894.60/11–2047
The Under Secretary of State (Lovett) to the Under Secretary of the Army (Draper)
Dear Mr. Draper: The Department of State has carefully examined the Japanese reparations questions which we discussed informally at lunch, and to which you referred again in your letter of November 20, 1947.1
It is the view of the Department of State, as indicated in your letter, that we should not oppose the finalizing by the Far Eastern Commission of the reparations levels provided in SWNCC 236/43 as amended by SANACC 236/48 pending the report of Overseas Consultants Inc., and that a cable along the lines of your proposal would accordingly not be appropriate. The Department would have no objection to a cable stating that FEC decision on the final reparations levels has not yet been possible, but that it is considered inadvisable to issue a unilateral directive based on SWNCC 236/43 at this time.
The Department will consider any recommendations made by OCI promptly and with great attention, and will take any action which appears desirable and possible in line therewith. The Department has no information, however, which raises a real question whether the presently proposed levels could result in a self-supporting Japanese economy. On the contrary, it believes that the factors involved in assuring such an economy were fully considered when SWNCC 236/43 was approved, and should not now be reconsidered unless for the strongest reasons. You will recall that SWNCC 236/43 was approved by SCAP and that on March 31–April 1, 1947, at meetings held in Mr. Strike’s office in New York, representatives of the State Department, War Department, Navy Department, Mr. Edwin Pauley2 and Mr. Clifford Strike unanimously agreed that it should be the U.S. position on industrial reparations from Japan.
Any doubts as to the wisdom of the levels set out in SWNCC 236/43 which are not supported by conclusive factual evidence are outweighed, it is believed, by the advantages of a final determination of the question, [Page 946] both in Japan and in the relations of this Government to the other governments interested in Japanese reparations; and by the safeguards provided by existing policies. I refer particularly to paragraph 10 of the FEC policy on Reduction of Japan’s Industrial War Potential,3 by which SCAP is authorized to except from reparations removal those facilities required to meet the needs of the occupation; and to the authority explicitly granted to SCAP to except from claim facilities suitable and now necessary for the manufacture of fertilizers.
Notwithstanding the foregoing position, it is hoped that the report of OCI will be available soon so that the details can be fully considered by the Departments of State and of the Army at the technical level, and so that this Government can supply estimates of the actual volume of industrial equipment likely to be available for removal in each category of industry on which the FEC has acted. The information which the OCI is obtaining as its principal mission is indispensable for such estimates, which the members of the FEC are anxious to receive.
Sincerely yours,
- Foreign Relations, 1947, vol. vi, p. 441.↩
- Edwin W. Pauley had been President Truman’s representative on reparations matters.↩
- August 14, 1947, Department of State, The Far Eastern Commission, Second Report by the Secretary General, July 10, 1947–December 23, 1948 (publication 3420, Far Eastern Series 29, U.S. Government Printing Office, Washington; March 1949), p. 25.↩