893.50 Recovery/2–648

The Consul General at Shanghai (Cabot) to the Director of the Office of Far Eastern Affairs (Butterworth)

Dear Walt: Although I have been in the Far East but three weeks, I think that the sharpness of some first thoughts and impressions derived in that time may make them of some slight interest to you with regard to the China situation—even though they are backed by such a wealth of inexperience.

Immediately upon arriving in Shanghai I was struck by the perfect field for the spread of Communism which it afforded. There is not only an immense disparity in wealth evidence in every part of the city; such wealth as there is belongs to the comparatively few, and the great masses seem literally on the ragged edge of subsistence. I understand that economic dislocations have not made the lot of the poorest people substantially harder; on the contrary their living standards have risen by comparison with pre-war standards. Nevertheless their misery is all too evident. On the other hand, too many of the wealthy people have made their money by means which are, to say the least, devious, and I am afraid spend it in ways which are, to say the least, heartless. Too often they seem to lack the virtues which might justify their privileges.

On the other hand, the intellectual leaders, if I understand correctly, are being severely squeezed by the progressive inflation. Naturally this factor, plus the corruption and reaction they see around them, has made them at least receptive to Communist propaganda if not actively sympathetic with it. This appears to be reflected in the university students who, as Ambassador Stuart put it, are 90% anti-Communist but also 90% anti-Government. Unhappily, so far as I yet have been able to see, the intellectuals have provided no outstanding liberal leaders, and the same is true of the really decent business men, who do not like the Government but who are not prepared to do anything effective about it (Lewis Clark49 quoted to me a Tientsin business man who said that they practically vomited every time they thought of the National Government).

The National Government appears to be so steeped in reaction and corruption, so split in factions, and so generally inefficient, despite [Page 468] outstanding exceptions, that it cannot assume effective leadership. From our military observers comes a picture of chaotic conditions in the Nationalist Armies, and such a lack of morale among the soldiers that they are no match for Communist zeal and fanaticism. Too often they simply don’t fight.

Among civilians I find a complacent fatalism with regard to the spread of Communism in China. They seem to accept the inevitability of Communist success and to be indifferent to its implications; they say placidly that the storm will pass, as have all other storms in Chinese history. It seems to make no difference if they belong to that group of Chinese which would certainly be the target of Communist witch hunting.

On the other hand, I find it difficult to agree with those observers who view the Communists as coming with gilded halos and wings to save and modernize China. I find the Communists mouthing today the same promises which they mouthed three years ago in Yugoslavia, and which they have there honored only in the breach since. It seems to me probable that if the Communists do succeed in winning all of China they will install in China a tyranny as subservient to Russia and a terror as brutal as Tito’s. Perhaps the Communists, even if they seem to win, will not succeed in taking over and dominating China completely, but their skill in other countries in knocking over one after another of the groups which might serve as the nuclei of successful opposition, while lulling the next victims with honeyed words, does not leave me very sanguine as to the outcome in this country. Communism would be a terrible alternative even to the rottenness of the present regime, quite apart from its implications in the world picture.

The major question in our relations with this country is, I assume, whether we should furnish aid, and if so in what manner and under what conditions. I take it as probable that if we do not furnish aid the regime will collapse and Communism, in one form or another, will come to dominate all of China. Experienced observers in this country seem to be generally agreed that both political and economic collapse could not be long delayed if aid were not given, and that the situation is deteriorating at an accelerating pace. We have tragically little time to act if we are to act, and we must realize that every day’s delay will make our task the more difficult in a material sense, if we eventually decide that we must rescue the Nanking regime.

Yet I do not think that we can afford to overlook the formidable objections to granting any aid. As I see it, if we embark on this course, in our further decisions we are damned if we do and damned if we don’t. If we furnish a moderate amount of aid (and that seems to be [Page 469] the present line of thinking), it is hardly likely to prove effective, and in that event it would simply furnish the Communists the excuse, which they don’t need but which they will find convenient, to act as disagreeably as possible with regard to our citizens and their property. On the other hand, as you wisely suggested to me before I left Washington, we do not wish to commit ourselves lightheartedly to all-out aid to China. We do not wish to get our prestige irrevocably involved unless we are quite certain that it will be effective, that it will be supported by the American people, and that it will not merely be used by the Chinese to saddle us with an impossible burden. If we really go into this situation as we have in Greece we cannot afford to fail. However, nine-tenths at least of the burden must be shouldered by the Chinese if it is to be successfully carried, and I see discouragingly little evidence that the Chinese at the present time are prepared to shoulder any such burden.

There is a further dilemma in that aid given without strict controls would not be acceptable to the American people, for the very simple reason they know that it would be frittered away in inefficiency and graft. On the other hand, I question whether it would be possible, given the temper of the Chinese Government cliques and of the people, to impose the controls which would assure that any aid given would be effectively utilized. Communist propaganda has been extraordinarily successful in stirring up Chinese nationalistic sensibilities against the United States and the other western powers. In the light of Russia’s record this is amazing to me, but it is the fact. Should we demand strict controls, Communist propagandists would have a field day. Moreover, the many elements in the Government—the CC Clique, the grafters, etc.—who would be personally prejudiced by the imposition of strict controls have already made it quite clear that they would fight such controls; in their press organs they have already invoked Chinese sovereignty against controls.

