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Opium, Tungsten, and the Search for National Security, 1940–52.
Published online by Cambridge University Press: 14 October 2011
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If Indochina goes, several things happen right away. The Malayan Peninsula, that last bit of land hanging on down there, would be scarcely defensible—and tin and tungsten that we so greatly value from that area would cease coming. … So, when the United States votes $400,000,000 to help that war, we are not voting for a giveaway program. We are voting for the cheapest way that we can to prevent the occurance of something that would be of the most terrible significance for the United States of America—our security, our power, and ability to get certain things we need from the riches of … Southeast Asia.—President Dwight Eisenhower, speech to Conference of Governors, 4 August 1953.
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- Journal of Policy History , Volume 3 , Issue 4: Drug Control Policy. Essays in Historical and Comparative Perspective , October 1991 , pp. 89 - 116
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References
Notes
1. Public Papers of the Presidents: Dwight D. Eisenhower, 1953, 540.
2. For an overview of the many cases illustrating this point, see Marshall, Jonathan, Drug Wars: Corruption, Counterinsurgency, and Covert Operations in the Third World (Forestville, Calif., 1991).Google Scholar
3. I have borrowed the term from Peter Dale Scott, a pioneering researcher in this field.
4. Quoted in Marshall, Jonathan, “The Road to War: Raw Materials and America's Far Eastern Policy, 1940–41,” honors thesis, Stanford University, 1976, 25.Google Scholar
5. Quoted in Ibid., 24.
6. Ibid.
7. Li, K. C., Tungsten (New York, 1955), xv.Google Scholar
8. Pearl Harbor Attack, Exhibits, XIX, 3503, cited in Marshall, “Road to War,” 198.
9. Quoted in Marshall, “Road to War,” 32.
10. Ibid., 187.
11. Li, Tungsten, xiv. The quantity involved was 5,940 tons of wolframite and 5,670 tons of antimony. See “Purchase of Chinese Wolfram (Tungsten) and Antimony,” 5 July 1940, box 56, Herbert Feis papers, Library of Congress.
12. Li, Tungsten, 50, 52. Between 15 May and 15 July 1942, American planes hauled seventy-nine tons of tungsten ore out of China; ONI Weekly, 26 August 1942, 27.
13. War Production Board, Statistics Division, Materials Branch, “Major Losses of Sources of War Materials,” 25 October 1942, 111.1 Raw Materials-Sources, RG 179, Records of the War Production Board, National Archives, Washington, D.C.
14- Bradford Huie, “Ten Ways to Lose the War,” American Mercury, October 1942. State Department Political Advisor Stanley Hornbeck commented that the article was “of considerable current significance.” 9 September 1942 memo, Box 466, Stanley K. Hornbeck papers, Hoover Institution, Stanford, California.
15. North China Daily News, 4 September 1947.
16. Tuchman, Barbara, Stilwell and the American Experience in China, 1911–1945 (New York, 1970), 477Google Scholar; Frillmann, Paul, China: The Remembered Life (Boston, 1968), 152Google Scholar; Epstein, Israel, The Unfinished Revolution in China (Boston, 1947), 338Google Scholar; Peck, Graham, Two Kinds of Time (Boston, 1950), 474Google Scholar; Gilbert Stuart autobiography, ms., Box 1, Gilbert Stuart papers, Hoover Institution; Pearson, Drew, Diaries, 1949–1950 (London, 1974), 60.Google Scholar
17. “Purchase of Chinese Wolfram (Tungsten) and Antimony,” 5 July 1940, in Feis papers, Box 56. Li may have been the wealthiest Chinese citizen in the United States. See Washington Post, 9 March 1961.
18. U.S. Congress, Senate, Special Committee Investigating the Munitions Industry, Munitions Hearings, 73d Cong., 2d sess., (4–14 September 1934, 1990, 2069; on military aircraft, cf. Joseph C. Green memo to Hornbeck, 13 June 1939, and memo of conversation between Hornbeck, K. P. Chen, K. C. Li, and Hu Shih, 2 August 1939, in Hornbeck papers, Box 16.
