Foreign Relations of the United States, 1946, The Far East: China, Volume IX

Marshall Mission Files, Lot 54–D270

Minutes of Meeting Between General Marshall and General Chou En-lai at 5 Ning Hai Road, Nanking, June 27, 1946, 1:30 p.m.

Nanking, June 27, 1946, 1:30 p.m.

Also present:	Mr. Chang
	Colonel Caughey
	Captain Soong

General Marshall: I appreciate General Chou’s coming this afternoon at this hastily arranged hour. I was absorbed in a discussion with the Generalissimo from 9:30 until noon. So I did not get back here until almost 12:30.

I think the best method of procedure would be for me to outline the principal statements made by the Generalissimo after he read the notes of General Chou’s discussion yesterday. In the first place, we were not able to deliver the notes until after 8:00 last night. We had no opportunity to correct them. They were often expressed in rather doubtful language, and then it apparently took them until an early hour this morning to complete the translation into Chinese, and the Generalissimo had not seen them, apparently, until 8:00 this morning. So he had only read very hastily General Chou’s comments. Therefore he had not reached any firm conclusions. He told me he would like to consider them more carefully this afternoon and then talk about them later. However, he made these preliminary comments:

Replying, apparently, to General Chou’s statements regarding the procedure of the National Government in a manner which was not productive or did not lead to a cessation of hostilities, the Generalissimo said this:

That as he saw it, following the PCC agreement in Chungking, it had been the Communists’ unwillingness to appoint or nominate the members for the National Council, I believe, and designate representatives to the proposed assembly to convene May 5, which had made it impossible for the Government to proceed with any reorganization. Also, that on the military side, the Agreement of February 25 providing that a list should be submitted three weeks after the signing conveying certain necessary information regarding troops, divisions, etc., as a basis for the detailed plans to regulate the demobilization and reorganization; another list was to be submitted three weeks thereafter. The Government had prepared its lists and the Communists had not yet, six months later, submitted theirs. He therefore felt that the obstruction to the civil reorganization and to the military reorganization had been on the part of the Communists.

Referring to General Chou’s statement regarding a fundamental issue with the Communist Party, that is, the preservation of the local governments in the areas occupied by them for the advantage of the peasantry, the Generalissimo stated to the best of his knowledge there were no indications of any, certainly not in a material way, refugee movements from the Government areas to Communist areas. On the other hand there had been a movement of something approaching 5 million people from the Communist controlled areas to the areas under Government control, which, to his mind, would indicate that the procedure of governing by the National Government was apparently more satisfactory to the people than that in the Communist controlled areas. The Generalissimo stated that he had never intended to imply that there would be no political readjustments but that it was his desire that troops should be so reestablished that clashes would be avoided and political negotiations could therefore be successfully conducted.

He stated, very much as I had previously indicated, the Government insistence would be that the clearing of the Tsingtao–Tsinan railroad, the evacuation of Chengte, Ku-pei-kou and Antung province, north Kiangsu and Harbin should be agreed upon for an early specified date and that the entry of the Government troops into those places should be agreed to at some time within a month. The remaining places where the Government indicated its insistence that the Communist withdraw should be accomplished within one month, but the Government troops entering into the area could be delayed for two or three months more.

Regarding General Chou’s point that the troops could be stationed in definite localities or spots rather than areas he accepted that. However, he wanted to know General Chou’s meaning of, “waiting until reorganization of the Government before making provisions that the administrative affairs will be left entirely to the reorganized Government without interference by the army.” Was General Chou referring to the general governmental reorganization or to the local civil reorganization?

That is a summary of the views expressed by the Generalissimo after hastily reading General Chou’s comments of yesterday and considering the Communist detailed proposal for the redistribution of troops.

I discussed with the Generalissimo the question of Kiangsu to see if there was any possibility of a compromise arrangement. He gave me no indication that there was. He stated that the Government insisted on that condition.

