The Formosa Problem That Would Not Go Away
"THIEVES AND RASCALS can run faster in the dark." The mainland Chinese who were glad to see the U. S. Army Liaison Group depart in April, 1946, were not happy to see an American Consulate and an UNRRA office established at Taipei in May.
It would be difficult to say who most regretted the necessity for a Consulate - Chen Yi's men or some of the junior officers at Washington who refused to consider Formosa a distinct "problem" and were not prepared to discuss Formosa's legal status.
In prewar days commerce and visa work were the primary concerns of American consular establishments around the world, and so it had been at Taipei. After 1939 Formosa's trade with the United States dwindled to the vanishing point; the State Department proposed to close the office. The British Government--considerably wiser in these matters--thought it worthwhile to keep open a small window here, for it was obvious that Japan was building up Formosa as a forward base for military adventure, and Hong Kong was nearby. The Philippines attack in December, 1941, was launched from Formosan bases. The Vice Consul and his clerk were promptly interned, the consular records and furniture packed off to storage in the
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British Consulate at Tamsui. Thus the civil interests of the United States were not represented on Formosa for three and one-half years
In January, 1946, 1 was asked to transfer from the Naval Reserve to the Foreign Service. China had virtually no navy and naval interests on Formosa could be looked after by our Attache's Office at Shanghai.
I reported to the Naval Attache at Chungking and then returned to Washington to report here and there around town.
My old colleagues in the War and Navy Departments were eager to discuss the situation in Formosa, but not so some of the "China Firsters" in the State Department. It was an astonishing experience. There was manifest an unspoken belief or hope that if Formosa were not discussed, any problems there (real or fancied) would simply vanish. If there was a problem, it was a purely local one of bad relations between two groups of Chinese; it should not be permitted to rise to a level of serious discussions along the Potomac. Gains made in the Japanese half-century were of no interest.
On March 6, an officer called me into his office in the old State Department building, tossed a paper across the desk and said brusquely that he had been directed to show it to me. To forestall any suggestions of change, be said that it was to be in the hands of the State, War and Navy Coordinating Committee (SWNCC) on this very afternoon, March 6. The SWNCC (known as "Swink") was a policy-discussion board from which well-considered policy questions or alternatives were moved forward to higher levels in or near the Cabinet.
The State Department had been asked for a statement of its position on the status of Formosa, and this was to be the answer prepared in the Far Eastern Division.
The Memorandum stated very briefly that after careful consideration it was the Department's view that the Chinese Nationalist Government exercised de facto control, hence the United States would recognize China's exclusive claim to sovereignty. So far as we are concerned, "This is China now."
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I brought forward my tiresome points (a) that Japan had surrendered Formosa to the Allies, and not to China alone, (b) that the United States was throwing away in advance the legal right to intervene on Formosa if in future the Allies should need the island as a policing base, and (c) the American government was ignoring a moral obligation to see that the "liberated" Formosan people were given just treatment and a guarantee of basic human rights.
As the paper was taken from my hands and tossed into the "OUT" basket, the reply was "Yes, but that's just too bad . . .
Two weeks later the Department had rather an unpleasant jolt; the Formosa issue was not "going away" as it should. The Scripps-Howard papers in Washington had begun to publish a special dispatch series by William H. Newton under these bold, black headlines:
CORRUPT CHINESE RULE BLEEDING RICH ISLE
CHINESE EXPLOIT FORMOSA WORSE THAN JAPS DID
FORMOSAN PLANTS RUST AS CHINA BUNGLES RULE
U.S. PARTLY BLAMED FOR FORMOSA'S WOES
The Washington Post editorialized on the "Formosa Scandal" and asked if the United States could afford to stand by while our ally and protege, Nationalist China, made such a mockery of all the wartime "liberation" promises. Here and there across the country the Newton series evoked similar press comment. Every Congressman read the Washington stories - or at least saw the headlines.
Newsmen at the State Department asked embarrassing questions and received short answers. "Responsibility for conditions in Formosa, where the war's aftermath has produced corruption, looting, and graft, rests with China and not with the United States, State Department officials said today." On the hasty surrender of all Allied rights and interests to the Chinese, the Department spokesman observed that "the United States
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has no part in the rule of Formosa . . . the ability of the Chinese to administer Formosan affairs was not a consideration in the arrangement." 
I had not seen Correspondent Newton since he had visited Formosa and provoked such an angry roar from our colonel, and I had had no communication with him even then, nevertheless some of my new colleagues in, the Department and most of Chen Yi's Commissioners at Taipei instantly concluded that I had prepared or promoted these stories.
