740.00119 PW/2–146

Draft Message Prepared for General of the Army Douglas MacArthur 81

Reports suggest that Japanese Government showing strong tendency to shirk its proper responsibility for ensuring effective utilization of Japanese economic resources during present critical period. In addition to delaying economic recovery and burdening you with details of economic policy, this trend if correctly reported will eventually identify occupation authorities more closely in public mind with responsibility for Japanese living conditions which are likely to be bad for some time as a result of conditions beyond control of occupation authorities.

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Your views on this situation appreciated together with estimate of anticipated change following elections. Would welcome any suggestion as to Washington actions which might be of assistance to you in forcing Japanese to recognize and discharge effectively their responsibility for full production and efficient distribution in agriculture and industry.

Recognized here that one major factor hampering industrial initiative and reorganization by Japanese is uncertainty regarding reparations removals. Every effort is being made here to secure early establishment inter-allied reparations commission and adoption of interim program based on Pauley recommendations.82

  1. Copy transmitted to Lt. Col. Ernest A. Gross, U.S. Army, Civil Affairs Division, War Department, by Edwin M. Martin, Chief of the Division of Japanese and Korean Economic Affairs, on February 1, with request that the message be sent to SCAP.
  2. For report of December 18, 1945, by Ambassador Edwin W. Pauley, Personal Representative of President Truman on Reparations, see text in his Report on Japanese Reparations to the President of the United States, November 1945 to April 1946, Department of State Publication 3174, Far Eastern Series 25 (Washington, Government Printing Office [July 1948]), Reference 1–a. See also Mr. Pauley’s telegram of December 6, 1945, to President Truman, Foreign Relations, 1945, vol. vi, p. 1004.