Wartime planning for training new government bureaucrats to be sent to Taiwan to manage the island’s postwar administration clearly showed how the Nationalist high authorities initially perceived the island’s status vis-à-vis China. In response to Chen Yi’s question about launching an urgently needed personnel training program for postwar Taiwan, Chen Lifu, then Nationalist minister of education and leader of the influential Central Club Clique (CC Clique) within the KMT, proposed that the program be launched in Fujian, where a new National College of the Maritime Frontier should be established. He cautioned that the training program should be carefully designed to meet Taiwan’s “distinctive colonial environment.”71 Chen’s rationale here was indeed very close to what Chiang Kai-shek had in mind. As revealed in his personal diary shortly after the war ended, Chiang thought that Taiwan’s special geopolitical background and colonial experience had given it a unique character. Therefore, Chiang believed the island would best serve as a maritime base in postwar China’s eastern sea frontier. In this regard, future Nationalist personnel dispatched to work on the island, as Chiang noted, should be specially nurtured and educated so as to fit in with Taiwan’s postcolonial environment.72
The Taiwanese members in the Investigation Committee, however, harbored somewhat different views about their home island’s future position and its governing structure. They admitted that, as the island had been under Japanese colonial rule for fifty years, social conditions there were indeed very different from those in other mainland provinces. Yet, at the same time they worried that placing too much emphasis on Taiwan’s “foreignness,” “frontier character,” or “colonial experience” would lead to an inevitable marginalization of the island’s position in the postwar Chinese political and territorial structure. Xie Nanguang, an advocate in Taiwan’s anti-Japanese movement in the 1920s who had subsequently been involved in the KMT’s intelligence activities on the island in the 1930s and the 1940s, made it plain in 1944 that he considered the Nationalist government’s frontier and ethnopolitical policy in China’s ethnic borderlands “a total failure.” Therefore, the last thing he desired was to see Taiwan being returned and governed as another frontier territory.73
Huang Chaoqin, another active “half-mountain” member in the Investigation Committee, shared the same uneasiness. To avoid a relatively modernized Taiwan being ruled as postwar China’s new frontier, Huang suggested that the island be considered as an “experimental province” of China, with its own provincial constitution and appropriate political mechanisms to accommodate its unique political and societal conditions.74 Ke Taishan, noted for his anti-Japanese revolutionary endeavors in the 1940s, expressed his concerns that the United States might take advantage of any military landing on Taiwan to dominate the island. Feeling anxious that the Nationalist authorities would not prioritize the postwar Taiwan issue when victory arrived, Ke pushed the Investigation Committee to take immediate preparatory measures to guarantee a smooth transfer of power on the island. As Ke and his fellow Formosans in the committee saw it, the most imperative task was to train a great number of Nationalist staff for the takeover operation, thus lessening the institutional gap between the island and the mainland.75
During the last months of 1944, a coordinated stance on postwar Taiwan was gradually formed within the committee. It was generally agreed that the island would be governed as a “special province” (not a district, region, or territory) under rules different from those for other Chinese provinces. The future head of the Taiwan provincial authorities would be given more power than the governors of mainland provinces. The new Taiwan provincial structure would be allowed greater authority to cope with the island’s political, security, economic, and civil affairs.76
As the Chinese Nationalists became ready for takeover operations in Taiwan, their attitude grew more assertive. In July 1944, when discussing the Chinese, American, and British postwar administration of liberated areas with American ambassador Clarence E. Gauss, T. V. Soong proposed a three-power conference to settle the issue. He told Gauss confidently that the Nationalist government would send its officials into Manchuria and Formosa to undertake effective governance there, while the United States would send its officials into the Philippines and the British would reenter Burma and Malaya.77 Having not heard back from Washington about the conference proposal, a month later Soong again pressed the American ambassador for a resolution. It was momentarily seen by the United States that a much more confident Chiang Kai-shek was now eager to secure permanent administrative and political dispensations in China’s postwar “liberated areas,” including Taiwan and the Pescadores.78
With research and training programs being kicked off by the Taiwan Investigation Committee, together with the formation of a relatively coordinated policy between the Nationalists and the Taiwanese “half-mountainers,” Chiang Kai-shek had reason to feel sanguine about governing the expected returned Taiwan. In the summer of 1945, as Japan’s defeat and China’s victory was only a matter of time, Chiang and most of his aides in Chongqing would probably never foresee that their new administration on the island was destined to be a bumpy and unblessed one. They could have never anticipated that, only sixteen months after the island’s return to China, a bloody and unnecessary tragedy would profoundly overshadow cross-strait relations. It would not only lead to a reconsideration of U.S. perceptions and policies toward the island, but would also have a traumatic impact on the island’s politics that continues even today.
