Foreign Relations of the United States, 1952–1954, China and Japan, Volume XIV, Part 2

S/S–NSC files, lot 63 D 351, NSC 125 Series

No. 588
Note by the Executive Secretary (Lay) to the National Security Council

top secret
NSC 125/2

Washington, August 7, 1952.

United States Objectives and Courses of Action With Respect to Japan

References:

A.

NSC 125, NSC 125/1 and Annex to NSC 125/1

B.

Memos for NSC from Executive Secretary, same subject, dated August 1¹ and August 7, 1952²

C.

NSC Action No. 660³

D.

NSC 48/5

The National Security Council, the Secretaries of the Treasury and Commerce and the Acting Director of Defense Mobilization, at the 121st Council meeting with the President presiding, considered NSC 125/1 on the subject and adopted it, subject to the amendment of subparagraphs (11) and (12) on pages 15 and 17 thereof, together with a footnote to subparagraph (11)⁴ (NSC Action No. 660).

NSC 125/1, as amended and adopted by the National Security Council and subsequently approved by the President on August 7, 1952, is transmitted herewith at the direction of the President for implementation by all appropriate executive departments and agencies of the U.S. Government under the coordination of the Secretaries of State and Defense.

In approving the enclosure, the President further directed that the general structure of a U.S. program to implement the courses of action enumerated in paragraph 7 of NSC 125/2 should, where suitable, be explored by the Department of State in consultation with the Departments of Defense and Commerce, the Office of the Director for Mutual Security, the Office of Defense Mobilization and other appropriate agencies, and that the main elements of such a program should be reported back to the National Security Council at the earliest possible time.

The enclosed report accordingly supersedes NSC 125, “Interim Policy With Respect to Japan”, and paragraphs 6.-c. and 10 of NSC 48/5.

James S. Lay, Jr.

[Enclosure]

Statement of Policy Proposed by the National Security Council on United States Objectives and Courses of Action With Respect to Japan

general considerations

1. Estimates

The United States should proceed in its determination of policy with respect to Japan on the basis of the following estimates:

a. Japan will maintain a close alignment with the United States at least through 1954.

b. Japan’s basic national objectives will be to rebuild its national strength and to enhance its position in the Far East. The most probable long-term prospect is that Japan will seek to increase its freedom of action in Asia within the framework of a generally pro-Western orientation.

c. Japan will take all feasible military measures to defend its territory from attack and the United States and Japan will develop combined measures to maintain Japan’s security.

2. United States security interests in the Pacific area

a. The security of Japan^* is of such importance to the United States position in the Pacific area that the United States would fight to prevent hostile forces from gaining control of any part of the territory of Japan.

b. It is in the interest of the United States to assist Japan rapidly to develop (1) the means for its own defense, thereby relieving the United States of sole responsibility for Japan’s security, and thereafter (2) the capability to contribute to the defense of other free nations of the Pacific area.

c. The United States should encourage and assist Japan to rearm itself with conventional weapons. It is important for United States security interests that this policy be related, in terms of timing and nature of assistance, to such factors as the political situation in the Far East, the internal situation in Japan, relations between Japan and other Far Eastern countries, and to the ways in which the United States desires to influence these situations and relations.

d. The United States security interests will require long-term retention of bases in the Ryukyu and Bonin Islands in view of the eventual possibility that future Japanese governments may severely restrict or exclude United States use of military facilities in Japan proper. Extremely careful preparation, including consultation with the Japanese Government and efforts to influence Japanese public opinion, will be required on whatever long-term arrangements the United States decides to put into effect regarding the Ryukyus to prevent this from becoming such an acute issue in Japanese domestic political affairs as to affect Japan’s relations with the United States.

e. For the foreseeable future it will be in the interest of the United States to maintain adequate armed forces in the Pacific area and to encourage appropriate arrangements in the Far East which would strengthen the security of Japan, the Ryukyus, and other areas vital to U.S. defense.

