794.5/3–1852

No. 540
The Counselor of Mission in Japan (Waring) to the Deputy Director of the Office of Northeast Asian Affairs (McClurkin)

top secret
official–informal

My Dear Bob: Ken Morrow1 came to my office on March 13 to discuss the accomplishments of the recent Marquat mission to Washington.2 Also present were Peyton Kerr3 and George Artamonoff, head of the small MSA staff in Tokyo—the latter at Morrow’s request. This letter has been drafted by Peyton Kerr.

Two general subjects were discussed: (1) the prospect for military orders for Japan and (2) the question of establishing a staff in Tokyo to promote economic mobilization and coordination of procurement.

Following is a summary of Morrow’s remarks.

Military Orders for Japan

A 10-division military force has been decided upon for Japan and equipment lists have been worked out. The total estimated cost of equipment for these 10 divisions is $777,000,000.

Approximately $40–65 million is still available for expenditure in Japan from U.S. military appropriations for fiscal 1952. Working with JLC and other appropriate military groups in Japan, Morrow has been given responsibility for preparing plans for expenditure of these funds in Japan for military equipment. He proposes to complete such plans within 30 days.

The U.S. military budget for fiscal 1953 will include $300 million for the JNPR. (An additional $300 million is promised for fiscal 1954.) If results obtained through expenditure of the $40–65 million referred to above are satisfactory, approximately $110 million of these funds will be spent in Japan. This $110 million plus $40 million from fiscal 1952 appropriations make up the $150 million referred to by General Marquat in his press release of March 11, 1952. (Despatch 1263, March 15, 1952.)4

The United States wishes to dispose of certain equipment. With respect to vehicles, U.S. forces are to be completely re-equipped [Page 1215]with new-model jeeps and 6 x 6 trucks by December 1953. For this reason, the question of whether (and to what extent) the JNPR should be supplied with second-hand equipment takes on added importance. Morrow predicts that vehicles supplied to the JNPR will be a combination of rebuilt and new construction in Japan. There are approximately 100,000 vehicles in the Far East available for a rebuilding program. Rebuilding means expenditure of $1,400 per unit in Japan, a total potential expenditure therefore of $140,000,000.

The estimate of $777 million for the total cost of equipment for 10 divisions is “phony” in the sense that Japan is to be charged replacement cost for the rebuilt jeeps and trucks. This estimate also includes a substantial charge for crating and shipping. Shipping charges can be earned by Japan to the extent that Japanese ships are available. A bill, sponsored by the Defense Department, to make 50 ships from the reserve fleet available to Japan will be introduced within two weeks.

The above figures are for the JNPR and do not include the possibility of MDAP off-shore procurement in Japan. The first order from MDAP funds to be placed in Japan amounts to $7 million for equipment for Indo-China. As in the case of JNPR equipment, Morrow predicts that results obtained from this order will determine the extent of additional MDAP off-shore procurement in Japan.

We had been previously informed of a controversy in Washington over whether U.S. military appropriations should be used to maintain the U.S. military production base or should be used in part for off-shore procurement. A recent telegram indicated that this controversy had been resolved and that off-shore procurement in Japan would be comparatively small. In view of the discrepancy between this telegram and Morrow’s relatively optimistic figures for prospective military expenditures in Japan, we asked him whether the controversy referred to had in fact been resolved. He indicated that he thought it has not been resolved completely.

Concerning the question of an economic mobilization staff in Tokyo, Morrow indicated that Mr. Foster, Under [Deputy] Secretary of Defense, favors establishment of such a staff by MSA but that a majority of the MSA legal staff considers that this is impossible under present MSA legislation. MSA does not want to set up such a staff for the added reason that such a move would give rise to pressure from Japan for an aid program. On March 12, Mr. Foster issued an order designating the Army as the coordinating agency for off-shore procurement but Japan was omitted, apparently because it was considered “that SCAP had adequate authority”. Morrow indicated that opinion is divided within the Department as [Page 1216]to whether such a staff should be a part of the Embassy. He indicated further that, if this staff is in the Embassy, the Department had agreed that salaries would be more or less in line with those to which ESS personnel have become accustomed. He stated further that the Department is interested in recruiting only himself and approximately 10 other members of Morrow’s own staff in ESS and is not interested in other top echelon ESS officials. He urged that a decision be expedited because it has been necessary to drop two additional members of his staff (his price man and his labor-force man), since he returned from Washington to meet reduction-in-force requirements, and because he himself must decide among alternative employment offers he has received.

I have sent a separate letter to you on the subject of an economic-mobilization staff in Tokyo.5

Accept cordial regards.

Sincerely yours,

Frank
  1. A senior official in the Economic and Scientific Section of SCAP.
  2. A group headed by Maj. Gen. W. F. Marquat, Chief of the Economic and Scientific Section of SCAP, had left Tokyo on Jan. 26 and had returned to Tokyo early in March.
  3. First Secretary of the Mission in Japan.
  4. Not printed. (894.10/3–1552)
  5. Dated Mar. 17, not printed. (794.0221/3–1752)