Foreign Relations of the United States, 1951, Asia and the Pacific, Volume VI, Part 1

694.001/6–151

Japanese Peace Treaty: Working Draft and Commentary Prepared in the Department of State

secret

[Washington,] June 1, 1951.

Preamble

I. May 3 Draft

[Here follows text of the Preamble of the May 3 draft. For that draft, see page 1024.]

II. U.S. Position

The United States proposes only two minor amendments, namely, that “its” be substituted for “her” in the seventh line of the second paragraph and that “post-surrender” be substituted for “post-war” in the thirteenth line of that paragraph. The impersonal pronoun is believed preferable in treaty drafting, and “post-surrender” is believed the more accurate term in view of the fact that the state of war will technically continue until the coming into force of the treaty.

III. Views of Other Governments

Suggestions by other Governments on the Preamble not already incorporated in the May 3 draft have been mainly on the question of participation, in connection with the first paragraph of the Preamble.

Australia

“It is considered that neither government of China should be invited to sign the treaty at this stage.”

Canada

Memorandum of May 1:

“The lack of unanimity among the governments which, by general consent, have the greatest interest in the Japanese Peace Treaty as to the proper Chinese signatory poses the major problem. The Canadian Government is concerned in addition with the effect of this problem on future relationships between Japan and China. It might be undesirable, from the point of view of future stability in the area, that Japan be bound to accept the signature of any Chinese government, upon which the opinion of the allied powers is divided, to a Treaty with such important implications for itself and China.

“The Canadian Government shares the views of the United States Government that an early peace treaty with Japan is desirable. For this reason and because of the difficulties already mentioned, we suggest that, while provision be made in the Treaty for signature on behalf of China, the signature be delayed for the present. An accession clause could be included in the Treaty to which China might later adhere. This procedure could also be followed in the case of other governments which might be unwilling or unable at present to adhere to the Treaty.”

Memorandum of May 18:

“Although it will be the purpose of the Japanese peace treaty to look to the future in Japan’s relationships with the community of nations, there is something to be said for including in the preamble some clause indicative of the fact that conclusion of the peace treaty brings to an end a situation brought on by an aggressive war. This would not be a guilt clause properly speaking but a clause designed to set the outbreak of hostilities in the proper historical perspective. As far as possible, the wording of the clause should avoid offending Japanese susceptibilities and any suggestion of revenge. The Canadian Government suggests, therefore, that there might be included in the preamble a clause along the lines of paragraph 6 of the Potsdam Proclamation. The clause should not stigmatize the Emperor, the present Japanese Government or the people of Japan but might in fact contain commendation of the steps taken by post-war Japan to buttress itself against a repetition of such an abuse of power. It might appear strange in the eyes of the world if Italy alone, the weakest member of the aggressive triumvirate, had to admit its share of responsibility. The Canadian Government therefore suggests some such clause as the following:

‘Japan bears its share of responsibility for precipitating a war of aggression into which her people were deceived and misled by irresponsible and self-willed militarists’.”

(Comment—There seems to to be little remaining pressure for a war guilt clause of any kind. If it appeared desirable for negotiating purposes, however, the Canadian draft might be accepted as a whereat clause between the second and third paragraphs of the Preamble.)

China

Memorandum of April 24:

“It is reported that certain Allied Powers are in favor of including the Chinese Communists as a party to the peace treaty or leaving China out as a party to the treaty. This trend of appeasement, if it is not checked in good time, would defeat the very purpose of an early peace with Japan with far-reaching repercussions throughout the world. The Chinese Government feels strongly that it is for the United States Government, as the sponsor of the peace treaty, to help forestall such a tendency and, in doing so, to bring to the fore the following facts: (a) my Government is the one recognized by the United Nations; (b) my Government is the one which fought and declared war on Japan and is the one recognized by the overwhelming majority of the countries at war or in a state of belligerency with Japan; and (c) my Government is the one representing China on the Far Eastern Commission.”

India

The Government of India consider “that the terms of the treaty should be such as not to give offense to powers like the U.S.S.R. and the Central People’s Republic of China who, as close neighbors of Japan, are vitally interested in the Far East. It is the view of the Government of India that if a stable and enduring peace with Japan is to be attained, it is essential that the Central People’s Government of China should be invited to express its views on the draft peace treaty.”

chapter i

peace

Article 1

I. May 3 Draft

[Article omitted.]

II. U.S. Position

No changes proposed.

III. Views of Other Governments

No objections offered.

chapter ii

territory

Article 2

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. proposes the following redraft:

• “(a) Japan, recognizing the independence of Korea, renounces all right, title and claim to Korea, including Quelpart, Port Hamilton and Dagelet.
• “(b) Japan renounces all right, title and claim to Formosa and the Pescadores.
• “(c) Japan renounces all right, title and claim in connection with the League of Nations Mandate System, and accepts the action of the United Nations Security Council of April 2, 1947, extending the trusteeship system to the Pacific Islands formerly under mandate to Japan.
• “(d) Japan renounces all right, title and claim based on any part activity of Japanese nationals in the Antarctic area.”

This revision contains only one substantive change—recognition by Japan of the independence of Korea, recommended by China, Ceylon and other countries. It has been considered practicable to have Japan do this instead of agreeing “to recognize and respect all arrangements which may be made by or under the auspices of the United Nations regarding the sovereignty of Korea”, as provided in the British draft. The other changes are merely in the interest of organizational clarity.

III. Views of Other Governments

Australia

Australia “wishes to see included a provision whereby Japan would disavow any claims on the Antarctic area deriving from the activities of Japanese nationals or otherwise.”

(Comment—The only difference between this proposal and the language of the May 3 draft, or the language of the U.S. proposal above, is the addition of the phrase “or otherwise”.

Canada

Memorandum of May 1:

“The Canadian Government is of the opinion that the Japanese Peace Treaty should, insofar as it is possible, follow the spirit of wartime agreements concerning the disposition of former Japanese territories. It is realized, however, that certain of the territories, notably Formosa, have become issues of the international concern apart from their relation to the Japanese Peace Treaty. In the interest of reaching agreement on the Treaty itself, the Canadian Government is of the opinion that Japan should be called on to renounce all her rights, titles and interests in her former territories, leaving their disposition to be decided upon outside a treaty.”

Memorandum of May 18:

“The Canadian Government, in its memorandum of May 1 to the United States Government stated that in its opinion ‘the Japanese peace treaty should, insofar as it is possible, follow the spirit of wartime agreements concerning the disposition of former Japanese territories’. In view of the lack of agreement on the disposition of some of the territory involved, we believe there is merit in an approach of the nature suggested in our earlier memorandum which would treat all former Japanese territory in a consistent fashion and not leave the way open for charges of discriminatory treatment of individual pieces of territory. The reply of the United States Government of May 8¹ did not comment directly on the principle involved in the Canadian suggestion.”

(Comment—While this formula would please the Chinese Nationalist Government, which also points to the apparent discrimination between the U.S. proposals for Formosa and for Sakhalin and the Kuriles, it fails to take account of the different circumstances obtaining in regard to Formosa and in regard to Sakhalin and the Kuriles, Korea and the Ryukyus. There is no ground for questioning Russia’s legal right to Sakhalin and the Kuriles if it is a party to the treaty, while agreement on the proper disposition of Formosa would be impossible in the treaty.)

“It would not seem necessary that Japan accept the action of the United Nations Security Council (extending the trusteeship system to the former Japanese mandates) since Japan will be bound by the terms of the treaty upon her signature of it.”

(Comment—Japan will be bound by the terms of the treaty but it will not be bound on this point unless the treaty makes mention of it.)

China

Memorandum of April 24:

“With regard to the territorial clauses, the Chinese Government takes note of the fact that the United States Government no longer maintains the proposal it made in the seven-point statement of principle of September 11, 1950,² that the status of Formosa, the Pescadores, South Sakhalin and the Kurile Islands be made a subject for future decision of the United Kingdom, the U.S.S.R., China and the United States. It is the view of the Chinese Government that this proposal, now dropped, should not be revived. Meanwhile, the Chinese Government wishes to take this opportunity to make known to the United States Government the following views:

“It is the basic view of the Chinese Government that Formosa and the Pescadores constitute historically, ethnically, legally, and in fact a part of Chinese territory. While the draft treaty provides only for the renunciation by Japan of Formosa and the Pescadores, it is, however, provided that Japan will return to the U.S.S.R. the southern part of Sakhalin as well as all the islands adjacent to it and will hand over to the Soviet Union the Kurile Islands. The disparity between the treatment accorded to these two groups of territories is so evident that it creates the impression of discrimination against China, which is obviously not the intention of the author of the draft treaty. In this connection, the Chinese Government is of the opinion that the principle of nondiscrimination should be followed. The Chinese Government will raise no objection to the present form of Article 5 (present Article 4) of the draft treaty in the event that an express provision of the return of Formosa and the Pescadores to the Republic of China is also included in the treaty. Failing such inclusion, the provisions contained in that article should be substituted with a simple renunciation on the part of Japan of South Sakhalin and the Kurile Islands.”

Ceylon

“Japan should renounce all rights, titles, and claims to ceded territories, as well as those deriving from the mandate system. The future of these territories should be left for decision by the United Nations.

. . . . . . . . . . . . . .

“There seems to be some doubt over the interests of Japan, if any, in the Antarctic region. While the Ceylon Government is of the opinion that if there are any such rights or claims, Japan should renounce them, it is also felt that if Japan has no recognized rights or claims in the Antarctic, it will not be necessary to provide for their renunciation. The Ceylon Government does not, however, consider that the Peace Treaty should exclude Japan from the Antarctic region for all future time and in the circumstances it may be desirable not to mention the question in the Treaty at all.”

India

“It is the view of the Government of India that Japan should not only renounce all rights, titles and claims to Formosa and the Pescadores Islands but should cede these islands to China. The question as to when these islands, especially Formosa, should be returned to China could be discussed separately. China should have the assurance that these islands would be returned to her at a future date in conformity with the Cairo Declaration.”³

New Zealand

“In view of the need to ensure that none of the islands near Japan is left in disputed sovereignty, the New Zealand Government favours the precise delimitation by latitude and longitude of the territory to be retained by Japan as suggested in Article 1 of the United Kingdom’s draft. The adoption of this device could for example make it clear that the Habomai Islands and Shikotan at present under Russian occupation will remain with Japan.”

(Comment—In the discussions at Washington the British agreed to drop this proposal when the U.S. pointed to the psychological disadvantages of seeming to fence Japan in by a continuous line around Japan. The Japanese had objected to the British proposal when it was discussed with them in Tokyo. U.S. willingness to specify in the treaty that Korean territory included Quelpart, Port Hamilton and Dagelet also helped to persuade the British. As regards the Habomais and Shikotan, it has seemed more realistic, with the USSR in occupation of the islands, not specifically to stipulate their return to Japan.)

“It is felt that the reference to the Antarctic in Article 3 should be made the subject of a separate clause which it is suggested might be worded as follows—

‘Japan recognises that she has no claim to or in connection with any part of the Antarctic area whether deriving from the activities of Japanese nationals or otherwise.’”

(Comment—The wording of the May 3 draft (unchanged in the U.S. revision) seems preferable. It would be odd for Japan to recognize that it has no claim, rather than to have it renounce any claims it may have. Actually, though the Japanese Government has never made any claims, the activities of Japanese private expeditions have provided the basis of claims.)

Article 3

I. May 3 Draft

[Article omitted.]

II. U.S. Position

No changes proposed.

III. Views of Other Governments

Canada

“The Canadian Government does not believe that its’ suggestion (see excerpts from Canadian Memoranda of May 1 and 18 under Article 2), if adopted, would leave the future of the Ryukyu and Bonin Islands ‘less certain’ than is the case if the United States draft prevails. It is suggested that even more certain wording might be employed. After renunciation by Japan of its rights in the Ryukyu and Bonin Islands is suitably provided for in the treaty, a clause along the following lines might replace the present Article 4:

‘The United States shall have the right to exercise any powers of administration, legislation and jurisdiction over the territory and inhabitants of the Ryukyu Islands south of 29° north latitude, the Bonin Islands, including Rosario Island, the Volcano Islands, Parece Vela and Marcus Island including their territorial waters until such, time as they are placed under the trusteeship system of the United Nations’.

