Foreign Relations of the United States, 1946, The Far East, Volume VIII

740.00119 PW/6–1146

Memorandum by the Legal Adviser (Fahy)

[Washington,] June 11, 1946.

In conference with Mr. Barnett of the FEC staff today, following up the conference with General McCoy, I advised that there was no legal objection to the attached proposal but urged, as a matter of policy, that subparagraph (a) should be deferred so as to maintain the position of the United States that such matters should be settled under correct principles. If the Reparations Commission is promptly set up and determines that Russia is entitled to a certain amount, and if under (c) of the draft the inventory is filed and shows that the total commingled amount which Russia has is not more than she is entitled to, there would never be an occasion for a definition of war booty. The decision could then be made on the basis of the facts that Russia should retain all such property, as provided in (a).

Charles Fahy

[Annex]

Draft on War Booty and Other External Assets⁵⁹

problem

To determine the United States position with respect to war booty and other external assets as factors in the Japanese reparations settlement.

facts bearing on the problem

See Appendix “A”.

discussion

See Appendix “B”.

conclusion

It is concluded that the United States member of the Far Eastern Commission should propose that no distinction should be made between war booty and all other types of Japanese external assets as they may be applied to fulfillment of recognized and approved national reparations claims, providing that simultaneous agreement is reached:

a. That all countries at war with Japan should retain all types of Japanese property, supplies, or equipment, military, quasi-military, or civilian, under their administrative control, existing within their territories on 2 September 1945, or removed to their countries subsequent thereto.

b. That Japanese property, supplies or equipment, military, quasi-military, or civilian, as defined in a. above should be offset against total national percentage shares of the total Japanese assets, both those within Japan (those declared available for reparations apportionment) and those outside Japan.

c. Inventory will be supplied to the Japanese reparations agency by countries at war with Japan of all types of Japanese property, supplies, or equipment, military or civilian.

59. Penciled notation: “6/11/46 Left with Mr. Fahy by Mr. Barnett”. For full text as approved on July 12 by SWNCC, see annex (“War Booty”) to SWN–4541, July 12, p. 546.