694.001/5–1250

The Special Assistant to the Under Secretary of the Army ( Reid ) to the Assistant Secretary of State ( Butterworth )

top secret

Dear Mr. Butterworth: The attached summary of a recent conversation with Mr. Ikeda Hayato1 is forwarded at the request of Mr. Joseph M. Dodge.2

Sincerely,

Ralph W. E. Reid

[Attachment]

Subject: Discussion of Japanese Peace Treaty with Mr. Ikeda, Finance Minister of Japan

Mr. Ikeda reported that there has been continued discussion of a Japanese Peace Treaty in the Diet. In the Prime Minister’s State of the Union Message to the Diet, it was described as being closer of realization than has since been apparent. The Prime Minister’s statement was somewhat over optimistic and the situation has since become discouraging.

The political opposition have centered their attack on the point that a one-party treaty is being discussed as against an over-all treaty and that the publicity about treaty discussions indicates the possible exclusion of the interests of certain other countries.

[Page 1195]

This point of attack originated with the Communists but reportedly has been joined by the Socialists and Democrats who apparently have grouped themselves into a council or front opposing a U.S. treaty and opposing continued military bases for the United States.

Two resolutions on this are reported to have been submitted to the Diet, one by the United Front and one by the Communist Party, which differed in some respects but were voted down by the House about two to one.

Actually, the United Front appeared to be aiming at a coalition that would carry a non-confidence vote against the Government, but this coalition ended in aiming their efforts at the Peace Treaty situation.

The present government party prefers the earliest possible treaty with all interested governments included, but, if this is not possible, wants the other kind of a treaty as early as possible. Essentially, they want the best they can get under the circumstances and as quickly as possible.

The political question for the party now in power in Japan is whether or not to carry the treaty question and their position on it as part of the party platform in the approaching elections for the House of Councillors, and what this position should be.

The opposition against continuing U.S. military bases in Japan is met by the Prime Minister as a hypothetical question to be considered when and if such a proposal is made.

The opposition moves are construed as an internal political effort directed against the government in power, except, of course, for the Communist attitude which is traditional and expected.

While it cannot be proved, the majority of the public are believed to favor the earlier treaty on any reasonable terms.

The United Front opposition is being strengthened by contentions that their democratic privileges are not actual in relatively minor matters of policy affecting the day to day life of the Japanese and in the actions of the Diet with respect to these. They have been looking for more latitude in these matters which they claim in some cases has been denied them. They object to interference in matters below the level of basic policy, such as the implementation of the Stabilization Program.3 The opposition contends that the freedoms and decontrols resultant from the Stabilization Program have been negatived by other and continuing interference at lower levels. The opposition does not believe that this is with the approval of SCAP, but that nevertheless it exists.

Mr. Ikeda conveyed a personal message from Prime Minister Yoshida to Mr. Dodge to the effect that the Government desires the [Page 1196] earliest possible treaty. As such a treaty probably would require the maintenance of U.S. forces to secure the treaty terms and for other purposes, if the U.S. Government hesitates to make these conditions, the Japanese Government will try to find a way to offer them.

A study of the constitutional angle has led to the conclusion that if continuing U.S. bases was made a requirement of a treaty it would make such a treaty easier to establish; also, that even volunteering the continuance of these bases would not be a violation of the Japanese Constitution. This provision could be in the treaty itself or by separate agreement.

Mr. Ikeda said that they were always aware that the present economic aid given Japan could be terminated by the unilateral action of the United States Government, but that if and when private capital from the United States could be introduced into Japan it would not only act as a most desirable substitute to the present grants of aid but indicate even to a greater extent the tie between the two countries. The introduction of substantial amounts of private capital investment from the United States would tend to make the Japanese people less skeptical about their own future.

In reviewing the attitudes of the Japanese people, Mr. Ikeda stated that they had not forgotten the statement of Secretary of the Department of Army Royall4 in February 1949 to the effect that Japan was not necessary to the United States. Emphasis had been given this by later public statements of the United States Government in writing off Formosa. It was further colored by the Communist gains in Indo-China, the fact that South Korea is not strong and could, perhaps, easily be abandoned, and that India’s position is not altogether clear.

The Japanese people are desperately looking for firm ground.

There is also the possibility that the Soviets may offer a peace treaty in advance of the United States and might include in that offer the return of Sakhalin and the Kuriles.

The people were aware of the situation in Berlin and the apparent concessions and retreats by the United States Government in meeting the Soviet advances in Europe.

They were skeptical on just what and when and where the United States would stand firm, and particularly with respect to Japan.

Mr. Ikeda emphasized that if this should prove to be no time for a Japanese peace treaty that it would be very discouraging for the present Japanese Government and the Japanese people. He believed it only could be offset by the Japanese being allowed more freedom [Page 1197] in the conduct of their own domestic economic and political affairs. In other words, to give as much as possible of the effect of a treaty with the U.S. and create a de facto treaty situation. He added that what had been expected from the Yoshida Government and Cabinet was substantially more freedom in conducting their own affairs than had proved to be the case and that as a result there was considerable disappointment and some declining popularity of the present Government. However, this did not mean that other parties were gaining in popularity. If the present Government should fall, no other party could gain the security majority that for the first time had been carried by the Yoshida Government.

Mr. Ikeda suggested that what was needed was some greater demonstration of interest in Japan than dollar aid as it was well known the United States was providing similar aid to other countries.

Mr. Dodge pointed out, completely unofficially and informally, that as the general international situation between the Soviet Union and the United States Government deteriorated, and particularly as this appeared to exist in the Far East, it was certain to raise serious questions as to the advisability of an effort to establish a peace treaty with Japan under these conditions and at this time. This in no way denied the general desire and objective of a peace treaty at the earliest possible and feasible moment. He suggested the possibility which must be taken into account that, as the general situation deteriorated, the military and strategic position of the United States rose in importance as a consideration. This, if true, would lead to a natural conclusion that the United States position in Japan should probably be maintained at its strongest.

It was also pointed out that the matter of a Japanese peace treaty had been and was under continuous discussion within the U.S. Government; that so far as he knew the Government position had not been completely clarified or determined as of the present. However, there was to be a discussion of the Japanese peace treaty at the Council of Foreign Ministers Meeting to be held shortly in London, and at that time there was a possibility that the United States position would be publicly exposed.

In any event, it did not appear either practical or possible to give Mr. Ikeda any definite assurance at this time other than the continuing interest of the U.S. Government in establishing a treaty as soon as practicable.

Mr. Ikeda was informed that his views and the views of his Government would be summarized, as they have been above, that this summary would be subject to his review and approval, and would then [Page 1198] be placed in the hands of the proper officials of the Department of State and the Department of the Army.5

Joseph M. Dodge
  1. Finance Minister of Japan.
  2. Financial Adviser to the Supreme Commander and Fiscal Adviser to the Under Secretary of the Army.
  3. For documentation pertinent to the initiation of this program, see Foreign Relations, 1948, vol. vi, pp. 1059 ff.
  4. In Tokyo at an off-the-record press conference held February 6, 1949. For pertinent documentation, see Foreign Relations, 1949, vol. vii, Part 2, p. 648.
  5. In a memorandum of May 12, 1950, to Acting Secretary Webb, Mr. Butterworth said this paper had been forwarded to Mr. Dulles as well as to himself and continued in part: “The conversation is regarded as significant because it is the first expression we have had at an official level of the attitude of the Japanese Government on the peace treaty and related questions.” Mr. Butterworth stated also that a résumé of the conversation (not printed) was being wired to the Secretary. (694.001/5–1250)