Foreign Relations of the United States, 1958–1960, Japan; Korea, Volume XVIII

168. Memorandum of Discussion at the 446th Meeting of the National Security Council⁰

Washington, May 31, 1960.

[Here follows a paragraph listing the participants at the meeting.]

1. U.S. Policy Toward Japan (NSC 5516/1;¹NSC 5913/1;²NSC Actions Nos. 2072³ and 2219–b–(1);⁴OCB Report on NSC 5516/1, dated April 8, 1959;⁵NIE 41–60;⁶NSC 6008⁷)

Mr. Gray pointed out that the Secretary of Commerce and the Acting Secretary of Labor were present for consideration of the draft statement of policy on Japan (NSC 6008). He suggested that Mr. Amory might wish to summarize recent developments in Japan before the Council turned to consideration of NSC 6008.

Mr. Amory said that Prime Minister Kishi was determined that he would not resign and would not dissolve the Diet. The active vocal opposition to the security treaty with the United States probably represented a small minority of the Japanese people. However, the chances of Kishi retaining office are diminishing, as a result of his handling of the riot in the Diet and his failure to get his case for continuance in office thoroughly accepted by the people. Kishi is counting on the President’s visit to Japan to restore his prestige and make it possible for him to dissolve the Diet and call new elections in the fall. If the current riots do not cease, Kishi may be compelled to abandon his ambitions for a third term. Kishi’s enemies within his own party are mainly preoccupied with eliminating Kishi; they seem to have no substantive objection to the security treaty. If the Kishi government loses power and is replaced by another government, it is probable that relations between Japan and the United States would not be materially affected except that the new Japanese Government might be more favorable to Communist China.

Finally, Mr. Amory reported his belief that the Japanese Government would be firmly in control of public order during the President’s visit to Japan. The President said his visit would be quite a good will visit, but he supposed the situation could be worse.

Mr. Gray then briefed the Council on NSC 6008. (Copy of Mr. Gray’s briefing note is filed in the Minutes of the Meeting, and another copy is attached to this memorandum.)⁸

After reviewing the background of NSC 6008, and referring briefly to the General Considerations and the Objectives, Mr. Gray turned to the first split in the paper namely, that in paragraph 44,⁹ dealing with the defense mission of the Japanese armed forces.

Secretary Dillon thought there was no great substantive difference between the alternative versions of Paragraph 44. He felt strongly that any effort to stimulate Japanese thinking along the lines described in the Defense–JCS proposal for paragraph 44 would have a very bad effect on Japan. We had already had serious problems with respect to the security treaty and efforts to increase the military capabilities of Japan. One of the bases of Japanese acceptance of the security treaty has been the principle that Japan would not be required to fight in Far Eastern wars. Secretary Dillon believed that while the ultimate objective of the Defense–JCS proposal was a laudable one, the Defense–JCS language was too strong. He suggested the Council might wish to adopt the middle course by a sentence which would read “Until conditions permit, take no action to stimulate Japan to participate more actively in the defense of Free World interests in the Far East.”

Secretary Douglas believed that Secretary Dillon’s remarks had not quite answered the hope reflected in the Defense–JCS version of paragraph 44 that Japanese defense forces might become effective beyond the immediate area of the Japanese islands. Secretary Douglas attached some importance to mention of this geographical factor in the paper, but he could not get excited about substituting “as conditions permit” in the paper.

The President said that in view of the troubles in Japan at present, and the Kishi government’s efforts to support us, he thought we had better be sure that we made no mistakes. He believed the State version of paragraph 44 was preferable. We should remember that this policy paper will be studied by our Ambassador and our Military Attachés, who will ask “What does this paragraph mean?” When the time comes to extend the Japanese defense mission, the decision that the time has come should be made by the National Security Council.

General Twining remarked that some military observers believe Japan is slipping away from us; that we are being too nice to Japan and will ultimately lose our shirts there. The President said that once we recognize the fact that Japan is an independent country, we can only keep Japan on our side by being nice; being too firm might lose Japan as an ally. General Twining believed that Japan was objecting to most of the military actions we wanted to take in Japanese areas, [less than 1 line of source text not declassified]. The President said he would rather have Japan as a friend than as an enemy. This was a matter of first importance. He felt it was necessary to be cautious at the present time. In three or four months, if Kishi succeeded in his efforts to stay in power the mission of Japanese military forces might be reviewed and, if necessary, changed.