3. The power position in the Pacific area

a. The military capability of Soviet and Chinese Communist forces in the Far East presents a major threat to Japan and to the security of the United States in the Pacific area. A sovereign Japan faces a power complex in which the USSR and the United States each possesses military potential far superior to that of Japan. However, it is probable that Japan will in time develop sufficient power to become a major element in Far Eastern affairs.

b. For at least the immediate future Japan will be aligned with the United States and largely dependent upon the United States for security from external attack and for economic stability. It is in the interest of the United States that Japan rapidly develop the capability for self-defense and that, in the face of Soviet and Chinese Communist power in the Far East, Japan’s military strength be developed to the extent that it can contribute significantly to the security of the free nations of the Pacific area and of the northern portion of the off-shore island chain.

c. Japan will increasingly seek to achieve an independent role in Far Eastern affairs. Japan’s flexibility of maneuver and freedom of choice will increase as Japan develops the capability for self-defense and economic and military self-support. In this situation Japan’s policies and actions will be determined on the basis of Japan’s conception of self-interest, and this conception may come into conflict with the interests of the United States.

d. Japan may try to take advantage of the United States-USSR conflict; desiring to restore Japanese influence on the continent of Asia and to regain the advantages of China trade, Japan might conclude that an accommodation with Communist-controlled areas in Asia would serve Japanese interests. The extent and nature of this “accommodation” would be conditioned by Japan’s ability to satisfy its economic needs through relations with the free world and her international undertakings in the field of export controls.

e. The continuance of Japan’s alignment with the United States will depend in large degree upon maintenance by the United States of a strong military posture in the Pacific and the pursuance of policies by the United States and other free nations which encourage the growth in Japan of basic economic strength and the close participation by Japan with the United States in developing satisfactory security relationships among all the non-Communist countries of the Pacific area and satisfactory economic relationships both among them and between them and other parts of the free world. It is also possible, however, that even without an accommodation with Communist influence in Asia, the Japanese will attempt to build up a paramount position of influence in the Far East to the detriment of the independence of the other free nations of the Far East and contrary to the interests of the United States.

4. The relationship between Japan and the United States

a. For the time being the security interests of Japan and the United States in the Pacific area are generally parallel. The United States should act in such a way that this mutuality of interest, which is necessary to effective cooperation, is maintained and that Japan is convinced of its reality. The achievement of this result will require, among other things, maintenance of a strong United States power position in the Pacific, respect for Japan’s status as a sovereign independent state, and the development and implementation of policies designed to accord Japan opportunities for the satisfaction of legitimate economic needs.

b. It should be the policy of the United States to encourage the development and strengthening by Japan of the principles and practices of representative government. It is in the interest of the United States to avoid actions which would have the effect of undermining the stability and popular position of the responsible pro-Western political forces in Japan. The United States should not interfere in Japanese domestic affairs except to carry out Article I of the United States–Japan Security Treaty.

5. Japan’s Position in the Pacific

a. A strong, stable and independent Japan restored to an influential position in Asia could be the most effective ally of the United States in Asia, provided Japan’s independent position is directed in the interest of the free world and does not lead to a growing isolation from the West, either in an attempt to play off the USSR and the United States or to dominate the other countries of Asia. South and Southeast Asia would probably accept the restoration of Japan to a position of power in order to contain the Communist bloc, as long as there is a balanced distribution of power in the region so that Japan does not become a dominating influence.

b. In the long run, Japan’s access to raw materials and markets for her exports will significantly affect Japan’s basic orientation. At present Japan has a comfortable foreign exchange reserve position and may expect sizeable dollar earnings from military expenditures for at least two years. Over the longer term, however, Japan’s position requires that every effort be made to expand Japan’s earnings from normal commerce and from programs of U.S. military and economic assistance to other countries, with a view to avoiding, if possible any requirement for direct economic assistance; at the same time should these measures prove inadequate, consideration should also be given to the provision of direct economic assistance when and if necessary.

c. United States policy should aim to encourage Japanese participation in the economic development of the free nations of the Pacific. Satisfactory economic arrangements between Japan and South and Southeast Asia will strengthen these areas against Communist exploitation.

