Marshall Mission Files, Lot 54–D270

Minutes of Meeting Between General Marshall and Mr. Miao Yun-tai at No. 5 Ning Hai Road, Nanking. October 25, 1946, 2 p.m.

Also present: Col. Hutchin

Mr. Miao informed General Marshall that he had just returned from a visit to his tin mines which were now producing some 2,000 tons annually, their pre-war production had reached 10,500 tons per year. However, the present 2,000 ton capacity was an improvement over their low of 1,200. Profit was not great but workable. The chief shortage was transportation.

Mr. Miao said that he felt like it was not particularly advantageous for him to participate in political talks. He thought that the whole problem was military rather than political. He asked General Marshall what he thought.

General Marshall replied that it is quite true that you cannot obtain a political settlement unless you neutralize the military situation. There were military leaders in the Kuomintang Party who felt that they could crush the Communist armies, and on the other side there were Communist military leaders who felt sure of their ability to carry on a protracted struggle. The Communists did learn a lesson at the battle of Ssupingkai and now they no longer will stand for [Page 422] heavy fighting, but would confine themselves to guerrilla tactics. Actually, most military leaders on the Government side did not appear especially interested in the National Assembly or in bringing the Communists into the Government. With their present feeling that they can crush the Communist forces, and settle matters once and for all, they are apt to get into a position where they will require military assistance and, of course, they won’t get it.

General Marshall felt that the real hope of reaching a settlement rests with the third party group. He felt that the third party is in a position to wield what amounts to a power. Whichever way they throw their weight is bound to affect any political settlement. It is a power that needs wise direction. It will be necessary for the third party to act as a unit.

Mr. Miao thought it was a must that the third parties bring out a concrete proposal which both sides could accept. He felt there was no use in carrying messages from the leaders of one party to the leaders of the other party. Personally, he was not adverse to letting the two major parties fight it out if the Kuomintang leaders could give some assurance that they could destroy the Communists. He asked General Marshall what he would think if the third parties came up with a proposal that General Marshall or some American officer be given command of all Chinese forces.

General Marshall replied that he did not think this was a practical solution. Command amounts to nothing unless it is respected. A large measure of the Generalissimo’s or Government’s power, rests on control of the military forces. If you place those forces under an American, then the major power of the Government would have been eliminated. Further, it would create an international political situation which would be unacceptable. It is difficult to imagine the turmoil that would result from an American commanding all Chinese forces. It would be impossible to convince the Soviets that this was not a U. S. stepping-stone toward getting a measure of control in Manchuria. General Marshall felt that such a proposal would be most impractical.

General Marshall then discussed the effect of Communist propaganda and showed that it had almost completely destroyed the effectiveness of Executive Headquarters. The power of that tripartite agency was so weakened as to be almost incapable of action.

General Marshall again emphasized the necessity for the third parties to act together and to play a wise and determined part. They should carefully examine both sides of the situation. The Generalissimo is aware that he is necessarily dependent upon the third parties for the success of the National Assembly. The third parties should get down to the fewest possible issues, get the fighting stopped, and [Page 423] settle certain fundamental issues, particularly like the organization of the State Council.

Mr. Miao agreed that the chief weapon of the third party group was its participation in the National Assembly. He felt that the first important point for the third parties to settle was the cessation of hostilities. Second and almost simultaneously would come a designation of the Communist delegates for the National Assembly. This would be followed by a settlement of the issues pertaining to the reorganization of the Government, the local government problem, and the Kalgan-Harbin problem. These are the five main points. If possible, it would be desirable to leave the reorganization of the Executive Yuan alone and just settle the matter of the organization of the State Council. Mr. Miao conjectures that it might be desirable for certain ministries, such as communications, finance, and education, to be absolutely neutral in every respect, possibly even to employ foreigners. He thought possibly this last might be too theoretical, though it might work if it were stipulated for a period of say only two years.