Tuesday, August 24, 2021

Part II, “USN covert ops in China:" Political intrigue

In Part I of “USN covert ops in China, War Plan Orange and SACO,” the discussion centered on  stories about the Sino-American Cooperative Organization (SACO) sailors out in the field in China, including those who participated in the expansion of the SACO mission list to include combat operations against the Japanese in China, mostly covert.

In Part I, I said the political intrigue involving multiple organizations conducting intelligence operations in WWII China including the Chinese leadership was absorbing. This Part II will focus on this political intrigue. The macro-organizations to be addressed here include:

  • Sino-American Cooperative Organization (SACO), combined US-China
  • Naval Group China (NGC)
  • Office of Strategic Services (OSS), predecessor to CIA
  • Kuomintang (KMT) Secret Service
  • 14th Army Air Foirce (14th AAF)

You may wish to browse through or read Part I to better understand what will be discussed in this, Part II, the political intrigue. As a reminder, the heroes are highlighted in Part I. This story is about the bureaucrats that made life tough for the heroes.

We tend to think of WWII with Japan as beginning with its attack on the Hawaiian Islands on December 7, 1941. WWII with Japan had much earlier roots: 

  • Starting in 1931, the Japanese invaded and took control over Manchuria.
  • In 1937 Japan invaded China and by 1940 controlled most of northeastern China and key coastal areas in southeast China.
  • In September 1940 Japan invaded northern Vietnam, Tonkin, and invaded southern Indochina in July 1941 and occupied it.
  • Japan invaded Malaya and Thailand on December 7, 1941 and occupied Malaya on February 15, 1941. Thailand fell within hours. Thailand signed an alliance with Japan on December 21, 1941. On January 25, 1942 Thailand declared war on the US.
  • Japan invaded the Philippines on December 8, 1941 and occupied it effective April 2, 1942.
  • Japan invaded Indonesia in January 1942 and occupied it all by March 1942.
  • Japan began attacking Burma on December 16, 1941, occupied Rangoon and had essentially taken and occupied most of Burma by May 27, 1942. 
  • Japan would knock on India’s door, and in March 1944 tried to invade, but failed.

In 1941 President Franklin Delano Roosevelt (FDR) announced the defense of China was vital to the defense of the US. Even prior to the December 7, 1941 Japanese attacks against the Hawaiian Islands, the US saw China as a main theater of operations. The US would secure, maintain and operate air forces against the Japanese, organize and use small American units to fight guerrilla warfare, and support Chinese and indigenous forces who would fight on the ground.

The dominant US interest in China during the war was to obtain intelligence on the Japanese. That made the US different from its British, French and Chinese allies. The British were more worried about the Chinese, and maintaining the British empire in the region. The Chinese were worried about Mao’s Chinese communists as much or more than the Japanese. The French were interested primarily in preserving their Indochina empire. Each of these countries would insert covert intelligence activities throughout the region, and each of these would bang up against the other at some point in time.

The British, its Commonwealth countries, and US joined with the Nationalist Chinese to fight the Japanese in what was known as the China-Burma-India Theater of war (CBI). The Nationalist Chinese and indigenous forces throughout the region provided ground forces and the US Army Air Force (USAAF) and British Royal Air Force (RAF) provided air support to those forces. For our purposes, the USAAF provided most of the air power supporting China.

Burma and India were British colonies. Vietnam, Laos and Cambodia were French colonies. The Nationalists, in the form of the Kuomintang (KMT), led by Generalissimo Chiang Kai-shek, governed the country, which became known as the Republic of China (ROC). The communists, led by Mao Tse Tung, fought against the Nationalists and at times against the Japanese as well.

The US refused to recognize the Japanese invasion of Manchuria in 1931. The US also refused to accept Japanese domination of China and the Asian mainland following the invasion of China in 1937. The US estimated that fully 80 percent of Japanese ground forces were in China during WWII.

In effect, the Japanese invasion of China had reached a stalemate by the late 1930s. Therefore, it was critical to keep these Japanese pinned down and engaged. Furthermore, the US saw Chinese bases in China as a way to strike at Japan.

US policies required it to maintain the image of China as a major US ally, specifically, maintain the close tie with Generalissimo Chiang Kai-shek (seated next to FDR) and continue to recognize him as the Supreme Allied Commander China.

The Combined Chiefs of Staff (CCS) (British and American) agreed in September 1941 to ask China’s General Chiang Kai-shek to be the Supreme Allied Commander China. Chiang was not subordinate to any Allied power or the CCS. None of China’s territory was to be under the jurisdiction of anyone else but Chiang. He was responsible only to himself. This was in keeping with FDR’s vision --- “treat China as a Great Power.”

Lt. General Joseph “Vinegar Joe” Stilwell, USA, commanded US forces in the CBI and served as an advisor to Chiang. That was at Chiang's request. He was also deputy commander Burma-India commanded by British Admiral Louis Mountbatten, Royal Navy (RN).

