Backs to the Wall

As chief of TIME'S Shanghai Bureau from 1945 to 1948, William Gray watched the disintegration of Nationalist China at first hand, came home doubtful that the Nationalists would ever be able to wage effective war against the Chinese Communists. Recently Gray, now a LIFE editor, visited Formosa, Nationalist China's last outpost. His cabled report:

Formosa represents the greatest irony in Asia today. Here, in its last refuge, Chiang Kai-shek's government has shed the chaos and despair of the mainland, and, at least temporarily, appears to be leading an almost serene and even well-managed existence. Nobody expects that this favorable state of affairs can last indefinitely, but for the present it must be regarded as a major phenomenon in the struggle for Asia. This rich, green, formerly Japanese-ruled island is a spot of unaccustomed order. The Nationalist government has pulled itself into presentable shape.

Chiang's government has come to a working peace with Formosa's people, so well that about 4,500 young Formosans are willingly training to help fight the Communists when the expected invasion attempt comes, probably this summer.

No Beggars. A young U.S. diplomat in Formosa's capital of Taipei remarked the other day: "This is a situation that China has not seen in years." It is a situation in which trains run on time, the island countryside is peaceful, the currency is gold-backed and for months has been stable. There are no ragged refugees or beggars on the streets, no agitators inflaming the students, no discernible great abuses of economic power or large-scale corruption.

The Prime Minister, grey, smiling little General Chen Cheng, claims with evident pleasure that "in the whole of Asia, Formosa is perhaps the most stable and prosperous area." It is at least equally important, as the island's Princeton-educated Governor K. C. Wu points out, that Formosa "is the only place in the Far East that has no serious Communist menace from within."

The exact strength of Nationalist troops on Formosa is a military secret, but including some 60,000 to 80,000 troops who arrived last week after the abandonment of Hainan Island, the island's defensive force probably numbers around 400,000. There is some indication that this force, like the latest government on Formosa, is a better force than the dispirited armies that lost the mainland. The recent abandonment of Hainan Island, the Nationalists point out, was a tactical decision taken two months before by Generalissimo Chiang and his staff.

The evacuation of Hainan, it was observed, came off without the mass defections to the Communists which had marked similar Nationalist retreats during the campaign on the mainland. At a south Formosan port where Hainan evacuees were disembarking, I asked a wounded young captain: "Could you have defeated the Communists on Hainan if you had not been ordered to withdraw?" "Without question," he snapped back. His answer was probably a fair indication of the spirit of Hainan's five defending armies.

What do the Nationalists now ask of the U.S.? First of all, further economic aid: a $30 million currency stabilization fund, which would release their own gold for economic development, and another $20 million, worth of economic assistance up to June 30, when the present ECA program ends. After that, Governor Wu has a simple formula: $10 million a month in American economic aid until Formosa can get on its feet.

But the Nationalists on Formosa are also renewing their hope of military aid. Chiang Kai-shek's formula: "The U.S. should match the forms of aid given to the Communists by Soviet Russia. We do not expect more than what the Soviet is giving." This would imply everything up to jet planes manned by American pilots, since the Russians now provide them for the Chinese Communists.

No Denial. What about this durable and much-debated personality, the Generalissimo, now that he has taken back the presidency? Chiang has done nothing at all to revive himself as a hero; if he is a reviving force, it is because the Communists, Chinese and Russian, have made him so.

Chiang neither ducks the sorry facts of his government's failures on the mainland, nor denies that much past aid was dissipated in those disasters. Chiang suggests a military EGA, in effect an effort similar to that directed by U.S. Lieut. General James A. Van Fleet in Greece. Who would direct such an undertaking in Formosa? The Generalissimo would consider it "reasonable" for General MacArthur, as Supreme Commander for the Allied Powers, to assume responsibility for Formosa's integrity pending the signing of a Japanese peace treaty. But Chiang insists that there be no infringement of China's sovereignty or administrative integrity. Such a move, of course, would take the Nationalists off the hook, and place a U.S. guarantee on the retention of Formosa.

No Doubt. It seems clear that the defenders of Formosa, fighting a 5,000,000-man army drawn from the cheap and endless manpower of China's mainland, are almost hopelessly doomed by sheer numbers if the Reds are ready to waste Chinese lives freely, as no doubt they are. Further, remembering the past, I think it is still easy to wonder whether or not the Nationalist high command seriously wants to stage a last-ditch fight to save Formosa.

But I am impressed by the earnestness of younger men far beneath the stature of Chiang--Chinese who still seem to want to save their people from Communism. They are the men who cannot escape: they have no place else to go. They include the troops trained by V.M.I.-educated General Sun Li-jen with U.S. Army methods, and they include U.S.-trained Navy men whose destroyer escorts are running out of three-inch shells. Somewhere along the ragged route of failure, the U.S. rightly or wrongly assumed a moral obligation to these younger Chinese. The look of a hungry friend is in their eyes now.

The moral question of America's right to supply arms in a civil war seems to have vanished when the Russians moved in wholesale on the other side. The Russians are now supplying the Chinese Red army not only with jet planes and Soviet advisers but with highly modern artillery and other weapons.

In this situation, as long as there are anti-Communist forces on Formosa who say they want to resist, the morality of renewed U.S. aid is hard to challenge.

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