d. In the relations between Japan and the other nations of Asia, the United States should not appear as a sponsor or advocate of Japan as against any of the other free nations. The United States should resist any design by Japan to serve as a broker between the United States and Asia or to restrict the United States position in Asia. However, the United States should seek to facilitate the difficult adjustments arising from Japan’s return to the international community through the exercise of the U.S. position of leadership among the nations of the Pacific area and as a moderating or, if necessary, mediating influence.

e. As a long term policy, the United States should encourage and where desirable participate in collective security arrangements in the Pacific area which would include Japan as an important member. Such arrangements would facilitate Japan’s contribution to the security and economy of the free nations of the area, would encourage Japan’s adherence to the free world, and would tend to allay fears among Pacific nations of a resurgence of Japanese ambition to dominate Asia.

objectives

6. In accordance with the general considerations above, the United States should seek in Japan the following objectives:

a. Preservation of the security and independence of Japan;

b. A Japan allied to the United States;

c. A prosperous Japanese economy with satisfactory economic relationships, particularly those providing access to sources of food, raw materials and markets, between Japan and other free countries;

d. A politically stable Japan maintaining the principles of representative government;

e. A Japan capable of defense against internal subversion and external aggression;

f. A Japan willing and able to contribute to the security of the Pacific area;

g. The development of Japan’s industrial potential as a source of supply for the free world;

h. The inclusion of Japan in arrangements in the Pacific area for purposes of mutual security and economic benefit;

i. The obtaining of Japanese membership in the United Nations.

courses of action

7. With respect to Japan, the United States should pursue the following courses of action in lieu of those contained in Paragraph 10 of NSC 48/5:

a. Political

(1) Strive to maintain a political relationship of trust and confidence between Japan and the United States, observing the principle of consultation between United States and Japanese authorities on matters related to all inter-governmental arrangements and agreements, and avoiding acts which interfere in Japanese domestic affairs, except to carry out Article I of the United States–Japan Security Treaty.

(2) Take such steps as are feasible to achieve membership for Japan in the United Nations and other international organizations.

(3) Negotiate with Japan on behalf of the Unified Command, the establishment of appropriate rights and responsibilities for all United Nations forces engaged in the Korean action when within the national boundaries of Japan.

(4) Encourage Japan and other free countries of the Pacific area to develop relationships which will contribute to their security and the development of their economic ties through such arrangements as may be determined to be consistent with the interest of the United States.

(5) Encourage Japan to preserve and maintain the principles and practices of representative government.

(6) Encourage and appropriately assist Japan to deal with the internal communist menace in ways believed most effective and desirable and encourage Japan to reach a realistic appraisal of the dangers inherent in “business as usual” relationships with the Soviet Union and Soviet-dominated Communist governments.

(7) Conduct in Japan an information, cultural relations, and other psychological programs designed among other things to create and develop in the Japanese Government and people recognition and understanding of the basic mutual interests of the United States and Japan and one which will combat the misconceptions widely circulated by Soviet propaganda agencies.

(8) In order to strengthen friendly relations between United States personnel in Japan and the Japanese people, maintain procedures for minimizing friction and settling disputes between instrumentalities of the United States and Japanese (particularly in the case of employer-employee relationships) and conduct continuing orientation and information programs among U.S. personnel stationed in Japan.

b. Military

(1) The long-term military requirements of the United States in and about the Ryukyus, Bonins and other islands covered by Article III of the Peace Treaty with Japan, will be sought in accordance with recommendations to the President by the Departments of State and Defense.

(2) Assist Japan to develop military forces which will eventually be capable of assuming responsibility for defense of Japan against external aggression. As a first stage, assist Japan to develop a balanced ten-division ground force and appropriate air and naval arms.

(3) Assist Japan, upon completion of the foregoing and in the light of circumstances then prevailing, to develop military capabilities for participating in the defense of the free nations of the Pacific area, keeping under constant review the nature and timing of assistance which will best serve the security interests of the United States.

(4) Until Japanese forces are adequate for the defense of Japan, maintain in and around Japan United States forces in sufficient strength so that, in collaboration with Japanese forces, they can secure Japan against external aggression, and enter into agreement with Japan as soon as possible to establish working arrangements which will permit, in event of hostilities or the imminent threat thereof, the creation of effective combined forces.

