Foreign Relations of the United States, 1946, The Far East: China, Volume X

Marshall Mission Files, Lot 54–D270

Draft Policy Memorandum Prepared in the Embassy in China³⁹

On the assumption that a state of civil war exists in China, it is necessary to reappraise the American position and determine what course of action should be followed in the face of this situation.

The primary and most urgent factor is that the existence of a state of civil war will inevitably encourage and increase the interest of the Soviet Union in the Chinese conflict and stimulate its hope that the United States may be persuaded by events to get out of China. Soviet political expansion into China would constitute a threat to the national security of the United States. It is, therefore, of primary importance that the United States remain in China and, concomitantly, that it maintain its policy objective, the creation of a united China, the first step toward which being a cessation of hostilities. It is merely the tactics to be employed to accomplish the immediate objective that are now subject to review and modification in the light of recent developments.

In my opinion, it would be as impractical for the United States to withdraw all aid from the recognized government of China and adopt a so-called policy of neutrality as it would be for it to accord all-out support to that government, giving it the wherewithall to solve the Communist problem by force of arms. The former course would discriminate against the effective government of most of China and would ultimately result in a chaotic condition in which the Chinese would find themselves at the mercy of Soviet machinations. The second course would discriminate against a large section of the Chinese people and would almost inevitably result at a certain stage in open or covert Soviet support of the Communists in order to advance their own interests, eventually leading to the possibility of a serious clash between the Soviet Union and the United States.

The alternative policy is conditional support of the National Government, using such support as a remaining lever to influence the Central Government toward some reasonable compromise in the overall political situation. In continuing a measure of support to the Government, it should be understood that the Generalissimo is the master in his own house and has practical control over the political situation in Kuomintang China. This being the case, and in view of his previous record and present position, there is no good reason to suppose pressure on him will cause him to undergo any fundamental change in his basic political philosophy and outlook. We must, therefore, take him as he is, but by our actions refrain from giving such support as will encourage him to think he can obtain a settlement of the Chinese problem by force. He must also be convinced that there are certain limits beyond which he cannot go and still continue to receive American assistance. Admittedly, this policy is in part one of penalizing the Central Government without corresponding pressure on the Communists; the fact is that we are in no position to exert any effective, positive pressure on Yenan.

A profound division exists between the supporters of the Central Government and the Communists. Mutual fear and distrust, even more than divergent political and economic philosophies, act to prevent immediate and peaceful settlement of the issues in dispute. A difference in the concept of the status of the Communist Party in the Chinese scene accentuates the attitude of suspicion. Two decades of intermittent civil strife have well laid the basis for mutual fear and distrust and confirmed the Communists in their belief that their political party requires its own army to assure its continued existence, and that having such an army they can operate as a state within a state. Correspondingly, the Central Government, aware of the gains the Communists have made at the expense of the legal government of China by employing forceful rather than political methods, holds the view that the party is in armed revolt against the legal government and can quite properly be treated as such. At the present time, the result is that both factions appear to be convinced of the inevitability of extended civil war; the Central Government because it thinks it can and should obtain by force of arms a dictated peace or at least secure a position sufficiently favorable to bargain more effectively; and the Communist Party because it appears to be convinced that the foregoing is the determined course of action of the Central Government and that it must, therefore, by a sufficient show or use of force demonstrate that this Government[’s] desiderata cannot be achieved and thereby, in turn, strengthen their own bargaining position. Additionally, the Communist Party may or may not believe that further extension of the civil war will so impair the overall Chinese economic and financial situation that the Communist appeal to the Chinese people will be correspondingly strengthened. It must, therefore, be the objective of the United States to convince the Generalissimo that settlement by military means is impossible and that he cannot expect American support in any such effort and, on the other hand, to convince the Communists that they will stand to lose more than they could conceivably gain should they refuse to accept any reasonable solution offered.

Although much has been accomplished for the Chinese people by way of reconstruction and rehabilitation during this year of relative peace, it must be recognized that the attainment of the objectives of American policy in China has now suffered a serious check and that as a result there is little likelihood that anything constructive can be achieved by American mediation until both disputants are finally persuaded of the inevitability of a political settlement. It must also be recognized that there will be serious danger in a stalemated continuance of civil war; that China may, in effect, become divided into two areas with the Soviet Union exercising predominant influence in the northern one. This eventuality must, if at all possible, be avoided; we must hew to our line of policy—to foster the creation of a united and stable China. Therefore, it is essential that the mechanism and instruments of American mediation and assistance be maintained in being available for immediate use when a condition of stalemate will make both parties more receptive to mediation. Accordingly, it is recommended that the following steps be taken:

(1) the President make a statement of American policy, suggested draft of which is attached;

(2) the mediatory efforts of the United States be, for the time being, held in abeyance until it becomes apparent to both sides that neither one can win, along with the increasing demand of the vast majority of the Chinese people for a peaceful settlement;