. . . . . . . . . . . . . .

“It would not seem necessary that Japan ‘concur in any such proposal’ (to place the former mandates under trusteeship) since Japan will be bound by the terms of the treaty upon her signature of it.”

(Comment—Japan will be bound by the terms of the treaty but it will not be bound on this point unless the treaty makes mention of it.)

India

“The Government of India feel that Japan has strong sentiments attached to the Ryukyu and the Bonin Islands which are inhabited predominantly by the Japanese. The Government of India think accordingly that these islands should continue to remain under Japanese sovereignty.”

New Zealand

“It is felt that Japan should be specifically required to renounce sovereignty over the Ryukyus, Bonins and the Volcano and Marcus Islands. Accordingly the New Zealand Government would prefer the substitution of Article 5 of the United Kingdom draft for Article 4 suggested by the United States.”

(Comment—There are advantages to leaving nominal sovereignty with Japan in view of the strong Japanese feeling over the loss of the Ryukyus.)

Article 4

I. May 3 Draft

[Article omitted.]

II. U.S. Position

No changes proposed.

III. Views of Other Governments

Canada

Memorandum of May 1:

“For this reason (see excerpt from Memorandum of May 1 under Article 2) we would favour the deletion of Article 5 (present Article 4) of the draft under consideration and the simple enumeration of the territories mentioned in it in the first sentence of Article 3 (of U.S. March draft) along with the territories already enumerated.”

China

“The Chinese Government will raise no objection to the present form of Article 5 (present Article 4) of the draft treaty in the event that an express provision of the return of Formosa and the Pescadores to the Republic of China is also included in the treaty. Failing such inclusion, the provisions contained in that article should be substituted with a simple renunciation on the part of Japan of South Sakhalin and the Kurile Islands.”

India

“Article 5 of Chapter III of the U.S. draft should be read with Article 19 of Chapter VIII. The Government of India feel that the southern part of Sakhalin as well as the islands adjacent to it and the Kurile Islands which are already in the possession of the U.S.S.R. should go to the U.S.S.R. as agreed upon at Yalta, even if the U.S.S.R. fails to sign or adhere to the same type of treaty as may be signed or adhered to by the United States and other nations. Any technical denial of these islands to the U.S.S.R. will only provoke that country without any compensating advantage. In any case, these islands will continue to be under the domination of the U.S.S.R. whether she signs the treaty with the other Allies or not.”

New Zealand

“It has been noted that in the view of the United States Government the cession to the Soviet Union of South Sakhalin and the Kurile Islands should be subject to the suspensory provision in Article 19 of its draft. Pending further study of the implications of this provision, particularly as it may affect the permanence of the other territorial adjustments proposed, the New Zealand Government wishes to reserve its position.”

Article 5

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. proposes that the beginning of paragraph (b) be revised to read:

“(b) Claims of Allied Powers concerned and of residents of the territories ceded or renounced …”

The reason for this change is simply to include the governments themselves as possible claimants.

It is further proposed that the question of Japanese liability for debts in respect of properties in renounced or ceded territories, referred to in the note to Article 5, be discussed with the Japanese Government.

The problem in respect to these debts is whether Japan should continue liable for obligations of the Oriental Development Company, Ltd., which financed the development of agriculture in Korea; the Taiwan Electric Company, Ltd., which financed electric power development in Formosa; and of the South Manchurian Railway. The total amounts involved are believed to be about $24 million and £5 million sterling, including accrued interest.

Bonds of these issues were originally guaranteed by the Japanese Government and in addition became direct obligations of the Japanese Government by virtue of Japanese wartime law, which also converted locally held bonds to yen obligations. It can be argued that there is no basis for relieving Japan of the obligation, since the loss to Japan resulting from the necessity to honor the debts while losing the assets is the consequence of the renunciation in Article 5(a) of the yen claims of the Japanese Government against the corporations. On the other hand, the Japanese could argue strongly that the monies borrowed were used for development in the ceded areas and that the obligation should be assumed by the governments getting the benefit of the assets. If there were good reason to believe that these governments would be able effectively to assume the obligation this would probably be the proper solution. As it is, however, the bondholders are likely to be left in the lurch if Japan does not recognize the obligations, and the Japanese Government may desire to do so to support its international credit.

III. Views of Other Governments

Canada

“Confusion might arise if no reference is made to the nationality of Japanese domiciled in those territories, the disposition of which is provided for in these articles of the treaty. It is suggested, therefore, that some attention should be given to the inclusion of an article similar in intent to that of Article 19 of the Treaty of Peace with Italy.”

(Comment—The problem faced in the Italian Treaty was much more complicated. Moreover, Japanese in the former dependencies have all been repatriated, except from the Ryukyus. The problem, to the extent it exists at all, can be handled by legislation by the new sovereigns, or, possibly, in the case of the Ryukyus, in the trust agreement.)

chapter iii

security

Article 6

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. reservation to paragraph (b) is lifted.

III. Views of Other Governments

Canada

“The Canadian Government would be interested to know why the United States Government thinks it necessary to include Articles 6 and 7 (Article 6 of present draft) in the treaty. While the Canadian Government does not object to the provisions of the Articles, it believes that they are not legally necessary since Japan could make treaties such as are suggested in Article 7 as a sovereign state and whether or not she joins the United Nations.”

India

“Paragraph 7 of Chapter IV (paragraph (b) of Article 6 of the present draft) refers to Japan voluntarily entering into a collective security agreement or arrangements ‘participated in by one or more of the Allied Powers.’ It is the view of the Government of India that there is little likelihood of Japan making arrangements for collective self-defence with any power or powers with which it is not now on friendly terms, at least in the near future. The Government of India feel that such a statement in the treaty would offend Japanese sentiments as it implies limitation of Japanese sovereignty. This may also offend countries that are unable to sign the proposed treaty.”

Article 7

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. reservation to this Article is lifted.

III. Views of Other Governments

Article 7 is new with the May 3 draft, which has not been presented to other governments for comment. However, Canada in commenting on the U.S. March draft expressed the view that the treaty should contain a clause similar to Article 73 of the Italian Treaty providing for the termination of the occupation.

chapter iv

political and economic clauses

Article 8

I. May 3 Draft

“(a) Each of the Allied Powers, within one year after the present Treaty has come into force between it and Japan, will notify Japan which of its pre-war bilateral treaties with Japan it wishes to keep in force or revive, and any treaties so notified shall continue in force or be revived subject only to such amendments as may be necessary to ensure conformity with the present Treaty. They shall resume their force three months after the date of notification and shall be registered with the Secretariat of the United Nations. All such treaties not so notified shall be regarded as abrogated.

“(b) Any notification made under paragraph (a) of this Article may except from the operation or revival of a treaty any territory for the international relations of which the notifying Power is responsible, until three months after notice cancelling this exception is given.”

II. U.S. Position

The U.S. proposes the following amendments:

(a) “Each of the Allied Powers, within one year after the present Treaty has come into force between it and Japan, will notify Japan which of its pre-war bilateral treaties with Japan it wishes to keep in force or revive, and any treaties so notified shall continue in force or be revived subject only to such amendments as may be necessary to ensure conformity with the present Treaty. They shall resume their force three months after the date of notification and shall The treaties so notified shall be registered with the Secretariat of the United Nations. All such treaties as to which Japan is not so notified shall be regarded as abrogated.

(b) “Any notification made under paragraph (a) of this Article may except from the operation or revival of a treaty any territory for the international relations of which the notifying Power is responsible until three months after notice cancelling this exception is given until such time as notification is given to Japan that such exception shall cease to apply.”

The first change in paragraph (a) arises from the belief that treaties which are to continue in force or be revived can practicably resume their force immediately on notification, as under the Italian Treaty.

The change in the last sentence of paragraph (a) is for greater clarity.

The revision in paragraph (b) is for greater clarity, with the three month time period deleted for the same reason as under (a).

III. Views of Other Governments

India

“Paragraph 10 (present Article 8) of this Chapter refers to the revival of prewar bilateral treaties. The Government of India are anxious to know the reason for not making the maintenance or revival of prewar bilateral treaties between Japan and the Allied Power reciprocal.”

Article 9

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. proposes:

1. The deletion of the phrase “the Convention of St. Germain-en-Laye of September 10th, 1919, and” in paragraph (b). The United States would, however, be willing to include in the treaty an article similar to Article 42 of the Italian Treaty, to read:

“Japan shall accept and recognize any arrangements which may be made by Allied and Associated Powers concerned for the modification of the Congo Basin treaties with a view to bringing them into accord with the Charter of the United Nations.”

2. Substitution of the following for paragraph (c):

“Japan renounces all rights, title and interests acquired under, and is discharged from all obligations resulting from, the Agreement between Germany and the Creditor Powers of January 20, 1930, and its Annexes, including the Trust Agreement, dated May 17, 1930, the Convention of January 20, 1930, respecting the Bank for International Settlements, and the Statutes of the Bank for International Settlements. The above mentioned rights, title and interests shall not be deemed to include the 19,770 shares of the Bank for International Settlements presently owned by Japanese financial institutions. Japan undertakes to notify to the Ministry of Foreign Affairs in Paris within six months of the coming into force of the present Treaty her renunciation of the rights, title and interests referred to in this paragraph.”

With these changes the U.S. is willing to lift the reservation in the note to Article 9.

The reasons underlying the first proposal, relating to the Congo Basin Treaties, are found in the following analysis:

1. Effects of British proposal on Japan’s position in the “Conventional Congo Basin”

If Japan renounced its rights under the Congo Basin Convention the only benefit it would thereafter derive from the convention would be that granted in Article 1, namely, “the trade of all nations shall enjoy complete freedom”. It would no longer have any rights which would guarantee equal economic treatment or afford protection against discrimination. Trade discrimination against Japan could be practiced in the Congo Basin area in a number of ways, e.g., by means of import licensing and exchange control, by the imposition of discriminatory tariffs, and by the application of certain tax laws, transit fees, industrial licensing ordinances, etc. All of these measures could be applied in such a manner as to favor only nationals of the administering power and of other states parties to the convention.

2. Trade of the Conventional Congo Basin

The administering powers have each dominated the trade of the areas under their respective administrations. Historically the United Kingdom has been significantly more important than Japan as a source of imports into the Conventional Congo Basin, and has also been a more important market than Japan for exports from those areas.

Japanese exports to the Conventional Congo Basin, before and since World War II, have been principally textiles and apparel. Although textiles have been relatively unimportant in total United Kingdom exports to the area, nevertheless competition between the two countries is greatest in these products.

3. United States trade policy toward Japan

It is the established policy of the United States to encourage the expansion of trade on a multilateral, non-discriminatory basis. The United Kingdom has subscribed to the same policy. The United States seeks, and accords, most-favored nation treatment in international trade. This policy is expressed in the Trade Agreements Act and in many international agreements to which the United States is a party, including the General Agreement on Tariffs and Trade.

United States policy recognizes that Japan cannot become a peaceful, self-supporting country without large-scale foreign trade conducted on a sound basis. The United States has consistently taken the position that, if such trade is to be developed, Japan must be readmitted to the world trading community on a basis of equality of treatment. The United States has attempted, without success, to obtain the agreement of other countries to the conclusion of a multilateral agreement extending most-favored-nation treatment to Japan. The United States has also tried and failed to have Japan invited to accede to GATT. If the British proposal were accepted, the Administering Powers would be able to discriminate against Japanese trade, and to the extent that such discrimination occurred the efforts of the United States to promote recovery of the Japanese economy would be retarded. Moreover, recognition of the rights of the Administering Powers to discriminate against Japanese trade in the conventional Congo Basin might be taken as a precedent for urging the establishment of discriminatory treatment in other areas which would tend to undermine basic principles of United States commercial policy. It would also hamper United States efforts to obtain most-favored-nation treatment for Japan.

