740.00119 (Control Japan)/5–1247
The Assistant Secretary of State (Hilldring) to the Assistant Secretary of War (Petersen)
Dear Pete: I have delayed replying to your letter of May 12 inquiring about the status of five steps to be taken in connection with the settlement of the Japanese reparations problem because several of the matters were in a state of considerable uncertainty.
[Page 406]As of today the situation is as follows:
- 1.
- The State Department cannot fix a time limit on FEC action on “Reparations Removals from Japan” (SWNCC 236/43) until all U.S. amendments have been put into General McCoy’s hands. As you know, the War Department has proposed certain amendments which were discussed at the SWNCC meeting of May 20. When a decision has been reached on these proposals an instruction will be given to General McCoy to seek action on the original paper, as amended by the instruction, within twenty-one days. At the conclusion of that period the question of issuance of an interim directive will be decided by the Secretary of State in the light of the situation at that time.
- 2.
- A reply to General Noce’s letter of April 18 on certain interpretations and amendments of SWNCC 236/43 was discussed at the SWNCC meeting on May 20, and sent him on May 22.
- 3.
- The State Department proposes to take action on a directive supplanting SWNCC 236/44 when action is taken on SWNCC 236/43, either by the FEC or by the issuance of an interim directive. All the provisions of SWNCC 236/44 will be before the FEC when General McCoy has received his final instructions for processing and amending SWNCC 236/43.
- 4.
- The State Department proposes to consider the provisions of SWNCC 302/6 in connection with the drafting of the disarmament provisions of the Japanese peace treaty.
- 5.
- The recommendation contained in your paragraph 5 is noted and appreciated. The State Department has informally agreed that the U.S. Delegation on the FEC should for the present concentrate on securing agreement on the provisions of SWNCC 236/43, but be prepared at an early date to present as a unit proposals for amendment which, in the light of the discussion, will facilitate FEC approval of the document without affecting the ability of the Japanese to maintain, from the standpoint of industrial capacity, the prescribed level of living. These recommendations must, of course, include changes that may be required to maintain not only an adequate capacity level but one which is in balance as between related industries. A single level cannot be changed without giving consideration to the effects in terms of both requirements and supply factors on many others.
There can be no disagreement between us as to the urgency of an early settlement of the Japanese reparations question, and a settlement which, by being really final and not open to challenge, can form a sound basis for planning the future economic development of Japan.
Sincerely,