Balancing Wartime Intelligence and Diplomacy in China 1942-1945
1. BALANCING THE DRAGON:
A WARTIME ANALYSIS OF U.S. INTELLIGENCE, DIPLOMACY,
AND POLICY IN CHINA
by
Steven M. Smith
Captain, U.S. Air Force
MSSI Class 2005
Unclassified thesis submitted to the Joint Military Intelligence College
faculty in fulfillment of the requirements for Masters of Science in
Strategic Intelligence
July 2005
The views expressed in this paper are those of the author and do
not reflect the official policy or position of the Department of
Defense or the U.S. Government
2. ii
CONTENTS
List of Graphics…………………………………………………………………………iv
Chapter
1. THE SCORECARD: PLAYERS THAT SHAPED CHINA……………….……1
Introduction, 1
The Political Players, 2
The Intelligence Players, 18
2. THE METHOD: USING BALANCE THEORY TO EXPLAIN HISTORY……31
Development, 31
The Projected Model, 32
The China Network: A Historical Application, 37
The China Network: 1942, 43
3. THE SEEDS OF INSTABILITY: 1942-43……………………………………..47
The General and the Generalissimo: Stilwell and Chiang Kai-Sheik, 48
Strange Bedfellows: The Formation of SACO, 55
OSS Finds a Loophole: The Formation of AGFRTS, 61
Appearances versus Intrigue: The Cairo and Tehran Conferences, 66
Outcome: Incorporating the Events of 1942-43 into the Model, 70
4. FOMENTING DISASTER: 1944-45……………………………………………77
Dinner Party Debacle: The General Miller Tirade, 78
Reforming the CBI: General Albert C. Wedemeyer, 84
OSS Meets Mr. Mao: The Dixie Mission, 91
The Skillful Arbiter: General Patrick J. Hurley, 98
Recruiting Guerrillas: OSS, GBT, and the Vietminh, 105
The Death of FDR and the U.N. Conference, 112
Outcome: Incorporating the Events of 1944-45 into the Model, 117
5. CONCLUSIONS: FINAL ASSESSMENTS, FUTURE STUDIES AND
APPLICATIONS………………………………………………………………..125
Final Assessments, 125
Areas for Future Research, 131
Contemporary Applications, 133
3. iii
CONTENTS (CONT.)
List of Appendices …………………………………………………………………136
Appendices A-W…………………………………………………………………….138
Glossary………………………………………………………………………………180
Bibliography…………………………………………………………………………183
4. iv
LIST OF GRAPHICS
Figure Page
1. FDR Signing the Lend Lease Act Of 1941 3
2. Roosevelt and Churchill at the Atlantic Conference 6
3. Chiang Kai-Sheik Giving a Speech in 1931 9
4. Tai-Li and Commodore Milton Miles 12
5. General William J. Donovan 20
6. NAVGRP Camp 1 Holds a Class in Hand-Hand Combat 28
7. Model of Participants 33
8. Model of Players with Weighted Valences 34
9. The China Network 38
10. Weighting the China Network, 1942 43
11. General and Madame Chiang and Joseph Stilwell 49
12. Miles And Tai-Li Signing the SACO Agreement 57
13. Claire L. Chennault, Commander 14th
AF 62
14. Chaing Kai-Sheik, FDR, and Churchill in Cairo, 1943 67
15. The China Network, 1943 74
16. General Wedemeyer, Sultan, Mountbatten and Donovan 1945 85
17. Colonel David Barrett and Mao Tse-Tung, 1944 93
18. Patrick J. Hurley and Mao Tse-Tung, 1945 101
5. v
LIST OF GRAPHICS (CONT.)
Figure Page
19. OSS Train Members of the VML, 1945 111
20. Harry S. Truman Taking the Oath of Office, 1945 113
21. The China Network, 1945 123
Map Page
1. The Long March, 1934-35 14
2. Communist Held Regions of China, 1944 16
3. OSS Missions and Bases in East Asia, 1945 22
4. NAVGRP, China Operating Areas, Spring 1945 27
5. Status of Forces in the Far East, 1941-42 37
6. French Indochina, 1945 106
Table Page
1. Execution of the Formula 36
2. Example of China Event Matrix 41
3. Formularizing the China Network, 1942 45
4. Weighting Events of 1942-43 71
5. Calculating the Events for 1942-43 73
6. Calculating for 1943 74
7. Calculating the Degree of Balance, 1943 75
6. vi
LIST OF GRAPHICS (CONT.)
Table Page
8. Weighting the Events of 1944-45 118
9. Calculating the Weights of 1944-45 120
10. Calculating 1945 121
11. Calculating the Degree of Balance for 1945 123
7. 1
CHAPTER 1
THE SCORECARD: PLAYERS THAT SHAPED CHINA
If you would understand anything, observe its beginning and its development.
--Aristotle
INTRODUCTION
Many studies have emphasized events in China following World War II
(WWII) as causes for the capitulation of the Nationalist government (KMT) and
the subsequent “loss of China” to the Chinese Communist Party (CCP) in 1949.
This thesis, however, delves further back, focusing on those wartime events
occurring between 1942 and 1945. Using an analytical model developed out of a
study of dynamics in small groups, this study attempts to demonstrate the
significance of these events and their contribution to the virtually unavoidable
circumstances surrounding post-1945 intelligence, diplomatic, and political
troubles in China. In doing so, this thesis sets out to answer the following
questions: First, what was the relationship between the political actors (U.S. and
Chinese) and intelligence organizations as the U.S. entered China in 1942 and
how did these relationships change by the end of the war? Second, what were
the events during the war that affected this change and how significant was the
shift. Finally, this thesis considers whether that change or shift could have
affected U.S. policy with post-war China, possibly contributing to a foreign policy
failure.
8. 2
Before any assessment can be accomplished regarding the pivotal
relationships in wartime China, the players must first be defined and fully
evaluated. This study begins with a look at both the political and the intelligence
sides of China’s internal landscape. Since the questions posed in this thesis
center on the ultimate role of the U.S. and its China policy, the players chosen
encompass those who arguably had the greatest influence on that policy. The
following sections provide a glimpse into the background of these players and
their roles and relationships in China during WWII. Many of the events touched
on in this chapter are expounded upon later in Chapters 3 and 4.
THE POLITICAL PLAYERS
The analytical model used in this thesis focuses on the key participants
that were directly involved throughout the events that led up to the post-war civil
conflict between the Chinese Nationalists and Communists. Whereas the Soviet
Union and the colonial powers clearly had a stake and an understandable
influence in Chinese affairs, the relationship between the U.S., the KMT, and the
CCP remained the most consistent and applicable for this study. Even though it
was Harry Truman who inevitably concluded the war after Franklin Delano
Roosevelt’s untimely death, for the purposes of this thesis the FDR and Truman
administrations are being evaluated as one entity. Indeed, while Truman may
have had some views inconsistent with those of FDR’s, it was Roosevelt’s
policies that by and large shaped China until Victory over Japan (VJ) Day.
9. 3
Figure 1. FDR signing the
Lend Lease Act of 1941
Source: America’s Library,
URL: <www.americaslibrary.
gov/jb/wwii/jb_wwii_lendleas
_1_e.html>, accessed 15
March 2005.
Washington: The Roosevelt and Truman Administration
There is little dispute among historians that FDR did not possess a
complete and coherent China policy. To be fair, FDR made no secret that a
“Europe First” strategy would prevail until the surrender of Nazi Germany.1
However, what can be construed as the roots of FDR’s China policy go back to
the spring of 1941. Roosevelt pushed Congress to sign the Lend-Lease Act
supporting people resisting aggression abroad
in order to keep a “war from our hemisphere”
type of strategy (see Figure 1).2
Through Lend-
Lease, the U.S. supplied these victim nations,
to include China, with economic and military
support.3
The amount of Lend-Lease aid
provided to China remained a highly
contentious item between FDR and the KMT
throughout the war. Regardless of what
intrigues may have loomed below the surface,
Roosevelt’s official policy toward China
remained fairly consistent: (1) effective joint prosecution of the war, and
1
Thomas G. Patterson, Encyclopedia of U.S. Foreign Relations (New York, NY: Oxford
University Press, 1997), 21-23.
2
Lester H. Brune, Chronological History of U.S. Foreign Relations Vol. 2, 1933-1988
(New York, NY: Routledge, Taylor and Frances Group, 2003), 310.
3
Overt military support came after the U.S. entered the war in December 1941; however,
the U.S. provided limited support before this time in the form of the American Volunteer Group
(Flying Tigers.)
10. 4
(2) recognition and buildup of China as a major power equal in rank to the “Big
Three” allies during and after the war.4
It was this intrigue nevertheless that
seeped down into intelligence operations, making the prosecution of the war
complicated and the post-war environment virtually untenable.
Roosevelt, as much if not more than any president in U.S. history, took a
personal approach to foreign policy. FDR kept himself divorced from the U.S.
State Department by choosing personal representatives to go to China. He did
not confide in either Secretaries of State Cordell Hull (1933-44) or Edward
Stettinius (1944-45) as much as would be expected from a president, usually
charging his Secretary with matters of relative unimportance.5
According to
author and historian Andrew Whitefield, “It is categorical that he [FDR] disliked
the State Department and kept them separate from his own diplomacy and
decision making.”6
This thesis later demonstrates how this disunity contributed
to the imbalance between political players in China and the intelligence
organizations created to support them. Additionally, it must take into
consideration the significant influence these representatives personally appointed
by Roosevelt may have had on his China policy over those with vastly greater
experience operating in theater.
4
The Big Three were the U.S., Britain, and Soviet Union. John S. Service, The Amerasia
Papers: Some Problems in the History of US-China Relations (Berkeley, CA: Center for Chinese
Studies, 1971), 57.
5
Patterson, 21-23.
6
Andrew Whitefield, Hong Kong, Empire & the Anglo-American Alliance at War, 1941-
1945 (New York, NY: Palgrave Publishers, 2001), 41.
11. 5
The internal dispute between the KMT and the CCP was a variable that
plagued U.S. China policy throughout the war. In fact, it had long been the policy
of the U.S. Government not to mix in Chinese internal affairs.7
However, it was
the official policy of the Roosevelt administration to recognize Chiang Kai-Sheik’s
KMT as the legal government while attempting to broker a wartime alliance
between Chiang and Mao Tse-Tung’s Communists. This official stance stood
firm during the war, although patchy relations between the U.S. and the KMT
over issues of wartime commitment caused many working under the
administration to question this alliance.8
In reality, the relationship between FDR
and Chiang was more of a public relations exercise. Though FDR complained of
Chiang privately, he was cautious not to publicly criticize him or the Nationalist
Government. Any criticism of Chiang Kai-Sheik was in effect a criticism of his
China policy and invariably himself.9
Though little was known of the true nature
of the Maoist movement, FDR did not view the choice of Communism over
democracy as an option.
Another issue affecting the coherency of Roosevelt’s policies in China was
the divergent goals in the Far East between Allied powers. Roosevelt and
Churchill met in July 1941 to issue a joint declaration against aggression later to
7
Service, The Amerasia Papers, 96. Reference 1899-1900 John Hay Open Door Policy.