Mr. Gray turned to a split in paragraph 45, which dealt with the question of grant military assistance to Japan.

Secretary Dillon said his own feeling was that both versions of paragraph 45 went too far in trying to establish a policy which would last for some time. The difference between the alternative versions, as reflected in the Financial Appendix,¹⁰ was only $6 million for the next fiscal year. Secretary Dillon was strongly of the opinion that the present was a poor time, after the internal struggle in Japan over the security treaty, to ask Japan when we could stop making new commitments for grant military assistance to Japan. Immediately after the ratification of the security treaty, we intend to negotiate with Japan the latter’s $600 million GARIOA debt.¹¹ Secretary Dillon thought the $600 million involved in GARIOA were more important than our expenditures in military assistance. After the GARIOA negotiations are completed, it might be possible to discuss with the Japanese Government a reduction in our military assistance commitments.

Secretary Dillon admitted that the State Department version of paragraph 45 might be somewhat extreme, and wished to suggest an alternative. He recalled that a report on NSC Action No. 2158¹² was due in August. He suggested that paragraph 45 be modified by eliminating both alternative versions and substituting the following: “Bearing in mind the ultimate objective of eliminating grant military assistance, continue such assistance for the present.” Grant military assistance to Japan could then be considered again in connection with the report on NSC Action No. 2158 this summer, and if new commitments to Japan were not ended as a result of such consideration, the matter could be considered again each year.

The President asked whether there was any understanding or any commitment between the United States and Japan as to grant military assistance made during the course of the security treaty negotiations.

Secretary Dillon said there were no such commitments. However, the United States has a definite program of cost-sharing to increase Japanese capabilities so that we can phase out U.S. forces now stationed in Japan. In fact, Secretary Dillon believed that an effort to eliminate new commitments for grant military assistance to Japan might result in retention of our forces in Japan for a longer time and at a greater cost than would be necessary if grant military assistance were not ended at an early date. Secretary Dillon said there was an implied commitment to Japan that we would continue for a year or two with our cost-sharing program. We should help Japan in building F–104’s, P2B’s, and missiles for air defense. However, if the State language of paragraph 45 were adopted, the Council would not be approving any particular financial plan for the future.

Secretary Anderson said he realized it was difficult to talk about ending commitments for grant military assistance at a time when our relations with Japan were somewhat precarious. However, NSC Action No. 2158, taken last August, provided that we would take steps at the earliest feasible time to end new commitments for grant military assistance to nations able to pay for their own military forces. Under this Action, no new commitments should be made or implied except through prescribed procedure. The Treasury version of paragraph 45 suggested that consultation between the United States and Japan should take place, but did not propose that our commitments be phased out until three years had elapsed. Moreover, our expenditures for military assistance to Japan would not become minimized until six years had elapsed. Under the Treasury language, consultations with Japan might even be postponed, since there was no provision indicating when such consultations would be feasible.

Secretary Anderson understood that the Country Team in Tokyo had worked out a six-year program, and had discussed it with the Japanese in contravention of the instructions in NSC Action No. 2158. Now it was argued that any attempt to change the program of the Country Team would place us in an adverse political position vis-à-vis Japan. Less that 1-1/2% of the Japanese GNP and less than 10% of the Japanese budget had been devoted to military purposes since the end of the war. Japan was in a favorable position with respect to gold holdings and liquid dollar assets. If the principle that nations able to pay for their military forces should do so was to be applied, we must begin some time.

Secretary Anderson felt that three years was not an unreasonable period for phasing out our commitments for grant military assistance to Japan. He also suggested that the words “as soon as feasible” might be substituted for “promptly” in the Treasury version of paragraph 45. Finally, he agreed with the view expressed by the President, that the National Security Council should decide when it is feasible to begin making changes in our military arrangements with Japan.

The President suggested that the timing provision in paragraph 45 might read “when declared feasible by the President”. He asked whether Japan was in a favorable budgetary position at the present time.

Secretary Anderson said that during a period when Japanese GNP rose from $17 billion to $30 billion, defense expenditures rose from $283 million to $436 million. The percentage of the Japanese budget devoted to defense declined from 12% to 7.87% between 1953 and 1958. The President inquired whether the Japanese budget was balanced. Secretary Anderson said he did not know whether Japan was operating under a balanced budget or was running a deficit.

