Accidental State

by Hsiao-ting Lin

  Less well known is that Chiang Kai-shek briefly contemplated total abandonment of the KMT party shortly after the Nationalist seat was moved to Taipei. In early January 1950, Chiang formed a study group, consisting of his most trusted advisors, to draft a plan for party reform. Exactly two years before, Chiang had criticized the KMT as “decrepit,” “degenerated,” and “lacking in spirit, in discipline, and in standards of right and wrong.” He concluded by saying that “this kind of party should long ago have been destroyed and swept away.”66 Now, in a meeting at Chiang’s reclusive resort at the Sun Moon Lake in central Taiwan, the attendees belatedly agreed that reforms within the KMT party were crucially necessary in order to rescue both the party and the state. Chiang’s advisors specified that, to attract more talented people to serve and improve the party leadership, the reform timetable should stress the importance of the party being a new organization, with new party guidelines, new demands, and new tasks.67 But Chiang’s original idea was far more drastic. Realizing that reform in the demoralized KMT mechanism was unpromising, he thought instead about building a new party, which he tentatively called the “China Democratic Revolutionary Party” (Zhongguo Minzhu Gemingdang), while the old KMT party would be allowed to continue. With such a dual device, Chiang thought of creating a favorable image by implementing a multiparty democracy in Taiwan, thus attracting wider support from both within and abroad. More realistically for the convenience of political maneuvering, Chiang could reconstruct his leadership in the new party, while rejecting the uncooperative KMT party veterans and clique members and placing his old rivals in the virtually defunct KMT party machine.68

  During the first months of 1950, Chiang’s inability to effectively dominate the party and the state frustrated him immensely. Despite precarious military, diplomatic, and national security conditions, intense arguments and bitter recriminations continued within the party and the government. The struggle between Chen Cheng and K. C. Wu over who should control overlapping provincial and state financial affairs remained unresolved even after Chiang had resumed the presidency. These disputes were followed by another bitter rivalry between the executive and legislative branches of the central government, when a group of legislators refused to approve an emergency bill that would give Premier Chen Cheng more authority to manage the crisis. The controversy led the angered Chiang, who was at his wit’s end, to reproach his party members as being “rude and unreasonable.”69 As the crisis on the island lingered on, more government officials and party members backed away from radical political reform, as they feared that the little power they still enjoyed might soon be transferred to other party members. Chiang was obliged to shelve party reform for the time being.

  MANAGING THE MAROONED MAINLAND FORCES

  During the first half of 1950, issues surrounding the management of the depleted Nationalist forces posed yet another grave challenge to the Taipei-based Nationalist authorities. In early 1950, two Nationalist army divisions totaling 30,000 under Hu Zongnan still held a small section of territory in the Sichuan-Xikang provincial border against 280,000 local PLA troops. Meanwhile, a wide belt in southern Yunnan held by loyal Nationalist irregulars also remained beyond Communist control. Shortly after Chiang Kai-shek departed Chengdu, a Nationalist military field headquarters was set up in Xichang, where Chiang ordered Hu to turn the area into an enduring base for guerilla operations in Southwest China.70 To consolidate the defense of Xichang, Chiang planned to use Mengzi in southern Yunnan, then still under Nationalist control as a transfer post, where the first batch of 50,000 gallons of fuel and other materiel was scheduled be airlifted to Xichang from Hainan Island. Meanwhile, Chiang also tried to use Claire Chennault’s Civil Air Transport to transfer the abundant tin ore in the Mengzi area out of Yunnan as revenue to subsidize Nationalist military activities on the mainland.71 To demonstrate his resolution in safeguarding Xichang to the end, Chiang sent his son Ching-kuo and other high-ranking military staff on a dangerous inspection tour and to work out a feasible defense strategy, in which a military zone bordering Sichuan, Xikang, and Yunnan might be sustained.72

  Maintaining a presence in mainland China’s remotest southwestern corner was a daunting challenge, and this last-ditch effort eventually proved futile. But miraculously, despite extreme difficulty in obtaining supplies and logistic support from the outside world, the Xichang stronghold lasted for three months. Despite the gallantry of their stance, the Nationalist remnants in Xichang were on their last legs by the end of March 1950. When the Communist-besieged Nationalist forces under Hu Zongnan were obliged to abandon their field headquarters, Hu instructed his men to withdraw southward into West Yunnan and to join the local anti-Communist force under General Li Mi, a loyal KMT commander still struggling against the Nationalist-turned-Communist Yunnan provincial authorities.73 A large portion of Hu’s forces was wiped out halfway through the Xikang-Yunnan border; only about 400 survivors managed to escape and retreat into the Shan State in northern Burma, where they were later joined by Li Mi’s remaining 2,000 men from Yunnan.74 Li Mi’s irregulars in Burma, who constituted an exiled but rather unmanageable Nationalist force, became a flashpoint in East Asia’s Cold War theater in the years to come.

