The Acting Secretary of State to General Marshall59
414. The following comment, responsive to your request of July 2,60 is offered in the realization that some portions may be obvious to you but in the hope that others may prove helpful in meeting the problems with which you are faced.
The basic difficulty in the situation, as you have frequently indicated, is the absence of mutual trust, not only as between the Kuomintang and the Communists but also as between the two parties and the Chinese people who, alarmed at the prospects of civil war, are distrustful alike of the motives of both parties.[Page 1296]
One of the most important steps that can be taken now is a revival of political discussions based on the PCC resolutions. Your effort therefore to obtain agreement to meeting of a high level group to discuss political solution appears to us as thoroughly sound tactic. Knowledge that political discussions were in progress should be helpful in calming those who fear early outbreak of civil war and should also act as a brake on actions of diehards in each of the political parties.
We do not believe that Chiang, as some reports indicate, has lost control over reactionary political elements surrounding him or over trigger-happy anti-Communists in his army. He is in a dilemma. Neither he nor the Communists want war but he fears the consequences of peaceful agreement. He is closely tied to his reactionary political and military cronies but he is most anxious to avoid responsibility for jeopardizing the success of your mission. Under pressure of expediency we believe he will choose to avoid war but we cannot ignore, as you do not, possibility that he may choose the other course. At this juncture it would be a particularly helpful gesture if Chiang could send Ho Ying-chin61 off on some innocuous tour or mission abroad and give Chen Li-fu62 a similar mission or some diplomatic post.
The Communists are anxious to avoid hostilities, we believe, because they are over-extended militarily. They may therefore be prepared to make relatively extensive concessions. We feel that any attempt by the Communists to seek improvement over the arrangement that was agreed upon in the PCC resolutions or to make permanent any gains in their military position since the January truce can be successfully resisted.
Chiang’s fire-eating political and military advisors may be right in their assumption that the Kuomintang would be successful in the initial phases of a civil war. They could probably extend their own area of control and contract that of the Communists. This is the thesis and method followed by Chinese warlords for the past three decades. An extension of territorial control has been looked upon as an end in itself. But Chiang cannot by these methods eliminate the Communists as a military force from China and certainly not as a social and political force. Furthermore, maintenance of his position in any newly acquired areas would entail utilization of military force on an extensive and ruinously expensive scale.
In balance we feel that with your guidance the Chinese, fearing the consequences of civil war, will not cease endeavors for a peaceful [Page 1297] settlement of some kind. But we must face the possibility (1) of a stalemate without civil war or (2) of a breakdown resulting in civil war. In case of (1), we might continue to maintain contact with both groups but relax for a time our efforts at bringing them together for agreement even though there may be isolated conflicts. It is not improbable that a period of inactivity may bring wiser counsels to the fore on both sides. If the stalemate is clearly due to Kuomintang intransigence, material support from this country could be withheld. In case of (2), while continuing to recognize and maintain relations with the National Government of China, all material support during civil war could be withheld and we could consider withdrawal of American military and naval forces from China except in so far as and for as long as they are needed to protect and evacuate Americans in danger zones.
The attitude of the Soviet Union is manifestly of paramount importance. In either eventuality, but more urgently in case of (2) we could endeavor to obtain from the Soviet Government firm agreement to a hands off policy. If such an agreement were reached the situation in China, deplorable as it would be from the standpoint of reconstruction and the welfare of the Chinese people, would not differ in character, although it might in degree, from situations that have prevailed there off and on during the two decades preceding the war. If an agreement cannot be reached and Soviet support of the Communists becomes a factor, Ave should make a complete assessment of all phases of the situation to determine whether there is a real threat to our national security and vital interests.
The foregoing are, as you will understand, our informal and personal views. Your own recommendations in the light of actual events would of course be of primary importance in reaching a decision as to this Government’s policy and course of action.