6-190 Statement to the House of Representatives Committee on Foreign Affairs

Publisher: The Johns Hopkins University Press
Date: February 20, 1948

February 20, 1948
Washington, DC

. . . I would not like to have it [i.e., the record of the session] distributed in any way because there are always leaks. It is my great embarrassment that if I am wrong, I do great harm to the Government of China. I am assuming your familiarity with the general outline of the Chinese program which I presented at the opening hearing on this subject. There is a great deal that bears directly on the problem which is not in the public interest of this country, and particularly of the Chinese Government, to state for the open record. A public statement of many of the factors which have led to the failures of the Chinese Government in both the military and economic field, however accurate, would be destructive of morale to that government and its army. It would be stimulating to the morale of the Communist Party and the Communist Army. Therefore, it has been very difficult to make a frank public statement of the problem.

Considering the military aspects of the problem, it was clear from V-J Day, in 1945, that the Chinese Government was confronted by a military situation which made it, in the opinion of virtually every American authority, impossible to conquer the Communist armies by force. Geographically, the odds were too heavy against the government—thousands of miles of communications bordered by mountains affording easy retreats for guerrilla forces, numerous vulnerable river crossings and tunnels easily subject to destruction, the strategical and tactical characteristics of guerrilla warfare permitting a concentration of guerilla forces at a desired point where the Government was weakest, and the Government’s military necessity of covering all points, therefore making all weak and vulnerable to surprise attack.

There was constant insistence on the part of the Generalissimo [Chiang Kai-shek] that the only way the issue could be settled was by force. I should explain that while the agreements were on the basis of a political settlement, the conferences of the supreme military council, which is a political council of both civilians and government people, frankly reversed that opinion by his [Chiang’s] statements that it could only be accomplished by force. Therefore, on the one hand, our public undertakings were on the basis of a political adjustment, but the pronouncement which was occurring in the confidential committees was the frequent statement that it could only be managed by force.
I endeavored to persuade them time after time that it was not within their capability to settle the matter by force; the odds were too heavy against them. Furthermore, there were conspicuous ineptitude and widespread corruption among the higher leaders. The consequent low morale of the Chinese Government Armies has been a factor of great importance to the military situation.

I referred this morning, I think, in answer to a question by Mr. [Walter H.] Judd, to the great and most serious lack in connection with the government armies. What I was specifically talking about—though I did not go into details there—aside from matters of leadership, which are fundamental in their importance, was the fact that they had no training program at all for the ranks of the army. In the agreement we had, which was signed in February of 1946, for the demobilization of the army down to 50 Government divisions and 10 Communist divisions, it was arranged there the procedure for training in these various districts.2 It would not be under military command; it would be under military control, but not military command. That was to take the military officials out of political control.

Also, that could have been started south of the Yangtze River because that area was not under duress by the Communist forces, and that would mean you would have, in the ranks of the army, these farm boys who were given at least an understanding of their weapons and who were accommodated to the violent change from their quiet, restricted life on the farm to the rather, at best, demoralizing conditions, in the divisions of the Chinese Army. What actually happened was, they would take boys straight off the farm and they would be in, often on the next day. They were just helpless. There was no firmness in the troops and they suffered tremendous losses of arms. They—the Communists—used to give me lists of the take in certain victories. I assumed them to be exaggerations, but I found in private investigation that a great amount had sound foundation. The fact of the matter was the armies had just ceased to be effective instruments, and the use of their material and all that was on a very wasteful basis.

We have had many proposals for this Government to support the Chinese military program. That is easy to say, but extraordinarily difficult and dangerous to do. It involves obligations and responsibilities on the part of this Government which, I am convinced, the American people would never knowingly accept. We cannot escape the fact that the deliberate entry of this country into the armed effort in China involves possible consequences in which the financial cost, though tremendous, would be insignificant when compared to the other liabilities inevitably involved.

So far, I have been discussing the Government military forces. On the other side, the Communist forces have brought about terrible destruction. This was their announced purpose—to force an economic collapse. The development of the situation was predicted by me to the Chinese Government frankly and forcibly many times in the summer and fall of 1946.

I might say, there, that I was not engaging in what you might call pro forma emphasis. I was just laying it on the line in the most forceful language I could command.

