NATIONL SECRIITY POLJCY           1


  Of thedubtful areas where such-&stand- might be taken, Formosa
has advantage&ssuperior to any other. Itis notsubject to the immediate
influenue of Soviet land power. It is close to our naval and air power.
It is occupied by the remnants of the non-Communists who have tra-
ditionally been our friends and allies. Its status internationally is
undetermined by any international act and we have at least some moral
responsibility for the native inhabitants. It is gravely menaced by a
joint Chinese-Russian expedition in formation. The eyes of the world
are focused upon it.
  If the United % States-wee- to -announce that it would neutralize
Formosa, not permitting it either to be taken by Communists or to
be used ,as a base of military operations against the mainland, that
is a decision which we could certainly ,maintain, short of open war by
the Sovet Union. Erye knows that that is the case. If we do not
act, it will be everywhere interpreted that we are making another
retreat because we do not dare risk war. if it is inferred that we do not
dare take a stand that risks 'war- unless our own citadel of the -North
Atlantic and America areas is directly attacked, then the disasters
referred to above will almost surely happen.
   We are not;so situatd that time is +working for us so that it can
be argued that 'we have to buy time. The further losses possible in
Indonesia- aind the Near East would greatly increase the war-making
power of the Soviet Union. Quite apart from that, the Soviet Union
is increasing its force-in-being, its atomic stockpile and its basic mili-
tary potential at a rate so -rapid that the relative position will be
worse two years from now than it is today. That would be so, even
though we somewhat increased our own efforts. That also is something
that is generally known. In consequence, if the rest of the world feels
that we are today afraid to take a stand which would involve a possible
risk of war then they would judge that almost certainly we will not
take that risk tomorrow unless it is forced upon us by actual attack
upon either the North Atlantic or American area.
   Admittedly the determination to withhold Formosa from Com-
 munists would involve complications with the Nationalist Government
 and with their elements on Formosa. It would involve spreading of
 our own military force, and possibly some actual losses. However,
 these aspects are of a secondary order. It is within our power to solve
 the political complications if we have the resolute will. Also, these
 same problems will embarrass us if we allow Formosa to fall. The
 efforts at evacuation, particularly attempts to evacuateto the Philip-
 pines large numbers of Nationalists, will pose new problems and
 difficulties perhaps as embarrassing as those that would be posed by
 an affirmative policy. It will not leave a good taste if we allow our


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