894.50/4–2348

The Acting Political Adviser in Japan (Sebald) to the Secretary of State

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No. 243

Sir: As of possible interest to the Department in connection with this Mission’s view that the economic deconcentration program in Japan should be completed as a matter of urgency, I have the honor to transmit as enclosures herewith copies of certain self-explanatory papers prepared in the Antitrust and Cartels Division.1 Other pertinent papers were forwarded with the Mission’s despatch 126, February 27, 1948.2

Respectfully yours,

W. J. Sebald
[Enclosure]

Recommendations Prepared by the Antitrust and Cartels Division of SCAP in Tokyo in March 1948

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1.
That the control of the Zaibatsu be eliminated and that actions be taken to prevent the Zaibatsu from regaining their control.
2.
That domestic cartels, such as control associations be eliminated and actions taken to prevent their redevelopment.
3.
That restrictive controls over private business, such as unnecessary licensing and quota and inspection provisions, be prohibited.
4.
That ownership in private businesses be distributed widely and that divestiture of government ownership in private companies be accomplished quickly.
5.
That excessive concentrations of economic power be reorganized into independent companies quickly and without impairing large-scale production efficiencies or hampering the speedy economic recovery of Japan.
6.
That anti-trust and anti-cartel legislation be administered equitably so as to prevent unfair competition and unreasonable restraints of trade.
7.
That governmental restrictions, necessary for completing the transition from Zaibatsu control to private-independent ownership, be eliminated as promptly as possible and that agencies and legislation needed for such transition be eliminated as soon as the job is done.
8.
That deconcentration increase the number of independent sources of credit and number of independent producing and distributing outlets, without establishing any maximum or minimum sizes or numbers of such independent operations for the future.
9.
That liabilities of companies suffering war losses be capitalized promptly so as to establish financially sound companies.
10.
That United Nations nationals, who were investors as of 7 December 1941, be restored their shares and given opportunity to receive prompt adjustment of additional claims and that all United Nations nationals be assured equitable treatment with Japanese investors to extent of no discriminatory legislation or governmental administration.
11.
That SCAP see to it that the entire deconcentration program, which includes actions which will establish a reasonable basis for freedom of enterprise and competition without special privileges, is administered efficiently, speedily, and to the advantage of Japan’s economic recovery.
12.
That public announcement from high authority be made of the recommendations made herein and that such notice include statement that examination of the actions taken and the actions planned indicate that the present administration is practical.
  1. Two papers not printed; third paper printed below.
  2. Not printed.