611.94/10–1751
The Deputy Director of the Office of Northeast Asian Affairs (Mc-Clurkin) to the Assistant Secretary of State for Far Eastern Affairs (Rusk)1
Subject: Financial Provision of the Administrative Agreement.
Attached is a redraft of the financial provision of the Administrative Agreement.2 This redraft resulted from discussions with representatives of the Department of Defense (including the SCAP mission) and the Department of the Treasury. I believe that it will be acceptable to both of those Departments.
This provision has been drafted with a view to public consumption. It recognizes the general principle that Japanese and United States contributions to the support of United States garrison forces may be reexamined from time to time in consideration of the relative burden of expenses borne by each country for all security purposes. More specifically, it provides that certain basic expenses of United States forces such as troop pay and military equipment will be provided, by the United States, that Japan will provide real estate and jointly used facilities, and that Japan will provide yen equivalent to $155,000,000 per year. This amount would be subject to renegotiation as conditions change, although there is no specified limit for the duration of the $155,000,000 annual payment.
The amount of $155,000,000 together with real estate rentals which will be undertaken by the Japanese, is in general a continuation of the fifty-fifty division of yen expenses which is in force for the present fiscal year.
I recommend that the attached draft be approved in substance and that, as soon as Defense and Treasury have concurred, authorization be given to communicate it to the Japanese as the United States position.