2
A Troubled Beginning
IMMEDIATELY AFTER JAPAN SURRENDERED on August 15, 1945, Chen Yi was appointed Taiwan’s new provincial administrator (xingzheng zhangguan), to serve concurrently as the island’s garrison commander. Generally speaking, Washington regarded Taiwan’s new provincial leader as an honest man and one who had gained Chiang Kai-shek’s confidence. Nevertheless, officials in President Harry S. Truman’s administration also observed that opinion in China had not been entirely friendly to Chen Yi, in part because of his corrupt subordinates back in the Fujian period, and in part because of his pro-Japanese tendency, “not to mention he had a Japanese wife.”1 Such an unfavorable opinion was not wholly groundless. Washington’s military intelligence quarters recalled that during the last months of Chen’s governorship in Fujian in 1941, conditions in the provincial capital Fuzhou were so disastrous that the Japanese occupation forces were welcomed as a means of breaking Chen’s leadership. Although Chen was afforded excellent opportunities, for example, to launch economic monopolies in the province, they were carried out with poor results, as many of his men advanced their own personal interests. As a result, even before Chen assumed his new post in Taiwan, some in the Truman administration began to fret about his performance on the island.2 This was by no means a good sign.
As portended before V-J Day, the United States was largely responsible for Allied military operations at the early stages of post-colonial Taiwan. Starting from late August 1945, the U.S. Navy began transferring Nationalist Chinese divisions to Taiwan, in order to repatriate the Japanese troops there and to safely withdraw Allied prisoners from Japanese POW camps in northern Taiwan. Between August 29 and September 9, U.S. Navy Task Group 77.1 proceeded from San Pedro Bay in the Philippines to Keelung, where its planes and ships participated in the evacuation of, and provided medical care for, 1,281 recently released Allied POWs. Of these, 1,160 Allied POWs, mostly Americans, were later transferred to Manila, while the remaining 121 POWs were evacuated to Taipei, where they were temporarily placed under the care of British Navy Task Group 111.3 then working jointly with its American counterpart.3
In the meantime, an American “Army Advisory Group” was organized in Chongqing under the direction of General Albert Wedemeyer, who succeeded Joseph Stilwell as Chiang Kai-shek’s chief of staff in the China theater, and was now responsible for the Nationalist takeover in the newly liberated areas.4 Between early September and mid-October 1945, several small-scale American military deputations arrived on Taiw
an and were soon integrated into an “American Liaison Group” under the command of Colonel Cecil J. Gridley. Among the first arrivals were Colonel Reginald L. Hatt, who, acting as G-2 for Gridley, was in charge of intelligence affairs, and Colonel Leslie C. Card, who would perform as a representative from the Office of Strategic Services (OSS).5 As the Nationalist Chinese were handicapped by a lack of naval transportation capabilities, they relied solely on both technical and advisory assistance from this liaison group for major takeover operations.6 On October 17, 1945, elements of the Seventh Fleet escorted more than forty American troopships into Keelung and Kaohsiung. On board were two divisions from the Nationalist 70th Army, numbering in excess of 12,000 men. Six days later, an American plane left Chongqing for Shanghai, bearing General Chen Yi and his official party for their new provincial administrative duties on Taiwan.7
