NAC files, lot 60 D 137
No. 687
Minutes of the 203d Meeting of the
National Advisory Council on International Monetary and Financial
Problems, September 16, 1953
[Extract]
1. . . . . . .
2. Settlement of Postwar Economic Assistance to Japan
Mr. Willis2 outlined for the Council the problem of the settlement of U.S. postwar economic assistance to Japan (see NAC Document No. 1528).3 He noted that the Japanese settlement had not previously been considered by the Council although it had been mentioned in late 1951 in connection with the settlement of German postwar economic aid. He explained that a forthcoming visit to the United States of a senior Japanese official presented a favorable opportunity to consider the Japanese settlement along with other problems of U.S.-Japanese relationships. He added that principal past interdepartmental differences on the terms of a Japanese settlement revolved around whether the German settlement should constitute a precedent for the Japanese settlement. He noted that while the German settlement covered private as well as public debts, the Japanese have already reached an agreement with their private creditors. The Staff Committee had been advised by the State Department that any proposal for settlement would be discussed with the appropriate Congressional Committees and that the State Department proposed to effect settlement by means of an Executive Agreement. The Staff Committee was recommending a flexible action providing for settlement on the best terms that can be negotiated, but not less favorable to the U.S. Government than those of the German settlement.
Mr. O’Hara4 stated that the Defense Department discerns two points of difference from the German case. First, in the German case there was considerable evidence of German willingness to participate in defense measures, a factor that was taken into account [Page 1508] in arriving at the final terms of the settlement. No similar willingness is now evident in the case of Japan. Second, German resources for payment of international obligations are considerably greater than those of Japan. This factor may constitute to some extent an offset to the first point of difference. He continued that it was the view of the Department of Defense that the U.S. negotiators should take account of this difference in attitude toward defense efforts and should accordingly seek better terms for the U.S. Government in the case of Japan, and that equitable treatment of the Germans requires the U.S. to obtain better terms from Japan than it did from Germany.
Mr. Hemmendinger indicated that the State Department has reason to believe that the Japanese attitude toward defense may recently have undergone a change, so that it was possible that the U.S. negotiators would find a situation at the time of the negotiations in which the distinction cited by Mr. O’Hara would no longer exist.
Without further comment or discussion the Council unanimously approved the recommended action.
Action: The following action was taken (Action No. 647):
The National Advisory Council advises the Secretary of State that the United States should seek to negotiate a settlement of the United States claims for postwar economic assistance to Japan on the best terms that can be negotiated, but not less favorable to the United States than those of the German settlement.
. . . . . . .
- Among the omitted material is a list of persons present (25). The meeting was chaired by Andrew N. Overby, Assistant Secretary of the Treasury.↩
- George H. Willis, Acting Secretary of the NAC and Director, Office of International Finance, Department of the Treasury.↩
- Supra.↩
- Robert E. O’Hara, Chief of the Foreign Programs Branch, Budget Division, Office of the Secretary of Defense.↩