This policy had been designed to meet an external threat when it seemed China was endanger
from imperialist powers. The American intent had always been to “preserve Chinese territorial
and administrative entity.”
8
This fact is demonstrated by numerous State Department reports discussed in Chapters
3 and 4.
9
Whitefield, 45. FDR had even referred to Madame Chiang Kai-sheik on occasion as a
“bloodsucking vamp.”
12. 6
Figure 2. Roosevelt and
Churchill at the Atlantic
Conference
Source: Franklin D. Roosevelt
Library, URL: <www.fdrlibrary.
marist.edu/photos.html>,
accessed 15 March 2005.
be known as the Atlantic Charter (see Figure 2).10
Much like Wilson’s Fourteen
Points of 1918, the Charter was set in idealistic terms. Perhaps one of the most
contentious points in the charter affirmed “to respect the right of all peoples to
choose the form of government under which they will live.”11
This belief was not
consistent with the British Empire’s goals to
maintain its colonies in the East; however,
Churchill’s dire need for American assistance
forced him to overlook this discrepancy.12
In fact,
Churchill did not view these points as wholly
pertaining to the Empire anyway. This resulted in
continuous angst between the two powers that
permeated FDR’s Asian policies as well as
impacted British, U.S., and Chinese intelligence
operations in theater. Additional divisions
included FDR and Churchill’s views toward
China’s role in the defeat of Japan. It was not until the 1943 Quebec Conference
that China’s role in Japan’s demise was even addressed. Roosevelt was of the
frame of mind that China would ultimately play a decisive role while Churchill, on
the other hand was less convinced.13
Perhaps FDR’s enthusiasm over China
10
Whitefield, 53.
11
U.S. State Department, 1941 Atlantic Charter, URL: <usinfo.state.gov/usa/infousa/
facts/democrac/53.htm. >, accessed 7 January 2005.
12
Whitefield, 51-52.
13
Archimedes L.A Patti, Why Vietnam? Prelude to America’s Albatross (Berkeley, CA:
University of California, 1980), 9-10.
13. 7
stemmed more from political rather than ideological or military influences.
According to a 1942 public opinion poll, 80 to 86 percent of Americans believed
China could be depended on to cooperate with the U.S. during and after the
war.14
Interestingly enough, Chiang Kai-Sheik was not even invited to share in
the vision of his country during this conference, possibly indicating the veracity of
FDR’s remarks.
When Harry Truman took over after FDR’s death in 1945 it was like
bringing in a relief pitcher that had never warmed up in the bullpen. Truman,
immediately upon assuming office, was completely ignorant of FDR’s inner
thoughts, goals, or agenda. He possessed no foreign policy experience and
essentially was not tuned in to FDR’s personal objectives.15
As a result, he was
resigned to following through with whatever official policies had already been
established. As VJ day approached, Truman’s priorities for occupation forces in
Asia were as follows: (1) Japanese Archipelago, (2) Korea, and (3) China’s
mainland.16
With intelligence reports assessing a resumption of hostilities
between Chinese Nationalists and Communists forces and a fear of Communist
expansion on the horizon, why was security of the China mainland the furthest
priority? The culmination of FDR’s ambiguous policy inherited by Truman or the
relationship between his intelligence and policy makers up to that point might
provide the answers.
14
Brune, 570.
15
Whitefield, 182.
16
Keith E. Eiler, Wedemeyer on War and Peace: Letters/Correspondence of General
Wedemeyer (Stanford, CA: Hoover Press, 1987) 137.
14. 8
The Chinese Nationalists (KMT)
Nationalism in China during WWII was a relatively new concept that had
tenuous growth since its inception. Though some historians trace the roots of
Chinese Nationalism to the Boxer Rebellion, arguably the first sustained
movement began in 1905.17
Leading revolutionary activists such as Sung Chiao-
jen and Sun Yat-sen were spawned, dedicated to leading their Revolutionary
Alliance against the Manchu Dynasty in favor of a republic.18
In 1911, Sung led
his alliance into a merger with several parties creating the KMT19
and appointed
Sun Yat-sen as its director. For the next decade, the movement struggled to
survive until 1923 when Sun Yat-sen signed a joint declaration to ally itself with
Russia.20
At the time, because the CCP in China was in its infancy and held little
influence or power, the Russians looked to Sun’s KMT as a capable ally to
bolster itself against anti-Communist Japan. It was during this period a promising
young Chiang Kai-Sheik emerged as a leader, studying in Moscow in order to
help the KMT army reorganize itself along Soviet lines while forming a United
Front with the CCP.21
After Sun’s death in 1924, the KMT-CCP alliance held for
only a short period largely fueled by Chinese nationalism over imperialist Japan
and the desire to unite the country. However, by 1926, the alliance began to
17
Warren I. Cohen, East Asia at the Center (New York, NY: Columbia University Press,
2000), 300-312. Encouraged by Japan’s success over Russia, Chinese students organized an
anti-American boycott against U.S. treatment of Chinese immigrants.
18
John Patton Davies, Dragon by the Tail, (London, United Kingdom: Norton Publishing,
1974), 35-45.
19
Also referred to as the Central Government
20
Cohen, 328-329.
21
Cohen, 331-333.
15. 9
Figure 3. Chiang Kai-Sheik giving
a rallying speech in 1931
Source: Chinese Historical Society
of Southern California, URL: <www.
chssc.org/>, accessed 28 January
2005.
collapse as Chiang began to purge Communist elements from the KMT. In 1927,
as Chiang’s power and influence grew, he turned his sights on eliminating
Communist forces he deemed as a threat to his political survival initiating the
start of the KMT-CCP Civil War (see Figure 3). In 1936, with the help of the
Chinese Communists, a warlord by the name of Chang Hsueh-liang captured
Chiang Kai-Sheik in Xian province.22
Under duress, Chiang was compelled to
agree to cooperate with the Communists
against the impending Japanese threat.
When the Second Sino-Japanese War
began in 1937, Communist forces under
Mao Tse-tung were able to take advantage
of the mock alliance and the weakened KMT
by gaining control over large areas of
northern China. As the U.S. mobilized to
combat the Japanese in China in 1942, the
battlelines between the KMT and the CCP were drawn despite the fact that both
sides claimed to temporarily cease hostilities in order to repel Japan.23
It was in
this difficult environment the U.S entered China.
From the beginning, the Nationalist leadership insisted on joining the Allies
as a full-fledged member under a unified command. Chiang Kai-Sheik was
22
Davies, 185-187. After Chiang’s release, Chang, who then surrendered to Chiang, was
tried and sentenced for his part in the affair; he was pardoned but kept in custody until 1962. He
was taken to Taiwan when the Nationalist regime fled there in 1949.
23
Many historians have pointed out since then that the priority of the defeat of Japan over
the internal struggle between the two was never clear-cut.
16. 10
frustrated he was not being consulted or treated in the same fashion as Stalin or
Churchill, who both had made numerous trips to Washington to meet with FDR.
China, after all, had stood alone against Japan with minimal international
support. Shortly after Pearl Harbor, the American-British-Dutch-Australian
Command was set-up under Sir Archibald P. Wavell. According to former OSS
member Archimedes Patti:
The new command structure excluded China because Roosevelt
and Churchill agreed that Chiang Kai-Sheik would oppose any
foreign control in China. This fell apart due to the conflict between
Chiang and Wavell and the whole Pacific came under U.S. direction
with Chiang retaining operational control of China.24
It can be argued that the implications of this initial incident may have had far-
reaching effects on the relations between the U.S. and Chiang’s government for
years to come. This first confrontation over control of the Far East may have
impelled Chiang to begin an aggressive campaign for equal status that would
continue throughout the war.
In addition to Chiang’s constant stress over equal status with the Allies,
his relationship with the U.S military forces assigned in China can be best
described as bittersweet. Previous to the U.S. entering the war, Chiang had
enjoyed a mutually beneficial union with Claire L. Chennault’s famed American
Volunteer Group (AVG) better known as the “Flying Tigers.”25
American pilots
were paid handsomely in return for providing China with an air defense that could
24
Patti, 8-9.
25
Michael Schaller, The U.S. Crusade in China, 1938-1945 (New York, NY: Columbia
University Press, 1979), 69.
17. 11
neutralize the rapidity of the Japanese advance over the mainland.26
In addition
to authorizing this collaboration, FDR announced the eligibility of China to receive
lend-lease assistance in the amount of $1.5 million over the next five years.27
After the U.S. officially entered the war, General Joseph “Vinegar Joe” Stilwell
was appointed in February 1942 as Chiang’s Chief of Staff and Commander of
U.S. Forces, China Burma India (CBI) Theater. Officially, Stilwell was charged
with maximizing the effects of the U.S. aid to China while improving the combat
efficiency of the Chinese army.28
However, as Chapter 3 will demonstrate,
disagreements over the use of the Chinese army, amount of lend-lease
assistance, and Chiang’s own internal politics beset relations between the two
leaders.29
In addition, Chiang’s inability to voice his disputes personally with
FDR resulted in even greater animosity toward Stilwell. Over the next two and a
half years this dysfunctional relationship bore negative impacts on the entire CBI
military and intelligence structure.
One of Chiang Kai-Sheik’s most vital instruments was his Nationalist
intelligence service known as the Bureau of Information and Statistics (BIS). The
head of the BIS, General Tai-Li, was well known among U.S. State Department
and intelligence operatives as a ruthless and sinister operator in charge of
26
Bernard Nalty, Tigers Over Asia (New York, NY: Elsvier-Dutton, 1978), 40-41. Salaries
varied from $250-$750 per month. A bonus of $500 for every confirmed aerial victory was also
awarded (not in the contract).
27
Brune, 551.
28
Brune, 570.
29
Schaller, 106-110.
18. 12
Figure 4. Tai-Li and Milton Miles
Source: Vice Admiral Milton
Miles, USN (Ret), A Different Kind
of War (New York, NY: Doubleday
and Company Inc., 1967), 247.
Chiang’s intelligence and internal police network.30
Tai-Li’s operation consisted
of nearly 400 spy stations throughout China.31
Additionally, he managed an
extremely effective cryptology network by forming the Office of Technological
Research of the Military Council.32
Loyal only to Chiang, Tai-Li resented any
intelligence operations in China outside of his immediate control regardless of
any Allied affiliation. As a result, he resented the presence of OSS operating
autonomously in China and worked persistently
to limit their operations. While relations with
OSS were perpetually strained, Tai-Li
established a rapport with the head of naval
intelligence in China, Captain Milton “Mary”
Miles under the Sino-American Cooperative
Organization (SACO) (see Figure 4). Miles
served as Tai-Li’s deputy director under this
bilateral agreement. Unlike others within
political and intelligence circles, Miles and his
chain of command appeared to view Tai-Li with
30
Captain Charles Barton, USN (Ret), The Rice Paddy Navy (London, United Kingdom:
Spalding Books, 1989), 151.
31
Elizabeth P. McIntosh, The Women of the OSS: Sisterhood of Spies (Annapolis, MD:
Naval Institute Press, 1998), 121-130.
