Foreign Relations of the United States, 1961–1963, Volume XXII, Northeast Asia

369. Letter From Secretary of State Rusk to the Deputy Secretary of Defense (Gilpatric)⁰

Washington, February 25, 1963.

Dear Ros: Thank you for your letter of February 8, 1963,¹ enclosing a copy of a memorandum to the President setting forth the conclusions reached during your recent meetings in Tokyo.

I am pleased to learn that your visit to Tokyo went so well. Ambassador Reischauer shares your belief that substantial progress has been made in our efforts to stimulate a greater Japanese defense effort.² I believe the decision to form a defense study group holds particular promise, and we are already working to establish it. I understand it is your intention that the additional series of meetings mentioned in the final paragraph of your memorandum to the President would be held in this forum.

I believe our efforts so far have demonstrated that we must approach the objective of greater military offsets in Japan by going back to fundamentals—agreeing on the threat and developing therefrom missions, then requirements, then equipment lists, from which will finally emerge opportunities for sales of U.S. military materiel easing our balance of payments situation. The defense study group should be an ideal forum for this approach.

The Department of State would of course wish to be consulted about any significant alteration in the U.S. military posture in Japan. As Ambassador Reischauer has pointed out,³ reductions producing even relatively small balance of payments savings might severely undermine the confidence of Japan in our determination to maintain strong defenses in the Far East, and thus weaken its desire to maintain its Free World alignment.

Finally, I think it should be borne in mind that Japan represents a highly favorable market for United States civilian exports. The principal limiting factor to steadily expanding United States civilian exports to Japan will continue to be Japan’s ability to earn the foreign exchange necessary to pay for them.⁴ This element in our economic relations with Japan should be kept in mind as we deal with the balance of payments drain associated with our forces there.⁵

With warm regards, Sincerely,

Dean⁶

0. Source: Kennedy Library, National Security Files, Countries Series, Japan, 2/63. Drafted by Kingdon W. Swayne of EA/J and cleared in FE/EA, U, and G/PM. Attached to a covering note from Brubeck to McGeorge Bundy, February 25.
1. Document 368.
2. Telegram 1848 from Tokyo, February 8. (Department of State, Central Files,DEF 1 JAPAN)
3. In telegram 1904 from Tokyo, February 14. (Ibid.)
4. Dillon, who had received a copy of this letter, stated in a March 8 letter to Rusk that this paragraph implied a direct link between the level of U.S. military expenditures in Japan and Japan remaining a favorable market for U.S. exports, but that such a direct link was “contrary to the principle of multilateral trade and payments” that was “the foundation of our entire international trade and financial policy.” He believed there was no question of the overall adequacy of Japan’s foreign currency earnings and its foreign exchange reserves were increasing, and he suggested a State-Defense-Treasury meeting once the JCS had completed its analyses of possible reductions in Japan. (Kennedy Library, National Security Files, Countries Series, Japan, 3/63)
5. A note from Michael Forrestal of the NSC Staff to Bundy dated February 26 noted: “It is pretty obvious that State is the Department which wants to go easy on reduction of military expenditures in Japan. I have commented to Gilpatric that we thought Defense might move more briskly. Unless you think this is enough, I will take the matter up with Averell [Harriman] who may not be sympathetic.” (Ibid.)
6. A handwritten postscript reads: “This supplements my earlier note! DR” The earlier handwritten note, February 9, reads: “Dear Ros—many thanks for your trip to Japan—it was a great help to us and you handled it magnificently. Dean” (Ibid.)