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

611.94/10–2554

No. 818
Study by the First Secretary of the Embassy in Japan (Leonhart)¹

[Extract]

secret

Tokyo, October 25, 1954.

A Preliminary Reappraisal of United States Policy With Respect to Japan

[Here follows a listing of the three parts of this study.]

part one: conclusions

1. The extent of the differences between present US and Japan policies with respect to the national defense of Japan constitutes a major obstacle to the coordination of their political activity. The defense relationship between the US and Japan has such cardinal importance that into its field of dispute is drawn all other aspects of US-Japanese cooperation—whether concerning the impingement of bases and facilities on the Japanese population, the disposal of US agricultural surpluses, the problem of Japanese internal political stability, or the development of Far Eastern security or economic regionalism. Until the present differences on defense policy can be reconciled, it seems doubtful if there can be that meeting of minds between the two governments required for immediate coordination of political and economic activity in Japan or for the construction of durable bases for US-Japan cooperation.

2. The failure of successive Japanese administrations, until very recently, even to attack the problems of economic readjustment and internal security has resulted in a stagnant, and in some cases, a deteriorating situation inside Japan since April, 1952. The Japanese approach to these problems is still slow and deficient. The absence of internal security—in government, industry, education, and information—has given to the communists and their apparatus of neutralists, pacifists, innocents, and dupes a remarkable opportunity for agitation, propaganda, and economic disruption. They have used this opportunity fully, and there has been since 1949 a steady seepage in internal political influence away from the conservatives toward an immature and unstable left. These areas are obviously not unrelated to national defense. If Japan cannot be made politically and economically stable, no investment in its defense sector is desirable or justifiable.

3. The problem concerns, not final objectives, but the adjustment of priorities and time factors. The most responsible and influential conservative leaders—inside and outside the government—whether pro-Yoshida or anti-Yoshida—have been unanimous in urging the view that the recovery of national strength and the rehabilitation of national spirit depend first of all on a reorganization of the national economy. They have insisted that the strengthening of their economy is the antecedent condition for all their official programs, and they have begun to undertake measures to this end. They have also, as a second priority, begun to prepare themselves to take more effective action against internal subversion. They have accorded a defense build-up and the expansion of their defense industries a lower priority.

4. A change of short-run emphasis in our relations with Japan now seems required in order to align our efforts with the realities and the prospects of post-occupation Japan and to conform more closely with the lines along which Japanese conservatives believe they must move. US policy for Japan as formulated in the crisis of the Korean war, confided too heavily on the recovery of Japanese national spirit, the strength of Japanese political leadership, and the immediacy of Japanese ambition. It assumed that political and economic stabilization could proceed simultaneously with a defense build-up, but that in any event defense should have priority. It has met with only a most limited success. Over the immediate period ahead US policy should place its emphasis on the political objective of assisting the conservatives to consolidate and make effective their majority position in Japan. Unless a strong and stable Japanese Government can be established, the measures necessary to produce greater economic health, to deal effectively with internal security, and to provide for the defense of its people will not be taken.

5. This shift of emphasis, over a short run, is moreover indicated by considerations exclusive to US planning: in particular, the need to assess whether—in the light of recent developments—the potential usefulness of Japan may not be less than had been assumed in our mid-1952 policies. Involved are more precise cost data for the Japanese programs than were hitherto available, the necessity for adjusting strategic concepts to the implications of nuclear technology, and the magnitude of the vulnerabilities of Japan. These are problems which will require not only a reexamination of current NSC doctrines for Japan but the integration of the resulting revisions into the framework of US national policy for Asia and the world conflict. This will necessarily be a protracted effort. Many of the problems inherent in the review will however come to the fore in the negotiation of the JFY 55 national defense program which is now at hand. Some interim readjustment of US policy is accordingly indicated.

These conclusions derive from the body of this study, its Exposition, which follows after a summary statement of recommendations. The Exposition: isolates certain divergences of major significance for US policy between the 1954 and the 1952 assumptions concerning Japan; surveys the credits and deficits in the contemporary balance of the Japan situation and strikes a provisional reckoning of Japanese prospects; presents a detailed statement of the Japanese position on defense policy and of its economic and political rationale with particular reference to the special nature of the US-Japan defense relationship; and poses what appear from the Tokyo point of view to be the essential questions for a longer term re-evaluation of US planning with respect to Japanese rearmament.

part two: recommendations

For the period of the next two Japanese Fiscal Years, or until March, 1957, the following recommendations are submitted:

