694.001/6–2651: Telegram
The Secretary of State to the United States Political Adviser to SCAP (Sebald)
priority
1826. For Allison from Dulles. Reurtels 22411 and 22422 June 26. Have conferred with Radius3 who points out that US executive pol has consistently sought to secure equality for shipping without regard to need to safeguard external financial position or balance of payments. We are now protesting some shipping preferences based on that reason. Therefore feels we ought not to maintain insistence that Jap can discriminate in favor of Jap shipping on account of external financial position or balance of payments. Also feels confident that elimination of this exception wld not in fact prevent maximum use of Jap shipping to be available over next 4 yrs.
Under circumstances feel disposed accept Brit position to this extent. Apparently Brit proposed text wld prevent Jap monopolizing coastwise shipping as against UK participation even though such monopolization is “an exception customarily provided for in commercial treaties of Japan”.
Believe however that this exception shld be permitted to Jap if in fact it has been customarily exercised in Jap’s commercial treaties. We wld not oppose bilateral arrangement between UK and Jap providing for Brit participation in Jap coastal shipping on basis of reciprocity but we wld not want to make this mandatory by multilateral treaty.
Suggest you confidentially discuss situation with Jap officials familiar with shipping and promptly give us their reactions.
Tell Glutton we are studying but cannot give answers immed.
For your strictly personal info we do not want to concede this point until we know what other changes we may want as result of Def study not completed until tomorrow. We wld then expect to deal with entire series of amendments through direct exchange with FonOff London. [Dulles.]