The President said he felt the Japanese GNP was carrying a great load. He pointed out that if the country had a starvation diet to begin with, even a considerable rise in GNP was not very significant. He noted that the United Kingdom was attempting to balance its budget by austerity measures, but was experiencing considerable difficulty. A similar comment might be made about Argentina.

Secretary Anderson said he thought the Japanese standard of living had improved. Secretary Dillon said per capita income in Japan was high for a Far Eastern country–about $300 per year. He added that he had no great difficulty with the drafting proposals made by Secretary Anderson. The word “promptly” had upset the State Department. Secretary Dillon saw three ways to improve the U.S. balance-of-payments position and help the U.S. taxpayer so far as Japan was concerned: (1) an increase in Japanese defense expenditures; (2) a favorable GARIOA settlement; and (3) a reduction in our military assistance to Japan. Only the last item was fully under our control. With respect to the question whether we were committed or not committed, Secretary Dillon wished to say that the United States had made no commitment to Japan as a result of the Country Team’s activities. We did not have to follow through on the Country Team’s five-year program, which was prepared in response to one of the recommendations submitted by the Draper Committee¹³ and approved by the President as a world-wide method of programming military assistance. Secretary Dillon said he did not know whether the Country Team had in fact talked with the Japanese about this program.

The President said one of his first experiences in office had concerned the question whether we were committed to make a large loan. He had carefully read all the papers on the subject, and had come to the conclusion that the good faith of this country had been committed to the extent of $300 million. The President felt that once a Country Team makes a favorable comment on a program, the foreign country regards that favorable comment as a commitment. He believed we must instruct our Country Teams to remain non-committal when discussing future programs with our foreign colleagues.

Mr. Gray doubted that our Country Teams could formulate satisfactory programs unless they were permitted to discuss these programs with our foreign colleagues. The President said he had no objections to such discussions; but the Country Teams should be careful not to make commitments. Mr. Gray thought that discussions slipped imperceptibly into commitments.

Secretary Douglas then read (from the Defense Comments in the Financial Appendix of NSC 6008) a paragraph which indicated that the only formal U.S. commitment to Japan was an agreement relating to the production of F–104 aircraft. This paragraph also stated that the United States had indicated an intent to support Japanese plans for certain weapons to a point where failure to provide such support would present considerable difficulty.

The President said the word “formal” should be underlined in the paragraph Secretary Douglas had just read. It was the indication of intent that the President was complaining about. The Country Teams should be cautious; their conversations should be exploratory and should not indicate intent.

Mr. Gray suggested that the timing provision in paragraph 45 might read “as soon as deemed by the President to be feasible”. The President agreed that we might say “when determined to be feasible by the President”.

Mr. Gray then explained the divergence of views in paragraph 51 of NSC 6008, dealing with U.S. control over the Japanese islands enumerated in Article 3 of the Peace Treaty.

The President said he seemed to be constantly fighting words, but he did not see much difference in the two versions of paragraph 51.

Mr. Gray said he feared the Planning Board had done a poor job in drafting the paper in that case, since a real difference of opinion existed.

Secretary Douglas agreed that paragraph 51 reflected a difference of opinion. He said the Department of Defense felt that the Majority version invited immediate discussion as to whether the present degree of U.S. control over the islands in question was essential to U.S. security interests. The Defense version of paragraph 51 settled the question for a few years at least.

Secretary Dillon was fearful lest the Defense–JCS version settle the question for a hundred years. He could conceive of situations arising wherein Japan would expand its whole security system in the Far East in return for relaxation of some of our control over the Ryukyus. He thought the language of paragraph 51 should be broad enough to enable us to make changes in the degree of control we exercise over the islands if such changes were in our security interest. The Defense language made it impossible to modify our control, even if such modification should be in our interest, as long as international tensions persist in the Far East.

Mr. Gray said this question was the subject of weekly controversy between the Departments of State and Defense. It had been one of the first things he had to deal with when he became Assistant Secretary of Defense.

The President felt there was no difference between the two versions of paragraph 51 as he would interpret them. As long as there was a Communist threat in the Far East, it was not in our security interest to relax our control over the islands.

General Twining said that each request for a relaxation of U.S. control over the islands was relatively modest in itself, but that a series of relaxations would result in seriously undermining our control.

The President suggested that paragraph 51 might indicate that we would retain the present degree of control over the islands for the duration of international tensions in the Far East and in the absence of changes in the U.S.-Japanese security treaty.