19. Washington Post, 9 March 1961.
20. Herbert Feis memo of conversation with K. C. Li re tungsten smuggling in China, 4 January 1943, in Division of Defense Materials lot file, Box 25, Record Group (RG) 59, Records of the Department of State, National Archives.
21. Stanley Hornbeck memo to Hull, 26 May 1943, Box 467, Hornbeck papers.
22. H. Trueblood, State Department Economic Affairs section, memo of 21 August 1941, in Box 278, Hornbeck papers.
23. Li, Tungsten, xii.
24. Washington Post, 9 March 1961.; OSS report A33480, 27 July 1944, RG 226, OSS records, Modern Military Records, National Archives, on the early history of Wah Chang.
25. Business Week, 21 November 1953.
26. K. C. Li cable to Chungking, n.d. (December 1942 or January 1943), Box 417, Hornbeck papers.
27. Marshall, Jonathan, “Opium and the Politics of Gangsterism in Nationalist China, 1927–1945,” Bulletin of Concerned Asian Scholars 8 (July-September 1976): 31–34.Google Scholar
28. Who's Who in China, 5th ed. (Shanghai, 1936), 237–38Google Scholar; Boorman, Howard L., ed., Biographical Dictionary of Republican China, 3 vols. (New York, 1967–1979), IIIGoogle Scholar: 329. For a list of his many positions in public organizations, education, finance, media, utilities, papermaking, flour-milling, textiles, fisheries, trading, and other industries, see the special supplement to Shang Pao, 29 August 1947, on the occasion of his sixtieth birthday. He also controlled the Chinese Association of Labor, which represented China before the International Labor Organization; see Wales, Nym, The Chinese Labor Movement (New York, 1945)Google Scholar, 122n, and Gould, Randall, China in the Sun (Garden City, N.Y., 1946), 358Google Scholar. At the same time, Tu was also on the payroll of the American-owned Shanghai Power, apparently to keep its labor force in check; see Snow, Edgar, The Battle for Asia (New York, 1941), 79Google Scholar. Milton Miles wrote that Tu “organized the workers of Shanghai so thoroughly that, in many ways, he held the running of the city in his hands. His ‘associations’ … included all the carriers—the stevedores, cargo boatment, ‘carry-cary’ coolies, and rickshaw men. He had also organized the employees of the public utilities—the street railway, the telephone, the telegraph, the water works, and the electric power and gas companies.” Miles also noted that Tu's men “succeeded in protecting the public utilities from several attempts to blow up Shanghai's generators and other important equipment.” See Miles, Milton, A Different Kind of War (Garden City, N.Y., 1967), 508Google Scholar, 527.
29. Memorandum for A-7 files, 3 July 1945, Milton Miles papers, Center of Naval History, Washington, D.C.
30. Marshall, “Opium and the Politics of Gangsterism.”
31. Joseph Stilwell, “Political Issues and Problems, The Narcotics Situation,” G-2 report, 5 March 1935, 893.114 Narcotics/1547, RG 59, National Archives.
32. Marshall, “Opium and the Politics of Gangsterism,” 33, 36–37, 41 [Nineteenth Route Army and aircraft]; Treasury memorandum to Henry Morgenthau, 21 April 1945, in U.S. Congress, Senate, Judiciary Committee, Morgenthau Diary (China) (Washington, D.C., 1965)Google Scholar, 11:1486–88 [Chinese bonds]; Gould, Randall, China in the Sun (Garden City, N.Y., 1946), 359Google Scholar [Tu and tungsten].
33. Boorman, Biographical Dictionary of Republican China, Ill:209.
34. Office of Naval Intelligence, “Background Study of Lt. General Tai Li, Chinese Army,” no date, in Chapter 38 file, Miles papers, Center of Naval History.
