740.00119 PW/1–649
Memorandum by the Chief of the Division of Northeast Asian Affairs (Bishop) to the Director of the Office of Far Eastern Affairs (Butterworth)
With reference to our conversation this morning I am attaching a memorandum on Japanese reparations.1 I regret its length but feel that the subject merits rather exhaustive treatment.
Personally I remain convinced that the position recommended by General MacArthur in his last telegram on this subject (C–66288, December 142) is the position which the United States can best defend, which will in the long run cause the least bitter disappointment to friendly countries, which is in the best interest of the United States, which will be most acceptable to Congress and to the American people, and which, for all of these reasons, we should adopt. As General MacArthur has pointed out, economic stabilization has now formally become a basic and primary “Allied objective” in the occupation of Japan. As far as United States policy toward Japan is concerned, economic recovery is second only to United States security interests. I believe that we can make, and should make at the earliest practical moment through the diplomatic channel, a strong case for our position. We can defend it not only on the grounds of practicality and political realities, but also on the grounds of the moral and political commitments we have assumed. Without in the least detracting from our commitment that there shall be reparations from Japan, we can in good conscience point out that there have been reparations. Claimant countries have already appropriated, on reparations account, from the Japanese economy large amounts of overseas assets.
I believe, as is pointed out in the underlying memorandum, that we could emphasize with great effect that, in considering the total amount of reparations to be exacted from Japan, we have always restricted that total to the amount which would allow a decent livelihood for the Japanese; that the Japanese economy has been a drain on the United States since the day of surrender; that the United States must examine carefully present worldwide demands on its resources and weigh each demand in the light of ability to meet it; that to abandon Japan at this juncture would be to undo the recent costly victory in the Pacific; and that we have no intention of so abandoning Japan.
With regard to the bitter disappointment which claimant nations will feel no matter what settlement we propose, I believe that we have a stronger case, legally and morally, arid a more palatable proposition, if we base our position on the fact that the reparations which can be [Page 609] taken from the Japanese without impairment of their ability to make a decent livelihood have already been taken, than we do if we attempt to agree that the Japanese can afford to give up only, say, a hypothetical 100,000 machine tools whereas Australia or some other country argues that the Japanese can give up 200,000 machine tools plus 2 locomotives. The consequent debate upon details would deprive us of a strong, unequivocal position and in the long run, because of the necessity of compromise and the end result of almost nothing, would bring more enduring bitterness than would a debate on the defensible principle that no further reparations removals are possible.
As soon as a Departmental position can be agreed upon, NA will prepare drafts of the necessary procedures and documents to implement that position.
- Not printed.↩
- Not printed, but see memorandum on this subject in Foreign Relations, 1948, vol. vi, p. 1064.↩