Foreign Relations of the United States, 1952–1954, China and Japan, Volume XIV, Part 2

794.5/3–352

No. 537
The Assistant Secretary of State for Far Eastern Affairs (Allison) to John C. Houston, Jr., Vice Chairman for Stockpile and International Programming, Munitions Board

top secret

[Washington,] March 3, 1952.

My Dear Mr. Houston: In your letter of February 19, 1952¹ you request the concurrence of the Department of State in the immediate placement of orders in Japan for the production of combat end equipment for export to friendly foreign countries. You state that in addition to the obvious time advantage to be gained by placing such orders now, rather than postponing action until the termination of the Occupation, the Department of Defense is desirous of obligating prior to 30 June certain funds now available under current appropriations.

As stated in Mr. Rusk’s letter of June 22, 1951 to Mr. Van Atten,² mentioned in your letter, and previous correspondence between the Department of State and the Department of Defense, the Department of State, in view of the FEC policy decisions which govern a proposal of this nature, has been reluctant to approve production in Japan for export to areas other than Korea of items designed solely for military purposes prior to the coming into force of the Peace Treaty. However, the considerations mentioned by you³ are appreciated and the Department of State is desirous of cooperating in every possible way with the Department of Defense in this matter.

Recognizing the validity of these FEC policy decisions until the effective date of the Treaty of Peace with Japan, the Department of State, nevertheless, perceives no objection to the immediate placement of orders in Japan for production of combat and equipment for export to areas other than Korea or to the initiation of the production of such combat end items, provided there is no delivery of such items to areas other than Korea before the effective date of the Treaty of Peace with Japan or specification in the contract as to the place of delivery. It is the understanding of the Department of State that the type of combat end equipment to be manufactured in Japan for export to areas other than Korea is similar to that being produced for the Japanese National Police Reserve and the Allied effort in Korea.⁴

In view of the time which it will take to place the orders and to put Japanese facilities into production, the Department of State considers that the foregoing proviso creates no effective obstacle to the accomplishment of the United States objective which is to strengthen the industrial mobilization base in Japan. The proviso would, however, have the effect of avoiding any international complications at this time.

Sincerely yours,

John M. Allison

1. Not printed, but see footnote 3, below.
2. For text, see Foreign Relations, 1951, vol. vi, Part 1, p. 1137.
3. In the letter of Feb. 19 Houston stated: “It has become apparent, however, that expanded production would result in significant savings to the United States, since total orders which it has been able to place to date for support of the JNPR or the Allied effort in Korea have been inadequate to permit Japan economically to produce combat end items. Accordingly, in order to reduce costs of manufacturing, to strengthen the industrial mobilization base in Japan, and to improve Japan’s capabilities to provide for her own defense, the Department of Defense is desirous of utilizing Japanese facilities to produce ammunition and combat end products now needed to provide military assistance to Southeast Asian countries.” (790.5 MAP/21952)
4. Concerning this point, the attachment to a memorandum dated Mar. 7 from McClurkin to Allison reads in part: “in August 1950 the Department concurred in the policy that certain Japanese munitions plants were to be used for production of articles required in the Korean campaign on the grounds that North Korean aggression constituted defiance of the United Nations and represented a threat to the occupation so that SCAP was justified in making what use he might determine of these war facilities in accordance with paragraph 10 of FEC 084/21. It is the understanding of the Department that no advantage was taken of SCAP’s authority under paragraph 10 of FEC 084/21 to permit manufacture of combat end equipment in Japan either for the Korean effort or the NPR until late November and early December 1951 when orders amounting to $20,000,000 were placed in Japan by the Department of Defense for the production of ammunition for the NPR.” (794.00/3–752)