794.5 MSP/1–1254: Telegram
No. 732
The Ambassador in Japan (Allison) to the Department of State
priority
1718. In analyzing latest Japanese defense program as forwarded in Embassy telegram 1709, January 11,1 there are several general points which should be emphasized. While program is still less than we would have liked, nevertheless it represents increase over what Ikeda was talking about in Washington and over what Okazaki put forward on December 28. Even more significant is fact that no attempt has been made this year in formulating Japanese defense budget to reduce expenditures. This is in sharp contrast to attitude one year ago when defense appropriations were cut by approximately 60 billion yen from previous year. Amount allocated to National Safety Agency this year is 20 billion yen more than in previous year’s budget. This, of course, is obtained by saving of 5 billion yen in Japan’s contribution to United States forces so that actual Japanese additional expenditure is only 15 billion yen. In opinion of Treasury Attaché Diehl, inclusion in budget of 10 billion yen reappropriation for relocation expenses is real victory for United States. Diehl is also of opinion that while 20 billion yen estimated by Japanese to be rental value of state-owned property turned over to United States security forces may be somewhat exaggerated, nevertheless turning over of these properties does represent real contribution by Japanese Government and even if it is only half of amount estimated, it deserves consideration as part of Japan’s defense contribution.
It is difficult to over-emphasize problems Japanese Government has faced and will continue to face in formulating budget wherein [Page 1597] only advances are in defense items. There has been and continues to be considerable agitation against decreases, particularly in such items as social security and welfare funds. At least four Ministry of Finance officials have been physically beaten by irate mobs protesting against budget cuts. Threats to other Finance officials have been so common that budget examiners have been taken to and from work in armored cars and have met in various places throughout Tokyo other than Finance Ministry in order to avoid protesting mobs. In spite of this agitation, government has so far remained firm and this is due primarily to strong stand being taken from very top by Yoshida, Ikeda, and Okazaki.
In our opinion chief United States interest is in seeing substantial increase in numbers of personnel added to armed forces. We believe present proposals do represent substantial increase and are most that government can do politically at this time. Real significance should be attached to addition of 33 persons for high-level liaison with United States forces as this is first concrete step taken by Japanese to enable them to carry out combined planning with United States forces which has long been one of principal United States desiderata. The increase of 213 civilians to the staff of National Safety Agency to work directly under Masahara is also of real importance as it indicates Japanese Government means business in setting up real defense organization. The over-all increase in defense manpower is slightly more than 33 percent, which in light of still formidable opposition to rearmament is commendable. From other Japanese Government sources we are informed that definite plans and legislation are being formulated for creation of a reserve. These plans not yet sufficiently concrete to report however.
In light of above it is our considered opinion that United States agreement to some reduction in Japan’s contribution to United States forces is justified and would be real factor in encouraging Japan to continue along road it has now at long last started. However, we believe that full amount of 5 billion yen should not be agreed to. Therefore request authority to tell Japanese on or before afternoon January 14 United States will accept reduction in Japanese contribution of 2,500,000,000 yen, providing force goals remain at approximate levels given me last night.
Following is FEC position:
Although force increases are well below United States position, FEC concurs in belief that forces are probably maximum that can be expected at this time. It is also recognized that reduction of yen support of USFJ might encourage Japanese public support of NSA [Page 1598] program. However, withdrawl of this support will necessitate increased dollar appropriation.