The reasons underlying the second proposal, relating to the Bank for International Settlements, are as follows:

The phrase “is discharged from all obligations” has been inserted in the first sentence to indicate that the purpose of the provision is not to exact a penalty from Japan, but merely to formalize the termination of Japan’s participation in the administration of the BIS. It is, therefore, appropriate to refer to Japan’s being discharged from obligations, as well as being deprived of rights. Among the obligations are, for example, the obligation to subscribe to new issues of stock by the Bank. Other changes in the first sentence are intended only to identify more specifically the agreements to which Japan is no longer to be a party.

The second sentence has been inserted in order to clarify the effect of the provision on the share interests now held in the BIS by certain Japanese financial institutions. During the April–May talks in Washington the British reported that the BIS took the position that Japan should relinquish her rights in the BIS, but that the share interests should not be affected. Presumably the British agreed with this position. The proposed change merely removes the possibility that the Japanese renunciation might be construed as a forfeiture of the share interests.

Proposed New Article

The United States proposes insertion of the following as a new Article 10, subsequent articles being renumbered accordingly:

“Article 10

“The Republic of Korea shall be deemed an ‘Allied Power’ for the purposes of Articles 5, 10 (to be 11) and 13 (to be 14) of the present Treaty, effective at the time that the Treaty first comes into force.”

The reason for this proposal is that the United States now considers, in agreement with the British position, that Korea is not entitled to be a signatory to the treaty. The U.S. and other major powers deliberately refrained from recognizing the “Provisional Government of Korea” as having any status whatsoever during World War II. The facts that that government declared war on Japan, and that Korean elements, mostly long time resident in China, fought with the Chinese forces, do not, therefore, have any bearing on the question.

The Korean Government has cited the fact that Poland was permitted to sign the Versailles Treaty. On examination, however, Korea’s case for participation in the Japanese treaty does not gain much support from this example. The Polish National Committee set up in Paris in 1917 under Paderewski was “recognized” and dealt with by all the principal western Allies. Although it has not been possible to determine definitely that it declared war on Germany it was set up for the purpose of fighting Germany and liberating Poland and can, therefore, be assumed to have done so. When Germany surrendered the Committee and the Regency Council, which had been set up by the Central Powers at Warsaw, combined and formed a Provisional Government of Poland which was recognized as such by the Powers before the Versailles Conference was convened. Poland had an army fighting in France even before 1917.

While it is not believed that Korea should be allowed to sign the treaty it is considered that it should derive the benefits of certain of its provisions. The proposed article would ensure Korea the full advantages of Article 5 (treatment of Japanese property in renounced or ceded territories), Article 10 (fisheries), and Article 13 (commercial relations) from the time that the treaty is first brought into force.

Article 10

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. supports the revision quoted below. This revision follows exactly language proposed by the United Kingdom in a note of May 9, except that “Allied Powers” has been substituted for “states” in keeping with the view that, but for a few specific exceptions, the benefits of the treaty should be restricted to the signatory Allied Powers.

“Japan agrees to enter promptly into negotiations with Allied Powers so desiring for the conclusion of new bilateral or multilateral agreements for the regulation, conservation and development of high seas fisheries providing for the regulation of fishing, and the conservation and development of fisheries, on the high seas.”

The British Embassy’s note of May 9 read as follows:

“We have now had a reply from London to our telegram about the fisheries article of the Japanese Peace Treaty. The gist of the telegram is as follows:

‘Subject to further Commonwealth consultation, we would if necessary be prepared to agree to the substitution of United States Article 9 for Article 34 of the United Kingdom draft. We should, however, like the wording of it to be amended to read as follows:

• Japan agrees to enter promptly into negotiations with states so desiring for the conclusion of bilateral and multilateral agreements providing for the regulation of fishing, and the conservation and development of fisheries, on the high seas.

‘We still think, however, that some provision on the terms of our Article 34 (2) would be useful. We must admit that the second paragraph of our draft Article 34 would not do exactly as worded because the expression “conserved fishing grounds” is too vague. It would have been necessary to have defined what this expression meant. We ourselves would have been ready to define it as “portions of the sea which are subject to fishery conservation agreements to which not less than X States are parties”, a definition which would have excluded the Philippine example suggested by the United States. We would have been prepared to impose an obligation on Japan in the Peace Treaty to keep Japanese vessels out of fishing areas on the high seas which are subject to such agreements until she had become a party to the conservation agreements.

‘Subject to further consultation with the Commonwealth, whose interest is greater than ours, we should be willing to drop the second paragraph, or retain it with an acceptable definition of “conserved fishing grounds”.’

“We shall let you know as soon as possible the result of our further consultation with the Commonwealth.”

Article 34 of the British draft reads as follows:

• “1. Japan hereby undertakes to participate in any general negotiations that may be entered into hereafter for the conclusion of a Far Eastern Fisheries Convention for the regulation of fishing and fishing grounds in Far Eastern waters.
• “2. Pending the conclusion of such negotiations Japan undertakes not to permit Japanese nationals or Japanese registered vessels to fish in conserved fishing grounds wherever they may be situated.”

Reasons why the U.S. cannot accept paragraph 2 of the British draft, even with the definition of “conserved fishing grounds” advanced in the note of May 9, are given in the following analysis:

1. The British proposal to define conserved fishing grounds in their paragraph 2 as “portions of the sea which are subject to fishery conservation agreements to which not less than X States are parties”, contains two difficulties:

a. The U.S. customarily treats with separate fisheries, not portions of the sea, in its fishery policies, treaties, regulations, etc. For instance, the halibut fishery and the salmon fishery occupy the same portion of the sea, but are treated in completely separate ways by the U.S. both internationally and domestically. Another example is the crab fishery and salmon fishery which occupy the same portion of the sea in Bristol Bay. We do not oppose Japanese entering Bering Sea; we do oppose their entering the salmon fishery there.

b. Any value which is given to X above the Number 1 would be contrary to the Yoshida letter and would overrule it because the Yoshida letter refers to arrangements made internationally or domestically. The bulk of the fisheries with whose conservation we are here concerned are regulated unilaterally or under bilateral agreement (United States–Canada, United States–Mexico, United States–Costa Rica). We could not permit these fisheries to be excluded from the effect of this paragraph.

Yet if any value of X is chosen which is below 4 or 5, it would be easy for two or three countries (for instance Russia, Korea, and China) to enter into a treaty which would exclude Japan from fisheries in the Yellow Sea, East China Sea, South China Sea, Sea of Japan, or Sea of Okhotsk which are essential to the economy of Japan, have been traditionally fished in by Japan, and have been primarily developed by Japan—in several instances exclusively developed by Japan. Particular attention is directed to the vital (for Japan) trawl fishery of the East China Sea, developed exclusively by Japan and essential to her.

III. Views of Other Governments

Australia

“Re fisheries, (Australia) temporarily reserves its position on Article 9 of the U.S. draft.”

Canada

“The United States Government will be aware that provisions concerning Japan’s future conduct with regard to fisheries are of special interest and importance to the Canadian Government. For that reason it has been suggested that experts from Canada and the United States should meet to discuss this problem. The comments of the Canadian Government on this clause are therefore preliminary and subject to revision in the light of discussions which it is hoped will take place In the near future.

“The clause as it stands does not appear to cover the period intervening between the signature of the treaty and the coming into force of agreements on fisheries. In addition, no time limit is suggested by which negotiations might either be entered into or completed. It is suggested that these two points might be taken care of in a redraft of the clause. It is further suggested that the latter part of the clause might be redrafted to read:

‘… formulation of new bilateral or multilateral agreements with respect to high seas fisheries among other things for the regulation, conservation and development of high seas fisheries.’”

(Comment—Canada’s comments indicate either a failure to understand or a conscious rejection of the U.S. desire to permit Japan to deal with the fishing question as a sovereign right after the treaty, in the light of the recent public statements of the Japanese Government on the question. There can be no objection to Canada’s proposed rewording if it can be explained what the “other things” might be. The Department’s fishing specialists cannot imagine what the phrase might refer to. The other proposals will probably require both expert and high level discussions before agreement is reached. Canadian experts are now in Washington to present Canada’s views on a possible U.S.–Canada–Japan fishing agreement or agreements.)

Article 11

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. has no changes to propose in this Article.

The United Kingdom proposed in the Washington discussions in early May that “including Manchuria” be added after “China”. The United States informed the British Embassy on May 31 that it was the United States view “that this addition would be inconsistent with the position long maintained by the United States and United Kingdom Governments that Manchuria, or the Three Northeastern Provinces as the area is referred to in China, is unquestionably part of China.”⁴

III. Views of Other Governments

Canada

“The Canadian Government believes that the ‘special rights and interests’ of Japan in China should be made clear, possibly along the lines of Article 24 to 26 of the Treaty of Peace with Italy in order to prevent difficulties of interpretation in the future. The Canadian Government is of the opinion that it would be wise to make separate provisions for renunciation by Japan of all rights and interests it may have presumed itself to hold in Manchuria.”

(Comment—The Chinese Nationalist Government, which should be a competent judge, does not consider more detailed language necessary except on the Boxer Protocol. The China Division of the Department does not consider special mention of Manchuria necessary or desirable in Japan’s renunciation of rights in China.)

China

“The principle underlying the provision of Article 11 is agreeable to the Chinese Government. However, in order to leave no room for possible differences in the interpretation of the provision relative to the renunciation by Japan of her special rights and interests in China, it is proposed that the said Article be amended to read as follows:

‘Japan renounces all special rights and interests in China, including all benefits and privileges resulting from the provisions of the final Protocol signed at Peking on September 7, 1901, and all annexes, notes and documents supplementary thereto,⁵ and agrees to the abrogation in respect of Japan of the said protocol, annexes, notes and documents.’

“It may be noted that as the final Protocol of September 7, 1901, takes the form of a multilateral agreement, it may give rise to a doubt as to whether the protocol falls within the purview of any of the original provisions of the draft Treaty.”

(Comment—There would appear to be no objection to the Chinese draft, which is taken almost verbatim from the Italian Treaty.)

Article 12

I. May 3 Draft

“The power to grant clemency, reduce sentences, parole and pardon (the last only when newly discovered evidence so warrants) with respect to the war crimes sentences imposed by military tribunals of the Allied Powers on persons who are imprisoned in Japan may not be exercised except on the decision of the Government or Governments which imposed the sentence in each instance, and on the recommendation of Japan. In the case of the persons sentenced by the International Military Tribunal for the Far East, such power may not be exercised except on the decision of a majority of the Governments represented on the Tribunal, and on the recommendation of Japan.

“(Note: U.K. reserves the first sentence of Article 21 of U.K. draft and on the use of the word ‘pardon’.)”

II. U.S. Position

The U.S. supports the following revision:

“Japan accepts the judgments of the International Military Tribunal for the Far East and of all other Allied War Crimes Courts both within and outside Japan, and will carry out the sentences imposed thereby upon Japanese nationals imprisoned in Japan. The power to grant clemency, reduce sentences, and parole and pardon with respect to the war crimes sentences imposed by military tribunals of the Allied Powers on persons who are imprisoned in Japan such prisoners may not be exercised except on the decision of the Government or Governments which imposed the sentence in each instance, and on the recommendation of Japan. In the case of the persons sentenced by the International Military Tribunal for the Far East, such power may not be exercised except on the decision of a majority of the Governments represented on the Tribunal, and on the recommendation of Japan.”

The British Embassy indicated in its communication of May 29 that this redraft of Article 12 is acceptable to the United Kingdom.

III. Views of Other Governments

Australia

“With regard to United States draft Article 12 (of U.S. March draft), Australia continues to believe that the Japanese Government should not have any rights or powers in this matter.”

(Comment—Japan’s rights and powers are now reduced simply to the right to recommend clemency to an Allied Power whose military tribunals convicted a war criminal imprisoned in Japan. It is difficult to see how Australia could maintain strong objection to this.)

