740.00119 PW/5–849: Circular telegram
The Secretary of State to Certain Diplomatic Offices 1
urgent
There fols background material for use as appropriate in presenting FonMin aide-mémoire on Jap reparations and level of industry quoted immediately preceding tel:2
US position formulated as integral part overall US policies toward Japan in light general FE and world conditions. Recent remarkable gains East-West struggle in Europe must be weighed against grievous events China. Whole FE feeling impact Commie advances China. Throughout FE area production is low, intra-regional trade hamstrung.
Despite island position and presence Allied occupation forces, Japan not isolated from these developments. Jap people have been disconcerted but also impressed by Commie advances China; Japan Commie [Page 737] Party following and influence have increased. Growing uneasiness and restiveness among Japs. Japs will either move toward sound friendly relations with non-Commie countries or into association Commie system in Asia. Only hope for peaceful Japan with continued friendly attitude toward free and democratic world lies in peaceful economic and social development with other peace-minded nations particularly in Pacific area. If effort is made to hold Japan in such tight check that it cannot develop normal trade, and if additional obstacles are added to those already faced by Japan in regaining a self-supporting status, FEC countries by own short-sightedness may gradually alienate now friendly disposed Japan and make it easy prey to Commie ideologies.
In present circumstances, Jap reparations must in last analysis be paid by US taxpayer. US naturally opposed to continuance such result. Japan faces extremely difficult task maintaining 80 million population on meager resources home islands. US has borne and is continuing bear burden current Jap deficits and bulk occupation costs to amount of almost 900 million dols annually. Faced by world-wide demands on its resources, US must end Jap burden earliest possible moment or jeopardize other foreign assistance programs. Essential therefore that Japs devote selves single-mindedly to stabilization and recovery objective. Obstacles to success program already so great imposition added burdens cld easily turn prospects success into failure.
Peaceful and democratic Japan long been recognized as essential element in stable and peaceful FE. US determined Japan’s war-making capacity shall not be permitted re-emerge. Hopes other FEC nations may be able agree further reparations wld constitute serious impediment to attainment of fundamental common objectives regarding Japan of far greater importance than benefits which cld be derived from such reparations.
- At Canberra, Canton, London (with added statement: “In presenting this matter to Bevin, Pls recall statement I made to him during conversation Apr 2 that reparations ‘are a confusing factor in the Jap economy and we shall let them fall into oblivion’”), Manila (with added statement: “In presenting aide-mémoire to President, pls state that though point of view expressed in Amb Romulo’s statement in FEC Mar 17 is fully understandable, it is hoped Phil Govt will appreciate broad considerations underlying US position. US has and will continue to make its interest in welfare Phils manifest through special direct arrangements”), New Delhi, Ottawa, Paris, The Hague, and Wellington.↩
- Circular telegram of May 8, 1 a. m. (originally 5 p. m.), to 10 FEC posts, quoted what was “substantively identical with statement to FEC” on May 12 (Department of State Bulletin, May 22, 1949, p. 667).↩