In reference to your letter of April 9, 1948 to the Secretary of
State1 concerning a
statement of the Soviet representative on the Far Eastern Commission
presented at the meeting on April 8, 1948, I am enclosing a proposed
reply for your use in the Commission.
[Annex]
Proposed Reply to Soviet Representative
Statement by U.S. Member, FEC, Concerning Plans for Japanese Self-Support
On April 8, 1948, the Soviet representative on the FEC made a statement, circulated as
FEC 298/2 concerning planned
credits for the reconstruction of Japanese industry. The
statement concluded that “the Soviet Delegation considers it
necessary to state, in order to make clear that without the
policy decision of the Far Eastern Commission on the question of
the reconstruction of Japanese industry no other unilateral
decisions and actions could be considered legal”.
I have been instructed by my Government to state that it is of
the opinion that no Far Eastern Commission policy precludes the
Supreme Commander for the Allied Powers from assisting Japan in
its exercise of the right to have peaceful industries adequate
for its self-support. On the contrary, the Potsdam Declaration
assures Japan the right to a self-sustaining economy. Policy
decisions of the Far Eastern Commission reenforce that
assurance.
For example, the Interim Import-Export Policy for Japan,2
approved by the FEC on August
18, 1947 states in paragraph 9 and 10:
“For the purposes of this paper imports are divided into
the following three categories:
- “a. Imports received
[required?] to prevent such
widespread disease and unrest as would endanger
the occupying forces;
- “b. Imports required to
accomplish the objectives of the
occupation;
- “c. Other imports
requested by the Japanese Government.
“For the time being import programs under categories 9
a and b are authorized subject to availability of
items and funds and such other limitations as may be
operative …”
In the above quoted policy decision of the Far Eastern
Commission, the Supreme Commander for the Allied Powers is
authorized, within limitations of other controlling policies,
and more particularly within the limits of available funds and
items, to arrange imports with Japan to accomplish the
objectives of the occupation. The attainment of Japanese
self-support clearly is one of such objectives. In the past
Japan’s shortage of funds and needed items has held Japanese
industrial output to less than 50% of the 1930–34 level and
exports to less than 25% of those required to make Japan
self-supporting. The U.S. announcement to the Commission on
January 21, 1948, to which the Soviet statement referred, states
the intention of the U.S. to assist in removing that obstacle to
self-support.
