740.00119 PW/2–2847
The Assistant Secretary of State (Hilldring) to Mr. Thomas C. Blaisdell, Jr., Assistant to the Secretary of Commerce and Director of the Office of International Trade
My Dear Mr. Blaisdell: The Department of State is undertaking the formation of a mission to Japan responsible for representing United States interests on problems of reparations, restitution of looted property, and the protection, preservation and reporting upon United States owned property prior to restoration. The official mission is to be composed of five members, assisted by a limited number of technical and clerical aides.
[Page 364]At this time, this Department is primarily interested in the formation of that part of the mission which will be concerned with United States owned property in Japan. SCAP has requested assistance and guidance on this problem, and numerous inquiries have been addressed to the State Department by private owners as to the condition of their property.
Current plans, therefore, call for sending to Japan at an early date the chief of the mission, who will be a State Department representative; the mission member primarily responsible for protection and rehabilitation, and a group of five to ten technical experts with clerical staff. As stated in preliminary meetings with members of your staff, it is our opinion that the mission member responsible for United States property should be from the Department of Commerce, while the technical experts should represent United States businesses with property holdings in Japan, serving, if necessary, on a rotating basis to insure fair coverage of all interests and employed on a dollar-a-year basis.
The functions to be performed by this group in representing United States property interests are as follows:
- (a)
- To inspect United States owned property and to advise the Civil Property Custodian, Supreme Commander for the Allied Powers, as to measures necessary to protect and maintain its value.
- (b)
- Appraise damage and deterioration resulting from the war and from Japanese negligence in the administration and control of the property during the period of seizure and custodianship, and to prepare information which may be used as a basis for claims by the owners against the Japanese Government.
The Supreme Commander for the Allied Powers has issued a directive to the Japanese Government to protect and maintain United States property. However, personnel is lacking to inspect adequately these properties, nor can government personnel speak officially on behalf of the property interests and claims of private concerns.
It is not the function of representatives to submit claims for or accept custody or control of United States property, resume plant operations, revive marketing outlets, and enter into contracts with Japanese for agency or other services. Such activities must await the establishment of restoration procedure, and the reopening of Japan to foreign private business operations.
Considerable concern has been expressed as to possible charges of discrimination among private owners resulting from the necessity of limiting the number of representatives who can be permitted in Japan at this time. Preliminary discussions have resulted in a recommendation that the Department of Commerce issue an invitation to United [Page 365] States owners having a substantial property interest in Japan to attend a conference to select jointly those persons to represent their interests. To avoid all possible charges of discrimination, the list invited should be as inclusive as practicable. The State Department is preparing and will shortly send the Commerce Department, a listing of firms with substantial interests in Japan.
Assuming that the conference can select five to ten representatives, the persons selected will form the initial staff operating under the direction of the Department of Commerce mission member. If, however, the conference cannot agree, in whole or in part, the Department of State and the Department of Commerce can then select representatives, either private or government, without being open to charges of discrimination. The individuals selected will, of course, be subject to normal State and War Department clearance.
If the Department of Commerce approves of the procedure outlined above, I suggest the immediate appointment of representatives to confer on the detailed procedures at as early a date as is possible.
Sincerely yours,