US Intelligence operations in WWII China

Sino American Cooperative Organization - SACO

Before the US had entered WWII, President Roosevelt in January 1941 sent an economic advisor, Lauchlin Currie, to China on an fact finding mission, in anticipation of further Japanese aggression in Asia. Currie conferred with Chiang Kai-shek, US Ambassador Johnson, and Naval Attaché McHugh to evaluate US assistance and to formulate terms for the Lend-Lease assistance program. Upon return, Currie recommended increased assistance in advisory capacities. Owen Lattimore was appointed as political advisor to Chiang, and he served to expedite the American Volunteer Group which Chennault was forming with retired military pilots.

In early February, 1942, Captain, later Commodore Milton Miles proposed the establishment of a radio intelligence unit in China. In May 1942 he embarked to China with vague orders from the Navy Department to undertake operations to inflict maximum possible damage to the enemy using a small number of operatives. Stilwell did not generally believe in military covert operations, however he was fervent to retaliate at the Japanese after their success in Burma, so he granted Miles free and exclusive control over "special operations" in CBI. His proposal led to the creation of Naval Group China (NGC), the umbrella organization for units that performed weather forecasting, advised and trained Chinese guerillas, and intercepted and analyzed Japanese radio traffic. NGC was essentially the American Navy part of the Sino-American Cooperative Organization (SACO).

In July, Lattimore arrived at Chungking and shortly later was joined by Currie to investigate disputes between Chiang and Stillwell, and to negotiate better cooperation between the KMT and CCP in their joint fight against the Japanese. Together, Miles and General Tai Li proposed the formation of the Sino-American Cooperative Organization (SACO) to be all inclusive. All American organizations doing secret work in China, including the Office of Strategic Services, were to be in SACO. This implied that they would be under Tai's supervision, with co-chief Miles. The basic justification recognized that China was our ally and shared our objectives, and on Chinese territory the command responsibility should be Chinese. When Generalissimo Chiang Kai-shek was approached in the matter, he gave the project his approval providing the nominal and actual head was a Chinese. The Army and OSS pushed to have SACO placed under the control of General Stilwell’s headquarters. Stilwell, however, advised the Army that SACO’s mission and the relationship between Miles and Tai were such that the organization would function best if allowed to operate as it had, rather than being subject to command and control by his headquarters. Frustrated by its inability to secure the cooperation of the Chinese regulars and guerillas without Tai’s cooperation, OSS attempted to foster better cooperation by appointing Miles the director of OSS operations in the Far East. The Navy responded with a show of support for Miles: the Navy portion of SACO was designated Naval Group, China, and Miles was appointed its commander and promoted to the rank of Commodore. However, the lines of support were clearly drawn with the NGC closely aligned with Chiang's factions, and SACO destined to exclude and even overtly oppose the CCP in the struggle against the Japanese occupation over the course of the war.

OSS director Maj Gen William Donavan and the OSS were often critical of SACO and expressed distrust of Tai Li and Chinese operatives. Miles refused to subordinate his mission for the Navy to OSS’s plans for China. And while he used Tai’s network of agents to report on the activities of the Japanese, Miles chose not to use those resources to compile intelligence on the Chinese themselves to pass to OSS intelligence.

Initially, SACO collected information, primarily along the coast, and also ran a number of weather stations throughout China and Mongolia supporting Navy operations in the Pacific. Later, SACO would train guerrilla forces and engage in operations and military sabotage. They often were the contact and rescuers for American fliers conducting raids over Japanese territories. Howver, the greatest conribution to the war effort, and relations with the Chinese people was a direct reslut of daily living within disputed and occupied areas of China. OSS and SACO had an uneasy relationship the entire war, primarily because of in-fighting between key personnel in China that reached all the way up to General Marshall, Chief of Naval Operations Admiral Ernest King, and Bill Donovan.

The Office of Strategic Services in China

In early 1942 Donovan was searching for a way to establish his untested Office of Strategic Services agency (predecessor to the CIA) in the CBI Theater. He sent representatives and later conferred with General Stilwell, but found Stilwell to be noncommittal and wary of intelligence operations. Nevertheless, Donovan proceeded to organize a special detachment under Captain Carl Eifler, a former customs agent who had once served in a reserve unit under Stilwell. While Stilwell was in Burma retreating with his Chinese divisions, OSS Detachment 101 was being formed.

After submitting a rough plan for disruption of the enemy by agents behind Japanese lines in the Far East, Eifler rushed to deploy a unit to the theater before Stilwell changed his mind. Using tips from acquaintances, he sought volunteers with skills in such areas as demolitions, communications, medicine, and Asiatic cultures. Recruiting from his former regiment, the 35th Infantry at Fort Benning, GA, Detachment 101 was activated in April 14, 1942, to perform espionage, sabotage, guerrilla warfare, propaganda, and escape-and-evasion operations in support of U.S. military objectives in China.

