694.001/3–1251: Telegram

The Acting Secretary of State to the Acting United States Political Adviser to SCAP (Bond)


Topad 1333. For Bond from Dulles. Further consideration certain provisions Provisional Memo initialed by Allison and Iguchi Feb 81 has resulted in alteration those provisions in draft treaty now being circulated for Dept clearance. Pls see Iguchi and hand him memo along fol lines. Request reply soonest, including steps Jap Govt wld be prepared take under 5. Headings correspond with those in Provisional Memo.

1. Preamble: In view wide concern trade practices problem clause added Preamble under which Jap declares intention in public and private trade and commerce to conform to internationally accepted fair practices. Allies welcome this and other statements of intention in Preamble and promise will seek to facilitate their realization. Scope of para (a) in “Polit and Econ Clauses” also extended to include treaties and conventions for promotion fair trade practices.

2. Terr: Unless and until Sovs remove selves from treaty picture appears preferable draft assume their participation. Accordingly provides for return by Jap of South Sakhalin and all islands adjacent thereto to SU and handing over to Sovs of Kurile Islands as they may be defined by bilateral agreement or by judicial decision under treaty disputes procedure. Provision wld be operative only if Sovs sign and ratify treaty.

3. Security: Considered unnecessary include last six and half lines, beginning “and any forces”, both in bilateral and in treaty so have deleted from treaty draft.

4. Pol and econ clauses, para (c): In addition to provision for notification bilateral non-polit treaties, draft provides Jap will accept annulment, as a consequence of war, of its rights under prewar pol treaties to which Jap and one or more of Allies and Associated Powers were parties.

5. Claims Arising out of the War: In view complications compensation question we are disposed to minimize this aspect matter in the [Page 909] treaty. Best solution appears to be for Jap voluntarily to enact compensation legis, which might fol lines Annex I of Provisional Memo. Treaty wld merely provide compensation wld be made in accordance with Jap domestic legis in yen subject to Jap fon exchange regs and in no event wld natls of Allied and Associated Powers receive less favorable treatment than that accorded to Jap natls. Separate cable explaining considerations behind this change in greater detail being sent Gen MacArthur.2

6. Submarine Cables: Fol discussion with Defense and FCC best solution this problem, which was not discussed with Jap, appears to be to divide cables equally between Jap and Allied Powers to whose terrs Jap cables run. Fifty-fifty ownership and operation of submarine cables has proved successful where employed (e.g. Ital cable from Italy to Azores to U.S.) and is believed preferable to dividing ownership at outer limit territorial waters Allied Powers as in Ital Treaty. Draft accordingly provides that Jap submarine cables connecting Jap with terr removed from Jap control pursuant to treaty shall be equally divided, Jap retaining Jap terminal and adjoining half cable and detached terr remainder of cable and connecting terminal facilities. [Dulles.]

  1. See Annex I to the letter of February 10 from Mr. Dulles to Secretary Acheson, p. 875.
  2. In telegram 1331 to Tokyo, March 12, marked “For MacArthur from Dulles,” the Department stated in part: “We wld eliminate any treaty commitments and treaty machinery to deal with these claims, leaving matter to Japanese domestic legis subject only to treaty requirement that compensation shall be on basis not less favorable than to Japanese nationals. Probably the Japanese as a matter of good business relations wld want to embody into domestic legis something along the line we discussed Tokyo permitting installment payments in blocked yen to enable foreign concerns to reestab their Japanese businesses and which provisions Japanese found entirely acceptable and which Dodge felt wld not cause any internal budgetary problem. However, we believe shifting of internal compensation problem to domestic legis and taking it out of peace treaty will make it easier to eliminate external reparation payments. We do not know whether Brit will accept our new formula, but think it worth while to try it.” (694.001/3–1251)