[Discussion off the record.]

We have furnished important aid to China since V-J Day. Military aid included the transportation by U.S. facilities of Chinese Government troops from points in west China to the major cities of central and north China, and from coastal points to the port of entry into Manchuria for the reoccupation of Japanese-held areas. At the end of the war, the United States had largely equipped and partially trained 39 Chinese divisions. Additional equipment was transferred to the Chinese to complete these divisions and to replace wornout equipment. Military lend-lease aid to the Chinese Government amounted to more than $700 million. The Chinese Government obtained the arms and equipment of the surrendering Japanese Armies in China proper, that is, below the Great Wall, and on Formosa from a total of approximately 1,235,000 men.
The Chinese Communists obtained large quantities of Japanese arms in Manchuria, through direct or indirect Soviet connivance; the number of surrendering Japanese troops in Manchuria is estimated at 700,000.

The National Government has had its own arsenals which, while small by U.S. standards, did represent an effective addition to its military potential. Japanese-armed Chinese puppet troops with their equipment were taken over by the Chinese Government in large numbers, estimated at 780,000.

Under Public Law 512, the United States has transferred to the Chinese Navy, as a gift, 97 naval craft, and has trained Chinese naval personnel to man these vessels. The U.S. Military Advisory Group at Nanking has furnished advice and assistance on a staff level to the Chinese Government in organizational and training matters, and is now participating in training of Chinese troops in Formosa on the division level.

The U.S. Marine Corps landed about 55,000 men in north China after V-J Day. In addition to disarming the Japanese, the Marines guarded railways and coal mines in north China until 1946 to insure an adequate supply of coal for the vital industrial areas in north and central China. I might say in connection with the Marines, there was always a Communist clamor against it, but there developed in Shanghai and other places, among businessmen and others, a tremendous pressure to have the Marines out because they felt that was keeping alive the disagreements which were carrying on the fighting and making it impossible to have a peaceful settlement. At the time of their withdrawal in the spring and summer of 1947, the Marines “abandoned” certain military material, including munitions, to the Chinese Government forces. That was a calculated abandonment; I directed it from Moscow. Unfortunately, they took out, before they abandoned it, a lot of the small arms ammunition I wanted them to abandon, but I think they got scared of an investigation back home and removed all that, and I did not discover until I got home just what had happened.

The U.S. Army and Marine Corps were largely responsible for the removal of approximately 3 million Japanese soldiers and civilians from China. They were also largely responsible for the removal and lifting of the ban on export of munitions to China in April and May of 1947.3

We have been supplying munitions under surplus property arrangements, and the Chinese have made some purchases of munitions commercially. In recent months, the Chinese have concluded contracts with Office of the Foreign Liquidation Commissioner for most of the U.S. military surplus suitable to Chinese needs including ammunition, transport planes, and other military materiel. Arrangements are now being completed to sell to the Chinese, under surplus arrangements, the remaining available ammunition in Hawaii and in the zone of the Pacific. There have been long delays in completing the necessary contracts mainly because the Chinese people took their time in getting a better bargain.

I speak from my own personal knowledge in this because I tried to expedite the surplus property affair. I was endeavoring to use my influence to force down the price. My difficulty was in getting the Chinese to conclude the agreements. I say “the Chinese,” but I am talking about the particular official they had in charge. He was trying to drive such a sharp bargain, or arrange the thing in such a particular way, that months elapsed before we could get any action.

With the exception of one contract concluded on December 9, 1947, the Chinese Government did not, after the lifting of the ban on export of munitions to China in May, 1947, make any purchases of munitions on the commercial market in the United States during 1947. Its foreign exchange reserves as of June 30, 1947, shortly after the lifting of the ban, were approximately $350 million.

On the civilian side, commercial vessels have been transferred to the Chinese Government, and large amounts of civilian goods valuable to the Chinese economy were sold to the Chinese Government, under surplus arrangements at prices representing only a small fraction of their procurements cost. The Export-Import Bank has extended credits to the Chinese for reconstruction purposes and the import of cotton. The United States contributed a major share of the UNRRA (United Nations Relief and Rehabilitation Administration) program for China. Authorized U.S. aid from V-J Day until the present date, exclusive of surplus property sales, totals $1,432 million, at least half of which was military assistance.

