DIPLOMACY OF SECURITY: BEHIND THE NEGOTIATIONS OF ARTICLE 18 OF THE SINO-AMERICAN COOPERATIVE AGREEMENT, THE

Cryptologia, Jan 2005 by Gladwin, Lee A

ABSTRACT: In early February, 1942, Commander M. E. Miles proposed the establishment of a radio intelligence unit in China. 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 part of the Sino-American Cooperative Organization (SACO). Most of the commitments of China and NGC were formalized on 15 April 1943 with the signing of the Sino-American Cooperative Agreement (SACO). Article 18 required further delicate negotiations between Miles and General Tai Li, head of the Bureau of Investigation and Statistics (China's secret service). Miles was soon trapped between his commitment to Tai Li and Joseph Wenger's concern that any intercepted traffic shared with the Chinese would quickly become available to the Japanese via insecure Chinese codes. Fleet Radio Unit, China (FRUCHI) resolved this dilemma.

KEYWORDS: Sino American Cooperative Organization (SACO), China, Milton "Mary" Miles, Joseph Wenger, Tai Li, Chiang Kai-shek, Naval Group, China (NGC); Fleet Radio Unit, China (FRUCHI); "Friendship", Office of Strategic Services (OSS), Government Code and cipher School (GC&CS), Edward Travis, William F. Friedman, William J. Donovan, J. S. "Jack" Holtwick, Herbert O. Yardley, Claire L. Chennault.

In May of 1942, a group of about thirty senior naval enlisted men assembled in a cramped basement room of the Old Navy Building in Washington, DC. They were briefed by Captain Joseph Wenger, assistant director naval communications, Op-20-G, and lieutenant Commander Welker (Op-20-GX, Intercept and Direction Finding Control), that five volunteers were required for "a highly classified and hazardous mission of undetermined duration." Five volunteers, including Theodore J. Wildman, came forward. The remainder left the room. They were told that they could not be told their destination, their departure date or when they might return. Wenger and Welker did not want to send them, "as they felt that the mission would not be a useful one and would waste resources (but they had been overruled); that we probably would be considered expendable."1 This was their introduction to project Friendship and Naval Group, China (NGC), the umbrella organization for units that performed weather forecasting, coastal watching, sabotage, advising and training Chinese guerrillas, and interception and analysis of Japanese radio traffic. Friendship was short for Friendship Heights, Maryland, a Washington, DC suburb. Captain Milton Miles commanded NGC. Most of the commitments of the Chinese and NGC were formalized on 15 April 1943 with the signing of the Sino-American Cooperative Agreement (SACO). Miles was instructed, however, to pursue further clarification of Article 18, which dealt with the limits of codebreaking cooperation. Generalissimo Chiang Kai-shek appointed General Tai Li, head of the Bureau of Investigation and Statistics (China's secret service), to work with Miles. Miles, an old China hand, found himself caught between Article 18's pledge to cooperate with Tai Li and Wenger's concern with the possible leakage of intercepted intelligence to the Japanese via China's insecure codes. Fleet Radio Unit, China (FRUCHI) was the resolution of this dilemma.

In early February, 1942, then Commander M. E. Miles spoke with Commander Arthur McCollum of the Office of Naval Intelligence (ONI), about the establishment of a radio intelligence unit in China. McCollum referred him to Captain John R. Redman, head of Op-20-G, the communications intelligence unit.2 Redman spoke with Miles on or about 19 February 1942. Miles informed him that he had "information that the Chinese are operating an intelligence unit in Chengtu [in south-west China] with subordinate intercept units at various locations along the China Coastal Area." Miles suggested that "through a certain Attache in the Chinese Embassy we might obtain considerable valuable help and cooperation from the above Chinese intelligence unit" by helping him purchase ten tape recording machines. Redman noted, helpfully, that if the Corregidor codebreaking unit relocated to Southeast or Southwest Australia, the "distance from Southeast Australia to the center of the China Sea is almost as great as the distance from Honolulu to this point." It was too great "to intercept short range intermediate frequency transmissions in this area [between Japan, Singapore and the Philippines], particularly if the Japanese are smart enough to keep their power reduced." The proposed China sites represented an "ideal" location "equidistant from the Japanese Islands, the more important mandated islands, the Dutch East Indies, and Singapore."3

A message was dispatched to US Naval Attache (ALUSNA) Marine lieutenant Colonel James M. McHugh on 20 February asking the feasibility of establishing a small radio intelligence unit of about ten people in China's interior. Information about radio interception along China's coast was also requested.4