(3) acceleration of the process of regrouping and reducing the number of marines in North China with a view to their early withdrawal at a propitious moment, after due notification to the Central Government in order that it can prepare occupation of the areas to be evacuated by American forces; the marines at Tsingtao to be the first to be withdrawn since the situation in that particular area appears more stabilized and withdrawal would cause the least repercussions;

(4) immobilization of military assistance, such as Magic and Executive Headquarters, until such time as these instruments can usefully be employed again;

(5) maintenance of the Seventh Fleet based on Tsingtao, but curtailment of the training program for the Chinese Navy;

(6) in the economic field the ship transfer negotiations to be concluded and action continued on credits already granted, including Surplus Property Agreements, it being thoroughly understood that none of these credits is to be utilized for acquisition of arms, ammunition and munitions of war; export licenses are also to be withheld on arms, ammunition and munitions of war even if they are paid for in cash by the Chinese Government; no new Export-Import credits to be granted except for long-range construction and development programs to improve transportation which would have no important relationship to the immediate problem.

Should it become apparent at any time that the Soviet Union is giving effective assistance to the Communists, it would, of course, then become necessary to reconsider our position and set our course of action accordingly.

Nanking, September 6, 1946.

[Annex]

Suggested Presidential Statement

Since I asked General of the Army George C. Marshall to go to China in December of last year to assist the Republic of China to find a satisfactory solution to the dispute which was disrupting the peace and welfare of that country, whole-hearted efforts have been made to find an acceptable solution to this perplexing and dangerous situation. Through the cooperation of those concerned much progress has been made in determining the nature of the various issues in controversy and in reaching substantial agreement on a wide range of important problems. The most outstanding example of this was the agreements reached by the representatives of all parties and groups in the Political Consultative Conference which offered a liberal and far-sighted means by which the various political groups could reach a peaceful settlement. In the light of the predominating desire of the overwhelming majority of the Chinese people for peace and unity, the remaining obstacles to complete agreement are by no means insuperable.

Despite the proximity of agreement, there has been during recent weeks a gradual but decided spread of hostilities which now threaten to engulf the entire country and to push into the unpredictable future the period when a strong and united China can turn its entire efforts away from bloodshed and fratricide to furthering the peaceful pursuits which are desperately needed after the long years of bitter warfare against Japan. So widespread has the fighting now become that it approaches a state of general civil war with all the destruction, misery and human suffering which that must inevitably entail.

In these circumstances I am forced to make known that the responsibility for not accepting the compromised proposals for meeting the remaining issues in dispute must be borne by irreconcilable cliques in both major political parties whose intransigence, mutual suspicion and lack of good faith have thus far prevented accord.

The Government of the United States still believes, as I said last December, that “China has a clear responsibility to the other United Nations to eliminate armed conflict within its territory as constituting a threat to other people, a responsibility which is shared by the National Government and all Chinese political elements and groups.”

With the advent of this period of needless bloodshed the moment has come for the conscience and desires of the Chinese people to make themselves overwhelmingly and unmistakably heard to the end that conflict of Chinese against Chinese shall be stopped.

In my statement of December 15, 1945, I declared that, “The Government of the United States has long subscribed to the principle that the management of internal affairs is the responsibility of the peoples of the sovereign nations. Events of this century, however, would indicate that a breach of peace anywhere in the world threatens the peace of the entire world.” I also said, “The United States is cognizant that the present National Government of China is a ‘one-party government’ and believes that peace, unity, and democratic reform in China will be furthered if the basis of this Government is broadened to include other political elements in the country”, and further that “in line with its often expressed views regarding self-determination, the United States Government considers that the detailed steps necessary to the achievement of political unity in China must be worked out by the Chinese themselves and that intervention by any foreign government in these matters would be inappropriate.” This is still my view and the policy of the Government of the United States.

China must realize, however, that although the people and Government of the United States are desirous of assisting the people of China to rehabilitate their country and to improve their agrarian and industrial economy, they will only sanction such assistance on the understanding that China will move toward peace, unity and democracy.

Accordingly, I appeal to all Chinese elements and groups to subordinate partisanship in the interest of their country as a whole for which peace is so essential and to reinitiate negotiations to that end. While this exclusively Chinese effort is proceeding, the mediatory mission established by the United States in China will be maintained in readiness to assist in implementing any arrangement which may result. In the meantime, the Government of the United States will refrain from any action which in its opinion might lead either of the contending elements in China to believe that it could force a military decision with American assistance. Furthermore, it is the full expectation of the United States that all other nations of the world will adopt an attitude which will give the Chinese people a free and unembarrassed opportunity to resolve their difficulties without external interference.

39. See last paragraph of General Marshall’s telegram No. 1367, August 23, p. 79. This draft was forwarded on September 6 by the Minister-Counselor of Embassy (Butterworth) to General Marshall with the observation, “Needless to say, I am not satisfied with it, having sought unsuccessfully some elixir to give a new life to our policy”.