George Kerr recounted that, on January 15, 1947, this group of “educated elites” drew up a petition addressed to General George Marshall, who had just been made secretary of state in the Truman administration. Kerr claimed that more than 150 signatures were attached, of which some represented spokesmen for organizations or groups of private citizens, numbering about 800 in all. But when it was ready, leaders of this group suddenly decided to delay presentation to the U.S. consulate in Taipei. Instead, they now intended to appeal to the Nationalist government in Nanking, hoping that it might induce Chiang Kai-shek to intervene in Taipei. But nothing happened after their appeal.53 A month later, in mid-February, the group at last brought to the consulate the long petition, which they had addressed to General Marshall. The crucial point was that the shortest way to reform a currently malfunctioning Taiwanese provincial government was to wholly depend on the “United Nations Joint Administration” on the island, and cut political and economic ties with China for some years. The group sought American support in fulfilling this goal so as to prevent the Taiwanese from becoming “the stark naked.”54
There was no indication as to whether the petition letter was being sent out to Washington or to the U.S. embassy in Nanking. This was barely surprising; Ralph Blake had long made it unmistakably clear that, as an official body, the American consulate in Taipei should not be allowed to take an interest in the Formosa problem, and that its official relations were with Chen Yi and his provincial authorities, and not the local Formosan groups.55 But the situation changed dramatically after the bloodshed of February 28. On March 3, representatives from this “well-educated Taiwanese” group resubmitted an ameliorated version of the petition letter to the consulate. Instead of asking for a “United Nations Joint Administration” in Taiwan and to cut their ties with China for some years, they now urged American assistance in seeking direct UN intervention pending the final transfer of sovereignty to China. Moreover, the group advocated that they would “resist [the] present Government if it seeks military revenue or fails to meet popular demands for reform to be discussed from March 10.”56 Presumably under heavy pressure from his colleagues within the consulate, notably George Kerr and Robert J. Catto, the director of the United States Information Service in Taipei, Ralph Blake backed down and changed his nonintervention stance. He now concluded, in his report to the State Department dated March 6, that the only panacea available was an “immediate American intervention in its own right or on behalf of the United Nations” to prevent disastrous slaughter by the Nationalist forces. Blake went on to argue that American prestige was high, and intervention was profoundly desired by the local people. The Taiwanese assumed that United Nations control would be predominantly American. In the end, Blake warned that “civil war on Formosa is [the] most probably alternative” if no immediate action was undertaken.57 Notably, Blake’s analysis came out two days before Nationalist reinforcements arrived and major bloodshed began.
Blake and Kerr were not alone in their opinions. G. M. Tingle, the British consul in Tamsui (on the northern tip of Taiwan), wired back to London immediately after the incident that the best solution to the problem of Taiwan now “would be for the island to be removed from mainland Chinese administration.” He believed that what the Taiwanese desired was to govern themselves, and until such time as they were able to accept such an undertaking, a UN trusteeship would “almost certainly meet with Formosan approval.” In his report to Whitehall, Tingle shared Kerr’s resentment of Chen Yi, observing that “British trade, along with other private trade, will be allowed no chance here” if the present provincial regime continued.58
In the midst of the riot and chaos in Taiwan, whether the U.S. government should withdraw American citizens on the island became an issue igniting much controversy. On March 5, the consulate in Taipei dispatched an urgent telegram to the embassy in Nanking stating that, as the crisis rapidly developed throughout the island with imminent troop reinforcement from the mainland, removing consular families and other UNRRA staff and citizens should be seriously considered. The consulate further suggested that the embassy send a plane at once to assist with the evacuation.59 Upon receiving this request, Ambassador John Leighton Stuart relayed this concern to the Nationalists. Although two days later the consulate reevaluated the evacuation operation as now unessential, the idea of evacuation itself greatly annoyed and humiliated Chiang Kai-shek, who in his diary impugned the American diplomats as “shallow and flippant.”60
On March 10, two days after the Nationalist reinforcements arrived and began cracking down on the rebels throughout the island, George Kerr submitted a new memorandum to the embassy in Nanking via Colonel F. J. Dau, assistant military attaché to the embassy, who was then ordered to fly to Taiwan and investigate the situation. Having realized that the Nationalist military suppression meant there was now little hope that the island would come under UN trusteeship, Kerr quickly shifted his stance, suggesting instead that Washington should encourage Chiang Kai-shek to replace Chen Yi with a civil provincial administration. To prevent the strategically important Taiwan from succumbing to communism as a result of the February-March massacre, Kerr meanwhile urged that American economic assistance be rendered to a newly reformed provincial administration.61 Despite such a subtle shift of stance on China’s policy toward Taiwan, as revealed in Kerr’s memorandum, he was now widely resented by the Nationalists as the major source of the island’s turmoil. On March 17, Kerr was ordered to leave Taipei for the embassy in Nanking, where he was assigned the task of preparing a comprehensive report on the recent turmoil in Taiwan. He would never again go back to his consular post in Taipei.