Article 13

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. proposes the following revision of Article 13:

“(a) Japan declares its readiness promptly to enter into negotiations for the conclusion with each of the Allied Powers of treaties or agreements to place their trading, maritime and other commercial relations on a stable and friendly basis.

“(b) Pending the conclusion of the relevant treaty or agreement, Japan will, during a period of 5 years from the coming into force of the present Treaty, accord to each of the Allied Powers, its nationals (including juridical persons), products and vessels:

(i) Most-favored-nation treatment with respect to customs duties, charges, restrictions and other regulations on or in connection with the importation and exportation of goods;

(ii) National treatment with respect to shipping, navigation and imports, and with respect to natural and juridical persons and their interests—such treatment to include all matters pertaining to the levying and collection of taxes, access to the courts, the making and performance of contracts, rights to property, participation in juridical entities constituted under Japanese law, and generally the conduct of all kinds of business and professional activities.

“External purchases and sales of Japanese state trading enterprises shall be based solely on commercial considerations.

“(c) In respect of any matter, however, Japan shall be obligated to accord to an Allied Power national treatment, or most-favored-nation treatment, only to the extent that the Allied Power concerned accords Japan national treatment or most-favored-nation treatment, as the case may be, in respect of the same matter. The reciprocity envisaged in the foregoing sentence shall be determined, in the case of products, vessels and juridical entities of, and persons domiciled in, any nonmetropolitan territory of an Allied Power, and in the case of juridical entities of, and persons domiciled in, any State or province of an Allied Power having a federal government, by reference to the treatment accorded to Japan in such territory, State or province.

“(d) In the application of this Article, a discriminatory measure shall not be considered to derogate from the grant of national or most-favored-nation treatment, as the case may be, if such measure is based on an exception customarily provided for in the commercial treaties of the party applying it, or on the need to safeguard that party’s external financial position, balance of payments or essential security interests, and provided such measure is proportionate to the circumstances and not applied in an arbitrary or unreasonable manner.

“(e) Private property shall not be subject to expropriation without prompt payment of just and effective compensation.

“(f) Japan’s obligations under paragraph (b) of this Article shall not be affected by the exercise of any Allied rights under Article 15 of the present Treaty; nor shall the provisions of that paragraph be understood as limiting the undertakings assumed by Japan by virtue of Article 16 of the Treaty.”

The considerations underlying the changes in the proposed draft are as follows:

Para. (a) The phrase, “trading, maritime and other commercial relations”, is designed to indicate that “commercial” is used in a broad sense, comprehending inter alia the establishment matters referred to in paragraph (b) (ii).

Para. (b) “Products and vessels” are included to cover the two major categories, in addition to nationals, treated in the succeeding subparagaphs. Reference to reciprocity is transposed to paragraph (c), for reasons explained in connection with paragraph (c).

(i) The only change in this subparagraph is the suppression of a few superfluous words.

(ii) The most-favored-nation standard has been dropped because its presence would seriously impair Japan’s effective rights under the reciprocity clause. Under the most-favored-nation standard Japan would be obliged to generalize to all Allied Powers the most favorable treatment (normally, national treatment) it was obliged to accord to any one of them; and would thus be in the position of having to accord particular Powers national treatment in return for a most-favored-nation treatment less favorable than national treatment. Thus, if Japan were obliged through reciprocity to open its coasting trade to British shipping (see below), it would have to extend the coasting privilege to all Allied Powers notwithstanding that all except Britain excluded foreign vessels (and thus Japanese vessels) from their respective coasting trades.

National treatment alone is believed, moreover, to be a generally satisfactory standard in the matters treated in (ii), because national treatment is normally the most favorable treatment that is accorded by the modern sovereign state.

The opening clause of the subparagraph as revised mentions only the general subject matter dealt with. The particularization of the various aspects with respect to which national treatment is sought is confined to the concluding clause, where it is in juxtaposition with what it relates to (namely, natural and juridicial persons)—the particularization has little relevance to vessels and products.

The words “levying and collection” are included in deference to the British view that, contrary to U.S. opinion, the words “all matters relating to taxation” are not sufficient.

The words “making and performance of contracts” provide a more inclusive rule than the “conclusion of contracts”.

The phrase “rights to property” is a summary statement of what is presumably intended by “the acquisition, ownership and disposal of property of all kinds”, and by being a more sweeping statement is designed to avoid the application of restrictive interpretations possible when more elaborate terminology is employed.

The final clause of the subparagraph has been incorporated as a sort of catch-all to minimize the danger of restrictive interpretations which the particularization technique creates and, particularly, of assuring that business may be conducted in other ways than through the medium of a Japanese-chartered corporation.

The concluding sentence of paragraph (b) is added in order to provide a rule governing the important matter of state-trading methods, a matter not covered in the May 3 draft.

Para. (c) All provisions on reciprocity are collected here in the interests of drafting convenience and logical organization. The transposing of the subject-matter of the first sentence from its position in the opening clause of (b) in the May 3 draft serves: (1) to emphasize the thought that (b) is a statement of policy to which Japan is committed as a matter of principle, with the reciprocity proviso merely a protective reservation; and (2) to allow leeway to state the reciprocity proviso in terms that reduce the amount of confusion and dispute that might arise over its intent and meaning. The phrase “to the extent that”, borrowed from an earlier U.K. draft, clarifies that reciprocity operates on a segment-by-segment basis—to the end that if, for example, a Power discriminates against Japanese shipping merely in the matter of tonnage dues, Japan’s right to retaliate would be confined to tonnage dues exclusive of other phases of shipping operations.

The second sentence is a restatement, in briefer form, of the subject-matter of (e) of the May 3 draft. One point clarified is the difference in the problems posed, respectively, by a colonial system and a federal system. In the latter, the national government exclusively has jurisdiction over international commerce and navigation; and it would thus be misleading to suggest that reciprocity might have bearing vis-à-vis the several states and provinces in that field. The problem posed by a federal system relates only to establishment matters, exclusive of international trade and commerce, which fall within the jurisdiction of the central government. Terminology is also improved in certain particulars: e.g., the word “domicile” is believed preferable to “residence”, as being the word suggestive of the more permanent tie.

Para. (d) Unchanged from May 3 draft.

Para. (e) This is an abridged version of (c) of the May 3 draft, retaining merely the second sentence thereof with the insertion of the concept of promptness. Retention of the first sentence would serve no useful purpose, and might even detract from the strength of the rule desired. Since the rule proposed is regarded as a rule of international law, binding universally, it is stated without reference to country, time limit or reciprocity.

Para. (f) Unchanged from May 3 draft.

III. Views of Other Governments

Australia

“Australia agrees in principle with the provisions of Article 13 of the United States (March) draft but considers that the categories of treatment accorded United Nations nationals should be specifically enumerated.”

Canada

“If the problem of possible Japanese accession to the General Agreement on Tariffs and Trade should arise in connection with the peace treaty, the Canadian Government would wish to advance the view that it is not appropriate to make any mention of GATT either directly or obliquely in the peace treaty unless the Contracting Parties should have reached prior agreement regarding the terms of Japanese accession. Signatories of the peace treaty which are also Contracting Parties would find themselves in an anomalous position if, after suggesting in the peace treaty that Japan accede to GATT, they were forced to vote against the accession if no satisfactory basis for accession were devised. Moreover, it is likely that, regardless of whether or not Japan is enjoined in the peace treaty to accede to GATT, it would apply for membership of its own accord since GATT would almost certainly increase its area of Most-Favoured-Nation treatment with a minimum of reservations.

“The Canadian Government believes that the appropriate forum for discussion of the accession of Japan to GATT is a future session of the Contracting Parties and that Allied Powers should not be required to place on record (by signature of the treaty) their approval of such accession before it is discussed by the Contracting Parties.

. . . . . . . . . . . . . .

“The Canadian Government considers it desirable to take all practicable steps to assist Japan to re-establish its position as a member in good standing of the world trading community, and thinks that Article 13 would serve a useful purpose in this regard. However, the Canadian Government may find it necessary to retain certain safeguards, not applied to most-favoured-nations generally, against the possibility of unfair competition from Japanese goods, if and when Most-Favoured-Nation treatment is extended to Japan. For example, Canada may wish to retain the right to apply fixed valuations for duty on certain Japanese goods. In this event Canada would be unable to extend Most-Favoured-Nation treatment to Japan without reservation. Canada does not apply fixed valuations to imports from other most-favoured-nations and could not do so under GATT. The Canadian Government would, of course, be prepared to concede to Japan the right to make similar reservations in respect of imports from Canada in the event of the exchange of Most-Favoured-Nation treatment with Japan.

“The Canadian Government considers that if Japanese trade is to attain the appropriate level, balance, and stability considerable adjustments in the trading position of other countries will be involved. Some countries are more exposed than others to the impact of such adjustments. Canada, for example, is more exposed than certain important trading countries which have much higher Most-Favoured-Nation tariff rates against types of goods exported by Japan and than other such countries which have quantitative restrictions against imports of these goods. Thus the Canadian Government feels that it must retain appropriate means of dealing with possible dumping or concealed subsidies or exchange manipulation or other forms of unfair competition from Japan, and could not agree to any provision in the peace treaty which might prejudice its position in this respect.”

Article 14

I. May 3 Draft

[Article omitted.]

II. United States Position

The United States proposes the following revision of Article 14:

• “(a) Japan agrees to enter into negotiations with any of the Allied Powers promptly upon the request of such Powers, for the conclusion of bilateral or multilateral agreements relating to international civil air transport.
• “(b) Pending the conclusion of such agreement or agreements with an Allied Power, Japan shall, during a period of five years, extend to such Power, on the basis of non-discrimination, treatment not less favorable with respect to air-traffic rights and privileges than those exercised by any of such Powers at the time of coming into force of the present Treaty.
• “(c) Pending her becoming a party to the Convention on International Civil Aviation in accordance with Article 93 thereof, Japan agrees to give effect to the provisions of that Convention applicable to the international navigation of aircraft and to give effect to the standards, practices and procedures adopted as annexes to the Convention in accordance with the terms of the Convention.”

The above revision is largely based on the civil aviation provisions of the British draft, which read as follows:

• “1. Pending the coming into force of Civil Air Transport Agreements between individual United Nations and Japan, Japan shall, in all matters concerning Civil Aviation, grant to each of the United Nations unconditional most favoured nation treatment, or not less favourable air traffic rights and privileges than they enjoyed immediately before the coming into force of the present Treaty, whichever is the more favourable.
• “2. Japan agrees promptly to enter into negotiations with any of the United Nations so desiring for the conclusion of bilateral or multilateral agreements relating to international air transport, and in making such agreements Japan shall be prepared to agree to reciprocal provisions of a liberal and non-restrictionist character relating to the exchange of air traffic rights and privileges.
• “3. Pending her admission to participation in the Convention on International Civil Aviation in accordance with Article 93 of that Convention Japan shall give effect to the provisions of that Convention and of any annexes to that Convention adopted or amended in terms of Article 54 (1) and (m) of that Convention as if she were a signatory thereof.”

The British Embassy advised the Department on May 29 as follows:

“The Foreign Office consider the redraft of Article 14 to be a great improvement and would like to accept it subject to clarification of paragraph (b). They would be glad to learn whether paragraph (b) means

• “(i) That each Allied Power will be entitled, with respect to air traffic rights and privileges in Japan, to treatment not less favourable than that enjoyed by any Allied Power at the time of the coming into force of the Peace Treaty.
• “(ii) If Japan after the Peace Treaty grants to any State more favourable air traffic rights and privileges than those enjoyed by the Powers having the most favourable rights and privileges when the Treaty came into force, that such a grant would be on the basis of non-discrimination.”

The major differences between the proposed new United States draft and the former British draft derive from the following considerations:

1. Order of paragraphs.

The order of the paragraphs has been changed in order to place the agreement of Japan to enter into negotiations for the conclusion of air transport agreements in the initial paragraph and to place the two paragraphs dealing with actions to be taken by Japan pending the conclusion of such agreements together as subsequent paragraphs.

