Saving Chiang in Washington
ON NOVEMBER 16, 1949, a New York Times editorial reviewed the Formosa Question, noted that the mainland Chinese appeared to be "somewhat" unpopular with the Formosans and that the island continued technically to be enemy territory and an Allied responsibility. Would a United Nations trusteeship solve the problem?
Chiang's partisans professed to be outraged by any suggestion that Formosa was not indisputably Chinese territory. On this point, more moderately, the Department of State found itself in agreement. Ambassador Phillip Jessup addressed the United Nations on November 28 stressing the Territorial Integrity of China as a "background for refusal to entertain the idea of taking over Formosa." American diplomatic missions abroad were quietly prepared to explain a policy statement which would signal the end of aid to Chiang.
Behind the scenes at the Department someone was giving thought to the possibility that the forthcoming declaration might bring Chiang's sudden downfall. What then? Suppose Washington had suddenly to intervene at Taipei? We might one day have to deal directly with the Formosan people.
In early December I was asked, very quietly, to name local leaders who might be "cultivated in the American interest."
There was only one possible response; the conservative
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Formosan leaders - the men who had sought our help in 1947 were now dead or in exile. Some time must elapse before a new pattern of leadership emerged. Perhaps we had forfeited Formosan trust by our official behavior during the March crisis and thereafter.
But as the State Department moved to jettison Chiang and abandon Formosa, American military leaders continued to urge an opposite course. They could not stand by silently as each Communist offensive on the mainland diminished the area from which someday we might desire to mount a counterattack in Asia. Speaking in behalf of the military interest, Hanson Baldwin advocated a strong show of the Seventh Fleet in the Straits of Taiwan and a large military aid mission to China which should have authority to control the supply of American arms to the Nationalist Chinese. Senator Alexander Smith of the Senate Foreign Relations Committee urged the United States to take over Formosa promptly and said in effect that his proposal had General MacArthur's support. Smith had just returned from six weeks in Asia; "The feeling I got from MaeArthur and the admirals was that they were unwilling even to assume that we would consider letting Formosa fall into hostile hands." Senator William Knowland proposed sending General Wedemeyer back to Formosa as Chief of Mission. Furthermore "Goodwill visits by American Navy task forces, including carriers, would have a stabilizing influence."
A number of Congressmen decided to form a "Committee to Defend America by Aiding Anti-Communist China." Soon the most extravagant claims were being made for Chiang's "military genius" and on behalf of his armies. The Nationalists obliged by announcing that they had more than a million men on the mainland waiting to spring to arms if they could be given guns. Chiang was said to be preparing a "powerful striking force, poised to move against Communism." Chiang's partisans began to refer to Formosa in ringing terms as "Free China" and a "bastion of democracy."
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No one attempted publicly to separate the issues. The American military interest required the isolation and security of the island of Formosa. Chiang saw to it that they had to take him, too.
Despite General Wedemeyer's note that privileged Chinese had immense wealth abroad which was not being used in China's behalf, some leading members of Congress and many prominent Republican laymen were persuaded that if Washington would just send along enough money Chiang would promptly stem the Communist tide. The "Aid Chiang" bills and programs were of great variety. The 80th Congress had voted $125,000,000 for 1949. Senator Knowland urged huge additional expenditures. Mr. William Bullitt scaled down his earlier estimate of needs from the billions to a mere $800,000,000. Senator Alexander Smith thought perhaps $200,000,000 might be helpful for the moment. Pat McCarran (a Democrat, but the Silver State Senator) proposed an aid bill of one and a half billion dollars of which the greater part (he hoped) would be sent to China in good hard silver dollars. Mr. Thomas Dewey demanded "much greater aid." Madame Chiang had asked for three billion American dollars to be advanced over a period of three years. It was suggested by one gallant Senator that she should be invited again to appear before the Congress to explain her needs. The Chiangs were assured that when the Democrats were unseated and the Republicans took over the Administration, nothing would be left undone to restore Nationalist authority on the mainland.
But the Chiangs had a problem; the American presidential elections would not be held until late 1952, and the Republicans could not possibly take over direction of policy until 1953. The Generalissimo had to find somewhere to await salvation.