32
Maochun Yu, OSS in China, Prelude to Cold War (New Haven: Yale University Press,
1996), 32-39. These cryptologic spy stations were developed with the help of Herbert Yardley,
architect of the American Black Chamber after WWI. Tai-Li recruited Yardley to establish and
train a cadre of Chinese signals operators. This program was known as the Chinese Black
Chamber. See also Herbert Yardley’s book, The Chinese Black Chamber: An Adventure in
Espionage.
19. 13
admiration. In 1945, Admiral Ernest King recommended Tai-Li for the Award of
Legion of Merit, claiming that he contributed to the war against Japan “with
distinction.”33
In Miles’ biography, he describes Tai-Li as a “sincere and loyal
follower of his leader” as well as a man who took a fearless stand against
malicious opposition.34
Tai-Li’s bipolar relationship with U.S. intelligence
contributed to a division already forming between OSS and naval intelligence due
to differences in methods of operation and rivalry over intelligence turf. This
rivalry would swell throughout the war exacerbating China’s internal discord.
The Chinese Communists (CCP)
Chinese Communism began its development after the First World War.
China’s frustration at the Paris Peace Conference coupled with the success of
the Russian Revolution fueled disillusionment with Western-style democracy. In
addition, the Bolshevik government, in an enormous gesture toward China,
offered the return of all territories lost in the past to the Tsarist government.35
A
year after the conference, radical dissidents formed the CCP. During this period,
many disillusioned Chinese became members of the CCP, to include Mao Tse-
Tung and Chou En-Lai. Initially, the CCP contained modest numbers having a
membership of 300 in 1922 and only 1,500 by 1925 compared to the KMT which
33
Vice Admiral Milton Miles, USN (Ret), A Different Kind of War (New York, NY:
Doubleday and Company Inc., 1967), 350.
34
Miles, 359.
35
Margaret Macmillan, Paris 1919 (New York, NY: Random House, 2003), 341.
Macmillan states that the Bolshevik government never actually delivered on the promise, but the
Chinese were deeply impressed considering no Western nation had attempted to do so.
20. 14
Map 1. The Long March 1934-35
Source: History of Chinese and
Japanese Civilizations, URL:
<homepages.stmartin.edu/HIS%20217%2
0Maps.htm>, accessed 15 June 2005.
by 1922 already had 150,000 members.36
However, by 1926 the KMT divided
into left and right wing factions, while the Communist party within the United
Front continued to expand. In 1929, Chiang Kai-Sheik foiled a coup to oust him
launched by members of the CCP, prompting him to launch a series of five
campaigns aimed at eradicating any remaining Communist activity.37
While the
first four campaigns met with mixed
success, by 1933-34 Chiang launched a
fifth campaign that threatened
Communist annihilation. In October of
1934, the Communists were forced to
conduct a massive retreat to the west to
escape the ensuing KMT forces. Known
as the Long March, this yearlong, 6000-
mile retreat ended when the Communists
reached the interior of Shansi province
(see Map 1).38
Though the CCP was
badly mauled, Mao Tse-Tung emerged
as the top Communist leader keeping his
retreating army intact by confiscating
property and weapons from local warlords and landlords while recruiting
36
Word IQ, The Chinese Civil War: The First United Front, URL: <http://www.wordiq.com/
definition/Chinese_Civil_War>, accessed 22 January 2005.
37
CCP members included Feng Yü-hsiang, Yen Hsi-shan, and Wang Ching-wei.
38
Schaller, 10. 75 percent of the 100,000 died along the way.
21. 15
peasants along the way.
The capturing of Chiang Kai-Sheik in 1936 and subsequent agreements
had mixed results for the Communists. While the capture forced Chiang to agree
to another United Front against Japan, it also painted a picture in America’s eyes
that Chiang was a unifier and possibly the single best man to bring China
together politically.39
It was this leap of faith that tied Washington to the KMT
leading into the war. The official recognition by the U.S. of the Nationalist
government as the sole legitimate government of China created numerous U.S.
intelligence gaps. As mentioned previously, Tai-Li’s BIS kept a short leash on
U.S. intelligence agencies operating in China. With the U.S. a committed ally of
the KMT, any intelligence partnership with the Communists was considered
taboo. This left an enormous untapped source of intelligence in northern China
that could have been used to defeat Japan as well as a way to monitor the status
of the Communist forces. Surely Tai-Li must have had informants inside the
CCP; however, the exact amount of intelligence collected or shared with the U.S.
remains an enigma. It was not until August 1944 that the U.S. finally convinced
Chiang to allow a U.S. observer mission to establish liaison in the Communist
held territory of Yenan (see Map 2).40
The U.S. Army Observer Group (a.k.a
Dixie Mission) provided the main source of U.S. intelligence in northern China as
well as the strongest liaison between the U.S. and the CCP through 1944-45 and
into the post-war.
39
Schaller, 12-13.
40
Carolle J. Carter, Mission to Yenan: American Liaison with the Chinese Communists
(Lexington, Kentucky: University of Kentucky Press, 1997), 24.
22. 16
While the U.S. struggled to establish an intelligence network in the CCP-
held areas in the north, Mao’s intelligence apparatus enjoyed continuous success
in penetrating numerous levels of the KMT in the south. In 1939, the Soviet
military intelligence agencies (GRU and NKVD) established a large presence in
Yenan, opening up an intelligence training school under the codename Institute
of the Oriental Munich.41
This school was co-located with the CCP’s intelligence
organization called the Social Affairs Department (SAD). The institute existed
from 1939-1945 training a large number of Communist intelligence officers in
Asia to include the Chinese.42
By 1941 the CCP had established intelligence
networks in all areas of China to include Japanese occupied territories as well as
41
Maochun, 40-42.
42
Maochun, 43-44.
Map 2. Communist Held Regions of China, 1944
Source: Vice Admiral Milton Miles, USN (Ret), A Different Kind
of War (New York, NY: Doubleday and Company Inc., 1967),
127.
23. 17
in the Nationalist capital of Chungking. Here Chou En-Lai, acting as CCP
representative in Chungking, and as a member of Chiang’s Military Council,
perpetrated a massive intelligence penetration into the KMT government as well
as Tai-Li’s BIS.43
It is reasonable to assess that these agents may have
infiltrated U.S. circles either through SACO or OSS, contributing to problems
within these organizations. However, to what level this may have occurred or the
extent of the impact has never been firmly established.
Perhaps one of the most significant factors underlying the views of the
U.S. toward the CCP during the war was the administration’s interpretation of
Chinese Communism and its relationship with the Soviet Union. The general
impression in Washington was that Mao’s group was highly influenced by
Moscow and was a mere extension of Soviet Communism. As mentioned, Chou
En Lai resided in Chungking as a CCP representative; however, Washington
denied any official contact during most of the war considering it impolitic to do
so.44
As a result, Washington instead sent Foreign Service Officers (FSO) from
the State Department to meet with CCP representatives.45
Many among the
Foreign Service Corps, such as John S. Service and John Patton Davies,
believed Mao’s brand of Communism to be vastly different from the Soviet
43
Maochun, 40-44. Maochun argues that Chou En Lai was perhaps the mastermind
behind CCP intelligence, infiltrating as many as 5,000 agents into Nationalist and Japanese held
areas.
44
Davies, 250-254. See discussion between Davies and U.S. Special Envoy Lauchlin
Currie.
45
Davies, 250-254. See also Davies-Enlai relationship 351-364.
24. 18
model.46
It can be argued that since the CCP came into existence, Soviet
interest in China was very opportunistic. It was essential for the Soviets to
maintain an ally in China as a buffer against Japan. The CCP had always been
considered too weak to support fully, so the Soviets half-heartedly endorsed the
KMT, while leaving the door cracked for Mao and his party in the event of any
change. In a 1944 discussion with U.S. Envoy Patrick Hurley, Soviet Foreign
Minister Vyacheslav M. Molotov encouraged allied support of the Nationalist
government. He spoke of the sweeping poverty throughout China and the fact
many mistakenly called themselves Communist due to their disappointment with
the country’s economic conditions.47
Stalin himself did not particularly like Mao
who he claimed to be too zealous in his factional infighting.48
Additionally, in
1938, Moscow’s xenophobic attitude resulted in the Stalin ban on all non-
Russian-born Communists from directly serving in the Soviet intelligence and
defense system.49
Overall, the views held in Washington contrasted considerably from the
views of some of the “Old China Hands” in the field. This created a complex
environment in which alliances, both political and military, would to be
determined and maintained.
46
Reference writings of John S. Service, The Amerasia Papers, and Lost Chance in
China and John Patton Davies, Dragon by the Tail.
47
Carter, 108.
48
Maochun, 42-43.
49
Maochun, 42.
25. 19
THE INTELLIGENCE PLAYERS
At the height of WWII, as many as 13 different U.S. intelligence
organizations or units operated in the CBI Theater.50
These included: the Joint
Intelligence Collection Agency, Military Intelligence or G-2, and the Office of
Wartime Information. While efforts of these organizations were significant to the
defeat of Japan and in no way should be minimized, the thrust of this model will
concentrate on those relationships amid two of the largest and all encompassing
presences in China during this time: the OSS and the Office of Naval
Intelligence (NAVGRP, China). Additionally, the role of the FSO in China during
the years 1943-1945 should not be neglected. While the State Department is not
directly included in this network for analysis, its political and intelligence views
are significant to this study and will be evaluated in Chapters 3 and 4.
Office of Strategic Service (OSS)
The OSS was officially established in June of 1942, spawned from the
creation of the Coordinator of Information (COI) under the leadership of General
William “Wild Bill” Donovan, personally appointed by FDR as the head of the
organization (see Figure 5). Donovan’s initiation into the highly competitive U.S.
Intelligence Community (IC) met with fierce resistance from the Army G-2
commander as well as the FBI who worked to minimize the OSS role in the
50
Eiler, 85-89. The number of intelligence organizations is disputed. Different sources
quote different numbers such as 8, 10, or 11. The reason for this may be varying definitions on
what an intelligence organization is or consists of.
26. 20
Figure 5. General William J.
Donovan
Source: Federation of
American Scientists, URL:
<www.fas.org/irp/ops/ci/doc
s/ci2/2ch3_a.htm>, accessed
21 February 2005.
war.51
However, due to initial successes of his
organization in 1942, especially in Operation
Torch,52
the JCS issued a charter in December
1942 to make OSS an equal partner in the IC
with ONI and G-2.53
Though OSS was now a
separate organization and fell directly under the
JCS, overseas units usually fell under military
chains of command.54
The OSS organization
ultimately comprised nine distinct branches:55
1. Secret Intelligence (SI): Responsible for
collecting intelligence from within neutral
and enemy territory.
2. Special Operations (SO): Responsible for conducting sabotage and
working with resistance forces in enemy territory.
3. Operational Group (OG): Responsible for training, supplying, and leading
guerrilla forces in enemy territory.
4. Morale Operations (MO): Responsible for the creation and dissemination
of “black” / covert propaganda.
5. Maritime Unit (MU): Responsible for conducting maritime sabotage,
delivery of supplies, land agents, and guerrilla forces into enemy territory
from the sea.
51
Maochun, 42.
52
Operation Torch was the allied Invasion of North Africa.
53
U.S. War Department. Strategic Services Unit. War Report of the OSS (Office of
Strategic Services), (New York, NY: Walker & Company, 1976), 216.