Recognizing that I do not have the experience on which to base a sound judgment, I nevertheless think we must consider carefully whether we can devise any formula which on the one hand would achieve the necessary degree of control over any aid we might give, and on the other secure adequate cooperation from the Chinese authorities. Paradoxically enough, I think it arguable that openly partisan aid to the Nanking Government might prejudice rather than help its chances of survival.

As I see it, two prerequisites should be satisfied before we grant any aid: (1) We should await the establishment of a government which has the confidence of the Chinese people; (2) that government should make the fundamental issue involved quite clear to the Chinese [Page 470] people—that they are fighting for their peace and freedom against the grave menace of Soviet imperialism. I recognize that it is unlikely that these two conditions can be met and met in time. That may well mean Communist domination of all China. But quite apart from the possibility that the present regime would survive, there is the further possibility, which Chinese history suggests, that we might have a better chance of accomplishing our purposes by building on some healthy anti-Communist growth after the collapse of the Nanking regime than by shoring up the termite-ridden timbers of that regime. In the event the Nanking regime disappears, we should probably not anticipate a split in Communist ranks or a successful uprising against Communist excesses, but I see little reason for optimism in any case, whatever course we follow.

I recognize, moreover, that if the two above-mentioned conditions were met and we were under those circumstances to grant the massive aid which alone would be effective, we would run a serious risk of precipitating World War III. I fear, however, that we cannot successfully bring Soviet aggression to a halt without running some risks, and that we might as well face them in China as anywhere else. I do not believe that the Soviets want to fight, and I believe that if they do they will not lack for excuses. The risk, then, of precipitating a war should be confined to the danger of starting a conflict which is wanted by neither side.

I must add that the present situation regarding aid fills me with misgivings. This town, for example, is swarming with our military and naval activities which are a shining mark for Communist propaganda. The same seems true all over the country—the AAG in Nanking, the Navy operations in Tsingtao, where some 2500 Marines are still on Chinese territory, and our activities in Taiwan, for example, which are evoking misgivings in the Chinese press. I should like to urge their restriction in this district were the situation not so serious that I would be gambling with the lives of American civilians in making any such recommendation.

Perhaps there is in all this an issue even more fundamental than the granting of aid to China. Our great issue in the battle with Communism for the minds of men, as I see it, is our upholding of freedom and democracy (we may believe that our system brings to the great masses more material wellbeing than Communism can, but it is difficult conclusively to prove it, let alone sell it to other peoples). How then can we back the Nanking regime, which obviously upholds neither? It is one thing to uphold the peoples of the world against the imposition of an aggressive tyranny, but it is a very different thing to uphold every rotten, reactionary regime against its own people merely because it happens to be anti-Communist.

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As I see it, so far as the public record is concerned, we can scarcely afford to take a holier-than-thou attitude vis-à-vis the Russians. Whereas we have every reason to suspect, but so far as I know we have never been able to prove, that the Soviets are furnishing material military aid to the Communists, our AAG is public evidence of our military support of Nanking, and our activities in Tsingtao are obviously intended as an advance base to offset Port Arthur. One is led to wonder (considering particularly that China borders the Soviet Union but not the United States) whether we do not share in some degree the responsibility for exacerbating the world crisis by giving Russians some valid grounds in this area for their supersensitive suspicions.

Taking all of the above considerations into account, I do not think that we can afford, in honor and decency, to abandon the Nanking regime to its fate at this point. If we feel that a Communist China would jeopardize our vital interests, then it would be advisable to give all-out aid upon such conditions as will ensure its effectiveness, regardless of the yelps of those whose toes are trodden on—and make it very clear that a refusal to meet our conditions means our complete and immediate withdrawal. But if, as I suspect, we are going to spend most of the next year in putting our hand to the plow and then taking several looks back, I suggest that the public emphasis in any aid might be on its peaceful character, and that we might be a darn sight less ostentatious locally about what we’re doing. I believe we should examine the need of keeping Marines at Tsingtao, for example, and for having such a swarm of United States uniforms and military vehicles clogging the landscape. Can’t we do something like reviving the Flying Tigers,50 for example? I recognize that the situation calls for more than palliatives, yet as I see it the situation is too precarious and our freedom of action too circumscribed by past actions and domestic limitations to insist at this time upon all of the conditions which, taken together, would give an aid program good prospects of success. But surely the Chinese Government should at least clarify the issue to the Chinese people if we are to grant aid; there is no use in our pouring money into China if the Government accepts and even mildly foments for its own tortuous ends agitation against the United States and Great Britain.

Probably the greater part of my thinking is brash and foolish, but if it contains any constructive thoughts for you I shall feel that this letter has been worth while.

With all good wishes,

Very sincerely yours,

  1. Minister-Counselor of Embassy in China.
  2. For correspondence on this subject, see pp. 289 ff.