894.60/6–1947
The Assistant Secretary of State (Hilldring) to the Assistant Secretary of War (Petersen)
Subject: Program of Strike Corporation in Japan
On 19 June you sent a message to SCAP on this subject which contained the following paragraph:
“Part 5. WD intends to make every effort to secure full US govtal auth to proceed with final reparations program on same unilateral basis as advance delivery directive. Matter to be discussed with Secy State tomorrow. Consider independent certified report on Japanese industry is needed to provide maximum unbiased factual support for US unilateral action respecting not only Japanese reparations and economic recovery programs but also for peace treaty provisions favorable to our avowed intention to assist in world economic stabilization and prevention of political unrest. State Dept fully shares this view.”
It is not clear to me what is meant by the statement that the report of the Strike Corporation will provide additional factual support for a Japanese economic recovery program and for the Japanese peace treaty provisions. It had been the understanding of the Department that the Strike Corporation was authorized to check the specific plant selections made by SCAP within the framework of FEC policy decisions with specific regard to the reparations program and the retention of essential facilities in Japan. It would be appreciated if you would clarify what further functions the Strike Corporation [Page 414] report is expected to serve. I understand, of course, that a clear definition of reparations removals will facilitate Japanese economic recovery and the determination of the United States policy in the formulation of a peace treaty with Japan. Nevertheless, I should like to know whether you envision the Strike Corporation report as extending to any subject other than reparations removals and permanent plant retentions. The State Department, of course, feels that we should not wait for the Strike Corporation to report before proceeding forthwith with both the Japanese recovery program and the preparation of the United States position on a peace treaty.
I am, thus, disturbed by the concluding sentence of the above-quoted portion of your message to SCAP indicating full State Department endorsement of the program outlined by you.
The Department could make no such commitment until it more fully understands the implications of the language used.
The message in question further implies that the State Department would support unilateral action by the United States on (1) Japanese reparations, (2) Japanese economic recovery, and (3) peace treaty provisions. Such a position is obviously inconsistent with our engagements to participate fully in the operations of the Far Eastern Commission. The State Department does not, in any sense, contemplate unilateral action by this Government in these broad fields.
I would strongly suggest that SCAP be informed that the State Department had not seen or approved this program. As a preferable alternative, I would urge that you and I meet to discuss this matter and agree on a more precise description of the assignment of the Strike Engineering Corporation for communication to General MacArthur as a corrected version of Part 5 of your message. Such an amended version could then bear, without qualification, the endorsements of both the State and War Departments.
In the meantime, it would be appreciated if you would send me, at your earliest convenience, a copy of the contract with the Strike Engineering Corporation so that we might be informed as to its specific terms.