the actual event about which other people are now proposing to testify.
Senator Tydixgs. We ought to have it all or none of it. There is
no doubt about it.

Mr. Rhetts. Onlj^ that seems satisfactory to us.
Senator Tydixgs. To take one sentence out of a purported tele-
phone or surveillance convereation and utilize it for any purpose is not
fair. It is not good Americanism, it is not good law, and it is not in
the interest of serving the public, who want to know the truth about
this matter.



1356 STATE DEPARTMENT EMPLOYEE LOYALTY INVESTIGATION

Mr. Morgan. That is exactly correct, but at tlie same time, our rec-
ord here in public session, as well as reports now in the press, have
that particular portion of this information and that is all the public
now has. It occurs to me that the only way we can proceed at all, if
we are going- to go into this situation and finally resolve it, is at least
go into this matter right here at this time.

Senator Ttdings. Let me see if we could do this for the time being.
I suggest, first of all, that the letters which Mr. Morris read to the
witness yesterday were not classified documents. The letters that
were read to the witness yesterday were correspondence for the most
part which Mr. Service carried on with certain acquaintances and
perliaps friends. They were not classified documents, and they were
a part of the so-called 1,700 documents seized in the case, and these
particular documents were nothing more than letters for the most
part.

I am wondering if part of those letters were put in the record yes-
terday, whether it would not have been fair to put the whole letter
into the record rather than just the sentences that w^ere picked out and
read. I would like to hear what counsel for Mr. Service has to say
on that particular point.

Mr. RuETTS. In that connection. Senator, I should like to point out,
first, that those letters were not found in the possession of Amerasia.
They were found in Mr. Service's desk at the Department of State,
along with his other personal effects.

Senator Tydings. I understand.

Mr. Khetts. I want to make that perfectly clear.

Senator Tydings. These were not seized in any connection with the
Amerasia matter at all. They were taken out of Mr. Service's desk in
the State Department.

Mr. Rhetts. Now, I certainly think that coming to your next point,
if the letters are to be put in, they might as well be put in completely.

Senator Tydings. Now that we have covered that, my reason in
bringing this up is we would not be breaking any rule of putting in
classified documents, because these are not classified documents, but
they are a part of the 1,700 papers that were seized or obtained in the
case.

Now, I think we got a little too much latitude yesterday having
])arts of these letters and memoranda, whatever they were, that were
m Mr. Service's desk read without putting the whole thing in. I am
sure Mr. Morris would want them put in, and my reason for bringing
it up now is to ask Mr. Service and his attorneys if they would object
to having them put in.

Mr. Reilly. Emphatically not.

Senator Tydings. I will take that responsibility by trying to correct
the error of yesterday by saying the whole document— it is not a docu-
ment, we are abusing that word— all the memoranda, letters, or papers
that were read yesterday now become a part of the stenographic rec-
ord, and I will ask Mr. Morris if he will, at his convenience, sort
those out, to which he referred yesterday, and give them to the ste-
nographer, and I will ask tlie stenographer if he will not leave space
riglit liere at this point to put them into the record.



STATE DEPARTMENT EMPLOYEE LOYALTY INl'ESTIGATION 1357

(The letters referred to follow:)

United States Pacific Fi.ket and Pacific Ocean Areas,

Headquarters of the ("ommandek in Chief,
Staff. CINEPAC, Advanced HEXtVDQUARTERs, Box No. 5,

Fleet Post Office,
San Francisco, April 2, 1945.
Dear Jack : Yonr rotiirnins boss gives nie a cliaiu'e to get tins line off to you.
I've been luxuriating liere on Ciuam for almost 2 months. I'm in the Future
Plans Section technicall.v but mostl.v am getting an education in what goes on
in the I'acitic and trying to keep uy/ on China — the former is fascinating, the
latter diflicult. If you could find a safe way to send me an occasional copy of
your memos I'd be grateful — maybe you'll find it practical, maybe not. So far
as I can find out this is the only opportunity I'll have to communicate with you
until and unless Lud ( '.' ) and Emmerson ( '!) come tlirough.