During the February and March incidents, observations and recommendations in reports from Blake and Kerr had become so controversial, so loaded with personal emotions, that Ambassador Stuart found it necessary to warn the State Department to be cautious about their narration and evaluation.62 In early April, Stuart further instructed all American consular officers in China that telegrams “which are speculative or interpretative in nature” should henceforth be sent to the embassy in Nanking only, not to Washington.63
Although he had made himself extremely unwelcome both in China and Taiwan, George Kerr may have never realized that his March 10 memorandum would soon trigger a series of new political developments about Taiwan. His idea of giving economic aid to help Taiwan’s newly organized administration was soon incorporated into Stuart’s official report to Washington, in which the ambassador suggested that Taiwan should be treated as “a special economic area and employ a group of American advisers to aid in developing its economics.” Although ostensibly this was about economic advantages, Stuart argued that the goodwill of the local Taiwanese and the realization of enlightened democratic principles adapted to the historical circumstances could be secured as essential factors.64 His suggestion soon got feedback from Washington. On April 2, Under Secretary of State Dean Acheson cabled Stuart, saying that assistance in economic development for Taiwan appeared sound in principle, although it was necessary first to question the practicality of sending technical advisers without reasonable prospect of gaining support from the local people.65
In hindsight, Kerr’s memorandum of March 10 may have served as an unintended, indirect catalyst to speeding up the Nationalist reorganization of Taiwan’s provincial administration. When Chiang Kai-shek met with Stuart on March 29, the American ambassador, who apparently concurred with Kerr’s idea, was polite and yet bold enough to suggest that Chiang should appoint a civilian official, preferably T. V. Soong, who had recently stepped down from the premiership, as Taiwan’s new governor. Stuart reminded Chiang that with such a man in charge and an emphasis on civil rather than military administration and on economic restoration, better treatment of the islanders and in general a more honest and enlightened administration could be hoped for.66 It should be stressed here that initially Chiang by no means intended to replace Chen Yi, as he still did not believe Chen’s disposition of the Taiwan u
prising was entirely wrong.67 When Chen’s dismissal seemed inevitable, and when T. V. Soong showed no interest in taking up the new position, other possible candidates surfaced, including several Nationalist high military chiefs and Chiang’s son Ching-kuo. But Chiang ruled out all these possibilities. Conspicuously, he needed to make American reaction his primary concern.