Thus the Formosa problem came home to roost in a very embarrassing and public manner at the nation's capital. The need for official American representation at Taipei could no longer be ignored nor action delayed.
Institutional Schizophrenia: The American Consular Establishment
A career consul was sent to reestablish the American office, and to restore, if he could, the prewar consular routines. He was soon to discover that something more than tea-shipment certificates and occasional passport work were to require attention, but he did the best he could to maintain the traditional routine. This itself was a complex job under the circumstances, for the little book of Foreign Service Regulations was clearly out of date; the postwar world had not been made to order in Washington, D.C. For some months we did our collective best, as an official body, to ignore unpleasant realities about us, and to deal only with official bodies of equal or higher rank.
Our consular staff numbered three American officers - the Consul, a Vice Consul, and an officer in charge of the United States Information Service. We had a supporting body of devoted clerks, interpreter-translators, radio operators and general errand boys. Some were Formosans and some were mainland Chinese.
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The Director of the USIS was in a most difficult position, for he was called upon to pioneer both inside and outside the consular office. The United States had never maintained a formal propaganda agency in peacetime. This new, subsidiary organization at the Consulate was obviously unwelcome and irritating. Its position in relation to bills of lading and visa duties was not well defined in the Foreign Service Regulations. Worst of all the USIS program called for some sensitivity to local current affairs and called for a show of cordial interest in local unofficial people that was distressing to old-school bureaucrats.
The USIS was expected to "tell the people about democracy," to explain American policy, and to assure the local population that Washington had its best interests at heart. The basic idea was to persuade people to "join up" with the United States and to close their ears and eyes to anything unfavorable to the American image. We were to show "our side" in the best possible light.
Unfortunately in those early days of USIS operations the USIS representative was expected to maintain a constant flow of radio and press news-release handouts to local radio stations and publishers. Too often these were stale or stereotyped and much too often entirely unsuited for release in the local situation. But instead of exercising local discretion to withhold unsuitable releases sent out from Washington, we were considered bound to distribute them.
The USIS operation at Taipei was extremely popular. among Formosans, for it brought in a breath of fresh air. There was a reading room open to the general public and there were mobile units (sound trucks and projectors) which carried films into the distant countryside. The USIS representative took part in many ceremonial activities which had nothing whatever to do with tea-exports, visa problems, or the official activities of the Chinese Government.
But from a traditional Foreign Service point of view this exposed the Consulate to far too many contacts with unofficial
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bodies. Since the Consulate had become so extremely active in pushing the American point of view, many Formosans assumed that they would receive a sympathetic hearing if they came forward to express a Formosan point of view as well. They brought their troubles to the Consulate with ever-increasing frequency. It was all very irregular.
Irregularity, above all things, was dreaded. If prescribed forms were not available for required reports, nonconformity had to be explained to Washington with meticulous detail. It was really thought better to make no report at all. Reports of "unusual events" brought risk; further reports and elaborations might be required by Higher Authority. Analysis of current events must be undertaken with utmost circumspection, if at all. Official people counted heavily; unofficial people were a waste of time and often a distinct embarrassment.
Within a few months the American Consulate at Taipei was in a schizoid state. The USIS program on the one hand attempted to create a rousing good impression of the United States as China's "Big Brother," and on the other hand the traditional Consulate proper attempted to make it very clear that as an "official body" the American Consulate was not interested in people - trade, yes, but not people. The dread of bureaucratic irregularity and possible censure impeded the flow of information to the Embassy.
We were also conscious of leakage somewhere along the line between Taipei and Washington. On June 5, one of Chen Yi's staff (Ma Hsien of the Secretariat) let it be known that a secret report on the Chinese Army's misconduct in Formosa, (prepared by the OSS team at Taipei), had been brought to the attention of General Chen Yi by the Generalissimo himself. There were other hints that the Chinese had knowledge of confidential and secret reports emanating from American agencies on Formosa. This froze the Consular blood.
My colleague, the Information Service Director (Mr. Robert J. Catto), shared my belief that Washington should have full
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reports on current events, for tension was growing steadily within the island, and we were keenly aware of misrepresentations sent abroad by the Governor's Office of Information. We knew that Chiang's position on the mainland was most unstable, and that circumstances within the island were prompting Formosan leaders to appeal to the United States more and more often for help. We believed it was important to conserve America's high prestige and influence among the Formosans; the United States might need their goodwill one day.
We were very well aware that the Consulate was not a policy making body, but we felt that our Taipei office had an obligation to impress upon the Embassy and the Department the nature of the growing crisis.
