794.5 MSP/5–1154: Telegram

No. 760
The Ambassador in Japan (Allison) to the Department of State


2757. Reference: Circular Telegram 366, April 15.1 Seriously disturbed over prospect only $29 million OSP for Far East (presumably Japan) for FY 1955. As Department aware defense industrial [Page 1640] build-up just starting in Japan despite late date and repeated top level directives to aid and expedite.

Is it intended that MDAP appropriation for Japan for FY 1955 include funds which can be used for local procurement? If not, Japan’s entire industrial mobilization will almost exclusively depend upon Japanese Government appropriation, which would probably mean that even presently existing capacity will not be utilized. This is most inauspicious prospect for mutual security program just getting under way.

We realize Japan will have to carry increasing part of burden of defense build-up and industrial mobilization and we have never recommended large OSP program. Nonetheless contemplated sharp reduction is unrealistic if we are really serious in desire for adequate defense industry created Japan. Diminished program coming immediately upon heels of Japan’s ratification of MSA, cannot help but raise serious problems when we discuss with Japanese their next year’s defense appropriation. It will also plan [play] into hands of Left Wing who argue United States has no real interest in Japan other than getting manpower for our own use. Furthermore, regardless of our present feelings, it may become absolutely essential to spend dollars in Japan under OSP to cover balance-of-payments deficits.

Given present temper of Japan toward defense expenditures, we are deluding ourselves if we think that defense industries will suddenly blossom here without substantial orders from the United States. Question then becomes, do we or do we not want Japan have adequate industrial capacities to supply at least in part of her forces and those of other friendly countries of the Pacific?

Far East Command concurs.

  1. Not printed.