The Chinese Government has received aid from other foreign sources. The non-U.S. share of the UNRRA program and certain foreign credits together total approximately $250 million. The Chinese Government obtained the large Japanese industrial and other holdings in China having a roughly estimated value in 1945 of $3,600 million; this figure allows for a 50 percent reduction of the value of Japanese holdings in Manchuria due to Soviet removals, civil war and related damage, and to general undermaintenance in the postwar period.

I tried to have the commander in Manchuria start the training of men in the industrial plants in one area. They had a Japanese supervisor there who was perfectly willing to carry out the work and understood all its technicalities, and they had it set up and facilities ready to start. I think there were 500 men, but you could have increased it very rapidly. They had in the neighborhood of 20,000 or 30,000 people out of work there. I thought it would have a great stimulating effect, aside from being a very normal procedure of rehabilitation, to start training these Chinese people in the technical handling of this equipment that was there, installed, and available at that time. I was never able to get any move on their part at all, on the part of this military commander. Here you had perhaps 40,000 men out of work, with very little to eat, the Communists working on them all the time, and not a thing being done to try to give an indication that the Government was trying to help them. There were so many matters like that all over the place that it undermined the Government position in this matter.

On the other hand, the Communists not only are immensely effective at their sabotage procedure, in their working among people, but they always put on a pretty good show, whether it was bona fide or not, in trying to convince the local people, the workers and everyone, that they, the Communists, were working for their interests. The results were that it left a situation where the Government was constantly losing the support that is necessary to it, particularly in the conduct of anything approximating guerrilla warfare.

All of the foregoing means, at least to me, that a great deal must be done by the Chinese authorities themselves—and that nobody else can do it for them—if that Government is to maintain itself against the Communist forces and agrarian policies. It also means that our Government must be exceedingly careful that it does not become committed to a policy involving the absorption of its resources to an unpredictable extent once the obligations are assumed of a direct responsibility for the conduct of civil war in China, or for the Chinese economy, or both.

All the time I was out there, I was confronted with the very frank statement, particularly of the Ch’en Li-fu group, that we would have to do all these things, and that there would probably be a war between the United States and Russia and we would have to do these various things.4 Perhaps Mr. Judd and some of the others of you are more familiar with the Chinese habits and procedure than I am, but they have a way of stepping aside and leaving the burden go to you, and that is one thing to be considered very carefully in this procedure.

There is another point that I wish to mention in consideration of this matter. There is a tendency to feel that wherever the Communist influence is brought to bear—I am talking about a fundamental policy—we should immediately meet it head on, as it were. I think this would be a most unwise procedure for the reason that we would be, in effect, handing over the initiative to the Communists. They could, therefore, spread our influence out so thin that it could be of no particular effectiveness at any one point.

Here you have almost an identical situation to the global, which we have just gotten through; the feelings in connection with this affair are not at all unlike those where I had to struggle with the tremendous pressure from the southwest Pacific, the pressure from the Navy to do certain things for them. Proposals were made that I go out with a congressional committee. I remember Happy Chandler wanted me to go out with him to negotiate the affair, without the Chiefs of Staff or anybody else being in on the matter.5 The pressure was constant and the attacks were persistent; behind the scenes they were very strong: We had to follow the best thought-out policy we could of applying our strength in a certain relation to the developments in the case, so that we could turn and do this, that, and the other thing.

I would assume that, historically, there would never be agreement in China to the policy we followed in the World War [II] in taking the European theater first. I know there would never be agreement on the part of a great many Americans who were in the Far Eastern setup because they were on the ground and they were suffering for lack of this and that. In that case, however, we have had the result, and it proved out with such rapidity that it almost upset all our plans when we came to the end in such a rapid matter. Many have thought that we should have clearly seen that. I am not that belligerent.

We should be prepared to face the possibility that the present Chinese Government may not be successful in maintaining itself against the Communist forces or other opposition that may arise in China.

It can only be concluded that the present government cannot reduce the Communists to a negligible factor in China. To achieve that objective in the immediate future, it would be necessary for the United States to underwrite the Chinese military effort on a wide and probably increasing scale, as well as the Chinese economy. The United States would have to be prepared to take over the Chinese Government, practically, and administer its economic, military, and government affairs.

