date of the Soviet evacuation, Chinese National Government officials having previously fled the city by airplane.
    General Marshall hastily departed for Chungking from the United States on April 12 but was unable to effect a reconciliation of the two parties prior to the movement of the National capital to Nanking the first of May. His efforts to mediate and to stem the fighting are continuing.
    [Subenclosure 2]

    Appendix “B”


    General. The security of the United States turns in large part upon the effectiveness of the United States in preventing war, and this in turn depends in large part upon the sincerity and the cooperation of the major powers in seeking selective security through the United Nations. Both the United States and the U.S.S.R. have committed themselves wholeheartedly to the United Nations, yet in actual practice a world of difference separates the two nations in ideology, in national policy, and in their respective interpretations of basic international concepts and of existing international agreements. No area is a zone of greater potential danger to Soviet-American relations than Manchuria.
    History. Manchuria became internationally important only in the nineteenth century. It was joined to China by the Manchu emperors, last of a series of northern invaders assimilated by the Chinese. This unity was disrupted by nineteenth century imperialist activities [Page 942]which culminated in a period of Russian predominance interrupted by the Russo–Japanese war of 1904–05. By the Treaty of Portsmouth,62 Russia lost to Japan substantially those rights and privileges which the Sino-Soviet treaty of August 1945 has restored to the Soviet state. A steadily increasing Japanese foothold in Manchuria led to the complete exclusion of China after the Manchurian incident of 193163 and the creation of a puppet state, “Manchukuo”, under absolute Japanese domination. Extensive exploitation of Manchurian industrial and agricultural resources made the area an arsenal of Japanese aggression during World War II; it was a keystone of Japanese long-term plans for world domination. The defeat of Japan returned Manchuria to Chinese sovereignty, but raises the question of which nation shall benefit in the future from Manchurian resources.
    Resources. Manchuria completes China’s “industrial crescent”, considered by the Japanese essential to an Asiatic empire. It possesses warm water ports in Dairen, Hulutao, Yingkow, and Port Arthur, an extensive railway system connected with China proper, Korea and Siberia, now in bad repair and poorly augmented by a road system, and extensive mineral, timber and agricultural resources. It habitually provides an annual exportable surplus of approximately one million tons of grain. It possesses a substantial part of available Asiatic sources of coal and iron together with adequate supplies of other resources essential to heavy industry, for the most part concentrated in southern Manchuria and fully developed for exploitation during the Japanese occupation. Coal deposits are estimated at 10 to 20 billion tons; iron ore at 2 billion tons.
    Population. The people are preponderantly Chinese, true Manchus comprising a relatively small minority. Japanese, Koreans, Mongols and Russians aggregate only about 3,500,000 in a total of some 42,500,000 people. Ethnic and cultural considerations incline the populace toward China. Manchuria possesses dissident “bandit” elements at least to the extent that they have traditionally existed in China, and will doubtless offer a haven to dissatisfied Communist Chinese elements.
    Present Military Situation. Armed forces of Russia, China, the United States and Japan are presently in, or in the vicinity of, Manchuria.
    Russian ground and air forces occupied Manchuria in the closing days of the war against Japan, but withdrawals are believed to be taking place substantially in accordance with Sino-Soviet agreements. [Page 943]These forces are elements of the Russian Siberian Army, the strength of which is estimated at 1,000,000 and all of which could readily be brought to bear in Manchuria. Under the provisions of the Sino-Soviet Treaty of August 1945 Russian forces may be employed in the Port Arthur naval base area indefinitely, and may utilize railways for transit purposes until the war with Japan is officially terminated.
    Chinese forces, both Nationalist and Communist, have entered Manchuria. Vigorous fighting between them is reported and the indications are that the present truce terms between rival Chinese factions in China cannot be applied to Manchuria. Thus far, Chinese Nationalist forces in Manchuria total over 150,000. Reorganization of Chinese forces to reach the post-war composition agreed upon by Chinese Nationalists and Communists will require eighteen months, at the end of which time a total of 50 Nationalist and 10 Communist divisions are contemplated in a single Chinese Army. For the present, numerous Chinese ground units are available, but are having difficulty in moving to Manchuria because of transportation deficiencies. They can be regarded as only partially effective in terms of weapons, equipment and training, according to conventional standards.
    U.S. forces, principally consisting of a reduced corps of Marines, are deployed in the Tientsin–Peking area as far north as Chinwangtao, and at Tsingtao. The U. S. Seventh Fleet, including three heavy and one light cruiser, but no aircraft carriers, among numerous lighter craft, is assigned to China waters; it could readily be reinforced with elements of other Pacific naval forces, most of which currently possess seriously depleted crew strengths. Depleted American air strength could be brought to bear on southern Manchuria from Korea, Japan and the Ryukyus. Substantial reinforcement of American forces, or the build-up of expeditionary forces in the area of Manchuria, would require many months in view of the rapid pace which demobilization has followed. Occupation forces in Japan and Korea are at a minimum, both in quantity and combat quality.
    Japanese forces, totalling some 700,000 are for the most part disarmed but their whereabouts is obscure. The Russians have made no reply to U. S. queries as to their intentions to repatriate these Japanese forces from Manchuria. On the contrary, reports indicate that extensive use is being made of Japanese military in the construction of fortifications at Vladivostok as well as in Manchuria.
    The Russians’ short-term military position vis-à-vis Manchuria is clearly superior to that of either the United States or China, or both together. Russia’s long-term military position in Asia requires further examination.
