Executive Secretariat Files

Note by the Executive Secretary of the National Security Council (Souers) to the Council

NSC 37/1

The Position of the United States With Respect to Formosa

The enclosed draft report on the subject, prepared in the Department of State, is submitted herewith at the request of the Acting Secretary of State for consideration by the National Security Council.

With reference to NSC Action No. 169,27 Mr. Lovett requested that instead of following the normal working staff procedure in this case, the paper prepared in the Department of State be placed on the agenda for a future meeting of the Council. Mr. Lovett said that when it came [Page 271] up for discussion there would be an oral amplification of the views set forth in the enclosure.

Mr. Lovett also said he would recommend that the new Secretary of State28 communicate with the Executive Secretary regarding the date of a Council meeting at which this problem could be discussed.

It is recommended that, if the Council adopts the enclosed report, it be submitted to the President with the recommendation that he approve the conclusions contained therein and direct that they be implemented by all appropriate executive departments and agencies of the U.S. Government under the coordination of the Secretary of State.

Sidney W. Souers

Executive Secretary

Draft Report by the National Security Council on the Position of the United States With Respect to Formosa

The Problem

1. To determine U.S. policy with respect to Formosa and the Pescadores.


2. The Joint Chiefs of Staff concluded in NSC 3729 that it would be in the interest of U.S. national security if Communist domination of Formosa could be denied by the application of appropriate diplomatic and economic steps. The Department of State associates itself with the general sense of this conclusion.

3. The present legal status of Formosa and the Pescadores is that they are a portion of the Japanese Empire awaiting final disposition by a treaty of peace. The U.S. position regarding the status of the islands is qualified by the Cairo Declaration by the Chiefs of State of the U.S., U.K. and China30 and the policy which the U.S. has followed since V–J Day of facilitating and recognizing Chinese de facto control over the islands.

4. The elements involved in the Formosan situation are:

the indigenous population;
the ruling Chinese class from the mainland; and
the Communists.

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5. The indigenous population has a strong sense of regional autonomy steming back to the nineteenth century when Formosa was independent. The Formosans are anti-Chinese, as well as anti-Japanese, and would welcome independence under the protection of the U.S. or the UN. But the indigenous population is without political experience, organization or strong leadership. The Japanese prevented the development of native political life and the Chinese liquidated most of the developing native leaders in the abortive revolt of 1947. At least one small group of Formosan autonomists of dubious quality is known to exist now on the islands. The present refugee Formosan group in Hong Kong and on the mainland is vocal but small and incapable of organizing by itself a successful revolution on its home islands.

6. The ruling Chinese class in Formosa has since V–J Day displayed a genius for mis-government. However, the present Governor of Formosa, General Chen Cheng, may be able to develop a stable non-Communist Government over the islands. But this is by no means certain. The greatest obstacle to his accomplishing this is the influx of refugee politicians and militarists from the mainland—many of them men whose gross incompetence has played into the hands of the Communists in China. The arrival of the Generalissimo, who seems intent upon building up Formosa as his final stronghold, would be particularly unsettling locally.

7. The Communists in the islands are now a weak, small group. There would seem to be two methods through which they might eventually obtain control over the islands. One is through infiltration and organization not only of the native population but also of the Chinese armed forces on the islands. The other is through a deal whereby the Communist-dominated successor government on the mainland successfully negotiated with the Chinese regime on Formosa for a take-over.