54
Francis Mills, OSS Special Operations in China (Williamstown, NJ: Phillips
Publications, 2002), 12. The CBI was an exception to this rule until General Wedemeyer replaced
Stilwell at the end of 1944.
55
Dan and Charles Pinck, Stalking the History of the Office of Strategic Services: An
OSS Bibliography (Boston, MA: The OSS/Donovan Press, 2000), 130-140.
27. 21
6. Research & Analysis (R&A): Responsible for producing economic,
military, social, and political estimates for every strategic area from Europe
to the Far East.
7. Counter-Intelligence (X-2): Responsible for the protection of American
and Allied operations and the identity of enemy agents overseas.
8. Schools and Training (S&T): Responsible for the assessment and training
of recruits in the U.S. and overseas.
9. Foreign Nationalities (FN): Centered in the U.S. responsible for all
information about enemy nations or enemy occupied areas from refugees,
political escapees, or exiles.
Not all theaters of operation maintained every branch while some theaters had a
greater branch presence than others. In addition, OSS branches were largely
compartmentalized during the war except toward the summer of 1945 when
many SO, SI, and MO teams operated jointly throughout many areas.56
While the OSS operated in virtually all theaters of WWII, no area of the
world challenged the idea of equal status of intelligence organizations more than
Asia. By and large, OSS was excluded by Pacific theater commanders from
areas where major military campaigns were conducted.57
OSS Pacific Ocean
Areas did exist, but in limited fashion consisting of a small MU unit based in
Hawaii. Douglas MacArthur and Chester Nimitz thought of OSS as superfluous
and relegated its mission to field photography and basic research duties.58
OSS
56
Elizabeth P. McIntosh, former OSS operative in China, 1942-44, interview by Maochun
Yu, 7 May, 1997, n.p., copy of transcript provided on 24 December 2004 by Joseph A. Yager,
former OSS operative in China 1943-45.
57
Maochun, 11.
58
Joseph A. Yager, former OSS operative in China 1943-45, interview by the author, 24
December 2004. Cited hereafter as Yager interview.
28. 22
therefore was limited to activities in the Far East to include the CBI Theater (see
Map 3).
The primary OSS units in the CBI from September 1942-October 1944 were:59
1. OSS South East Asia Command, Headquarters, Kandy, Ceylon.
Established September 1942-October 1944. Consisted of Detachment
101 responsible for commando operations into northern Burma.
2. OSS/China, Burma, India, Headquarters, Chungking, China.
Established April 1943-October 1944 under SACO. Consisted of
Detachment 202 responsible for all-source collection in the CBI.
59
Patti, 24-27.
Map 3. OSS Missions and Bases in East Asia by 1945
Source: Central Intelligence Agency, URL: < www.cia.gov/
cia/publications/oss/art09.htm>, accessed 13 February
2005.
29. 23
OSS/China faced enormous odds in establishing itself in the CBI Theater.
General Stilwell feared the Chinese government’s unwillingness to permit this
group to operate in China and that it would conflict with the already established
U.S. NAVGRP, China.60
He therefore diverted the first OSS contingent from
China, assigning Detachment 101 to support military operations in Burma. 61
It
was here in September 1942 that OSS first emerged in the CBI. Over the next
year, Donovan lobbied to establish a firmer foothold of OSS operations in
theater. In April 1943, he signed the SACO agreement with Captain Milton Miles
and Chinese General Tai-Li.62
SACO was a unique joint military effort between
the U.S. and the KMT consisting of about 2,500 Americans, mostly from the U.S.
Navy, who led, trained, and fought with Chinese Nationalist troops in China. Led
by Tai-Li and Miles, this organization proved to be a significant challenge for
OSS due to the suppressive nature of Tai-Li toward any intelligence organization
not subordinate to the BIS. Constricted by this obtrusiveness, Donovan sought
sanctuary in General Claire Lee Chennault’s Fourteenth Air Force. Here
Donovan and Chennault formed the American and Ground Forces Resources
Technical Staff (AGFRTS) or not so affectionately known as “AGFARTS.”63
AGFRTS was designed as an independent unit of selected personnel that
operated as an intelligence-collecting agency supporting tactical operations for
60
Joseph A. Yager, “Origins and History of the State Department’s Division of Research
for the Far East”, unpublished manuscript obtained in an interview by author, April 1999, 16. Cited
hereafter as Yager manuscript.
61
Yager manuscript, 20.
62
Maochun, 94-95.
63
Yager interview, 24 December 2005.
30. 24
the 14th
AF. Here Donovan hoped to run clandestine operations without the
outside interference he experienced with SACO. However, in order to gain
ground, Donovan once again had to compromise. It was agreed AGFRTS would
remain a Fourteenth Air Force unit under the command of U.S. Army Air Corps
A-2 Colonel Wilfred Smith, making the OSS subordinate once more to an outside
entity.64
A similar event occurred in July 1944, when an agreement was signed
between the U.S. and Chiang Kai-Sheik to send the U.S. Army “Dixie Mission”
into northern China to establish liaison with Mao’s Communist guerrillas.
Recognizing an opportunity to insert itself into this virtually uncharted area of
intelligence, OSS attached people to the mission. However, just like SACO and
AGFRTS, the Dixie Mission was a U.S. Army mission, making independent
operations by OSS nearly impossible to achieve. These three attempts by
Donovan to establish an independent OSS presence in China affected the
balance of relations between OSS, NAVGRP China, both Chinese Nationalists
and Communists, and Washington decision-makers.65
The analysis and extent
of the impact of these events will be evaluated in Chapters 3 and 4.
In October 1944, under the tutelage of newly appointed theater
commander, Albert C. Wedemeyer, the CBI was restructured into two separate
theaters: India-Burma and China.66
As a result, OSS/CBI was again reorganized
into two separate commands: (1) OSS India-Burma (OSS/IBT) replacing
64
Yager manuscript, 28.
66
Maochun, 170-171.
31. 25
OSS/SEAC and (2) OSS/China.67
Additionally, in 1945 OSS was finally made an
independent agency directly under the command General Wedemeyer.68
Under
this new theater command structure, OSS was finally able to make some limited
progress in expanding its number of units in theater. The following depicts the
composition of OSS as of 1945.69
1. OSS/IBT
a. Detachment 303 at New Delhi, India: A rear echelon base for
OSS/IBT
a. Detachment 404 at Kandy, Ceylon: Headquarters for OSS/IBT
2. OSS/China:
a. Detachment 202 at Kunming: OSS headquarters, China Theater
Detachment 203 at Chungking: Carried out mostly R&A, MO,
and SI duties.
b. Detachment 204 at Kaiyuan: Consisted of training schools.
c. Detachment 205 at Dinjan, India: Main supply base for
OSS/China
d. Detachment 206 at Chengtu: X-2 operations and liaison with
Twentieth Bomber Command.
Shortly after the defeat of Japan, on 20 September 1945, Executive Order
Number 9620 terminated OSS effective 1 October 1945.70
While this meant the
end of OSS in name, it did not end in function. The R&A branch of OSS was
transferred to the State Department and designated the Interim Research and
Intelligence Service (IRIS).71
The rest of the agency was transferred to the War
67
Patti, 24-27. The India-Burma Theater was also subordinated to the British-led
Southeast Asian Command (SEAC) under the British Commander, Lord Louis Mountbatten.
68
Maochun, 199-205.
69
Yager manuscript, 30.
70
Yager manuscript, 35.
71
Yager manuscript, 41.
32. 26
Department where it became the Strategic Services Unit (SSU).72
After VJ Day,
field remnants of OSS found themselves in limbo, struggling for new objectives
under this new system. As bits and pieces of OSS attempted to manage
themselves in this state of flux, local operations in China continued with a new
focus on the impending civil war between the KMT and CCP. It is during this
period that the bifurcated objectives of the war years began to show their effects
on allied intelligence as well as Washington’s China policy.
ONI (NAVGRP, China)
Next to OSS, NAVGRP China had the largest intelligence presence
operating in the CBI Theater (see Map 4). It was established in 1942 under the
leadership of Captain (later Commodore) Milton Miles. Even though Miles
operated under the CBI command structure, like the OSS, his group was not
directly responsible to General Stilwell. Miles acted on oral orders from
Commander-in-Chief, U.S. Fleet Admiral Ernest J. King and initially operated
under the title of “Naval Observer to U.S. Embassy, China.”73
Initially, NAVGRP’s
primary mission was to set up a network responsible for reporting weather in
order to support the vital interests of the Pacific Fleet; however, this mission later
expanded into providing reconnaissance of the China coastline and harassing
the Japanese in occupied areas of China. Perhaps the largest intelligence
72
War Report of the OSS, 260-289.
73
Wyman H. Packard, A Century of U.S. Naval Intelligence (Washington, DC: Office of
Naval Intelligence and the Naval Historical Center, 1996), 411. Cited hereafter as Packard.
33. 27
operation conducted by NAVGRP included the 1945 directive by General
Wedemeyer to provide coastal intelligence for a possible U.S. landing on the
China mainland.74
NAVGRP consisted of approximately 2,500 U.S. Navy and
Marine Corps personnel and established its headquarters in Chungking, China
(COMNAVGRP) at a location warmly known as “Happy Valley.”75
The unit was
organized in two divisions: (1) Special Duty-Aviation, responsible for intelligence
liaison with Army Air Forces in theater, and (2) Special Duty-Intelligence,
responsible for supervising coastal watch networks. In addition, an organization
called the Air Ground Aid Service (AGAS) was established at COMNAVGRP to
74
Also known as the AKRON Project. The dropping of the atomic bomb a year later
ultimately negated the need to carry this plan out. This will be addressed again in Chapter 4.
75
Packard, 411.
Map 4. NAVGRP, China Operating Areas, Spring 1945
Source: Vice Admiral Milton Miles, USN (Ret), A Different Kind of
War (New York: Doubleday and Company Inc., 1967), 127-128.
34. 28
Figure 6. NAVGRP’s Camp 1
holds a class in hand-to-hand
combat
Source: Vice Admiral Milton Miles,
USN (Ret), A Different Kind of War
(New York, NY: Doubleday and
Company Inc., 1967), 247 367.
assist in the evasion of downed airman. Miles worked hard to establish a close
liaison and working relationship with Tai-Li, the head of the BIS. Regardless of
Tai-Li’s shady reputation and animosity toward OSS, Miles and the General
established a strong rapport coordinating intelligence efforts through the 1943
Friendship Project, later to be officially named SACO.76
It was under this
organization that NAVGRP officially acquired its name. Ultimately SACO
controlled nearly 100,000 guerillas, 50 weather stations, and 60 coastal units in
addition to other small intelligence units operating in South East China (see
Figure 6).77
Additionally, NAVGRP China made
contact in Indochina in 1943 with Commodore
Robert Meynier of the French Navy.78
Through
Meynier’s agents, COMNAVGRP received
intelligence reports from Indochina regarding
Japanese activity.79
SACO was disbanded on
September of 1946, prompted by the end of the
war in the Pacific. U.S. Naval Forces continued
to maintain a meager intelligence presence in
China through a liaison office in Shanghai
charged with evaluating internal events during KMT-CCP hostilities.80
76
Packard, 412.
77
Packard, 412.
