Office of the Historian

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

Tokyo, October 26, 1955—1 p.m.

1005. Evident US position proposed in joint Embassy–FEC recommendations (Embtel 1000)2 provides inadequate basis to arrive at agreed defense budget through use of general formula for reduction in yen contribution which could be applied in subsequent years. This almost inevitable if negotiations this year conducted under rigid provisions Article XXV 2(b) of Administrative Agreement and terms of annual agreements making reductions for one year only which FEC–Defense insisted upon in order avoid any implication Article XXV amended by annual agreements. As long as Japanese obligation to provide $155 million is in no way impaired by annual agreements, appears difficult to establish basis for general formula except on tenuous legal grounds.

Japanese, on other hand, led to believe by Washington talks and communiqué3 that US prepared establish general formula for reduction over next few years. Government’s willingness increase defense costs even to 140 billion yen probably predicated in good part on belief agreement on general formula will offset criticism of budgetary increase. US failure to seek agreed formula will undoubtedly be interpreted as lack of good faith on our part even though communiqué in no way represents legal commitment.

Under circumstances, I urge that we make honest effort to work out mutually satisfactory formula for reduction effective at least with JFY 57 budget. Formula would require prior revision of terms Article XXV which possible either by amending article or by provision in annual agreement for JFY 56 to effect yen contribution reduction will be extended to subsequent years. I prefer simple amendment of language Article XXV 2(b) in order avoid ambiguity and subsequent differences on interpretation of annual agreement.

I hope that I can be in position to negotiate amendment of Article XXV 2(b) and general formula for yen reduction during course of forthcoming defense budget negotiations since this likely facilitate JFY 56 budget agreement. Even if general formula would not apply to JFY 56 budget, our subsequent defense relations will be placed on regularized basis, free from binding legal provisions which have led to tough negotiations with Japanese on defense budget and consequent over-involvement in Japanese budgetary procedures.

[Page 137]

Deptel 887 received after completion above.4

Allison
  1. Source: Department of State, Central Files, 794.5/10–2655. Secret; No Distribution Outside State Department.↩
  2. Supra.↩
  3. Of August 31; see footnote 8, Document 47.↩

  4. In telegram 887, October 24, the Department stated that it believed amendment of Article XXV was necessary; that in the JFY 1956 negotiations it believed, and had told the Department of Defense, that as a minimum position Japan should spend 103 billion yen on its forces and contribute 30 billion yen to U.S. forces; that Defense had not yet submitted any figures of its own; and that while Defense believed the JFY 1955 defense notes obligated Japan to match any reduction in the yen contribution by equivalent spending on its own forces, it was considering State’s position “that since NSC rejected this principle US need not adhere to it.” (Department of State, Central Files, 794.5/10–1455)

    In telegram 1034, November 15, the Department noted its reluctance to start negotiations on a basis that would produce acrimony but agreed with the contention in telegram 1000 that the United States “should not ignore clear provisions August note exchange. Believe however long-term foreign policy considerations make it essential negotiations be conducted friendly manner commensurate with NSC [5516/1?] paragraphs 48 to 51 and particularly requirement US should avoid pressing Japanese increase their military forces to prejudice political and economic stability.

    “In consonance with above considerations you and CINCFE authorized commence negotiations on basis your 1000.” (Ibid., 794.5/11–1055)

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