Office of the Historian

894.60/4–847

Memorandum by the Army Member of State–War–Navy Coordinating Committee66

secret
[SWNCC 236/43]
[Washington,] 7 April 1947.

Reparations Removals of Industrial Facilities and Merchant Shipping From Japan

1.
As a result of the outcome of recent discussions between representatives of the State, War and Navy Departments and representatives of the Pauley and Strike reparations groups,67 agreement, subject to SWNCC approval, has been reached on a U.S. position for a comprehensive Japanese reparations removals program.
2.
These discussions culminating months of effort on the part of the U.S., both unilaterally between Washington and General MacArthur, and on a governmental level in the FEC, have resulted in agreed conclusions which should be set into motion as soon as practical.
3.
Although an effort should be made to secure FEC agreement, indications are that agreement is improbable within a reasonable period of time and that final agreement will only come with the signing of the peace treaty. Inasmuch as the prompt handling of the Japanese reparations problem is essential in the attainment of U.S. occupational objectives and in alleviating Japanese economic and industrial inertia, thereby reducing U.S. costs, it is believed that prompt unilateral U.S. action will be necessary.
4.
A second paper on the implementation of removals of industrial facilities and merchant shipping from Japan has been drafted and will be presented to SWNCC in the near future.
5.
A third paper on the control of the economic war potential of Japan has also been drafted and will be presented to SWNCC in the near future. This paper will be a substitute proposal for SWNCC–302, now under consideration in the FEC (FEC–084 Series).
6.
It is requested that the enclosure be approved by SWNCC as a matter of urgency.68
  1. This memorandum was circulated as SWNCC 236/43, April 7, in SWNCC and approved informally April 8; the enclosure, not printed, was forwarded on April 8 to General McCoy for consideration by the Far Eastern Commission.↩
  2. Edwin W. Pauley and Clifford S. Strike headed reparations groups to Japan in January 1947. Mr. Strike was head of F. H. McGraw & Co., and of Overseas Consultants, Inc., both of New York.↩
  3. See Department’s memorandum of May 13 to General McCoy, p. 393.↩