Foreign Relations of the United States, 1951, Asia and the Pacific, Volume VI, Part 1

694.001/7–1251: Telegram

The Secretary of State to the Embassy in the Philippines ¹

confidential
priority
niact

Washington, July 12, 1951—6 p. m.

145. Dulles to Ambassador. I regret extremely difficult situation you have to deal with as regards Jap reparation. As of possible assistance I recapitulate fol facts:

1. Over five years of experience with Jap’s economy through SCAP led to firm conclusion of SCAP and his staff that Jap cld not pay any further reparation. Fact US during this period had itself to put up about two billion dollars to maintain viable economy and prevent spread of Communism there is concrete evidence sincerity this view. Therefore, our Mar draft of Peace Treaty made no provision whatever for any future Jap reparation.

2. As result representations by Phil Govt with great reluctance and doubt we altered our position so that June 14 draft contained Allied recognition of principle of reparation for damage and suffering caused by Jap during war and also incorporated in substance formula of Ital Peace Treaty for reparation by Ital industrial activity for countries which had been attacked, occupied and devastated by Italy. However, in further zeal to facilitate position of Phil Govt we eliminated two major safe-guards contained in Ital Treaty: namely, (1) the dollar ceilings, which in Ital Peace Treaty were very low, e.g. 25 million for Ethiopia; and (2) provision that the arrangement cld only operate for five years.

3. After this draft was discussed by Allison at Manila in June we made two further changes. We eliminated a third protective qualification which was contained in the Ital Treaty, namely “avoid interference with econ reconstruction”. We also changed beginning of Art so as to require Jap to recognize the reparation principle instead of such recognition being attributed merely to the Allied Powers. There was no such recognition by Italy.

We feel we have met Phil viewpoint just as far as is possible and perhaps we have gone too far. Certainly we have gone much further than the principal Allied Powers went to meet comparable position of Albania, Ethiopia, Greece and Yugoslavia under Ital Peace Treaty.

FYI SCAP is seriously concerned as to effect upon Jap’s economy of what we have done and if what we have done is not acceptable to Phil Govt we wld feel that we ought to reincorporate at least some of limitations of Ital Peace Treaty, particularly that which limits the operation of the Art to five years.

We realize you have to deal with a situation that is emotional and that probably no rational appeal can be expected carry weight, but I felt that it might be useful to recapitulate what has taken place as above. We hope that sober second thoughts will prevail, but our own position is one which we believe to be completely defensible and which we are not afraid to submit to the judgment of our public opinion here at home if unhappily that shld become necessary.

We feel that Phil Govt is gravely at fault in not having informed its public opinion about great efforts we have made to meet Phil situation.² [Dulles.]

Acheson

1. This telegram was drafted by Mr. Dulles and cleared in draft by Secretary Acheson personally.
2. In the course of telegram 202, from Manila, July 13, not printed, Ambassador Cowen stated he had seen Mr. Romulo immediately on receipt of telegram 145 but gave no further description of his presentation or the Minister’s reaction to it. (694.001/7–1351)