Prior to their departure, the recruits trained at an secret agent school in Canada and at an OSS training site in the Catoctin Mountains of Maryland. At Camp X, near Lake Ontario, Eifler, and six other trainees practiced demolitions and hand-to-hand fighting, developed a familiarity with Allied and foreign weapons, and received instruction in guerrilla tactics. Meanwhile, the rest of the contingent went to the Catoctins, where they studied cryptography, demolitions, and hand-to-hand combat. Unfortunately, most of the techniques taught at the two institutions were derived from the operations of the British commandos and consequently had only limited applicability to Asia. To compensate, members of the detachment collected books and talked to every available expert on China and left for the Far East in May.

When the first group of 21 members of Detachment 101 arrived at China-Burma-India headquarters in New Delhi, India in July, Stilwell remained aloof, informing him that "I didn't send for you and I don't want you." Upon his arrival Eifler found that Stilwell had little inclination to use the detachment at all. A conventional soldier and a passionate admirer of infantry, Stilwell disparaged guerrilla tactics as "illegal action." To complicate the situation, Navy Capt. Milton E. Miles in Chunking had already reached an agreement with Chiang and Tai Li to train 50,000 Chinese guerrillas. General Tai Li, head of the Bureau of Investigation and Statistics (China's secret service), distrusted the OSS, an organization he viewed to be as political as it was military (as was his own investigative bureau). Alerted to Detachment l0l's arrival by the suspicious Tai Li and determined to preserve his exclusive control, Miles took his case to Stilwell, who claimed with some irritation that the War Department had pulled a "squeeze play" on him. Eifler appeared in Chungking as the head of an Office of Strategic Services mission that Stilwell had initially rejected. The CBI Theater commander, at Miles' suggestion, relented enough to permit Eifler's detachment to gather intelligence and conduct guerrilla warfare in Burma.

The Japanese occupation of the country had cut the Burma Road, the main supply line to China from the outside world; to replace it, American engineers were constructing a new route from Ledo, on the India-Burma border. Japanese control of the north Burmese city of Myitkyina and the surrounding region blocked completion of the road, and enemy aircraft from an airstrip near the town were continually harassing American transports flying supplies to China. Given the limited resources available, Stilwell needed any help he could obtain to drive the enemy out of the area. Over time, Stilwell's estimation of special operations rose with the success of Eifler's OSS Detachment.

Within two months, Detachment 101 operatives were spreading out over north and central Burma, scaling jagged mountains, hacking their way through almost impenetrable jungle and crossing dusty plains where temperatures soared to 130 degrees Fahrenheit. Clothes and boots rotted in the humidity, and diseases such as malaria and dengue fever were rife.

Stilwell directed to set up a base in northern India and begin operations into Burma as soon as possible. He said he wanted the officers and men of Detachment 101 to learn to survive and live in the jungles, and to consider themselves as pioneers in blazing the way back into Burma. Stilwell wanted information, and he also wanted to sabotage operations, aimed at reducing the effectiveness of the Japanese air base in Myitkyina. Japanese aircraft flying out of the Myitkyina air base were shooting down U.S. planes flying over the Hump with supplies for China. Stilwell ordered Detachment 101 to destroy road and railroad bridges leading to Myitkyina from the south. At a minimum he hoped that the detachment could prevent Japanese use of the airfield, informing Eifler that "all I want to hear are booms from the Burma jungle." In addition, he asked Detachment 101 to maintain liaison with the British so that the colonial government would have no complaint about Detachment 101's activities.

Lacking men, equipment, funds, a clear directive from Washington, and current intelligence on the situation in Burma, Eifler faced an immense task in building a clandestine organization. Although the unit successfully resisted minor staff assignments from the overworked CBI Theater headquarters, it still had less than two dozen men. Since American agents in Burma would attract attention, the detachment canvassed the British-led Burma Army for Anglo-Burmese volunteers. Supplies and equipment were a more difficult. Communications would be critical to operations; yet the radios available in the Pacific theater were woefully inadequate in range and adaptability to the damp Burmese climate. Finally, a Japanese air raid destroyed the detachment's warehouse, aggravating an already grim supply situation.