Wliat goes on these days in the old country? 1 got a chuckle out of the news
Ibis morning that old Lung Pi-win (V) is going to be a delegate to the SF
Conference.

Best to the boys— specially Sol, if he is about.

A (s) Jim.



Washington, April 16, 1945.

Dear Annai^ee and Teddy : The optimistically pleasant speculations we allowed
ourselves to indulge in on that last evening of mine at 879 were 180° off.

The paper tiger roared loudly enough around here to drown out the general
but timid — opposition. And based on the Tiger's modest account of his achieve-
ments, the big boss said "Keep it up." After that, the table pounding in regard
to yours truly was only a matter of course.

Especially disappointing was the "political sense," in the narrow meaning,
by the man I had hoped would fight.

I am now assigned to a safe job here but have been urged to bide my time.
The Tiger's support ended on the 12th, the day of my arrival. And there is a
(now some J feehng that good jobs go to good party members.



Washington, April 16, 1945.
Dear Annai.ee and Teddy: The optimistically plea.sant speculations we al-
lowed ourselves that last evening of mine at 879 were 180° off.



1350 Euclid Avenue,
Berkeley, Calif., March 7, 1945.
jlJt* Tack Service

' Care of Neil Brotm, OWI, APO 627, Care of PM, New York, N. Y.

Dear Jack Service: I do hope you don't resent that I now trouble you long
distance. But my conscience bothers me ; I know how I would feel if I were in
Dr. Schwarz's shoes (and I would be in his shoes save for some fortunate circum-
stances, including J. S.).

I had hoped to have a chance to see you again before you left — you sure move
fast, and it seems you get across the sea sooner than we get across the bay.

Actually, I have little to add to Kurt's story ; I just may add his address : 173
Route Mayen (Hwa Ting In) — that's the place where the kindergarten is. Per-
haps you may want to add his address to your other addresses, in case there is a
chance to use it. Kurt's name is also known to Carlson, who used to work in
Opintell, and to Fitch ; and Lyman Hoover actually knows Kurt. I had a letter
from Lyman a few weeks ago.

If you think it possible to write to Kurt, even just greetings so he sees he Is not
forgotten, I know it would be a great lift for liim and Martha. He knows your
name. I feel lousy to suggest this to you, and I would feel guilty if I didn't. So
here you have my dilemma.

Next month I will celebrate the fourth anniversary of my arrival — and last
week my folks (father and mother) arrived in the United States from England
on the quota ; it took me all these 4 years to get them here, but now I am the
happiest guy between the two coasts.



1358



STATE DEPARTMENT EMPLOYEE LOYALTY INVESTIGATION



From time to time in the office we have a chance to see reports which include
your name, so we are currently reminded of you. What an interesting job you
have.

Well, once again, I hope you won't mind all this too much — but I feel if anyone
can appreciate the circumstances it's you.
Very sincerely yours,

S. Max.

Max Knight.

Mr. Rhetts. In that connection, niioht I make another suggestion ?
Along toward tlie close of the proceedings yesterday afternoon, Mr.
Morris was relying on the interesting theory of guilt by association
and referring to certain names and addresses found in an address book.
I should like similarly to suggest that all the names and all the ad-
dresses in that address book be made available. If that type of
imputation of guilt is to be indulged in, I think we should have that.

Senator Tydings. I think that is fair.