  The other Nationalist army in exile unexpectedly found its way to Vietnam. Between November and December 1949, Bai Chongxi’s forces were largely defeated and destroyed in Guangdong and Guangxi provinces, and only one army corps, totaling about 30,000 men under General Huang Jie’s command, survived and retreated to the Guangxi-Vietnam border. These Nationalists resisted fierce PLA attacks in the rear, while their representatives negotiated with the French at Chi-Ma, a Vietnam border post. An agreement reached on December 12 allowed the Nationalist forces to enter Vietnam, where they soon surrendered their arms and equipment. Shortly thereafter the disarmed soldiers moved from Chi-Ma to the shores of the Bay of Along near Haiphong.75 In late January 1950, another 4,500 Nationalist troops under Li Mi in Yunnan fled the PLA and also moved into Vietnam, where they too were interned right away.76

  In Beijing, the newly inaugurated Chinese Communist regime realized the possibility of the Nationalist entry into Indochina, and Mao Zedong was furious. On November 29, Zhou Enlai issued a warning to the French authorities in Vietnam, to the effect that any government offering refuge to the Nationalist forces would face consequences.77 The French had every reason to worry about the Chinese Communists’ threat. Their outposts at Chi-Ma and other northern Vietnamese borders had a garrison force of only one or two companies, while Zhou Enlai’s strong warning was supported by more than 50,000 PLA in Guangxi Province. Zhou’s warning greatly disturbed the French. For a while, around mid-January 1950, they considered returning the interned Nationalists to mainland China, a plan they never implemented.78 In the summer of 1950, the Nationalists were transferred to Phu Quoc Island, about 15 miles off the southern coast of the Indochina Peninsula, awaiting eventual repatriation. The other 5,000 Nationalists from Yunnan were also relocated in Cam Ranh Bay in South Vietnam. It was not until the summer of 1953 that these disarmed and ragged Nationalist soldiers were eventually sent to Taiwan.79

  The presence of these two exiled Nationalist military remnants in, respectively, Burma and Vietnam, despite enduring miserable conditions, had considerable political implications. For Chiang Kai-shek, as long as there were still traces of a Nationalist military presence in Asia, there remained a dim yet symbolic hope of reconquering the Chinese mainland. Shortly after Huang Jie’s men settled themselves near Haiphong, Bai Chongxi proposed to Chiang that his exiled soldiers in Vietnam be reorganized into a volunteer force to collaborate with Bao Dai’s regime against communism. Huang’s implication here was that this exiled Nationalist force might one day return to Southwest China.80 In April 1950, General Li Mi, now appointed by Chiang as governor of Yunnan, proposed that two operation bases be set up on the Yunnan-Burma and Yunnan-Vietnam borders. Li urged that negotiations be opened with the governments of Thailand and Vietnam over the establishment of
two liaison offices in Bangkok and Saigon to facilitate his anti-Communist cause in Yunnan. While the Nationalist Foreign Ministry was reluctant to follow suit when considering Taipei’s already strained international position, it nevertheless suggested that an underground network be created under the cover of Taipei’s existing diplomatic posts in Bangkok and Saigon.81 After the outbreak of the Korean War, these two exiled Nationalist forces became an issue between Taipei and Washington.

