Foreign Relations of the United States, 1948, The Far East and Australasia, Volume VI

740.00119 PW/9–2148

Memorandum by the Assistant Secretary of State for Occupied Areas (Salternan) to the Under Secretary of State (Lovett)

top secret

[Washington,] September 21, 1948.

Subject: Submission of State Department Position on Japanese Reparations to the National Security Council

I am enclosing copy of a letter dated September 17, 1948, from Secretary Marshall to Secretary Royall on the subject of Japanese reparations (Tab A).¹

The letter is the last of a series of exchanges on this subject between the two Secretaries (Tabs C through H), and presents Secretary Marshall’s final views on the matter before his departure for Paris. His recommendations regarding the quantities of industrial facilities which should be made available for reparations removal, and the quantities of facilities in given industries which should be retained for use in Japan, are expressed in the body of the letter. The other aspects of his proposal are contained in a revised section on Japanese reparations, appended as an enclosure to the letter, for inclusion in NSC 13, “Recommendations with Respect to U.S. Policy Toward Japan”, and in points 2 through 6 of his earlier letter of September 10 (Tab D), which Mr. Royall was understood to accept at his meeting with the Secretary on September 14.

You will note that the Secretary states in the last paragraph of his letter of September 17 that “I am submitting to the NSC the attached revised recommendations for inclusion in the policy paper on Japan.” Since the Secretary may not have had time before his departure to request you to take this action in his absence, I am taking this means of bringing the matter to your attention, and am enclosing a letter of transmittal from you to Admiral Souers (Tab B).² There are enclosed with the letter a copy of the revised State policy proposals and a statement, for the information of the Council, of the quantities of industrial facilities which would be made available for reparations removal to accord with the Secretary’s conclusions on this question set forth in his letter of September 17 to Mr. Royall. Although the question of the quantity of facilities which should be made available is a matter for agreement between the State and Army Department alone under the State proposals, it would seem desirable that the Council be acquainted with our position.

I would like to call your attention also to the 5 points (numbers 2 through 6) advanced by Secretary Marshall in his letter of September 10 regarding the manner of implementation of the new U.S. reparations proposals. Although Mr. Royall was understood at his meeting with the Secretary on September 14 to accept these points, I would strongly recommend, if Mr. Royall has not committed himself more positively in the matter in the meantime in his reply to the Secretary’s latest letter, that you or your representative reiterate our intentions in this regard at some point during the NSC discussions of the paper, in order to avoid any possibility of future misunderstanding.

[Annex]

The Acting Secretary of State to the Executive Secretary of the National Security Council (Souers)³

top secret

Dear Admiral Souers: You will recall that the State Department’s policy paper, “Recommendations with Respect to US Policy Toward Japan”, submitted to the National Security Council last June and given the designation of NSC–13, contains no proposals on Japanese reparations. It was provided in the paper that recommendations on this subject would be submitted at a later date.

After extended discussions with the Department of the Army and General MacArthur, the Department of State has now determined on an over-all reparations proposal which Secretary Marshall requested before his departure for Paris be submitted immediately to the Council for incorporation in NSC–13. I am accordingly forwarding the proposal⁴ to you as enclosure number 1 to this letter.

You will notice that it is provided in paragraph 2(b) of the proposal that “SCAP should be directed to determine, announce and make available for reparations claims, categories and quantities of industrial facilities and equipment which are in excess of the levels finally agreed to by the State and Army Departments”. The discussions with the Department of the Army and General MacArthur have largely revolved around the question of what these levels should be. In his final letter of September 17 before leaving for Paris, Secretary Marshall submitted his conclusions on this question to Secretary Royall with the hope that Mr. Royall would find it possible to accept them. These conclusions are presented for the information of the Council in enclosure number 2 to this letter.

In view of the urgency of the matter, and in order that the diplomatic discussions envisaged in the first paragraph of the policy proposal may be expedited, I suggest that the proposal be inserted in NSC–13 and the entire paper be placed on the agenda of a special meeting of the Council to be held at the earliest date agreeable to the members.

Sincerely yours,

Robert A. Lovett

1. Not printed.
2. Annex, below.
3. Sent on September 23.
4. See memorandum of September 15, p. 1014.