(The data referred to are as follows :)

27^Sunday :

6 : 30— Terrell
12 : 30— Jones
28— Monday : 2 : 30 Reichne— 2177Q
29— Tuesday :

12 : 30— Weaver
7— Rose Ellen— 3447
S

Wakefield
30— Wednesday : 6 : 30— Senator Pepper
1— Friday : 1 : 00— Rankin— 2DS55
2 — Saturday — Andy
3 — Sunday :

Lattimore
Supper for Rose
4 — Monday : Paid
5 — Tuesday :

12 — Lineboyer
7 : 30— Burns— 4902 S 28 R
Fairlington 12 & Penn.
End line
6 — Wednesday :

10— Gebb OSS here
12 : 30 — Duncan Lea



Sol Adler :

85/5172

85/2026
Ameson, Eliz. Yard : Glebe 2431
Adkinson, Brooks:

120 R Dr. 1

En. 2-5293
Arnold, Carl : Ex. 7700/280
Brown, Lt. Kmil : Ent. 2D 869
Barnett : 86/4725
Carr : Mi. 4,321
Colling, Capt. .T. : 86/6001
Caldwell, .Tolni : OWI 71192
Cowan, Col. Jim :

Co. 0991 >

86/74107
Davis, Dan : Navy 2488
Marty : OSS/639
Dennison : RFC/614
Drunmight : s/2666



Engdahl



Emnierson, ,Tohn K. :

903 N. Wahsatch St.

Colorado Springs, Colo.
Lee:

1725 W. Hampshire

Apt. 4a3

s/2398. Du. 5351
Ficlan : Navy 63037. Ch. 1891.
John Fairbank: 80/5454
The Hon. Gauss :

17 Circle Drive

Balled Bay Sher.

Newi)ort Beach, Calif.
Gayn Mail :

302 W 12

Ch. .3-2743
Griffiths :

Garrisonville 17

Fredericksl)urg, Va.
Gentille: OSS/654



STATE i>epart:ment employee loyalty investigation



1359



Ya. 17: Ask for Tom



Roberts : 86/74107.



24 SS
8514



7700/498



W.

WO 3091
State 459



W. :

Engineer Bd.



NW.



Garrisonvllle,

Waller
Hutchinson : OSS 2547
Hitch. LI. S. H. : Navy
Honiaii, Christine: Ad.
Harris, Capt. : 80/72809
Hatem, Cpl. J.N. :

loS5 Service Unit

^IcGuire General Hospital

Kichniond 10, Va.
Isaacs, Harold :

;«C. P. W. N. Y.

122
.TatTe. Phil. :

225 5th, N. Y., 13

MU ;]-0245
Jones, Col. Paul : Ex.
Little, Herbert

3761 W, N.

OSS264G.
Lyon, Freddy :
Luden :

50 Woodard Rd.

West Roxbury 32

Boston
Lattimore :

Roland View Rd., Huxten, Balti-
more

OWL Re. 7500. 72228. Towson 846
^Ir. W. W. Lockwood :

I'X. 4-0200

119 and Morningside
Capt. Paul Lineherger : S6/5504
HcHugh, Col. : OSS/2014. 2188
Mayer, Col. W. : War 72535
Mertsky (Coleman) Jeannette : Mamar-

oneck 2497
McNally, Col. E. J. ; 86/2772
Penfield, J. K. :

U. S. For. Ser. Off.

Staff Cinepar, 5

Yarderman, Rose: Di. 8665

]\Ir. Morris. In connection with those letters, I believe there were
three of th^m to which reference was made : A letter from CINCPAC
headquarters, the letter from Mr. Service to Annalee and Teddy, and
the third one we had just (rotten to when we abandoned the project.

Mr. Rhetts. One from Max Knight.

Mr. Morris. From Max Knio;ht, just three letters. I will see that
the stenographer gets them in their entirety.

Mr. Morgan. Is this applying merely to the letters or also to the
reports, portions of which were read into the record?

Senator Tydinos. The reports were IMr. Service's OAvn personal re-
ports and not classified documents, as I understand it. Is that correct,
Mr. Service?

Mr. Morgan. At yesterday's proceedings I believe portions of your
reports were read, and you were asked as to whether or not they repre-
sented a fair cross section of your reports. I believe you commented
that in your opinion that did not so represent a fair cross section.

