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

Cryptologia, Jan 2005 by Gladwin, Lee A

On 28 December 1943, Miles, Holtwick, Holcomb, and Lt. (jg) Taylor met with Tai Li's representatives. The Chinese representatives laid six terms upon the table:

1. Joint operation.

2. All phases of intercept, traffic analysis and cryptanalysis to be covered.

3. American officer to act as Chief of the section, with a Chinese Deputy Chief. Other personnel to be matched man for man.

4. All intercepted raw material and all intelligence resulting therefrom to be freely available to the representatives of both countries for joint study. These results to be disseminated outside of the section only on joint approval of the American Section Chief and his Chinese deputy.

5. Whether Navy, Air or Army systems to be main points of attack, subject to a mutual decision by the American section Chief and his Chinese Deputy.

6. It is contemplated that eventually all RI work will be concentrated in the Thai House. Until that location is ready, the White House (Holcomb's Unit) to remain in status quo. The Chinese are ready to participate whenever the Americans indicate that they are ready to use them.

Holtwick agreed readily with points 1 through 4. When it came to point 5, he noted that the experience of naval personnel was limited to naval systems. Point 6 was the source of some disagreement. Op-20-G wrote him on 19 December: "If Naval section can retain privacy of Ultra messages and affairs, no great harm is seen in amalgamation, but if this is not possible, it would probably become necessary to end all connections of unit outside SACO." Holtwick accordingly informed the Chinese that "his instructions were to form a separate unit to implement Article 18 independent of Holcomb's unit. Any unification of his group with Holcomb's "would require approval by Washington." Hsiao protested that "the only unit authorized under Article 18 is a combined unit, and therefore a separate one cannot legally exist." Apparently, the Chinese had been burned by a similar agreement with the Russians whereby the Russians were able to send "raw materials to Moscow, without instructing the Chinese in RI procedure" and the Chinese received no intelligence. Holtwick asked assurances that if a unified RI unit were approved by Washington, that "the present practice of sending all copies of intercepted raw material to Washington could be continued."

As a sign of good faith, the Americans offered to begin training 26 Chinese, five in traffic analysis and 21 in interception. The Chinese agreed to take up the offer with Tai Li. A report of the conference, together with Tai Li's response would be brought to Op-20-G by Holcomb and Taylor who were departing Chungking on 31 December.40

An initial report of the conference was cabled in three parts to Op-20-G. On 30 December, Purnell sent a message to Miles indicating that the six points were being favorably considered by the vice Chief of Naval Operations along with Holtwick's proposed solution to the problem. Holtwick recommended that Holcomb's group "establish interpretative Radio Intelligence unit having normal connection with DNS [Director Of Naval Communications] which initially will serve with and under [General Claire L.] Chennault, 14th Air Force, Baker and Holtwick with bulk of both present navy units form Chinese-American intercept, traffic analysis and cryptoanalysis unit in SACO accordance Article XVIII." A communications intelligence unit would be established "under Chennault to be available as nucleus for possible later formation of US Army-Navy interpretive unit." If Chennault approved, the proposal for a Navy crypto unit to work for the Army would require War Department authorization. Miles was informed that, while final decision awaited the arrival of Holcomb in Washington, he could "furnish Holtwick's unit with number of persons withdrawn from Holcomb as well as small additional number from time to time."41