I discussed with him the dispositions in Manchuria. He had already expressed himself regarding Harbin and Antung, but he had not looked into the matter sufficiently to talk regarding the other details. I discussed with him the disposition of the Communist armies along the Peiping–Hankow railroad, and that portion that runs south to the junction of Lunghai railroad with regard to the location of Communist units in cities along the railroad. He did not make any reply, but I think there is a possibility that, judging from the fact that he did not immediately reject the idea, that might be resolved favorably. I told him I thought all of these discussions about the distribution of troops had become unfortunately involved in the indication of arrangements, and later he accepted the proposition that definite places would be indicated for troops.

General Chou: You mean he accepted the idea of spots?

General Marshall: Yes, and I explained that was in conformity with the Agreement of February 25.

I think that covers the field of discussion this morning. He terminated the meeting by stating that he would go more carefully over the notes of General Chou’s statement this afternoon.

General Chou: I appreciate that you told me the high lights of the Generalissimo’s statements. However, on two points of the Generalissimo’s statement, though I do not want to go to length in my reply, I want to comment briefly as follows:

The first point: the Generalissimo believes that the delay of political negotiations rests on the Communist Party. I think that is an unfair statement because, as everybody knows the true fact was, as I have already told you, that after the PCC meeting on February 1st I went to see the Generalissimo, telling him that Yenan was prepared to join the reorganized government. I also indicated to him as to who of the Communist Party would join that government. I even mentioned that General Mao was prepared to join it. But at that time the Government’s idea was rather to wait for the decisions for the party meeting in March, and so the reorganization was delayed for one month. The Government further has the intention to let the whole name lists prepared by the other parties be passed by the Kuomintang Party meeting itself, and that was the cause for the delay. Furthermore, the Government has also intended to change the ratio of those members who have to be appointed with the approval of the Communist Party, as it has been understood at the PCC. Consequently, the Government’s intention is to change the ratio of the 14 men who have to be appointed with the consultation of the Communist Party. Under such circumstances we see no way to present the name list because even the seats allotted to the Communist Party were not fixed then. How can we present the list?

Later in February the student demonstrations and other disturbances brought a lot of confusion to the political situation. The Kuomintang Party meeting in March again overturned many decisions after the PCC and the resolution of the Kuomintang Party was again made known to the public, which caused a lot of complaint about the Communists as well as other parties. Later on, because of the complaint of the other parties, the Kuomintang representative explained that its decisions published in the paper are not true decisions of the Kuomintang Party but merely their suggestions. However, this list does not alter the fact that those decisions have been published in the paper. As regards the revision of the draft constitution, we made a further compromise by conceding on three points, but the Government is insisting on further revisions, and thus the second dispute led nowhere.

Apart from that, the Government also asked for an increase of the seats of the National Assembly, so that the ratio of the representatives of the various parties will have to be redetermined. These are the factors which made the implementation of the PCC decisions impossible, and consequently the convention of the National Assembly was delayed.

It can be seen therefore that we are not responsible for the delay because we never asked for any revisions of the PCC decisions or any change of the procedure. It is the Kuomintang which repeatedly asked for a revision and for a change of the procedure. At the Kuomintang Party meeting its intention to overthrow the whole PCC decisions was indicated. Therefore, the responsibility does not lie on us but on the Kuomintang Party.

The second point: regarding the military customs. I admit that we did not present the lists called for by the Army Reorganization Plan. The reason is that after the announcement of the Army Reorganization Plan we had hoped that the fighting in Manchuria could be stopped immediately because even the Army Reorganization Plan includes provisions for Manchuria, and we have made a considerable concession with regard to Manchuria. However, despite these considerable concessions the fighting was not stopped. On the contrary, the fighting is taking bigger and bigger proportions. This makes it impossible for us to get the complete lists of Communist troops, particularly in Manchuria.