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Taipei, "Temporary Capital of China"
General Li's presence in Washington damaged Chiang's projection of himself as the "only possible savior of China." What if President Truman persuaded Acting President Li to break with the Nationalists and allow a Third Force to emerge in the civil Government in exchange for direct military aid to the generals who were still fighting in South China?
The Generalissimo neatly disposed of this danger. He ordered Li's Cabinet to fly to Formosa and there it convened on December 9. Chiang himself flew in next day, declared Taipei to be the "Temporary Capital of China," and set about reorganizing the shattered Party, Army and Government. Formosa was not the sprawling continent with its many unmanageable regional problems; here was a compact island, physically well organized, technologically well advanced, and susceptible to a very tight security control. Not even foreign newsmen might enter without permission, and if one reported "inaccurately" his permit could be promptly lifted. There would be no unauthorized broadcasting from the island. The hunt for "subversive" Formosans would be redoubled.
Here Chiang - always making a great show of eagerness to return to the mainland "alone, if need be" - could wait it out until the United States cleared the way for him to return to power in China.
Retreat to Formosa also enabled Chiang to slough off many embarrassing associates - not least among them his wife's money-hungry relatives. Dr. T. V. Soong declined the opportunity to settle on Formosa, preferring the Hudson River Valley near New York. Dr. H. H. Kung and his wife were already there. Madame Chiang's elder sister preferred to join the Communists at Peking.
For the moment the Communists had neither navy nor air force with which to cross over to Formosa. On the other hand
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Formosa's communications were open to the West, to the source of arms and economic supply in America - if the American Government could be made to reverse its "hands-off" policy decision.
Chiang had enough armed forces with him to impose iron control upon the Formosan people. It was estimated that nearly half a million conscripts had been tumbled aboard ships in the last few weeks of the exodus and even Chiang could see that too many had come in. Soon some 25,000 had died of disease, another 150,000 were demobilized, and scores of generals and colonels were retired.
The Generalissimo's principal military rivals within the Nationalist organization - the generals who supported Acting President Li, for example, and a scattering of former warlords who had never been very much Chiang's men - were now being pushed back into the rugged southwestern provinces or down through Kwangtung and Kwangsi to Hainan Island. There the Nationalists were destined to make their last stand. Some of the defeated generals obeyed orders to cross over to Formosa, risking mild restraint or loss of face and influence. Some went abroad, for they could not trust Chiang. Some, taking their men and supplies with them, went over to the Communists.
Would a sufficient reorganization at Taipei provide Chiang's military friends in America with convincing evidence of "military vitality" and his Republican friends with evidence of "genuine reform"? It was worth a try.
On December 21 General Chen Cheng left his post as Governor of Formosa to assume the presidency of the Executive Yuan, the Premiership. From there the tough old general could continue to supervise the civil administration of Formosa as "one of the provinces of China."
To succeed him, the Generalissimo brought forward Dr. Wu Kuo-chen, better known to a host of important American friends as K. C. Wu. To some qualified observers the choice
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was a measure of Chiang's desperation, for K. C. Wu was a genuine liberal, a man of highest personal integrity, and an accomplisbed administrator. He was a graduate of Grinnell College in Iowa and of Princeton University. He had wartime experience as Mayor of Chungking and as Vice Minister for Foreign Affairs. Most recently he had been Mayor of Shanghai. Soon enough on Formosa the island people began to say that at last, in Dr. Wu, they found a Governor who truly had their interests at heart.
Wu took office when Nationalist fortunes were at their lowest ebb.
On December 23 the Secretary of State at Washington let it be known to all American diplomatic missions overseas that in the Department's view "Formosa, politically, geographically, and strategically is part of China ... Although ruled by the Japanese for fifty years, historically it has been Chinese. Politically and militarily it is a strictly Chinese responsibility."
On that day the Chinese Ambassador at Washington made a formal request for further military aid. The answer was "No," but on the same day the Department reestablished the Embassy to China at Taipei, in the dingy Consular Building. Dr. Stuart, the Ambassador, and his Chinese secretary Phillip Fugh remained in the United States, leaving the office in the hands of a charge d'affaires,
On January 5, 1950, President Truman formally stated the "hands-off" policy. It was traditional practice, he said, to respect the territorial integrity of China. Formosa had been handed back to the Chinese under terms of the Cairo and Potsdam Declarations.