78
Miles, 183-192.
79
Miles, 183-192.
80
Miles, 508-510.
35. 29
Included in its place in history as one of the main intelligence units in
China during WWII, SACO also permitted the first toehold for the OSS in China.
The affiliation forged between the OSS and NAVGRP under SACO had an affect
on both intelligence and political matters in China. This was typified when
William Donovan appointed Miles to be coordinator of OSS activities in the Far
East. This actually dual tasked Miles as head of OSS operations under the
SACO agreement while maintaining his duties as Commander, NAVGRP China.
The overall OSS-NAVGRP rivalry marked an episode in which politics
perpetuated a bitter struggle between two allied intelligence organizations that
had lasting implications for U.S. policies in China. The alliance formed between
Tai-Li and Miles under SACO affected the very nature of the relationship
between OSS and NAVGRP. The existence of NAVGRP operations in China
rested on the rapport between Miles and Tai-Li. As a result, Miles had little
choice but to adhere to the strict political convictions of the KMT. Any expansion
outside that perimeter would very possibly have sent Miles home. However,
since OSS had never established a firm footing in China to begin with, Donovan
reaped his success by collecting and producing intelligence in many ways
contrary to Miles.81
This created a situation that transcended mere inter-service
rivalry between two striving organizations, leaving Washington policy makers to
measure the credibility of each side.
In Chapter 2, an analytical method based on Balance Theory is introduced
and explained. This method provides a model that weighs and measures the
81
Forging relationships with Communist elements such as the CCP is an example of this
divergence. These various friction-producing events are examined in Chapters 3 and 4.
36. 30
types of relationships of these five players as they entered the war in China. The
results gleaned will provide the foundation for subsequent analysis presented
later in the thesis focused on the transformation of these associations.
37. 31
CHAPTER 2
THE METHOD: USING BALANCE THEORY TO EXPLAIN HISTORY
It should be known that history is a discipline that has a great number of
approaches.
--Ibn Khalduin of Tunis
DEVELOPMENT
The earliest formulation of balance theory has generally been attributed to
the psychologist Fritz Heider whose work on balance theory spanned the period
from 1944-1958. Heider’s theory essentially focused upon interpersonal
perception and behavior between individuals.82
Using Heider’s work as a
baseline for developing balance models, numerous other psychologists
throughout this period developed similar but different models from systems of
orientation to cognitive dissonance.83
In 1970, Howard F. Taylor, a professor of
social psychology at the University of Syracuse, wrote a book dedicated to the
use of balance theory in small groups. In his book, Taylor draws from the works
of Heider as well as other balance theorists to devise a systematic method for
analyzing the interpersonal relationships or networks among different social
82
Howard F. Taylor, Balance in Small Groups (New York, NY: Van Nostrand Reinhold
Company, 1970),14-15.
83
Taylor, 14-30. Taylor references the works of Newcomb (1953-1963), Festinger (1957),
Osgood and Tannenbaum (1957-1967), and Rosenberg and Abelson (1960).
38. 32
participants.84
Applying this model to state or sub-state participants as well as
bureaucratic organizations can provide an interesting tool for charting the
evolution of these relationships that can ultimately shape decisions or policies
made by a particular group.85
This use of the balance theory model allows
analysts to configure the dynamics between groups whether it is for historical or
present purposes. By configuring these social dynamics, analysts now have a
method for measuring the shift in particular group settings in order to determine
or explain outcomes of certain events.
THE PROJECTED MODEL
The concept of proper balance in a small group of participants involves
certain requirements about the characteristics of relationships between all actors
in a group. Simply put, proper balance in a small group is the epitome of the
conditions expressed in an old adage:
A friend of a friend is a friend
A friend of an enemy is an enemy
An enemy of a friend is an enemy
An enemy of an enemy is a friend
Accordingly, imbalance exists in a small group when there are certain
relationships among actors that are in contradiction of the aforementioned
principles:
84
Kanafiah Deni, Social Balance Theory: Revisiting Heider’s Balance Theory (Jawa
Barat, Indonesia: Bandung Fe Institute, Department of Computational Sociology,1996), 10-36.
85
“The Great Imbalancing Act: Burmese Foreign Policy in the 1960’s,” research paper,
n.p, 1971, provided on 13 December 2004 by the author, Professor Jon A. Wiant, JMIC faculty.
Cited hereafter as “Great Imbalancing Act.“ Professor Wiant’s paper took the theory developed by
Taylor and successfully applied it to state actors.
39. 33
A friend of a friend is an enemy
A friend of an enemy is a friend
An enemy of a friend is a friend
An enemy of an enemy is an enemy
In theory, these concepts of balance and imbalance can be represented through
the use of a model demonstrating these relationships (see Figure 7).86
Explanation of Terms
A model of a network of players is constructed out of two components:
(1) the players (points) and (2) the valences (lines) which connect the actors and
represent the relationships between the two. Heider devised a way to represent
these relationships by assigning each valence a “sign” in accordance with the
attributes of the relationship. In this case a “favorable” relationship is signed
positively (+) and a relationship characterized as “unfavorable” is signed
negatively (-). In 1961, another balance theorist named T.M. Newcomb
rationalized that relationships could not be judged solely on the basis of favorable
or unfavorable. He proposed that various degrees or weights of familiarity must
86
“Great Imbalancing Act,” 3.
DC
BA
(-)
(-)
(-)
(+)
(+)
(+)
Figure 7: Model of Participants
40. 34
be measured in order to glean more accurate results.87
As a result, Newcomb
developed a method for quantifying relations by using what is called a “Likert
Scale” as follows:88
+3 = a strong positive relation
+2 = a moderate positive relation
+1 = a weak positive relation
0 = a neutral or no existing relation
-1 = a weak negative relation
-2 = a moderate negative relation
-3 = a strong negative relation
Therefore, giving representative weights to these valences indicating the intensity
or strength of both friendly and hostile feelings can enhance the shape of the
network (see Figure 8).89
Fundamental to the measurement of balance in small groups are the
concepts of “path” and “cycle.”90
A “path” is two or more valences connecting
87
T.M. Newcomb, The Acquaintance Process (New York, NY: Holt, Rinehart and
Winston, 1961), 73.
88
Taylor, 21.
89
Taylor, 22.
DC
BA
(-2)
(-1)
(-2)
(+1)
(+3)
(+2)
Figure 8: Model of Players with
Weighted Valences
41. 35
consecutive actors. A cycle is a path that returns to the point, or actor, of origin.
The number of valences in it determines the length of a cycle. In Figures 7 and
8, each network has five cycles, one of which is a 4-line (ABCDA) and four that
are 3-line cycles (ABCA, ACDA, BCDB, and BDAB). (Note: Hereafter the last
letter in a cycle, denoting the return to the point of origin is dropped). Finally, by
coalescing these components into a single working model, a “network” of
participants is conceived that can now be formularized to begin balance theory
analysis.
The Formula
In order to evaluate the complete character of the network, the
relationships must first be broken down into cycles. Each cycle, either positive or
negative, is derived from the algebraic outcome of the weighted valences in the
cycle. For example, in Figure 7 the one 4-line cycle and the two 3-line cycles
(ABC and ACD) are positive and the remaining two 3-line cycles are negative.
Using the concepts, one can now determine the degree of balance within a
network of actors. This is accomplished by finding the ratio of positive cycles in
the network to the total number of cycles in the formula:91
b(N) = +c(N)
c(N)
b(N) = the degree of balance in the network.
+c(N) = the number of positive cycles in the network.
c(N) = the total number of cycles in the network.
90
Taylor, 54-55.
91
“Great Imbalancing Act,” 4-5.
42. 36
Resolving this formula for the network in Figure 7, the degree of balance is .60,
indicating only a slightly balanced association. In order for the network to be in
formal balance (1.00) the relationship between actors A and C would have to
deteriorate from positive to negative.
The degree of balance in Figure 8 where the valences are both signed
and weighted using the Likert Scale is measured by modifying the formula:
b(N) = +c(N)
c(N)
+c(N) = the sum of the algebraic products of the positive cycles.
c(N) = the sum of the absolute products of all cycles.
The formula is resolved in the following manner in Table 1:92
After computing the weights in each of the five cycles an algebraic product is
produced. In accordance with the original formula, the sums of the positive
cycles are then divided by the sums of the absolute products (representing the
total number of cycles). The end result is a .4 indicating a slant toward
imbalance in the network.
92
“Great Imbalancing Act,” 4-5.
12-12(+3)(+2)(-2)BDA:
Sum of
Absolute
Product = 25
Sum of Positive
Cycles = +10
(+1)(-1)(+3)
(-2)(-1)(+2)
(-2)(+1)(-1)
(-2)(+1)(-1)(+2)
Cycles
-3
+4
+2
+4
Algebraic
Product
3BCD:
4ACD:
2ABC:
4ABCD:
Absolute
Product
Table 1: Execution of the Formula
43. 37
Now that a picture has been properly painted as to the uses and function
of this theory and model, the next step is to apply it practically to the focus of this
thesis: The WWII China Intelligence Network. The model will determine how a
series of wartime political and military developments affected the relationships
among and between key U.S. intelligence organizations and their Chinese allies.
THE CHINA NETWORK: AN HISTORICAL APPLICATION
The China Network begins in 1942 when U.S. policy and intelligence first
put down roots in the CBI with the objective of defeating Japan. By that time, the
Japanese had expanded their empire well into the Pacific to include much of
China (see Map 5).
Map 5. The Status of Forces in the Far East 1941-1942
Source: USMA Library, URL: <www.dean.usma.edu/history/
web03/atlases/ww2%20pacific/ww2%20pacific%20%20pages/ww2%2
0pacific%20map%2016.htm>, accessed 20 February 2005.
44. 38
As illustrated in Chapter 1, the U.S. entered China in less than perfect
circumstances striving to assemble a successful network of policy, intelligence,
and diplomacy with a host of intriguing players. With the concepts and analytic
tools presented previously in this chapter, a network for examining the foreign
policy behavior of a state in its relationships with other states, political groups,
and organizations has been constructed (see Figure 9).
As laid out in Chapter 1 of this thesis, five highly significant players have been
selected encompassing political and intelligence organizations that dominated
China from 1942-1945:
The Political Players:
Washington (FDR and Truman Administration)
Chinese Nationalist Government (Kuomintang or KMT)
Chinese Communist Party (CCP)
WASH
CCPKMT
ONIOSS
(+,-) (+,-)
(+,-) (+,-)
(+,-)
(+,-)
(+,-) (+,-)
(+,-)(+,-)
Figure 9: The China Network
45. 39
The Intelligence Players:
Office of Strategic Service (OSS)
Office of Naval Intelligence (ONI or NAVGRP, China)
In evaluating the network of participants, it is assumed that any group
within the network will have some relationship with at least two other groups in
the network. In this sense, the network is defined by the concurrence or
mutuality of relations between these five groups. This model does not profess
that these five players encompass the total picture of the operational
environment of the time. Since there were a multitude of smaller intelligence and
related organizations operating in the China Theater, many more months (maybe
even years) of study would have to be accomplished. However, the players
chosen for this study provide a significant foundation and represent the strategic
and operational components of U.S. policy and intelligence. Overall, the valences
between the participants in the network represent the predominate character of a
relationship between any two, either favorable (+) or unfavorable (-), at a given
time period. If a relationship is neutral or has not been established the valence
will be depicted with a weight of zero. There also exists the possibility that the
weight of zero could infer a third more significant meaning when trend analysis is
conducted. For example, values such as +3, or –2 demonstrate indicate an
“active” favorable or unfavorable position, meaning that a particular group is
actively supporting or hindering another group. However, if a group’s position
shifts from either a positive or negative value to a zero value, this would signify
that the two groups have virtually isolated themselves from each other providing
46. 40
zero coordination. This could be significant in a relationship where coordination
is paramount to success.
