104. Memorandum of Conversation1

SUBJECT

  • Balance of Payments
  • Japanese Role in Asia and Views Toward Vietnam
  • Sato's Visits to Southeast Asia
  • China and Japan's Security
  • Ryukyus Reversion

PARTICIPANTS

  • Japanese Side
    • His Excellency Eisaku Sato—Prime Minister
    • His Excellency Takeo Miki—Minister of Foreign Affairs
    • His Excellency Takeso Shimoda—Ambassador of Japan
    • His Excellency Toshio Kimura—Minister of State and Director General of the Cabinet Secretariat
    • Mr. Haruki Mori—Deputy Vice Minister for Foreign Affairs
    • Mr. Fumihiko Togo—Director, American Affairs Bureau, Ministry of Foreign Affairs
    • Mr. Naoshi Shimanouchi—Interpreter
  • United States Side
    • Honorable Robert S. McNamara—Secretary of Defense
    • Honorable U. Alexis Johnson—Ambassador to Japan
    • Honorable Paul C. Warnke—Assistant Secretary of Defense for International Security Affairs
    • Dr. Morton H. Halperin—Deputy Assistant Secretary, Policy Planning and Arms Control
    • Mr. James Wickle—American Embassy, Tokyo—Interpreter
1.

Balance of Payments. In opening the substantive conversation Prime Minister Sato said he understood the U.S. hoped Japan would help out in the balance of payments problem by providing $500 million temporary assistance; he could say that $300 million was possible. [Page 228]The new subcommittee on balance of payments might well study the problem. He noted that the situation in Germany was different in that Germany held much greater reserves, and he hoped the U.S. would understand this difference. It would be particularly difficult to put much into medium term bonds. Japan's holdings of foreign exchange were down from $2 billion to $1.9 billion, and bond purchases would cause this amount to decrease further.

The Secretary agreed that the subcommittee should study the problem. The question of foreign exchange offset was not the primary concern of the Secretary of Defense, but he was interested because of the political implications which affected foreign policy. The American people were becoming more restive and unwilling to carry burdens by themselves. The willingness of Japan to take some of the burden was important, not only because of its financial effects, but because it would show that Japan was truly participating in the defense of the free world.

Mr. Sato said Japan was not in a position to intervene militarily or to extend military aid and he was sure the U.S. understood this. In the financial area Japan would like to do what it could and had indicated this in its support of the Asian Development Bank and loans to Southeast Asia. Japan would like to protect the pound and the dollar to the extent possible. Japan could not, however, do all that was requested.

2.

Japanese Role in Asia and Views Toward Vietnam. The Secretary said he was pleased to see Japan expand its role in Asia and show growing interest in the Asian Development Bank and other projects. He hoped that as the years went by Japan would play a larger role. There was much criticism in the U.S. of the Vietnam operation, in large part because the U.S. was spilling blood in support of peace in the area. The American people wanted to know why Japan, India, and Western Europe did not believe it important to contribute. We understood why Japan does not play a military role, but the American people do not. He hoped that Japan would work toward a greater political and economic role and, ultimately, a military role in Asia.

Mr. Sato said he agreed. In the course of his recent visits to Southeast Asia, he found everywhere realization and appreciation of U.S. sacrifices to safeguard freedom. It was generally agreed that the U.S. must stand firm until peace was attained. Especially in the Philippines, Australia, and New Zealand; all of which have sent troops to Vietnam, a majority support the war. In Japan some elements were critical of the bombing of North Vietnam, but this feeling was confined to a very small group. He felt guilty about this sentiment in Japan, especially toward the U.S. which was making such sacrifices. Mr. Sato said he had to cut his visit to Vietnam short in order to return for former Prime [Page 229]Minister Yoshida's funeral,2 and was, therefore, unable to meet General Westmoreland and Ambassador Bunker. He did meet Thieu and Ky. He was impressed with the efforts to establish a democratic government. He was also deeply impressed with the U.S. troop commitment, which was helping the country while refraining from interference in the local affairs of the Vietnamese.

The Secretary said he was pleased to hear this report. The Prime Minister's statements represented exactly the kind of leadership which was necessary. His visit to Vietnam was a courageous act, which served to begin to convince the American people that Japan associated itself with the U.S. effort. This was an invaluable step, and he was grateful to Mr. Sato for taking it.

Mr. Sato said he was embarrassed by the Secretary's words of appreciation. He said that he was aware that fear existed that the war would spread, but the war in Vietnam was not a normal war. The U.S. could not go all out; its hands were tied. This was a difficult way to wage war and, this was why it dragged on and created uncertainty in the U.S. Foreign Minister Miki and he were searching for peace, but the difficulty was that any Japanese effort might be interpreted as a sign of weakness. Nevertheless, they were still trying to find some way to bring about peace.

[Omitted here is brief discussion of Burma, Singapore, Malaysia, and Indonesia.]

4.

China and Japan's Security. The Secretary asked how the Japanese people were reacting to China's nuclear strength.

Mr. Sato said that real thinking Japanese were concerned, but he had to say that the masses were not concerned. He felt the government had not done enough to educate the masses, on whom the Socialists had made a deep impression. The Japanese Constitution was called a “Peace Constitution” and the Socialists told the people that it guaranteed Japan could live in peace and safety. This gave a sense of false security unrelated to what Red China might do.

Mr. Sato said Japan's whole security was based on its security arrangement with the U.S. The Japanese were well protected by the U.S. nuclear umbrella and Japan had no intention to make nuclear weapons. Three years ago the President assured him that the U.S. was prepared to aid Japan against any attack.