Secretary Dillon said that under the Defense language we would have to maintain the present degree of control over the islands as long as international tensions exist in the Far East, but under the State language minor changes were possible. He preferred the flexibility permitted by the State language.

The President wondered why we should control the Ryukyus–indeed, why we would want to–in the event Japan became quite powerful. In this event we would have to accede to Japanese wishes regarding the islands.

General Twining believed it was necessary for the United States to control these islands in order to control the Far East. He feared that a relaxation of our control would eventually result in the loss of Okinawa. Secretary Dillon wished to make it clear that the State Department was not suggesting the relinquishment of Okinawa.

The President said the security treaty with Japan had been drawn up in the light of the Communist threat. Accordingly, paragraph 51 might contain the clause “under conditions now prevailing and as visualized in the security treaty”. He agreed with Secretary Dillon that the Communists might be a threat in the Far East for a hundred years. Japan could become so powerful that our garrisons on the Japanese islands would appear puny.

Mr. Gray then explained the spirit in paragraph 52, dealing with Japanese requests for closer relations with the Ryukyus in such areas as trade, cultural relations, provision of economic assistance, and the interchange of nationals.

The President said he was inclined toward the Defense version of paragraph 52, which said that Japanese requests should be considered sympathetically consistent with U.S. security interests.

Secretary Dillon was also inclined to agree with the Defense–JCS version of paragraph 52 if “sympathetic consideration” had a real meaning. Last year, however, the Army had cancelled a program for the provision of a small number of Japanese teachers for the Ryukyus, although teachers were badly needed in that area. Actions of this nature had resulted in State formulating the rather extreme position found in the State version of paragraph 52.

The President remarked that State would probably like the Defense version to read “consider sympathetically and, if feasible, favorably”. The President then suggested that the Defense–JCS version of paragraph 52 should be adopted, and that a note should be made in the Record of Action of the Council’s understanding that “considered sympathetically” means taking a positive attitude toward the Japanese requests.

Mr. Gray then called the attention of the Council to paragraph 60, which was concerned with Japanese trade practices.

The President wondered why this question was in an NSC paper. He was particularly concerned about the detailed provisions relating to pirating of designs, infringement of patents, and cartels, as well as unfair business practices. Many people thought that cartels were not unfair at all.

Mr. Gray said that an attempt had been made to comprehend all our policies toward Japan in this paper.

The President said that if paragraph 60 remained in the paper it might as well have a paragraph on tariffs and GATT.

Mr. Gray said that paragraph 57 did in fact deal with tariffs and GATT.

The President believed that a large number of things were being covered under the label of national security. He wondered whether economic policies of this kind should be in an NSC paper. Council proceedings were supposed to be secret advice to the President. If the Council discussed the policy relating to trade practices, infringement of patents, and so on, and our policy on these matters was later made public, then the privileged character of Council advice to the President would be violated.

Secretary Mueller said we were attempting to assist Japan economically as well as in security matters. The economic paragraphs in NSC 6008 were part of the effort to build up Japan.

Secretary Dillon reported that as a result of his visit to Japan,¹⁴ Chancellor Adenauer had directed the West German Government to change its trade policy toward Japan. Last week a West German-Japanese trade agreement had been signed opening West German markets to Japanese goods.

The President said he was still concerned about including in an NSC paper as much detail as appeared in paragraph 60. Some of the economic policy in the paper should be more “visible”; perhaps this policy should be incorporated in another paper.

Mr. Gray explained that if it were necessary to make any of these policies public, they could be published as Presidential policy without reference to the fact that they had been recommended to the President by the National Security Council.

The President asked whether it was the duty of the State Department to negotiate with Japan concerning the pirating of designs, and so forth.

Secretary Dillon replied that this matter was something of a joint State-Commerce responsibility; the State Department negotiated with Japan with the support of information supplied by the Department of Commerce.

The President said another difficulty with presenting economic details in an NSC paper was that the Department of Commerce was not normally a part of the NSC mechanism.

Secretary Mueller said the policy paper on Hong Kong was largely economic.

In reply to a question from the President, Mr. Gray said the Hong Kong paper was not on the agenda of this Council meeting.

Secretary Anderson believed that Secretary Dillon’s report on the Japanese-West German trade agreement was very important. If Japan was to become self-sufficient, it would have to have markets in addition to those in the United States and Canada. He wished to applaud the fact that Japan and West Germany had signed a trade agreement.

