740.00119 PW/1–2749/
Memorandum by the Acting Legal Adviser (Tate) to the Secretary of State
Subject: U.S. Legal Commitments as to Japanese Reparations
- 1.
- The Legal Adviser’s Office is not charged with the difficult economic, political and military aspects of the Japanese reparations problem, but is concerned only that the United States make no move in the premises in consequence of which she can stand accused of breaching legal international commitments.
- 2.
- At Potsdam on July 26, 1945, the President of the United States agreed with the executive heads of China and Great Britain (with subsequent adherence of the Union of Soviet Socialist Republics) that Japan should not be permitted to maintain industries “which would enable her to rearm for war”. (Par. 10, Potsdam Proclamation.)1 On June 19, 1947, the United States joined with the ten other nations in the Far Eastern Commission in the formulation of a Basic Post-Surrender Policy for Japan, which provided, inter alia, that reparations should be exacted from Japan through the transfer of Japanese capital equipment and facilities “in the interests of destruction of the Japanese war potential in those industries which could lead to Ja pan’s rearmament for waging war”. (FEC 014/9, Par IV, par. 4.)2 On August 18, 1947, the United States joined with those same nations in the Far Eastern Commission in the formulation of a policy for the “Reduction of Japanese Industrial War Potential”, one provision of which was that all special-purpose industrial machinery and equipment functionally limited to use in connection with combat equipment end-products should be destroyed, but that “all other industrial machinery and equipment in primary war industries” should be made available for claim as reparations, and that “during the period of the occupation a prohibition should be maintained against the reestablishment of primary war industries”. (FEC 084/21, par, 1.)3 It was also [Page 632] provided that after selection had been made for delivery to claimant countries, any residual capacity “should be appraised from the standpoint of the individual and collective war potential represented by this capacity, and a decision made by the Far Eastern Commission as to its disposition” (par. 6). “Primary war facilities” were defined as those “primarily engaged in the development, manufacture, assembly, testing, repair, maintenance or storage of combat equipment end-products and civil aircraft, and…4 building merchant vessels above a size to be determined by the Far Eastern Commission” (par. 2).
- 3.
- From the point of view of the Legal Adviser’s Office it is unthinkable that the United States Government, in view of the commitments entered into as above stated, should now propose a program to leave primary war facilities in Japan. It seems to the Legal Adviser to be peculiarly unfortunate that this proposed breach of our international commitment to destroy the Japanese war potential should be based solely on the pecuniary interests of the United States. In spite of this demeaning defense of our action, we shall, of course, be accused of an intent to thwart a basic tenet of the Potsdam Agreement, and of a purpose to enable Japan to rearm for war.
- 4.
- The United States Government also stands committed, by other provisions of the same documents, to distribution as reparations of such industrial facilities in other industries, denominated “war-supporting industries”, as may be in excess of the peaceful needs of the Japanese economy.” These “peaceful needs” have been defined in a series of policy decisions of the Far Eastern Commission known as the program for “Interim Reparations Removals”. In view of the fact, however, that the program is based on an estimate of the “peaceful needs of the Japanese economy” which passage of time has shown to be faulty, no stigma should be attached to a statement by the United States at the present time that it has changed its mind about the further distribution as reparations of “War-supporting industries”. No such defense is available, however, for a breach of the United States commitment to a 100 percent destruction or removal of primary war facilities.
It is, of course, appreciated that the whole reparations program has been held up, through no fault of the United States, by the failure of the Far Eastern Commission to agree on the division of the reparations into shares. While the Legal Adviser’s Office would favor a resolution of the impasse, by means of a U.S. interim directive, for the purpose of distributing the primary war facilities among the claimants, provided that military considerations do not negative the advisability of such action, this is by no means the only way out. If the United States does nothing more than withdraw certain offers which she has made with respect to her own shares, in an effort to end the impasse, the [Page 633] stalemate will undoubtedly continue until the peace-settlement; when the whole reparations problem will have to be settled any way. No base motives could be imputed to the United States if it takes no further steps to resolve the dispute.
- See paragraph numbered 11, Department of State, Far Eastern Series No. 29: The Far Eastern Commission, Second Report by the Secretary General, July 10, 1947–December 23, 1948 (Washington, Government Printing Office, 1949), p. 45.↩
- Department of State, Activities of the Far Eastern Commission, pp. 49, 56.↩
- For FEC decision of August 14, 1947, see Department of State, Far Eastern Series No. 29: The Far Eastern Commission, pp. 25–30.↩
- Omission as indicated in the source memorandum.↩