740.00119 FEAC(Info)/2–2847: Telegram

The Secretary of State to the Acting Political Adviser in Japan (Bishop)


69. FEC 9. Obligation to Consult Allied Council. Soviet Government rejected U.S. alternate phrase quoted in FEC 8. At Commission meeting Feb. 20 following compromise phrase agreed upon with consent of U.S. Government: “upon consultation with Allied Council in accordance with terms of reference of Allied Council” U.S. Government would prefer no reference to consultation but formula agreed upon will adequately protect SCAP.

Assured Production Capacity Levels for Japan. This policy paper approved by FEC Feb. 20 with insertion in two places of consultation phrase referred to above. Policy will permit SCAP immediately to designate, up to certain limits, production facilities which will in no circumstances be subject to removal.

Advance Transfers of Reparations. U.S. policy paper has so far received unqualified approval only from Canadian and Chinese Governments. Australian government objects to relief as basis for any delivery of reparations but if policy is adopted wishes to put in claim based on occupation by Japanese of New Guinea, Papua and Nauru. [Page 366] French Government would prefer program applicable to all 11 countries but if relief is adopted as basis must insist upon share for use in French Indo-China. Indian Government states cannot agree to omission of India from any program based on relief. Claim based on war-caused famine in India and Japanese occupation and devastation of Andaman and Nicobar Islands. Netherlands, New Zealand, Philippines, USSR and U.K. representatives have not yet received instructions. Netherlands representative however supported U.S. policy and opposed suggestion that advance transfers be applied to all 11 countries. New Zealand representative advanced theory that U.S. would not be legally justified in unilaterally allocating reparations by means of interim directives. U.K. representative supported this view and questioned urgency of matter.