1. The goal of increased political stability in Japan should be given absolute and urgent priority in our programs. This will involve the orientation of policy to the objective of strengthening the moderate conservative movement in Japan. In the face of the immaturity and susceptibility of the non-communist Japanese left, the US over the next several years can hope to work with no other element in Japanese political life. The leadership of the moderate conservatives is not at present strong enough, or skilled enough in the processes of party and public opinion management to move toward self-support in the Japanese economy, to control effectively internal subversion, or to lay enduring foundations for US-Japan cooperation. US policy should be directed to strengthening both the structure and the appeal of this leadership and should consider the following specific actions:

2. In the field of Japanese defense:

a. The US should be prepared to accept with a minimum of bargaining anticipated Japanese proposals for only a slight increase in the JFY 55 national defense budget (including reductions in the Japanese share of local support costs for USFJ). It should recognize on the basis of the 1953 experience that a long and stubborn negotiation would be required to raise their budget proposals further; that in the end we should probably agree to accept very little more; and that whatever additional slight increase was obtained, again on the basis of experience, might not in fact be spent. US policy should instead use the leverage of agreeing to the Japanese defense proposals in return for unequivocal commitments to take specific actions in the fields of economic austerity and internal security.

b. The US should compensate for the decreased Japanese contribution to USFJ costs by announcing in calendar year 1955 that one US Army division or some specific percent of US ground forces would be withdrawn from Japan but maintained in Pacific area. This would additionally: (i) ease the mounting frictions of our continued stationing of US Forces in Japan; (ii) break the link idea by which the Japanese believe that they can control the deployment of our forces by their defense inactivity.

c. The US should also begin to prepare, and should announce its intention, to remove progressively from Japan those units of United States Armed Forces and United Nations’ military forces whose presence in Japan has some other primary justification than the defense of Japan. The whole concept of Japan as a staging or a stockpiling area for troops which might, in certain contingencies, be sent elsewhere in the Far East needs review in terms of the probable US response to new acts of communist aggression and in terms of the continuing strain on US-Japan political relations imposed by the prolonged quartering of foreign troops in Japan.

d. If these actions are taken, the major deterrent to Soviet or Chinese Communist aggression against Japan must continue to be the knowledge that the US would come to the assistance of Japan in the event of the aggression. This deterrent influence of US power could be reemphasized in this context either by the conversion of the Security Treaty into a mutual defense treaty (as proposed in paragraph 4a below) or by the issuance at an early date of a unilateral public declaration that the US would regard as a threat to its own national security any attempt at military aggression against Japan or any attempt to change by force its form of government. Either would extend to Japan essentially the same form of guarantee that has already been given to the Republics of China, Korea, and the Philippines.

3. In the field of economics:

a. The US should continue its attempts to accommodate Japan’s need for markets; should maintain the maximum flexibility possible in its special dollar expenditures in Japan and in its receipt and use of the special post-war credits payable by Japan to the US; should assist Japan to solve its remaining reparations deadlocks and to participate in SEA regionalism; should continue its efforts to promote private foreign investment in Japan and to sponsor public and private industrial productivity programs. If a reasonably adequate program of self-help and austerity is undertaken, the United States should be willing, over the period of the next two years, to extend forms of direct economic aid or guarantees as may be required, including if necessary a currency stabilization credit. This willingness should be communicated privately, at the senior level, to the Japanese Government as a commitment by the US to support a conservative Japanese administration willing to undertake, in the immediate future, difficult policies for political and economic stabilization.

b. The components of a reasonable Japanese program for selfhelp and austerity are in general well understood. As formulated in the 1954 FOA Meyer Mission, they included:

i. A strengthening of present policies for qualitative and quantitative control of credit.

ii. Continuation of the present balanced budget policy and stronger measures for controlling unbalanced local government budgets.

iii. Improved production, management, and marketing techniques.

iv. Encouragement of foreign and domestic investment, both institutional and private, in areas which promise assistance for the economy and the foreign exchange position.

v. Further reduction and selectivity in imports.

vi. Channeling of imports into production for export.

vii. Renewed Japanese emphasis on settling its reparations problems and on investment in Southeast-Asia development.