The beginning of Nationalist Chinese recovery of Taiwan seemed both unimpressive and inauspicious. According to the American Liaison Group, Chinese army personnel arrived without bedding or clothes and seized what they needed. To facilitate their operation, the Chinese army units had to inform the defeated Japanese with shame that the Americans in this group were their advisors, and thus they were acting according to the group’s instructions.8 George Kerr, now an assistant naval attaché in the U.S. embassy, who escorted Chen Yi to Taiwan, recalled that the Chinese officers arriving at Keelung begged the Americans to send an advance unit overland through the narrow valleys leading to Taipei some eighteen miles away, as they had heard that vengeful Japanese suicide squads lurked in the hills. Formosans soon heard this and laughed at the “shambling, poorly disciplined, and very dirty” Chinese Nationalist troops as they marched. According to Kerr, local Taiwanese began teasing that the Chinese “victors” ventured into Taiwan only because the United States stood between them and the dreaded Japanese. Kerr went as far as to accuse Chen Yi and his entourage of seizing every opportunity to cause the Americans a public loss of face on the island. One example took place during a great parade prepared for Chen and the Americans. It was arranged that Chen would ride in the motorcade near the head of the possession, with the senior American officers somewhere near him. However, it turned out that the Americans’ escorts had faded away, eagerly scrambling for space as near Chen’s car as possible. Other Americans in the liaison group were left to find their own way to the last car in the line. This “small unnecessary official discourtesy,” Kerr exclaimed, was unmistakably due to a desire to cause the Americans a public loss of face.9
George Kerr’s somewhat exaggerated narration may be balanced by accounts given by the British, who took a more sympathetic attitude toward the Chinese. A Foreign Office field report pointed out that the first Nationalist troops to land in Taiwan, the 70th Army, were actually well disciplined, and the impression they created was not unfavorable. It was the 107th Division, arriving later and taking up quarters in Taipei, which created the most adverse impression.10 In any case, with the assistance of their American allies, the Nationalists were at last able to fulfill the Allied General Order No. 1, accepting the surrender of the Japanese armed forces in Taiwan.
By early April 1946, when the last Japanese soldier had left the island, the American Liaison Group also withdrew, having no further “official duties to perform” on the island.11 Indeed, at this point the Americans acted according to what they had planned. A policy guideline set up in the spring of 1945 clearly demonstrated that one key purpose of Washington’s military policy to China in the immediate postwar era was to assist the Nationalists in maintaining peace and security in the liberated areas of Manchuria and Taiwan, “without undertaking the governance of these territories.”12 Shortly after V-J Day, Washington further dropped any discussion of issues surrounding the Chinese jurisdiction over Taiwan and the Pescadores. Still, experts like George Kerr did not cease to claim that, in a strict legal sense, transfer of the sovereignty of Taiwan had to wait until a formal peace treaty with Japan was concluded. There was also no shortage of military concerns over America’s future interests in Taiwan; between November 1945 and November 1946, the proposed arrangement for a comprehensive aerial mapping of Taiwan fully exemplified the high estimation Washington held over the island’s strategic importance even during peacetime.13
Nonetheless, the fact that no Allied powers voiced any doubts about Chen Yi’s new provincial administration suggests that, however controversial or imperfect it was in the early postwar years, the Nationalist government’s de facto control of the island had been generally recognized. In the summer of 1947, when General Wedemeyer led a fact-finding mission to a Nationalist China that was rapidly becoming dispirited, a confidential State Department memorandum prepared for him still maintained this political understanding.14 When the American Liaison Group completed its task and departed from Taipei, no one predicted that, within years, the legal status of Taiwan, and the suitability of Nationalist rule over the island, would erupt as one of the most pressing issues confronting the Truman administration.