A second cause was the outgrowth of hostilities in China proper. These situations make the implementation of the army reorganization impossible. To submit a list has become merely a matter of form. We are of the conviction that if the lists are presented to the American side alone it would be of no bad consequence. For example, in the past we have presented all the materials with regard to our troops to the Yenan observers group, and I have presented the lists, particularly to Colonel Yeaton.⁹¹ This shows trust in the American side, but to present those lists to the American sub-committee so that the lists would be known to the Government is a matter we consider inadvisable at a time when the hostilities have not yet been stopped. However, this does not imply that we are not interested in the army reorganization and demobilization. In actual fact, since March, and in certain places since February, demobilization was being carried out in the Communist areas. By May the demobilized personnel reached one-third of the total strength of Communist troops in China proper. We also participated with interest in the combined Chief of Staffs conference under the military sub-committee. At that time we have made many proposals and suggestions to the combined Chiefs of Staff. At the time General Marshall was away and it was led by General Gillem.⁹² Owing to the conditions of the fighting in Manchuria the military sub-committee itself could not even talk about the reorganization of troops so, of course, it shows that little could be done. So the delay was primarily caused by the conditions of the fighting in the Northeast, and it was not due to any deliberate delay on our part.

In the third place, regarding the refugees and the Generalissimo’s statement that because there are so many refugees coming out of the Communist areas this proves the people support the Kuomintang rule. I think this can be used effectively as a propaganda method but if we want to judge whether a local authority does enjoy the support of the people or not we have to look at his policy and the result of that policy. It is not as simple as it first may appear. As a matter of fact, many people have come out of the Government areas to Communist areas. Those people in Government areas who have no money and no land are being oppressed. We did not adopt the same procedure as the Government is now doing by organizing refugee groups, and letting them cause disturbances here and there. Our procedure is rather to get the people established, to obtain land, to have agricultural implements, to loan money and to reloan on houses, building and lands, so that they can establish a living. Such things happen in the Northwest, around Yenan, Shansi, Hopei, a part of Honan, Shantung, and a part of Kiangsu and Antung. The total number of people affected is certainly not only several hundred thousand but even has reached millions. Incidentally, now that we are undertaking the repair of the dams of the Yellow River, we have to displace many inhabitants now staying on the river bed. Those are mostly refugees coming from the Government areas. We have established them in the river bed. Now that the Yellow River will be diverted to its old course we have to relocate them again. Thus, it can be seen that we did not use those displaced persons for propaganda or to stage demonstrations against the Kuomintang. A second factor is that it is rather difficult for the people to go from the Government area to the Communist area, due to a heavy blockade. Many people were put into custody because they tried to go through the blockade.

Regarding those refugees which the Government referred to, I admit a part of them are coming out of our areas. They are leaving because the peasants in our areas are now conducting a rent reduction and interest reduction movement. The peasants are now going to own land themselves. As I stated yesterday, unless an agricultural formula is introduced the productivity of the peasants will not be increased and there would be no way to increase the purchasing power of the peasants. Therefore there is no way for the industrialization of the country. Many American friends understand this very well. For example, Mr. Wallace⁹³ mentioned this point when he came to China two years ago. Our policy is just as the people’s—to increase the living standard, thereby the productivity of the peasants. These peasants would not be terrorized by the landlords who would prefer to continue their exploitation. But, we are trying to divert the rents of the landlords for investments in agriculture and commercial enterprises.

General Marshall: Which rents are you diverting?

General Chou: The landlords collect rents from the land and we are trying to persuade, or teach, them to use the money from land rents for commercial and agricultural enterprises. Unless they get the money into the hands of commerce to increase production, the feudalist system will be perpetuated. Since such a system as ours cannot be enforced by law, we are trying to persuade the landlords, or to encourage them, to adopt this procedure. However, many of the landlords are reluctant to adopt it. Of course, a part of them accept this procedure but others do not. In other areas, where the Communist local authority has consolidated itself, this procedure has been accepted favorably by the landlords, as in Shansi or other parts of North China. Those landlords who are hostile to such a procedure are trying to intimidate other people to flee from our areas.

A third factor is that the secret police elements are propagating rumors that we are going to conduct massacre, and create terrorism. It is particularly easy for the secret police elements to do this because they can easily infiltrate from the Government areas to our areas, and a part of the refugees believe what they say. The landlords could leave if they wished particularly since we would not put any restriction to their movement. Had we enforced the same kind of blockade as does the Government, they would have no way to go out. Our policy is rather to welcome them and to welcome their return if they want to return.

