893.50 Recovery/4–1249: Telegram
The Secretary of State to the Consul at Taipei (Edgar)
59. For Merchant. Urtel 113 Apr 12.
1. Dept agrees ur recommendation desirability deferring approach Chi auths Formosa except as indicated below. Since Soong probably has some directive from Gimo and no doubt wishes obtain firm indication US attitude re Formosa, it seems desirable give him some indication US Govt views this subject and disabuse him of some illusions. Dept accepts ur judgment self-interest Chi now in control Formosa primary consideration rather than promise US economic support this stage. Approach to Soong would serve indicate to them their own efforts will be determining factor and US aid can only be supplementary such efforts. Failure establish this point clearly with Chi auths would inevitably result eventual failure US efforts prevent Commie domination island.
2. In view foregoing Dept believes you shld see Soong and make statement along fol lines:
You have noted his conversation with Edgar (Taipei’s 110, Apr 11). US Govt has no desire see mainland chaos spread Formosa and would be inclined view favorably question economic aid Formosa shld Chi take steps prevent Commie or coalition govt control island. However in certain quarters there is obviously a misconception of US interest Formosa: for example that US considers island essential link Western Pacific defense chain. US Govt is entertaining no designs on Formosa and does not desire establish bases Formosa. Although it looks with favor on denial Formosa to Commie control, Formosa not of sufficient strategic importance in mid 20th century which has sufficiently moved away from coaling-station strategic concept that there is no question of US employment forces to effect destiny of Formosa. Question US econ aid Formosa inevitably involved with pattern previous US efforts aid China. Certain econ measures indispensable effective contribution Formosan stability: for example availability for current use Formosa substantially all foreign exchange proceeds Formosan exports, limitation Formosan trade with mainland to barter for benefit current consumption Formosa and virtual cessation mainland remittances Formosa, both Govt and private. Unless Chi auths willing and able [Page 316] measures this nature, external aid wld be of little significance and inevitable result wld be repetition mainland situation. Formosa represents valuable economic assets which could be made self-supporting with efficient admin as example of non-Commie Chi Govt achievement. US Govt has, however, viewed with misgivings recent developments Formosa which give promise repeating mainland pattern. Influx large numbers refugees has exacerbated feelings Formosans and contributed further to instability and thus to opportunity Commie penetration. At present ECA prepared go ahead with fertilizer and JCRR program and it is hoped Chi auths can take measures establish basis for effective econ support.
3. Urtel 114 Apr 12 being made subj separate tel.