8. Alternative courses of action which the U.S. might pursue with regard to Formosa and the Pescadores are:

To occupy the islands under the terms of the Japanese surrender31 either through negotiations with the National Government or by direct action after the collapse of that Government. It is unlikely that the Nationalists would negotiate any such transfer. Whether or not direct action encountered Chinese armed resistance on the islands, there is no doubt that it would galvanize all mainland Chinese opinion in support of the Communists, the very thing we must avoid if our political warfare is to have any degree of success in China. And no matter how earnest our protestations of good faith, such a move would be cynically viewed by the international community and might very well lead to a case being brought against us in the Security Council by China, which would be politically exceedingly damaging to us.
To negotiate an agreement with the National Government providing for U.S. extra-territorial and base rights in Formosa. While the National Government might be willing to grant the U.S. base rights in Formosa, it would probably do so only in extremis for the purpose of obtaining U.S. assistance in maintaining its hold on the island. It is, however, doubtful that it would even in its present extremity grant the restoration of extra-territoriality in view of the fact that every Chinese regime for several decades has sought to abolish such special privileges for foreigners in China and since these privileges were relinquished by foreign powers so recently, the U.S. having taken the lead in negotiations to that end resulting in the Sino-American Treaty of 1943 for the Relinquishment of Extra-Territorial Rights and Related Matters.32 Any successor government of any complexion would probably cancel treaty rights of both these categories and would eventually probably be supported in the UN. In any event, such concessions would be an illusory defense against Communist capture of power through either penetration or a deal. Military bases are not a sovereign remedy against Communist infection in a foreign country. As often as not they are an aggravating factor. U.S. national interests would only be served by Formosa’s being controlled by a government not friendly to the USSR.
Also, as in (a) above, the Communists would be able to exploit the granting of bases to the U.S. in Formosa to rally public support of mainland Chinese to themselves with the result that the U.S. position on the mainland would be jeopardized.
To support on Formosa the National Government or a rump thereof as the recognized Government of China. This would increase risks of immediate local instability, provide the most fertile environment for the growth of Communism, greatly complicate our position on the mainland and hamstring our tactical flexibility toward China Proper.
To support continued local non-Communist Chinese control, using our influence wherever possible to discourage the use of Formosa as a refuge for National Government remnants. Working against efforts to prevent an influx of these remnants is the increasing tendency of a great many Kuomintang officials and their families to seek refuge on the island. Furthermore, the Generalissimo has recently appointed as governor a general personally loyal to him and there are ample indications that the Generalissimo is building up the island as a fortress to which he may eventually repair. However, support of local non-Communist control in Formosa would permit greater freedom of U.S. action in China, although it would involve considerable risks of failure through several factors. An important factor is that which has contributed so to our inability to bring positive influence to bear effectively in China—our lack of a counter-force in hand, an alternative to the National Government leaders which we could use as a pressure to influence Nationalist policy and administration. Lacking such a force we may find that the Chinese would continue to ignore [Page 274] our recommendations and endeavor to blackmail us with their in-dispensability in preventing Communist control of the island. Other factors would be the danger of a turn-over to any coalition government that might be formed on the mainland and the possibility of Communist infiltration of the Chinese armed forces on Formosa.

9. The U.S. cannot leave out of account the Formosan people and their strong resentment of Chinese rule arising from Chinese maladministration and repression. Formosan discontent provides possible material for Communist infiltration and exploitation and the U.S. should be prepared to make use of a Formosan autonomous movement if and when it appears desirable in the U.S. national interest to do so.


10. The basic aim of the U.S. should be to deny Formosa and the Pescadores to the Communists. The most practical means for accomplishing this at the present time is by isolating those islands from the mainland of China without ourselves taking any open unilateral responsibility for them or power over them.

11. It is apparent from what has been said in the brief analysis that in seeking to achieve this aim our choice of courses of action with regard to Formosa and the Pescadores is much the same as in many other areas of Asia—the choice is not between satisfactory and unsatisfactory courses of action but rather of the least of several evils or an amalgam of the lesser of them.

Given the uncertainties of the Formosan situation, we should maintain a wide latitude of flexibility in our position.

12. When the situation in China has developed to the point where we know what governing groups we will have to deal with in Formosa, the U.S. should seek to develop and support a local non-Communist Chinese regime which will provide at least a modicum of decent government for the islands. We should also use our influence wherever possible to discourage the further influx of mainland Chinese. The U.S. should also seek discreetly to maintain contact with potential native Formosan leaders with a view at some future date to being able to make use of a Formosan autonomous movement should it appear to be in the U.S. national interest to do so.

13. This Government should make it discreetly plain to the governing authority on Formosa that:

The U.S. has no desire to see chaos on the mainland spread to Formosa and the Pescadores;
The U.S. has not been impressed by Chinese administration on the islands and believes that if there is continued misrule the Chinese authorities would inevitably forfeit the support of world opinion which might be expected to swing in favor of Formosan autonomy;
U.S. support for the governing authorities of Formosa will inevitably depend in a large measure upon the efficiency of their regime and the extent to which they are able to contribute toward the welfare and economic needs of the Formosan people and permit and encourage active Formosan participation in positions of responsibility in Government.
The U.S. cannot remain unconcerned over possible developments arising from the influx of large numbers of refugees from the mainland and the consequent effects, including the increasing burden on the island’s economy, and is disturbed at the indication of the Chinese belief that the building up of military strength on Formosa will in itself provide an effective barrier to Communist penetration;
The U.S. expects that the lessons to be drawn from developments on the mainland and from previous Formosan reactions to Chinese rule will not be overlooked by the Chinese authorities in dealing with the problems of the island and with the Formosan people.

  1. On January 6 the National Security Council directed its staff to prepare as a matter of urgency a report for consideration by the Council on the position of the United States with respect to Formosa, taking into consideration the discussion at the meeting, the views of the Joint Chiefs of Staff in NSC 37, and the proposals by the Army and Navy, and the forthcoming comments thereon by the Department of State.
  2. Dean Acheson.
  3. Dated December 1, 1948, p. 261.
  4. Foreign Relations, The Conferences at Cairo and Tehran, 1943, p. 448.
  5. September 2, 1945, Department of State Bulletin, September 9, 1945, p. 364.
  6. Signed at Washington, January 11, 1943, Department of State Treaty Series No. 984, or 57 Stat. (pt. 2) 767.