At a tea plantation near Nazira in the northeastern Indian province of Assam, the detachment established a base camp under the guise of a center for malarial research. Using the services of a former district forester in Burma, Detachment 101 recruiters found about fifty refugees and Burmese military personnel anxious for the pay or the opportunity to fight the conquerors of Burma. Divided into small groups to preserve security, the prospective agents endured lengthy conditioning hikes into the rugged Naga Hills along the India-Burma border. They also received instruction in demolitions, weapons, communications, junglecraft, ambushes, and hand-to-hand combat. Lacking language capabilities of its own, the detachment had to rely almost exclusively on recruits who had at least a rudimentary knowledge of English. The trainees also provided their instructors with much information on local traditions, customs, and dress. While training continued, technicians, using parts from standard signal equipment and the local market, improvised a portable, self-powered, waterproof radio set with a range of over 500 miles. Through great effort and considerable improvisation, the detachment was ready for operations by mid-November.

For the detachment's initial operations Eifler planned to stress sabotage, intelligence collection, and the establishment of agent nets while laying the foundation for guerrilla activities. Detachment 101 took time to develop its capabilities and relationships with native guides and agents, but Eifler found a ready source of recruits among the Kachin hill tribesmen of north Burma who had borne the brunt of atrocities committed by the Japanese in the early months of occupation. OSS Detachment 101 created, supplied, trained, led, and fought with troops who came to known as known as the USA Kachin Rangers. The Kachin people taught the Americans how to survive in their environment while the Americans trained the Kachins to fight the Japanese occupation. With barely 120 Americans at any one time, Eifler's unit eventually recruited and trained almost 11,000 Kachin guerrillas and, from a string of outposts established along a 600-mile front, mounted repeated attacks on Japanese supply lines and personnel.

Together, the Americans and the Kachins made a strong, aggressive, intelligence gathering, fighting force. They conducted constant actions, including the conquest of the Burma Road from Nam Khan to Lashio, and south almost to the Thai border. While providing target intelligence for the Allied air forces, American pilots were able to bomb and strafe with deadly accuracy targets they could not even see. They destroyed enemy bridges, supply dumps, rail lines, and cleared the enemy from an estimated 10,000 square miles of territory. When Allied troops invaded Burma in 1944, Detachment 101 teams advanced well ahead of the combat formations, gathering intelligence, sabotaging key installations and rescuing Allied airmen who had been shot down. During three years of jungle warfare, the unit claimed to have killed 5,447 Japanese, and destroyed 51 bridges and 277 military vehicles, while suffering the loss of just 184 Kachins and 18 Americans killed in action.

After assuming command of the new China Theater in October 1944, Maj. Gen. Albert C. Wedemeyer pushed hard for control over all U.S. clandestine operations in China. His arguments before the Joint Chiefs of Staff and Donovan's constant complaints to President Roosevelt of Chinese obstructionism finally resulted in the creation of an OSS agency independent of the Sino-American Cooperative Organization and under Wedemeyer's control. Meanwhile, the end of the war in Europe enabled the OSS to shift materiel, supplies, and personnel, including trained operational groups, to the Far East. By the summer of 1945 four man OSS teams were training and leading large groups of Chinese partisans in operations against Japanese communications in southern China. The establishment of an independent OSS branch in China and the end of the war in Europe in early 1945 facilitated the expansion of OSS operations.

In the summer of 1945 the OSS effort in China was only beginning to become effective. During the first three years of the agency's involvement there, it had made little progress due to lack of resources, bureaucratic infighting, and the complexities of Chinese politics. Often operations in norther China supported Mao's Chinese Communist Party. Chiang's government, fearing growing CCP sentiment and suspicious of any clandestine agency outside its control, limited its support to the joint SACO under Tai Li, with Miles as deputy director. To gain entry into the theater, Donovan initially placed OSS activities in Asia under Miles, but the partnership never worked well. Miles was determined to be independent of Donovan's agency, which he perceived to be staffed with "old China hands" who operated as imperialists and could not deal with the Chinese as equals. The Office of Strategic Services, in turn, regarded Miles as the tool of Tai Li, who repeatedly blocked OSS efforts to establish an intelligence presence independent of the Nationalist regime. Seeking to free themselves from Miles, OSS operatives in China sought a patron in Maj. Gen. Claire L. Chennault of the U.S. Fourteenth Air Force. An OSS mission even investigated the possibility of supplying arms to Mao's CCP, who were conducting guerrilla warfare against the Japanese from bases in Yenan.

The end of the war in Europe enabled the OSS to shift materiel, supplies, and personnel, including trained operational groups, to the Far East. By the summer of 1945 four-man OSS teams were training and leading large groups of Chinese partisans in operations against Japanese communications in southern China. OSS personnel had been attempting to organize Chinese commando forces for operations behind enemy lines. The idea apparently drew its inspiration from Wedemeyer, who, as a staff officer, had been involved in the formation of Darby's Rangers, the Army’s first Ranger battalion. Given the generally deplorable performance of Chiang's regular army in the field, the American theater commander hoped that smaller Chinese units, with intensive American training and guidance, might fight more effectively than the standard Chinese divisions. After some opposition, Chiang's government grudgingly agreed in February 1945 to provide about 4,000 troops, food, clothing, and equipment for a force of twenty commando units. Almost immediately, the project encountered problems. The Chinese soldiers failed to arrive at the training area in Kunming until mid-April, and the quality of those who finally came varied greatly. Not surprisingly, Chiang's generals gave little support to the effort. Nevertheless, with the Office of Strategic Services in China providing most of the supplies and equipment, the OSS instructors began a hurried eight-week course in weapons training, guerrilla tactics, and parachuting. By July three commando units, each containing about 150 Chinese and 20 American advisers, were ready for the field.