The United States has no predatory designs on Formosa or on any other Chinese territory. The United States has no desire to obtain special rights or privileges, or to establish military bases on Formosa at this time. Nor does it have any intention of utilizing its armed forces to interfere in the present situation.
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The United States will not pursue a course which will lead to involvement in the civil conflict in China . . . Similarly, the
United States will not provide military aid or advice to Chinese Forces on Formosa . . . 
The President's statement prompted a number of leading Republican leaders to speak of the rights of the Formosan people. Senator Taft was already thinking of an independent "Republic of Formosa"; Senator Alexander Smith suggested creation of "a joint political authority and military responsibility between ourselves, the Nationalists, and the Formosan people." Senator Vandenburg observed that "The rights of the Formosan people themselves must be consulted ..."
Such liberal Republican voices were soon stilled, or drowned in the streams of abuse poured by the Opposition upon the Administration.
The Nationalists called President Truman's declaration a "betrayal," and basic Chinese anti-foreign sentiment came welling to the surface. There was bitter talk at Taipei and on January 9, hot-headed young officers aboard the Nationalist gunboat Wuling shelled an American freighter as it moved toward Shanghai.
What was Washington to do? If it moved to protect American shipping it would be condemned for "pro-Communist" policy, and if it meekly accepted Chiang's declaration of blockade, then it must recognize both belligerents. This in turn would create a new state of tension in Washington's relations with governments which did not recognize the Nationalists.
Across the world in New York the Russians moved to expel the Nationalist Chinese from the United Nations, holding that they represented only a band of refugees at Taipei. It was absurd to pretend that they were a "World Power." But China's delegate was at that moment Chairman of the Security Council, and Russia's motion was defeated. The Russians walked out of the Council (January 11). This act marked the beginning of
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the end of the Council's prime importance in the world organization. Would the Assembly, too, someday be torn apart on the Formosa Question?
On the next day the harassed Secretary of State (Acheson) made an address which defined a defense perimeter for American interests in the Western Pacific, a line running southward from the Aleutians through Japan and the Ryukyu Islands to the Philippines. Korea and Formosa were beyond the pale.
Formosa was a "continental" and not an "oceanic" problem. Chiang would be left to defend himself as best he could.
What of the Formosans?
President Truman's policy statement had plunged Formosan leaders into despair. For the second time since Japan's surrender the United States had let pass an opportunity to intervene on behalf of the island people. On the day Secretary Acheson declared Korea and Formosa beyond the frontiers of American interest, a poignant letter was addressed to me which reflected the sense that the Formosans had been trapped and would bear Chiang's harsh police rule until the Red Chinese should take the island from him. The letter also disclosed how carefully Formosans scanned every dispatch from abroad and searched every public statement which might bring a ray of hope.
Thinking that this may be the last chance that you can hear from me, I have decided to write you this letter ...
[I have been] looking forward to the time when I can see you again on the island "under brighter situation." But I am almost sure now ... I have to give up my hope, as it is clear now that Formosa has been written off by the United States, and accordingly in another few months I shall find myself under the rule of the Chinese Reds, unless I succeed in getting away from
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the island. It will be extremely optimistic to expect that the Nationalist forces on the island will successfully fight the Red invasion which is sure to be launched against the island any time after February.
As a matter of fact, Formosans are hopelessly disappointed at President Truman's statement on the fundamental policy toward Formosa. I wonder what the late FDR would have done if he were still alive. I think this is a situation he could not have dreamed of when he promised to give Formosa to "The Republic of China" (not to the "People's Republic of China"), apparently not paying any consideration to the will of the 6 million people living on the island.
Ever since the conclusion of the Shimonoseki Treaty the will of the islanders has never been respected at every crucial moment when the fate of the island was at stake. Since the shape of Formosa, as seen on the map, looks somewhat like that of a foot-ball, probably the people living on the island are predestined to be kicked around in the game of world politics.
I was very much surprised to read in one of the USIS news bulletins the following paragraph:
"Hamilton Butler (Detroit Free Press) while noting the strategic importance of the island (Formosa) declared: "The permanent occupation of Formosa as an American outpost would not only get us into a lot of troubles with the islanders themselves, but would involve us in a course of action (Daily News Bulletin No. 140, dated December 17, USIS, Taipei)
I do not know on what ground Mr. Butler could make such a statement, and what kind of trouble he expected, but no Formosans would agree to his statement.
