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United States Department of State / Foreign relations of the United States, 1949. The Far East and Australasia (in two parts)

Northeast Asia: Japan,   pp. 601-939 PDF (132.7 MB)

Page 609

taken from the Japanese without impairment of their ability to make
a decent livelihood have already been taken, than we-do if we attempt
to agree that the Japanese can afford to give up only, say, a hypotheti,
cal 100,000 machine tools whereas Australia or some other country
argues that the Japanese can give up 200,000 machine tools plus 2
locomotives. The consequent debate upon details would deprive us of a
strong, unequivocal position and in the long run, because of the neces-
sity of compromise and the end result of almost nothing, would bring
more enduring bitterness than would a debate on the defensible prin-
ciple that no further reparations removals are possible.
   As soon as a Departmental position can be agreed upon, NA will
 prepare drafts of the necessary procedures and documents to imple-
 ment that position.
                                               M[AX] W. B[IsioP]
740.00119 PW/1-749
   - Memorandum by 31r. Paul H.. Nitze, Deputy to the Assistant
        Secretary of State for Economic Affairs (IThorp)'-
TOP SECRET                          [WASHINGTON,] 7 January 1949.
  1. Progress towards solution of the Japanese reparations problem 2
has reached another impasse in Washington largely due, this time, to
SCAP$'s unfavorable reaction to the most recent State-Army pro-
posals sent to him for his comment, but -also due to the following fac-
tors, There is serious, question whether a China, under or imminently
under Communist domination, should now be awarded the hitherto
proposed 30-40% share of reparations, There is a question whether
the U.S. Congress and public would, at this hour, let pass without
sharp challenge the award of any reparations whatever from Japan
to the U.S.S.R. There is the more fundamental question of whether
a defensible case, legally or pOlitically, can be made for considering
any reparations program as a "final settlement" unless that program
be erected upon the basis of formal FEC action.
  2. I am conscious that a review of our "legal" obligations, under
Potsdam and previousU.S,. commitments in the FEC, has been made
in order to establish the framework within which a satisfactory repara-
tions program might be worked out. I understand that there are a
variety of possible programs under study ranging from asserting the
U.S. "first charge" claim against all surplus capital in Japan,
fixed and liquid, and thereby washing out reparations for other
claimants to (working out some procedure for making available repara-
  1Addressed to George F. Kennan, Director, Policy Planning Staff; General
Saltzman; Mr. Butterworth*; and the Legal Adviser (Gross).
  2 For previous documentation on this subject, see Foreign Relations, 1948,
vi, pp. 943 ft.

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