London, 8 September 1950

4269. Top Secret

1. The following comments summarise my views on the subject matters indicated as a result of my discussions with Attlee, Bevin, Younger,² Griffiths³ and others.

2. Formosa. The United Kingdom Government does not consider Formosa as of vital strategic importance. It regards itself as generally bound by the terms of the Cairo Declaration.⁴ It is however, acknowledged that any early transfer of Formosa to the Central People's Government is, under the present circumstances, out of the question. It concedes that a Communist seizure of Formosa will have far reaching adverse effects against the Western powers throughout the whole of Asia. The matter has been debated by Cabinet but no firm decision as far as I can ascertain has been arrived at, the general view, however, being that as soon as practicable Formosa must be handed over to the People's Government. They favour discussion with the United States, the Commonwealth, France, and other friendly powers to determine the course of action to be pursued when this subject is dealt with by the United Nations. My own summarised views follow below.

3. There are two main objectives in which are some conflicting factors–

(a) Security against the Soviet.

(b) Steering a course which will not provoke Communist China into aggression against the Western powers.

The problem which presents itself is how for we may go in achieving (b) without compromising (a). My opinion is that to contemplate the military denial of Formosa to Communist China because of its strategic significance for an indefinite period of time and under any circumstances, would be calculated finally to write off any chance, whatever the value of that chance, of diminishing Soviet influence over the People's Government of China. It is, in addition, almost certain to provoke violent reactions and might well precipitate a conflict with Communist China which would play directly into the hands of Soviet Russia since, if Korea is any guide, it would tie up very large forces of the Western powers in that area. Generally the implications of MacArthur's line are so serious that Formosa would have to be of very great strategic significance and we could⁵ have to be reasonably certain that Communist China proposes to tie herself to any war plans of Soviet Russia before a military commitment to with–hold Formosa from China indefinitely were undertaken.

4. Australia's position with respect to the Cairo Declaration is different from that of the United Kingdom. In my view we should oppose the immediate handing over of Formosa to China either as a matter of right or as a solution to the present position. To hand it over now (because of Cairo) would lose the West the support of Asian people because it would appear a victory for aggression or threat of aggression.

5. But at the same time it is necessary to remove any implication of imperialist aggression on the part of the West. There is general agreement on the first step, namely, the neutralisation of Korea–a policy dependent, however, on military means. What we should aim at is neutralisation by political means. I am of the view that the proper course is to place Formosa under a Commission of the United Nations pending determination of its future. I think also that our objective should be ultimately to hold a plebiscite to determine whether the Formosans wished to become independent or to effect a union with the mainland of China. When we consider Formosa's checkered political history it is by no means certain that they would freely elect for union.

6. Prior to an ultimate plebiscite and under United Nations international administration, Formosa would in effect be retained for strategic purposes by the West. The military defence of the territory in those circumstances would avoid many of the problems presented by MacArthur's line of action in the present situation. The course I suggest would seem to me to meet best the objectives which I put forward in paragraph 3–security through political neutralisation and avoidance of an outright rejection of the Chinese Communists.

7. United Nations control presents administrative difficulties of great magnitude which bear directly on the practicability of the course. But if it is desired to avoid conflict of any magnitude in the area I can see no real alternative. For such a policy to be successful it is essential that the Nationalists avoid provocation. This is a major obstacle. Chiang Kai Shek's regime is rather lamentable to say the least. In any event it can hardly be said to represent a democratic choice of the Formosans. United Nations administration would require Chiang's forces in that area either to be under United Nations control or else to be disarmed. The latter presents an obvious physical difficulty apart from the political problem of persuading American public opinion.

8. So far as the Communists are concerned it is unlikely that they would be easily reconciled to a policy of neutralisation. But it could be made clear that it was a temporary expedient and that their claims would be taken into account in the settlement which could be effected through the United Nations or the Japanese Treaty discussions⁶ but preferably in my judgement the former.

9. I have not sought in this cable to develop details of the procedure. It is obvious that any course will antagonise to some extent either the Communists or the Nationalists. All the chances are that whatever we decide to do will antagonise both. I have arranged with Bevin to discuss this and other matters with him and Acheson in New York whereupon I will cable you further.

[matter omitted]

[NAA: A1838, TS6711/4/28]

ESCALATION OF CONFLICT IN KOREA

Fighting in Korea intensified toward the latter part of 1950. On 15 September, a UN force landed near Seoul, shortly before the arrival of Australian troops, which had been committed by the Australian Government in July. United Nations/ROK forces initially enjoyed great success against North Korean troops–by 26 October, the combined armies had reached part of the border with the PRC. But the extent of this advance proved fateful. Peking, judged privately by Menzies to have been 'afraid of her interests being attacked in Manchuria', injected hundreds of thousands of its soldiers into Korea. Their effect was overwhelming. From late November to late January 1951, UN and ROKforces were compelled to make a series of evacuations and retreats, and were driven to a line south of Seoul. As is clear below, Australia's attitude to the gravity and estimated duration of the conflict reflected the timing and causes of these events.

1 From Spender to Menzies. On 6 August, Spender left Australia to travel to London, and from there to the United Nations in New York. Menzies was Acting Minister for External Affairs from 23 August.

2 Kenneth Gilmour Younger, UK Minister of State.

3 James Griffiths, UK Secretary of State for the Colonies.

4 The Cairo Declaration was a statement released by the leaders of the United States, the Soviet Union and the United Kingdom on 1 December 1943. It committed the three great allies to 'restrain and punish the aggression of Japan' and to restore to the Republic of China territories 'stolen from the Chinese', including, for example, Manchuria, Formosa and the Pescadores.

5 The word 'could' should presumably read 'would'.

6 That is, discussions between the Allied powers and Japan on a Peace Treaty that would resolve legal issues, including the continuing state of war, arising from the Second World War.