740.00119 PW/10–2149
The Assistant Secretary of State for Far Eastern Affairs (Butterworth) to Major General Garter B. Magruder, Deputy to the Under Secretary of the Army1
Dear General Magruder: I wish to thank you for your memorandum of October 21 setting forth the policy of the Department of Defense toward Japanese industry, and to offer the following comments [Page 903] on the Conclusions (paragraph 10) to the memorandum recommending action to bring U.S. policy proposals in the FEC and, to the largest possible extent, approved FEC policy decisions into line with the position stated in your memorandum.
The actions which you propose are substantially those envisaged in our May 12 reparations and level-of-industry statement in the FEC and in Secretary Acheson’s letter of July 8 to which your memorandum is the reply. Since that time, however, procedures for moving forward with a Japanese peace treaty have, as you know, been discussed with the British Foreign Minister and possibilities of the conclusion of a treaty which would deal definitively with these problems have greatly increased. In these circumstances it would seem preferable for us to present our proposals on Japanese industry to the British in December, and to certain of the other friendly governments concerned, on a high-level, government-to-government basis in the context of our over-all security and other treaty proposals.
There are a number of considerations which would seem, indeed, to render this the only feasible course. You will recall, for example, that the provisions in your memorandum regarding the manufacture and operation of civil aircraft specify that such manufacture and operation should be restricted to an extent which “would not constitute a threat to the security of the United States.” The exact restrictions which would be required, which would need to be specified in any proposals to the FEC, apparently remain to be determined. In this instance and in the case of merchant shipping and shipbuilding, moreover, the views of other agencies of the Government will need to be considered, making it unlikely that a final U.S. position on these questions could be obtained before we were ready to initiate discussions on the treaty as a whole with the British. Until decision has been reached within the Government on such basic treaty questions as the size and composition of the Japanese constabulary, and whether the Japanese should be permitted in the treaty to manufacture the arms for the constabulary, it will be impossible to submit new proposals regarding security limitations on Japanese industry to the FEC. It would appear that revision of NSC 13/32 and pertinent SWNCC and SANACO papers must also await decision on these basic questions.
I would appreciate hearing from you at your earliest convenience should you be unable to agree with these views.3
Sincerely yours,