Foreign Relations of the United States, 1955–1957, Japan, Volume XXIII, Part 1

253. Telegram From the Embassy in Japan to the Department of State¹

Tokyo, December 20, 1957—8 p.m.

1665. Embtel 1647.² Background of Fujiyama’s request is persistence of Ichimada in pursuing traditional Finance Ministry policy of lowest possible defense appropriation and lowest possible defense contribution under Art XXV of Administrative Agreement. Press treatment of issue so far has been substantially confined to reporting of statements made by him, and stories presumably inspired by Finance Ministry, to effect that reduction US forces logically leads to reduction in yen contribution over and above the formula amount and that US will be asked to agree to such reduction. Therefore to certain extent expectations have been built up in minds of both politicians and public and of course any such reduction would have popular and political appeal.

I have conveyed to Fujiyama and Ichimada (despatch 644)³ and indirectly to Kishi, and other Embassy officers have conveyed to their official contacts, personal opinion that attempt to revise formula this year would be most unwise and unjustified by facts of present situation. These efforts did not prevent official approach being made to me but they may have moderated somewhat extent to which GOJ has so far committed itself to obtaining additional reduction.

There is no doubt in my mind that Fujiyama is right in saying such additional reduction over and above formula amount will be political advantage to Kishi in pre-electoral period. At same time failure to get it may not be too great political disadvantage unless issue becomes built up in press as first-class conflict between two governments which has thus far not happened. Foregoing factors, and lack of any really good case for additional reduction unless it matter of overriding necessity to avoid very significant damage to Kishi and Liberal-Democratic Party in elections, lead me to recommend that we should go back to GOJ with negative response along following lines:

(1) Present Japanese argument is that as our forces go down their contribution should be reduced over and above reduction resulting from application of formula. This overlooks important point of entire defense relationship, i.e. that reduction in our forces is related to increase in Japanese defense capabilities. Division of our costs in Japan discussed at great length various times in past and conclusion reached that most easily measured yardstick of Japanese increase is defense budget. Application of formula thus already takes account of decrease in US forces. Unreasonable, therefore, that there should be additional reduction on this ground.

(2) Direct costs of operations in Japan will go down in future but we do not expect reductions in next year to be in proportion to numerical reduction in forces. Impossible to estimate now what actual cost reduction will be.

(3) Quarterly reports by USFJ to Joint Committee on “USFJ cost of operations” showed expenditures by USFJ in JFY 1956 of $590 million. Japanese yen contribution was $83 million or only 14 percent of this amount.

(4) Foregoing figures in any case do not take account of direct military aid under MDAP and of indirect US defense cost which contribute very materially to military security of Japan, e.g., acquisition cost of aircraft stationed in Japan, US forces supporting security of Japan such as Seventh Fleet, Strategic Air Command, etc.

(5) Using estimates cited by Fujiyama, overall national budget next JFY will be about 9 percent greater than current year; and total defense appropriations (including Defense Agency budget, yen expenditure for facilities and yen contribution to USFJ under formula) will be increased by only 5.7 percent. Concession of additional reduction now sought by GOJ to mean that defense appropriations would be only 2.8 greater than current year.

Moreover, again using Fujiyama’s estimates, total defense appropriations next year would be 12.2 percent of total national budget, compared with 12.4 percent in current year, 13 percent in JFY 1956 and 13.1 percent in JFY 1955. All these figures show declining proportion of government’s financial resources going to defense purposes and it is difficult for us to see how Japanese public, if facts are fully presented to them, can or will take exception to level of defense expenditures proposed for next year.

(6) In current year there has been in Japan both tax cut and budget surplus. There is talk of both these desirable ends being achieved in next Japanese fiscal year. We understand fully political aspects of present situation in Japan and wish to do everything reasonably possible in intergovernmental relationships to support Japanese government. However, American people also would like tax cuts but all indications are that our very heavy current rate of defense expenditure will be increased next year.

(7) Material in paragraph 4 of Deptel 1310⁴ could be used to emphasize importance of fair distribution of defense burdens in facing new challenge from Communist bloc.

(8) In light of current international situation, Japanese proposal seems contrary to spirit of partnership and concept that free world, to preserve its security, must share burdens. This was essential basis of new US-Japan relationships established by Prime Minister with President Eisenhower last June, a relationship which we continue to hope will lead to constructive solutions of far more important issues affecting long-term interests of both countries.

(9) For all foregoing reasons, US Government believes that additional reduction of Japanese contribution to support of US forces is not justified and USG believes that we must adhere to formula which was designed previously to deal with situation such as now exists.

We have been told final budget plans are to be approved by Cabinet December 30 and speedy action is therefore needed. Therefore I urgently request authorization (by Monday morning Tokyo time if possible) to make response along lines indicated above, with any changes or amplification which Department thinks desirable.

It would be helpful if Department would call Asakai in at fairly high level and take similar line, taking particular pains to urge importance of secrecy in interest of avoiding serious public dispute between two governments impairing constructive cooperation in other fields.⁵

COMUS Japan concurs with this message.

MacArthur

1. Source: Department of State, Central Files, 794.5/12–2057. Secret; Priority.
2. In telegram 1647, December 19, MacArthur reported that Fujiyama had that day requested a reduction in Japanese support of U.S. forces stationed in Japan of 4 to 5 billion yen in addition to the reduction of 10 billion yen which could be expected by application of the revised formula adopted in 1956. Part of MacArthur’s summary of Fujiyama’s oral presentation reads: “While amount of yen contribution under general formula is determined on basis of increase in Japan’s defense expenditures, problem of percentage share of local costs of American forces has been target of attack at National Diet in connection with yen contribution.”

   The telegram continued: “In this connection, since American forces will in course of next year be reduced by roughly one half as compared with beginning of this year, Japanese public will expect their local costs will also be curtailed to similar extent and yen contribution will be cut down accordingly.” According to MacArthur, Fujiyama also stressed at several points that the problem was exacerbated by the forthcoming general election. (Ibid., 794.5/12–1957)

3. Dated December 12, not printed. (Ibid., 794.5/12–1257)

4. Regarding telegram 1310, see footnote 5, supra. Paragraph 4 reads as follows:

   “It is essential in our view that there be a greater sharing of free world responsibilities in all aspects of the Communist challenge. As far as the US is concerned this is necessary if we are to meet this challenge without sacrificing our freedoms and standards of living to military efforts as do the Communist nations. Toward this end the executive branch is currently planning for increases next year in the amounts currently expended for defense and mutual aid programs. A greater sharing of these burdens among free world countries is as justified as it is necessary. Every principal free world member must bear his responsible share in accordance with the maximum of his capability.”

5. In telegram 1364 to Tokyo, December 21, the Department concurred in the negative response MacArthur had suggested to Fujiyama’s request: “Consider argumentation excellent and have no suggestions for changes or amplification.” (Department of State, Central Files, 794.5/12–2057) However, when MacArthur conveyed the U.S. reply to Fujiyama on December 24, Fujiyama, while promising to request Kishi and Ichimada to consider the U.S. view carefully, also reiterated the Japanese position and asked the United States to reconsider its views. (Telegram 1681 from Tokyo, December 24; ibid., 794.5/12–2457)