2. Use of term “Allied Powers”.

Throughout the article the term “United Nations” used in the British draft has been changed to “Allied Powers” for consistency with the rest of the treaty and in order to make the grant of aviation rights available only to parties to the treaty.

3. Nature of Air Transport Agreements.

The provision in the British draft to the effect that air transport agreements should be of a liberal and non-restrictionist character has been omitted. Such a provision is considered inconsistent with the basic policy of restoring Japan to a fully self-determining and sovereign status and of avoiding vague and unenforceable treaty stipulations. No attempt is made in Article 13 to prescribe the character of the commercial treaties Japan will conclude after the peace settlement.

4. Limitation of Interim Treatment to a Period of 5 Years.

The interim grant of air traffic rights and privileges not less favorable than those exercised at the time of coming into force of the peace treaty should be limited to a definite period in order to prevent any of the Allied Powers from extending unduly the period of time during which they can obtain unilateral aviation rights in Japan.

5. British Request for Clarification of Paragraph (b).

This paragraph was intended to permit each Allied Power to exercise air traffic rights and privileges in Japan not less favorable than that enjoyed by any Allied Power at the time of coming into force of the treaty of peace, i.e., the first interpretation given by the British Foreign Office. No Allied Power should obtain additional unilateral rights as the result of the negotiation of a reciprocal agreement with Japan by another Allied Power. The negotiation of such agreements should be in accordance with the international principle of equality of opportunity in the establishment of international air transport services, as expressed in the Preamble to the Convention on International Civil Aviation, but Japan should not be required to extend air rights and privileges to any country which is not willing to grant reciprocity. The present United States draft differs from the British draft in this respect. The first paragraph of the British draft provision provides for “unconditional most favored nation treatment” without a time limit.

6. Most-favored-Nation Treatment.

The most-favored-nation treatment provided for in the British draft has been omitted. As is noted in a British memorandum accompanying the British draft, the use of most-favored-nation provisions in aviation treaties and agreements has been carefully restricted. The operations of aircraft in international civil aviation involve many factors which make the application of most-favored-nation treatment difficult, if not impossible. As an example, it may be pointed out that whereas most-favored-nation treatment may be usefully extended to shipping companies, aviation operations requiring the use of limited airport and air navigation facilities, and involving flights over the territory of the country granting the rights, are not proper subjects for the application of such treatment. Aviation agreements are based on reciprocity.

7. Application of the Provisions of the Chicago Convention and its Annexes.

This provision was altered in order to render the text more precise and accurate. Certain provisions of the Chicago Convention relate to the creation and functions of the International Civil Aviation Organization. Since Japan cannot take part in that organization until she has become a party to the Convention, she cannot undertake to apply any provisions relating to the organization. It is, therefore, more accurate to limit Japan’s obligation to an undertaking to apply the principles applicable to the international navigation of aircraft and the standards and recommended practices adopted as annexes to the Convention.

III. Views of Other Governments

No objections offered.

chapter v

claims and property

Article 15

I. May 3 Draft

[Article omitted.]

II. United States Position

The United States proposes the following revision of Article 15:

“(a) The Allied Powers recognize that Japan lacks the capacity to make payments in bullion, money, property or services which would enable Japan to maintain a viable economy, to meet its obligations for relief and economic assistance furnished since September 2, 1945, in furtherance of the objectives of the occupation, and also to make adequate reparation to the Allied Powers for war damage. However, each of the Allied Powers shall have the right to seize, retain, liquidate or otherwise dispose of all property, rights and interests of Japan and of Japanese nationals (including juridical persons) which at any time between December 7, 1941, and the coming into force of the present Treaty were subject to its jurisdiction, except:

• (i) property of Japanese nationals permitted to reside who during the war resided with the permission of the government concerned in the territory of one of the Allied Powers, other than territory occupied by Japan, except property subjected during that period to measures not generally applicable applied by the government of the territory where the property was situated to the property of Japanese nationals resident in such territory; provided, however, that this provision shall not require more favorable treatment of Japanese property than is accorded by the Allied Power concerned to nationals of countries occupied by Japan or Germany during the war;
• (ii) all real property, furniture and fixtures owned by the Government of Japan and used for diplomatic or consular purposes, and all personal furniture and furnishings and other private property not of an investment nature which was normally necessary for the carrying out of diplomatic and consular functions, owned by Japanese diplomatic and consular personnel;
• (iii) property belonging to religious bodies or private charitable institutions and used exclusively for religious or charitable purposes;
• (iv) property rights arising out of after the resumption of trade and financial relations between the country concerned and Japan and or acquired pursuant to authorization by the country concerned before the coming into force of the present Treaty.
• (v) obligations owed by Japan or by Japanese nationals (including juridical persons), any right, title or interest in tangible property located in Japan, interests in enterprises organized under the laws of Japan, or any paper evidence thereof, provided such property, rights or interests were not owned by an enterprise organized under the laws of an Allied Power.

“Property referred to in this paragraph paragraphs (i) through (v) shall be returned not of any expenses incident to subject to reasonable expenses for its preservation. If any such property has been liquidated the proceeds shall be returned instead.

“(b) The right to seize, retain, liquidate or otherwise dispose of Japanese property referred to in paragraph (a) above shall be exercised in accordance with the laws of the Allied Power concerned, and the Japanese owner shall have only such rights as may be given him by those laws.

“(c) The Allied Powers agree to deal with Japanese trademarks and literary and artistic property rights on a basis as favorable to Japan as circumstances ruling in each country will permit.

“(d) Except as otherwise provided in the present Treaty, reparations claims of the Allied Powers, other claims of the Allied Powers and their nationals (including juridical persons) arising out of any actions taken by Japan and its nationals in the course of the prosecution of the war (including claims arising out of the treatment accorded by Japan to prisoners of war and civilian internees), and claims of the Allied Powers for direct military costs of occupation shall be deemed to be satisfied out of the Japanese assets subject to their respective jurisdiction in accordance with the foregoing and out of assets received from the Japanese home islands during the occupation.

“(Note: The foregoing suggestions regarding reparations are made subject to current exchanges of views.)

“(Note: U.K. reserves Articles 23 and 28 of U.K. draft and the question of dates in this and other relevant Articles.)

“(Note: U.S. reserves its position with respect to the following of assets into Japan.)”

The first and third insertions which are proposed to be made in subparagraph (i) have been suggested by the British for clarification. The insertion of the phrase, “other than territory occupied by Japan”, is proposed by the reason that, while Japanese nationals permitted to reside in unoccupied Allied territory during the war and not subjected to restrictions affecting their property may be assumed to have been friendly to the Allied Powers, and therefore entitled to have their property excepted from seizure, no such assumption may be made with respect to Japanese nationals residing in Allied territory occupied by Japan during the war. The reason for the insertion of the clause regarding more favorable treatment is that under present United States legislation Allied assets were vested in some cases and the return of such assets has been subjected to a number of conditions, e.g., property of collaborators has not been returned and conditions relating to cartels have been applied on the return of certain corporate assets.

The word “private” has been inserted in subparagraph (ii) at the suggestion of the British Embassy for the reason that it will help to minimize disputes which seem likely to arise out of the phrase, “property not of an investment nature.” Since the phrase was intended to be applicable only to property owned by Japanese diplomatic and consular personnel in their individual capacity, use of the word “private” makes the intended construction clearer.

The deletion of the lined out clause in subparagraph (iv) is proposed for the reason that, since all property rights arising after the resumption of trade are to be excepted from vesting, it is not necessary to specify that a certain class of such rights, i.e., rights acquired pursuant to authorization by the country concerned, are excepted from vesting, and such language could cause confusion since some rights were acquired in the U.S. pursuant to authorization given in contemplation of vesting. The word “after” is used instead of “out of” because it is intended to except from vesting property which may have been acquired by inheritance, etc.

The changes proposed in the last sentence of clause (a) are self-explanatory.

A new exception, subparagraph (v) has been added in an attempt to solve a vexing question. The Japanese and German external assets programs were designed to afford reparation out of overseas holdings and not to increase reparation through increased control by Allied powers of assets in Japan and Germany. However, the presence of paper evidence in Allied territories of obligations of Japanese enterprises (debt or ownership) could, if nothing was said, lead to reaching back into Japan by Allied enemy property custodians, thereby increasing the reparation burden of Japan through additional foreign ownership or control of Japanese enterprises. The new subparagraph is designed to prevent such reaching back except in a single case, where the paper evidence of ownership of a Japanese enterprise was held by an Allied corporation which was enemy owned or controlled. Even this case represents an extension of the “external assets” program, but this extension has recently been agreed upon by the Office of Alien Property and the State Department in the case of Germany. The U.S. Office of Alien Property desires a further extension, to permit the custodian to reach into Japan as a result of his having vested paper evidences of ownership or obligations which were located in the United States and owned by branches of Japanese enterprises. This further extension has not been accepted since it could greatly enlarge claims against Japanese enterprises, especially through vesting of branches of Japanese institutions located in the area now controlled by the Chinese Communists. It is difficult to estimate the seriousness of this problem without discussion with the Japanese.

Since this problem is most acute in the case of the United States and the United Kingdom, it may be desirable to have a protocol settlement of the matter by these two countries and Japan, leaving the treaty text uncluttered by this complication.

The insertion of clause (d) is proposed for the reason that the treaty should settle and dispose of all claims of the Allied Powers and their nationals arising out of the war. If no waiver were provided, some Allied governments or Allied nationals might continue to press such claims against Japan after the coming into force of the treaty. Settlement of claims in the treaty assures that no Allied government or Allied national receives preferential treatment. The language of the waiver follows closely the language of Article 19 in which Japan waives claims against the Allied Powers.

III. Views of Other Governments

Australia

“The Australian Government has already made known its views to the United States Government as to Japan’s liability for reparations, sufficient at least to ensure payment of compensation to former prisoners of war who suffered ill treatment over a long period at Japanese hands, and to the relatives of those who died. A further claim which the Australian Government maintains against the Japanese Government concerns the personal property and personal prejudice claims of Australian citizens who suffered loss or injury at Japanese hands in countries outside Japan. Given Japan’s liability in those connexions, the Australian Government is of the view that there should be an equitable distribution among the Allied powers of the stocks of monetary gold and bullion and of precious metals and jewels which were in the possession of the Japanese Government at the termination of hostilities, and of Japanese assets in neutral and ex-enemy countries.”

Canada

“The Canadian Government is of the opinion that provision should be made for the liquidation and allocation among the Allied Powers of Japanese external assets in other than Allied countries. It believes that the Treaty should contain recognition by Japan of pre-war debts owed by Japan or Japanese nationals to Allied governments or Allied nationals. The Canadian Government considers that the stock of monetary gold and bullion and of precious metals and jewels, held by Japan at the close of the war and referred to often as the ‘gold pot’, might be marked for distribution among countries with recognized claims to reparations from Japan.

“The Canadian Government would be interested to have a further statement of the views of the Government of the United States with regard to the exemptions (i to v) set out in Article 14. It is noted that no such exemptions from disposal as reparations of similar classes of German external assets were granted in the Act of Paris on German Reparations. There is further doubt as to the advisability of certain of these exemptions in that the return of property envisaged might possibly run counter to the domestic legislation of certain of the Allied Powers. The Canadian Government is of the opinion that if any of these exclusions or exemptions is to be retained in the treaty, this provision should merely require the Allied Powers to return the proceeds of the liquidation of exempted assets which they have liquidated without any further obligation on their part towards the Japanese former owners.

“While the Canadian Government wishes to reserve its position on the question, it offers the following comments on the specific exemptions provided for in Article 14.

• “(i) The adequacy of the term ‘special measures’ is questioned. It should be noted that the Canadian Government has already returned the proceeds of liquidation of property to a number of Japanese nationals who had been residing in Canada prior to seizure and vesting of their property by the Custodian of Enemy Property.
• “(ii) The Canadian Government could not return more than the proceeds of liquidation less administrative expenses and other charges even if the principle of return were accepted.
• “(iii) There is no serious objection to this exemption subject to our general reservations.
• “(iv) We would be interested to have some clarification of the the purpose of this exemption.
• “(v) The Canadian Government is not convinced of the necessity to return trade-marks to Japan except under terms satisfactory to itself.

