740.00119 Control (Japan)/2–849: Telegram

The Secretary of State to the Acting Political Adviser in Japan (Sebald)


46. Part 1. Subj summary Steering Comite mtg Feb 1.

Replacement Lost Cultural Objects ( SC–272/12). In reply to query of Indian member re use cultural objects by SCAP for purpose democratization in Japan, US member stated his Govt understood SCAP has used and is currently using selected cultural objects for purpose democratization and education Jap people.

Sov member requested consideration his amendment be postponed until all members had instructions. Item retained on agenda.

Removal of Aircraft and Private Munitions Plants from Japan ( SC–312). Retained on agenda.

Part 2. Subj summary FEC mtg Feb 3.

Labor Policy in Japan ( FEC–045/5). No discussion.

Economic Stabilization in Japan ( FEC–329/3). Sov member referred to SCAP and State Dept replies to his statement of Jan 27, [Page 646] 1949, that directive to SCAP involved change in regime of control in Japan and reiterated view that directive to Gen MacArthur was contrary to decisions adopted by FEC. Also referred to SCAP’s Circular No. 2, Jan 14, 1949, on Foreign Business and Investment Activities in Japan and press release on same subj and inquired if “investments made by Amer investors and the businessmen from Wall Street would foster the Japanese national independence.” Felt such rights given to businessmen by this circular would on the contrary endanger natl independence of Japan, and that this was in contradiction with FEC policy decisions. Also alleged that circular was not in accordance with Para 3 of FEC policy decision on Conduct of Trade with Japan. Concluded as follows:

“In connection with the carrying on of the program for the economic stabilization of Japan, on January 14, 1949, the Supreme Commander for the Allied Powers issued to the Japanese Government a circular and a directive which required unlimited expansion of the field of activity for foreigners in Japan, allow free investment of foreign capital, and permit the acquisition of property by foreigners. The directive requires the Japanese Government to remove limitations existing in the Japanese legislation in respect to foreign enterprises. New regulations which are being introduced on the basis of the circular and the directive put foreign nationals, with the exception of transactions in respect to immovable property, on the same footing with persons of Japanese nationality and Japanese firms.

“The circular and the directives issued by General MacArthur also lead to substantial changes in the regime of control over Japan and consequently should be discussed by the Far Eastern Commission.”

US member pointed out that as Chairman he had made great effort to try to obtain international cooperation in FEC, but that Sov Amb did not seem desire to cooperate in that he tilted at every windmill that came out in newspapers. Added, however, that Sov member had right to call attention of Comm to any act of SCAP inconsistent with FEC policies and that he would try to give reasonable replies to the many charges of Amb which were usually made with sinister implications.

In reply to Sov statement made at last mtg, US member read formal statement1—text of which was transmitted by Army Dept on Feb 3, 1949.

Sov member categorically rejected statement of US member that he, Sov representative, did not want to cooperate, adding that everything done by Sov representative had objective of democratization and demilitarization of Japan and strict fulfillment of FEC policy decisions. Reserved his right to answer statement of US member at later mtg.

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US member replied he would try to keep Comm informed of developments in economic situation in Japan and would bring Sov statements to attention of his Govt. Also indicated that Sov member was within his rights, under FEC policy on press, to release his statements to the press without waiting for a reply if he felt such action met his responsibilities to other members of Comm without giving them opportunity to consider statement or hear a reply.

Policy Toward Patents, Utility Models and Designs in Japan ( FEC–284/14). This paper represents Comite revision of FEC–284/10 which was referred to Comite 1 on July 14, 1948. Chairman of Comite 1 indicated Sov amendments to paras 4 and 5 and Neth amendments (C1–284/13) had been defeated and that in place of either US or UK amendment to para 5 a compromise wording of para 5 had been agreed upon as follows: “Nationals of countries at war with Japan who had duly filed in any country the first application for a patent not earlier than twelve months …”2. Positions of Chi, Indian, and Sov members reserved on this para.

No action taken on Comm level.

  1. See memorandum of February 3, p. 642.
  2. Omission as indicated in the original telegram.