Generally, the program was successful but came too late in the war to have much of an impact. Under the operational control of the Chinese military command, the commandos were to attack communications, to capture significant operational objectives, to gather intelligence, and to protect key facilities from destruction by retreating Japanese forces. Although the commandos later suffered severe losses in the field, they exhibited a fighting spirit rare in the other Nationalist combat units, but lack of coordination and their subsequent misuse as line infantry were major problems. Similarly, SACO operatives advised and trained Chinese guerillas while they were immersed in the daily lives of living and sometimes fighting within Japanese occupied areas. Miles and SACO documented exemplary success in interdiction and training. Intelligence was provided by SACO and the Fleet Radio Unit in China interpreted and channeled intercepted radio traffic to the US Navy from 1943 up to 1946. Near the end of declared war with Japan, politics of participation seemed to consume as much energy as waging actual war.

In his book published in 1972, A Secret War: Americans in China, 1944-1945, Oliver J. Caldwell an OSS operative in China describes the intervention in China as a case of America winning the war against Japan, and losing the one in China. Writing from the perspective of a unit that was secondary to Miles daily operations, and mistrusted by General Tai Li, Caldwell was highly critical of some of the SACO accomplishments. His personal observations focused on Tai’s brutal and totalitarian methods and the KMT efforts to exclude CCP. He speculated that the navy detachment was completely under Tai Li's thumb, and received preferential treatment from the Chinese. The OSS, on the other hand, primarily staffed by U.S. Army personnel, insisted on the fulfillment by the Chinese, of their obligations. The greater such insistence, the less Tai Li liked the OSS.

Another reason for Tai's dislike of the OSS was his evident belief that it was a complete secret service organization like his own. He did not want the OSS to become too strong in China, especially with its demonstrated tolerance and support of the CCP. In many subtle ways he made it impossible for it to fulfill its mission in China. The only exception was the training functions of the OSS. He was generally willing for Chinese soldiers to learn whatever Americans could teach them. But it was not always easy to put training into practice. In contrast, American SACO personnel lived in the field and often became trusted advisors and participants in both overt and covert missions.

Up to 1944, Miles had been head of the entire American secret warfare enterprise in China. His command consisted of two diverse elements. There was a large navy detachment and there was a smaller OSS group. OSS headquarters became dissatisfied with the pace of progress, and General Donovan himself went to China to assess the structure. General Donovan did not have the confidence of Chiang or Tai Li nor did he understand the Chinese people. OSS most assuredly would have been more successful in China had it made better use of the China experts in the organization and had the agents become more immersed in the field.

Tai Li was a proven master at manipulating people and capitalizing on American weaknesses. My father related stories of tacit control of some Americans using chiefly wine and women. And there was the omnipresent secret service agents who protected American SACO with their very lives, but who also demonstrated great brutality and threats as directed. Banquets for visiting dignitaries is a time-tested Chinese social setting, and strategic information was constantly solicited from such occasions. Donovan's visit was celebrated by a banquet in which wine and Mai-Tai flowed freely. Tai Li controlled the event, which he so often used to great effect, and poised like a hawk to take advantage of any indiscretions on the part of his guests. Caldwell describes in detail an altercation during the OSS chief’s tribute.

"The issue on this occasion was the inability of OSS to get anything done under Tai Li's domination. According to some of my friends who were present, Donovan remained cold sober. "Wild Bill" was always famous for direct and forceful speech. He said bluntly that OSS had a mission to perform and if it could not be performed in cooperation with Tai Li, then OSS would operate separately.

Tai Li flared up and said, "If OSS tries to operate outside of SACO I will kill your agents."

Donovan answered, "For every one of our agents you kill, we will kill one of your generals," and he pounded the table with his fist.

"You can't talk to me like that," shouted Tai Li.

"I am talking to you like that," said Donovan. "

At that point the two masters of intrigue suddenly calmed down and were all smiles, having made their respective points.

The, OSS continued to be in SACO and was promised many things by Tai Li. But never was the OSS able to attain its potential under the leadership and supervision of a foreign commander, and especially one so paranoid. It has been suggested that some of the OSS achievements were technically illegal since they were carried out independently of its command structure.

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