“It is questionable whether the penultimate paragraph of Article 14 should be included in a treaty with Japan since it concerns a matter between one Allied Power and another.

“It is suggested that something should be written into the treaty concerning who is entitled to Japanese assets within territories renounced by Japan or within territory administered by any of the Allied Powers under United Nations trusteeship.

“A drafting change would seem necessary in the second sentence of Article 14 in order to avoid any question by Japan as to whether property clearly vested in the Custodian of Enemy Property by Canadian legislation is property within Canada’s jurisdiction as contemplated in the treaty. The Canadian Government suggests therefore that the words ‘However, Japan grants … within their territories’ might be replaced by the following: ‘However, the Allied Powers shall have the right to seize, appropriate, vest and retain in absolute ownership all property and all rights and interests in property of Japan and Japanese nationals which, between December 7, 1941 and September 2, 1945, were, according to their laws subject to their jurisdictions’.”

China

Memorandum of April 24:

“As regards claims for reparations, the Chinese Government has previously communicated to the United States Government the following views through the Chinese Ambassador in Washington: ‘It is to be pointed out that because of the prolonged invasion of China by Japan, the Chinese people suffered and sacrificed longer and more extensively than the people of any other invaded country. It would be entirely consonant with the principles of justice to insist upon adequate reparations being paid by Japan for the damage caused by her invasion since such Japanese property as there was within Chinese territory has been found insufficient to meet the legitimate claims, and since the interim deliveries partially effected three years ago amounted only to a token payment. In order, however, to facilitate the early conclusion of a Japanese peace treaty, the Chinese Government is prepared to waive China’s claims for additional reparations provided all the other countries do likewise. Should any of them insist upon its reparations being paid to it, the Chinese Government would ask for equal, if not prior, consideration. In consideration of the conciliatory stand of the Chinese Government on the question of claim, it is hoped that the United States will give friendly support to China in the matter of recovering looted property and replacing certain art objects of historic and cultural value to the Chinese nation and in the question of transferring to China such property and assets in Japan as belonged to the puppet regime of ‘Manchukuo’ and the Bank of Taiwan.’ The above quoted statement still represents the general position of the Chinese Government on reparations. In view of the fact that not all the Allied Powers have agreed to waive their claims for reparations, the Chinese Government is not yet in a position to offer any additional opinion.

“It is understood that the suggestions set forth in the preceding paragraphs are only tentative. The Chinese Government may submit any further comments at a later date.”

Memorandum of May 23:

“The following changes relating to Article 14 (present 15) are suggested:

• “1. After the date of December 7, 1941, the following parenthetical provision be inserted: ‘(in respect of China, the date shall be September 18, 1931)’. This date is to be applicable to China alone since a state of armed conflict between China and Japan came into existence as from September 18, 1931, immediately after the so-called Mukden incident.
• “2. The date of September 2, 1945, wherever it appears in the second sentence of the first paragraph of Article 14 in the present draft, be changed to ‘the date of the first coming into force of the present Treaty’. This change is considered necessary because the territories to be renounced by Japan were taken over by the Allied Powers on different dates and no other suitable uniform date can be found.
• “3. The provisos under the headings (ii), (iii), and (iv) be deleted. The reason is that since the Japanese Peace Treaty is to be concluded some six years after Japan’s surrender, it will be most difficult, if not impossible, for each of the Allied Powers to restore to Japan or Japanese nationals the property referred to under these headings. Furthermore, such property should also be considered a part of the Japanese assets out of which reparation claims of the Allied Powers shall be deemed to be satisfied.”

Ceylon

“The Ceylon Government is of the opinion that no further claims for reparations should be made on Japanese industrial assets. Ceylon also considers that it would similarly be desirable to make no claims against Japanese stocks of gold, bullion, precious metals, etc. The value of these is understood to be of the order of £200 million and, in Ceylon’s view, it would be far more practicable, and a gesture that will be welcomed by Japan, to leave this as a Currency reserve to Japan in her attempt to restore her economy, than to try to divide this up among claimant countries. Ceylon, for her part desires to waive her claims for reparations against Japan.”

New Zealand

“It has been noted that the United States Government does not support the suggestion that the stocks of monetary gold under SCAP control and Japanese assets in neutral countries should be made available as reparations. The New Zealand Government is fully aware of the heavy financial burdens undertaken by the United States in supporting the post-war Japanese economy and is anxious that nothing should be done to impair Japan’s ability to regain economic self sufficiency. It recognises, moreover, the force of the United States arguments in regard to Japanese assets in neutral countries, but it is reluctant to accept the view that these assets as well as the stocks of gold should be returned to Japan. Pending further consultation with other interested governments it must reserve its position on this question.”

Article 16

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. proposes

1. That the following be inserted as a new second sentence:

“Property whose return is not demanded by the owner within the prescribed period shall be disposed of by the Japanese Government as it may determine.”

2. That the following be added as a new second paragraph:

“(b) Japan agrees to continue to accord to industrial property of nationals of Allied Powers the benefits afforded by Cabinet Orders 309 and 315, effective September 1, 1949; Cabinet Order 12, effective January 28, 1950; and Cabinet Orders 9 and 10, effective February 1, 1950.”

The first proposed change is intended to clarify the right of the Japanese Government to dispose of unclaimed Allied property at the expiration of the six months [one year] period.

In connection with the proposed new second paragraph, the listed Cabinet Orders provide satisfactorily for the restitution of Allied patent and trade-mark rights which may have been lost during the war and for the extension of their term for a period equivalent to the period from effective date of loss to date of restoration.

These cabinet orders were put into effect in Japan pursuant to SCAP directives issued in accordance with FEC Policy Decisions dated March 30, 1949 (Press Release 52)⁶ and July 28, 1949 (Press Release 56),⁷ to which representatives of the United States, United Kingdom and other FEC countries agreed. The Treaty should not include provisions conflicting with these arrangements or likely to cause confusion as to the status of the cabinet orders and implementing regulations issued thereunder.

The major benefits accorded by the Cabinet Orders listed in the proposed paragraph may be summarized as follows:

1. Patents. Cabinet Orders 309 and 315 provide for the restoration of Allied patent rights which lapsed or were cancelled during the war; for the extension of their term for a period equivalent to the period from the effective date of war to date of restoration; and for the extension of the right of priority with respect to patent applications (without such extension patents could not be secured owing to loss of novelty of invention through patenting in other countries, use, or public disclosure during the war). Provisions were also made for continued use by independent inventors or their assignees of inventions patentable by Allied nationals because of the priority right extension; these provisions allow the negotiation of royalty-bearing contracts, permit appeals by either party to the Patent Office and subsequent appeals to the courts.

2. Trade-marks. Cabinet Orders 9 and 10 provide for the restoration of trade-marks cancelled during the war retroactively to dates of cancellation; provide that the act of cancellation shall in no way affect validity of the mark; provide that adverse use of the same or similar names prior to date of restoration shall not affect validity of the marks; provide for the disposal of goods belonging to others which bore the restored mark or an infringement thereof prior to date of restoration; extend duration of trade-mark rights for a period equivalent to that from effective date of war to date of restoration; provide that new trade-marks applied for by Allied nationals shall be treated as they would have been at the effective date of war; provide for extension of right of priority as in the case of patents; and provide that the Allied owner whose trade-mark is restored or who acquires a new mark pursuant to the above provisions may apply for cancellation of infringing marks.

3. Trade names. Cabinet Order No. 12 provides that Allied nationals having trade names generally known in Japan may apply to the courts to stop the use of conflicting names subsequently adopted by others and provide, to the extent appropriate, additional relief analogous to trade-marks.

In order to avail themselves of the benefits of the Orders, Allied nationals must take certain actions by certain dates. These dates are March 31, 1951 with respect to patents and trade-marks and January 28, 1951 with respect to trade names.

In other words, unless an Allied national takes some step—such as filing an application or commencing a court action—prior to these dates, he has no remedy under the Orders.

It is not correct, however, to assume that by the date of ratification of the Peace Treaty all of the benefits of the act will have been received by Allied nationals. The following are examples of future benefits:

1. An Allied national may file a patent application prior to March 31, 1951, taking advantage of the extension of right of priority afforded him under the Cabinet Orders. The process of issuing a patent, however, involves an indeterminate period of time. It is essential, therefore, that the applicant’s right of priority be recognized immediately before issuance of the patent, which may be after ratification of the Peace Treaty.

2. The Allied national referred to in (1) may succeed in obtaining his patent by proof of priority over an independent inventor. In this event it might be necessary for the Allied owner of the patent to negotiate a patent agreement with the independent inventor or a firm which commenced use through such independent invention. If the Allied owner is dissatisfied with the arrangements, he has an appeal first to the Patent Office and second to the courts. It is, of course, desirable that these appeal provisions, which could be time-consuming, continue to be available after ratification of the Treaty.

3. In order to secure cancellation of a trade-mark infringing on one which has been restored to him, an Allied national would have to bring an action for cancellation prior to March 31, 1951. The action, however, might take considerable time and, therefore, the owner might need to rely after the Peace Treaty on certain provisions of the Cabinet Orders which protect him against loss of rights arising from the wartime period of cancellation.

There is some question whether it is necessary or desirable that the new paragraph or any other special provision regarding industrial property be placed in the Peace Treaty. The first paragraph of Article 16 would probably afford some basis for protesting rescission of the rights granted to Allied nationals with respect to this type of property. It is unlikely, however, that Japan would attempt to rescind any such rights. There is, nonetheless, some risk involved since Allied rights are based solely on these Cabinet Orders. The question should be answered in terms of the degree of risk that is being taken in the drafting of the Treaty on other problems of like character or order of importance.

Literary and Artistic Property—The note to Article 16 mentions that the U.K. will prepare a draft on literary and artistic property (and also on insurance deposits and reserves) for inclusion in this chapter of the treaty. It is believed that the U.S. should take the position that it is unnecessary to provide Allied nationals with a period of time to enable them to accomplish acts for obtaining or preserving rights in literary and artistic property which were not capable of accomplishment owing to the existence of a state of war on the grounds that:

(a) No direct action was taken by the Japanese Government during the war with respect to Allied copyrights in Japan.

(b) No acts need be performed to acquire copyright. Protection of copyright is automatic, at least with respect to publications in the Berne Union, and does not involve formalities such as application or registration with government authority.

The United States should take the position that it may be unnecessary to provide a period during which Allied nationals may institute proceedings in Japan against persons who infringed their rights in artistic and literary property on the ground that such suits can now be maintained without special provision therefor since ownership of copyright was not disturbed during the war. (This is now being checked with SCAP.)

The United States should take the position that extension of time of copyrights for a period corresponding to the period from the effective date of war to some postwar date is unnecessary, since it would constitute an insignificant addition to the present term of copyright, which is life and fifty years.

The United States should be prepared, if requested by the United Kingdom, to consider the extension in Japan of the ten-year term provided for translation rights under the Berne Convention for a period equivalent to that lost during the war period. Since the United States is not a member of this Convention, such an extension would be of no value to it. Rather than include such a provision in the Treaty, however, the U.S. should take the position that it would be preferable to handle the matter through directives to the Japanese Government. Resulting orders of the Japanese Government could then be incorporated in the list of orders referred to in the proposed second paragraph in Article 16.

III. Views of Other Governments

Australia

“With regard to restitution and restoration of Allied property, The Australian Government considers that Japanese obligations should be spelled out in specific detail as is done in Articles 24 and 26 of the United Kingdom draft.”

