Foreign Relations of the United States, 1950, East Asia and the Pacific, Volume VI

794A.00/1–550

Memorandum of Conversation, by the Secretary of State

confidential

Washington, January 5, 1950.

Subject: Formosa Problem

Participants:	Senator William F. Knowland
	Senator Alexander H. Smith
	The Secretary of State
	Mr. Jack K. McFall1

Senator Knowland and Senator Smith called at my office this morning and we discussed the Formosa issue for about an hour and a half.

I opened the conversation by stating that I felt it proper to review briefly the general considerations entering into the Formosa problem. First I called attention to the fact that, to all intents and purposes, all of continental China was now to be written off as there did not appear any possibility of further effective military resistance to the Communist regime on the mainland. I called attention to the fact that I had had repeated conferences with the British, designed to point up to them the desirability of maintaining a nonrecognition policy of Communist China but that in spite of those representations the British had decided their interests lie in the direction of recognition.² Consequently I felt that the statements I was to make should be placed in the framework of the realization of the fact that Burma, India, Great Britain, New Zealand, Australia, Canada, and doubtless a large number of other nations would be recognizing the Communist regime before the passage of any considerable period of time. I made it clear that our standing in the eyes of the Chinese at the moment had reached a nadir which was somewhat comparable to the same state of disaffection in which the Russians were held some 21 years ago. I pointed out that to all intents and purposes Manchuria and outer Mongolia were firmly under Russian control, achieved as the result of a long-time design, and that inner Mongolia and Tsinkiang were also under a less severe measure of control. I stated, however, that as far as the rest of China was concerned Russian control as such had in no way been consolidated and that I felt the Soviets were going to encounter increasing difficulties by way of their program of subjugation. My reasons for this view were amplified.

I then briefly reviewed country by country the present situation in Burma, Malaya, Siam, Indo-China and Indonesia, indicating, that with the exception of Burma, there are encouraging signs of varying degree on the horizon in each of these areas.

I next reviewed the history of the Formosan question, pointing out that Formosa was essentially a Chinese territory, the control of which was interrupted by the Japanese for a period of some 40 years and that in recognition of this inherent right of ownership of the island by China both the Cairo and Potsdam Declarations reaffirmed such right.³ I pointed out that if one wanted to, be legalistic it could be argued that in sheer legality Formosa would not be a part and parcel of China until a stipulation to that effect had been made in the Japanese Peace Treaty. In further elaboration of this point I said that legal arguments of somewhat kindred nature with only a difference in party in interest could be made as regards the Mandated Islands in the Pacific, the Kuriles, and Korea; but for my part I preferred to deal with the sheer realities of the situation in each one of these cases, namely, that it makes little difference what might be done by way of formal documents, the fact remains that all of these areas fall in the same category as far as their administration and control are concerned by having had their fate morally sealed by some form of prior agreement. I then stated that if we accept the thesis that to all practical purposes Formosa historically has been a part of China—that it is part of China today and must in all morality continue to be a part of China—we are next confronted with the situation as to what, if anything, is to be done about the existing situation. In essence, I replied to my own question by stating that as I view the picture we, are confronted with the necessity of making a choice that ultimately would lead us to adopting one of two alternative courses of action; We can take the position either that we will fight, if need be, for the retention of the island tinder our aegis, or in the absence of such a position we must be prepared to accept what now appears to be the real possibility of its collapse.

As regards the first alternative, I stated I did not believe it was in the interest of the American people to hazard a war over Formosa; and secondly, that the mere statement of our intention to so hold the island would be completely defeative of the general line we had been taking and the philosophy we had been preaching of self-determination of all countries and areas in Asia. I emphasized my strong feeling that such a move would play right into the hands of Russian propaganda which could exploit to the fullest the point that such actions give the lie to our protestations of an absence of any imperialistic design in our motives. I reiterated that we simply cannot afford, by overt moves on our part, to place ourselves in a position where we would have difficulty in answering the charge that we were moving in the same orbit of imperialistic design that Russia is following today. I remarked that in my opinion any such move on our part would be greeted by all of the other countries in that area with whom we are trying to work in instilling ideas of responsible government with a sense of revulsion and with an attitude that our deeds were belying our words. I then stated that it would be possible for us to take this view, of course, only if the area in question were one that our highest military authority had deemed to be not of vital importance to the security of the United States. Following this up, I made the statement that the Joint Chiefs of Staff had made such a definition and that while I acknowledged that the highest military authorities would look with considerable concern should a foreign power occupy Formosa, nonetheless the retention of Formosa has been defined to be not of vital importance to our security.