(5) Continue to maintain forces in Japan for the support of United Nations operations in Korea, so long as they are required.

(6) Encourage Japan to develop the industrial capacity to produce such military equipment and supplies as are determined to be in the United States interest for Japan to produce.

c. Economic

(1) Facilitate the achievement by Japan of an economy which is self-supporting, expanding and capable of maintaining adequate living standards, supporting the defense of Japan, and contributing to the defense of the Pacific area.

(2) Keep Japan’s internal and external financial position under constant review in connection with United States security objectives, including in the review the possibility of rendering appropriate economic assistance if necessary.

(3) Encourage the expansion of international trade on a non-discriminatory, multilateral basis between Japan and other free nations, through the general lowering of tariffs and other governmentally imposed trade restrictions in accordance with the principles of GATT. In particular, the entry of Japanese goods into the United States market should be facilitated.

(4) Encourage the reestablishment of mutually beneficial business relationships between United States and Japanese nationals through the development of trade and investment opportunities.

(5) Utilize Japan to the extent practicable in the interests of the United States as a source of supply on a commercial basis for equipment and supplies procured for U.S. armed forces or under United States aid programs for other countries.

(6) Seek to prevent Japan from becoming dependent on China and other Communist-dominated areas for essential food and raw material supplies through stimulation of Japan’s trade with other free nations and through implementation of programs designed to develop sources of supply for Japan among the free nations.

(7) Encourage Japanese contribution to the economic development of countries of South and Southeast Asia through participation in arrangements, including especially those dealing with trade and investment, formed for the purpose of increasing the economic strength and political stability of the Far East.

(8) Encourage the expansion, rehabilitation and modernization of Japan’s industries on a sound economic basis so as to increase Japan’s export potential and to improve its competitive position in world markets.

(9) Encourage Japan to maintain a free, competitive economy and to carry on its foreign trade and commerce in conformity with internationally accepted fair trade practices.

(10) Seek adequate financial and material contribution by Japan to mutual security objectives, having due regard for the political sensitivities of the Japanese Government and people and for the essential requirements of the civilian sector of the Japanese economy.

(11) Continue the understanding with the Japanese Government that:

(a) it will retain under export control substantially the same list of commodities which it now subjects to such controls;

(b) it will maintain its embargo on all items on the U.S. Security Lists (including the Battle Act⁵ Lists) as well as those items which after careful review are judged to be of security significance to Communist China and North Korea at least so long as there is communist aggression in the Far East^†; and

(c) the residual commodities now controlled by Japan will be restricted in such manner as the U.S. and Japanese Governments may agree represent a proper safeguard to their mutual security.

(12) Export controls to be maintained in the post-aggression period should be determined through agreement reached by negotiation among the free nations principally interested in trade with the Far East areas of the Soviet bloc.

1. This memorandum transmitted the JCS memorandum, Document 582, to the NSC.
2. Not printed; it is a formal notification to Council members of the President’s approval that day of NSC 125/2.
3. This action, taken at the Council meeting held on Aug. 6, is described in the first paragraph of Lay’s note. (S/S–NSC (Miscellaneous) files, lot 66 D 95)
4. An unsigned memorandum for the President dated Aug. 7, contains a summary of the discussion at the NSC meeting held the previous day. It includes a one-sentence summary of the consideration of NSC 125/1: “Mr. Bruce, Secretary Lovett and Secretary Sawyer discussed the draft proposals for eliminating the split views on subparagraphs (11) and (12) on pages 15 and 16 of NSC 125/1, and agreed on a modification that was then accepted by all present.” (Truman Library, Truman papers, President’s Secretary’s file)
5. Japan is a part of the off-shore U.S. defense line which also includes the Ryukyus, the Philippines, Australia and New Zealand. [Footnote in the source text.]
5. For text of the Mutual Defense Assistance Control Act of 1951, approved Oct. 26, see 65 Stat 644.
6. Note: It is understood that the statement in subparagraph (b) above constitutes the U.S. objective and the successful accomplishment of that objective will require that the U.S. and Japanese Governments agree bilaterally on the security significance of the items. [Footnote in the source text.]