Canada

“The Canadian Government considers that the last sentence of Article 15 relating to war loss of or damage to Allied property in Japan is most unsatisfactory. Nothing is known of Japanese domestic legislation on war damage claims nor have we any guarantee that any such legislation might not be revoked after ratification of the treaty. It seems unreasonable to place claimants arbitrarily at the mercy of the Japanese Government in a matter of this kind. In this connection certain of the provisions and safeguards of Article 78 of the Treaty of Peace with Italy should be included, especially the following:

• “(a) Apart from the actual war damage claims, compensation at an agreed percentage should be payable in respect of any financial loss (other than a loss of profits) incurred as a result of Japanese action.
• “(b) Provision should be made for compensation on a proportionate basis in respect of direct or indirect holdings by Allied nationals or corporations in Japanese corporations which have suffered war damage or sequestration.
• “(c) Compensation should be paid free of levies, taxes or other charges and be freely usable in Japan.
• “(d) The reasonable expenses incurred in Japan in establishing claims including the assessment of loss or damage should be borne by the Japanese Government.
• “(e) Allied nationals or corporations and their properties should be exempted from and have refunded any exceptional taxes, levies or imposts imposed since December 7, 1941 on their capital assets by the Japanese Government or its agencies for the purpose of meeting the costs of or charges arising out of the war, the occupation or reparations. Japan should be prohibited from levying on Allied nationals or corporations any such exceptional taxes, levies or imposts in the future.”

China

“The following sentence should be inserted between the first and second sentences of Article 15 [Article 16 of May 3 draft]:

‘Property, rights or interests in Japan for one time claimed to be under the custody of, or belong to, a collaborationist regime in the territories of an Allied Power, such as the “Manchukuo” and the “Wang Ching-wei regime” in China, shall be deemed to be the property, rights or interests of such Allied Power.’”

(Comment—The Philippine Government has asked, most recently in a note of May 16, 1951, to the Department that full title to the Philippine Embassy building at Tokyo, which was purchased by the Philippine puppet government, be transferred to the Republic of the Philippines. The request is that the transfer be made “at the earliest practicable date and before a peace treaty, or reparations settlement eventuates.”

The May 3 treaty draft requires that the Japanese Government restore the property of “Allied Governments” but does not attempt to determine whether Allied Governments are to be considered as automatically succeeding to the property of their puppet regime predecessors. It is not believed that the treaty reference to “Allied Governments” can properly be expanded to cover every contingency arising from the existence of the puppet regimes. It is recommended that Article 16 remain unaltered and that the Chinese (and Philippine) Governments be informed that while the Department favors the return to them of any property in Japan to which they are entitled under accepted principles of international law relating to the rights of successor governments, (as well as applicable Japanese law), it is not at this time in a position to pass on the legal principles involved in the several cases. It is further recommended that a legal opinion be obtained as to the status of the Philippine Government and the Chinese Nationalist Government with relation to the respective puppet regimes to which they claim to be legal successors. In addition, decisions under Japanese law will be required to determine whether title had in fact passed to the puppet regimes in the various transactions.

A JAPQ paper now being prepared in GHQ, SCAP is expected to contain information on the property claimed by the Philippine and Chinese Governments and recommendations regarding its disposition. According to Tokyo’s despatch No. 1594, May 15, 1951,⁸ the Civil Property Custodian Section intends to propose the return of the Embassy property to the Republic of the Philippines “as an asset not to be considered an element of reparations”. According to an earlier despatch (Tokyo’s 1260, March 13, 1951),⁸ the Chinese claims to property formerly associated with the Manchukuo puppet regime are so entangled and involved so many contradictory records of fact and contention that the Civil Property Custodian has ruled that no decision on ownership of the various properties will be publicly announced until the ownership of all properties under claim has been settled.)

New Zealand

“While New Zealand has a relatively minor interest in the restitution and restoration of United Nations property in Japan, it is nevertheless considered that clauses covering these matters should be precisely drafted in order to avoid later dispute. For this reason it is felt that Article 15 of the United States draft could with advantage be given more detailed treatment. In this connection the implications of the sentence dealing with compensation for property lost or damaged in Japan are not clear. While it is recognised that Japan’s limited capacity to pay may make it difficult to secure compensation in full, a clause along the lines of Article 26(4) of the United Kingdom draft would in the New Zealand view be preferable.”

Article 17

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. has no changes to propose.

III. Views of Other Governments

Article 17 is new with the May 3 draft, which has not been circulated to other governments for comment.

Article 18

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. proposes that the problem raised in the note to Article 18 be dealt with as proposed in connection with Article 5.

III. Views of Other Goverments

Article 18 is new with the May 3 draft, which has not been circulated to other governments for comment.

Article 19

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. proposes:

1. That paragraph (a) be revised to read as follows:

“(a) Japan waives all claims of Japan and its nationals (including juridical persons) against the Allied Powers and their nationals (including juridical persons) arising out of any actions taken by the said powers and their nationals in the course of the prosecution of the war, and waives all claims arising from the presence, operations or actions of forces or authorities of any of the Allied Powers in Japanese territory prior to the coming into force of the present Treaty.”

2. That paragraph (b) be revised to read as follows:

“(b) The foregoing waiver includes any claims arising out of actions taken by any of the Allied Powers with respect to Japanese ships between September 1, 1939, and the coming into force of the present Treaty, as well as any claims and debts arising out of the Conventions on prisoners of war now in Korea arising out of the treatment accorded by the Allied Powers to prisoners of war and civilian internees.”

3. That paragraph (c) be revised to read as follows:

“(c) Subject to reciprocal renunciation of claims by Germany, the Japanese Government also renounces all claims (including debts) against Germany and German nationals (including juridical persons) on behalf of the Japanese Government and Japanese nationals (including juridical persons), with the exception of claims arising from contracts and rights acquired before September 1939, but including intergovernmental claims and claims for loss or damage sustained during the war, including intergovernmental claims and claims for loss or damage sustained during the war, but excepting (a) claims arising from contracts and rights acquired before September 1, 1939, and (b) claims arising out of trade and financial relations between Japan and Germany after September 2, 1945.”

The first proposed change has been made at the suggestion of the United Kingdom, made in a note of May 29, in order to make more precise the category of claims waived by Japan. In making its proposal, the British Embassy also added to the underlined phrase the following words in brackets: “or in the exercise or purported exercise of belligerent rights.” If the bracketed words were suggested as a substitute for the phrase “in the course of the prosecution of the war” this latter phrase is preferable, because it is more comprehensive than the bracketed words. If the bracketed words were suggested as an addition, they would appear to be superfluous as “actions taken … in the exercise or purported exercise of belligerent rights” are included within the meaning of the phrase “actions taken … in the course of the prosecution of the war.”

The second proposed change eliminates from paragraph (b) the phrase “arising out of the Conventions on prisoners of war now in force”. This phrase is misleading because there is a new convention, signed August 12, 1949, now in force on the treatment of prisoners of war, although the convention has not yet been ratified by the United States or by any of the major Allied Powers. It is not desirable to refer to the 1929 prisoners of war convention because Japan is not a party to the convention, though it did agree in the course of World War II to abide by its provisions.

Reference to claims of civilian internees as well as of prisoners of war is included because the latter phrase is not generally construed to cover civilian internees.

The British Embassy advised on May 29 that:

“On reflection the Foreign Office doubt whether the words ‘as well as any claims and debts arising out of the conventions on Prisoners of War now in force’ would extinguish all types of claims which the Japanese could raise against the Allies under the 1929 Geneva Convention on Prisoners of War or in respect of Japanese surrendered personnel. In order to make this waiver of claims comprehensive they would prefer to substitute for the words quoted above the following ‘as well as any claims and debts arising in respect of Prisoners of War’”.

This comment indicates that the U.S. revision of paragraph (b) will be acceptable to the U.K.

In respect to the revision of paragraph (c), the proposed renunciation by Japan of its war-time claims against Germany would seem to be justifiable only if Germany agrees to a reciprocal waiver. In considering the problem of appropriate waiver by the Federal Republic and its nationals of war-time private and governmental claims against countries at war with Germany, the Intergovernmental Study Group on Germany has tentatively proposed (Document IGG/P(51)91(2nd Revise, 27 April 1951) that such waivers be “without prejudice to the terms of the peace settlement with Germany”. Since it appears improbable that the Federal Republic would at this time give an unqualified waiver of German claims against Japan, the qualification with regard to reciprocity would in effect keep Japanese claims alive until German claims are waived.

III. Views of Other Governments

Canada

“The Canadian Government agrees with the need for a clause under which Japan would renounce her claims against the Allied Powers for action taken during the war but believes that a more precise definition of the claims to be renounced should be included. It suggests a clause along the lines of Article 76 of the Treaty of Peace with Italy.”

China

“The following paragraph should be added to Article 16 (of the U.S. March draft) as its second paragraph:

‘Without prejudice to the provisions of Article 10, Japan waives in favor of the Allied Powers all claims of Japan and her nationals to rights or benefits under all treaties, agreements or contracts concluded prior to the state of war hereby ended.’”

(Comment—The purpose of this provision is not clear. It appears to call for a one-sided waiver by Japan of all rights and benefits accruing to it under all pre-war treaties, agreements or business contracts, with no corresponding waiver by the Allies. It also appears to run: directly counter to paragraph 1 of the first protocol to the May 3 draft, under which Japan is to resume its rights and obligations under all presently effective pre-war international instruments.)

Article 20

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. has no changes to propose.

III. Views of Other Governments

Article 20 is new with the May 3 draft, which has not been circulated to other governments for comment.

chapter vi

settlement of disputes

Article 21

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. has no changes to propose.

III. Views of Other Governments

Canada

“The Canadian Government is of the opinion that provision might be made for the appointment of special conciliation commissions or tribunals to deal with disputes arising out of individual war claims. While it would be desirable that the President of the International Court should appoint such special tribunals, it would not seem necessary to involve the prestige of the Court itself in disputes of a technical nature and of relatively minor importance. Provisions for the establishment of conciliation commissions or tribunals should be so drafted as to reduce to a minimum the risk of disagreements on such matters as membership of a conciliation commission or tribunal, the rules of procedure thereof, or the stage at which a dispute may be referred thereto. The Canadian Government, having in mind the experience gained with respect to earlier treaties of peace, would suggest that some provision be included in a clause of this nature defining when a dispute may be considered to exist. It might, in addition, be desirable to limit the period for settlement of a dispute through diplomatic channels in order that diplomatic exchanges could not be carried out indefinitely with the object of avoiding a decision.”

chapter vii

final clauses

Article 22

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. proposes revision of the second sentence of this Article as follows:

“It shall thereafter for a period of three years be open to accession by any such State which has not signed it.”

The phrase “for a period of three years”, which was contained in Article 22 of the U.S. March draft, was inadvertently omitted from the May 3 draft.

III. Views of Other Governments

China

“The following paragraph should be added to Article 18 (of the U.S. March draft) as its second paragraph:

‘For the purpose of the present Treaty, the nationals of an Allied Power shall be deemed to include all the inhabitants of the territories renounced by Japan and administered by such Allied Power; and the vessels and companies of an Allied Power shall be deemed to include all those registered in accordance with the laws and regulations enforced by such Allied Power in such territories.’”

(Comment—While obviously directed toward assuring that Formosan claims are recognized as Chinese claims, the proposed paragraph would affect all ceded or renounced territories. Thus the arrangements contemplated in Article 5 of the May 3 draft regarding claims of the ceded territories and property and claims related to the trust territories would be pre-determined to be the same treatment as is provided for Allied claims and Japanese property in Allied territories. The leaving of these matters to future arrangements reflects the U.S. desire not to prejudge the issue pending further study. In the meantime, we should not accept a formula which, for example, would by the test of “administration” make the inhabitants of the Trust Territory nationals of the United States for purposes of the treaty.)

Article 23

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. proposes:

1. That “States” be substituted for “Powers” near the middle of paragraph (a).

2. That “[Korea]”⁹ be deleted.

3. That a clause reading “not later than three years after the date of deposit of Japan’s ratification” be added at the end of paragraph (b).

The first of these changes is merely in the interest of uniformity, “States” having been employed earlier in the paragraph.

