29. Memorandum From the President’s Special Assistant for National Security Affairs (Bundy) to President Johnson1

Doug Dillon asked me a couple of weeks ago to report on his conversations at the finance meetings in Tokyo.2 The following are the leading items distilled from these conversations:

1. The Japanese Minister of Finance, Tanaka, presented the Japanese case for exemption from the interest equalization tax in such a way as to indicate that the problem is more political than economic. As a result, Dillon concludes that the political need can be met in other ways, perhaps by settling the air route discussions which have been put over until after the election. I myself think Dillon’s glasses may be somewhat rose tinted because of his great interest in avoiding any further concessions on interest equalization.

On the other hand, it is a matter on which we can stand firmly if we wish to.

[Omitted here is a brief report on Franco-American relations.]

McG. B. 3
  1. Source: Johnson Library, National Security File, International Meetings and Travel File, Dillon—Japan Trip. Secret.
  2. The meeting was held on September 6 at 10:30 a.m. at the Okura Hotel, Tokyo. It was attended by Dillon, Bullitt, Reischauer, and Robert G. Pelikan, Financial Attaché at the Embassy in Japan, as well as Kakuei Tanaka, Minister of Finance, Shinichi Ishino, Vice Minister of Finance, representatives from the Japanese Foreign Ministry’s International Finance Bureau, and the Financial Minister at the Japanese Embassy, Washington. The memorandum of conversation, September 8, is attached to a memorandum from Dillon to Bundy, September 14. (Ibid.)
  3. Printed from a copy that bears these typed initials.