We were greenhorns who had not learned to let well-enough alone, sleeping dogs lie, and dust settle.
The truth was we were all trying to pick up the bits and pieces of a world that would never be the same again. There was much more to do in the American interest than stamp shipping invoices. The Okinawan problem on Formosa in 1946 was an excellent example.
Okinawans and Other Troublesome People
Officially the Consulate took the position that the problems of nationals of other countries who were also on Formosa were of no concern to the United States of America, and in 1940 this might have been so. But in 1946 General MacArthur ordered the mass repatriation of Japanese living on Formosa. Among them were 14,906 Okinawans. Those who lived far from Keelung port sold or gave away all their properties, including their homes, moved to Taipei and Keelung, and prepared to depart. About one-third the total number had sailed for Okinawa when another MacArthur order directed the remaining Okinawans
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to stay in Formosa; war-torn Okinawa could not take care of them.
For months thereafter 800 homeless Okinawans camped in the fire-gutted ruin of the Government-General building, and other hundreds camped in primitive shelters in the parks or in any nearby shed. They were forced to use street-side hydrants for water and street-side ditches for latrines. An investigation (by UNRRA personnel) disclosed that more than 2000 were near starvation, that the incidence of disease was rising, the death rate was very high among old people and infants, and petty theft and prostitution were becoming the principal means of economic survival. Desperation was breeding radical agitation among the jobless younger men.
Older Okinawan leaders - some of them doctors and teachers I had known before the war -came to beg for American help for their stranded compatriots. The Chinese took the position that they were Japanese subjects and enemy aliens, obviously the responsibility of Tokyo, and of no interest to the Taipei Government.
On May 27 a principal Okinawan spokesman came to the American Consul asking for confirmation-or denial-of a rumor that SCAP had again begun negotiations for Okinawan repatriation. His people were desperate; if they were not soon to be sent home they would have to scatter over Formosa in search of shelter and food in less crowded areas.
The Consul denied knowledge of SCAP's plans; he made it clear that the American Consulate was not officially interested in the problem; the fate of the Okinawans was a matter of concern to the military authorities alone. The Consulate had received no instructions, and it should be understood that it was not the Consulate's fault that it had no proper channels through which to bring the problem to Tokyo's attention.
The Okinawans then turned to the UNRRA group, which managed to work out a modest relief program, tiding them over until Tokyo permitted repatriation.
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In August I prepared the routine midyear report on social, economic and political conditions, called for by the Foreign Service Regulations. Lest any whisper of criticism concerning the Okinawans had reached Washington, I was directed to insert this carefully worded disclaimer:
While the American Government here dissociates itself from the problem of many thousands of Japanese retained for "technical services," and from the problem of the several thousand Okinawan refugees who are living near starvation while awaiting American permission to return to their homeland, the possible development and repercussions of the problem of their presence in Taiwan cannot be overlooked . . .
This bureaucratic double-talk informed Washington of the problem, as a matter of record, but assured the Department that in all correctness we had done nothing about it.
There were foreigners of many nationalities marooned on Formosa at the war's end. The majority looked to the United States for help, whether they might deserve it or not. To our official distress spokesmen for the Japanese who had been retained as technicians made it clear that they looked to the United States for protection in a very chancy situation. Said one, "The fact that there is someone listening to the words of the Japanese remaining on the island with the attitude of impartiality and fairness is a great relief to us." He was referring to the UNRRA staff and not to the Consulate.
Only a demonstration of consular interest in conditions aboard repatriation ships forced the Chinese to abandon plans for grossly and most dangerously over-crowding Liberty ships sent to carry the Japanese back to their homeland, but this demonstration took place only after it was pointed out to the Consul that a disaster at sea would have international attention, and that responsibility for it would rest squarely with the American Government.
During my brief residence as the Embassy's Assistant Naval
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Attache on Formosa, I had made some reports on curious and interesting foreigners on the island at the end of 1945. There were Annamese who had been political exiles here, abandoned when Japan was defeated and driven from Indochina. A large number of Javanese seamen were present, stranded in local ports after a period of service in the Japanese merchant marine. Filippinos were present who had served the Japanese in various ways. Two Russian peddlers were known to have been living on Formosa at the outbreak of war. I could not locate them, but was not much surprised to have delivered to my hands one day a cablegram addressed simply "To the Representative of the U.S.S.R. at Keelung," which created a minor mystery, never solved. Here and there German nationals lived obscurely in the larger towns, teachers of science and of the German language, ready enough to serve Germany's ally Japan when all went well, but now claiming volubly to have been "secret agents" working for the Allies when surrender came. They were a familiar breed all along the China coast. In 1946 a German bearing a Peruvian passport came to me asking for a visa, and for introductions which would help him find scientific employment in the United States. He professed to be investigating microorganisms living in or near hot springs, though we developed reasons to believe that he might be more interested in radioactive minerals. He had been trained in a German science institute, sent by the Nazi Government to Peru, and from there (with a Peruvian passport) sent on to Japan and Manchuria. The war's end found him employed in one of T.V. Soong's vast enterprises, and by the Soong interests, so he said, he had been sent to Formosa. He did not like the prospects of impending trouble there, and so asked us for permission to enter the United States. Our answer was "No."
