740.00119 PW/4–1746: Telegram

The Chargé in the United Kingdom ( Gallman ) to the Secretary of State


4264. British reply to US proposals regarding establishment of Inter-Allied Reparations Commission for Japan as outlined in Department’s 1868, February 28, has been delayed due to preoccupation of Treasury officials with problems of European reparations. However, this morning we were asked to meet with Sir David Waley of Treasury and Foreign Office representatives for informal discussion of matter. Waley has promised to submit in writing shortly questions which have arisen in British mind as result of studying US proposals, but following brief résumé of this morning’s talk probably covers most of matters Treasury will raise in writing.

Waley stated first question of importance seemed to British to be what kind of body should reparations commission be, and said definite British preference was for reparations to be dealt with by committee of Far Eastern Commission. This is felt by British to be only logical due to close connection between question of reparations and general economic future of Japan which is being studied by FEC. Problem of obtaining necessary expert staff was also brought up and British contention is that experts attached to FEC should be used as there are not enough qualified people available to set up separate body.

With regard to point 2 in Dept’s proposal in its 1868, Waley believes it will be unrealistic to fix a total reparations sum which can be divided amongst the various claimants before any decision is reached as to how much Jap industry is to be removed from country and where it is to go. In this connection Waley expressed personal opinion that question of what equipment USSR has taken from Manchuria will be a [Page 491] most important factor. He believed we should apply in Far East the policy enunciated by Ambassador Pauley at Potsdam with reference to German plants taken by Soviets.3 British believe we should not expect that any plants or equipment taken out of Manchuria will be returned, that this factor should be recognized and that care should therefore be taken to see to it that Russia gets no additional reparations. Problem of Jap equipment taken by China was also mentioned and difficulty was pointed out of determining whether China would still have basis for reparation claims against Japan after she had taken all Jap property in China. British feel such questions as these may have to be decided at top diplomatic level but that all other questions of detail should be referred to a committee of FEC.

British believe unlikely it will be possible to carry out terms of point 3 of US proposals and point out that position taken here is exact reverse of that taken by US representatives at Paris Reparations Conference, particularly as far as Latin American countries are concerned.

Waley made general comment that British were surprised that so much emphasis had been placed in US proposals on questions affecting Japanese external assets. British feel most important questions regarding reparations must be settled on basis of assets within Japan.

At close of meeting British stated their strong feeling that question of Jap reparations was urgent and that we should get down to definite concrete consideration of it soon as possible. They asked whether it was US intention that further talks on reparations should be held in London or Washington. We replied we had no information but expressed opinion that Department would probably wish further discussions carried on in Washington. Sir George Sansom4 is now in London and we are seeing him next week. It is suggested that if Department has any further comments on Jap reparations and could send them to Embassy before Sansom’s departure there might be an opportunity to go over them with him and British Treasury officials so that he would be in position to carry on more detailed talks when he returns to Washington during first week in May.5

  1. For Ambassador Pauley’s report, September 20, 1945, on German reparations, made to President Truman, see Foreign Relations, The Conference of Berlin (The Potsdam Conference), 1945, vol. ii, p. 940.
  2. British Minister in the United States.
  3. In airgram A–467, April 30, from London, the Embassy quoted the British reply of April 29 on the subject of Japanese reparations. It stated that Japanese external assets should be taken up by the Far Eastern Commission or some body appointed by it; that certain paragraphs in the American memorandum were more or less acceptable, although it was doubted that a total amount for Japanese reparations could be fixed in advance and consequently each country’s claim would not be known until completion of reparations payment by Japan. (740.00119 PW/4–3046)