I am wondering, Mr. Chairman, if you desire to extend your ruling
with respect to these matters that have been read into the record to in-
clude the incorporation of the full text of those reports where portions
of them have been read into the record.



Reicliner, Phoebe: OSS/24'i
l^t. Col. Rankin

I'ent. 21)855
Lt. Andy Roth :

Kill N. Queen, Arlington

S10/.3S92
Roger Smith Hotel: Na. 2740
Ray, Frank : FEA 3132
Snow :

Route 1, Madron, Conn.

Or c/o Mrs. Estelle Carlson

Int. House Berkeley
Stevens. Mrs. Harley :

3522 P St. NW.

Wash. OSS ext. 2831
Stein. Gueiithcr: 102 W. 80. En. 2-2900
Sullivan, Phil, s/2633 : Room 609.

17129
Schnulz, Gen. J.

Fort Belvoir

Temple 6800/2201
Service, R. M. : APO 210
Taylor, George : 5530 Broadfrank
Terrell, Gerald :

.3828 Fulton N.W.

Wise. Car N at Fulton

11/, blocks to left
Tolstog : <)SS/248S
Vinogiadoff, Eugene:

Conunissonat F. A.

Chinese Dept.

Moscow
Wilbur :

1625 Fitzgerald Lane

Park Fairfax, Arlington
Al. 0023. OSS. 2050
Watts. Dick:

920 5th

Bu. 8-2109
Weaver, Capt. : OSS 2232
Wolfe : Thelma : Ed. 4-8634 NYC



1360 STATE DEPARTMEXT EMPLOYEE LOYALTY INVESTIGATION

Senator Tydings. They are not highly classified or secret docu-
ments, and I feel I could, without impropriety, inasmuch as parts of
them were read, direct that the remainder be put in the record, but I
think we have to draw the limit somewhere.

(The two reports referred to above are as follows:)

[Report No. 22]

United States Army Ousesver Section.

AFO 879, September 4, 19U-
Subject : The Growth of the New Fourth Army : An Example of the Popular

Democratic Appeal of the Chinese Communists.
To : Commanding General, Fwd. Ech. USAF-CBI, APO 879.

1. The growth of the Chinese Communists armies during the present war has
proved them to be an extremely powerful political instrument because this spec-
tacular development would not have been jwssible without the support of the
people of the areas in which they have operated. This widespread popular sup-
port must, under the circumstances in which it has occurred, be considered a prac-
tical indication that the policies and methods of the Chinese Communists have
a democratic chai-acter.

2. This may seem to be jumping to an ipso facto conclusion.

(a) It might be assumed, for instance, that a patriotic desire to fight the
foreign invader was responsible for this popular support. This is partially true.

But to the Chinese peasant (who is the only important class involved, both
because of his overwhelming numerical superiority in China and because the
Communists have had to operate entirely away from the cities) the idea of
active personal resistance was entirely new. In the past the peasant has re-
garded all governments merely as something to be endured ; there was little,
as far as he was concerned, to choose from between them ; and even if one was
slightly better or worse than another, it was no concern of his and there was
nothing he could do aliout it.

So the peasant needed a great deal of education and indoctrination — and
some tangible evidence that it would benetit his own interests — before he was
willing to take up arms. The fact that the Communists were able to accomplish
this while the Kuomintang was not, indicates a closeness to and an ability to
appeal to the commcm people in terms which tlK\v understand. This is something
akin, at least, to democracy.

(b) Furthermore, the people, if they were willing to fight, almost always —
certainly in the early years of the war had two choices : They could fight with
either Kuomintang or the Communists. It would have been more natural for
them to have turned to the Kuomintang because it was the Government. In-
stead they turned to the Communists, who have come more and more to be re-
garded and treated by the Government as rebels. It would seem therefore that
the peasants received better understanding and treatment from the Communists.
This, again, is a prima facie indication of democracy. At least it can be said, on
this basis, that the people must regard the Communists as more democratic than
the Kuomintang.

