Foreign Relations of the United States, 1946, The Far East, Volume VIII

740.00119 PW/12–946

Proposed Policy Statement for the Far Eastern Commission⁴⁰

undated

The Selection of Plants for Reparations Removals, Destruction or Retention in Japan

Within those amounts of industrial capacity determined by the Far Eastern Commission for retention in Japan, for destruction or for removal as reparations, the Supreme Commander for the Allied Powers should, in selecting specific plants, machinery, equipment, and other facilities, give consideration to the following:

1. Security and industrial disarmament requirements: Facilities which have been employed in primary and secondary war industries and facilities in war-supporting industries, the operation of which was directly and closely related to war industries, should be removed in preference to those not so employed.

2. The achievement of a fair balance between:

a. The general preferences of reparations claimants for plants, machinery, equipment and other facilities

(1) Of modern and efficient design and manufacture

(2) In good working condition and capable of being removed from Japan with minimum loss of value and efficiency

(3) In consolidated or integrated units

(4) Of special value or need to claimant countries, and

b. The legitimate needs, as determined by the Far Eastern Commission, of Japan’s peacetime economy for similar equipment having due regard for the geographical location of individual plants in reference to markets, raw materials, manpower, fuel supply, and complementary facilities; for variations in specific products as among types, sizes and other variable characteristics; and for the feasibility of repair and rehabilitation in Japan.

3. The occupation policies of dissolving large industrial and banking corporations which have exercised control over a great part of Japanese trade and industry.

4. In carrying out the selection of particular plants, machinery and equipment for reparations removals the following order of removal should be exercised:

a. Plants and equipment owned by the Japanese Government, the “Zaibatsu” concerns and other big industrial and financial concerns and companies.

b. Plants and equipment owned by other Japanese nationals and by nationals of the countries—allies of Japan.

5. A separate statement of policy covering the treatment of property of nationals of Members of the United Nations will be issued by the Far Eastern Commission. In the meantime, no action should be taken under the present paper with respect to such property.

40. FEC–091/4 approved November 4 by Committee No. 6 (Aliens in Japan) at its 25th meeting, was forwarded on November 5 to the Steering Committee for consideration; paragraph 4 embodied “a portion of the proposed Soviet amendment in FEC–091/3”. Paragraphs 1–3 “embodied principles derivative from approved SWNCC documents and could be considered official U.S. policy without further SWNCC action” (memorandum of December 9 initialed by Mr. Gross).