FDR envisioned the US as a dominant power alongside China, and he wanted to get the British and French out of the colonization business throughout the entire CBI.

The complexities of the international politics among the Allies in the CBI are daunting.

I should say at the outset that the links between US actions in China are inextricably linked to its actions in Indochina. I will focus on this in a separate report.

For its part in China, the US faced several important intelligence shortfalls:

  • Little intelligence about Japanese activities on the Chinese mainland to support targeting
  • Little access to current weather information to support naval operations in the Western Pacific
  • Little intelligence regarding Japanese technologies, especially naval technologies
  • Little intelligence on Japanese shipping and naval movements

Let’s wade through highlights of the political intrigue surrounding intelligence operations in China. 

First, I'll highlight a few placenames important to this story.

Nanking: The capital of the provisional capital of the newly formed ROC in 1912. The communists took it in 1927 and the Chinese Nationalists took it back in 1928. It was named the nation's capital at that time. The Japanese captured it in December 1937. Japanese forces slaughtered anywhere from 200,000 - 300,000 Chinese citizens in the city through January 1938. 

Chungking (Chongqing): Japanese forces took Shanghai on the coast and it was clear they would next take nearby Nanking, Therefore Chiang Kai-shek's government moved to Chungking in China's hinterland in early December 1937. It became the ROC provisional capital through 1946. General Stilwell put his headquarters there as well during the war.

Kunming: Located in southwest China, not far from northern Vietnam and northeast Burma, Kunming became a transportation and industrial center for the ROC as a result of the war. It had vital transportation links. Prior to the Japanese invasions, Kunming had a rail link to Hanoi. The Burma Road also ran from Rangoon to Kunming, helping the city develop as an industrial center. Rangoon in turn was connected to the Gulf of Martaban and on to the Andaman Sea, making Rangoon a port to the world. So supplies could flow from the Rangoon seaport to Kunming.

I should start with the Chinese leadership.

Chiang and his number one intelligence officer, General Tai Li, shown here, were apprehensive about all foreign intelligence operations in China. They distrusted Allied intentions toward China. Tai Li worked very hard to hold a grip on every nation’s intelligence operations in China. That’s the bottom line to remember.

However, China's allies would insert covert intelligence activities throughout the region to response to their own national intelligence requirements, and each of these would bang up against the other.

Britain was an imperial power across South and Southeast Asia. It had many financial and commercial interests there, including in China.

The Japanese attacked British territories in Hong Kong, Malaya (now Malaysia), Singapore and Burma, and took them all. They fought to India’s border and invaded. British and Indian forces threw them back. Japan’s logistics lines were too long. They withdrew.

I will not spend much time on the British in China. They did send a general officer to Chungking followed by insertion of Mission 204, consisting of British and Australian troops. Mission 204 was to support Chinese ground forces. It was a commando kind of unit. The British also formed an organization known as the Special Executive Branch (SOE). Its mission was to conduct espionage, sabotage and reconnaissance in occupied Europe and later, also in Japanese occupied Southeast Asia and aid local resistance movements.

Both Chiang Kai-shek and General Tai Li had little use for the British. They did not like the way the British conducted intelligence operations, and they felt, as did others, that the British were more focused on China than on the Japanese. The British had considerable investments in China, most importantly in Hong Kong, and Singapore, the latter located at the southern tip of Malaya.

I’ll talk to the SOE later.

The French were active in China as well. They were mostly concerned about preserving their Indochinese empire (Vietnam, Laos, Cambodia). Like the British, I will not spend much time on the French. When talking about the French in WWII, you have to talk in terms of Vichy France, led by French Premier Philippe Pétain. He and his government were beholding to the Germans who occupied France. Then there are the Free French, led by General Charles de Gaulle, exiled in England.

The Japanese defeated French Indochinese colonial forces during WWII and occupied all of Vietnam, Laos and Cambodia. China bordered on Tonkin, the northern part of Vietnam, ad Japanese forces were located there.

I cannot go into the relationships between Vietnam and China during WWII. It is a  fascinating subject and opens the window on how the US got involved in Indochina downstream.

Vichy France continued relations with Chiang Kai-shek’s government. Its diplomats were in Chungking. However, it allowed Japanese troops to conduct cross-border operations from Vietnam into China’s southern province of Yunnan, and it allowed them to use three airbases in Indochina.

General de Gaulle sent Jean Escarra, an expert in international law and an advisor to the KMT, to Chungking to contact Chiang Kai-shek and arrange to set up a Free French relationship with the KMT. Escarra set the stage for the establishment of a Free French military mission in Chungking and set up a network to do that.

To underscore the complexities of dealing with the French, Vichy French forces in Indochina were commanded by French Major General Eugene Mordant, shown here. He took command on August 7, 1940. He switched allegiance to General de Gaulle’s Free French in 1942 and was told to lead a resistance in Indochina and prepare for an Allied invasion.

