Executive Secretariat Files

Memorandum by the Director of the Office of Far Eastern Affairs (Butterworth) to the Secretary of State

Since the preparation and submission to the National Security Council of the Department’s paper entitled “The Position of the United States with respect to Formosa”, contained in NSC 37/1 of January 19, 1949 (Tab A), further reports have been received from U.S. official sources in China bearing upon the conclusions of the Joint Chiefs of Staff concerning the strategic importance of Formosa and their belief that it would be important to U.S. national security interests if Communist domination of Formosa could be denied by diplomatic and economic steps.

Ambassador Stuart reports in his despatch no. 11 of January 10, 194951 (received on January 26) as follows: “Communists are infiltrating into these armed forces (the Chinese Air Force and Navy on Formosa) and the laboring classes. They have some airplanes and may have more with further desertions. His (the Generalissimo’s) sea-girt stronghold is therefore by no means impregnable.”

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In a telegram, dated January 26, 194952 General Barr expresses the opinion that “should the Chinese Air Force and Navy remain loyal to the Generalissimo, which is doubtful, and should they really fight, which they have not done in the past, he should be able to hold Taiwan for some time.”

In a telegram dated January 2853 Consul General Cabot at Shanghai reports that General Barr has expressed serious doubts that Formosa could be held with the Chinese Air Force and Navy in their present state of inefficiency. He further reports that Mayor Wu of Shanghai in reply to General Barr’s question stated that the Chinese felt reasonably confident of the loyalty of the Air Force and Navy but admitted that there was considerable Communist agitation among the crews of merchant ships and agreed that disparities between Chinese Army and Air Force pay should be lessened.

The foregoing reports point to the possibility that the application of diplomatic and economic measures suggested by the Joint Chiefs of Staff may not succeed in preventing Communist domination of Formosa.

  1. Missing from Department of State files.
  2. Post, p. 481.
  3. Telegram No. 280, vol. viii, “Political and military situation in China”, chapter II.