Dr. Tsiang⁹⁴ of CNRRA talked to me about this matter and I told him we would welcome their return and that we would take care of their land. Of course they have sold a part of their land to the peasants themselves, but other parts they can still preserve and we will protect their private property. Today the living standard in the large cities, such as Shanghai, is so high that even the big landlords cannot afford to stay away and therefore we welcome them to come back.

The Government’s tactics now are not to try to solve those problems, but rather to capitalize on the refugees for propaganda reasons or to use them to stage demonstrations, such as the Shakwan incident.

General Marshall: Which incident?

General Chou: The incident at the Nanking railroad station.

To my mind it is not true that this situation would prove that the people are moving to Kuomintang districts in North Kiangsu. As a matter of fact the number of the refugees was not so large as the papers reported. Various people from the Democratic League in Nanking and people who would have a different view than ours also say the movement is not so large. The Democratic Leaguer, Mr. Ling, chairman of the Kiangsu Provincial Council, told me the figure is by far not so large. Even so, we welcome their return and we would render them protective service. We have in no way driven them out of the Communist areas. They did it of their own accord.

My attitude towards the Generalissimo’s press release is that as soon as the Central Government is reorganized then, in accordance with the joint platform agreed upon,⁹⁵ the local authorities will be readjusted accordingly and proper elections will be held. Then the people can determine for themselves what personnel and what policies they would like to have. For example, in Shanghai there are now several hundred thousand workers who favor the Communist Party but we cannot base our claim on that for the control of Shanghai. As to North Kiangsu, the 20 million population is far larger than the number of refugees there. Therefore, the Government cannot use them as a basis to claim Kiangsu. A proper election can settle the question. That is why I hold the view that the military reorganization should not interfere with the local administration, which can be decided only by proper election.

In regard to the Generalissimo’s question as to what I imply the relation of the army and local authorities to be, I wish to give the following reply. My view on the separation of army and civil administration implies that the troops garrisoned in a certain area would not interfere with the local administration. Only after reorganization of the Central Government, could a local re-election settle the problem of the local authorities. Otherwise, as soon as the army comes to a certain place the local authorities have to readjust themselves accordingly. For then the Kuomintang would send personnel to rule over that area. Such a procedure would constitute a party rule, which we adamantly oppose.

Coming to the specific matters: As I have stated yesterday that we should divide discussion between Manchuria and China Proper. That is my suggestion. As to Manchuria, we may consider the detailed problem of locating Government and Communist troops in certain specific areas and try to find a solution for that. For example, we may consider a readjustment at Harbin. I am prepared to consider such problems in connection with Manchuria. As to China Proper, the hostilities have stopped for a long time and since so large an area is involved it is thought fears of the opposing party will be created. I wish to state definitely that we are not in a position to accept the Government’s claim of the Tsingtao–Tsinan railway, Chengte, Kupeikou, or such places. However, if the Government fears that they are menaced, I can state that in certain places, such as North Kiangsu or Shantung, we can consider stationing a smaller force or no force at all. But this does not imply in any way that the Government troops may enter our areas so that the people in that part will again be oppressed. This is beyond what we can do.

Now, turning to the variance of views between the two parties. The gap is still very wide and I appreciate General Marshall’s devoting so much of his time to conversations with both sides. Both yesterday and today I presented some concrete proposals. Now there are three days left before the deadline and I hope General Marshall will consider what is the prospect of reaching a partial agreement. Our attitude is clear—whether the cessation of fighting will proceed or whether an agreement should first be raised on outstanding issues—we have only one goal, and that is peace. In this way we differ from the Government which is rather stubborn in its pursuit of a preconceived plan. But our anxiety for peace cannot be capitalized by the Government to force terms upon us and to force us to accept their terms by threatening war. We have made a large concession by conceding to discuss the military reorganization first before the political questions are discussed. Now we cannot make a concession to a point where we, while talking about army reorganization, expose our people to oppression. Should we do so, we would fail and the people would desert us.