In contrast, an AP dispatch from San Francisco, dated January 4, 1950 quoted Mr. John J. MacDonald who had been the American Consul General at Taipei until last December as saying " ... Most Formosans had hoped they might be taken out of the Nationalists control through a United Nations trusteeship, but seemed to have given up the hope of that recently when the Chinese Government fled to Formosa from the mainland and established
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its capital at Taipei. Now they seem to think it would be a good thing if the Supreme headquarters in Tokyo could take them over, provided they could get a guarantee that they would get their freedom later." I have never met any Formosans who objected to Mr. MacDonald's view.
Some Formosans think: "Politically Formosans are mere infants who need outside help in their struggle for survival as a free people. But the Formosans will not remain forever as poltical infants. If things are to be left as they are now, Formosans may some day grow up to be a formidable and sworn enemy of U.S. under the influence and guidance of the Kremlin."
I know, of course, that U.S. has a lot of other problems to take care of as the leader of freedom-loving peoples in the world, and that there is a limit to the capability of the United States. In this sense such Formosans may be called too self-centered.
Some other Formosans are of the opinion that on deciding her policy toward Formosa, the United States should have chosen between justice and injustice instead of between advantages and disadvantages, and they deem it unjustifiable that Formosans who dislike Communism should be left to fall behind the iron curtain simply because Formosa happened to have been Japan's colony for over fifty years, while Japan, one of the chief culprits in the last aggressive war, is made entitled to the blissfulness of democracy and freedom just because she may otherwise start another aggressive war. History will be the best judge.
While I am writing this letter, I hear the chorus of Japanese military song being sung by a bevy of Formosans marching along the streets and cheering up the Formosan youths who are going to be conscripted this year for the first time since the inauguration of the Chinese rule after V-J Day. The enthusiasm with which Formosan youths responded to the call to the ranks is mystifying, and in a way frightening to mainlanders on the island! I think you can understand why the enthusiasm.
I am fed up with such kind of local life as one can never tell when and where he may lose his life, in whatever outrageous way, but I still pray that present state of affairs may take, in time, a turn for the better. I would like to know your opinion, if possible ... 
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To the Formosan elite - men such as this one - Governor Wu now addressed himself with a reform program designed to reduce local bitterness and to secure Formosan support for the Nationalist organization. In his heart he knew that Chiang would not "reconquer" the mainland; it was going to be hard enough to hold Formosa, and the refugees were going to need the full support of the island people.
On January 13 Wu promised measures to promote local self-government. On April 5 it was announced that the Executive Yuan had granted the new Governor authority to hold popular elections for district magistrates and mayors. On paper, at least, this would give Formosans some degree of control over the local civil police, an objective which had been at the very heart of the demands presented to Chen Yi during the March crisis, 1947.
In Governor Wu's new cabinet or council of twenty-three Department Heads, no less than seventeen were prominent Formosans, including some who had been sharply critical of Chen Yi and had been long in hiding. Wu meant that they should have an effective voice in local government.
But when elections actually took place the Nationalist Party agents exercised their right to supervise the selection of candidates, the qualifications of voters and the conduct of the elections themselves. Formosans who were given place in Wu's Cabinet found themselves surrounded by mainland assistants, subordinates and advisors. Governor Wu did his best to liberalize the administration and mitigate abuses, but (as he later said) at every turn he met the secret police and security agents who were responsible to Chiang Ching-kuo.
Wu faced great odds. Iron-fisted General Chen Cheng was his immediate superior in the table of organization, Ching-kuo's security agents penetrated every civil and military office and inspired fear among the common people with frequent acts of brutality, unwarranted house-search and threatening interrogations. In economic matters the ghost of T. V. Soong lurked in the background. In the realm of finance there were two
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familiar faces. The former Commissioner of Finance for Governors Chen Yi, Wei, and Chen Cheng was Yen Chia-kan, now moved upstairs to become Minister of Finance in the "National" government. This in effect left him in control of local finance at the Provincial level. In his place Wu was obliged to accept Jen Hsien-chuan as Commissioner of Finance. Jen had been Chen Yi's Commissioner of Communications, and Yen's colleague in 1946 and 1947.
