740.00119 P.W./6–145

Memorandum by the Acting Secretary of State to President Truman

Subject: Japanese Surrender Terms.

The following information has been transmitted by the OSS representative in Lisbon:

“On 7 May 1945 the OSS representative reported that during a contact with a regular source of varying reliability, source stated that he had been asked by Masutaro Inoue, Counsellor of the Japanese Legation in Portugal, to contact United States representatives. Source quoted Inoue as saying that the Japanese are ready to cease hostilities, provided they are allowed to retain possession of their home islands. Inoue stressed American and Japanese ‘common interests’ against the USSR. He said, however, that unconditional surrender would not be acceptable to Japan.

“(The OSS representative believes that Inoue selected this particular source to carry his message to American representatives, because of source’s long experience in Portugal and Japan.)

“On 19 May, the OSS representative reported that Inoue again had repeated to source his desire to talk with an American representative. On this occasion Inoue declared that actual peace terms were unimportant so long as the term ‘unconditional surrender’ was not employed. The Japanese, he asserted, are convinced that within a few weeks all of their wood and paper houses will be destroyed. Inoue insisted, however, that such destruction would not lead to unconditional surrender and that the war would still be prosecuted in China. The destruction of the Meiji Jinja shrine, Inoue added, had strengthened Japanese will to resist.

“(The information contained in the above messages was given the United States Ambassador by the OSS representative.)

“The OSS representative on 23 May reported that the United States Ambassador, after consultation with the British and Chinese, instructed that Inoue be told he must show proof that he is authorized [Page 486] to speak for the Japanese Government and that he is prepared to discuss unconditional surrender—the only basis acceptable to the United States.”

No action on our part is at present indicated but we shall carefully follow further developments along this general line.

Joseph C. Grew