The President remarked that European countries in conversations about the Outer Seven were inclined to shy away from talking about Japanese trade.

Secretary Dillon said that West Germany in one jump had changed from a country which was lagging behind in relations with Japan to a country which was now very favorable to Japanese trade.

The National Security Council:¹⁵

a. Noted and discussed an oral briefing by Mr. Robert Amory, Jr., for the Director of Central Intelligence on recent developments with regard to the situation in Japan.

b. Discussed the draft statement of policy on the subject contained in NSC 6008; in the light of the views of the Joint Chiefs of Staff thereon, as reported at the meeting.

c. Adopted the statement of policy contained in NSC 6008, subject to the following amendments:

(1) Page 21, paragraph 44: Insert the following as the second sentence, in lieu of the alternative Majority and Defense–JCS versions:

“Respond positively to, but until conditions permit take no action to stimulate, initiatives by Japan to participate more actively in the defense of Free World interest in the Far East.”

(2) Page 22, paragraph 45: Insert the following as the 4th sentence, in lieu of the alternative State–Defense–OCDM and Treasury-Budget-Commerce versions:

“In order to achieve the orderly reduction and early elimination of new commitments for the provision of military equipment to Japan on a grant basis, undertake, as soon as deemed feasible by the President, consultations with the Japanese Government toward this end.”

(3) Page 24, paragraph 51: Insert the following in lieu of the alternative Majority and Defense–JCS versions:

“51. Taking into account the Communist threat in the Far East and the new security arrangements with Japan signed on January 19, 1960, maintain the degree of control over the islands enumerated in Article 3 of the Peace Treaty deemed by the President to be essential to our vital security interests.”

(4) Page 25, paragraph 52, 2nd sentence: Include the Defense–JCS version (deleting the State version) and adding as a footnote “The term ‘considered sympathetically’ is to be interpreted as meaning that a positive attitude will be taken toward Japanese requests.”

d. Noted the President’s determination, with respect to paragraph 51 of NSC 6008 as revised, that for the time being the present degree of control over the islands enumerated in Article 3 of the Peace Treaty is essential to our vital security interests.

Note: The President, after further consideration of the discussion at the meeting with respect to paragraph 60 of NSC 6008, directed that the following wording at the end of the first sentence of that paragraph be deleted as being too detailed for inclusion in an NSC policy paper: “; preventing the pirating of designs, infringement of patents, cartels and other unfair business practices.”

NSC 6008, as amended by the action in c above and the immediately preceding sentence, and the action in d above, subsequently approved by the President; circulated as NSC 6008/1 for implementation by all appropriate Executive departments and agencies of the U.S. Government; and referred to the Operations Coordinating Board as the coordinating agency.

[Here follow the remaining agenda items.]

Marion W. Boggs

0. Source: Eisenhower Library, Whitman File, NSC Records. Top Secret; Eyes Only. Drafted on June 1 by Boggs.
1. See footnote 2, Document 167.
2. For text of NSC 5913/1, September 25, 1959, “U.S. Policy in the Far East,” see vol. XVI, pp. 133–144.
3. NSC Action No. 2072 was taken at the 404th meeting of the National Security Council on April 30, 1959. It noted the report on NSC 5516/1 made by the OCB as well as the review of U.S. policy toward Japan to be conducted by the Planning Board. (Department of State, S/S–NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)
4. NSC Action No. 2219–b–(1), taken at the 441st meeting of the NSC, April 14, 1960, reads as follows: “The revised policy on Japan (item 2, page 1) should be submitted for Council consideration prior to the President’s departure early in June on the trip which will include a visit to Japan”. (ibid.)
5. Not printed. (Ibid., OCB Files: Lot 62 D 430, Japan)
6. Document 150.
7. See Document 166.
8. Not printed; see Supplement.
9. See Document 166.
10. Not printed. (Department of State, S/S–NSC Files: Lot 63 D 351, NSC 6008 Series)
11. See footnote 1, Document 202.
12. See footnote 3, Document 167.
13. The President’s Committee To Study the U.S. Military Assistance Program chaired by William H. Draper, Jr.
14. Dillon visited Japan in October 1959; see Documents 102 and 103.
15. Paragraphs a–d and the Note that follows constitute NSC Action No. 2240. (Department of State, S/S–NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)