We are not surprised to learn that twice within the first fifty days in office (on January 11 and on March 9) Governor Wu threatened to resign. His first administrative crises involved a question of fiscal policy raised by the "professional Formosan" Huang Chao-chin. Huang, it will be recalled, also served in Chen Yi's administration and for his help during the March massacre had been rewarded with chairmanship of one of Formosa's largest banks. When Wu's reforms threatened to disturb long-established arrangements ensuring the proper flow of reward to the proper people, Huang protested vigorously, and Wu took the issue to the Generalissimo. Chiang knew that he had to maintain the new Reform Image for a time, and Wu won his point.
Chiang Returns to the Presidency
In spite of all these stirring reforms on Formosa, in which he had no part, Acting President Li continued to be a potential threat to Chiang. As he went in and out of clinics in America he conferred widely with Americans and with Chinese in America, seeking to crank up enthusiasm for a Third Force endeavor. At last it was arranged for Li to confer with President Truman on March 3.
On March 1, far away on Formosa, the astute Generalissimo announced that he had resumed the Presidency of China. Li's status in Washington promptly became that of a "former
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Acting President" and his presence at the White House purely ceremonial.
Within a few weeks President Chiang arranged to have the former Acting President impeached, in absentia, for "dereliction of duty." Li joined the Soongs and the Kungs in retirement on the banks of the Hudson River.
And so history books will show that without Chiang Kai-shek at the helm, China proper was lost to the Communists. Li must take the blame and the Chinese people must wait for the Generalissimo to rescue them from Communist bandits and rebels.
To match Wu's reforms in the civil administration, Chiang now decreed a show of reform within the Party and the Army.
With an eye to the effect in Washington, Chiang made Lieutenant General Sun Li-jen Commander-in-Chief of the Chinese Armies and of the Taiwan Defense Command. No better choice could have been made for propaganda purposes.
Sun promptly proposed a training program for Formosan youths, saying that he had found them excellent material with which to work. He would recruit 4500 in the first instance and then use them in training a next recruitment of 35,000 men. This was a radical step, for as the older mainland Chinese conscripts were mustered out they had perforce to be replaced by Formosans. The new men might be eager to defend Formosa, but would they be so ready to fight on the mainland?
Foreign correspondents gained the impression that General Sun was quietly taking a realistic position. He would have all he could do to prepare adequate defenses for the island itself; to talk of "retaking the mainland" was window- dressing.
For Chiang the appointments of Wu and Sun were distasteful; for many years he had exercised his genius for creating factional checks and balances with consummate skill. He now began a reorganization of the Party and Army which would ensure the succession to his elder son, "Crown Prince" Ching-kuo, and place him in a position to check Sun and Wu or any other liberals who might think of Formosa as a "second China," a trust territory, or an independent entity.
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Step by step the structures of the Army, Party, and Government were modified until General Chiang Ching-kuo became a dominant figure, next to his father in importance in these three sources of power. The Generalissimo was supreme in military authority. The Heir Apparent was gradually brought forward until at last he became Defense Minister, second only to his father in direct military authority. As Tsungtsai or Party Leader, old Chiang held supreme authority in all political matters, interpenetrating the Army with a system of political commissars attached to each military unit and controlling the Government by controlling appointments and supervising elections at every level of this "democracy." Here the Elder Son was brought forward in the Party as master of the Political Department in the Army and as a member of the elite Central Executive Committee which controls Party affairs. As President of the Republic of China, the elder Chiang enjoys special emergency powers - dictatorial powers in times of crisis and war. His son, as Defense Minister, dominates the civil authority under these emergency provisions.
The grooming of Chiang Ching-kuo to succeed his father took place over a number of years, but the process first began to be clearly indicated during the crisis in early 1950. The forced concessions to "reform" and the appointments of K. C. Wu and Sun Li-jen had to be offset behind the scenes. Ching-kuo's ultimate source of power lies in his control of the secret services of Army, Party and Government, and the political commissars placed at every level of the military organization.
This was Free China, the "bastion of democracy."
After he moved to Formosa in 1949 to prepare the way for his father, General Chiang Ching-kuo held the Formosans in line through a policy of terror. The losses of 1947 had been heavy; arrests, imprisonment and executions had continued throughout 1948, but Ching-kuo's advent in 1949 brought on a new era of fear throughout the island.