(f) It might be argued that the Communists have the advantage of a "cause,"
that they use such direct appeals as distributing the land of the landlords to the
peasants, that they spread a rabble-rousing comnuuiism, or that they have found
an equivialent of the fervor which gave such impetus to the Taipings or the
Boxers. But. in fact, this argument is never heard. Even the Kuomintang does
not bother to advance it. If tliey did, it would be refuted by the evidence of
every foreign observer who has traveled through the Communist guerrilla areas.
The Communists are not even actively preaching communism — though it can-
not be denied that they are, sometimes by not too subtle means, trying to create
support for the Communist I'arty.

{(I) It can also be claimed this popular support is chiefly due to the Communist
skill in propaganda. The Communists are masters of this art, and it does have
a part, but only a relatively small one. The war has lasted more than 7 years,
longer than mere propaganda without positive results could hope to hold the
stolid and practical Chinese peasant. Furthermore, the guerrilla warfare into
which the Communists have drawn their supporters is the type which is hardest
of all military forms on the peasant because the whole area is continually a
battleground.






STATE DEPARTxMEXT EMPLOYEE LOYALTY INVESTIGATION 1361

(e) Another argument, little heard hecaiise it is so obviously untenable, is that
the Conununists have forced the people to support them and join their armies.
But the Communist armies were small when the war began; they did not have
tlie military power necessary to liave forced the people. Their armies, relatively
sneakiiiu- are still small. They are, for instance, much smalled than the Ivuo-
mintaim uses to garrison areas of equivalent size far in the rear away from any
enemv " It is obvious therefore that the Communist army does not need large
forces to maintain its own rear— as it would if it carried out Kuomintang poli-
cies of conscription and taxation and was plagued by the same resultant prob-
lems ..f banditry and internal unrest. It is also true that these relatively small
regular forces could not successfully fight oft the .Japanese and hold these areas
uidess thev had the active assistance and participation of the people m large
irregular auxiliary forces, which can only, by t^ieir nature, be voluntary The
Communists claim over 2,00(\00() local volunteers, the Peoples !\Iilitia, who aie
an active force in resisting and harrassing the enemy. This hgure may be exag-
-prated— thouiih the evidence wo have so far been able to gather indicates that
Communist statistics of this nature are not intlat.d. But an organization of this
type cannot be created and made effective by the threat of mUitary force. And
the Kuomintang does not even claim to have such an organization.

H.^The cnclusiou therefore seems justified that the peasants support, join, and
tight with the Communist armies because they have been convinced that the
Communists are fighting for their interests, and because the Communists have
created this conviction by producing some tangible benefits for the peasants.

These benefits must be improvement of the social, political or economic condi-
tion of the peasants. Whatever the exact nature of this improvement, it must
be^in the broader sense of the term as the serving of the interests of the majority ,
of the i^ietiple — t(nvard democracy. .... ^ *.

3 1 b^liexe that this success of the Communist forces in winning the support
of the pe pie is particularly well shown in the history of the new Fourth Army
(hereiSer referred to as N4A) . This force has not received the publicity given
o the development of the Eighth Route Army, which was visited by a number
of foreign journalists and other observers early in the war. In many ^^ays,
however, its growth has been even more remarkable. , ^ ,. ,„„f , ^f

r The N4A was not organized until 1938. It was formed out ot remnants of
the' old Red Armv who had been scattered among numerous isolated areas in
Cith and Central China since the withdrawal of the mam Communist forces
fn m K^an-ai at the end of 1934. ( See my Report No. 19, August 31, 1944 par. 2 .
T is wartl^lrefoie an entirely new force with no background of unified organi-
z-ltion: it could hardly compare with the Eighth Route Army, which at the out-
break of the war was already a well-organized army m being.