35. Naval attaché report, 7 April 1942, Box 159, Hornbeck papers. Not all judgments were so harsh. One U.S. assessment admitted that he “has not hesitated to kill or maim” and was “definitely cruel and barbarous,” but added with satisfaction that he “has actively sought to leam our methods.” It judged Tai Li to be “exactly as fascistic and evil as J. Edgar Hoover.” And it noted that he was well liked by, among others, Admiral Charles Cooke, General Claire Chennault, and Col. John Coughlin of OSS (ONI, “Background Study,” Miles papers, Center of Naval History). The chief of naval intelligence, Thomas Inglis, termed Tai Li an “ardent admirer of the U.S. Navy” and concluded that his possible appointment as China's navy secretary “would be highly advantageous except for the fact that his public reputation identifies him chiefly as the head of the Chinese National Secret Police.” (Thomas B. Inglis, chief of naval intelligence, memo for Secretary of the Navy, no date, Miles papers, Center of Naval History.) Tai Li's chief American admirer and wartime liaison, Navy Commander Milton Miles, reflected in 1950, “I am certain in one thing that if Tai Li were alive today there would not be any Red China today. As you know, he was my best friend; and as you also realize, he was ruthless and capable of engineering a great deal of things of importance to free peoples, even if in the engineering there was a slight amount of killing here and there” (Milton Miles letter to Captain C. D. Smith, 6 July 1950, Box 1, Milton Miles papers, Hoover Institution. After Tai Li was killed in a plane crash in 1946, the Navy insisted that he be given the Distinguished Service Medal, a proposal whose political implications distressed General George Marshall. See Beal, John Robinson, Marshall in China (New York, 1970), 236.Google Scholar
36. Marshall, “Opium and the Politics of Gangsterism,” 38–40; E. Jacobson report, 28 July 1941, 893.114 Narcotics/3074, RG 59; E. Jacobson report, 18 August 1941, 893.114 Narcotics/3085, RG 59, National Archives.
37. Quoted in Marshall, “Opium and the Politics of Gangsterism,” 40.
38. “General Tai Li,” in Chapter 38 file, Miles papers, Center of Naval History.
39. Marshall, “Opium and the Politics of Gangsterism,” 41–42; Memorandum for A-7 files, Subject: Tu Yueh-sen, 3 July 1945, Miles papers, Center of Naval History.
40. Peck, Two Kinds of Time, 38.
41. Marshall, “Opium and the Politics of Gangsterism,” 42. Despite Tai's drug smuggling, SACO also enjoyed training assistance from experts from the FBI and FBN (New York Times, 14 September 1945).
42. Memorandum, 14 May 1942, Box 3, Preston Goodfellow papers, Hoover Institution.
43. Wei, Yang, I tai hao-hsia Tu Yueh-sheng (Hong Kong, 1968), 85–86Google Scholar; cf. Shih-i [pseudonym for Hu Hsu-wu], Tu Yueh-sheng wai-chuan (Hong Kong, 1962), 109–10. Another OSS agent who had extensive contact with the Green Gang, though perhaps not with Tu himself, was Oliver Caldwell. See MacDonald, Elizabeth, Undercover Girl (New York, 1947), 102Google Scholar; Caldwell, Oliver, A Secret War: Americans in China, 1944–1945 (Carbondale, Ill., 1972).Google Scholar
44. Marshall, “Opium and the Politics of Gangsterism,” 42; “War Diary of SACO Camp 8, 12 July 1944–15 August 1944,” in Chapter 26 file, Miles papers, Center of Naval History; MacDonald, Undercover Girl, 194–95. The former French intelligence officer Thyraud de Vosjoli recounted how “Tai Li granted the monopoly for smuggling along a certain part of the coast to two leaders, Chang Kuei Fang and Chang Yi Chiu, who ruled over more than 25,000 pirates. In exchange, they kept him informed on everything in their area and occasionally agreed to carry out jobs for him.” See Vosjoli, P. L. Thyraud de, Lamia (Boston, 1970), 86Google Scholar. Caldwell later become an avid member of the right-wing China lobby. Another OSS contact of the pirates, Thibaut de Saint-Phalle later served as a CIA agent in French Indochina; MacDonald, Undercover Girl, 194–95.
45. Goodfellow memorandum to General Le, no date, Box 3, Goodfellow papers.
46. OSS CID 126155, 19 April 1945, RG 226. Cf. Hanna, David, Virginia Hill, Queen of the Underworld (New York, 1975), 148–50Google Scholar; Messick, Hank, Secret File (New York, 1969), 215.Google Scholar
47. Marshall, “Opium and the Politics of Gangsterism,” 42; Naval attaché report (Chungking), 4 May 1945, OSS CID #XL10551, RG 226.