General Marshall: As I told General Chou yesterday, I am at a loss as to how to proceed because, as General Chou has just said, the two sides are so far apart and they are so adamant in their positions. I find that in both my discussions with the Generalissimo and with General Chou, about the time a new idea forms in my mind as to possible compromise, some further statement obliterates that as a possibility. If I had two or three weeks I might make more definite progress except for the fact that probably a new series of events would develop which would completely impair the previous situation. Before discussing Manchuria, I would like to ask General Chou some questions. I wish to clarify in my own mind specific possibilities and, if possible, assurances. My impression is the Government is attaching more importance to Kiangsu than to any other particular area and that its concern over the situation there is not, I imagine, other than military. The proximity of the Communist forces located there close to the city of Shanghai and to the national capital presents a constantly disturbing factor and a probable source of continued incidents which would at all times be very unfortunate in their consequences. I understood General Chou to state that, while he was not committing himself, nevertheless there was the possibility, however remote, that it might be arranged for the evacuation of Kiangsu so long as the Government troops did not enter. Was that correct?

General Chou: More explicitly I have in mind at this moment that North Kiangsu will be garrisoned with a small force but the Tsinan-Tsingtao railway will be ungarrisoned. I have in mind, without consulting others, that previously, at the time of 25 February, the Government agreed to station one Communist army there in the first phase and 2 Communist divisions there at the end of the 18 months. I therefore believe that since the Government now fears our forces there are a menace that the strength can be reduced. As to the Tsinan-Tsingtao section, since the Government has a fear that the line may be interrupted by the Communist forces, I may consider to leave it ungarrisoned by Communist troops. Of course this in no way prejudices the local authorities.

General Marshall: (A general discussion took place.) I understand from the discussion which we have just had that while General Chou is not authorized and not even informed as to the possibility of compromises regarding the disposition of Communist troops in Kiangsu, that he has been willing to consider with me the following possible readjustment:

That the present Communist propositions in Kiangsu contemplate three concentrations: one at Tung-t’ai, one at Huai-an and one at Su-ch’ien would be altered by the movement of the troops at Tung-t’ai, to the north of the Lunghai railroad. There would then remain under possible agreement the Communist divisions at Huai-an and another at Su-ch’ien, with no other Communists army troops in the province.

Furthermore, that the Government would maintain or reduce its present military dispositions in Kiangsu and that the area from which the Communist troops have been withdrawn would not be entered by the Government troops. Also that the local governments established in that region would be permitted to continue in their functions.

I understood General Chou also to state that he was considering the practicability of an early establishment of the Communist forces in the two areas mentioned, Huai-an and Su-ch’ien. He did not know whether or not that could be accomplished in the first month. A further point in the discussion related to the operation and freedom of shipments from the coal mines at Tsaochuang. General Chou called attention to the fact that the Communist proposal as submitted to the Government involved the withdrawal of all troops from that region, leaving no garrison troops. Therefore, under the communication agreement left the railroad free for operation of the coal mines, which would be operated under the present committee arrangement.

General Chou further stated, in connection with the discussion of Kiangsu and the general region to the north, that again while he was not authorized at the moment to commit himself he was considering the proposition of altering the Communists’ proposal to the Government so that the division of Communist troops located at I-tu on the Tsingtao–Tsinan railroad would be located away from the railroad, leaving the government forces at Tsinan, at Wei-hsien and at Tsingtao, but that withdrawal of the Communist divisions from I-tu would only be made if the Government agreed not to locate military forces at other points along the railroad. General Chou further stated that this clearing of the railroad of Communist troops would be agreed to only on the consideration that the local established government in that region be permitted to continue to function.

91. Col. Ivan D. Yeaton, commanding officer of the U. S. Army Observer Group at Yenan.
92. Lt. Gen. Alvan C. Gillem, Jr., U. S. Army.
93. Vice President Henry A. Wallace, who visited China in June, 1944; see Foreign Relations, 1944, vol. vi, pp. 216 ff.
94. Tingfu F. Tsiang, Director of the Chinese National Relief and Rehabilitation Administration.
95. See summary of conversations as issued October 11, 1945, Department of State, United States Relations With China, p. 577.