The favorable or unfavorable conditions as they relate to balance and
imbalance are tested in this model using the combination of political and
intelligence players. With regards to China, formal balance would be obtained in
two situations: (1) where there are positive valences between all participants,
either a unipolar network or an absence of any polarity in the network, or (2)
where relationships within the network are absolutely dichotomized in bipolarity.
Any other situation contradicting the discussed principles will result in varying
degrees of balance or imbalance within the network. The proposition made in
this thesis is that the closer the network is to formal balance (1.0), the
more symbiotic the relationship between China policy makers and the
intelligence organizations supporting them. Therefore, a general
imbalance would represent a dysfunctional network resulting in low
influence of intelligence. Alternatively, an imbalance could arguably depict
a disproportionate influence of one intelligence organization over another
on the decision making process. After a weighted baseline model has
been established, significant events are then used to chart the shift in
relationships.
Using Events to Evaluate Balance Shift
Since a driving force of this thesis is concerned with identifying and
analyzing certain events and how they shifted relationships between the players
47. 41
chosen, events spanning the years 1942-45 are incorporated into the network.
The 10 events selected are separated into two time periods: 1942-1943 and
1944-1945. The events are based on three factors: (1) time--between 1942-1945,
(2) overall impact on the focal players, and (3) overall impact to operations in the
CBI Theater. Ultimately, the process for selecting these events involved
extensive background research and analysis using historical texts and primary
source documents, as well as interviews from individuals present in China during
that period of time. The events were then validated using a panel of experts
proficient in both intelligence and Chinese affairs of the time.93
In addition to
validating the researched events, the panel has also weighted them based on the
data presented and on their own knowledge. The events and their representative
weights for each period are put into a matrix in order to calculate their average
affect on the network (see Table 2).
93
The panel combined subject matter experts from the two main areas of study that
make up the foundations of this thesis. Professor Jon A. Wiant advised on the broad spectrum of
matters relating to intelligence history and Professor Perry L. Pickert provided perspective on all
matters related to China.
EVENTS
WASH
KMT
WASH
CCP
WASH
OSS
WASH
ONI
KMT
CCP
KMT
OSS
KMT
ONI
CCP
OSS
CCP
ONI
OSS
ONI
Event 1 (+) (-) (-) (+) (+) (-) (+) (-) (-) (+)
Event 2 (+) (+) (-) (-) (-) (+) (-) (-) (+) (+)
Event 3 (-) (-) (-) (+) (-) (-) (+) (-) (-) (+)
Event 4 (+) (+) (+) (+) (-) (+) (+) (-) (-) (-)
VALANCETOTAL (VT) =
TOTAL NUMBER OF EVENTS (TE) = 4 4 4 4 4 4 4 4 4 4
CALCULATED WEIGHT (VT/TE) =
Table 2: Example of China Event Matrix
48. 42
This process, while admittedly subjective in nature, provides a relatively sound
assessment of the chosen events. After the events have been evaluated and
weighted, they are systematically incorporated into the existing weighted
model in order to determine any shift in balance within the network. It is
important to mention that the events calculated will not always yield a
definitive whole number. More often than not, the results will show a point
value such as a +.25 or -.50. This is completely acceptable as it would be
unrealistic to expect large shifts in such a short period of time.
Additionally, analyzing these values down to their point value becomes
significant in order to assess the way a series of events gradually altered
the relationships.94
Following the general rule of the network definition, the event used must
have an affect on the relationship of at least two participants in order to have any
ensuing effects on others. The event does not necessarily require an impact on
all participants, especially in the immediate sense. It is important to note that
once a relationship has been established, all participants will maintain a certain
degree of positive or negative association unless that relationship falls into the
zero value category as discussed previously. Once the weights for each event
as it relates to each pair of actors have been determined, they are added into the
formula (refer to Table 1) and executed in order to determine the degree of
balance for that particular time period.
94
Taking multiple perspectives into consideration, a general margin of error of +-.50 is
used.
49. 43
THE CHINA NETWORK
1942
Weighting the Network
In order to chart the evolution of the China Network from 1942-1945, it is
essential that a baseline first be established. Using Chapter 1 as the general
foundation, an accurate assessment can be made concerning the relationships
between the actors as the U.S. officially entered China in 1942 (see Figure 10).
While most of the signs and weights attached to the actors are readily apparent
based on the background in Chapter 1, there are a couple that deserve further
WASH
KMT
WASH
CCP
WASH
OSS
WASH
ONI
KMT
CCP
KMT
OSS
KMT
ONI
CCP
OSS
CCP
ONI
OSS
ONI
3 0 3 3 -3 1 2 0 0 2
WASH
CCPKMT
ONIOSS
(+3) (+3)
(+1) (-2)
(-3)
(+2)
(+3) (0)
(+2)(0)
Figure 10: Weighting the China Network
1942
50. 44
amplification. For example, as of 1942 the path between Washington and the
CCP and the OSS and the CCP is depicted as neutral or no relationship
established (0). This is due in part to the FDR administration’s initial policy of
complete recognition of the KMT as the sole governing apparatus in China. As
later models will show, this policy, or absence of agreement on policy, becomes
somewhat convoluted as the war goes on. However, in contrast to this, the
model also shows the path between the ONI and CCP to represent a moderately
negative relationship (-2). This is due to the moderately strong relationship
between the ONI and KMT (an enemy of a friend is an enemy). The close
intelligence partnership shared between Tai-Li and Milton Miles precluded ONI
from having anything but an unfavorable connection to the CCP. However,
unlike the KMT, ONI was not actively engaged in hostilities against the CCP. For
this reason, the ONI-CCP path is depicted slightly more improved than the KMT-
CCP path.
Determining the Balance and its Meaning
After evaluating the model from Figure 10, it can be determined that the
China Network is comprised of 12 possible cycles. As demonstrated previously
from Table 1, these cycles are weighted and calculated using the balance
formula (refer to Table 3). Once the sum of the positive cycles are divided by the
sum of the absolute products or total cycles, the results show a balance of 1.0
indicating formal balance in the China Network.
51. 45
So what does all this mean? The proposition drawn from the data shows
that as the U.S. entered the war in China in 1942, diplomatic and intelligence
organizations operated in an environment that appeared on the surface to be
conducive to achieving mission success. This holds absolutely true as the
mission pertained to the defeat of Japan. However, as it shall be established in
the following chapters, the defeat of Japan turned out to be only part of the
mission, at least as it pertained to the KMT and CCP. For U.S. officials, the
internal struggle over China was perceived as a issue secondary to Japan’s
defeat. Even with U.S. State Department warnings of an inevitable collapse of
the Nationalist Government, the internal dispute of the “Unified Front” was
allowed to stew beneath the surface. This was ultimately compounded as the
network became more strained toward displaying imbalance and the flow of
information to policy makers became both more constricted and politicized,
resulting in “colored” reporting. Chapters 3 and 4 illustrate how shifting
CYCLES ALGEBRAIC PRODUCT ABSOLUTE PRODUCT
WASH / OSS / KMT / CCP / ONI (+3)(+1)(-3)(-2)(+3) 54 54
OSS / ONI / CCP/ KMT (+2)(-2)(-3)(+1) 12 12
WASH / ONI / KMT / OSS (+3)(+2)(+1)(+3) 18 18
WASH / ONI / CCP / OSS (+3)(-2)(0)(+3) 0 0
WASH / ONI / OSS (+3)(+2)(+3) 18 18
WASH / KMT / OSS (+3)(+1)(+3) 9 9
WASH / ONI / CCP (+3)(-2)(0) 0 0
WASH / CCP / KMT (0)(-3)(+3) 0 0
OSS / CCP / KMT (0)(-3)(+1) 0 0
ONI / CCP / KMT (-2)(-3)(+2) 12 12
OSS / ONI / CCP (+2)(-2)(0) 0 0
OSS / ONI / KMT (+2)(+2)(+1) 4 4
Sum of Positive Cycles
=117
Sum of Absolute Product
= 117
Table 3: Formularizing the China Network
1942
52. 46
relationships can have a profound effect on the whole system, as growing
tensions between just two of the players can ripple throughout the network. The
events evaluated in these chapters are three-sided: (1) influence on the
successful outcome of the war, (2) their influence in the ultimate imbalance in the
China Network leading to the failure of the U.S. to positively align itself with post-
war China, and (3) their impact on understanding internal developments in China.
53. 47
CHAPTER 3
THE SEEDS OF INSTABILITY: 1942-1943
American policy in the Far East can have but one immediate objective: the defeat
of Japan in the shortest possible time with the least expenditure of American
lives. To the attainment of this objective all other considerations should be
subordinate.
-- John S. Service, Foreign Service Officer, CBI Theater
The war years for the U.S. in China were responsible for the conception of
policy that plagued the U.S. throughout the post-war leading up to Mao’s
conquest of China. As the U.S. entered China in 1942, formal balance existed
within the China Network with the clear objective of defeating Japan. The
Washington-KMT alliance was firmly established with the U.S. determined to
bring the CCP on board, while the OSS and NAVGRP were determined to
establish a footprint, albeit slowly. However, as U.S. forces endeavored to defeat
Japan, a side-war was being conducted between the KMT and the CCP. This
side-war acted like a cancer on the network of China players, rearing its ugly
head practically at every important juncture or event of the war. Once more, U.S.
policy makers failed to address it head-on, allowing it to metastasize.
The events illustrated in this and ensuing chapters follow a broad and
many times overlapping timeline. While certain events may stay fixed to a
particular year, such as a conference or diplomatic meetings, long-range events
such as mission operations, may start in one year and bleed over into
subsequent years to be discussed in further chapters. This matter is virtually
54. 48
transparent to the analytical model used and does not have a significant affect on
its outcomes. However, in terms of context, best efforts are made to focus on the
particular event, its relation to other events, and its impact on the network of
players.
This chapter depicts the significant events that transformed the U.S.-China
scene in 1942-43 toward a manner of instability. As General Joseph Stilwell
attempted to forge a bond with Chiang Kai-Sheik and establish a theater
command structure, the OSS and NAVGRP began to enter into a marriage of
convenience under SACO. As fallacies within this marriage became readily
apparent, Donovan took OSS and began to branch off into the hands of the 14th
AF and AGFRTS. In November 1943, FDR and Chiang met for the first time in
Cairo to demonstrate wartime solidarity between east and west. Intrigue quickly
undermined this show of uncompromising union when FDR continued his journey
to Tehran to negotiate terms of future support in the Pacific with Joseph Stalin.
