Foreign Relations of the United States, 1964–1968, Volume XXX, China

83. Memorandum From James C. Thomson, Jr., of the National Security Council Staff to the President’s Special Assistant for National Security Affairs (Bundy)¹

Washington, April 15, 1965.

SUBJECT

• The Taiwan Situation

As a follow-up to my preliminary travel report of March 29,² I offer the following comments and recommendations on the situation in Taiwan. I must stress that these views reflect only a 48–hour visit; they also reflect, however, extensive conversations in Washington and elsewhere in the field, both before and after my trip.

The key word in Taiwan’s present apparent health and longer-term sickness is “stability”. Most of our current actions—and all of our current inaction—are explained in terms of the maintenance of stability. Where, one is asked, can one find a more stable nation in all East and Southeast Asia than the Republic of China? Why upset the apple cart?

The problem is that underneath the surface lie major factors of instability. As long as we minimize them or pretend that they don’t exist—and as long as the GRC does the same—we are courting bad trouble in the very near future.

I identify three chief problem areas, all of which are interrelated:

1. The Problem of Morale

From both Chinese and Americans (I talked to no Taiwanese) I developed a disturbing impression of a severe and deepening crisis of morale on the part of most elements of the island’s population. It is a new and particularly significant factor among the mainlanders. Its ingredients appear to be:

(a) The growing awareness, on the part of most of the emigres, that a return to the mainland is simply not in the cards. It is probable that a good many have doubted the feasibility of return for sometime now; but the Chicom nuclear explosion has confirmed their doubts.

(b) Poverty and corruption. The present low ceiling on civil service salaries cuts across the bureaucracy, the military and all teachers, thereby forcing educated mainlanders to scrape along at below-subsistence levels of income. For officials, this makes corruption essential to survival. My Chinese informants tell me that corruption has spiraled over the past two years, and there is no end in sight. To quote one fortunate mainlander, whose salary is double the civil service norm because he works for a joint Sino-American outfit: “All my friends in the bureaucracy are doing it; and if I were in their place, I would be doing exactly the same thing.” As for academics, they have had to support themselves by holding down two and three jobs simultaneously for some years now. One additional by-product of low civil service salaries is inadequate police pay, hence poor police protection and a very high rate of petty crimes.

(c) Conspicuous consumption and the condition of the KMT. Meanwhile, the party apparatus suffers from two familiar maladies—a general lack of vigor, youth and ideas, and a high level of luxurious living at the top. The fat, heavy hand of the party is an obstruction to creative talent in the bureaucracy; the big black limousines and the 30-course feasts of the party bigwigs add to the demoralization of their impoverished underlings. Although the Generalissimo continues to live and preach austerity, his retinue are prime offenders (and have outdone themselves in building a rumored 16 largely unused villas for their Chief at scenic points on the island).

(d) The flight of talent. Twenty-five percent of all Taiwan’s college graduates leave the country, mainly for the United States; and over 95 percent of these young people never return.

(e) Feather-bedding. The processes of government are further obstructed by the excessively large number of bureaucrats kept on the job in one province to maintain the paraphernalia of a national government. My informants suggest that a solution to this problem would be to lay off at full salary the 4 out of 6 men in every office who are extraneous, so that the two remaining officials can perform their functions with efficiency.

(f) Communal relations. Those Embassy officers who keep in close touch with mainlander-Taiwanese relations report that little has been accomplished to bridge the gap between the two groups. The apparent political docility of the Taiwanese is a result of the relative prosperity of the farmers and businessmen as well as their sense of the futility of political action; it is not a result of increased support for the GRC or of rapport with the mainlanders. Taiwanese resentment remains a potentially dangerous force on the island.

2. The Malaise of Our Embassy

In our own diplomatic establishment we face a classically dangerous situation. I talked at length with seven of the younger Embassy and Agency China specialists. They were all bright and articulate, largely free of visionary zeal. They were unanimous in their bitter complaint: that the upper echelons of the Embassy will not permit reporting of the facts of life in Taiwan. When I pressed them to clarify their meaning, I was told that reporting which tends to contradict the current U.S. “line” on the stability and prosperity of Taiwan is suppressed. In particular, the reporting of group attitudes, as detected by these younger officers—the attitudes of enlisted men, of mainland lesser bureaucrats, of mainland intellectuals, and of various Taiwanese groups—is strongly discouraged, either through the blue pencil or a refusal to pass such papers forward (a “gentleman’s agreement” that such things are not helpful to report).

I regarded this as a very serious charge and said so; but my informants stood their ground.

As far as I can determine, this Embassy gap between young Turks and their seniors has been a Taiwan problem for some years. In its currently acute form, it is largely a reflection of the attitude of the present Ambassador, as implemented by his senior associates. There are also, of course, certain factors endemic to Taiwan: the exploration of group attitudes, particularly among Taiwanese, inevitably causes concern on the part of the GRC security establishment, and this concern is passed to the top Embassy personnel. If your primary purpose is not to “upset the apple cart”, it is safer to discourage such snooping.