Senator Smith mentioned at this point that he had spoken to Ambassador Stuart just before his heart attack and the Ambassador had indicated he felt that we must devise some means to prevent Formosa from falling into Communist hands. The Senator followed this observation with a statement that he wondered why the advice of men on the spot like General MacArthur⁴ and Admiral Radford,⁵ both of whom had expressed to him very strong feelings that under no contingency should we permit Formosa to fall into Communist hands, had not been taken into account. I replied to this observation with the statement that there were always differences of opinion among military personnel as to the strategic importance of practically any place which one could select in the world and therefore it was necessary in such matters to accept the considered judgment of the Joint Chiefs of Staff who were charged with the responsibility of resolving our military potentials and strategy in terms of a worldwide outlook.

At this point I proceeded to develop the strategic aspects of Formosa, pointing out that it was only 40 miles nearer to Okinawa than the mainland of China and only 160 miles nearer to the Philippines than the China mainland—both of them distances that have no significance in terms of airpower today. Next I called attention to the military and financial resources which the Nationalist government has on hand today to meet the threat of any possible invasion from the mainland. I averted to the fact that the population of Formosa, is about 6½ million, to which a million individuals have been added in the form of the large Nationalist Army, plus a 100,000-man airforce and a 30,000-man Navy, not to mention about 700,000 refugees from the mainland. I stated I felt China had sufficient financial resources to buy whatever military equipment and replacement material might be needed to meet any threat of invasion which might come from the Communist forces on the mainland, provided that the political situtaion in Formosa did not decay to a point where the invasion could be successful because of the sheer inability of the Nationalist government to make its men fight and prevent defections of both men and materiel of the Air Force and Navy. I reaffirmed my position that we should continue to supply the needs of the island for fertilizer and to carry on the rural rehabilitation program, but that anything further than that by way of increased military assistance or military advice is regarded as unnecessary on our part and would be defeative of the principles of non-intervention which we had been endeavoring to espouse.

Senator Knowland at this point called attention to the fact that all ECA aid other than the fertilizer and rural rehabilitation programs had been stopped; that the funds available for a reconstruction program had been frozen and that he felt strongly this was a mistake. Senator Knowland also stated he could not share my view that the situation internally in Formosa was nearly as bad as he inferred from my remarks and that to the contrary he left the island with the impression that there was quite a high state of morale among the armed services as well as the Formosans, and that if we would give a proper measure of both military and economic aid the situation could be saved. Senator Knowland was particularly critical of my statement that I considered the 100 million or 150 million dollars left in the financial coffers to be sufficient to meet their needs, saying he felt it was essential for the Nationalist government to retain those funds as a backing for their currency and that he was unable to understand why we would continue to aid England to build up her reserves when apparently we took the view that it was not necessary for Formosa to have any financial reserves at all.

Following this phase of the discussion I took occasion to read from a memorandum all of the military equipment and ammunition that had been sent to Formosa during the past calendar year from the U.S. as well as from other sources,⁶ Senator Knowland stated that in his opinion the Nationalist armies were not adequately armed on either Formosa or Hainan as his investigation disclosed that much of the ammunition and a good proportion of the guns were of ten or twelve years of age and of a vintage that we would have disposed of for our own purposes five years ago. I countered this statement with the observation that they would probably have the same kind of ammunition that the Communists would have in the event they would endeavor to invade the island.

At this point Senator Smith interjected the remark that he did not understand why the State Department had forbidden him and Senator Ferguson to go to Formosa. I stated I had looked into the charges that the State Department had frustrated Senator Ferguson’s movement into Formosa and that the Department had had absolutely nothing to do with the matter at all; that his failure to reach Formosa was due rather to his inability to secure proper plane transportation to take him there. Senator Smith then stated he had seen the wire himself which counseled him not to proceed to Formosa, I thereupon told Senator Smith I would look into it immediately as it was certainly done without my knowledge.