The second change is necessitated by the new U.S. position that Korea should not be a signatory to the treaty.

The third change is to establish a time limit on the right of states at war with Japan to bring the treaty into force between themselves and Japan, similar to the time limit under the procedure set forth in paragraph (a).

III. Views of Other Governments

Canada

“The Canadian Government suggests the words ‘or the principal occupying power’ be deleted.”

(Comment—The phrase is not necessary and could be deleted if it offends anyone.)

Ceylon

“The Treaty should be ratified by the Allied Powers and by Japan, and should come into force when instruments of ratification have been deposited by a simple or 2/3rds majority of the States parties to it. The Ceylon Government does not agree that the coming into force should be conditional on the ratification by one or more particular States.”

India

“The Government of India are not quite clear about the position of an Allied Power vis-à-vis Japan if the former for some reason finds itself unable to sign the same treaty as agreed upon by a majority of the members of the Far Eastern Commission including the United States.

“It is the view of the Government of India that a non-signatory Allied Power to the proposed treaty should not be prevented from signing a separate peace treaty with Japan so long as the terms of such a separate treaty or treaties do not constitute any threat to peace or confer upon the signatory powers greater advantages than those for signatories to the treaty under discussion in its final form.”

(Comment—Article 20 of the U.S. March draft forbidding Japan to make a peace settlement with a state not signatory to the Treaty which granted that state greater advantages than contemplated by the Treaty has been deleted.)

Article 24

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. proposes the following:

“All instruments of ratification or accession shall be deposited with the Government of the United States of America which will give notice of them and of the date of their deposit, as also notify all the signatory and acceding states of each such deposit and of any notifications made under paragraph (b) of Article 23, to all the signatory and acceding States. of the present Treaty.”

The changes, suggested by the Department’s Treaty Division, are solely in the interest of better treaty draftsmanship.

III. Views of Other Governments

No objections offered.

Article 25

I. May 3 Draft

[Article omitted.]

II. U.S. Position

The U.S. proposes that “Article 11” be revised to read “Article 10 and 12”. (These numbers are on the assumption that the proposed new article on Korea is included, resulting in the present Article 11 becoming Article 12.)

III. Views of Other Governments

No objections offered.

Article 26

I. May 3 Draft

[Article omitted.]

II. U.S. Position

“The present Treaty shall remain be deposited in the archives of the Government of the United States of America by whom each signatory State will be furnished with a certified copy and will be notified which shall furnish each signatory or acceding State with a certified copy thereof and notify each such State of the date of the coming into force of the Treaty under paragraph (a) of Article 23 of the present Treaty.”

The changes in this Article, suggested by the Department’s Treaty Division, are solely in the interest of better treaty draftsmanship.

III. Views of Other Governments

No objections offered.

Signatory Clauses

I. May 3 Draft

[Clauses omitted.]

II. U.S. Position

It is proposed that the first paragraph end with “the present Treaty.” The deletion of the reference to seals is proposed by the Treaty Division, which states that the use of seals would complicate the signing ceremony and might well be foregone, as it was for the North Atlantic Treaty.

III. Views of Other Governments

The signatory clauses are new with the May 3 draft, which has not been circulated to other governments for comment.

Protocol

I. May 3 Draft

[Protocol omitted.]

II. U.S. Position

The U.S. proposes the following revision of this protocol:

“With respect to the Treaty of Peace signed this day, the Government of Japan makes the following Declaration:

“1. Except as otherwise provided in the said Treaty of Peace, Japan recognizes the full force of all presently effective multilateral international instruments to which she Japan was a party on 1st September, 1939, and declares that she it will, on the coming into force of the said Treaty, resume all her its rights and obligations under those instruments. Where, however, participation in any instrument involves membership in an international organization of which Japan ceased to be a member on or after 1st September, 1939, the provisions of the present paragraph shall be dependent on Japan’s readmission to membership in the organization concerned.

“2. It is the intention of the Japanese Government formally to accede to the following international instruments within six months of the coming into force of the Treaty of Peace:

(1) The International Convention for the regulation of whaling signed at Washington on 2nd December, 1946, as subsequently amended;

(2) The Protocol amending the 1931 Narcotics Convention signed at New York on December 11th, 1946;

(1) Protocol opened for signature at Lake Success on December 11, 1946 amending the agreements, conventions, and protocols on narcotic drugs of January 23, 1912, February 11, 1925, February 19, 1925, July 13, 1931, November 27, 1931, and June 26, 1936;

(3) The Protocol on the Traffic in Synthetic Drugs signed at Paris on 19th November, 1948;

(2) Protocol opened for signature at Paris on November 19, 1948 bringing under international control drugs outside the scope of the convention of July 13, 1931 for limiting the manufacture and regulating the distribution of narcotic drugs, as amended by the protocol signed at Lake Success on December 11, 1946;

(4) Customs Formalities Convention, 1923;

(5) The International Convention on the Execution of foreign Arbitral Awards of 1927;

(6) Convention relating to economic statistics, 1928 and Protocol 1948;

(3) International convention relating to economic statistics, with protocol, signed at Geneva on December 14, 1928, and protocol amending the international convention of 1928 relating to economic statistics, signed at Paris on December 9, 1948;

(7) Agreement on false indications of origin, 1934;

(4) Agreement for the prevention of false indications of origin of goods signed at London on June 2, 1934;

(8) Convention establishing uniform rules with respect to assistance and salvage at sea, 1910;

(9) International load line convention, annexes and final act, 1930, as subsequently amended.

(5) Convention for the unification of certain rules relating to international transportation by air, and additional protocol, signed at Warsaw on October 12, 1929;

(6) Convention on safety of life at sea opened for signature at London June 10, 1948;

(10) Each of the four Conventions on conduct in time of war signed at Geneva on 12th August, 1949.

(7) Geneva conventions of August 12, 1949 for the protection of war victims.

“3. It is equally the intention of the Japanese Government, within six months of the coming into force of the Treaty of Peace, to apply for Japan’s admission to participation in the Convention on International Civil Aviation opened for signature at Chicago on the 7th December 1944, and as soon as Japan is herself itself a party to that Convention, to sign and accept the International Air Services Transit Agreement also opened for signature at Chicago on 7th December, 1944.”

The changes in paragraph 1 are simply in the interest of clarity and improved treaty drafting.

The changes in paragraph 2 where the treaties and conventions listed in the May 3 draft have been retained consist merely of the substitution of technically more precise titles. The changes in the composition of the list have been made for the following reasons:

Deletion of Convention for the Regulation of Whaling—This convention has been omitted because Japan has recently become a party to it.

Deletion of Customs Formalities Convention of 1923 and Convention on the Execution of Foreign Arbitral Awards of 1927—the convention relating to customs formalities recognizes the principle of the equitable treatment of commerce. It requires the avoidance of unjust discrimination and the prevention of the arbitrary or unjust application of laws and regulations with regard to customs and other similar matters, and provides for adequate redress for those prejudiced by such abuses. The subjects dealt with in the convention include export prohibitions and licenses, publication of customs tariffs and regulations, treatment of commercial travelers and their samples, certificates of origin, consular invoices, certificates of analysis, rapid passage of goods through customs, examination of passengers’ luggage, goods in warehouse and warehousing charges, and temporary exports and imports. The convention was signed for Japan on November 3, 1923, but was never ratified by Japan.

The international convention on the execution of foreign arbitral awards supplements the protocol on arbitration clauses signed at Geneva September 24, 1923. Under the protocol contracting states recognize the validity of an agreement between different contracting states by which they agree to submit to arbitration all differences that may arise in connection with a contract relating to commercial matters. The convention provides that an arbitral award made in pursuance of such an agreement for settlement of differences shall be recognized as binding and shall be enforced in accordance with the rules of procedure of the territory where the award is relied upon, provided the award has been made in the territory of one of the contracting states and as between persons who are subject to the jurisdiction of one of the contracting states. The protocol was signed for Japan on September 24, 1923, and ratified by Japan on June 4, 1928. The convention was signed for Japan September 26, 1927, but was never ratified by Japan.

These two conventions are not the type of conventions usually listed for compulsory accession in a peace settlement and no special justification for so doing in the Japanese treaty is perceived. Neither of the conventions falls within the category of treaties which cover subjects of general and mutual concern to the international community and which, for that reason, are embodied in peace treaties for the purpose of having the former enemy state assume the obligation thereunder. This concept of general concern to the international community does not, in general, apply to customs regulations, which are traditionally a matter of internal concern, or to the execution of arbitral awards which relate solely to commercial contracts. It has not been possible to ascertain why Japan, after becoming a signatory to the conventions, never ratified them, but it may have been that the customs formalities convention would have required too many radical changes in Japan’s customs laws and that the convention on execution of foreign arbitral awards was too inconsistent with Japan’s system of jurisprudence. It was apparently for these reasons that the United States never became interested in becoming a party to either convention. In the case of the arbitral award convention, it is interesting to note that Japan deposited its ratification with respect to the protocol on arbitration awards on June 4, 1928, subsequent to the date of its signature of the supplementary convention on execution. It would appear that the latter instrument must have been considered and rejected at the time the protocol on arbitration awards was considered and ratified.

In view of the above, it appears to be unfair and unwise to impose upon Japan the obligation of acceding to the two conventions, particularly when it would probably necessitate extensive changes in the laws and the system of jurisprudence of Japan. It might be that it would be to Japan’s advantage to become a party to each of the conventions, but it is believed that such action should be a matter for study and final determination by Japan acting upon its own initiative.

Deletion of Convention on Assistance and Salvage at Sea of 1910 and Load Line Convention of 1930—Japan was a party to these conventions in 1941 and, since they are still effective, will automatically be required by paragraph 1 of the protocol to resume participation.

Addition of the Warsaw Convention of 1929—The Warsaw Convention relates to the liability of aircraft operators with regard to injury or death of passengers or damage to cargo carried on aircraft engaged in international operations. Until Japan begins operating international services it will be of little benefit to Japan to be a party to this convention. Nevertheless, it is believed to be desirable for Japan to become a party to this convention in order to make its benefits available to the international airlines operating into Japan.

Addition of Convention on Safety of Life at Sea—Japan was a party to the older convention on this subject operative in 1941 and it is considered desirable to ensure that it becomes a party to the new one established in 1948.

In regard to the deletion of the phrase “sign and” in paragraph 3, while the introductory statement to the International Air Services Transit Agreement refers to “The States which sign and accept this International Air Services Transit Agreement”, Article VI of the agreement makes it clear that the states which signed the agreement are the states which had delegates at the conference in Chicago in 1944 where the agreement was drawn up, though any state a member of the International Civil Aviation Organization may accept the agreement. Therefore, when Japan becomes a party to the Chicago Convention, thus also becoming a member of the International Civil Aviation Organization, it will be eligible to accept the transit agreement but not to sign it.

III. Views of Other Governments

No objections offered.

Protocol

I. May 3 Draft

[Protocol omitted.]

II. U.S. Position

The U.S. has no changes to propose.

III. Views of Other Governments

No objections offered.

1. Note to Canada, not printed. (Lot 54 D 423)
2. For text, see Foreign Relations, 1950, vol. vi, p. 1296.
3. For text of the Cairo Communiqué of November 26, 1943, released to the press December 1, 1943, see Foreign Relations, The Conferences at Cairo and Tehran, 1943, p. 448.
4. Note to the United Kingdom, not printed. (Lot 54 D 423)
5. For texts, see Foreign Relations, 1901, Appendix, pp. 306–339.
6. Apparent reference to the Policy Decision of March 17, 1949, “Policy Toward Patents, Utility Models, and Designs in Japan.” For text, see “Third Report by the Secretary General on the Activities of the Far Eastern Commission, 24 December 1948–30 June 1950,” Department of State Press Releases, 1950, No. 61, pp. 16–18.
7. “Trade Marks, Trade Names & Marking of Merchandise in Japan”. Text is printed ibid., pp. 19–20.
8. Not printed.
8. Not printed.
9. Brackets appear in the source text.