Needless to say, however, there is a rather more urgent objective to be served: that policy makers in Washington be adequately informed of what underlies the surface stability of Taiwan. That objective is not now being served. The dangers are compounded by the inevitability of political change once Chiang Kai-shek is removed from the apparatus he has controlled and balanced so skillfully for 35 years—and by our unpreparedness for those changes.

3. The High Costs of Ambiguity

I came away from Taiwan deeply disturbed by the debilitating effects on both Chinese and Americans of a non-credible but unquestioned myth: the myth of return to the mainland.

On the face of it, the situation is rather eerie: the GRC knows that we don’t believe it; and we know that they know we don’t believe it; and we suspect that some of them don’t believe it; but no one says it. The result is that our every relationship is affected by the unmentionable dead cat on the floor.

I am most concerned by two costs that are paid out for continued ambiguity: the emotional and intellectual cost, and a more tangible cost in the allocation of economic resources.

In the first category, the general effect of any over-riding myth is to make most serious discussion impossible. In the case of Taiwan, the ambiguity is a breeding ground for continuing suspicion of the U.S. and for latent anti-Americanism. As long as we make a pretense, by silence, of sharing their myth, we are subject continually to the charge that we are not true believers—and, by extension, that we are going to betray their interests. In permitting the ambiguity to linger, we hand to the GRC a considerable instrument of leverage against us: leverage to force us regularly to prove what cannot be proven, i.e., that our hearts are in the right place on this issue. To assuage our guilt and sustain the ambiguity, we have to keep offering up bits and pieces of concessions. Finally, I might add, ambiguity permits some U.S. officials to begin to believe in the myth.

The second category of cost relates to the first. As long as the GRC is tacitly encouraged to honor the myth, its economic planning will be geared to implementing that myth through the maintenance of a foolishly massive defense establishment. One of the tragedies of Taiwan is the fact that the resources do indeed exist to make it a “garden spot”, a “beacon of free Chinese development”, and a “showcase” for the mainland and the rest of Asia. As one Chinese friend told me, “This place is obviously a paradise relative to the mainland; but the tragedy is that it could have been and could be so much more—a free, dynamic and prosperous alternative to the mainland.”

Recommendations

On the basis of the foregoing analysis, I would conclude that the U.S. has a major interest in assuring that Taiwan’s apparent stability and prosperity become real stability and prosperity. I would also conclude that we have certain instruments to achieve this result which we are not now using. Specifically, I suggest the following actions:

(1) That we replace Ambassador Wright at the earliest possible moment with an experienced, tough, politically sensitive and shrewd insider. My three top choices for this assignment would be Bill Bundy (if available), Marshall Green, and Henry Byroade. State’s tentative candidate, Walter McConaughy, would be an improvement over the present incumbent; but I do not believe that he would be capable of curing the Embassy’s present malaise or of moving with skill and swiftness in the fluid situation that may develop after the Generalissimo’s death.

(2) That the present DCM be replaced by a Foreign Service Officer of strong economic background. It will be essential in the months ahead to bring to bear on the GRC as much persuasion as we can to make rational use of its economic resources in the development of Taiwan and to edge away from unjustifiable expenditures on the military establishment. (Our AID Mission is closing down this year.) For this job I would suggest the names of Edwin Cronk (Economic Counselor in Bonn) or David M. Bane.

(3) That we explore on an urgent basis ways in which our heavy accumulation of Taiwan counterpart funds could be put to use at once to supplement the GRC’s civil service salaries. There are precedents for such a move in the long-standing Joint Commission on Rural Reconstruction (JCRR), whose salaries are now double the normal bureaucratic level. The GRC currently hopes to increase civil service salaries by 15 percent next year; but this is clearly inadequate in terms of the current need.

(4) That whoever our new Ambassador in Taipei may be, he be given a Presidential mandate to:

(a) press for a continuation of Taiwan’s economic growth;

(b) use every occasion possible to reduce the size of the GRC military establishment; and,

(c) end the present U.S. ambiguity regarding mainland return in his dealing with top GRC officials. (Such a move should be coupled with absolutely firm assurances of our proper unambiguous commitment: support for the continued free existence of Taiwan and the Pescadores. We have many friends and allies with regard to whose grandiose aims we have agreed to disagree; it is high time to do the same with the GRC—it would be a far healthier arrangement, both for them and for us.)

James C. Thomson, Jr. ³

1. Source: Johnson Library, National Security File, Komer Files, China (GRC). Secret. The source text is a copy sent to Komer; a copy was also sent to NSC staff member Chester Cooper.
2. In his March 29 memorandum, Thompson reported briefly on a 2-week trip to the Philippines, Hong Kong, Taiwan, Okinawa, and Japan. (Ibid., Name File, Thomson Memos)
3. Printed from a copy that bears this typed signature.