Memorandum of Conversation, by Mr. Willard L. Thorp, Deputy to the Assistant Secretary of State ( Clayton )
Pauley40 said that he was passing along the substance of a suggestion which he had made both to the President and to the Secretary. He feels that the Russians are robbing the other nations in their removal program in Manchuria, and that the program will greatly hamper the recovery of the Far Eastern economy. We should put all reparations into one pot, and offset whatever the Russians may have taken from Manchuria against their present share of reparations from the western zones. In fact, he believes that a declaration that we propose to do this, will stop further removals in Manchuria.
Mr. Thorp asked how he proposed to prevent the European participants in reparations from getting a windfall and transfer this benefit to China, the country which is being most seriously “robbed.” [Page 1121] He said that, if the declaration did stop the removal process, that would benefit the Chinese. If the sanction did not succeed, some other machinery would have to be found.
He also said that, contrary to the procedure with respect to Germany, he did not propose to file his final report on Japan with the President until it had State Department agreement. He is leaving the city, and has assigned Martin Bennett to work with JK41 on the report.
Mr. Pauley said that he is leaving for California, but would be on call if he is needed at any time.