894.602/9–2448
Memorandum by the Director of the Office of Far Eastern Affairs (Butterworth) to the Assistant Secretary of State for Occupied Areas (Saltzman)
Subject: Proposed Course of Action on Japanese Industrial Deconcentration
I understand that Mr. Draper phoned you on September 17 to inquire whether you still wished him to send our wire requesting the text of the Deconcentration Review Board’s terms of reference, in view of the new information provided in CINCFE’s September 16 telegram.1 After reading CINCFE’s telegram and the other wires and despatches enclosed with this memorandum, it would seem to me inappropriate and inadvisable to send the wire at this time in view of the delay which has occurred in its despatch and the undesirable interpretation which might be placed upon it in SCAP Headquarters as a result of developments during the period that the wire was being held. I suggest that you inform Mr. Draper that we wish to withdraw the wire for these reasons.
As you know, I have been in doubt for some time whether it was necessary or wise for this Government to submit a new policy proposal on deconcentration to the FEC in place of the old FEC–230. The developments noted in SCAP’s wire and, probably with some exaggeration, in the enclosed Burton Crane and Central News despatches, have further strengthened me in this view. Even a recitation to the FEC of [Page 1023] action taken to date by SCAP in the field of deconcentration (proposed as a means of persuading other members that a policy decision is not necessary) would probably only serve to arouse undesirable criticism and controversy, particularly in view of the suspicions which news of “reinterpretations” and changes of attitude on this subject in SCAP Headquarters and in Washington must have occasioned in some FEC countries.
I would therefore recommend that the U.S. representative of the Economic Committee simply announce that this Government does not consider a policy decision on deconcentration necessary, and that the U.S. would accordingly decline to participate in the preparation of a policy paper on the subject if one is desired by other members. We would express our willingness, however, to obtain from SCAP as heretofore any information on the progress of the deconcentration program desired by other members. There would be no need for us to go into the question of what we would do if a policy paper drafted by other members came up for final approval in the Commission, but if this did occur, probably long hence, and it was a brief and general paper such as the British appear to desire, we might be able to approve it. If it was longer and unacceptable we could veto it, unless we decided it could be made acceptable by changes we might decide to suggest.
I am enclosing a memorandum of September 23 from Mr. Allison to me2 setting forth in greater detail certain of the considerations giving rise to the above recommendations.