690B.9321/8–1551: Telegram
The Ambassador in Burma ( Key ) to the Secretary of State
189. For Rusk.1 Recent reports from … Rangoon indicate that KMT troops which penetrated into Yunnan from Kengtung and Wa states early June have now suffered severe reverses at hands of Chinese Commies and are retreating in disorder into Burmese territory. Moreover, these troops, whose morale and discipline have seriously deteriorated as result defeats, are now engaged in pillaging Burmese villages, which arousing increasing resentment among population of border areas.
Substantially same reports also received from other local sources. The Sawbwa of Kengtung confirms KMT defeat Yunnan and claims much of their heavy arms and radio equipment lost to Commies. He greatly agitated over extremely serious situation developing in his state as a result present behavior KMT remnants who, though previously fairly well disciplined and willing make some payment for supplies, now becoming very unruly and indulging outright looting. Other Burmese sources report KMT troops also selling arms to insurgents.
All above information, with exception details as to arms and radio equipment losses, has been confirmed by War Office to our Army Attaché. Moreover, serious extent of threat to Army security arising KMT activities eastern Shan states indicated by recent dispatch of Burmese troops to Salween with object containing KMT in areas east of river. But Defense Minister2 warned Army Attaché that troops available were insufficient in strength to prevent KMT crossing Salween if they made determined effort.
In view these developments it quite possible GOB will soon raise again problem of KMT military activity in Burma. This connection, Department may wish give consideration suggestions contained in despatch 917, June 21, as situation envisaged that despatch has now arisen. Embassy fears that KMT operations against Commies in Yunnan would not only be frustrated by superior military forces available to Commies in western Yunnan but would result in an aggravation of Commie threat to Burma when the defeated KMT troops were forced to flee back over the border have now been realized. On basis [Page 289] information available here, there is nothing to show for KMT expeditions to Yunnan but heavy casualties and loss of equipment to Commies.
Meanwhile, this adventure has cost us heavily in terms of Burmese good will and trust. Participation by Americans in these KMT operations well known to GOB and constitutes serious impediment to our relations with them, a fact which has become only too apparent to all of us here. Denial of official US connection with these operations meaningless to GOB in face of reports they constantly receiving from their officials in border areas that KMT troops are accompanied by Americans and receiving steady supply American equipment, some of which dropped from American planes, and of reports from their Bangkok Embassy of American support activities going on in Siam, which is an open secret there. Thus American participation in KMT operations, which have brought chaos to eastern Shan states and have been conducted in flagrant disregard Burmese sovereignty, cannot but make a mockery in Burmese eyes of our officially expressed desire to aid in the restoration of internal stability and to strengthen Burmese independence. This situation is prejudicing everything which we are striving to accomplish here and threatens all our future prospects. It also adversely affects Burmese-Thai relations.
Whatever the original justification may have been for these operations, therefore, it now seems obvious, as far as can be determined here, that they have failed to achieve useful results commensurate with the harm they have done to our interests in Burma. For this reason I feel strongly that the time has come to call a halt to any further American participation in these operations and recommend that the Department endeavor by all means at its disposal to bring this about.