After World War II, America Immediately Faced Challenges in China, Russia

Taiwan struck a gold 2000 Yuan Year 55 (1966) to commemorate the 80th birthday of Chaing Kai-shek.

By Jim O’Neal

Chaing Kai-shek joined the Chinese Nationalist Party in 1918, succeeding founder Sun Yat-sen as the leader. In 1925, he expelled Chinese Communists from the party and led a successful reunification of China. When the Allies declared war on Japan in 1941, China took its place among the Allied nations.

Chaing may have been an ally of the United States, but he presided over a corrupt society made ungovernable by China’s decade-long occupation at the hands of the Japanese and the growing strength of communist revolutionary Mao Zedong. Inflation was rampant, as was starvation, but Chiang’s police crushed opposition and no amount of American pressure could dissuade him.

In 1946, George Marshall made a valiant effort to consolidate power between Chiang and Mao, but it proved futile. As the Cold War advanced, Americans saw their own security at risk by supporting the anti-communists. Then, the Communist Revolution created an ardent hatred of all things American, followed by more bad news in September 1949. As the last of the Chinese Nationalists fled to Formosa (now Taiwan), a squadron of USAF B-29s detected traces of radioactive material while flying over the North Pole. This provided irrefutable evidence that the Soviet Union had successfully exploded their first atomic bomb.

Americans were disillusioned. This was not the way things were supposed to go. Right was supposed to triumph over wrong, freedom over oppression, God over the godless. Hadn’t the Allies just finished proving this on the beaches of Normandy and in the vast waters of the Pacific? And hadn’t the gods determined that Americans alone should possess the atomic secrets to keep the forces of evil in check?

Mao’s victory and Joseph Stalin’s bomb forced a reconsideration of plans for occupied Japan, for now the line between East and West had to be drawn even more firmly, and every American decision had to be viewed through the prism of the Cold War. The initial strategy, as it had been for occupied Germany, had been to halt Japan’s capacity for future aggression, to disarm the former enemy and slowly introduce democracy. But, just as the Russian actions in Eastern Europe had changed the pace of reeducation in West Germany, the victory of the Chinese Communists made it essential that Japan be immediately strengthened to resist the spread of the Red Tide in Asia.

General Douglas MacArthur, the supreme commander of occupied Japan, had personally written the new Japanese constitution, which banned “land, sea and air forces” and stated any war potential “will never be maintained – or the development of a military industry.” Just three years after the end of the war, that ban was lifted, creating a “self-defense force” of 75,000.

Today, as North Korean nuclear threats continue to grow, there are discussions about Japan assuming total responsibility for their own defense, including the possibility of a nuclear deterrence, something that many believe could be viable in a matter of months.

We seem to be incapable of eradicating or even mitigating war capabilities. Maybe there is just too much profit potential involved.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

China’s Fall to Communists Launched Dark Period in American History

Andy Warhol’s screenprint Mao (With Orange Face), 1972, realized $47,500 at a May 2015 Heritage auction.

By Jim O’Neal

On April 4, 1949, the day the United States and 11 other nations signed the North Atlantic Treaty Organization (NATO), a Communist General by the name of Chu Teh began massing a million of Mao Tse-tung’s seasoned troops on the north bank of the Yangtze River. This was the last natural barrier between Mao and the few southern provinces still loyal to Chiang Kai-shek’s Nationalist Party, or Kuomintang (KMT).

Three weeks later, Chu Teh’s veterans stormed across the Yangtze, but only met token resistance. Chiang had withdrawn 300,000 of his most reliable soldiers to form a rear-guard perimeter around Shanghai. A week later, Chiang fled across the Formosa Strait to Taiwan, along with a cadre of KMT, but it seemed clear that China was a lost cause.

Mao Tse-tung proclaimed Red China’s sovereignty on Sept. 21, 1949 – the same day West Germany declared its sovereignty – and this was followed by Chiang announcing the formation of his new government in Taipei. Chinese politician Sun Yat-sen’s 50-year-old vision for a democratic China was dead, and the U.S. expectation that Chiang would establish the non-communist world’s eastern anchor died with it.

The world now had two Chinas!

The American response was slow. Newspapers had carried regular accounts of the Chinese Communists and the KMT’s slow disintegration, but China was so vast, the geography so unfamiliar and movements of the unmechanized armies so slow, that Americans had lost interest in these distant battles.

However, when the KMT collapsed, U.S. Secretary of State Dean Acheson decided to lay out the entire situation before the American people. On Aug. 5, 1949, the State Department issued a 1,054-page white paper, conceding the world’s largest nation had fallen into communist hands. The chain of events leading to this tragic end was also explained, including the $2 billion that had been largely wasted and the 75 percent of American arms shipments that had fallen into Mao’s hands.

The American people were stunned by this admission. Everything American diplomats had achieved in Europe – the Truman Doctrine, the Marshall Plan, NATO – seemed to have been annulled by this disaster in Asia.

The burning question was … who was responsible for losing China?

Richard Nixon of California flatly blamed the Democrats. On Feb. 21, a young congressman from Massachusetts, John F. Kennedy, said that at Yalta, a “sick” Franklin Roosevelt had given strategic places to the USSR. This, Kennedy concluded, “is the tragic story of China, whose freedom we fought to preserve. What our young men saved, our diplomats and our presidents have frittered away.”

Thus began one of the darkest periods in American history. President Harry S. Truman’s Executive Order 9835 created the “Loyalty Order” program and in 1947, the FBI began stalking “disloyal and subversive persons” by conducting name checks on 2 million federal employees and background checks on 500,000 annual applicants for government jobs. During the program’s five years, the FBI screened over 3 million Americans and conducted 10,000 field interviews. Preliminary indictments were filed against 9,977, of whom 2,961 were arraigned.

Seth Richardson, chairman of the Subversive Activities Control Board, summed up his findings for a Congressional committee: “Not one single case or evidence directing toward a case of espionage has been found by the FBI indicating that a particular case involves a question of espionage.”

In the entertainment industry, “blacklisting” became a form of blackmail and took its toll on a small group for a full decade.

Time has blurred the sharp contours of the Age of Suspicion, but it was a dark period that must never be allowed to recur.

We still don’t know, or agree on, who lost China.

Jim O'NielIntelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is President and CEO of Frito-Lay International [retired] and earlier served as Chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].