48. John Carter Vincent memos, 24 December 1942 and 15 January 1943, Foreign Economic Administration (FEA) Intelligence file #457282; C. E. Gauss to Secretary of State, 21 December 1942, FEA Intelligence file #418813; Harrison Matthews (London) to Secretary of State, 22 January 1943, FEA Intelligence file #424428, all in RG 169, records of the Foreign Economic Administration, National Archives. Cf. Gould, Randall, China in the Sun (Garden City, N.Y., 1946), 193Google Scholar; Consul General M. S. Myers dispatch from Canton, 28 July 1941, 893.114 Narcotics/3070, RG 59.
49. R. D. Wolcott, OSS, to Mahlon F. Perkins, Department of State, 22 September 1942, in Box 15, Division of Defense Materials lot file, RG 59; cf. FEA Intelligence file, #494107, RG 169.
50. C. E. Gauss dispatch to Secretary of State, 21 December 1942, FEA #418813, RG 169.
51. “Report on the Showa Trading Company” by Lt. Eric W. Fleisher, Investigative Division, 25 July 1947, RG 331, Office of the Military Government, United States (OMGUS) files, Washington National Records Center, Suitland, Md.
52. G-2 memo to Lt. Col. R. E. Rudisill, 24 May 1947, RG 331.
53. William Edwards's interrogation of Kodama Yoshio, 21 and 23 July 1947, RG 331.
54. Edwards's interrogation of Kodama, 21 July 1947; G-2 memo to Lt. Col. R. E. Rudisill, 24 May 1947, RG 331; “Curriculum Vitae of Kodama, Yoshio,” U.S. army compilation, RG 331; Los Angeles Times, 6 February 1976 [tungsten mines]; Japan Times Weekly, 14 February 1976 [spy ring]; David Kaplan and Alec Dubro, Yakuza (Reading, 1986), 65 [KempeiTai].
55. G-2 report on Kodama Yoshio, #18930, 24 May 1947, RG 331; Lt. Col. William T. Hornsday's interrogation of Kodama, 14 March 1946, RG 331; cf. Statement of Home Minister in puppet Nanking regime, International Military Tribunal for the Far East [IMTFE], Proceedings, 4912–13.
56. M. R. Nicholson report, 14 November 1939, 893.114 Narcotics/2673 1/2; Nicholson report, 15 November 1939, 893.114 Narcotics/2683 1/2; Nicholson report, 8 May 1940, 893.114 Narcotics/2787; Shanghai police report, 26 March 1940, 893.114 Narcotics/2756; Richard P. Butrick (Shanghai) to Secretary of State Cordell Hull, 28 March 1940, 893.114 Narcotics/2724; Stuart Fuller's remarks to Opium Advisory Committee, 20 May 1939, 893.114 Narcotics/2718, all in RG 59.
57. “Report on Investigation of Kodama, Yoshio, ex-Class “A” Suspect,” RG 331; IMTFE Proceedings, 4881–4913.
58. Liberal Party secretary general Ichiro Kono cashed in the diamonds by pressuring wealthy rice brokers to buy them. See Los Angeles Times, 6 February 1976; Japan Times Weekly, 21 February 1976; Parade, 28 March 1976.
59. G-2 memo to Lt. Col. R. E. Rudisill, 24 May 1947, RG 331.
60. New Statesman, 21 May 1976. Blum, born in Yokohama, became a high-level OSS officer in World War II.
61. Ampo, April-September 1976, 19.
62. Loftus, John, The Belarus Secret (New York, 1982)Google Scholar; Simpson, Christopher, Blowback (New York, 1988).Google Scholar
63. On Willoughby's tungsten venture, see Cumings, Bruce, The Origins of the Korean War: The Roaring of the Cataract, 1947–1950 (Princeton, 1990), 99.Google Scholar
64. Kaplan and Dubro, Yakuza, 68.
65. Kirk, Donald, “Crime, Politics and Finger Chopping,” New York Times Magazine, 12 December 1976, 91.Google Scholar
66. New Asia News, 16 April 1976.
67. Kaplan and Dubro, Yakuza, 62.
68. Ampo, October-December 1975, 58.
69. Morris, Ian I., Nationalism and the Right Wing in japan: A Study of Post-War Trends (London, 1960), 45–46Google Scholar, 228–29; New Asia News, 16 April 1976. This group was close to Gen. Ho Ying-chin and enjoyed the support of Chiang Kai-shek. The whole mission sounds suspiciously like that of Admiral Charles Cooke, described in Cumings, The Origins of the Korean War, 132–34, 140–41, 510–53.
