Memorandum of Conversation, by the Consultant to the Secretary ( Dulles )
Subject: Japanese Peace Treaty
Dr. Koo stated that his government was in general accord with the principles set out in the 7-point memorandum1 previously given him. With respect to Formosa, it was his understanding that even though [Page 1373] the future disposition of Formosa was left unsettled Japan would, by the treaty, renounce its own title thereto. With respect to reparation his government was prepared to make no reparation claims provided all others did the same. His government was in accord with the security provision contemplated and, with United States trusteeship of the Ryukyu and Bonin Islands.
Dr. Koo inquired whether any reply had been made to the inquiries which Mr. Malik had made of me. I said that a reply had been drafted and would probably be transmitted to Mr. Malik within a day or two and then would be made public.2 I said that the contemplated reply did not enlarge upon the original memorandum.
Dr. Koo inquired whether any of the other conversations had brought up the question of Chinese communist participation. I said that so far no other country had raised this as a major point, but I had no doubt that before we got along much further it would be raised. I asked what he thought the attitude of Japan would be toward dealing exclusively with the national government. He said he thought they would be willing to do so because there were increasingly good relations, particularly with trade between Formosa and Japan. However, he said that there were considerable number of Japanese traders who would put pressure on to have their government recognize and deal with the communist government. He thought, however, this pressure would be less today than heretofore because of the fact that the government monopolies of the Chinese communist trade made dealing with communist China rather unattractive.