THE GENERAL AND THE GENERALISSIMO:
STILWELL AND CHIANG KAI-SHEIK
In January 1942, General Joseph Stilwell was sent to China to act as
U.S. Representative to Chiang Kai-Sheik (see Figure 11). Stilwell seemed the
perfect choice for the assignment with his many years of experience as an
attaché, his superb military record, and his skill with the Chinese language.95
However, the relationship between Stilwell and Chiang would soon be
95
Barbara W. Tuchman, Stilwell and the American Experience in China: 1941-45 (New
York, NY: Grove Press, 1971), 31.
55. 49
considered one of the most toxic of the war. This resulted in a lasting impact to
China’s internal dynamics from Washington policy-makers all the way down to
U.S. intelligence organizations. Stilwell’s position and mission in China was laid
out in a letter by Chief of Staff General George C. Marshall:
Accompanied by such staff as may be authorized you will
proceed as soon as practicable to Chunking, China, for service in
the Chinese Theater, under the Supreme Command of
Generalissimo Chiang Kai-Sheik. You will act as the U.S. Army
Representative in China, Carrying out the instructions of the
Secretary of War.
Your mission is to increase the effectiveness of the U.S. assistance
to the Chinese Government for the prosecution of the war and to
assist in improving the combat efficiency of the Chinese Army. In
so doing, you are authorized to accept any appropriate staff and/or
command position that may be tendered you by the
Generalissimo.96
96
Major Charles H. Benson III, USA, Leadership, Diplomacy, and Intelligence in the
China, Burma, India Theater: A Study in Combined Military Operations, MSSI Thesis chaired by
Lieutenant Colonel Michael Rhoden (Washington, DC: Joint Military Intelligence College, 2002),
43-77.
Figure 11. General and Madame Chiang Kai-
Sheik and General Joseph Stilwell
Source: World War II Timeline Website, URL:
<history.acusd.edu/gen/WW2Timeline/
Pacific06b.html>, accessed 15 May 2005.
56. 50
As the U.S. Army Representative in China, Stilwell could not have
imagined the number of roles this position would entail. For example, he was
commanding general of American forces in India and Burma as well as China; he
was the military representative of the President of the United States (POTUS) in
Chungking; and he was dispenser of lend-lease materials from the U.S.97
This, of
course, put Stilwell in a very precarious position. Any disagreements between
Chiang and Washington were put in Stilwell’s lap who technically served both
masters. Additionally, in 1943 Stilwell took on yet another role as Commander of
the Chinese army in SEAC under British Commander Lord Louis Mountbatten.98
One again, Stilwell was put in another position of serving two masters that
seldom agreed.
Immediately upon his arrival, Stilwell set about his task of assessing the
strength of the Chinese Army. After approximately two months, he presented his
recommendations to Chiang calling for a reduced, reorganized, and better-
trained force. Remarkably, with all his China experience, the view and approach
Stilwell took was in typical Western fashion. In reality, the Chinese armies were
an amalgamation of soldiers loyal to Chinese warlords who were in turn loyal to
Chiang, at least temporarily.99
While Chiang shared the allied objective of
expelling Japan from the China mainland, he had no choice but to also address
his continuing objective of maintaining power over the CCP. In Chiang’s eyes it
97
Charles F. Romanus, Stilwell’s Mission to China: United States Army in WWII: China,
Burma, India Theater (Washington, DC: Center of Military History, U.S. Army, 1987) 88-89.
98
Chiang did not want to relinquish command of Chinese forces to a British commander
and decided to make Stilwell an intermediary instead.
99
This was based on agreements made due to the ongoing struggle with the CCP.
57. 51
was absolutely impossible to reorganize to the degree that Stilwell demanded.
Truly understanding Chiang’s dual motives was something Stilwell or Washington
could never grasp. Even when Burma threatened to collapse to the Japanese in
1943-44, Stilwell’s plea to re-deploy Chinese armies to the west constantly met
with intense conflict due to the CCP threats in the east. With Stilwell’s focus on
defeating the Japanese in Burma, the relationship with Chiang was never more
contentious. Stilwell believed that the manpower and equipment of the
Generalissimo’s army were not being fully utilized to fight Japanese, but were
being conserved to fight an impending civil war with Mao’s Communists once the
allies defeated Japan.100
Eventually in 1944, this ineffective partnership led
Stilwell to propose a plan for working with Communist forces against the
Japanese further, exacerbating the situation.101
The awkward position that Stilwell had been occupying was now
beginning to transfer back to FDR. While FDR may have been inclined to agree
with Stilwell in principle, he could not stand by him politically.102
FDR viewed
Stilwell’s mission as diplomatic as well as military, expressing this point in Cairo
to both Stilwell and his political advisor and FSO John Patton Davies:
“Remember, you’re both ambassadors…both ambassadors.”103
His efforts to
100
Mark Sherry, China Defensive (Washington, DC: U.S. Army Center of Military History,
1996), 8.
101
See section on the Dixie Mission, “OSS Meets Mr. Mao.”
102
FDR favored incorporating the Communists into the war effort and made the fact clear
to Chiang throughout the war.
103
Davies, 280. This comment startled Davies and Stilwell as they both believed their
mission to be exclusively centered on militarily defeating Japan.
58. 52
negotiate a peace between the two culminated in dispatching Vice-President
Henry Wallace to China. What occurred over the course of the talks between
Wallace and Chiang would have a profound impact on the Washington-KMT
dynamic and arguably China as a whole. Wallace discussed with Chiang the
poor showing the Chinese troops were making against the Japanese and the
need to harness Communist support. Not surprisingly, Chiang blamed the
condition of his army on the lack of lend-lease supplied by Washington and most
notably the perceived mistakes made by Stilwell.104
Chiang pressed Wallace
stating he needed a commander in China that could act as a single liaison for
both military and political matters. In no uncertain terms, the Generalissimo
made it clear that Stilwell was not this man. This charge in turn had a
considerable effect on U.S. Ambassador to China, Clarence Gauss, who by
proxy did not enjoy Chiang’s confidence either. Wallace recommended to the
President that the situation called for an American general who would have both
military and political authority. It could not be Stilwell, Wallace said, for he was
immersed in the Burma campaign and did not enjoy Chiang’s confidence.105
Stilwell’s eventual recall from China in 1944 was a diplomatic and political failure
by FDR affecting the Washington-KMT relationship. In an international sense,
there was a general belief that when FDR gave into Chiang over Stilwell, his
efforts toward aiding China began to diminish.106
However, domestically
104
Carter, 22.
105
Herbert Feis, China Tangle (Princeton, NJ: Princeton University Press, 1953), 145-
156.
106
Service, Amerasia Papers, 59-64.
59. 53
Stilwell’s recall was useful to distance the U.S. from Chiang and China in the run-
up to the 1944 elections.107
According to author Charles F. Romanus, FDR’s
attitude toward China became colder after this and less accommodating to
Chiang’s desires.108
Additionally, it may be seen at this point that FDR began to
abandon his hopes of China as a bastion for U.S. interests in the Far East, and
concentrated more on the Soviet Union as a post-war stabilizer in the Far
East.109
As an adjunct to the political effects, Stilwell’s command in China nurtured
a dichotomous relationship between OSS and NAVGRP. As mentioned
previously, Stilwell wore many “hats” within the CBI. This, coupled with his
fixation on securing Burma, affected his ability (or desire) to mange intelligence
outside his own G-2. This lack of centralized control created hostilities between
the CBI’s two largest intelligence organizations, produced duplication of effort,
and promoted petty rivalry. Nowhere was this experienced most than under the
SACO agreement.110
In addition to a bankrupt command structure, Stilwell’s
views toward intelligence outside his G-2 were not exactly flattering. While he
did not have any direct qualms toward NAVGRP (at the end of the day they were
still military), Stilwell had his “opinions” about OSS. After all, not a lot was known
about OSS and it did not exactly function as a military organization. As
107
Hans Van de Ven, War and Nationalism in China: 1925-1945 (New York, NY:
Routledge/Curzon Press, 2003), 61.
108
Romanus, 469.
109
Service, Amerasia Papers, 65-66.
110
To be discussed fully in the next section.
60. 54
mentioned in Chapter 1, the first COI/OSS group entered the Far East in
September 1942. Not surprisingly, as this first contingent entered India, Stilwell
diverted them to Burma and re-designated them Detachment 101.111
While
Stilwell was not as hell-bent on keeping OSS out of theater as MacArthur and
Nimitz in the Pacific, he did view them as a nuisance. He placed responsibility
for the staff supervision and coordination of all quasi-military operations (to
include OSS) in CBI with the Rear Echelon Headquarters staff.112
Though
Stilwell saw great utility in using OSS in an operational role such as Detachment
101, he did not care much for the other branches. A section from a 23-page
narrative before his departure from theater is worth noting:
Based on the yardage, this report is out of balance with other
sections of the CBI report. It blows up the performance of the OSS
far beyond what I consider their desserts or accomplishments. I am
quite ready to say they did a good job, especially 101, and that I
would do about the same thing with them if we had to repeat. 101
was of great assistance; it was really an auxiliary force of irregular
fighters who were extremely useful in getting information. They
pulled their weight. But such amateur dramatics as the Tolstoy-
Dolan “Mission” to Tibet113
had no effect on the war, and I see no
point in making it appear important. The facts are about as stated,
with certain changes I have made, and rather than write the
Goddamn thing myself, I’ll accept it as it now stands.114
This perception combined with the elements previously discussed set the stage
111
War Report of the OSS, 419.
112
NAVGRP did not fall under this umbrella due to Miles’ contention that they fell under
the Department of the Navy.
113
The Tolstoy-Dolan Mission was organized by OSS to supply Tibetans with radio
equipment and other supplies. The KMT did not approve due to its claim of suzerainty over Tibet
and feared it as aiding Tibetan independence.
114
Benson, 43-77. Benson acquired this report from the Hoover Archives, Stanford, CA.
61. 55
for continuing aggravation between intelligence organizations. Also, as the
hostilities between Stilwell and Chiang began to fester over into this intelligence
dynamic, a significant shift in relations began to materialize between Washington,
KMT, OSS, and ONI. This shift continues to develop throughout the following
events still to be discussed.
STRANGE BEDFELLOWS: THE CREATION OF SACO
There were no authorized OSS operations in China prior to the signing of
SACO on 15 April 1943.115
Before this agreement was made, there were a
number of undercover intelligence agents who reported directly to Washington
the trend of events in China. However, there were no organized intelligence
networks and the work these men did was on the military-political observer level.
When OSS became a partner under SACO, it was agreed that General
Tai-Li’s secret intelligence net and agents would be used by OSS and NAVGRP
in return for equipment and American personnel.116
Tai-Li, on the other hand,
had other ideas for SACO, using it as a mechanism for controlling OSS
operations in China.117
Under the agreement, Tai-Li would command SACO,
with Miles wearing two hats, (1) as deputy of SACO under Tai-Li and (2)
OSS/OIC under SACO. The best OSS could hope for was an OSS
115
OSS Detachment 101 was intended for China, but was diverted to Burma to support
Stilwell’s campaign.
116
The agreement was signed by Chiang Kai-Sheik, Dr. T.V. Soong, General Tai Li, Lt
Col Sinju Pu Hsiao, FDR, BG William Donovan, Frank Knox, and Captain Milton Miles.