Strong Chinese sensibilities regarding infringement of China’s sovereignty, the intense feeling of nationalism among all Chinese, and the unavailability of qualified American personnel in the large numbers required argue strongly against attempting any such solution. It would be impossible to estimate the final cost of a course of action of this magnitude. It certainly would be a continuing operation for a long time to come. It would involve this Government in a continuing commitment from which it would practically be impossible to withdraw, and it would very probably involve grave consequences to this Nation by making China an arena of international conflict. An attempt to underwrite the Chinese economy and the Chinese Government’s military effort represents a burden on the U.S. economy and a military responsibility which I cannot recommend as a course of action for this Government.

On the other hand, we in the executive branch of the Government have an intense desire to help China. As a matter of fact, I have struggled and puzzled over the situation continuously since my return in January 1947. Our trouble has been to find a course which we could reasonably justify before the Congress on other than emotional grounds. It has been a long struggle to concoct an economic program and clear it through the various Government agencies—the National Advisory Council, and, of course, the Budget Bureau, where they properly have to be very factual.

[Discussion off the record.]

We are already committed by past actions and by popular sentiment among our people to continue to do what we can to alleviate suffering in China, and to give the Chinese Government and people the possibility of working out China’s problems in their own way. It would be against U.S. interests to demonstrate a complete lack of confidence in the Chinese Government and to add to its difficulties by abruptly rejecting its request for assistance. The psychological effects of that would be terribly serious; the psychological effect in China would be harmful.
We hope that the program we are presenting to Congress will assist in arresting the accelerating trend of economic deterioration by providing the Chinese Government with a further opportunity to lay the groundwork for stabilizing the situation.

In these circumstances, I consider that this program of economic assistance, proposed with full recognition of all the unfavorable factors in the situation, is warranted by American interests.

The problem of U.S. aid to China must be considered in the light of not only the foregoing, but also in its relation to other important factors. China does not itself possess the raw material and industrial resources which would enable it to become a first-class military power within the foreseeable future. The country is at present in the midst of a social and political revolution. Until this revolution is completed—and it will take a long time—there is no prospect that sufficient stability and order can be established to permit China’s early development into a strong state.

Furthermore, on the side of American interests, we cannot afford, economically or militarily, to take over the continued failures of the present Chinese Government to the dissipation of our strength in more vital regions where we now have a reasonable opportunity of successfully meeting or thwarting the Communist threat—that is, in the vital industrial area of Western Europe with its traditions of free institutions.

Present developments make it unlikely, as previously indicated, that any amount of U.S. military or economic aid could make the present Chinese Government capable of reestablishing and then maintaining its control throughout all of China—that is, unless they reach some political agreement.

The issues in China are thoroughly confused. The Chinese Communists have succeeded, to a considerable extent, in identifying their movement with the popular demand for a change in present conditions. On the other hand, there have been no indications that the present Chinese Government, with its traditions and methods, could satisfy this popular demand or create conditions which would satisfy the mass of Chinese people and prevent further violence and civil disobedience.

I know from my own experience that large numbers of young Chinese, college graduates, have gone over to the Communist Party, not because they favored the ideology of the party, but because of their dislike of the officials of the Chinese Government. They just came to me, giving the accounts of what went on, and much of it happened in my presence. In the opinion of these young men, the Communist Party was trying to do something for the common people, and no one accuses the Communist leaders or officials of personal graft. They extorted money, they did all sorts of terrible things to get money, but it was not on a personal basis.

For this reason the Communist military forces are not all of the same way of thinking. I have recently been told by our representatives in Manchuria and other places that it is quite apparent that considerable groups are within the ranks of the Communist army because they are opposed to the inequities of the political party in power, the Kuomintang, and its failure to do anything constructive for the common people, and not because of any belief in Communist ideology. For that reason, we felt that we had to be careful, to some extent, with our statements. It would be more helpful if we could drive a wedge between Communist groups, between those who are there because of disgust and those who are there because of indoctrination.