    Manchuria in relation to Russia.–Little accurate information [Page 944]is available as to the extent of industrialization achieved by Russia in Siberia. There are strong indications that she attempted to gain substantial self-sufficiency with respect to her Siberian Army, both in food and industry, during the 1930’s when relations with Japan were strained, on occasion, to the point of local undeclared hostilities. That these efforts proved inadequate is indicated by the J. C. S. 1313 series, exploring potentialities of Siberia as a base for operations against Japan. Russia’s efforts to improve east–west rail communications, together with her continuing military and diplomatic efforts to secure defense in depth for these communications, is added proof that self-sufficiency has not been obtainable to the extent considered desirable in Siberia. It is a reasonable assumption, however, that the addition of Manchuria, or control of Manchurian resources, would assure virtual autarchy to a Siberian region thus rendered capable of supporting major forces during extended combat operations. Intelligence estimates during hostilities with Japan indicate that Manchuria had the capability of supporting, with virtual self-sufficiency, about 1,000,000 Japanese troops. Manchurian grain should assist greatly in supporting an increased Siberian population. Russian interests in Manchuria are assured considerable freedom by the Yalta agreement and the confirming Sino-Soviet Treaty of August 14, 1945. The rights and benefits accruing to Russia under these agreements, while substantial, should not in themselves procure for Russia full economic control of Manchuria, but must on the other hand be regarded as setting the limits beyond which Russia should not be permitted to go. Should Russia succeed either in absorbing Manchuria or in orienting Manchurian economy altogether, or very largely, towards herself, it is apparent that the long-term result could be a degree of self-sufficiency for major forces in Asiatic Russia which would permit her conduct of a major war in that area with little regard to the fragility of communications between European and Asiatic Russia. Such a contretemps would greatly strengthen Soviet military potential. Its effect would be even greater, however, in terms of the decreased power potentialities of China.
    Manchuria in relation to China.–It can be definitely stated that, without full control and exploitation of Manchurian resources, China’s industrial development will be retarded until such time as technology can provide substitutes for coal and iron and for present methods of surface transportation. Under such circumstances, it would appear that China can remain in the foreseeable future a major power only in theory, and that, with Japan reduced to a third-rate power, no balance of power will exist in Asia. The only bars to Russian expansion at the expense of China in this event, will be Russian good will, thus far not prominently in evidence, United Nations censure, and the checks [Page 945]exercised by the United States or a combination of powers including the United States.
    Manchuria in relation to the United States.–Although the United States is attempting to maintain its position as respects the Open Door Policy in Manchuria, as in the remainder of China, it can be assumed that trade with Manchuria will not for decades assume real importance to our economic structure except as Manchurian resources can be utilized to strengthen China, improve her standard of living, and make of her a better customer for our products. While such an eventuality would be of considerable importance, it is the benefit to China itself which is of most importance to the United States in terms of our present policy toward China and in terms of our basic interests, which appear to require an Asiatic counter-poise to Russia. At best, during the next two generations, China can exist as an Asiatic counterpoise to Russia only by grace of the support she receives from the United Nations, strongly backed by the United States, or from the United States alone. At worst, without substantial control of Manchurian resources, China may increasingly become an economic and political vacuum into which a powerful and aggressive Russia may inevitably be drawn, regardless of American deterrent action short of war.
    1. The Department complied in its instruction No. 597, June 10, not printed.
    2. Signed at Moscow; United States Relations With China, p. 585.
    3. Secretary of State, September 20, 1898–July 1, 1905.
    4. Foreign Relations, 1899, pp. 128143.
    5. Signed at Washington, February 6, 1922; Foreign Relations, 1922, vol. i, p. 276.
    6. Signed at San Francisco, June 26, 1945; Department of State Treaty Series No. 993, or 59 Stat. 1031.
    7. Department of State Bulletin, December 4, 1943, p. 393.
    8. Agreement signed at Yalta, February 11, 1945, Foreign Relations, The Conferences at Malta and Yalta, 1945, p. 984; also Department of State Executive Agreement Series No. 498, or 59 Stat. 1823.
    9. Department of State Bulletin, July 29, 1945, p. 137. This declaration was issued on July 26, 1945, by the heads of Governments of the United States, United Kingdom, and China, and was signed by the President of the United States and the Prime Minister of the United Kingdom at Potsdam and concurred in by the President of the National Government of China, who communicated with President Truman by despatch. Later, in its declaration of war against Japan, effective Aug. 9, 1945, the Soviet Government joined in the declaration of July 26, 1945.
    10. For texts, see Department of State, United States Relations With China, pp. 585 ff.
    11. See memorandum by the Minister Counselor in the Soviet Union, August 8, 1945, Foreign Relations, 1945, vol. vii, p. 960.
    12. For the surrender terms as set forth in “Instruments for the Surrender of Japan, General Order No. 1”, see directive by President Truman to the Supreme Commander for the Allied Powers in Japan on August 15, 1945, ibid., p. 530.
    13. See President Truman’s message to General Marshall, December 15, 1945, entitled “U.S. Policy Towards China,” ibid., p. 770.
    14. See statement by the President, Department of State Bulletin, December 16, 1945, p. 945, or United States Relations With China, p. 607.
    15. Department of State Bulletin, March 17, 1946, p. 448; for correspondence, see vol. x, pp. 1099 ff.
    16. Signed September 5, 1905; Foreign Relations, 1905, p. 824.
    17. Japanese seizure of Mukden, September 18, 1931; see Foreign Relations, Japan, 1931–1941, vol. i, pp. 1 ff, and Foreign Relations, 1931, vol. iii, pp. 10 ff.