U.S. policy therefore moved toward the creation of a certain kind of political-economic setup on Taiwan, even though at this point no one imagined that this new policy direction eventually would lead to an “unintended state” after 1949. In mid-April 1947, Kerr finally completed his memorandum on Taiwan for Stuart, who revised it and passed on the final version to Chiang Kai-shek and other Nationalist high officials. In this memorandum, Kerr reemphasized the importance of preventing communism from infiltrating Taiwan after the uprising. Beginning on a conciliatory note, Kerr said there could be no question that “Formosan-Chinese have felt loyalty to the Central Government and toward the Generalissimo.” Yet he also warned that, after the massacre, “a local form of communism is not only possible but is believed to be a highly probable development if economic organization collapses under the pressure of continued military occupation.” Distancing himself from the idea of placing Taiwan under UN trusteeship, Kerr, whether genuinely or expediently, instead advocated a prompt and fundamental reform of the island’s provincial mechanism that included both the Formosans and the Chinese mainlanders, to restore the island to “its former high level of political allegiance and of economic production.”68 Four days after receiving the memorandum, Chiang Kai-shek declared that Wei Daoming, a civil official who had recently been the Chinese ambassador to the United States, would succeed Chen Yi as Taiwan’s new provincial governor.
PICKING UP THE POST-TRAGEDY PIECES
With the “recommendations” from the American embassy, which were essentially based on George Kerr’s ideas, Nanking began restructuring Taiwan’s provincial administration and recruiting more Taiwanese elites into the island’s political apparatus. More practically, top Nationalist leaders like Chiang Kai-shek were pressured to take remedial measures to restore peace and order on the island, at a time when their struggle with the Chinese Communists was rapidly turning ugly on the mainland. Chen Yi was first relieved of his post as a result of a decision made at the KMT Central Executive Committee on March 23, and on April 22, Wei Daoming was installed as Taiwan’s new provincial leader. Meanwhile, the island was made a regular province, one of the thirty-five provinces of China, and the provincial governor was given the official title of “Chairman of the Provincial Council,” to conform with the practice followed in all the other provinces. The Taiwan Provincial Administrative Executive Office, the single organ in which great power had been concentrated, was duly abolished.69
The newly organized Taiwan Provincial Council now consisted of fourteen members, half of whom were “half-mountainers,” most of them with mainland experience. The great majority of Chen Yi’s cohorts were replaced by new appointees, a considerable proportion of whom were Taiwanese. Although the provincial chairman was given jurisdiction over the island’s armed forces, its civil and military authority was substantially curtailed.70 Such a power reduction in the aftermath of the 1947 uprising bore one unforeseen result, and its significance would not be felt until sometime later. Simply put, the decreased provincial authority served as a crucial factor in the final survival of Chiang Kai-shek’s political life in the late 1940s and early 1950s, when the Generalissimo, who was then head of the KMT party but not the head of state, found himself still holding some bargaining chips vis-à-vis a U.S.-backed and yet authority-constrained Taiwan provincial chairman over the island’s politics.
John Leighton Stuart was outwardly pleased with the new political arrangements on the island, which he deemed as “a step forward as regards the susceptibilities of the Taiwanese.”71 George Kerr, however, was more wary of the new appointments. On the eve of his departure from Nanking to return to Washington on April 28, Kerr reminded his superiors both in the embassy and the State Department that it remained too early to know whether the new provincial governor’s services abroad, especially in the United States, would be played up locally to create an encouraging aura of liberalism in Taiwan. He was conscious enough to point out that Wei Daoming’s prospects for success as civil governor of Taiwan would be conditioned by the influence he could exercise over the military, the well-entrenched bureaucracy left by Chen Yi, and the policies so far espoused by Nanking, which had led to the bloody episode.72
Admittedly, Kerr’s concerns were mostly correct, and perhaps what was more inspiring to him was that the new provincial authorities were endeavoring to improve the island’s situation. Fairly speaking, during his term in office for a year and a half, Wei Daoming made an honest effort to undo the ill effects of Chen Yi’s administration. He publicly expressed himself in favor of free enterprise on the island. A number of government enterprises, such as the Match Company, were newly opened to private operation and investment. Mining and industrial concerns, jointly operated by government and private interests, were also turned over to private hands. Meanwhile, the Monopoly Bureau was changed to the Public Sales Bureau, which was then revamped by restricting the number of commodities it could sell to retailers. The Trade Bureau was reorganized into a new Material Supply Bureau to streamline its handling of commodities sold abroad and produced by publicly own enterprises, and their sales to meet the demands of private enterprises. The reform of the two bureaus, as one scholarly work maintains, tremendously increased the number of private enterprises, allowing local Taiwanese business people to conduct their affairs with more freedom and certainty than before.73
One unnoticed development the above policy change brought about was that it marked the beginning of a gradual shift of Taiwan’s economic policy reformulation and rethinking. In their on-the-spot investigatory reports to Chiang Kai-shek, both Minister of National Defense Bai Chongxi and the supervisory commissioner for Fujian and Taiwan provinces, Yang Lianggong, unanimously urged that economic reforms be implemented on the island. Their main idea was that Taiwan’s private and publicly owned enterprises should be separated, and that the power of the latter greatly reduced. Bai especially urged that Nanking should send delegates to all branches of the Taiwan provincial government to check on the progress of these economic reforms and to determine whether further changes were needed. Chiang apparently agreed with these points.74 While the United States urged Nanking to reform Taiwan’s inept administration, these two investigators from within the Nationalist government proposed a salient departure from the former governor’s economic philosophy on the island.