The presence on Formosa of such a diverse bag of foreign nationals suggested the need for a report to Washington. "No," said the Consul, the presence and activities of other foreigners was of "no concern whatsoever" to the American Consulate.
Late in the year I sent along to the Embassy and the
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Department a secret coded supplementary report upon prominent personalities about town, and certain evident conflicts within the Taipei Government. My report evoked a telegraphic request for more detail, but this was construed to be a rebuke; I had committed an unpardonable bureaucratic sin by raising an issue which called attention to ourselves.
My second semi-annual report for 1946 on social, political and economic conditions was endorsed, coded, and forwarded through Nanking, to Washington. It carried a warning that tensions within Formosa were near the breaking point, a violent crisis might be upon us at any time. The document was given a number and entered into our secret record book.
Thus throughout 1946 the Consulate was an unhappy "schizophrenic" organization. The career Consul represented the old regime, when Consulates were official bodies dealing principally with official bodies and with commercial matters, according to the Regulations. The USIS organization, on the other hand, represented the new postwar order. The world had changed, the United States Government and people were entering upon the long cold war of words, ideas, and human emotions.
We were reminded soon enough of this when we began to see the pattern of Chinese reaction to the presence of prying, spying foreigners on Formosa.
Chinese Reaction to Foreign Critics:
"Getting the Facts Straight"
Chen Yi's men resented the presence of foreigners, for it gave them a double task. On the one hand they had to persuade the world overseas that despite occasional unfriendly news reports, they were doing a magnificent job, rehabilitating the economy and leading the Formosans back from Japanese servitude to full and happy membership in the democracy of China.
On the other hand, they had to undermine and destroy, if
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they could, the high prestige of Americans on Formosa, and the emotional trust with which Formosans were turning to foreigners with tales of woe. The biggest task was to block development of Formosan appeals to the United Nations or the United States. The American Consul's associates and the UNRRA group were a menace to the success of Necessary State Socialism.
The Department of State appeared to be much more certain of China's legal position than the Chinese themselves seemed to be. Would other nations be willing to subscribe to the views on sovereignty embodied in the SWNCC memorandum? And what if unfriendly press notices abroad prompted the United States Congress to demand an investigation?
Anticipating this challenge, Chen Yi reorganized the Provincial Government Information Service. All references to the "provisional" character of the local government began to disappear from official and unofficial documents and from public statements. All foreign visitors - and especially American visitors - were smothered with evidence of progress, presented by men who knew how to flatter Americans. Steps were soon taken to lower American prestige among the Formosans and to discredit Formosans in the eyes of foreigners overseas. Something had to be done to check this dangerous talk of local appeals to the United States or the United Nations.
A graduate in journalism from the University of Missouri (Stanway Cheng, M.A., '37) was placed in charge. Huang Chao-chin (M.A., Illinois, '26) became "Foreign Affairs Representative" or front man. The Central News Agency of China opened a Formosa office on March 16. A private, confidential press-clipping wire-service in Cheng's office kept the Governor's men abreast of published American comment on Formosan affairs.
Visiting Congressmen, the Administration's agents, and other unwary guests who came to Taipei were at once taken in hand by Cheng and Huang or their deputies, to be given flattering
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V.I.P. treatment. For visiting "fact-finders" it was a great convenience to be handed up-to-date statistical summaries which could be read at any time on the homeward journey. These made tedious on-the-spot investigations unnecessary, and left time for delightful suburban tours, hotspring outings and gargantuan Chinese feasts. Over-crowded scheduling for the visitors ensured a maximum insulation from reality and prevented any unfortunate straying from well-marked paths. If a visitor insisted upon talking to Formosans there was always ex-Mayor Huang, a native of the island, and Chairman of the People's Political Councils, to satisfy their curiosity. Delays in transportation, far from Taipei, or mechanical difficulties with cars within the city became standard means of forestalling undue meetings with independent and articulate Formosans or long conferences at the American Consulate. Creating insulation for visitors was a fine art, pursued by talented men.