THE CHEN YI ADMINISTRATION
At the beginning, with both military and civilian authority centralized in Chen Yi’s hands, the new provincial administration was operating rather well. As one British consular report reckoned around mid-1946, Chen was having considerable success with the problem of “controlling a population that was only in name Chinese and was in fact insular and almost alien.”15 Chen, as depicted by former OSS intelligence analysts who were now affiliated with a new research bureau within the State Department, had particularly done a good job of transforming the island’s rich Japanese assets into the Nationalist properties for China’s postwar rehabilitation and reconstruction.16 This, in hindsight, could not have been achieved without America’s noninvolvement in post-colonial Taiwan’s internal disposition, which only occurred because the idea for a greater U.S. role was dropped the last minute. In late 1946, Taiwan’s provincial government had controlled a command economy made up of 70 percent of industrial wealth and 72 percent of Taiwan’s land.17 By mid-1947, former Japanese assets, businesses, and industries, both state-run and privately-owned, taken over by Chen Yi’s administration amounted to 15.66 billion in Nationalist Chinese currency (fabi), which was approximately 7.83 million in US dollars. In addition, a total of 987 units of Japanese “enemy enterprise property” were confiscated by the provincial authorities, among which 494 units were incorporated into Taiwan’s public-owned enterprises.18
Attracting foreign companies and investments for joint ventures in Taiwan quickly grew in importance among the Nationalist central authorities in Nanking. In mid-1946, keen discussions were underway concerning which American or U.S.-based oil companies, such as the Texas Company, Standard-Vacuum, and Shell, might join the Chinese Petroleum Corporation in owning an oil refinery in Kaohsiung. Weng Wenhao, Nationalist vice premier in charge of the project, was convinced that it would be much easier to launch a petroleum refinery and a development partnership with foreign companies in Taiwan than in Manchuria, where Soviet influence remained unfavorably strong and the political situation remained delicate.19 Weng estimated that $3,700,000 was needed to rehabilitate the Kaohsiung refinery and develop petroleum potentialities in southern Taiwan, and he urged Washington to support this project. And yet, the Nationalists had no intention of turning the Chinese Petroleum Corporation into a private enterprise, because they considered controlling petroleum products critical to assuring that supplies would not go into Communist hands. As a result, the State Department deemed it inappropriate to participate in a project where a state-owned enterprise functioned both as a business competitor and as a government regulator.20
In retrospect, the cost of exploiting post-colonial Taiwan’s wealth and industrial base for Nationalist postwar reconstruction, and specifically for the struggle against the Chinese Communists, was extremely high. This was easy to detect when the exploitation policy implemented by Nationalist leaders like Chen Yi eventually led to the 1947 “February 28 incident” on the island. Cla
iming himself a faithful follower of Sun Yat-sen’s philosophy, Chen Yi strongly believed in placing national capital over private investment, as well as in emphasizing state enterprises, as the best way to run postwar Taiwan’s economy.21 These ideas fit perfectly well into Chiang Kai-shek’s planned strategy of utilizing Taiwan as a supply base in postwar China’s rejuvenation. Indeed, soon after his inauguration, Chen and his provincial administration lost no time in reorganizing the Japanese enterprises into a system of officially operated monopolies. A series of new regulations were promulgated so as to lay the legal basis for taking over operations, and new political organs were set up for the same purpose.22
2.1 Chen Yi, the first Nationalist provincial administrator of postcolonial Taiwan. (Courtesy KMT Party History Institute)
But Chen Yi’s policies, involving such important issues as the disposition of Japanese assets and economic reconstruction, cultural reintegration and language, and participation in political activity, all led to disputes with the local Taiwanese, who felt that their living conditions worsened after the retrocession. As early as January 1946, an American intelligence report indicated that Chen Yi’s attempted seizure of private property involved “the unauthorized use of the name of the U.S. government,” causing resentment among the people of Taiwan, the breakdown of law enforcement, and discrimination against the Taiwanese by the Nationalists.23 Believing that local anti-Chinese feeling was rising to an extent to which an enquiry was necessary, in early 1946, members of the OSS stationed in Taipei, led by Captain William J. Morgan, began conducting a public opinion survey throughout the island. According to George Kerr, now serving as the American vice consul in Taipei, the surprised Taiwanese were boldly asked by the OSS staff whether they would prefer continuing Chinese rule, a return to Japanese administration, or a future under United Nations trusteeship, with the United States as trustee.24 Although Kerr later claimed the survey to be a “silly performance,” Chen Yi and his cohorts suspected that Kerr was endeavoring to “protect Japanese interests” on the island and had had a hand in this intrigue. An attempt to have Kerr removed from Taipei soon followed, but failed.25
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