The French set up a very active network of radio stations and listening posts to obtain intelligence on Vietnam. Incredibly, these networks were set up without the knowledge of General Tai Li or General Chennault’s intelligence unit. I''ll talk about Chennault more later. He commanded the 14th AAF which supported Chinese ground forces and flew supplies from India to China.

This French network provided some of the very best intelligence, some of which had become indispensable to Chiang and Chennault.

As an aside, I’ll mention that senior officials in the US wanted China to invade and take French Indochina for themselves. That did not happen but it underscores Chinese intelligence interests in Vietnam.

Let’s now switch the focus back to the US.

In July 1941, President Franklin Delano Roosevelt (FDR) set up the Office of the Coordinator of Information, the COI. He did this prior to the US entering WWII. This was the nation’s first peacetime, non-departmental intelligence organization. The COI was supposed to overcome the lack of coordination between the many intelligence agencies and offices.

FDR appointed William J. Donovan to lead the COI. Donovan, shown here, was an influential New York lawyer, a former Army colonel in WWI, and a recipient of the Medal of Honor. He was close to FDR and pushed for a centralized intelligence program. He saw the need for a single national intelligence office to coordinate and control intelligence activities of the US.

FDR insisted the COI be a military organization. Donovan was recalled to active duty and FDR made him a major general in the Army. The Army, the powerhouse of the US military at the time, did not receive that well and did not approve of the new COI. It feared its intelligence operations would be at risk. FDR would add to the Army’s fears by having Donovan report directly to FDR.  China was to be the place where Donovan would have to fight his fight, both at home and in China.

Donovan was enamored with British commando units, which he saw as “a place for aggressive, small mobile forces which might greatly increase the enemy’s misery and weaken his will to resist.” This would be the basis upon which he would organize special operations. Recall Chiang and Tai Li had no use for the British. They therefore viewed Donovan with skepticism.

As a matter of interest, Donovan, with the help of Colonel M. Preston Goodfellow, USA, set out right away to train men for special operations in the Far East.

Donovan and his COI had a rough go of it. The FBI, Navy, Office of Naval Intelligence, the Army G-2 (Intelligence office on the US Army Staff) and the State Department each operated their own intelligence activities. Each worked to limit the power of the COI. I’ll return to Donovan and the COI shortly.

The Army’s Military Intelligence Division (MID) was led by Brigadier General Sherman Miles, USA, a long-time adversary of Donovan. Upon learning that FDR had approved the COI, General Miles immediately ordered the dispatch of an American military mission to China.

General Miles selected Brigadier General John Magruder, USA, shown here, an intelligence officer then at Ft. Devens, to lead the mission. The main purpose of the mission was said to be to implement the Lend-Lease Act with China. So far as Miles was concerned, the mission was to get the Army’s intelligence operational oar in China before Donovan.

The Navy (USN) had a long history of interests in China that dates back to as early as 1818, employing US gunboats to keep Chinese rivers, river ports, and ocean ports open to free commerce. The Yangtze River patrols were perhaps the best known.

USN ships landed Marines numerous times in China, at places such as Canton, Shanghai, and Hong Kong, to protect American trade interests and nationals. US forces were even in Peking. 

This photo shows a detachment of “China Marines” in Shanghai in 1900. In 1927, the US had 5,670 troops ashore in China and 44 naval vessels in her waters, almost always because of political unrest and violence inside China.

US Navy Asiatic Fleet ships covered the Chinese coast and rivers and Chinese ports in the North and South. In the 1930s, US Navy ships were routinely in Chinese ports. US commerce with China was of huge importance to the US, as was freedom of the seas. Asiatic Fleet ships visited China while the Japanese were invading China, from 1933 through the end of 1940. Our sailors and Marines witnessed the fighting, observed Japanese naval activity in Chinese ports, and found that reporting associated intelligence upstream proved increasingly important to the Navy and US policy makers. Watching Japanese naval activity in Chinese ports became a hallmark of covert Navy operations as time went on.

The Navy was the first to create an office of intelligence, in 1882 which became the Office of Naval Intelligence (ONI). It sent its officers abroad to gain knowledge (to wit spy) on foreign naval technology.

As an aside, President FDR was greatly interested in naval intelligence. He had served as Assistant Secretary of the Navy during WWI.

Admiral Earnest J. King, shown here. was Commander-in-Chief of the United States Fleet, meaning he was responsible for all US fleets worldwide.  Rear Admiral Willis “Doc” Lee became King’s chief of staff.  He had read a 1939 paper produced by Commander Milton Miles, USN that advocated having a USN presence in China to collect intelligence on the Japanese, especially their technologies.

Following the Japanese attack against the Hawaiian Islands, Admiral Lee directed Commander Miles to go to China to plan and establish the operation he had recommended in his paper. Miles worked with Colonel Xiao Bao, the Chinese military attaché in Washington, to develop such a plan. It turns out Colonel Xiao Bao worked directly for General Tai Li. 

