DEPARTMENT OF STATE Memorandum of Conversation
DATE : August 31, 1950
SUBJECT: Observations of Ambassador V. K. Wellington Koo deriving from his trip to Taipei
PARTICIPANTS: The Secretary Ambassador V. K. Wellington Koo Mr. O. Edmund Clubb, CA
COPIES TO: S FE U CA EUR Am Embassy, Taipei UNA AmEmbassy, London
Ambassador Koo referred to his recent return from a trip to Taipei and said that in general he had been much encouraged by what he saw. He had observed much reform accomplished in respect to both military and financial matters. He had made a trip around Formosa for the particular purpose of observing the military establishments and state of administration and of conversing with Formosan people.
Ambassador Koo said that he had been present at a reception attended only by Formosans and had conversed freely with them. He found that determination existed among them to do more still along the lines of reform. Much had already been achieved; more still would be done.
Ambassador Koo reported that he found treatment of the Army to have improved, with rations, for instance, better. The financial position of the Government likewise was better. Where in December of last year there was an 81 percent deficit in the budget, now there was only a 19 percent deficiency. In short, the percentages had been exactly reversed. With new sources of income it was hoped to be able roughly to balance the budget by
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the end of the current year - excepting for extraordinary military expenses.
Ambassador Koo had been interested in ascertaining the feeling of the local population. He had talked to all classes of people. He found a genuine sentiment in favor of the Government. In the event of a Chinese Communist invasion, the people would support the Government.
The people continue to have some grievances, particularly with reference to taxation and the occupation of schools by the troops. The Government was fully aware of those grievances and was taking steps to meet them. Special taxes (of which there have been two in the current year) will henceforth be avoided. Barracks for the troops are in the process of construction, and by the end of September schools now occupied will be evacuated. In sum, Ambassador Koo's impressions of Formosa were good, especially if comparison be made with the mainland.
Ambassador Koo said that he had one or two questions that he would like to take up on the present occasion. One was the "so-called Formosan question". This is now on the UNSC agenda and presumably might come up at the time of the Foreign Ministers' Conference, when there would presumably be discussed the general situation in the Far East and possibly the situation respecting Formosa in particular. He was interested in the objective of the current discussion of the matter in the UNSC. The wording of the item on the agenda was clear, but the Chinese Communists and Soviets took up the matter as a propaganda move.
The second question was that of the President's policy of June 27 envisaging the prevention of an attack on Formosa and the stopping of military action against the mainland. If this matter were discussed, it would be hoped that majority support for the American position could be obtained in the UNSC. It was hoped, however, that discussion would not proceed beyond that stage, would not enter into the political aspects of the matter. It would be difficult to say where discussion of political aspects of the Formosan question would end. Such discussion would serve to divide the united front. The important thing was that the area of military conflict should be localized. If this be the objective, the question should thus be limited.
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I said that it was impossible to see very far ahead in this regard. The item is up for discussion and possibly there would be discussion of the whole of the present situation. It would be impossible to say whether the discussion would broaden beyond the area indicated. The objective is truly to prevent a division of the democratic forces. The form of the discussion, however, would have to be developed as we go along.
Dr. Koo said that if the United States made it clear that the discussion of the matter should be limited to the question in point, if there could be a resolution which would dispose of the matter thus - that is, as a question of "armed invasion" - and there were general endorsement of the Truman doctrine of neutralization, this could be considered a good solution.
I expressed agreement with Dr. Koo's conclusion, but indicated that I felt that such a desirable resolution of the matter might prove difficult.
Dr. Koo asked whether the Foreign Ministers would discuss Formosa at their impending conference. I replied that they probably would, since various important political matters were to be discussed and the question of Formosa was of high moment, but that an agenda had not been fixed.
Dr. Koo said that if the three Foreign Ministers could take a joint stand regarding Formosa it would contribute to world understanding of the matter and clarify the United States policy for the maintenance of peace. He asked whether I could enlighten him as to whether the United Kingdom took a different view of Formosa than did the United States and hesitated to support American policy.
I replied that I doubted whether the British had endorsed the American policy. Mr. Chubb confirmed this.
Dr. Koo said that the American policy constituted a contribution to the maintenance of peace and should receive endorsement. The Nationalists, he said, would not themselves launch an attack. I commented that it had not always been clear from Nationalist actions of late that they would not attack. Dr. Koo went on to explain that, before June 27, there had been a strong Nationalist desire to meet any
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Chinese Communist attack on the islands. The Nationalists' aim now was to avoid anything like provocation and the Nationalists would not attack. If the Chinese Communists attacked, however, other Governments should be in a position to support not the Nationalists - who of late, admittedly, were not getting general support - but United States policy.
I indicated that the British, in particular, had not stated that they were ready to give such support. Mr. Clubb interpolated the remark that, for clarity's sake, it should be noted that we had not asked any Government for approval or support of our present position.
Dr. Koo said that the Nationalists were perturbed by Communist preparations at present in course. The Nationalist Government policy was to avoid any step which might be considered provocation. It was hoped that in the present talks the American policy of peace would receive endorsement. This would take care of any threat from the Communist bloc, which was doing all that it could to sow seeds of dissension. I stated that it was to be hoped that such an ideal goal could be attained, but that this might prove impossible. It was necessary to preserve unity and to develop the matter as one went along.
Dr. Koo asked what the objective of the action in the Security Council might be. I replied that the matter was not ours alone, and that it would be handled as best possible in the circumstances. Dr. Koo expressed the hope of his Government that the United States delegation would keep in touch with the Chinese delegation regarding the matter in point. The Chinese delegation had consistently supported the United States and would contribute anything within its ability.
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