On the whole, although it cannot be said that economic conditions improved forthwith under Wei Daoming’s administration, the situation did not become appreciably worse. Around mid-1948, as one political report by the British consular staff on the island specified, with Wei’s skillfulness and diplomacy, the political situation was calm and no discontent had been permitted to become vocal, thus furthering consolidation of Chinese rule on the island.75 The new economic measures imposed after the riot, notably the lifting of Chen Yi’s state socialism, were originally intended both to pacify the native Taiwanese and to fulfill the ambition of making the island a model for the mainland Chinese provinces. It was thus historically accidental that those post-traumatic measures inadvertently laid the foundation for the subsequent formation of a Nationalist island state and unwittingly sowed the seeds of Taiwan’s free market economy. Despite some positive signs coming out in the field of post-Chen Yi Taiwan’s domestic affairs, in diplomatic terms, the riot, coupled with a worsening situation on the mainland, had inevitably brought about a gradual shift of American policy toward the island. Such a change of policy, in retrospect, played a crucial part in the subsequent development in China’s domestic and regional politics. It was also fatefully entwined with the making of Nationalist China on Taiwan.
3
Reformulating U.S.
Policy toward Taiwan
DESPITE GEORGE KERR’S recall, his rich experience in Taiwan remained one important source of information within Washington’s policy-planning circle. Upon returning to Washington around May 26, 1947, Kerr was summoned to present his views concerning post-February 28 incident Taiwan to the State Department chiefs. At that meeting, Kerr urged Washington to develop a new formula to prevent Taiwan from falling to communism. He stressed the importance of U.S. aid in the existing economic structure of the island, and urged international “joint management” following the withdrawal of Nationalist troops. He also suggested that if advantage could be taken of “the de jure status of Taiwan” to insist on a supervisory body to reduce and check the “current excesses” of the Nationalist administration, the island might be reserved under temporary international control as a stable foothold for future liberal reconstruction efforts in China.1 According to Kerr, his “imperialist” line of argument was snubbed. John C. Vincent, director of the Office of Far Eastern Affairs, saw him to the door after the briefing with remarks to the effect that “no one in the United Nations and certainly very few in Washington would ever be interested in Formosa.” Without a doubt, Kerr was angry about this policy of “no-policy” for Taiwan.2
To be sure, something was actually about to change in America’s Taiwan policy. As Chiang Kai-shek’s military position throughout North China was turning dreary, there began a lurking uneasiness among Washington’s strategists. Starting in early 1947, Chinese Communist units retreating from northern Jiangsu joined with others from central Shandong to counterattack their Nationalist pursuers on the Shandong-Jiangsu provincial border. Chiang’s forces were woefully routed with the loss of some 40,000 men and twenty-six tanks, with which the Communists began building an armored column of their own. The ensuing defeat of Nationalist forces in central Shandong in late February cost them another 30,000 men, and the loss of control of the strategic Jinan-Qingdao railway now put the local Nationalist authorities in an extremely precarious situation.3
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