Their plan set three goals:

  • Monitor weather in China as a predictor of Pacific Ocean weather
  • Recruit coast watchers to monitor Japanese shipping traffic in and out of coastal China
  • Prepare for a possible US invasion of China to defeat the Japanese who were occupying it which in turn would enable the US to attack Japan from China

Admiral King supported the Miles mission. King wanted it kept secret, though General George Marshall, USA, the Army’s chief of staff, was involved.

Admiral King’s vision was to push back the Japanese such that the US could invade the Pacific coast of China, most probably across the Formosa Strait (now the Strait of Taiwan) and drive through Manchuria to Korea, the latter also occupied by the Japanese. King also saw the need to pin down the some four million Japanese forces in China.

The Navy was hell-bent on building an intelligence organization in China. King did not want to depend solely on other sources of intelligence. He wanted his own intelligence sources.

As a result, the Navy set up Naval Group China (NGC) in 1942. It was the USN’s intelligence unit in China during World War II. The Navy promoted Commander Miles to the rank of captain, and put him in command of NGC. Miles, shown here, has written:

“Our Navy project in China wasn't even in the sampan stage in March, 1942, when I started to that land. A one-man force, I had verbal orders to investigate and carry on any work that might be of help to the United States Fleet in the next two or three years.

“Admiral Willis A. ("Ching") Lee, later of the battleships, had told me the morning after Pearl Harbor to ‘get on my horse’ and go to China to see what I could do about setting up intelligence and weather services there.”

In his book, The Dragon’s War: Allied Operations and the Fate of China, 1937-1947, Maochun Yu said King’s instructions to Miles were as follows:

“You are to go to China and set up some bases as soon as you can. The main idea is to prepare the China coast in any way you can for the US Navy landings in three or four years. In the meantime, do whatever you can to help the Navy and heckle the Japanese.”

Admiral King tasked Miles for this mission. Miles was to report directly to King. Miles also was to work under cover as a military attaché or US Naval Observer to China attached to the US embassy. Altogether, Miles had clout. Furthermore, Miles was to work alongside Chinese General Tai Li, the chief of China’s intelligence services.

Miles, Tai Li and the NGC were woven together. But keep in mind that technically NGC was a USN operation reporting to the USN. Also recall Miles was to report directly to Admiral King.

Capt. Miles arrived in China in May 1942. He and Tai Li created the Sino-American Cooperative Organization (SACO). It was a combined US-Chinese intelligence organization. Here you see Captain Miles (left) and General Tai Li (right) signing the formal SACO agreement on July 4, 1943. President FDR and General George Marshall, USA, the Army’s chief, of staff both approved. The agreement officially established SACO.  It took about four months to get this agreement. Delays had to deal with all the problems associated with translations. There also was considerable political maneuvering on both sides.

Tai Li would lead SACO, Capt. Miles would be his second. This was crucial to Tai Li, and Chiang.

General Tai Li was a prominent personality in China. He worked directly for Chiang Kai-shek. In addition to his being in charge of the Chinese Nationalist Secret Service, he also commanded a large militia force called the Loyal Patriotic Army (LPA). The LPA was active in Japanese-occupied interior regions of China. He also had connections to various Chinese bandit and pirate groups along the coast. He coveted his intelligence operations, distrusted foreigners, and was one tough cookie.

Recall Colonel Xiao Bao, the Chinese military attaché who worked with Miles to prepare an intelligence plan: he was subordinate to Tai Li. So the evolution of SACO was cast. 

The agreement established the need for a Navy component as the military means of organizing and managing the sailors assigned to conduct the training and any other activities required of them. The NGC did this.  would be synonymous with SACO among those involved.

SACO’s initial focus was on the weather, with five weathermen assigned. The SACO mission expanded greatly and quickly. Linda Kush, writing “The fighting’ forecasters: The US Navy in China in World War II,” wrote:

“Their (US-ROC through SACO) cooperation evolved into a multifaceted operation. In addition to weather monitoring, SACOs (sailors working for SACO) spied on Japanese troops and ships, blew up enemy supply depots, laid mines in rivers and harbors, rescued downed American pilots, and trained thousands of Chinese soldiers in guerrilla warfare. Navy aerologists thus found themselves in multiple roles, engaging Japanese forces and training Chinese recruits both as soldiers and weather technicians.”

JCS Policy Document 245 assigned Miles the responsibility to conduct US psychological warfare operations associated with China, Korea, Indochina and Thailand “in cooperation with and under the direction of the Director of SACO who is under the direct command of Generalissimo Chiang Kai-shek.” This is curious since it seems to assign Tai Li some authority to operate in Korea, Indochina and Thailand.

