740.00119 PW/4–3046
Memorandum by the Assistant Secretary of State for Occupied Areas (Hilldring) to Ambassador Edwin W. Pauley, Then at Tokyo
Mr. Clayton has asked me to answer your letter of April 30. I am able to report some progress in the implementation through the channels of our government and the Far Eastern Commission of the recommendations submitted by you on December 18, 1945.
The industrial removals proposals as contained in SWNCC 236/10,32 a copy of which was given to you prior to your departure from Washington, have been adopted by the State–War–Navy Coordinating Committee without change. Prior to their final clearance, they had been unofficially presented for consideration by the Far Eastern Commission. The FEC has approved the United States proposals for removal of facilities in the aircraft industry, Army and Navy arsenals, and light metals industry33 with the following changes:
- a.
- In paragraph II, the definition of light metals processing facilities was widened to include “extruding, forging, and casting”, as well as “rolling and drawing”, facilities.
- b.
- A new sub-paragraph, numbered II (a) (3), was added after sub-paragraph II (a) (2), to read: “Sufficient rolling and drawing equipment should be retained to handle 15,000 metric tons per annum of fabricated aluminum. Such equipment should be of a general purpose character, and can be obtained from any surplus available in other branches of the non-ferrous metals industry.”
- c.
- In connection with sub-paragraph 6 (a) (2), it was decided to deal with shipbuilding and ship repair facilities later under the category of shipbuilding, rather than in connection with Army and Navy arsenals.
Proposals for removal from other industries are now under negotiation in the FEC.
The State–War–Navy Coordinating Committee has under consideration your recommendation that a vesting decree be issued which would completely divest the Japanese of all external assets. It has not yet adopted a policy on this matter because it is considered desirable to await conclusion of State Department negotiations now proceeding with the Swiss over the disposition of German assets in Switzerland. It was believed that the outcome of those negotiations would help to show the way of best divesting Japanese external assets in neutral countries and making them available for reparations apportionment. [Page 513] This, I am informed, will involve a delay of approximately one month. It is my judgment that if we can incorporate in our external assets project in Japan the experience we shall have gained in the case of Germany by waiting only approximately one month, the delay is worthwhile.
I find that no action has been taken on your recommendation that the gold and other precious metals now in custody of United States Forces in Japan should be shipped to the United States Mint at San Francisco. I intend, however, without further delay, to get a U.S. policy on this issue.