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

Lot 54 D 423

Memorandum by the Deputy Director of the Office of Philippine and Southeast Asian Affairs (Gibson) to the Assistant Secretary of State for Far Eastern Affairs (Rusk)

[Washington,] August 10, 1951.

[Subject:] Japanese Assets in Thailand

The following is background to your appointment with the Thai Ambassador¹ on Friday, August 10th to discuss the disposal of Japanese assets in Thailand.

Mr. Dulles and Mr. Allison, in consultation with the British negotiators for the Japanese Peace Treaty, have arrived at the position for the Department set forth below in regard to the disposal of these assets:

1. Article 16 of the Treaty provides that Japanese assets in neutral countries or those at war with any Allied power shall go to the International Red Cross for distribution to Allied prisoners of war.

2. It is the view of the U.S. and the U.K. that Japanese assets in Thailand must be regarded separately from all other external Japanese assets in view of the vesting action taken and the control assumed over a substantial portion of these assets by the Government of Thailand after its liberation. It is consequently the view of the U.S. and the U.K. that special provision must accordingly be made for disposing of such assets.

3. Because of immediate and firm British objections, and possible future objections and recalcitrance from neutral nations, it is not practical to word Article 16, or to foot note it, in such manner that a recognized exception is made for Japanese assets in Thailand.²

4. It is not realistic to hope to solve the problem by disposing of all or part of these assets to the Thai Government prior to the signing of the Treaty. The financial records and the legal actions necessary are too complicated ever to allow a settlement in the several weeks remaining. Such a settlement might at this time also carry Japanese recognition of only dubious legality.

5. The only course remaining—given U.S. policy that most of the assets should go to Thailand and recent British concurrence that a large part of them should, is to accompany the signing of the Japanese Peace Treaty with public assurances that during the period before the coming into force of the Treaty, the two signatories most directly concerned and in possession of these assets, the United States and United Kingdom, will, in view of the complicated status of the assets and the unusual position of Thailand, agree upon and carry out arrangements permitting the Thai Government to obtain permanent possession of a portion of them to be determined upon by the two signatories. The Japanese Government will at the same time give public assurance of its assent to such arrangements.³

6. The American Assurances will take the form of a statement issued by Mr. Dulles on the occasion of the signing of the Treaty. It is not yet known what form the British and Japanese statements will take.³

7. A diplomatic note will be transmitted by the U.S. Government to the Thai Government between now and the signing of the Treaty conveying the foregoing position and giving assurances regarding the action to be taken.³

It is understood that in accordance with your conversation of Thursday with Messrs. Dulles and Allison, you do not plan to convey the above developments to the Thai Ambassador during the interview unless by that time we have received a reply from the British to our latest communication with them on the subject. If a reply has not been received, it is suggested that you at least reassure the Ambassador strongly that the U.S. Government is maintaining its position of support to the Thai Government’s claim that it participate in the distribution of Japanese assets in Thailand and that, further, the U.S. Government feels reasonably confident that a suitable method for accomplishing this objective can be agreed upon with the other interested Governments in the very near future.⁴

1. Prince Wan Waithayakon.
2. See the note regarding Thailand first introduced (at the request of the United States) at the end of Article 16 in the peace treaty draft of June 16, p. 1228. This note was dropped from the final draft of August 13.
3. The projected document has not been found in Department of States files.
3. The projected document has not been found in Department of States files.
3. The projected document has not been found in Department of States files.

4. In his memorandum of Mr. Rusk’s conversation held August 10 with Prince Wan and with other American officials, Mr. Gibson indicated that Mr. Rusk gave assurances along the lines suggested above. (692.94231/8–1051)

   The last document printed in this compilation regarding this topic is the memorandum of August 30 from Kenneth P. Landon, Officer in Chargé of Thai and Malayan Affairs, to Mr. Rusk, August 30, p. 1310.