The bottom line with regard to SACO is that the Chinese, with Tai Li in charge, would exercise considerable authority over the Americans. The Americans in turn got what they wanted --- good weather reporting, good intelligence on the enemy and ultimately covert combat operations harassing the enemy and the infrastructure he was using.

The Army among others did not like the SACO set-up. The Army wanted SACO under control of General Stilwell, USA, who was serving multiple roles as commander, US forces China and advisor to General Chiang. This did not happen, even though the Army at the time had the most clout among the US military departments.

SACO's headquarters was just northwest of Chongqing, on the grounds of Tai's country estate. The Americans called the estate "Happy Valley.” The photo shows SACO members with local children overlooking Happy Valley. S. Shepherd Tate, commented that Happy Valley was ”Tai Li’s tight little kingdom where the headquarters was located ... Happy Valley was not really a valley, but a series of rocky hills with towering mountains behind. Rice paddies were everywhere, and armed Chinese sentries guarded every path.” As best I can tell, “Happy Valley” was simply a codename for the place.

Miles described SACO’s character as follows:

“We hoisted no flag. We sounded no calls. We practiced no salutes and wore what was handy. We walked, hiked, and scrambled, but we never marched. It was a place to forget spit and polish but never cleanliness, to forget rank but not discipline.”

I need to switch gears in a big way and talk about the US Army Air Force (USAAF). I want to introduce you to its role in the CBI and to its leader there, General Claire Chennault.

The USAAF mission in the CBI fundamentally was to provide the ROC with air power. Its crews attacked Japanese ground forces and strategic targets, fended off Japanese air defenses, and flew re-supply missions over the Himalaya Mountains between India and southwest China.

The USAAF story in the CBI has to start when Claire Chennault was a captain, USAAF. He is a fascinating character and aviator.

While in the USAAF, he was a great advocate of pursuit flying. He had some health issues, some difficulties with his superiors, and failed to get promoted. He resigned from the USAAF in 1937. 

Chennault was keenly interested in China. He went there and began to train Chinese airman in 1937. It turned out Madame Chiang Kai-shek was the Secretary of the Aviation Committee. In effect she ran the ROC Air Force (ROCAF), which was in a shambles. Chennault would become her chief air advisor and he soon became the same to Generalissimo Chiang Kai-shek. Chiang sent him on several missions to Washington to lobby for greater support to the ROCAF.

Chennault would over time lead the famous American Volunteer Group (AVG), popularly known as the “Flying Tigers.” This was a civilian air force, mostly Americans, using aircraft provided by the US. Technically, the AVG was under Chinese command. Its men flew against the Japanese in China.

After the US entered WWII, in 1942 the USAAF insisted the AVG be disbanded, and it was. That led to the formation of the China Air Task Force (CATF), composed of all USAAF members. I’m moving quickly through a mesmerizing bit of history.

The USAAF reinstated AVG Clair Chennault in the AAF at the rank of brigadier general, and assigned him to command the CATF, later promoting him to major general. The CATF was subordinate to the 10th Army Air Force (AAF) headquartered in India. In turn, the 10th AAF was subordinate to General Stilwell, who was in command of ground forces in China.

In reality Chennault dealt directly with Chiang Kai-shek.

In 1943, the CATF was disbanded and the 14th Air Force (AF) was established, headquartered in Kunming, China, in south-central China.  Its mission remained essentially guerrilla in nature: disrupt, harass and confuse the movements of a numerically superior enemy.

I should stop for a moment and talk a bit more about Kunming. The city was in southwest China, not far from northern Vietnam and northeast Burma, shown upper right on this map. It had vital transportation links. Prior to the Japanese invasions, Kunming had a rail link to Hanoi. The Burma Road also ran from Rangoon to Kunming, helping the city  develop as an industrial center. Rangoon in turn was connected to the Gulf of Martaban and on to the Andaman Sea, making Rangoon a port to the world. So supplies for the Chinese could flow from the Rangoon seaport to Kunming.

The Japanese captured Rangoon and occupied Burma, cut the rail line and the Burma Road, and blockaded lines from there to China.  As a result, the USAAF began flying supplies from India over the Himalaya Mountains, landing at Kunming. While that was happening, the Army built the Ledo Road from Ledo, India roughly to Bham where it connected up with that part of the Burma Road in China the Japanese had not closecd.

The USAAF would headquarter in Kunming and fly attack missions against Japanese forces in China and Vietnam. Finally, Chiang Kai-shek made it the National Redoubt in case the provisional capital at Chunking fell.

The net result was Kunming became a very important location to the Chinese and the Allies, including the French. They all wanted intelligence on the area, each launched covert activities in the region, and different motivations directed the course of each. So keep this in mind.

FDR had gone against the advice of his generals to make this Chenault appointment. Army Chief of Staff George C. Marshall termed Chennault disloyal, Chief of the AAF Henry H. Arnold rated him a crackpot, and Stilwell referred to him as a jackass. Depending on how you view life, Chennault was anything and everything but what they called him.

