893.50 Recovery/4–1249: Telegram
The Consul at Taipei (Edgar) to the Secretary of State
[Received April 12—5:22 a. m.]
113. From Merchant. Reference Taipei’s 111, April 11, Shanghai’s 1130, April 9 and Deptel 607, April 7 to Shanghai. I agree combination [Page 314] factors requires reappraisal recommendation made in Taipei’s 97, April 5 [6].
Communists’ understandable intransigeance at peace table and accelerating collapse mainland economy combine to shorten time for decision by governing group on Formosa. Self-interest Governor Chen Cheng and Generalissimo crowd, now in control, almost certainly will dictate refusal to accept authority any Communist-dominated mainland government. Such action would likewise serve our immediate interest. I do not believe their decision or their chances initially of successful resistance will be affected or improved by promise US economic aid today.
On other hand knowledge (which would unavoidably soon become public) of substantial US aid forthcoming would give Communists new handle to propaganda jug, disappoint Formosans who resent present Chinese authorities and confirm widespread mainland Chinese fears that we have imperialistic designs on Island.
Since first arrival here I have doubted ultimate usefulness US aid to present Governor and his clique. I had hoped his displacement by enlightened Chinese leader would provide setting in which US aid could be effectively translated into direct improvement Formosan’s lot. These hopes have not materialized nor do they seem likely to now.
At this moment I see nothing to be gained and much to be lost by approaching Governor Chen with view committing US economic aid beyond routine continuation present modest ECA commodity imports and current slow moving JCRR program. Accordingly I withdraw reluctantly recommendation contained Taipei’s 97, April 5 [6] and urge continued deferral and approach to Governor Chen pending further development events on mainland.
Re last paragraph Deptel 607, April 7 to Shanghai and official Nationalist Government request reported in Shanghai’s Toeca 1316, April 8.30 I recommend up to half prospective ECA 54 million be gradually committed to keep post-June 30 mainland commodity pipeline filled but that 25 million be unostentatiously withheld by Washington against possibility later effective use for reconstruction and JCRR on Formosa. [Merchant.]