Office of the Historian

110. Memorandum From the Deputy Director of the Office of Northeast Asian Affairs (Ockey) to the Assistant Secretary of State for Far Eastern Affairs (Robertson)1

Washington, January 19, 1957.

SUBJECT

  • Japanese Defense Negotiations

Ambassador Allison and General Lemnitzer have urgently requested authorization (Tab B)2 to concur in the application of the general formula arrived at in the negotiations last year on the basis of the revised proposal made by the Japanese in the negotiations presently in progress. Acceptance of this proposal will result in the following Japanese defense appropriations for JFY 57 as compared with the appropriations for JFY 56 (in billions of yen):

JFY 56 JFY 57
Defense Agency 100.2 101.0
Facilities for US forces 10.5 10.5
*Contribution to USFJ 30.0 29.6

*The general formula provides that the yen contribution to USFJ for each fiscal year, beginning in 1957, will be that for the previous fiscal year reduced by an amount equivalent to one-half of the increase in the appropriation for defense purposes (i.e. Defense Agency and facilities) over that for the previous fiscal year.

In addition to the cash appropriations indicated above, the Japanese will increase the contract authorization for JFY 57 to 23 billion yen (16.5 billion yen in JFY 56). The Japanese have also given official [Page 250] assurance that the entire carry-over from JFY 56, estimated at 231/2 billion yen, will be reappropriated and expended for JFY 56 programs as planned.

In the present negotiations, U.S. military representatives have expressed disappointment on a technical basis with the revised defense proposals and have pointed out that the Six Year Plan, at best minimal and austere, will be further weakened by this revised budgetary action. In response, the Japanese indicated that the revised proposals resulted from political decisions of the highest government and party leaders. By limiting cash appropriations for the Defense Agency to an amount that can be disbursed in the fiscal year, the large annual carry-over will be eliminated, which will serve to counter the impression held by the general public that the Defense Agency is wasting money and receiving funds in excess of its requirements. The personnel augmentation of 10,000 men in the Ground Self-Defense Force, planned in the initial budget (127.6 billion yen) for the fourth quarter of JFY 57, will be deferred until the first quarter of JFY 58.

The Embassy and the Command have concluded that the Japanese revised budget is in reasonable compliance with the April 1956 agreement. Although the defense build-up is not as substantial as we would like, there is little that can be accomplished by objecting and any nominal increase would be gained at the expense of losing the advantage which follows from this year’s defense budget being purely a Japanese responsibility.

Recommendation:

That you sign the attached telegram (Tab A)3 authorizing concurrence in the Japanese revised proposal.

  1. Source: Department of State, Central Files, 794.5/1–1957. Confidential.↩
  2. Not found attached and not otherwise described. Almost certainly, however, it included telegram 1566 from Tokyo, January 18, which contained joint Embassy–FEC recommendations on the defense budget. (Ibid., 794.5–MSP/1–1857)↩
  3. Not found attached, but sent as telegram 1537 to Tokyo, January 19. (Ibid., 794.5/1–1957)↩