4. In the field of political action:

a. The US should communicate its willingness to open negotiations for the conversion of US-Japan Security Treaty into a reciprocal and mutual defense treaty and for the revision of the Administrative Agreement whenever the Japanese Government desires these actions.

b. A systematic effort should be made to increase the prestige and participation of Japan in Asian affairs. In particular, the US should encourage the attendance by Japan at every multilateral conference on the Far East that the US attends in the company of other Asian states. While emphasizing the independence and sovereignty of Japan, the US should seek to appear to the Japanese public as determined to secure the reintroduction of Japan into the councils of the international community as the Soviet Union appears to them to be in its sponsorship of the introduction of Red China.

c. The liquidation of all World War II residues between the US and Japan should be undertaken urgently. In particular an inventory should promptly be taken of all claims and obligations against or in favor of Japan arising from World War II. (For example, we are still negotiating not only GARIOA but also on claims for the wartime bombing of the Embassy Chancery in Tokyo and the US Consulate at Nagasaki, for the accounts of Trust Territory residents, etc.) All these should be settled urgently and by the end of 1955 at the latest.

d. The US should offer to provide, at the request of Japan, technical assistance, including equipment and training, for more effective internal security operations.

e. The present unilateral status of the Atomic Bomb Casualty Commission, as a United States investigative laboratory unable to treat Japanese survivors of Hiroshima and Nagasaki, should be converted either to a joint US-Japan institution or to an international institution, open to all nations which care to contribute to its support or to all which have adhered to the UN Atomic Pool. In either event the Japanese side should include Japanese physicians qualified to treat Japanese patients. Present resentment over the present ABCC status is an important irritant to US-Japan scientific cooperation.

f. Consideration should be given to a greatly expanded exchange of persons program and to the establishment, from Japanese postwar financial obligations payable to the US, of a scholarship foundation for Japanese youth. If approved, this would require the recruitment of the highest caliber of US personnel to administer the program.

5. This program should be presented to the Japanese as a contingent program, all or part of which would be undertaken by the US in return for specific actions by Japan.

a. So far as the acceptance by the US of the Japanese JFY 55 defense program and the grant of presently contemplated US economic assistance, are concerned, the essential conditions should be:

(i) that in the field of economics, Japan adopt and carry out reasonably satisfactory program of austerity and self-help;

(ii) that Japan institute and apply a systematic program to deal effectively with the problems of internal security, with the communist penetration of its trade unions, with its communist manipulated mass media, and with its leftist controlled schools; and

(iii) that the implementation of this program should be reviewed by a continuing joint US-Japan Council, composed of senior officers of both governments. The Council should be empowered to require and receive specific progress reports on activities of mutual concern and to make recommendations for appropriate action. Whether the Council itself or its terms of reference should be classified will require additional consideration.

b. The rest of the program suggested above should be equated with specifics of Japanese performance: e.g. willingness to revise the Security Treaty should be conditioned on an agreement for the long-term US occupancy of air and navy bases in Japan, including any special weapons understandings considered indispensable; the loan or the grant of police equipment in return for closer internal security coordination.

6. These recommendations are only illustrative. They are products, not of new US objectives in Japan, but of altered emphases and priorities in our approach to the Japanese problem. They are designed to determine how much can be accomplished, within a two year period, toward producing the basic requirement for the long-term US-Japan relationship: a strong, stable conservative government in Japan. Whether such a government can be created will determine in large measure the kind of adjustment US policy will be obliged to make to take into account the geographic, the strategic, and the technological vulnerabilities of contemporary Japan. This much is certain: the stakes are too immense to permit longer the stagnation which has taken place in Japan since 1952.²

. . . . . . .

1. This study is the enclosure to despatch 516 from Tokyo, Oct. 25, in which Parsons stated: “This study leads to the conclusion that strong government, economic stability, and defensive strength are all essential to Japan’s rehabilitation as an important associate in the free world, but that higher priority for the first two of these may now be more productive.” Parsons mentioned that Leonhart had prepared the study as a consequence of meetings with the Ambassador, the Chief of MAAG, “senior officers of a friendly agency,” and officers of the Embassy. CINCFE was bringing portions of it to the attention of the JCS. The Ambassador had taken copies with him to Washington upon his departure Oct. 25. Parsons concluded:

   “This study has the general approval of the Ambassador although, pending further consideration, he does not wish to be committed in detail to every recommendation and viewpoint contained therein. It also has the general concurrence of the Chief of the Military Assistance Advisory Group, and the head of a friendly agency has informed the Embassy that the concept of the study has his general approval. Credit for much of the thinking and for the organization and drafting of the study belongs to Mr. Leonhart.”

2. The “Recommendations” section ends here. The section entitled “Exposition” is not printed.