694.0031/7–2247: Circular airgram
The Secretary of State to Diplomatic and Consular Officers
I. Opening of Limited Private Trade in Japan
Limited private international commercial relations with Japan will be available after August 15, when private traders may enter Japan for trade purposes, although no contracts may be consummated until September 1. While Japan remains in status of enemy nation it will be necessary that controls be maintained; however, they will be relinquished earliest feasible, many of them before signing of peace treaty.
Quotas and Entry Permits:—Due to shortage of accommodations, Supreme Commander for the Allied Powers (SCAP) has provided overall limitation of 400 traders during initial stages. Inter-Allied Trade Board of FEC has established quotas for various countries as follows: US 102; UK and colonies 64; China 64; Netherlands and colonies 27; India 39; Australia 23; France and colonies 16; Canada 8; Philippines 6; New Zealand 6; all other countries 45.31 SCAP will [Page 258] probably arrange for representatives of USSR trading organizations to be included in USSR mission presently in Tokyo.
Within its established quota, US through Dept of Commerce selects American business firms on basis of commercial competence, past experience, availability of desired goods in Japan, and on basis of probable contribution to Japan’s trade. Although primary consideration given to applicants who will expand Japanese exports, sellers of raw materials which are needed and essential in Japan will be given consideration. Applications for entry for purpose of property inspection and pursuit of substantial investment interests will also be given consideration. Nationals of other FEC countries should apply to their governments, who will select on bases similar to those of U.S., and request SCAP to issue entry permits for those selected. Nationals of non-FEC countries should apply to SCAP through their Governments. Where such country has no mission in Tokyo, Dept of State will upon request transmit application to SCAP. All Governments will presumably issue passports to applicants upon receipt of SCAP’s approval. U.S. nationals outside continental U.S. should apply Dept Commerce through Dept State facilities unless they are representatives of U.S. firms, in which case application must be made by the firm on behalf the representative. If representing foreign firm, must go on that country’s quota. Method of transportation responsibility of applicant, entrance permits valid for 21 days, subject to renewal upon application to SCAP and Government of applicant. It is not anticipated that dependents will be permitted entry at this time. Each trader must bring two copies passport photographs 13/8΄΄ x 17/8΄΄ for issuance identification cards on arrival. Innoculation for Japan and Korea as follows: Typhoid and smallpox within a year before arrival, typhus and cholera within six months.
Accommodations and Services:—Hotel accommodations, transportation, and communication facilities within Japan will be handled by Japanese, under SCAP supervision. Food for trade representatives will be provided from imports in order that critically short subsistence supplies of Japanese will not be further depleted. During the initial period visitors will pay in U.S. dollars for services rendered and cost may be estimated to approximate commercial rates. Until more accommodations are available, traders will be billeted in Tokyo, Osaka, Nagoya, Kyoto, with other trips to nearby cities permissible by arrangement. Recreational, entertainment, and medical facilities will be provided to extent possible.
Business services such as banking, shipping, and insurance will be offered as rapidly as available. To extent required, international interests to provide such service will be permitted entry prior to and [Page 259] after August 15 without counting against quota. Applications by such firms should be made directly to State Dept.
Pricing, Payment, and Other Business Arrangements:—Initially there will be no foreign exchange rate established but this will be done as soon as practicable. An arbitrary rate set now would be unrealistic and unfavorable to some transactions because of wide range of prices within Japan and consequently would restrict total volume of trade. In so far as possible prices will be negotiated by SCAP commodity specialists, based upon world prices, competitive bids, etc., but this will not prevent individual traders from discussing prices and other contract terms with Japanese producers. Prices will be quoted in dollars, but sales may be consummated in any currency acceptable to SCAP to whom payment is made, Pricing will be transferred to Japanese at earliest practicable date. Transactions approved by SCAP will be licensed by the Japanese Government and validated by SCAP. SCAP will not become a party to the transaction, which is strictly between buyer and Boeki Cho, the Japanese Board of Trade. SCAP will endeavor to prevent undue advantage to Allied and neutral nationals now residing in Japan in connection with closing of transactions. SCAP will not provide warranty on any merchandise and Japanese Government will assume full responsibility for fulfillment of contracts. SCAP will receive matters of dispute or adjustment forwarded through Allied governments and will take all possible steps to cause Japanese government to make proper adjustments. In so far as it is feasible to do so Japan’s foreign trade is to be administered in accordance with the relevant principles of the draft charter for an International Trade Organization. In adopting draft Charter principles to problems peculiar to Japan, emphasis will be placed upon specific Charter principles barring trade restrictions and discriminations, rather than upon its permitted exceptions which are designed, in the main, to cover emergency and temporary situations.
In case of some items in world short supply, sales will conform with allocations established by international control agencies.
Traders entering Japan to purchase exports should provide themselves with
irrevocable letter of credit for purpose of payment. In determining
acceptability of foreign currencies SCAP will be guided by the FEC directive, which specifies that payment for Japanese
exports may be made in currencies:
Anticipated that transactional communications will be available in near future although mail for ascertaining facts and exchanging information is now permissible. Transactional mail will include privilege to exchange samples. Air mail transactions will be available at the earliest date consistent with establishment of commercial air mail facilities.
Information on U.S. customs and tariffs will be available to traders in Tokyo.
Insurance on export shipments may be provided either through the offices of insurance companies permitted to enter Japan or by the necessary coverage supplied by the consignee in his home country.
Telegraph communications will be permitted. Messages will be paid for in Japan in dollars or at the receiving end in the currency of the country concerned.
Governments having missions in Japan should be urged to have their missions maintain close liaison with SCAP for latest developments on procedures and lists of items available.
General List of Goods Available:—Raw silk, cotton textiles, and the 1947 tea crop will continue to be sold and purchased through the medium of governmental agencies. The following list (by principal category) is subject to revision upon notice from the theater:
[Here follows list of items available.]
- In circular airgram of September 4, 8:55 a.m., the Department indicated that the statement that all other countries would share 45 places had been changed as follows: “Six places have been reserved for USSR and quotas have been established for 9 non-FEC countries as follows: Belgium and Luxembourg 3; Sweden 3; Egypt 3; Switzerland 2; Norway 2; Argentina 2; Siam 2; Union of South Africa 2; all other countries one each (first come first served).” (694.0031/9–447)↩