In conclusion, I stated it was my view that inasmuch as Formosa was not of vital importance from a strategic standpoint, the United States had much more to lose than to gain if we were to take any military action, or adopt a policy of military assistance that would lead to military involvement, designed at holding Formosa, and that distasteful as the possibility was that the island might well be occupied by the Communists at some time in the future, we must concede the possibility, and not compromise our entire position in the Near East by doing deeds that would give the lie to our words.

I next suggested that it would be well to clarify the situation on the publication of the confidential inter-Departmental paper on Formosa.⁷ I emphasized that this paper was just one of hundreds of similar papers constantly being issued with the design of giving government employees holding responsibility for explaining world and area developments and happenings a proper line of comment and explanation in the context of our foreign policy and national interest if and when any such developments and happenings occur. If, therefore, the contents of the paper were to be viewed fairy in terms of its purpose and design, I stated that I could not view the directions given therein to be in any way damaging to us but rather that it was sensibly contrived to protect our world prestige should the possible eventuality of the fall of Formosa become a reality.

Senator Knowland thereupon quoted several excerpts from the paper and stated that he was amazed at the “spirit of defeatism” contained in the passages and that in his opinion it showed that the Department was taking an indefensible attitude on this issue and was endeavoring to encourage others to take and propagate the same view. I firmly disavowed this interpretation by stating that the Senator was reading the passages entirely out of context and reaffirmed my previous statement that proper management and stewardship required us to keep responsible government officials informed of proper “slants” for them to take in the interest of securing a press reaction that would explain developments to the world in a fashion that would serve a maximum advantage to our world position and prestige. I repeated that the direction given was on an “as, if and when” basis and was not intended to encourage any propaganda efforts before the fact on the part of anyone. As an example, I cited the fact that we had prepared a paper⁸ of similar nature at the time of the recent Philippine elections, pointing out the nature of the position that should be taken by responsible government officials in commenting on the election of the Philippine President. The paper was prepared in such a way as to give them a proper course of action to follow in meeting any of the three possible election results that would flow from the selection of any one of the three presidential candidates. Neither Senator Knowland nor Senator Smith made any request of me to look at the paper.

At this point Senator Knowland stated that in all respect to me he must reiterate that he felt the State Department was pursuing a policy of grave danger to the American people and that he considered the issue to be one of paramount importance. He said he felt it his conscientious duty to endeavor to acquaint the American people with what he regarded to be a fatal policy I was espousing which we would live to rue and regret.

Senator Smith concluded the observation by stating he was disappointed that no opportunity was afforded for any consultation on this matter, as disclosed by the fact the President was in the act of issuing a policy on Formosa⁹ without either him or Senator Knowland having been consulted before the policy was given to the public. Senator Smith stated he felt there was a real possibility that this action might affect his future attitude of support of a bipartisan foreign policy.

Courteous but restrained goodbyes were offered by those present.

1. Assistant Secretary of State for Congressional Relations.
2. On January 6, 1950, the Government of the United Kingdom announced its recognition of the People’s Republic of China as the de jure Government of China and stated its readiness to establish diplomatic relations with the People’s Republic of China. For documentation on the United States Government’s decision not to recognize the People’s Republic of China, see Foreign Relations, 1949, vol. ix, pp. 1 ff. Material on the recognition question during 1950 is contained principally in Department of State decimal file 793.02.
3. See Foreign Relations, The Conferences at Cairo and Tehran, 1943, p. 448, and ibid., The Conference of Berlin (The Potsdam Conference), 1945, p. 1475.
4. General of the Army Douglas MacArthur, Supreme Commander, Allied Powers (Japan), and Commander in Chief, Far East.
5. Adm. Arthur W. Radford, Command in Chief, Pacific.
6. On January 3, Assistant Secretary of State for Far Eastern Affairs W. Walton Butterworth had forwarded to Mr. Acheson a memorandum, not printed, listing the most significant military items shipped from the United States to Formosa during the past 13 months. The memorandum also covered the status of military equipment on the island. (794A.5/1–350)
7. For information on this paper, dated December 23, 1949, see Foreign Relations, 1949, vol. ix, p. 460.
8. Not printed.
9. See the editorial note, infra.