740.00119 PW/6–1848
Memorandum by the Under Secretary of State (Lovett) to Bear Admiral Sidney W. Souers, Executive Secretary of the National Security Council
Subject: Proposed cable to General MacArthur regarding Japanese Reparations.
The Department of State and the Department of the Army have had under discussion the settlement of the problem of Japanese reparations [Page 978] as part of the policy recommendations relative to Japan which the Department of State has recently submitted to the National Security Council.1 The Department of State and the Department of the Army have been unable to reach agreement on a reparations program. In such a program the level of industry to be used as a basis for determining industrial equipment which may be made available for claim by reparations claimant countries is the essential element. This is a matter on which SCAP’s views are not clearly known but are of great importance and would probably be of help in reaching a solution.
The Department of State and the Department of the Army feel that it would be desirable that the National Security Council send a cable to General MacArthur explaining the problem as it is now seen here and requesting his answers to certain pertinent questions. A cable has been drafted jointly by the two Departments for this purpose. I am attaching it with the request that you send it to General MacArthur.2