The British Embassy to the Department of State

Ref: 2705/ /45


His Majesty’s Government have been considering, in respect of territories liberated from the Japanese, the problem of United Nations assets seized by Japanese or Puppet Authorities, Japanese and Puppet assets and the assets of other enemies. In the view of His Majesty’s Government these assets need to be identified and recorded as soon as possible, in order that they can be restored to their United Nations owners (in cases where no machinery exists for direct restoration) or included in reparations settlements. This is an urgent requirement and one which cannot appropriately be dealt with through bilateral diplomatic channels, since it will require coordinated action between all the Allied Powers concerned. No existing Inter-Allied machinery is adequate for this purpose and it would therefore [Page 993] seem desirable to establish an ad hoc organization composed of representatives of the Powers concerned, whose duty would be to receive and collate information about the assets.

Much intelligence material will be available in this connection from Japanese authorities in Japan (which will serve in many instances as a check on corresponding information received from the liberated territories) and it would thus seem desirable that the organization should be situated in Tokyo.
Such an organization would have no executive powers in respect of the disposal of the assets but would be authorized by the Allied Powers to collect information from:—
The Japanese Central authorities in Japan;
Any remaining Japanese local authorities in liberated territories as long as these continued to exist;
The theatre commanders in liberated territories; and
The authorities to which the control or administration of the territories was in due course transferred. If they considered it desirable, the Allied Governments could also send to their representatives on the organisation particulars for record of claims which they had received from their Nationals relating to assets in these territories.
In respect of information to be obtained from Japanese authorities it would be necessary that facilities for the work of the organisation should be afforded by the Supreme Commander for the Allied Powers, while information from Non-Japanese sources would be supplied to it by the theatre commanders and Governments concerned.
The proposed organisation could, in the first instance, be subordinated to and report to whatever body was established to deal with Inter-Allied consultation in regard to the liberated territories, and could eventually be emerged into the Inter-Allied body charged with settling the details of reparations by Japan.
It is realised that such an organisation would not succeed in obtaining full records of the assets in question but even incomplete records would limit subsequent controversy between the Allied Powers over restitution and reparations. It is felt, therefore, that much would be gained by the compilation of as complete lists as possible of:—
United Nations assets seized in liberated territories by Japanese or Puppet authorities (which may subsequently have been handed over by those authorities to other ownership);
Japanese assets in liberated territories (which may have been transferred to or cloaked by Non-Japanese ownership);
Assets of Non-Japanese enemies in liberated territories.