DEPARTMENT OF STATE Memorandum of Conversation
DATE: October 3, 1952
SUBJECT: Japanese Financial and Political Matters
PARTICIPANTS: The Secretary Ambassador Eikichi Araki, Embassy of Japan Ambassador Juichi Tsushima, Advisor to the Foreign Office on Financial Matters Mr. Kenneth T. Young, Jr., Director, Office of Northeast Asian Affairs
COPIES TO: S/S (2) RE FE NA/E - Mr. Hemmendinger NA (3) NA/J - Mrs. Dunning PSA BNA UNA
Ambassador Araki came in to see me today at 2:30 to introduce Ambassador Tsushima, who has just concluded negotiations in New York between the Japanese Government and the United States and British bondholders.
Ambassador Tsushima mentioned his letter to me of July 10, which I told him I had been very glad to receive and which I had since answered. He remarked that the negotiations had been concluded satisfactorily with the United States and British bondholders but that he had not reached final agreement with the French bondholders. In response to my question, he indicated that the difficulty with the French was a real one, since they desired the settlement to be in gold, but he believed that a compromise could be worked out in time. I congratulated him on the successful conclusion of his negotiations and noted that it would be helpful in establishing the credit of Japan. Ambassador Tsushima left with me the reports of his agreements on the private debt settlement, as well as other relevant documents.
Ambassador Tsushima informed me that Prime Minister Yoshida had asked him to undertake negotiations on reparations, following his return to Japan. He explained that he had already held preliminary discussions with the Philippine representatives in Manila early this year but that the Philippine Government had presented a claim for $8 billion which the Japanese Government could not accept. He also had held discussions with an Indonesian delegation last December and
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January, which reached agreement only on the procedural aspects of the reparations problem but left the questions of the time and amount of settlement for the future. Ambassador Tsushima indicated that he would undertake these negotiations in the near future with the Governments of Indonesia and the Philippines, and asked that the United States understand the position facing his government in this matter. I assured him that the United States was well aware of the difficulties and complexities in the settlement of reparations claims.
Ambassador Araki then stated that the Government of Japan desired financial assistance from the United States to assist in power and road development. I replied that the International Bank for Reconstruction and Development was the proper way to take up this question, and that I was gratified that the Bank is about to send a survey team to Japan, which both Ambassadors agreed would be helpful.
Ambassador Araki took this occasion to thank me for the assistance which the United States Government had given Japan in trying to obtain Japan's membership in the United Nations at the recent sessions of the Security Council. I told him that I deeply regretted the Soviet veto, and that the United States would continue to do everything it could to bring about Japan's membership in the United Nations.
Finally, Ambassador Tsushima inquired as to whether I had any personal message for him to convey to the Prime Minister. I asked the Ambassador to give my very best regards and personal wishes to the Prime Minister, to congratulate the Prime Minister on the outcome of the elections, and to assure him of my continued support for his policies which appear to have been so successful.
FE:NA:KTYoung:emb