DEPARTMENT OF STATE Memorandum of Conversation
Date: February 17, 1950
Subject:
Participants: The Secretary Mr. L. K. Little, Inspector General of Customs for the Republic of China Mr. Livingston T. Merchant, Acting Assistant Secretary for Far Eastern Affairs
Copies to: S/S, S/P, FE, CA
I talked with Mr. Little for about a half an hour this afternoon, at the outset of which I asked him, out of his experience of more than thirty years in China, how he accounted for the collapse of the National Government. Mr. Little replied without hesitation that it was a combination of incompetence and corruption, accentuated by the strain of long years of war. We then turned to a discussion of Formosa and I solicited Mr. Little's views on this problem.
Mr. Little expressed the strong conviction that we should either disassociate ourselves completely from the National Government on Formosa or, preferably, we should encourage and if necessary promote a separatist movement which would bring into being an independent Formosa which we could then recognize and overtly support. Mr. Little expressed his opinion that we were making the worse of both possible courses by continuing to support Chiang Kai-shek, diplomatically and economically. We discussed all phases of the problem at some length and I pointed out certain of the difficulties encountered in our search for a solution which took into account the interests of the Formosan people as well as our own.
FE:LTMerchant:mw 2/27/50