70. Japan Times Weekly, 8 May 1976.
71. Ibid.
72. New York Times, 10 November 1952.
73. New York Times, 5 July 1951.
74. U.S. Congress, House, Government Operations Committee, hearings, Investigation of United States Government Contracts for Purchase of Tungsten in Thailand, 83 Cong., 1st sess., 30 November 1953 to 5 February 1954, 324.
75. New York Times, 2 April 1976.
76. Dooman correspondence, cited in Prof. Howard Schonberger, “The Japan Lobby and the CIA: A Smoking Pistol,” unpublished ms., and conversations with Professor Schonberger. I am grateful to him for sharing the results of his research in progress. One kidnapping case that Dooman may have had knowledge of, involving both G-2 and the CIA, is discussed in Kaplan and Dubro, Yakuza, 60.
77. Cumings, The Origins of the Korean War, 148.
78. Engineering and Mining Journal (October 1952): 132.
79. Smith, Bradley F., The Shadow Warriors (New York, 1983), 408.Google Scholar
80. Letter from Harold Wendel Lady (Office of the President, Republic of Korea), 2 March 1949, Box 1, Goodfellow papers.
81. Cumings, The Origins of the Korean War, 136, 515–19.
82. Memo to Goodfellow, 27 April 1954, Box 1, Goodfellow papers.
83. Cumings, The Origins of the Korean War, 147.
84. For a good overview of the airline's history, see Leary, William M., Perilous Missions: Civil Air Transport and CIA Covert Operations in Asia (University, Alabama, 1984).Google Scholar
85. CAT Bulletin, August 1953.
86. ISC memorandum, Political Analysis of the Leading Figures in N.W. China, no date. Box 1, Whiting Willauer papers, Seeley G. Mudd Library, Princeton University. Willauer, Chennault's partner in CAT, had a commission in U.S. Naval Intelligence before World War II. He was later named ambassador to Honduras in 1953 thanks to Under Secretary of State Walter Bedell Smith, former head of the CIA. See “Oral History of CAT,” Box 1, Willauer papers.
87. U.S. Congress, House, Committee on Un-American Activities, International Communism: Consultation with Major General Claire Lee Chennault (Washington, D.C., 1958), 8.Google Scholar
88. See Cumings, The Origins of the Korean War, passim, on this angle.
89. New York Times, 10 November 1952; Ibid., 20 January 1953; Lamour, Catherine and Lamberti, Michel R., The International Connection: Opium from Growers to Pushers (New York, 1974), 95.Google Scholar
90. New York Times, 23 September 1951.
91. Tibor Mende, “Report from the Burma Border,” Reporter, 12 May 1953, 17–21; cf. New York Times, 20 January 1953.
92. House Government Operations Committee, Investigation of United States Government Contracts for the Purchase of Tungsten in Thailand, passim. On the Thai Border Patrol Police and KMT activities, see McCoy, Alfred, The Politics of Heroin in Southeast Asia (New York, 1972), 130–35Google Scholar. On Narong Kittikachorn, see Washington Post, 12 April 1976.
93. For an overview of this history, see Marshall, Drug Wars.
94. Many sources remark on Chiang's early relationship with the Green Gang in the days when he was a broker in Shanghai. See, for example, Boorman, ed., Biographical Dictionary of Republican China, 1:319; Gayn, Mark, Journey From the East (New York, 1944); 338Google Scholar; Clubb, O. E., Twentieth Century China (New York, 1972), 144Google Scholar; Isaacs, Harold, Tragedy of the Chinese Revolution (Stanford, 1951), 81Google Scholar; White, Theodore and Jacoby, Annalee, Thunder Out of China (New York, 1946), 120–21.Google Scholar
95. To take just the claim of political extremism, Tu Yueh-sheng's money was an essential element in the the post-World War II rise of the right-wing CC-Clique (named after powerful brothers Chen Li-fu and Chen Kuo-fu), which controlled the KMT's secret political police and “opposed all of Marshall's efforts at compromise.” Its rigid stand helped ensure the relatively swift and total loss of power by the Nationalists on the mainland of China. See Beal, Marshall in China, 23, 27, 96, 252; OSS CID 15501–217, RG 226. Joseph Stilwell noted in his 1935 G-2 report that the “intimate connection between opium and militarism is a cause of two of China's great sorrows—the tremendous size of her so-called armies and their utter worthlessness for national defense.” See note 31.