For our purposes here, Chennault’s fliers needed targeting intelligence, and that required covert deals and clandestine operations --- human intelligence. I’ll talk to that more a bit later.

Drop back now to General Donovan and his COI. The COI was opposed by many of the other US intelligence agencies. Donovan had FDR’s ear and pressed hard for a single organization to lead US intelligence activities worldwide. 

As a result, on June 13, 1942, FDR issued a military order creating the Office of Strategic Services (OSS) to supercede the COI.

Its missions were to collect and analyze strategic information required by the Joint Chiefs of Staff (JCS) and to conduct special operations not assigned to other agencies. It would report to the JCS, in keeping with FDR’s desire for the COI to be military.

Donovan was a great believer in special operations, covert operations. He set out very early to train men for special operations in the Far East.

Initially the JCS was not pleased to be responsible for the OSS. Nonetheless, in 1942 the JCS agreed to the establishment of the Special Operation Branch (SO) within the OSS, and further agreed to partner with the British SOE. The JCS in late 1942 also agreed to authorize the OSS to run American counterinsurgency units behind enemy lines.

For purposes of the Chinese leadership, this evolution struck a sour chord.

Recall that both Chiang and Tai Li were fed up with the British SOE. Just days before Capt. Miles left the US bound for China, Tai Tai Li announced the US would replace the SOE as the foreign intelligence operator in China.

Furthermore, both Chiang and Tai Li detested what were known as “Old China Hands.” Having heard of the formation of the OSS with General Donovan at its lead, and knowing of Donovan’s respect for British intelligence, both Chiang and Tai Li were sure Donovan would hire up “Old Hands” who would work against the Chinese leadership. Moreover, Tai Li distrusted anyone other than those under his direct control conducting intelligence activities in China. That included the American OSS. Chiang and Tai did not want to depend on intelligence produced by the OSS.

Donovan adamantly opposed the SACO arrangement. He did not like Tai Li leading SACO with Miles as his second. Even worse, the SACO agreement said Miles, a Navy man, would be in charge of Donovan’s OSS agents.

Donovan and his people were eager to get into China, especially those regions closest to Japan. But he wanted the OSS to be in charge of clandestine USk operations in China, and he wanted to insert his own agents into China and be in charge of them.

Nonetheless, the Miles appointment was written into the SACO agreement.

Donovan, for the time being, would have to accept the deal. His only option was to bring Miles into the OSS fold. He reluctantly agreed to appoint Miles as Chief of OSS Activities in the Asiatic Theater, giving Miles control over all OSS activity in China.

Donovan had another issue. As said earlier, SACO's mission had expanded greatly and DFonovan wanted to control much of it,l especially the covert special operations.

General Tai Lee was one tough character, referred to by some as China’s “Himmler.” He was adamant about maintaining compete control over all clandestine activity in China. The Chinese set up one obstacle after another to block OSS efforts to get in on its own.

But Donovan was no push-over either. A lawyer by trade, Donovan did not see the SACO agreement as binding, but instead as strict guidance, just another piece of paper subject to interpretation. Donovan also kept hammering away at SACO’s control over his OSS agents.

Donovan and his people, many of whom were lawyers, inundated Miles with legal papers addressing command and control and the types of operations that could be conducted.

To Donovan, Tai Li and Miles seemed too content with the SACO setup.  SACO did not offer the OSS an avenue through which to conduct intelligence operations; the OSS had been relegated by SACO to work as a logistics section. This was not going to work for Donovan, who even now had a vision of the OSS providing long-term political and commercial intelligence beyond 1945, which is what its successor, the CIA would do.

Throughout much of 1943, Donovan kept trying to weave himself into control of OSS operations in China. He failed at almost every attempt to dislodge SACO, General Tai Li and Capt. Miles.

There was an exception. In December 1943 the OSS created an outfit known as Detachment 202 at Chungking. OSS had such a detatchment working in Burma, called Det 101. Detachment 101’s mission in Burma was to collect intelligence on enemy order of battle, find targets for the 10th AAF, rescue downed Allied aircrews, and recruit native troops to serve as guerrillas. Donovan felt this was a way to orchestrate a workaround with regard to SACO in China.

Therefore Det 202 had much the same mission as Det 101, and arguably the same mission as SACO. Formed in 1943, based at Kunming, at first it operated under the NGC, Chinese intelligence and SACO, much to Donovan’s chagrin. Detachment 202 as a result was very limited in what it could do. SACO had relegated it to logistics duties. However, that changed later when Lt. General Albert Wedemeyer, USA, who had replaced Stilwell as the Army theater commander for China and Vietnam, pulled the OSS under his command. That enabled Det 202 to operate covertly with a mission to tie down as many Japanese troops as possible. More on Wedemeyer later.

Along with this development, in December 1943 came a bombshell. General Donovan took the “bull by the horn” and fired Miles from his position as the OSS chief in China. He assigned Colonel John Coughlin, shown here, to that role.

