794A.00/9–650
Memorandum by Mr. Robert C. Strong of the Office of Chinese Affairs1 to the Director of the Office of Chinese Affairs (Clubb)
Subject: Summary of Views on Formosa as of Late August 1950
Politically and militarily, Formosa is on the downgrade. Economically, the island seems to have reached a temporary balancing point which is more easily tipped to the unfavorable side.
A concerted effort seems to be in progress to tighten the personal control of the Generalissimo over political and military affairs while at the same time creating the impression abroad that sincere efforts at self-improvement are under way. Failing to understand the basic reasons for loss of the mainland and deeply suspicious of the intention of the United States Government with respect to himself, the Generalissimo is emulating the control of the Communists over their subjects in order to preserve his personal power.
There is no question that the Generalissimo fears the Formosans and Sun Li-jen, both of whom are receiving too much American support for his taste. He also fears his own party because of the discontent among them over his rule and the increasing importance of Chiang Ching-kuo.
Therefore, exerting his full authority as teacher, head of the party, and head of the Government, the Generalissimo has forced through [Page 486] the party measure which is called reform but which in actuality centers in his elder son great power in police, party, military and political affairs. The several secret police organizations are being unified under his control; the work of political indooctrination and political espionage within the armed forces is directed by him; dealings with overseas Chinese insofar as political and secret affairs are concerned are under his jurisdiction; and the bulk of the propaganda and subversive activities against and on the mainland is in his hands.
The result is a reign of terror, more silken than in other countries or in other times, but nevertheless in progress. Criticism of the Government, even in a mild form, is almost out of question; the critic is in dire danger of being arrested as a Communist and disappearing. There is no such thing as a system of justice, as we know it. Extreme measures are being used to prevent political contacts between residents of Formosa and political and military representatives of the United States Government accredited to the Nationalist Government. In some cases, persons with such contacts have been arrested, in other cases warned, and in others closely questioned. The few who still maintain contact either are approved by the secret police or are courageous and anti-Communist enough to avoid persecution.
In an extension of his famous “divide and rule” tactics, the Generalissimo is playing the Tokyo end of the United States Government for all it is worth, in the expectation that not only will military advantage be gained but also political benefits. Making use of every indication of support by and from General MacArthur, the Generalissimo also plays up the inevitability and nearness of the Third World War and the imminence, as a result, of his triumphant return to the mainland. Although privately it is stated that the purpose of such propaganda is to encourage mainland residents, it is doubtless intended to fix in the popular mind throughout the world the image of the Generalissimo as the only man for the “return”, and to prove that he is an essential member of our team.
In playing Tokyo and Washington as two separate, competing entities, the Generalissimo openly shows favor to Tokyo personnel and almost equally openly ignores and undercuts accredited United States Government officials. At the same time he is careful to restrict the contacts of the Tokyo personnel to those individuals who are properly indoctrinated and under strict control.
Encouragement to the Generalissimo in this game has been given unwittingly by General MacArthur, who has played a lone hand with the National Government to the complete exclusion of the Embassy in Taipei. Chinese officials have frequently visited Tokyo without knowledge of the Embassy, nor has there even been an indication of the subject or content of conversations there. No statement or allegation [Page 487] by such Chinese officials to any American officer in Tokyo has ever been referred to Taipei for comment. Such acute observers and shrewd deducers as the Chinese cannot have failed to notice this.
The Chinese armed forces are now in a worse state than several months ago. The intense efforts at political indoctrination of officers, the emphasis on spying on each other by officers and men, the arrest of competent officers on trumped up political charges, the breaking down of the military training program, the strengthening of clique influences, the suspicions between the forces, the suspicions within each force, the hopeless command tangle, the inadequate pay and diet and medical attention, the feeling that the United States is now carrying the baby, and the widespread dislike of and lack of confidence in the Generalissimo combine to paint a very gloomy picture. In addition might be mentioned the failure of the Combined Service Force properly to do its job, the favoritism shown the Armored Force (under the Generalissimo’s second son),2 the lack of mobility of the ground forces, the absence of over-all defense planning and training there-under, the continuation of incompetent officers in important commands, and the interference by the Generalissimo which adds to the confusion and disruption.
With regard to the economic scene, there is at present a temporary balancing point. Although no effort will be made in this memorandum to make a thorough summary of the economic field it may be said that the economic wellbeing of the Island depends very largely on what the United States does in the political and economic field.
The Chinese authorities have reached the point at which they are prepared, with our assistance, to carry out thorough surveys in various areas, and to switch their efforts from shortrange, stopgap measures to emphasis on longrange problems and decisions. They definitely require American technical assistance to achieve their goals, as well as continuation of ECA participation at the current level.
Apart from ECA (and possible military aid which would reduce foreign exchange expenditures), the factor most likely to affect economic stability is the political attitude of the United States toward Formosa. Although uncertainty as to the future inevitably exists, there is enough confidence to minimize the flight of capital and hoarding of foodstuffs and commodity. Any move by the United States to cut its ties with the Nationalist Government would have most serious repercussions and undo constructive measures previously undertaken.
Results of studies by American experts now in Formosa should be available within the near future. These will go far beyond anything that could be attempted herein.