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32. Telegram From the Embassy in the Republic of China to the Department of State0

“The Sec returned the call and B said he was just going in with the early morning reports and he thinks the most stimulating is the backfire to Drumright. The Sec said he is drafting a personal message to him from the Sec. The problem is government in Taiwan wants us to act like a satellite. The Sec thinks we should talk it over fully—he is thinking of suggesting the FM come over—they are in sort of a pathological state of mind and are not satisfied unless we follow every one of their points. B asked if the Sec expects political backfire here. The Sec said some but he thinks the Amb here is sensible enough not to go too far in that direction.” (Ibid., Rusk Files: Lot 72 D 192, Telephone Calls)

824. At tea yesterday honoring former MAAG Chief, President Chiang asked me to remain for private talk. Madame Chiang was present.

1. President first alluded to Thomas Liao case.1 He has just read Amb Yeh's cable notifying US decision to admit Liao and had not yet had time to go over case with Foreign Minister. I interrupted to say Foreign Minister [Page 77]had discussed case with me previous day and on basis of conversation I had cabled report to Washington (Embtel 818).2 Speaking with emphasis and at times in tone of indignation, President said it was incomprehensible to him that US would admit Liao in face of his past actions and clear motivations, persistent and recorded GRC opposition to this action, and without consulting GRC in advance re action proposed to be taken. He could only conclude State Department unaware of profound implications of its action to admit Liao. President termed Liao action an unfriendly act taken in utter disregard of interests of friendly ally. Admission of Liao would be regarded locally as step on part of USG to promote “two Chinas” and as effort to promote Liao's scheme for an independent Taiwan at cost of GRC. US action to admit Liao was not only incomprehensible but inconsistent with US defense and aid commitments to GRC. Admission of Liao would create confusion and misunderstandings among Chinese people. Liao and other adherents of an independent Taiwan would be encouraged to stir up trouble at cost of stability of Taiwan. Burdens of GRC would thus be magnified at time when it imperative that US and GRC stick together in face of growing Communist danger.

2. President then raised Outer Mongolian issue.3 He had meant to leave this and their representation issue to Foreign Minister, but introduction of Liao case at this juncture impelled him to express some views on these issues as well. In proposing to establish relations with Outer Mongolia, US was becoming involved in what Chinese regarded as issue of high importance to them. Here again US was proposing to take action portending incalculable consequences to friendly ally without opportunity for advance consultation; advance notification was far from adequate in such an important issue. Establishment of US relations with Outer Mongolia would not only be of tremendous benefit to Communist Bloc but would do irreparable harm to GRC interests. USG was handling Outer Mongolian and Liao issues in a manner that would not be worthy of a master-satellite relationship, let alone relationship supposed to exist between friendly allies with mutual interests. Continued US ignoring of rights and interests of friendly and loyal ally could produce very serious consequences.

3. President raised as third point China representation issue. He said he regarded US proposals advanced thus far for dealing with this issue [Page 78]as not only ineffectual but as a plan to bring about a “two Chinas” arrangement in UN. GRC would have no part of such proposals and would withdraw from UN rather than be party to them. If US adhered to existing proposals, GRC would in actual fact be “driven” to leave UN. In President's view US would have to bear responsibility for this action.

4. President said Liao development, following in wake of Outer Mongolian and China representation attitudes of US administration, led him to suspect that despite protestations of support, USG is actually embarked on a calculated change of its China policy. If this should unfortunately be borne out by further unfavorable development of foregoing and other important issues, US-GRC relations could be seriously prejudiced with unfortunate results to security and other interests of both countries. President said “honor” was most precious quality. It had led him to Taiwan when all was lost on mainland. “Honor” would be his main guideline if he should again be put to crucial test. To this quality he linked “principle, responsibility and integrity.” He would rely on these moral qualities to see him through any crisis.

5. President started conversation as if it were to be private, unofficial person-to-person talk, but he ended by requesting that I pass his observations to Department. I assured him I would do so.4

6. I made no attempt at a point-by-point rebuttal of President's observations. I did, however, deny his implication of a calculated change in US China policy. I also stated I believed Liao decision had been taken because of outside pressures and was not to be construed as evidence of US support of an independent Taiwan. President clearly was not convinced by my argumentation.

