894.50/9–2948
Memorandum by the Assistant Secretary of State for Occupied Areas (Saltzman) to the United States Representative on the Far Eastern. Commission (McCoy)
Subject: The Statement of the U.S. Member of the FEC Regarding Soviet Member’s Proposals on “Level of Economic Life in Japan: Policy Toward Japanese Industry.”1
In connection with the statement made by the Soviet Member at the last meeting regarding proposals on the level of economic life in Japan, the following statement is provided for your use at your discretion. You will note that certain questions are set out in this statement. It is the feeling of the Government that the United States should not take [Page 1024] a leading position in the discussion of this subject. Therefore, it is believed preferable to defer asking these questions until it is seen whether some other representative may ask them. If none does, then the questions should be put at your discretion.
“My Government notes with interest the statement made by the Soviet member concerning FEC 242/32. My Government has pointed repeatedly to the mutually beneficial effects upon the economic rehabilitation of the Far Eastern countries which may be expected from a development of Japanese peaceful industry and enlargement of Japan’s foreign economic ties. On January 21 of this year I stated to the Commission that the U.S. Government expected to take positive measures to bring about that objective. My Government welcomes any indication that other member countries of the Far Eastern Commission have a similar interest in realizing the potential advantages to all member countries which may be expected from the free and healthy development of Japanese trade and production for peaceful purposes.
“There are, however, a number of questions which have been prompted by this statement.
“A distinction was drawn by the Soviet member between ‘peaceful Japanese industry’ and ‘Japanese war industry’. It would be appreciated if the Soviet member could clarify the meaning of these two expressions.
“The Soviet member has referred in his statement to the need for establishing ‘controls’ in his proposed policy decision to prohibit the revival and creation of Japanese war industry. Does the reference to ‘controls’ imply the establishment of some machinery for this purpose during the period of the occupation, and so would not such controls conflict with the terms of reference of the Far Eastern Commission, the Allied Council for Japan, and the role of the Supreme Commander for the Allied Powers in the regime of control in Japan?
“The Soviet member has referred to ‘those powers most interested in preventing a new Japanese aggression.’ Does this phrase describe the present membership of the Far Eastern Commission, or are fewer or more countries than those now members of the Far Eastern Commission referred to?”