740.00119 PW/5–2449: Telegram
The Chargé in Japan (Huston) to the Secretary of State
174. Cite CX–50259, unnumbered to Army Dept, unnumbered to CSUSA. Reference State Serial 213, May 18, 1949,1 concerning Japanese reaction to US reparations statement.
[Page 755]Unanimous Japanese reaction one of elation. Japanese word most commonly used was “arigatai,” meaning welcome. US statement not unexpected by informed Japanese quarters, but all were surprised by sweeping nature of US position, especially decision that primary war facilities should be converted to peaceful use where possible. All quarters Japan attributed decision to US generosity and to US desire to revive Japanese economy, and emphasized improved morale of people and likelihood of higher standard of living.
Japanese Government reaction entirely favorable without regard to politics. Diet members emphasized both US desire to help Japan and saving of well over 2 billion yen from Japanese budget. Opinion also expressed in Diet that peace treaty will be facilitated since Japan’s major wartime obligation apparently removed. Private opinion also expressed that this US move effectively counteracts recent gains Communist influence resulting from China successes. No official Communist Party reaction; Communists want budget saving effected to be used for education, and one prominent Communist claims that US move means reparations from production, which he says Communist Party has always advocated. Japanese Finance Ministry has cautioned that US move does not necessarily mean that no further reparations will be taken from Japan, but Foreign Office has indicated publicly that US position will effectively preclude further reparations after interim program finished.
Japanese press gave US statement widest publicity, extras on day of announcement and headlines for two days. Technical aspects regarding revision of directives, primary war industries, et cetera, caused some confusion but press and public quickly realized that US was stopping present reparations program and advocating maximum use industrial capacity Japan for peace-time industry. Japanese press and public only vaguely aware of mechanics of FEC but are clearly conscious of US contribution to Japan’s economic recovery; connection with nine economic principles and Dodge Mission noted. Stock market, especially heavy industry, jumped immediately after US announcement. Later reactions concerned statistics of repatriations [reparations] already delivered, budgetary saving and use of this money, and effect on deconcentration program of stopping of reparations.
Local allied representatives accepted US decision without protest, except Chinese and Filipinos who have made vigorous informal protests. All local allied representatives appear to have realized probability of some such US move and most do not question its necessity. Chief concern of local representatives now is whether or not equipment now allocated but not delivered to four advance transfer countries will be cut off.
- Not printed; it requested information (740.00119PW/5–1849).↩