96. San Francisco Chronicle, 12 January 1975.
97. New York Times, 2 July 1974. The Kishi government arranged the Japan-U.S. Security Treaty, signed in 1960, Kodama organized a force of 15,000 rightists and gangsters to break up planned anti-Kishi and anti-Eisenhower demonstrations. See Far Eastern Economic Review, 20 February 1976.
98. New York Times, 11 May 1976.
99. New York Times, 1 March 1976 and 2 April 1976; Ampo, March 1976, 6–9, 12; Kaplan and Dubro, Yakuza, 79; Tad Szulc, “The Money Changers,” The New Republic, 10 April 1976, 10–12; John Roberts “America and the Making of Japan Inc.,” Nation, 13 February 1982, 175. There is a narcotics connection here, too. One figure in the Lockheed payoff channel was Shig Katayama, president of ID Corporation, which kept an account at the Castle Bank in the Bahamas, where notorious gangsters and drug traffickers parked their money. According to an unconfirmed Japanese source, Katayama did intelligence work for the occupation in the 1940s and then in the next decade went on “to handle narcotics for the US intelligence work.” See Yamakawa Akio, “Lockheed Scandal,” Ampo, April-September 1976, 3. Castle Bank was headed by Paul Helliwell, former head of OSS in China, a key backer of Chennault's Civil Air Transport and one of the organizers of the CIA program of support for the KMT army in Burma.
100. Marshall, Drug Wars, 55.
101. Japan Times, 22 May 1976 and 21 February 1976; Ampo, March 1976, 17.
102. Quoted in Ampo, Winter 1975, 40.
103. International Herald Tribune, 19 February 1977; Newsweek (international edition), 7 March 1977.
104. On Tongsun Park's representation of the interests of Kodama and Machii Hisayuki in Japan Lines, see Takaoka Susumu, “South Korea Buys Politicians in Japan, Too,” New Asia News, 12 November 1976. Kodama was also a prime mover behind two other KCIA sponsored agents of influence in the United States: the Unification Church of Sun Myung Moon and the World Anti-Communist League (WACL). The American head of WACL, retired Gen. John Singlaub, was deputy CIA chief in South Korea during the Korean War, where he may have known Kodama. See Anderson, Scott and Anderson, John Lee, Inside the League (New York, 1986), 125Google Scholar, 151; Congressional Quarterly, 1 April 1978. Singlaub, WACL, and the Unification Church became leading promoters and sponsors of the Nicaraguan contras in the mid-1980s. In the White House, another such promoter was Donald Gregg, national security adviser to Vice President Bush. Gregg had been CIA station chief in South Korea from 1973 to 1976, during the height of Korean influence peddling in the United States.
105. Tad Szulc, “Too Much Rice, the Original Sin,” The New Republic, 29 January 1977.
106. San Francisco Chronicle, 22 November 1976; International Herald Tribune, 9 June 1977; San Francisco Examiner, 31 July 1977; Washington Post, 22 December 1979.
107. For but one exploration of this theme, see Messick, Hank, John Edgar Hoover (New York, 1972)Google Scholar. See also various works by Scott, Peter Dale, beginning with The War Conspiracy (Indianapolis, 1972)Google Scholar. Bruce Cumings also makes an impressive effort in this direction in the second volume of his The Origins of the Korean War. The Iran-contra affair brings many of these elements together; see Marshall, Jonathan, Scott, Peter Dale, and Hunter, Jane, The ban-Contra Connection: Secret Teams and Covert Operations in the Reagan Era (Boston, 1987).Google Scholar