Anyone found objectionable to the regime, at any level, in
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Party, Army, Government or private life, can be labeled "pro-Communist" and be done away with. Guilt by association is easy to arrange and false or malicious accusations are encouraged by rewards. Tillman Durdin comments on the "indiscriminate ferocity" of the campaign which began in 1949 and notes that in 1954 Chiang Ching-kuo boasted that he had broken up (as he put it) an average of thirteen "communist conspiracies" th over a period of three and a half years. This chilling figure adds up to 550 "conspiracies" in all. Ten years later - in 1964 - it was estimated that Ching-kuo had 50,000 regular policing agents in the many organizations under his control, and that the number of paid informants active on Formosa might be ten times that figure. 
The Generalissimo's first concern was with the Army. Pellmell retreat from the mainland and offshore islands brought into Formosa many officers whose loyalty Chiang questioned. Soon Ching-kuo's agents were naming scores of officers who were not deemed trustworthy and were said to be in communication with the enemy.
The purge which began in early 1950 ran for many months, with disclosures embarrassing to Americans who had so loudly proclaimed the strength of Chiang's military organization. Among the lieutenant generals taken up, tried and executed were the Chief of Military Conscription, the Vice Minister of National Defense, the Chief of Army Supply Services and the Commander of the 70th Division. Scores of less prominent military figures were seized and done away with.
Meanwhile on the mainland the Nationalist military record was one of unmitigated disaster. Hainan Island was lost on May 2, 1950, and on May 16 Chiang's forces abandoned the Chusan Archipelago lying between the Yangtze estuary and Formosa.
To divert attention from these reverses the Nationalist Air Force increased the number and range of its spectacular hit-and-run raids all along the coast. The Communists began to
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prepare for retaliation, a massive cross-channel drive that would put an end to Chiang.*
By midyear a sense of crisis gripped the Nationalists at Taipei. The great question continued to be "What will the Formosans do if the Communists attack?"
In a spectacular bid for favor Chiang at last ordered the execution of his old friend General Chen Yi. It was announced that he was being punished for his abuse of the Formosan people in 1946 and 1947. Rallies were organized, a ration of fireworks was issued to make a gala occasion, and on June 16, after a year in prison contemplating this event, Chen Yi was taken before the firing squad.
The Formosans were glad to see him go but as they set match to the firecrackers, not a few remembered Chiang's praise of Chen Yi for a "job well done" in March, 1947.
One week later the need for reforms seemed to have vanished
Chiang Saved--But Leashed
Peking had taken seriously Washington's declaration of "no interest" in Korea and Formosa, considering it an open invitation to push into Korea and to cross the channel.
On June 25 the Communists entered South Korea. Chiang quite inadvertently had been saved by Mao Tse-tung.
President Truman promptly announced an abrupt change in American policy. On June 27 he served notice that the United States would resist Communist aggression in Korea and called upon the United Nations to act together there. He then said:
In these circumstances the occupation of Formosa by Communist forces would be a direct threat to the security of the
* It has been reported that an epidemic swept the Communist base camps from which the cross-channel invasion was to take place and it had therefore to be postponed indefinitely.
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Pacific Area and to the United States forces performing their lawful and necessary functions in that area.
Accordingly, I have ordered the Seventh Fleet to prevent any attack on Formosa. As a corollary of this action I am calling upon the Chinese Government on Formosa to cease all air and sea operations against the mainland. The Seventh Fleet will see that this is done. The determination of the future status of Formosa must await the restoration of security in the Pacific, a peace settlement with Japan, or consideration by the United Nations. 
This was in effect a blunt order telling the Generalissimo that he was under restraint, for his own good. The United States and the United Nations had quite enough to cope with in Korea, to which the President was determined to confine the fighing if it could be done. Members of the United Nations organization who were prepared to resist Communist aggression in Korea were not at all prepared to support Chiang's "comeback" ambitions in China.
Taipei had to accept Washington's blunt presidential order, but to save face Chiang promptly offered to send 30,000 Nationalist troops to Korea.
This was embarrassing, for the joint Chiefs of Staff did not want to be hampered by Nationalist units of dubious quality and untested loyalty, nor did Washington want to give Peking an excuse to open a second front by striking at Formosa. General MacArthur at Tokyo was directed to reject Chiang's offer. 
The Generalissimo's chagrin was tempered by realization that now Formosa would probably receive massive economic and military aid.