7. Comment: President's observations mirror GRC disapproval of US actions in three separate areas. GRC believes US is taking unilateral decisions of great importance to GRC in disregard of GRC interests. Beyond this GRC sees US handling of Laos problem as weak and ineffectual and as probably portending weakening of US determination to defend free Asian nations. Moreover, GRC believes US is not showing required leadership to rally free nations and is in fact waging a losing battle against communism.

[Page 79]

Lack of GRC confidence in US firmness and consistency of policy has been growing, although Vice President's visit brought temporary relaxation. Chiang touched on three points of immediate concern to GRC. In his mind all add up to “two Chinas” and seating of Chinese Communists in UN. Clearly, Chiang will leave UN rather than be forced into “two Chinas” arrangement. It is clear too that Chiang will use veto to bar Outer Mongolia from UN no matter what eventual cost may be to GRC.

Liao case has hardened Chiang's determination and roused deep suspicion of US motivations. Although inherently least important of three issues raised, Chiang regards it as of highest personal importance. If Liao is admitted and allowed to engage in anti-GRC political activity in USA, Chiang will be convinced it represents USG-supported conspiracy against him and his regime. Liao's actions could conceivably lead to a virtual suspension of GRC-US relations. Here on Taiwan Chiang would almost certainly impose pervasive security measures that would cripple promising social programs in being and probably seriously set back accelerated economic program. Our relations with GRC counterparts would be undermined and our influence diminished or destroyed.

If Liao is allowed liberty of political action in USA Chinese Communists will seize upon this as golden opportunity to create division between mainlanders and Taiwanese. Liao would be held up of course as US agent. Communists would no doubt redouble hitherto ineffective attempts to influence and subvert Taiwanese.

I can only urge from here that we reconsider our position on the points raised by Chiang in hope of stopping drift toward breakup of friendly relations and mutual confidence that have hitherto existed. As admission of Liao can only be gained at tremendous cost, I would hope a decision would yet be taken to exclude him. We are also at an impasse over Outer Mongolia's admission to UN by abstention method. On China representation, I believe we should conduct a careful survey of possibility of a successful moratorium jointly with GRC before taking any decision to rule it out. If GRC could be satisfied moratorium would fail, perhaps GRC would find it advantageous to adopt some passive tactic that would still keep Chinese Communist from UN.

  1. Source: Department of State, Central Files, 793.00/6-2161. Secret. Rusk and Bundy discussed this telegram in a telephone conversation at 8:51 a.m. on June 21. Notes of the conversation by Rusk's secretary, Phyllis Bernau, read in part as follows:
  2. Thomas Liao, self-styled “President of the Republic of Formosa in exile in Japan” and leader of the Formosan Democratic Independence Party, had sought admission to the United States at intervals since November 1950 but had been denied a visa. After Senator William Fulbright urged granting Liao a visa in a March 30 letter to Rusk, Rusk referred the question to the Legal Adviser's office, which concluded on May 19 there were no legal grounds for denial. On June 13 the Department informed Ambassador Yeh of the decision to grant a visa to Liao. The case is discussed in memoranda of April 5 and June 26 to Bowles from his Special Assistant James C. Thomson, Jr. (Ibid., Central Files, 793.00/4-561 and 790.00/6-2661, respectively)
  3. Dated June 20. (Ibid., 793.00/6-2061)
  4. The Embassy informed the Foreign Ministry on June 1 that the United States was opening talks in Moscow concerning the possible establishment of diplomatic relations with Outer Mongolia. On June 5 Foreign Minister Shen told Drumright the GRC considered this a “very unfriendly act” and gave him an aide-memoire urging reversal of the decision. The text of the aide-memoire was transmitted in telegram 767, and the conversation was reported in telegram 768, both dated June 5. (Ibid., 303/6-561) For related documentation, see Documents 198-200.
  5. Drumright reported in despatch 691, June 26, that Foreign Minister Shen had conveyed “supplementary” views from Chiang to him at Chiang's direction on June 23, but the substance was similar to that transmitted in telegram 824. Subsequently, Drumright was given Chinese records of the chief points made by Chiang and Shen. He enclosed translations of those records with despatch 691, noting that this was an unusual procedure, probably done at Chiang's direction. (Ibid., 793.00/6-2661) Chiang Ching-kuo elaborated on his father's statements in June 23 conversation, in which he stressed GRC concern at the U.S. decision to grant a visa to Liao and stated that because of this he was canceling a planned July trip to the United States. (TDCS 3/478,643, dated June 23; Kennedy Library, National Security Files, Countries Series, China)