740.00119 FEAC (Info)/5–1647: Telegram
The Secretary of State to the Political Adviser in Japan (Atcheson)
175. FEC 18. Reparations. At meeting FEC May 5 Australian Ambassador96 read statement giving his government’s opinion that FEC has no jurisdiction over division and allocation of reparations although does have authority to determine total amount of reparations to be exacted from Japan. Australia therefore proposes establishment of impartial three-person tribunal to investigate facts and formulate recommendations to peace conference which alone would have authority to determine reparations shares. Australian statement threw Commission into confusion but after numerous bilateral conversations during next 3 days all members except Australian decided to proceed with work on division of reparations despite Australian position. Consequently on May 8 Commission passed policy decision on “Division of Reparations Shares” which is in fact reparations section of FEC paper on Basic Post-Surrender Policy for Japan not yet approved in toto. Policy decision adopted by 10 votes with Australia abstaining. This decision establishes principle that reparations shares shall be determined on “broad political basis” and defines meaning of that phrase, and for first time lays down principle that defraying of occupation costs and maintenance of minimum standard of living for Japanese shall not be prejudiced by reparations removals. Passage of policy decision will also serve to reassert jurisdiction of FEC over all phases of reparations problems. Verbatim text of decision follows.
[Here follows text of policy decision of May 8.]
Sources of Japanese Imports and Destination of Japanese Exports. These two papers which establish principles under which sources of imports and destinations of exports should be determined have been held up for months because UK desired that “pre-war pattern of trade” be a primary factor in determining sources and destinations while USSR desired that pre-war pattern play very minor role. Compromise reached May 8 and both papers approved unanimously.97