Lot 54D423
Memorandum by the United States Representative on the Far Eastern Commission (Hamilton) and the Director of the Office of Northeast Asian Affairs (Allison) to the Consultant to the Secretary (Dulles)
Subject: Japanese Peace Treaty
Attached at Tab A is a proposed “Outline of Procedural Steps for a Japanese Peace Treaty”. As indicated in item II of the outline, the date by which agreement with the Defense Department on the security aspects of the treaty may be hoped for may depend in large degree on the progress of events in Korea. Except for this unknown the proposed schedule seems within the range of practicality. Possibilities of being able to hold the Preliminary Peace Conference while the General Assembly is in session seem so remote that that idea has been abandoned in the outline. The suggestion is advanced, however, that the U.S. publicly announce in mid-September that treaty terms and procedures are being discussed among the concerned governments and that the U.S. is proposing that a peace conference be convened in January. Though an earlier conference date would be desirable if the [Page 1238] Assembly session did not prevent, the knowledge that concrete steps for a treaty are being taken should satisfactorily compose the situation in Japan until January. It would also take the wind out of any Soviet proposal for a peace conference during this period.
As indicated in item I of the outline, there are a half dozen political and economic articles in the December 29 treaty draft1 which were not fully agreed at the time of preparation of the draft or about which questions have been raised since. Agreed language on three of these articles involving relatively minor issues is now being worked out, but it is hoped that on the other three you may be able to meet with us at your convenience to reach the necessary decisions.
The first of these major unresolved articles is Article I. In this Article, following a reference to the high purposes, principles and standards of the United Nations Charter and to Japan’s progress under the occupation in the direction of the standards of conduct prescribed in the Charter, Japan undertakes to apply forthwith for membership in the UN, to accept the Charter as its guide and inspiration pending its admission to membership, to observe and protect for all persons under its jurisdiction the fundamental human rights and freedoms, and “to observe the high principles relating to human rights and social justice embodied in legislation enacted in Japan during the last five years, …”2 Although the Article is phrased as much to make it an appeal and a challenge to the Japanese as it is to make it a legally enforceable treaty obligation, it nevertheless stands as a treaty requirement that Japan preserve the essential elements of the political and social reforms introduced during the occupation.
Doubt has, as you know, been expressed by Mr. Kennan and others whether such a requirement should be made. It is contended that the decision whether the reforms are to be preserved must, and in the last analysis will, be made by the Japanese themselves in their own way and in their own time, and that a treaty stipulation would merely lead to difficulty between the Allies and Japan. Those believing that the existing general requirement in the Article should, on the contrary, be retained argue primarily that the Japanese have not yet had sufficient experience with the reforms to enable them to make an intelligent decision whether or in what degree they wish to preserve them, and that a treaty requirement is necessary to ensure that they gain added experience before taking that decision. It is also held that omission of the requirement would be interpreted by the Japanese as evidence that the Allies did not care whether the reforms were kept or abandoned, further prejudicing their prospects of becoming a permanent feature of Japanese life.
[Page 1239]The second unresolved article is Article 4 on the disposition of Formosa, a problem related to and partly dependent on the question of China’s participation at the peace conference. In his statement of June 27 the President said that “the determination of the future status of Formosa must await the restoration of security in the Pacific, a peace settlement with Japan, or consideration by the United Nations”.3 It would seem that preliminary decisions on the Formosa and Chinese participation questions should now be reached.
The third major unresolved article is Article 32 with its accompanying Annex V. As Annex V now reads Japan is required to pay 50 percent compensation to nationals of the Allied and Associated Powers whose property in Japan was lost or damaged as a result of the war. The percentage in the treaties with the German satellites was 66⅔. In commenting on an earlier Japanese treaty draft General MacArthur recommended (on the basis of what is believed to have been an exaggerated conception of the probable amount of the compensation bill) that Japan not be required to pay any compensation for such loss or damage. This recommendation was rejected by the economic offices of the Department so far as the economic basis of General MacArthur’s argument is concerned. The economists’ position was that the compensation bill would at the most be 40 billion yen (1 dollar equals 360 yen) rather than the 117 billion yen figure General MacArthur had cited, and that payment of this amount spread over a number of years would not be a serious burden on Japan. Doubts regarding the wisdom of requiring such compensation were later expressed by some higher officers of the Department, however, and two months ago the matter was put up to Mr. Butterworth (Tab B)4 with the suggestion that he might wish to have the question decided at a high level.
It was Mr. Butterworth’s view that it would be more consistent with our general position that Japan could stand no further reparations or other extraordinary economic burdens and should be afforded maximum opportunity to revive its economy if the U.S. took the position, at least initially, that no compensation should be required. If it appeared advisable during the treaty negotiations this position might be relaxed to some extent. Mr. Butterworth’s position was subsequently discussed with representatives of the economic and legal offices. The former maintained that the compensation program proposed in the treaty draft was entirely feasible economically but that the question whether our original proposal should be partial compensation or no compensation was a political one. The legal representatives [Page 1240] favored leaving the draft as it is in view of the similar treatment given other comparable situations after both the first and second World Wars. From a negotiating point of view it has been contended in opposition to Mr. Butterworth’s position that while a no-compensation stand has the merit of consistency with our overall position for the protection of the Japanese economy, it carries that position to extreme lengths. Those of this view fear that presentation to the British and others of a U.S. draft which makes no concessions whatsoever to their point of view may turn them against the draft as a whole and increase the difficulty of our negotiating task.
It would be appreciated if you would set a time when we might have, say, an hour with you to discuss these questions.
- Not printed.↩
- Omission in the source text.↩
- In this same statement the President had said in part that he had ordered the United States Seventh Fleet to prevent any attack on Formosa and was calling upon the Chinese Government on Formosa to cease all air and sea operations against the mainland. For text, see Department of State Bulletin, July 3, 1950, p. 5.↩
- Not printed.↩