Coughlin had served with Det 101 in Burma. Miles, however, remained number two at SACO. But he was fired from the OSS position, Miles focused on providing comprehensive weather maps for the Pacific Fleet. He sent them daily until the end of the war. 

I am not exactly sure how Donovan pulled this off given Tai Li’s presence and Chiang’s distrust of the OSS, though I have found a clue.

On his way to fire Miles, Donovan stopped off to visit General Chennault, now commander 14th AAF, which focused on air operations over China. Chennault was a strong advocate of good intelligence information. He had a relationship with SACO which included SACO passing targeting intelligence information to Chennault’s pilots. While it seemed like this relationship was working, over time tensions grew between Miles and SACO on the one hand and the 14th AAF on the other.

Donovan understood this. Donovan also knew he needed a cover to break his OSS people away from SACO. During their meeting in December 1943, Chennault and Donovan agreed to work together. Chennault saw this as a way to get more intelligence on the ground situation than he was getting just through SACO.

But Donovan had a problem --- the OSS was legally prohibited from working in China outside SACO. So Donovan and Chennault agreed to keep their relationship quiet. Chennault told his people not to inform Miles or Tai Li of the setup. He also obtained Donovan’s agreement to put their new group under 14th AAF command.

Chennault’s deputy, Capt. Carl Hoffman, developed a way to conceal the 14th AAF-OSS connection. The 14th AAF set up the 5329th Air and Ground Forces Resources and Technical Staff (AGFRTS), affectionately known as the “Ag-farts,” and placed the OSS people under its wing --- to wit, under its cover. This effectively was an OSS-14th AAF 5329th AGFRTS merger of convenience.

A small OSS detachment was set up in Kunming, and worked with the Ag-fart analysts. The net result was that Chennault started receiving valuable intelligence from OSS people operating behind Japanese lines, far better than was being produced by SACO. By the way, men from the 5329th also provided Chennault intelligence on the Chinese.

So the Ag-fart arrangement worked well. Chennault’s people were so happy with the resulting intelligence that the OSS was able by August 1944 to locate OSS agents throughout China. As of August 26, 1944, all OSS branches in China, including a highly regarded Resources Technical Staff, merged with the Ag-fart unit. Whether Chiang and Tai Li knew about it or not, neither would challenge Chennault as they needed his air power badly. The OSS was effectively operating in China whether Chiang or Tai Li liked it or not.

I must now introduce you to Laurence Gordon, a Canadian and British subject who had worked for Cal-Texaco in Indochina for many years. Gordon left Haiphong after the Japanese invaded and occupied the area. But Cal-Tex urged him to go back in 1941 to look after the company’s interests there.

Gordon went to the US War Department with a plan to organize an intelligence unit in French Indochina. The US referred him to the British who in turn wanted the plan to conduct intelligence in China instead of Indochina. As things turned out, the chief of British intelligence in India wanted him to concentrate on Indochina, and offered equipment, so that’s what Gordon decided to do. British intelligence provided him the cover, sent him to New Delhi, and secretly commissioned him a captain in military intelligence. He was to work with the French military mission in Chungking and set up an intelligence network in Vietnam. A Chinese admiral authorized him to operate in the Kwangsi (Guangxi) province which bordered Tonkin, not far from Hanoi or Haiphong.

In 1942 Gordan was joined by two Americans, Harry Bernard and Frank Tan, the former British, the latter a Chinese-American. Both were also former Texaco colleagues. The group now came to be known as the Gordon-Bernard-Tan (GBT) group.

The GBT was operating a clandestine intelligence network in Vietnam. It was doing so well the OSS wanted to bring it into the fold. The OSS had developed the Ag-fart relationship as a way to work around SACO and General Tai Li. By September 1944 OSS assigned an officer to the GBT,  Lt. Charles Fenn. The OSS continued expanding its operations and increasingly brought the GBT under its supervisory wing. 

Let's drop back to the Navy. In 1943 it launched a flurry of new organizations for clandestine maritime operations in Europe and rthe Pacific. The Navy had many needs.

One of those was codename Codename Special Services Unit One (SSU-1). RAdm. Daniel “Uncle Dan” Barbey, USN, commanding officer, Amphibious 7th Fleet, established it in July 1943 in the Pacific. It was quite a secret at the time, and not a lot is written today about it. SSU-1 was a combined (more than one country) joint (more than one service) unit with people from Australia and the US Army, Navy and Marines. The Navy-Seal Museum wrote:

“They were trained in martial arts, hand to hand combat, map making, rubber-craft operations, jungle survival training, Pidgin English, underwater coral formations, and sea-creatures recognition.”

