740.00119PW/11–2146
Memorandum by the Chief of the Division of Japanese and Korean Economic Affairs (Martin) to the Assistant Secretary of State for Occupied Areas (Hilldring)
SWNCC 236/2944 is approved by JK subject to the following amendments:
1. Paragraph 8, “Conclusions”, be amended to read, in its entirety:
“Countries receiving industrial machinery, equipment, or supplies from Japan on reparations account should obligate themselves not to offer such assets for sale or barter to another country within three years from the date of assignment of title of facilities, (as defined in [Page 594] SWNCC 236/2045). This general restriction should not be interpreted as limiting the right of a recipient country to dispose of reparations goods to its own nationals, wherever domiciled; to any person, irrespective of nationality, for use within the recipient country; to satisfy private claims of persons arising out of war damage, or to barter such goods with other reparations receiving countries in exchange for other assets allotted on reparations account. Insofar as fulfillment of the U.S. claim for industrial equipment is in excess of ability or desire of the U.S. to utilize it, the U.S. shall have the right to allocate, or otherwise dispose of its claim, to other claimants and to Korea without charge, in such manner as the U.S. deems most likely to assist the rehabilitation of the Far Eastern economy.”
The foregoing is a clarification of the conditions under which a reparations recipient may dispose of assets which is considered necessary to prevent the confusion which might arise through misinterpretation of the present wording of paragraph 8.
2. Paragraph 10, “Discussion”, should be amended to read:
“It is stated above that the U.S. should require that all Japanese liquid assets be made available if necessary to cover the costs of imports into Japan for civilian supply. It is recognized that gold and other precious metals found in Japan do represent a category of reparations assets of special and particular interest, both economic and political, to claimant countries whose restitution claims will in many cases be unfulfilled due to difficulty of identification. Nevertheless, it has been recommended that gold and silver be held as available to meet costs of imports, and only if a surplus remains when U.S. responsibility for Japan’s trade balance has ended, should gold and silver be distributed up to the value of total proven losses.”
As presently worded, paragraph 10 states that gold and silver will be distributed against losses before being made available to meet occupation costs, which is in direct conflict with statements elsewhere in the paper, and the intended policy.