When organized the N4A had a strength of only 12,0J0 officers and men: Th s
is snrfn • mpared ^^•irh the SO.tlOO of the Eighth Route Army m 193 < . ^\ eapous
4renuil mint were insufiicient and mostly old; many of them were dug up
from the ground where they had remain burie-1 during the years of Kuomintang
suppression The new anus promised them by the C\-ntral Government were
never ?orthconiing; all they eler received was a small amount of aminuni tmm
Likewise the recruits that had been pr-miserl by the Central Government to hU
their ranks were never turned over to them. • i ., . i ,„t..,.

This new army was immediately thrown into action and was assigned the lowei
Yanirtze Vallev, where it was to attack already important and heavily garn-
sone^l Japanese areas. In these areas, or close to them, there were also Ku.,m,ii-
?aSg troo s The N4A army thus had much less favorable opportunities tor
explnsi on than the Eighth K.,ute Army, which had first occupied large ainio.st
Imntv areas lehind the .Iapnnes,> lines, from which the Central Government
Ss Sd withdnnvn and which the Japanese had left very lightly guarded as

^^Having" tWs"greater freedom, the Eighth Route Army was able, as early as
193S to establish stable bases to sui)port its operations. When the Kuomintang
in the vears 1939-12. made au attempt to recover this territory, the P lysical
difficulties of distance and interposing Japanese lines made it impossdilo lor
The Kuomintang to bring great strength against them. But the N4A opfratini.
partlv in Kuomintang territory much more easily accessible to the < ennal
Government, was subjected to much stronger Kuomintang pressure and was
forced to change its bases of operations several times. The result has been that
most of the present N4A bases date from only 1940 or 1941. This is a serious
handicap to the Communist method of growth by the mobilization of local
support through a comprehensive political and economic program.



1362 STATE DEPARTMENT EMPLOYEE LOYALTY INVESTIGATION

The N4A not only had to move ; it also suffered heavy losses in conflicts with
the Central Government troops. There have been sporadic small engagements
and several of considerable size. In the largest of these, the "incident" of Jan-
nary 1941, the N4A suffered about 7,000 casualties, furthermore, since that time
the N4A has been "illegal" by official mandate of the Central Government.
Recruits .ioining it, therefore, know that they will be regarded by the Kuomin-
tang as rebels and that this official vengeance will extend to their families.
The Eighth Route Army has also suffered under this opprobrium, but to a much
less extent.

What was the actual development of the N4A under these apparently unfavor-
able conditions?

At the end of its first year (spring 1939) the original strength of 12,000 nad
grown to 35,000. Operations extended from Shanghai to Hangchow, from
Nanking to Hsuchow, and from Hsuchow west along the Lunghai Railway to the
vicinity'^ of Kaifeng. Equipment had been brought in by recruits and captured
from the Japanese.

By the spring of 1942 strength had risen to 100,000 regulars. Operations in
the "area between the Yangtze and the Lunghai Railway had been extended to
the Kisngsu coast; it had also moved forces into the Japanese-occupied areas
around Hankow.

By the spring of 1944 the regular strength of the N4A had increased to 152,000
men. armed with 93,000 rifles, and supported by an organized Peoples Militia
of 550,000. Operations had been extended into East Chekiang and into South
and West Hupeh. Stable base areas had been created with a total population,
paying taxes only to Communist-controlled governments, of about 30,000,000.
All of these bases had withstood large-scale Japanese attacks and some areas
had not been penetrated by the Japanese for over 2 years.

In this development the N4A has increased its size by more than 12 times.
In a slightly longer period the Eighth Route Army has increased sixfold.

5. These results have been achieved by a force which started from almost
nothing. It has grown as it went along, out of the people. It has been an
orphan, without any powerful, well-established govenmient with large resources
behind it. It has had to supply itself entirely.

During much of its history it has shared areas with or been in close proximity
to Kuomintang tioops. Despite the advantages of supply, reenforcements and
government support, those Kuomintang forces did not have any such increase.