Foreign Relations of the United States, 1952–1954, China and Japan, Volume XIV, Part 2

611.94/8–1454: Telegram

No. 790
The Ambassador in Japan (Allison) to the Department of State

confidential

Tokyo, August 14, 1954—2 p.m.

365. Reference Embtel 318¹ and Deptel 300.²

1. I met Ikeda privately yesterday at his request in Minister Finance residence where he hoped to be undiscovered by press (this apparently was impossible; see Embtel 364).³ Ikeda accompanied by Suzuki and Miyazawa and I by Diehl and Leonhart. Talk lasted two hours, was frank, unrestrained, and of considerable consequence in illustrating current official attitudes here.

2. I opened conversation by reading press accounts of what Ikeda was supposed to have said off-the-record on August 9 and 10 and suggested that if he would like me to report particular instances of misquotation I would be pleased to do so. I would first however like to review for him recent FE development and present strategic situation in SEA as it appeared to us. I did so quoting paragraphs from Secretary’s June 11 address (which I left with him) and general line Department’s 300.

3. Ikeda replied that he had of course been misquoted, that he believed US-Japan cooperation was basic to all aspects Japanese policy, so basic and well understood that he had not believed it necessary to dwell on this essential in his off-record remarks. What he had been trying to do was infuse some freshness and some sense new policy into Liberal Party. We should recognize that never has prestige Mr. Yoshida and liberals been so low as it is today, that Yoshida and liberals are determined to put US–Japan cooperation on permanent and lasting basis but to do so they need increased strength. Mr. Yoshida is old man and there are many things he does not understand, but he is still “one of few men” in Japan who can develop sound foundation for US–Japan relations.

4. Ikeda continued that is why Yoshida trip to US is so important, why it should be made as soon as possible, and why it was indispensable for Yoshida to bring back real presents from US. On timing of trip, Ikeda said they must have special Diet session early in November and Yoshida must be back for several days before its opening. I said I had sent several telegrams urging maximum accommodation of Yoshida plans and would report Ikeda’s remarks. He seemed satisfied and observed we should not be disturbed by what we read in press concerning date of departure. In order forestall special session they would continue announcing Yoshida’s trip as imminent.

5. He then turned to what we could do for Japan. It was not important that people spoke of Yoshida as “puppet of somebody”; what was important was that they should consider him “puppet of benevolent somebody.” Unfortunately many Japanese were beginning to feel that US had no real benevolence toward Japan. US was failing to recognize that much of Japan’s present economic difficulties were attributable to mistaken occupation policies in such fields as labor, decentralization of government, school reforms, etc. Since these were US mistakes, US should now be more generous in helping Japan to recover from them. Moreover, many Japanese are coming to believe US had been far more benevolent toward Germany than Japan.

6. Ikeda continued in this vein for some time, at no place indicating either Japanese responsibilities for Japanese policies in last two and half years or need for Japan to take self-help measures as prior justification for US aid. I said I wished to speak equally plainly and wished to point out: (a) US had found Japan in ruins at end of war and had rebuilt its productivity to highest peak in its history; (b) at end of occupation and under Dodge plan, Japan was solvent and making real economic progress; what had happened since was consequence not of following occupation economic policy but of repudiating them; (c) political differences between a sovereign and unified Japan and a divided and occupied Germany were too obvious for comment; economic differences owed to fact Germans had gone to work and Japanese had wasted their substance. I added that if Japanese people still believed US had not followed a benevolent policy toward Japan it could only be because Yoshida government had not made effort to tell them. I also expressed surprise that Japanese people could be won by purely material means. Ikeda then said Japanese people might be better off today than at war’s end but they looked back to pre-war. This was first time Japan had been defeated—Germany had prior experience—and Japanese people blamed America for their present bad situation. I could only repeat that apparently those in government who knew better had made no effort to correct this.

7. This appeared to have some effect on Ikeda. He acknowledged that certain recent Japanese economic, particularly financial, policies had been mistaken, in particular the government has maintained an “import preference subsidy” instead of “export preference subsidy”. He intended to have this corrected immediately. He asked what we thought they should do, and I replied it was necessary for Japan to draw up a specific account of what measures they proposed to take to help themselves; this should cover not only short-range situation but period of some years. On basis such a plan we would be willing consider what we could do. Ikeda replied he had written something of sort for Yoshida to give to President last June; he would bring it up to date and give it longer range emphasis, and he wrote this carefully down in little notebook.

8. In response to my question, he said he thought about ten more Progressives would follow three who left party two weeks ago. He added smilingly that he “had to put his own party’s house in order before he went to work on the others.”

9. He did not mention GARIOA during this conversation; he is certain to have been informed of Okazaki’s communication (Embtel 350).⁴

10. On leaving I handed him copy of President’s mid-year economic situation report. He said he hoped we could meet frequently for this kind of private conversation. I said I should look forward to our next meeting and that in it I should like to ask him about Yoshida government’s plans for dealing more effectively with problem of internal subversion in Japan.

11. Implications of many of Ikeda’s remarks most disturbing and have, I believe, great importance for future of Japanese-American relations. I do not wish to comment at length until I have had opportunity to consider matter carefully and discuss it with senior members my staff. I hope to forward Embassy views early next week.⁵

Allison

1. Document 786.
2. Document 788.
3. In this telegram, dated Aug. 14, the Embassy transmitted the text of an article concerning the Ikeda–Allison meeting which had appeared in that day’s Asahi Shimbun. (611.94/8–1454)

4. In this telegram, dated Aug. 13, the Ambassador reported that Minister Okazaki had informally proposed that Japan fulfill its GARIOA obligation by paying the United States $500 million over 20 years, interest free.

   The Ambassador continued, “He said government hoped for early settlement and was inclined to favor settlement along political rather than strictly accounting lines. Apparently Foreign Office which, along with Yoshida, had originally preferred settlement involving United States agreement to use payments in Japan for economic purposes, has now come around to Ministry of Finance position namely, that settlement should be along straight financial lines. Okazaki said government desired to separate repayment of debt from any aid program United States might agree to.” (794.5 MSP/8–1354)

5. See telegram 463 from Tokyo, Document 796.