At present, the Chinese Government is not only weak, but is lacking in self-discipline and inspiration. Dr. [John Leighton] Stuart made effort after effort. I had been present during some of those attempts, and had succeeded in getting the Generalissimo to do certain things and in getting him to step out from the close tieup with the Kuomintang and take over the inspiration movement of the so-called liberal group. We felt that once he took that lead, a great many in the Kuomintang Party would go to that, and a great many in the Communist Party would go to that. You would have the beginning of a balance there that would make possible some reasonable political adjustment. He would recognize the importance of these so-called liberals, the Young China Party, the Democratic League which was very much allied with the Communists, and several other groups, and several nonpolitical groups, all of whom had come to me.
But when it came to getting them together, each one had its leader who was very determined that he would maintain that leadership, and only the Generalissimo’s personal leadership could have brought about the amalgamation.
[Discussion off the record.]

In these circumstances, any large-scale United States effort to assist the Chinese Government to oppose the Communists would most probably degenerate into a direct U.S. undertaking and responsibility, involving the commitment of sizable forces and resources over an indefinite period. Such a dissipation of U.S. resources would inevitably play into the hands of the Russians, or would provoke a reaction which could possibly, even probably, lead to another Spanish-type of revolution or general hostilities.
In these circumstances, the costs of an all-out effort to see Communist forces resisted and destroyed in China would, as indicated above, be impossible to estimate, but the magnitude of the task and the probable costs thereof would clearly be out of all proportion to the results to be obtained.

Committee on International Relations, United States Policy in the Far East, Part 1, pp. 159–68.

1. The Foreign Affairs Committee met in executive session from 2:30 to 4:15 p.m. so that Marshall could tell them what he did not wish to say in public regarding his 1945–46 mission to China and the present situation in that country. Various drafts of what Marshall intended to say are in NA/RG 59 (Central Decimal File, 893.50 Recovery/1–3048). The version used here is in US House of Representatives, Committee on International Relations, Selected Executive Session Hearings of the Committee, 1943–50, vol. 7, United States Policy in the Far East, Part 1 (Washington: GPO, 1976), “Foreign Assistance Act of 1948 (S. 2202, 80th Cong., 2d Sess.),” pp. 159–68. The section headings were added by the House staff for the record copy.

2. See Marshall’s February 22, 1946, message to MacArthur, Papers of GCM, 5: 465–66 regarding Marshall’s 1945–46 mission to China and the present situation in that country.

3. A May 26, 1947, memorandum by John Carter Vincent, director of the Office of Far Eastern Affairs, stated: “The Secretary desires that the necessary steps be taken to remove the prohibition established on July 29, 1946, on the issuance of export licenses covering the shipment of arms to China. It is his wish that the Chinese be given normal commercial access to the arms market in this country.” (Foreign Relations, 1947, 7: 833.)

4. Note in the published source text (p. 165n): “Ch’en Li-fu was a prominent figure in the Kuomintang hierarchy. In 1948 he was chairman of the legislative Yuan and later served as minister without portfolio. His earlier service to the party was marked by a 10-year stint (1928–38) as chief of the investigation bureau, the primary organ responsible for internal security and the extermination of Communists in the Nationalist Armed Forces. He was a member of the nine member standing central executive committee of the party and the head of the key organization department of the party. Ch’en Li-fu and his brother Ch’en Kuo-fu were known as the leaders of the ‘CC Clique’—a close-knit group of conservatives who were highly influential in party affairs. They were noted for their dedication to Chiang Kai-shek, Kuomintang orthodoxy, and their relentless anticommunism. The clique resisted all efforts toward compromise.”

5. Albert B. “Happy” Chandler—former governor of Kentucky (1936–39) and since 1945 commissioner of professional baseball—had been a Democratic senator from Kentucky between 1939 and 1945 and a member of the Military Affairs Committee.

Recommended Citation: The Papers of George Catlett Marshall, ed. Larry I. Bland, Mark A. Stoler, Sharon Ritenour Stevens and Daniel D. Holt (Lexington, Va.: The George C. Marshall Foundation, 2013- ). Electronic version based on The Papers of George Catlett Marshall, vol. 6, “The Whole World Hangs in the Balance,” January 8, 1947-September 30, 1949 (Baltimore and London: The Johns Hopkins University Press, 2013), pp. 371-380.