740.00119 P.W./5–146

Memorandum by the State Department Member of the State–War–Navy Coordinating Committee ( Hilldring ) to the Secretary of the Committee ( Moseley )

Subject: SWNCC 236/1621—Memorandum by the Acting Navy Member, SWNCC

With reference to SWNCC 236/16, the reservation accompanying the Navy Department’s approval of SWNCC 236/10 and SWNCC 236/15, the State Department concurs in paragraphs 4 and 5 but is unable to concur in paragraph 3. The reservation concerning determination of United States occupation costs and their application as a first charge against all Japanese assets would in effect postpone indefinitely, if not wholly negate, implementation of the interim reparations removals program which Mr. Pauley, SCAP, and the Far East Subcommittee of SWNCC and the J.C.S. have regarded as a matter of urgency.
The State Department recognizes the importance of formulation by the United States Government of a policy dealing with definition of costs of occupation and methods by which they may be met. The State Department has formulated proposals on this subject which will, in due course, be submitted to SWNCC for its consideration. SWNCC 236/10 imposes no limitation on the freedom of the United States Government to favor such policies as it may wish with respect to categories and priorities of reparations claims, including those based on occupation costs. The State Department fully concurs in the importance of protecting United States interests in this connection, but does not believe that the reparations transfers proposed in SWNCC 236/10 in any way prejudice in this respect the position of this Government.
J. H. Hilldring
  1. May 9; see footnote 10, p. 493.