Manipulation of the news to show "progress under Chen Yi," and America's hearty support of the Chen Yi regime is illustrated in this example, published in Taipei, which purports to have originated in Washington:
GREAT IMPROVEMENT IN REHABILITATION ON FORMOSA AS TOLD BY RETURNING U.S. ECONOMIC OFFICERS
(UP) Washington, Aug. 5, Relayed by Central News Agency. United States economic officers who have just returned from a tour of the Far East do not fall in with the general belief that the Chinese administration on the island of Formosa is inadequate and that there has been large-scale looting and ransacking.
They saw marked improvement in rehabilitation work in the regions they visited where the Chinese Government seemed to be exercising an adequate management of all industries and local affairs with every possible technical assistance available.
Except those who were retained as technical experts and their families, totalling about 28,000, all Japanese on the island have been duly repatriated. 
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The Newton articles were not forgotten. To smother unfavorable impressions created by one man's dispatches, Chen's Information Office invited twenty-six correspondents to spend the week of August 31-September 6 on Formosa, with lavish entertainment and all expenses paid.
The bona fide correspondents knew that their press credentials for long-term work on the mainland might be lifted if they were too outspoken. They could merely hint that all was not well. For example, Ronald Stead of the Christian Science Monitor wrote that "Chinese Government officials and Taiwan provincial administrators say the number of dissidents is very few. So far our time has been so occupied in eating our way down and up the island, receiving the most lavish hospitality everywhere, but making only a wide, superficial inspection, that there has been little time to weigh the situation."
A few foreigners were assumed to be well-paid agents hired to steer the group toward a proper understanding and reportage of Chinese achievements on Formosa, and some frankly confessed (privately) that they were "free-loaders" professing assignments -fictitious or self-devised - from local papers in the United States. Temporary press cards had been issued to them at Shanghai.
Transients could be handled by Chen Yi's agents with marked success, but the presence of UNRRA and Consular people remained always a problem. In a move to concentrate the foreigners' evening activities at one spot, Cheng and the Information Service arranged (behind the scenes) to open the Lucky Bar, thoughtfully designed to appeal to American patronage. Here the Chinese Information Service could keep abreast of day-to-day affairs within the foreign community.
I had doubted the accuracy of the report which told of the origins of the Lucky Bar, but one summer evening, after drinks and dinner at my house, the mysterious Admiral S. Y. Leigh (T. V. Soong's man, Li Tsu-i) asked me why I never went to the Lucky Bar, adding, indiscreetly, that whenever he wanted to
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know what Americans thought of the situation in Formosa he simply went to the Bar and took the booth next to that habitually occupied by the American Consul, his wife, and their friends, or sat near the favorite booths and tables of the UNRRA members drifting in and out.*
The story of the United Nations Relief and Rehabilitation
Administration (UNRRA - Taiwan) is thoroughly documented and rests upon the observation's of able men and women from fourteen nations - doctors, nurses, industrial engineers and agricultural specialists.+
A majority had worked in China on earlier assignment. Formosa was a challenge; here was no need for "relief," but an opportunity to bring about speedy rehabilitation and a high production of material needed for relief on the mainland. The Formosan people were well organized, well disciplined, "modernized" and eager to cooperate. And it was refreshing to discover that the Formosans were friendly and that here were none of those signs reading "Yanks, go Home!" Soon the presence of this mixed foreign group exerted an influence upon Formosan relations with the mainland which was out of all proportion to its numbers, or the value of the material and technical aid brought into the island under its auspices.
* Thus in the Lucky Bar we had the forerunner of Madame Chiang's clubs, The Officers' Moral Endeavour Association (OMEA), a series of hostelries which catered to foreign correspondents, businessmen, diplomatic service underlings, and minor military observers, all taken in at a distinctly favorable rate. To the charitable OMEA establishment there were added in due course the Friends of China Club, the Taipei Guest House, and the Grand Hotel, all of them listening posts - Lucky Bars - on a grander scale, befitting the "temporary capital of China."
+ Australia, Brazil, Canada, Columbia, Costa Rica, Denmark, France, Haiti, Holland, New Zealand, Norway, the United Kingdom, and the United States of America. One Formosan staff-member later became an American citizen.
The technical and professional fields represented here included medicine, nursing, dentistry, child welfare, public health, dietetics, sanitary, industrial, and transport engineering, and agricultural rehabilitation. There was a small supporting staff for administration.