  In Taipei, working out what was the best way to deal with the Nationalist authorities on Hainan Island had become a headache. In early March 1950, Bai Chongxi appealed to Chiang Kai-shek for financial aid to support his 90,000 surviving forces in the mountain areas of his home province of Guangxi, where they were carrying out small guerrilla operations against the Communists. Although a reluctant Chiang verbally agreed to pay 100,000 silver dollars monthly to Bai’s remnant forces through the Hainan authorities, he realized that a decision had to be made about cutting support for Nationalist forces not under his direct command, a move that Taiwan’s financial crisis made urgent.82

  According to one U.S. confidential report, by early 1950 the total monthly budget for Nationalist military expenses was 38,530,000 silver dollars, of which the budget for the Southeast Military and Political Administration command area (including Taiwan, Hainan, Zhoushan, and other islands along China’s southeast coast) was 26,710,000 silver dollars. To sustain the Southeast military and political command, 11,990,000 silver dollars would be contributed by the central government, while the remaining 14,720,000 silver dollars (roughly 42 million New Taiwan Dollars) would be the Taiwan provincial government’s responsibility. As the provincial government’s revenues in 1949 fell short of its own civilian expenditures, and as K. C. Wu could not now raise more than 10,640,000 silver dollars monthly for military expenses, it was extremely difficult to see how the provincial authorities could meet this monthly contribution without resorting to inflationary measures.83 The account given by Ren Xianqun, K. C. Wu’s capable provincial finance commissioner, indicated that around February 1950, the gold reserve that Chiang Kai-shek brought from Shanghai was estimated at 850,000 ounces, and of which 200,000 ounces were expended for military expenses monthly.84 By the end of March, Chiang was so worried about the speedy depletion of Taiwan’s gold reserves that he ordered a ceiling on monthly military expenditure be fixed at 23,000,000 silver dollars, well below the 38,530,000 silver ceiling in place at the beginning of 1950.85

  Given such dire financial conditions, it is unsurprising that, in early March, the governor of Hainan, Chen Jitang, and the island’s military defense commander, Xue Yue, decided to fly to Taipei to ask for further aid, but Chiang dissuaded them from making the trip. Instead, Chiang sent his vice minister of economics to Hainan to deal with the leaders on the island.86 In the meantime, when Chen Jitang’s Nationalist 32nd Army stationed in Hainan planned to evacuate to Taiwan due to increasing difficulties in obtaining food and logistic support, Chiang categorically rejected the plan.87 By early April 1950, it became evident that Chiang cared less and less about whether Hainan was lost or held, an observation that led Colonel David Barrett, U.S. military attaché in Taipei, to posit that “any U.S. money spent in Hainan in the near future would inevitably be lost, without even having purchased time.”88 What Chiang urgently needed now was an acceptable schedule and justification for giving up Hainan that would not further damage his government’s already weak prestige. Eventually a decision was made with the advice of Admiral Charles M. Cooke, who carried out a privatized U.S. policy toward Chiang and thus influenced Nationalist China’s vital national defense and security policy formulation in the darkest moments of Chiang and his crumbling regime.

  7

  U.S. Military and Security Policy Goes Underground

  IN JANUARY 1950, when Harry Truman and Dean Acheson publicly announced that Washington would not provide military assistance to safeguard Taiwan, few in the world doubted that Chiang Kai-shek’s political career was doomed and that Mao Zedong’s forces would invade Taiwan and the island would perforce become part of the new People’s Republic of China. But in the meantime, in the United States, a group of politicians, businessmen, and serving and retired military officers, all staunchly pro-Chiang, had been busy exploring possible means to prevent Taiwan from falling to the Communists. Given Washington’s official stance of nonintervention in the unsettled Chinese civil war, efforts made by Chiang’s American supporters inadvertently led to a somewhat privatized policy toward the Nationalist government, unprecedented in China’s as well as in America’s recent history.

  A growing trend toward privatizing American policy toward Nationalist China became more discernable when, on November 7, 1949, William Pawley, the recently retired U.S. ambassador to Brazil and a core member of the China lobby, wrote to Dean Acheson suggesting that “a small group” of retired officers should be dispatched without delay to Taiwan as Chiang’s military advisors. Pawley specified in his letter that the total number in this group of advisors, including additional civilian economic ones, should be 130 to 150, and he asked for the “approval or acquiescence” of the Truman administration.1 Instead of refusing outright, the secretary of state replied that he did not object to a “limited number” of private American citizens going to Taiwan, if their services were contracted directly by the Nationalist government and if the United States took no part therein.2 Although Acheson gave Pawley the “acquiescence” he requested, nothing substantial followed. Around the time that General Zheng Jiemin visited the United States, there was a brief discussion about sending a military assistance group to Taipei. This idea was soon aborted because of the State Department’s reservations.3