117
War Report of the OSS, 422.
62. 56
representative who always had to answer to Miles or Tai-Li. The mission of
SACO was to “conduct sabotage, reconnaissance, meteorological work,
propaganda against the enemy, and for communication activities necessary to
the functioning of the organization.”118
Immediately upon execution of the
agreement, tensions between OSS and the Tai-Li-Miles alliance over what OSS
could or could not do in theater led to a revised agreement in December 1943
when Donovan fired Miles as OSS/OIC in SACO and appointed Colonel John G.
Coughlin as the new OIC.119
Under this revised agreement, OSS became a
separate unit inside SACO with Miles retaining his position as Tai-Li’s deputy. As
a result, OSS took over the following duties: secret intelligence, counter-
espionage, secret operations (including physical and morale), research and
analysis, supplies, communications, training, and repair shops. The Navy was
assigned to takeover weather and aerial reconnaissance operations as well as
special maritime operations, mining, and radio intercepts. It is important to note
that the special maritime operations held a very subjective meaning in the mind
of Milton Miles. Under SACO, Miles established 10 stations where U.S. Marines
trained Chinese provided by Tai-Li in guerrilla warfare tactics.120
These
operations ran parallel to OSS/SO operations as directed in the SACO
agreement. However, it was Miles and Tai-Li who controlled SACO and had the
118
As quoted in Article XIX of the SACO Agreement,1943. The agreement was
extremely lengthly, therefore not provided as an annex to this thesis.
119
Patti, 24-25.
120
Packard, 412.
63. 57
final say on all operations conducted on the mainland. This rivalry fueled an
already apparent dislike between the forces of SACO and OSS.
Throughout the entire history of SACO, constant friction between OSS and
NAVGRP and Tai-Li was evident. In addition to the stated rivalry, there was a
difference of opinion between the Navy and OSS as to whom these organizations
should turn for final authority. As discussed earlier, during General Stilwell’s
tenure in China, neither OSS nor NAVGRP were responsible to the theater
commander. This caused great friction between the two groups with regard to
solving internal disputes. Miles, when convenient, would defer to his immediate
boss Tai-Li or push the issue to Admiral King back in Washington. OSS, on the
other hand, turned to Donovan who already had his hands full fighting off anti-
OSS predators back in Washington.121
Because of this basic difference, there
was evidence of a closer liaison between Miles and Tai-Li over OSS. The SACO
121
Since OSS inception, other intelligence organizations such as Army G-2 and FBI
resented Donovan and his fledgling organization, viewing it as threat to their operations.
Figure 12. Miles and Tai-Li signing the SACO agreement
Source: Maochun Yu, OSS in China, Prelude to Cold War
(New Haven, CT: Yale University Press, 1996), 99.
64. 58
problem was presented in a letter written by Colonel Coughlin to General
Donovan in which he formally discussed the situation:
The progress made by each branch under SACO is of
disappointment. In MO for example, Major Donald B. Monroe has
talked and written reams, but nothing is forthcoming from the
Chinese—not even a translator. SI too, told a tale of non-
cooperation. When Captain Hykes took the agents he had so
carefully trained for so long and which he had financed as the
Chinese suggested, he received no cooperation from the Chinese.
With SO, it was much the same story. The “agents” sent by Tai-Li
for the sabotage courses would have made good coolies. My
personal opinion and that of most officers is that SACO will never
produce anything. In MO for example, the type of people we need
refuse to have anything to do with Tai’s organization. Tai-Li’s main
idea is to get money, probably by padding the expense accounts of
whatever agents we put in. I think Miles is paying off plenty big and
we are worth wasting time on. Miles is equipping some 10,000
men…he says.122
Much to Donovan’s chagrin, OSS continued to provide funds and equipment to
SACO, though the amount and consistency of this aid remained a highly
contentious topic.123
As discussed in Chapter 2, the balance within a network has to be
measured by taking into account perceptions by both sides. The Chinese side of
the SACO story was one of chronic misunderstandings and confusion. For
example, Tai-Li was confused with the OSS chain of command. General
Donovan signed the SACO agreement and then sent Major Carl Hoffman out as
his personal representative. Next, Hoffman left for India, and Coughlin appeared
122
Colonel Coughlin, Letter to General Donovan, Chungking, China, November 1943;
Records of the OSS; Correspondence; RG 226; Section 190; Entry 154; Box 7; National Archives
and Records Administration, College Park, MD, accessed 10 February 2005.
123
William J. Donovan, Letter to General Wedemeyer, Washington, DC, January 1945;
Records of the OSS; Correspondence; RG 226; Section 190; Entry 180; Box 11; National
Archives and Records Administration, College Park, MD, accessed 18 November 2004.
65. 59
on the scene. Already there had been three OSS liaison officers, where the
Navy continued to have only Miles. Because the Chinese never agreed to
Coughlin as Miles’ opposite number, negative feelings were apparent from the
start. In addition, Coughlin wore other duty hats. As the Strategic Services
Officer for the CBI, his duties encompassed operations outside of SACO such as
OSS operations in India and Burma. Tai-Li never understood that and refused to
negotiate with other OSS representatives when Coughlin was gone.124
Also, the
issue of information sharing was not viewed the same by both parties. The BIS
contained information of a “Gestapo” nature and Tai-Li apparently had no
intention of allowing any of his files in American hands.125
However, one of the
objects of the SACO agreement was to have access to Tai-Li’s agent network,
reputedly the most comprehensive in all of China. In an interview in Chungking
at the close of the war, Captain Donald Monroe of OSS gave his account of the
Chinese side of the SACO story. He states:
Perhaps one of the reasons for this action [not sharing intelligence]
was that the Chinese didn’t want the Americans to get a first-hand
picture of the nefarious actions going on in the no-man’s land of
China, where smuggled goods passed from Jap to puppets to Tai-
Li agents with great regularity.126
Captain Monroe believed that there was no conscious obstruction, for the
124
Maochun, 82-84.
125
“Report on OSS and SACO, 1942-45;” Records of the OSS; RG 226; Section 190;
Entry 154; Box 7; National Archives and Records Administration, College Park, MD, accessed 18
November 2004. Gestapo nature refers to Tai-Li’s additional responsibility of KMT internal
security. This term was used frequently by OSS describing Tai-Li’s operations
126
Captain Monroe, Report to OSS/HQ, Chungking, China, September 1945; Records of
the OSS; Correspondence; RG 226, Section 190, Entry 154; Box 3; National Archives and
Records Administration, College Park, MD, accessed 18 November 2004.
66. 60
most part, on Tai-Li’s side. A great deal of the difficulty stemmed from the
General’s own literal interpretation of the SACO articles.
With growing perceptions from other units, OSS continued under SACO to
be in a no win situation. Other intelligence agencies operating in Chungking such
as Army G-2 distrusted the perceived OSS tie-in with Tai-Li and SACO and
refused to recognize an organization that had no headquarters permission to
function in theater.127
The SACO agreement did not recognize any activity
outside of Happy Valley. As a result, other intelligence agencies operating in
Chungking viewed OSS as a problem child that often compromised and
embarrassed their organizations. There was a constant attempt to “slip out of the
SACO straight jacket” on the part of OSS and to leave a token crew to give lip
service in Happy Valley. However, in OSS eyes there was some usefulness to
the OSS-SACO alliance. In a 1944 letter to Donovan, future OSS/CT Director
Colonel Richard Heppner stated three reasons for the OSS to keep up the SACO
façade: (1) It provides an “in” to the Central Government, (2) permitted them to
do something which would otherwise be difficult, and (3) they didn’t have to
commit a bit of personnel to it.128
The SACO agreement was a bittersweet association for OSS. While the
agreement allowed Donovan a foothold in the Far East, it was a weak
establishment that provided OSS little opportunity and even lesser power.
127
Even though OSS operations were authorized under SACO, Stilwell’s refusal to
recognize them in the theater chain-of-command initially degraded their credibility with the other
services.
128
Colonel Richard Heppner, Letter to William J. Donovan, Chungking, China, October
1944; Records of the OSS; Correspondence; M1642; Roll 47; National Archives and Records
Administration; College Park, MD, accessed 24 March 2005.
67. 61
Moreover, SACO proved to be a mechanism for rubbing two open wounds
together, slowly degenerating OSS relations with NAVGRP and the KMT while
complicating their own ability to provide intelligence. Throughout the other events
to be discussed, the presence of SACO, whether directly involved or not,
continued to be an influence at least in some degree. The overall effect of this
event had a moderately negative impact on the KMT-OSS-ONI association,
strengthening relations between KMT-ONI, but worsening relations with OSS.
Moreover, this bilateral cooperative agreement between the U.S. and China is
assessed as having, at least on the surface, a slightly favorable effect on
Washington-KMT relations.
OSS FINDS A LOOPHOLE: AGFRTS
While Donovan could not find a friend in Tai-Li or Miles, he found one in
General Claire L. Chennault, Commander of the 14th
AF “Flying Tigers” (see
Figure 13). Through backdoor channels, Donovan and Chennault established an
intelligence branch that came to be known as the 5329th
Air Ground Fighter
Resources and Technical Staff.129
Later the next year on 26 April 1944, this unit
by command of General Stilwell in General Order 36 became officially
129
The complexity of the name was intentional in order to keep those outside the
organization from remembering it.
68. 62
Figure 13. Claire L. Chennault,
Commander 14
th
AF
Source: Hadtorteneti Military
History Collection, URL: <www.bibl.
u-szeged.hu/../ ww2/who/chennault.
html>, accessed 15 May 2005.
recognized (see Appendix A).130
The formation of AGFRTS in 1943 primarily
grew out of the need by OSS to “escape the
SACO straightjacket,” according to Colonel
Coughlin, who was instrumental in
establishing the cover organization under
control of the 14th
AF. Lieutenant Colonel
Wilfred J. Smith, formerly assistant A-2 with
the 14th
AF, was appointed Commanding
Officer of the organization. As it was setup,
AGFRTS was designed as a self-contained
independent unit of selected personnel that operated as an intelligence-collecting
agency for U.S. forces in China, more specifically, for the 14th
AF.131
The
formation of the organization was clandestine in nature mainly as an effort to
cover up any OSS intelligence activity outside of SACO. There was much
debate over the wording of some provisions in the SACO agreement that forbade
any secret intelligence organizations being created outside of SACO.132
As a
result, those anti-Tai-Li championed the formation of AGFRTS, while those more
130
Maochun, 153. The group was officially authorized and established in 1944; however,
Donovan began pulling personnel out of SACO as early as 1943 and assigning them to the 14
th
AF.
131
“OSS History of AGFRTS,” Chungking, China, September 1945; RG 226; Section 190;
Entry 154; Box 7; National Archives and Records Administration, College Park, MD, accessed 18
November 2005. This was the first time in China that OSS was able to collect and analyze
intelligence strictly through OSS channels. Up until AGFTRS was formed, intelligence coming into
OSS came from third party collectors such as British, Dutch, French, or Chinese.
132
Maochun, 60-77. It must be noted here that it was part of Donovan’s persona to craft
up agreements that were vague in nature. This allowed him to interpret them in any shape he
deemed advantageous to himself and OSS.