5.
Ryukyus Reversion. The Secretary noted that the President has said this many times. This related directly to the question of the Ryukyus and the natural desire of the Japanese for reversion. The [Page 230]Secretary said he would be frank and candid. The Ryukyus were bound to revert to Japan. The question was not one of reversion but of bases and the Mutual Security Treaty, as well as the President's statements about responding to nuclear blackmail. These all carried unwritten assumptions that Japan would act in a way which would permit the use of bases. Reversion was certain, but what was uncertain was the role of bases. We could not leave U.S. forces exposed and unable to operate effectively. Japan must permit the U.S. to operate militarily in the Ryukyus in ways which might ultimately involve operations requiring nuclear weapons to be placed there and combat operations to be conducted from there. The Secretary understood these were difficult problems for the Japanese people. It would take time for Mr. Sato to educate his people. He wished to emphasize that the American people would never allow the U.S. to operate in this area without the support, that is the political acquiescence of Japan. Accordingly, the whole package of bases and reversion was tied together and must be explored in the light of the interests of the two countries. The American people would not tolerate a continued U.S. presence without Japanese support.

Mr. Sato said he fully understood the Secretary's premises. As Prime Minister, it was his duty to give primary consideration to the security of Japan and he wished to do so in a framework of the security of Asia.

At the same time, it was the strong desire of the Japanese people and the one million Japanese in Okinawa for reversion. This was easy to understand, since for almost twenty-five years these islands have been under a foreign government. These spontaneous feelings demanded a response, but security needs and sentiment were not inconsistent and could be satisfied simultaneously. If the return of Okinawa meant military weakness, this was not desirable. He sought reversion which would not prejudice the security of either country. The problem was not “now” but “how.” President Chiang Kai Shek had told him that he felt safe because of the U.S. presence in Okinawa, and he would be concerned if the U.S. withdrew after reversion. Sato replied that this was not his objective and he had no intention to weaken the security of the area. If, at some time in the not too distant future, agreement could be reached on when reversion could take place, it would be useful. If after reversion there were a need to strengthen bases, this could be considered.

Mr. Sato noted that there used to be a clamor when nuclear submarines visited Japan but this had subsided and it had now been agreed to permit the Enterprise to visit Japan. Unlike the Socialists, his party was not opposed to the Security Treaty but based Japan's security on it. He sought a return of the Ryukyus Islands but not at the sacrifice [Page 231]of weakening bases. If the problem were mishandled, it could become serious and the mutual objectives of Japan and the U.S. would not be attained. He thought that what the U.S. and Japan could do was to agree that reversion was possible and that the question of timing would rest on agreement of the two governments.

It was too soon to talk about the use of nuclear weapons, or the free use of bases, or the question of prior consultation. Technical problems such as these could wait until agreement has been reached on the basic issue of when and how reversion would take place. It might take some time, perhaps months or longer, but he must give some hope to the people of Japan that reversion was coming. Sato said he might be accused of showing bad judgment in tying the question to Vietnam or the Chinese nuclear threat, but he must bring this up to respond to the sentiment of the Japanese people.

The Secretary said he understood the Prime Minister's position. He realized the desires of the Japanese people and understood the political pressures. He was not prepared to discuss specific language, but could support reversion under circumstances which did not reduce the U.S. capability to fulfill its commitments under the Mutual Security Treaty and other treaties.

Mr. Sato asked the Secretary to bear in mind that sometimes he felt the Japanese were strange. There were strong pressures on him in Japan against visiting the U.S. for fear he might come back with commitments. There was strong feeling in Okinawa and Japan that he should make an appeal based on the sentiment of the people. It was very important to settle the issue in a wise and prudent manner and he hoped the Secretary would appreciate his position. The main thing was to give hope that would enable the people to cooperate more willingly in regard to freedom of bases.

Foreign Minister Miki said he would like to add that, as the Prime Minister explained, the problem he faced in regard to reversion was the need to obtain basic agreement before entering into consultation to work out details. It was of the utmost importance for the Prime Minister to obtain this agreement in the absence of which many problems would arise. He hoped that the U.S. Government could respond to the desires of the Japanese people.

The Secretary said that everybody understood the political pressures the Prime Minister was under. We also understood that if we have bases there, we must be able to operate them as necessary under the Treaty. We must work out an equation of these sometimes contradictory objectives.

The Prime Minister said that the text which he handed the President very explicitly stated that there must be agreement between the two governments to carry out reversion. He was not insisting that a [Page 232]target date be pinpointed, such as 1970 or 1973, but that both sides agree. Even with agreement on such a basis, many would say it is too vague and indefinite; nevertheless, it was necessary to have a basic agreement. This involved not only Japan, but Korea, Taiwan, and the Philippines, all of which relied on the U.S. presence and arrangements in Okinawa that served to assure the security of the whole area.

  1. Source: Washington National Records Center, OSD/OASD/ISA Files: FRC 330 72 A 2468, Japan 091.112. Secret. Drafted by Halperin and approved by Warnke on November 18. The meeting was held at Blair House. Prior to meeting with McNamara, Sato was welcomed at the White House and met privately with President Johnson. They discussed Sato's recent trip through Southeast Asia, the situation in Vietnam, and the British currency crisis. The President suggested that Sato discuss the Ryukyus and Bonins with Rusk and McNamara to work out remaining details on reversion issues. (Memorandum of conversation, November 14; Johnson Library, National Security File, Country File— Addendum, Japan) After meeting with the President, Sato and members of his party met with Rusk and other Department of State and Defense officials. Their discussions centered on China, Southeast Asia, and the British currency crisis. (Memoranda of conversations, November 14, National Archives and Records Administration, RG 59, Central Files 1967–69, POL 7 JAPAN)
  2. Sato visited Saigon on October 21.