  After the Nationalist government moved to Taiwan in December 1949, the island’s military security remained a crucial topic for political and military chiefs in Washington, who kept a wary eye on both the seemingly inevitable collapse of the ragged regime and an expected increase of the Communists’ military strength when they captured the Nationalist weaponry on the island. This is fully understandable. A top-secret State Department memorandum prepared in early 1950 provides a rare glimpse of Taiwan’s ammunition landscape at the critical juncture of its survival. In the fourteen months between November 1948 and early January 1950, the most significant items shipped to Taiwan from the United States included 137,200 rifles, 7,060 machine guns, 200 motor carriages, 20 AT-6 aircraft, 77,189,000 rounds of shells and ammunition, 70,000 rounds of rockets, and 17,900 bombs of various categories. This confidential investigative report went on to suggest that the Nationalist government was able to procure 30 Sherman tanks from Britain, 1,000 tons of small arms munitions from Spain, 81,000,000 rounds of ammunition from Canada, and 25,000,000 rounds of ammunition, 41,000 rifles, and 600 machine guns from Belgium.4 Meanwhile, there were 100 each of scout cars, armored cars, and light tanks waiting to be shipped to Taiwan from Philadelphia; they ultimately reached the island in late March 1950.5

  While many in Washington were convinced that the Nationalists had enough to defend their island base, others, specifically those at the SCAP headquarters in Tokyo, believed more should be done to rescue Chiang Kai-shek. In late January 1950, apparently with the tacit approval of General MacArthur, whose changed perception of Chiang is discussed later, two high-ranking SCAP intelligence officers surreptitiously arrived in Taipei. There they met Chiang Kai-shek, K. C. Wu, and other Nationalist high officials. According to the SCAP headquarters, the purpose of their visit was to “inspect future sites for radar stations” to be established in Taiwan.6 Chiang seized the opportunity and urged Tokyo to assist Taiwan with the island’s weak air defense. In addition to enhancing Taiwan’s air defense and the possible installation of radar stations, Chiang also discussed with the two SCAP intelligence officers the practicality of establishing secret bases of operations in South Korea.7

  Despite the professed technical nature of the meeting, the presence of the two military officers in Taipei immediately aroused serious
concerns among State Department bureaucrats, who worried that the “inspection tour” contravened decisions enunciated by Truman and Acheson. Robert Strong bitterly complained to Dean Acheson that the SCAP officers failed to inform him of their arrival and the purpose of their visit, and they failed to keep their appointment to see him in the embassy. They made all the appointments with Nationalist ranking officials, including Chiang Kai-shek, on their own, which fostered the impression of division among U.S. government agencies. More seriously, they had created in Nationalist Chinese minds “erroneous ideas of what to expect” from the Americans.8 The State Department also worried that the Nationalists in Taiwan would ask the two officers for advice on the maintenance and operation of these radar stations, and the press would interpret the visit as further evidence of American assistance.9 In September 1950, when Major Henry Vanderpuyl, one of the two SCAP military officers who flew to Taiwan, was found engaging in a security breach by disclosing the substance of a classified U.S. Embassy telegram to Chiang Kai-shek’s military representative in Tokyo, the State Department took that as a chance to fight back.10 In the spring of 1951, at the request of Assistant Secretary of State Dean Rusk, the Defense Department ordered the removal of Major Vanderpuyl from all contact with intelligence work involving Chinese affairs and transferred him to a “technical bombing group assignment,” where he no longer dealt with Taiwanese matters.11

  CHARLES COOKE’S HOUR IN TAIWAN

  Despite the State Department’s grave concerns that Taiwan’s fall to the Communists was inescapable, MacArthur and other staunch KMT supporters in the U.S. military establishment were determined to act on their own. On February 11, about ten days after the two SCAP intelligence officers’ visit to Taipei, Charles M. Cooke, former commander of U.S. naval forces in the Far East who was now accredited as a correspondent for the International News Service, followed suit. Accompanying Cooke was Millard P. Goodfellow, former deputy director of the Office of Strategic Services, who had served in Korea shortly after World War II and maintained close relations with the Korean government, SCAP, and military authorities on Okinawa. As newly released Chinese documents reveal, their trip to Taipei was apparently arranged by SCAP headquarters with MacArthur’s approval.12 Meanwhile, the State Department and the U.S. Embassy in Taipei were kept in the dark. They were told that the purpose of Cooke and Goodfellow’s visit to Taiwan was to conduct private business, including “selling fertilizer”; Cooke and Goodfellow’s actual activities in Taipei were never made known either to the State Department in Washington or to American diplomats in Taipei.13