740.00119 PW/3–349
The Secretary of the Army (Royall) to the Secretary of State
Dear Mr. Secretary: With respect to the matter of Japanese reparations, there are transmitted herewith1 as alternatives I and II two positions which the United States might take. These alternatives, I am informed, are adapted from proposals which you have had under consideration. Although alternative II would appear to be in line with the latest recommendations from General MacArthur and might appear preferable from an immediate point of view, taking into account [Page 682] the Japanese stabilization program, nevertheless alternative I would appear to be preferable if it will dispose of the problem with a greater degree of finality and will make the greatest progress toward the development of normal Japanese international relations. Also it has been our understanding that alternative I corresponds to the preference of the Department of State. However, the Department of the Army would accept either of these alternatives, or a position comparable thereto, if the one selected will be considered by the Department of State as the “final settlement” of the Japanese reparations problem and if the Department of State will agree to discuss the proposed United States position with the Chairmen of the Foreign Afairs, Appropriations, and possibly the Armed Services Committees of Congress before this position is finally adopted as a basis for negotiations with other countries.
As you know, the Department of the Army is anxious to establish as quickly as possible a United States position on Japanese reparations which, to the maximum degree possible, will dispel business and financial uncertainty in Japan and which, in the near future, will terminate costs to the Japanese government being expended to maintain and guard possible reparations assets. A decision is needed now in the interest of inducing Japanese economic recovery and a status of self-support for Japan in order to lighten the United States’ financial burden in connection with our responsibilities inherent in the Japanese situation. This whole matter has been thoroughly discussed with General MacArthur and further consultations with the Supreme Commander, it is believed, would serve no useful purpose. It is hoped that you will advise us of your decision.
Sincerely yours,
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