- - Tuesday, February 19, 2013

By Linda Kush
Osprey Publishing, $25.95, 302 pages

The U.S. Navy conducting intelligence operations in the inner regions of China? Including arming and directing guerrilla bands to fight the Japanese?

As far-fetched as that might sound, such is exactly what happened in World War II, in what was one of the best kept secrets of the war. Although several books have been published about the “rice paddy navy,” Linda Kush’s book is the most thorough exploration of the work of an extraordinary joint venture, the Sino-American Cooperative Organization (SACO).

Two conflicts were being waged in China in the 1940s — the struggle against Japanese invaders and the civil war between communist insurgents and the government of Chiang Kai-shek.

The driving force behind SACO was Comdr. Milton “Mary” Miles, who had served for eight years in China in the 1920s and 1930s on river parole boats. (His feminine nickname was bestowed on him by Annapolis classmates, a takeoff on the name of the popular silent screen actress Mary Miles Minter.)

As war threatened, he and other veterans talked regularly about the need for naval intelligence activity in China. The Navy’s primary concern was obtaining weather reports. The United States had no weather monitoring west of Hawaii. The Japanese, conversely, had weather stations from Mongolia to Indonesia. Prevailing winds out of Asia blew from west to east. A storm in China meant heavy waves in the Pacific the next day or so.

Ordered to China during the first weeks of the war, Miles realized that he must enlist the support of Chiang’s spymaster Gen. Dai Li, who was perhaps the second most powerful figure in the government. However, Miles was taken aback when he read reports on Dai from the U.S. Embassy. He was billed “the Himmler of China.” Through an estimated 300,000 agents in Southeast Asia, “he ruthlessly protected Chiang Kai-shek’s political, military and governing interest, executing and imprisoning Chiang’s enemies” through “a Gestapo-like organization known as the Blue Shirts.” According to the State Department dispatches, “he even ordered the execution of his own mother — twice.” (A false claim, as it turned out.)

Miles read these reports with a cocked eyebrow. He knew that many embassy officers were reflexively anti-Chiang, and he decided to make his own judgment when he met Dai in person. Miles made another important decision at the outset. He would not recruit any “old China hands,” the Western businessmen and government bureaucrats who had embarrassed him with their patronizing behavior during his China service. The Chinese painted these persons “with a broad bush as exploitative racists.”

At their first meeting, Dai greeted Miles with “a penetrating smile and a broad, gold-toothed grin.” As they chatted, “Miles searched for signs of the sinister character described in the State Department files.” He found none. Dai readily agreed to Miles’ plan to set up weather stations, send radio transmissions and help train guerrillas. Moreover, Dai said he would provide operating bases. An embassy officer watched in awe. As he cabled Washington, “Commander Miles has gotten off to a flying start and has been taken entirely into the confidence of the Chinese Secret Service. He has seen and done things I never thought any foreigner would be able to do.”

In due course, the Sino-American Cooperative Organization had nearly 3,000 American servicemen (mainly sailors with a few Marines and soldiers) in its work. There was also 97,000 organized Chinese guerrillas, and another 20,000 “individualists” — pirates and lone-wolf saboteurs.

The main training school, dubbed “Happy Valley,” graduated classes of several hundred Chinese fighters every two months. In addition to weather reporting, SACO intercepted and cracked Japanese codes, blew up Japanese supply dumps, destroyed bridges and sank scores of enemy vessels. In a post-war history, SACO claimed the felling of some 26,000 Japanese, while losing only five of its own men.

Miles did have many problems. Foremost was the fact that his contingent was utterly dependent on the Army and its Air Corps for supplies, which had to be flown in via India.

A more serious challenge was posed by Gen. William Donovan and his Office of Strategic Services, designated as the primary intelligence and special operations command during the war. Donovan “badly wanted to get into China,” to the extent he decided to bypass Chiang and Dai Li and send ad hoc teams into the country. Unlike Miles, Donovan relied heavily on “old China hands,” including R.V. Starr who had wide commercial holdings in China in insurance and publishing. The Chinese, of course, were infuriated. When questioned by Miles, Donovan said his men “were in China on personal business.”

A mighty row ensued. At a meeting in Dai’s home, “Donovan repeated that OSS was going to operate in China whether Dai liked it or not. The party deteriorated into a shouting match during which Dai threatened to kill any unauthorized OSS agents in China, and Donovan threatened to retaliate by killing Nationalist Chinese generals tit for tat.”

When Donovan appealed to Chiang the next day, the generalissimo replied “that China could no more tolerate an unauthorized American intelligence operations in China than the Americans would accept the same from the Chinese in the United States.”

In the end, after a bureaucratic war too complex to summarize here, OSS and SACO tacitly agreed to go their separate ways — and Donovan had to do his work without any cooperation from the Chinese.

Miles retired as a vice admiral. On his 60th birthday, Chiang sent him a scroll reading, “Two men in the same boat help each other.”

Joseph C. Goulden’s most recent book is “The Dictionary of Espionage” (Dover, 2012).

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