Admiral King was interested in landing forces in China, most probably from Formosa (present-day Taiwan). Pat and Hank Staudt wrote this about the development of SSU-1:

“(There was) a need for precise and accurate intelligence about (amphibious) landing sites. This meant there was a need for forming a unique, highly skilled, and cohesive force unlike any the military had ever seen before. The duties these men would be required to perform would be hazardous in the extreme. They required the abilities of men of very differing background, training, and experience to subordinate individual identities and work successfully in unison and covertly to achieve crucial goals. This group was needed because of the failure of aerial photos and no onsite recon to produce precise intelligence about landing sites.”

Another need was to get up close to Chinese coastal waters, lakes and rivers. Admiral King set up a program named "Amphibous Roger" to operate on such bodies of water using small steams and sampans.  The idea was to collect inteligence on Japanese occupation forces, especially those afloat. The Naval men in this program were also to survey potential landing beaches for an invasion of mainland China, and report on Japanese movements, weather, tides, and obstacles.

Amphibious landings were at the time the bread and butter of the march to Japan. Navy Seabess, Scouts & Rangers, and underwater demolition teams (UDT) all participated.

The OSS in turn saw that it needed a maritime capability. In January 1943, the OSS established a Maritime Unit (MU). Its task was to plan and coordinate agent infiltrations, supply resistance groups, conduct maritime sabotage, and develop special equipment to be used from the sea. The MU had men from the Army, Navy, Coast Guard and Marines in its ranks. The MU employed special boat infiltration tactics.

As you probably have suspected by mnow, there was a lot of bureaucracy that enveloped all these many intelligence endeavors in China. However, as history wouild have it, there was some light at the end of the tunnel with the assignment of Lt. General Albert Wedemeyer, USA to replace General Stilwell. 

FDR had wanted Stilwell to command all Chinese fores instead of Chiang Kai-shek since things were not going well for the Chinese force. FDR sent an ultimatum that would force Chiang to accept Stilwell in this position or lose all American financial aid. Unfortunately, Stilwell gave the note directly to Chiang with no diplomatic preparation, Chiang was very upset, and FDR felt he had to recall Stilwell for his indiscretion.

So Wedemeyer, shown here, posted in Europe, was sent to replace Stilwell in China. He was a highly regarded officer and military planner. He did not have many US forces under his command. General Chennault’s 14th AAF was the most significant. Chennault by now had a good mix of fighters, including the new P-51 “Mustang” fighter, medium and heavy bombers, and transport aircraft. Chennault’s crews began intensive attacks against Japanese supply centers and railways and damaged the Japanese war making capacity significantly.

General Wedemeyer was no fool. He was a military man. He was a West Point graduate. He became an important authority on German tactical operations, and he had General George Marshall’s ear. Furthermore, he was a planner. Indeed my sense is that when Wedemeyer arrived, the hammer started coming down.

He was displeased with many things. He found China fighting the Japanese and also immersed in a civil war between the Nationalist Chinese and the Communist Chinese. Each side often was more interested in fighting the other than fighting the Japanese. He also found gaping holes in US intelligence in China and Vietnam. He was not pleased with the British, asserting they were focused more on economic and political intelligence about China than about the enemy, the Japanese. In fact, he learned that the British opposed the American idea of a strong unified China and an effective Chinese force fighting the Japanese.

And finally, he also complained about two more intelligence related issues. First, he did not like British intelligence penetration into China and French Indochina. Second, he complained there were too many intelligence outfits operating in China. He wrote to General Marshall and said:

“One outstanding weakness in the Allied war effort in China is the fact that there are so many different (intelligence) agencies operating independently and uncoordinated, running at cross purposes.”

Included in this latter complaint was his problem with turf warfare among the various US intelligence agencies. Wedemeyer’s list of agencies included the OSS, NGC-SACO, the 5329th AGFRTS, the Air-Ground Air Section (AGAS), and British intelligence.

Wedemeyer decided to meet with General Tai Li specifically to talk about SACO and NGC, and his own newly established command. They met in January 1945. By this time Tai Li had a lot of problems with SACO and especially with Capt. Miles. Xiao Bao, with whom Milton Miles set up SACO, explained SACO’s functions to Wedemeyer. This convinced Wedemeyer that he needed to remove NGC from Tai Li’s control. Wedemeyer and Miles flew to Washington and the general won his argument. The SACO agreement was to be amended to place NGC under theater command and operational control, to wit under General Wedemeyer. However, Tai Li did not agree and neither did Admiral King.

Wedemeyer did get “authority” over SACO. Miles’ direct link to Admiral King remained and King retained operational control over the NGC and Miles. Maochun Yu, in his book
OSS in China, remarked, “So the dual status of Miles and the ambiguity of command over the navy contingent still lingered inside SACO.”

In March 1945 General Wedemeyer gained control over SACO despite Admiral King's protest. Miles remained the commanding officer of US Navy's NGC through the end of the war.

By 1945, SACO’s strength was 2,964 Navy, Army and Marines with 97,000 organized Chinese guerrillas and perhaps 20,000 “loners” such as pirates and saboteurs.

I'll close here.

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