740.00119 Control (Japan)/10–1647
The Acting Political Adviser in Japan (Sebald) to the Secretary of State
No. 1340
Sir: I have the honor to refer to my despatch No. 1321 of October 8, 194785 and previous correspondence in regard to the meetings of the [Page 308] Allied Council for Japan and to forward herewith five copies of the Agenda and Corrected Verbatim Minutes of the Forty-third Meeting of the Council held on October “15, 1947.86
The only official matter on the Agenda was a “Report by the Chairman on the Establishment of a Foreign Exchange Rate for Japan”, proposed by the Supreme Commander for the Allied Powers. The report was designed to highlight the importance of determining an exchange rate as soon as possible, not only to facilitate the expansion of Japan’s foreign trade but also to assist in the rehabilitation and stabilization of her economy. Emphasis was placed upon the difficulties and problems involved in an immediate determination of such a rate, as well as the serious consequences which would follow upon the establishment of a premature and unrealistic rate. It was nevertheless emphasized that the Supreme Commander intends to institute some form of an exchange rate, in connection with necessary auxiliary controls, at the earliest practicable date.
The other Members of the Council were in unanimous agreement as to the importance of determining a rate of exchange in the near future. The Chinese Member expressed the belief that extreme precautions should be taken to prevent an unfavorable effect upon the internal economy of Japan. The Acting Soviet Member emphasized the desirability of a thorough investigation before the establishment of an exchange rate. The British Commonwealth Member, after commenting upon the problems involved, agreed that a rate should be established, as soon as the economy of Japan is sufficiently stabilized, in order that she may reestablish normal commercial relations with the rest of the world. He recommended that the responsibility for proposing an exchange rate be placed upon the Japanese Government. At his request, and with the concurrence of all the Members, the subject was retained on the Agenda for discussion at the next meeting of the Council.
Respectfully yours,