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

794.5 MSP/7–3054: Telegram

No. 800
The Acting Secretary of State to the Embassy in Japan¹

confidential

Washington, September 10, 1954—8:20 p.m.

551. Your 235.² Japanese Embassy informally submitted to Department September 10 breakdown defense cuts JFY 54 expenditures. Of 78.830 billion yen appropriation for National Safety Agency, only 46.4 billion yen susceptible to reduction in view standing expenses for salaries personnel etc. Thus 4.545 billion yen cut in defense budget is 5.7% cut in 78.830 billion yen figure but 9.7% cut in 46.4 billion figure. Also undefined cut in 14 billion yen carry-over. Reduction explained grounds 9.3% decline price levels since February 1954. Navy budget cut 31 million yen because delay completion vessels by Japanese and 230 million yen because failure US deliver anticipated vessels. Disposition savings to be determined next session Diet.

Question why savings could not be used procurement additional matériel, i.e., naval vessel, answered in terms legislation and political difficulties such action. Tanaka made point that except for naval recruitment program, defense cuts would not affect US–Japan agreement on expansion forces.

Does foregoing coincide your understanding issue and outcome your discussions Okazaki per last para Part III urtel 235?

Smith

1. Drafted and approved for transmission in NA.
2. Document 782.