Foreign Relations of the United States, 1947, The Far East, Volume VI

740.00119 PW/6–3047

The British Embassy to the Department of State ¹⁴

Japanese Reparations

In the course of discussions in the Reparations Committee of the Far Eastern Commission of the shares of reparations from Japan in the form of industrial equipment, the United States member of the Committee has put forward two lists of percentages. The first of these, which was presented on 12th May, 1947, represented the personal views of the United States member and proposed that the United Kingdom should receive 9%. The second, which was presented on 29th May, represented the official views of the United States Government and proposed an even smaller percentage for the United Kingdom, viz. 8%.¹⁵

His Majesty’s Government in the United Kingdom are very much disappointed at the ungenerous treatment which the United States representative has proposed for the United Kingdom.

On general grounds of policy His Majesty’s Government agreed in July, 1945, that the United States should have priority with the United Kingdom in the allocation of German reparations, although there was an excellent case for a higher percentage for the United Kingdom. His Majesty’s Government feel therefore that there are strong grounds for asking for reciprocal treatment in the allocation of reparations from Japan. Nevertheless, in recognition of the preponderant part which the United States played in the Pacific war, His Majesty’s Government will support a higher percentage for the United States than for the United Kingdom. His Majesty’s Government feel that in return they are entitled to ask for just treatment for the United Kingdom and a proper consideration of the grounds for the United Kingdom claim.

The United Kingdom has a major claim on any of the three main grounds on which claims to internal assets in Japan can be based, viz. (a) extent of devastation, (b) war effort, and (c) paucity of holding of Japanese external assets.

With regard to the first of these, the extent of the devastation of British territories in the Far East appears to have been insufficiently recognised. Burma, for example, twice suffered serious devastation in the war against Japan, first from a scorched earth policy and then from bombing and a military campaign which traversed the whole country. Similar considerations apply to Malaya, Hong Kong and Borneo, where an immense task of reconstruction and rehabilitation has been left for His Majesty’s Government to deal with.

With regard to war effort, His Majesty’s Government wish to mention that British forces fought a major land campaign, with the result that the whole Japanese military and administrative machine in Southeast Asia was destroyed. On the sea, His Majesty’s Navies drove the Japanese naval forces from the Indian Ocean and neighbouring waters, contained capital forces in the South-east Asia zone, took part in the naval advance to the shores of Japan and mounted a full scale operation for the recapture of Singapore.

It is difficult to believe that, in proposing the figure of 8% for the United Kingdom, the United States Government have given full weight to all the relevant factors. For instance, the United States Government propose to give China more than three and a half times the share of the United Kingdom, which cannot be consistent with any just appraisal of relative deserts in relation to war effort and holding of Japanese external assets. Nor does it appear that the United States Government have properly appreciated that the share of the United Kingdom is intended to cover Burma and the Colonies as well. It would be difficult to maintain that, taking Burma as a single unit, she should be less generously treated than the Philippines, to which the United States Government propose to give as great a share as to the United Kingdom, Burma and the Colonies taken together.

His Majesty’s Government wish also to comment on the proposal submitted to the Far Eastern Commission by the United States Government that “in so far as fulfilment of the claim for industrial equipment is in excess of the ability or desire of the claimant country to utilise it, that country shall have the right to allocate or otherwise dispose of its claim, to other claimants and to Korea, on a political basis.”

Such a principle would be contrary to that unanimously agreed upon in respect of reparations from Germany, when it was laid down in the final act of the Paris Conference that “if any signatory Government renounces its share or part of its share in German reparations, the shares or part thereof thus renounced or remaining shall be distributed pro rata among the other signatory Powers.” The view of His Majesty’s Government is that the foregoing principle should apply also in the case of Japanese reparations. They would regard it as a misuse of reparations receipts if the latter were transferred by the recipient to other countries for political purposes.

It is the earnest hope of His Majesty’s Government that the United States Government will re-examine the basis of their proposals for shares of reparations from internal assets in Japan and will be able to support a percentage for the United Kingdom, Burma and the Colonies which takes proper account of the devastation suffered, the war effort exerted and the insignificant amount of external assets held.¹⁶

[Washington], June 30, 1947.

14. Handed to the Secretary of State on June 30 by the British Ambassador (Inverchapel).
15. Neither list found in Department files, but see memorandum of May 15, p. 395.
16. In reply, the Department on July 25 stated that the subject of Japanese reparations was still under study, the points raised by the British Embassy would be fully taken into account, and some modification in initial views of all FEC members would be required if a final decision were to be reached (740.00119 PW/6–3047).