Office of the Historian

894.50/6–2148

The Secretary of the Army (Royall) to the Secretary of State

confidential
Washington, 21 June 1948.

Dear General. Marshall: I am informed that at the 110th meeting of the Far Eastern Commission on 9 June 1948 representatives of the governments of the Philippines, France and Australia indicated that instructions had been received which would permit their support for the “Policy Towards Japanese Industry—Level of Economic Life in Japan” contained in FEC 242/32.1

As you know, neither the State nor the Army Department is now in agreement with the provisions of this paper. Since industrial levels in Japan are the basis for a reparations policy which will be included in the decision of the National Security Council on the policy paper now before it, it seems important to me that the United States representative on the Far Eastern Commission should be specifically instructed to oppose any attempt to approve FEC 242/32 prior to final U.S. policy decisions in the National Security Council.

In a letter from Mr. Frank Wisner, Deputy to the Assistant Secretary of State for Occupied Areas, to General McCoy,2 the latter was [Page 979] advised to delay action on FEC 242/32 and, if necessary, to prevent a vote in the full Commission “pending Mr. Kennan’s return from his conversation with General MacArthur and analysis of his report”. Since Mr. Kennan has returned and his report has been analyzed and made the basis of the National Security Council policy paper, it would seem appropriate to explain the situation to General McCoy so that he would understand the reasons for the instructions I have suggested.3

Sincerely yours,

Kenneth C. Royall
  1. See last paragraph of telegram 212, June 11, 7 p. m., to Tokyo, p. 812.↩
  2. Letter of March 19 not printed, but see footnote 3, p. 667.↩
  3. On July 2, Mr. Lovett replied that he was sending Mr. Royall’s letter to General McCoy for his information and added that “the mandate to delay action on FEC 242/32” was “still in effect”. Mr. Lovett also took occasion to urge “that the U.S. determine its position on this matter as soon as possible.” The exchange of letters was sent General McCoy on July 6. For Mr. Kennan’s report, see PPS/28, March 25, p. 691.↩