68. Telegram From the Embassy in Japan to the Department of State1
1596. Reference: Embtel 1595.2 As indicated in reference telegram, we have now reached impasse on problem of general formula. Three basic courses of action are open to us: (1) to accept formula proposed by Japanese; (2) to stipulate in notes that next year’s negotiations start from $155 million as provided in administrative agreement; and (3) to agree that starting point for next year will be 30 billion yen, recognizing thereby that previous reductions in yen contribution are final.
Third alternative appears least desirable since it would provide concession desired by Japanese without parallel agreement on their part to matching principle which would assure that at least 50 percent of increase in defense agency budget will be borne by Japanese.
With respect first two alternatives, advantages and disadvantages need be carefully weighed. Principal reasons for accepting Japanese formula are those that motivated my initial support for general formula, namely desirability of placing US-Japanese defense relationships on smoother basis and avoiding danger of acrimonious annual negotiations implicit under current arrangement. In addition, from practical viewpoint, it will be increasingly difficult secure Japanese agreement in future years to yen contribution greater than previous year irrespective of provisions annual note. USFJ yen costs are declining and furthermore Japanese are fully cognizant of German efforts to eliminate entirely contribution to allied forces. Japanese agreement to matching principle also would in effect provide more favorable agreement than we have obtained in negotiations during past two years.
On other hand, I am reluctant to make another concession to Japanese since it is not absolutely required in terms of political stability despite desirability of formula arrangement from viewpoint overall US-Japanese relations. Furthermore, Japanese next year will probably be in stronger position politically and economically and therefore able to take pressure from us on defense matters without affecting political [Page 153] stability. Finally, US proposed formula is more consistent with last year’s agreement than is Japanese formula—a point of importance to FEC.
While I would be inclined on balance to go along with Japanese on their proposed general formula, I am not in position to secure General Lemnitzer’s agreement to a joint recommendation along these lines. In securing previous joint recommendations, I have overruled his serious objections made on military grounds to the proposed concessions to the Japanese. I do not feel that I can again ask for concessions to the Japanese without endangering the goodwill existing between Embassy and Command. General Lemnitzer has previously gone along with our views on the grounds that these concessions were required to avoid an immediate threat to the political stability of the Japanese Government. Since the Japanese may be willing to delay or even forego agreement on a formula, it is difficult to justify to FEC a further concession on similar grounds.
Therefore, if the Department agrees that a general formula, if need be on Japanese terms, should be sought during current negotiations, it will have to come at its initiative and on basis of its assessment of overall situation, including developments in Germany on similar problem of local contributions.
Since foregoing was drafted I have learned from Suzuki of Finance Ministry that Japanese Government does consider general formula (theirs, not ours)3 desirable and important and wants it as part of package deal. Matsumoto also phoned to say Cabinet this morning reached decisions which we should find satisfactory but what this means in regard to formula (as opposed to 100.2, 10.5, 30 breakdown)4 I do not yet know.
- Source: Department of State, Central Files, 794.5/1–1356. Secret; Priority; No Distribution Outside Department.↩
- In telegram 1595, January 13, the Embassy reported in part that the Japanese Government appeared to be so opposed to the U.S. version of a general formula for progressive annual reduction in the yen contribution to maintenance of U.S. forces in Japan that it was willing, rather than accept the U.S. proposal, to risk commencing negotiations the following year on the basis of the old $155 million figure. (Ibid., 794.5/1–1356)↩
- Shigemitsu informed Allison of the latest Japanese proposal for a general formula on January 18: “Formula as proposed would call for reduction in yen contribution from contribution previous year by amount equal to one-half increase in expenses for defense purposes, i.e., net increase of JDAY and facility expenses. Formula proposed in Shigemitsu paper also calls for consideration of further reduction in case USFJ expenses ‘greatly decreased’ due to withdrawal or other factors. I believe Japanese would not insist on latter provision.” (Telegram 1622 from Tokyo, January 18; ibid., 794.5/1–1856)↩
- In telegram 1622, Allison also reported that Japan had agreed to this breakdown.↩