740.00119 P.W./3–447

Memorandum by the Chief of the Division of Japanese and Korean Economic Affairs (Martin) to the Assistant Secretary of State (Hilldring)


As indicated in the accompanying memorandum to the SWNCC Secretariat,50 the amendments to SWNCC 236/35 “US Policy on Reparations Allocations Procedures for Industrial Facilities in Japan”, proposed by the Joint Chiefs of Staff in 236/40, are generally acceptable with the notable exception of the changes with respect to the formation and functions of the proposed inter-Allied Reparations Technical Advisory Committee.

In view of the nature of the Japanese occupation and of the proposed directive on the advanced transfer of reparations goods in Japan, it is considered of paramount importance to establish promptly such inter-Allied Advisory Committee in Japan. Such a committee would provide a procedure for international assistance in the settlement of disputes over reparations between claimant countries, disputes which otherwise would tend to degenerate in every case into a bi-lateral fight between SCAP and another country. In operation such a committee would serve to remove some of the onus of unilateral action inherent in the present situation with regard to Japanese reparations.

Further, the presence of the Committee would afford an orderly procedure for the presentation of questions and problems to SCAP by other countries, which in itself would tend to reduce disputes, since such problems would be initially presented for the scrutiny of an inter-Allied group.

In an exchange of cables, SCAP has expressed strong opposition to the formation of such an Advisory Committee on the grounds that it would infringe on his authority. On the basis of the SCAP objection, the JCS has recommended that the formation of such a committee by SCAP, and the referral of disputes between SCAP and a majority of the Committee to the US Government for action, be made optional rather than mandatory.

It is believed that the formation of such a Committee is of such importance to US foreign relations that the State Department cannot concur in the JCS recommendation, and that the strongest argument should be made for the original State Department provisions of SWNCC 236/35 in the SWNCC meeting. However, if it becomes evident that the War Department will not accept the State Department’s recommendations in toto, it may be necessary in order to pass this [Page 371] paper to compromise by permitting the submission of disputes between SCAP and a majority of the Committee to the US Government to be optional with SCAP, but providing that the formation of the Reparations Technical Advisory Committee be mandatory on SCAP.51

  1. Not printed.
  2. A copy of SWNCC 236/45, “Interim Directive regarding advance transfers of Japanese reparations and reparations allocation procedures for industrial facilities in Japan”, was transmitted to Nanking in instruction 317, April 18. For statement on April 3 by General McCoy to the Far Eastern Commission on the U. S. decision to send an interim directive to SCAP, see Department of State Bulletin, April 13, 1947, p. 674. For the directive to SCAP, serial 75, April 4, see p. 376.