Enclosure to Tokyo's
Despatch No. 806,
November 19, 1949.
-4-
Articles 20 through 30. (Security provisions not yet received.)
Article 31. To take the place of this Article as it appears in the November 2 draft, a substitute Article along the following lines is recommended:
"The Allied and Associated Powers take note of the distribution already effected of assets from Japan as reparations, and affirm that their further reparations claims will in no instance exceed the value of Japanese assets in their respective jurisdictions. To the amount of such further reparations claims each of the Allied and Associated Powers shall have the right to seize, retain, liquidate, or take any other action with respect to all property, rights, and interests which were within its territory at any time between the beginning of hostilities between such country and Japan and September 2, 1945, and which belong to Japan or to Japanese nationals, and to apply such property or the proceeds thereof to such further reparations claims."
The purpose of the proposed revised Article 31 is to settle the reparations question and to provide a legal basis for the seizure of Japanese assets abroad (see also our comments under Article 41, paragraph 1).
Article 32. No comment.
Articles 33 through 37. It is recommended that the matters contained herein be covered by a single general statement, appearing as one Article referring to annexes
Article 38. Appears unnecessary; deletion recommended.
Article 39. Aside from the inability of the Japanese Government to pay compensation as provided in the last two clauses of Article 39, and aside from the fact that the United States Government would probably indirectly pay such compensation through economic aid to Japan, it is suggested that the negotiating position of the United States would be improved by at least omitting the clauses "and shall pay compensation for damaged property in Japan, as provided in Annex VII".
We suggest a revised wording of Article 39 substantially as follows:
"In so far as Japan has not already done so, Japan shall restore all tangible or intangible property located in Japan which on December 7, 1941, was owned by the United Nations and their nationals and was not subsequently legally disposed."
SECRET (illegible text)
