384 Ballard to Department of External Affairs

Cablegram 2 TOKYO, 10 November 1945, 1.15 a.m.

SECRET

My telegram 1 [1], paragraph 3.

The most important directives may be classified under the following main heads:-

(1) Financial and industrial.

(2) Public relations.

(3) Educational and religious.

(4) Public health.

2. The following is a digest of the chief matters dealt with therein, under the above headings.

(1) (a) Bank of Japan has been ordered to make available funds for the occupation forces by the Finance Department United States Army. Supplemental military yen currency issued by the occupation forces has been made legal tender. Transactions involving gold or silver coins, gold, silver or platinum bullion have been prohibited.

(b) Colonial and Foreign Banks and special wartime financial institutions have been ordered to close.

(c) Banks, Trust Companies, Insurance Companies and Security Brokers have been required to segregate foreign exchange assets held by them and to furnish reports thereon.

(d) Reports have been called for from the Japanese Government on the following matters:-

Machinery established for production and distribution of essential consumers commodities;

Control of prices, salaries and wages;

Elimination of black market;

Quantities of industrial and agricultural products available, with a computation for twelve months of estimated monthly needs.

Following on these reports the Japanese Government has been made responsible for control of wages and the prices of essential commodities and for encouraging maximum production of essential consumers goods.

(e) In matters of factory conversion G.H.Q. approval must always be sought.

(f) The Japanese Government has been granted authorisation for the use of certain quantities of specified textiles and certain quantities of steel, aluminium, leather and rubber.

(g) Petroleum stocks are made available, as directed by G.H.Q., through Home Ministry.

(h) Japanese plan for dissolution of holding companies involving Zaibatsu has been approved in general by G.H.Q. Main concerns involved are Mitsui Honsha, Yasuda Hozensha, Sumitomo Honsha and Mitsubishi Honsha. Lists are to be submitted of property, securities reserves and control in which Mitsui, Yasuda and Sumitomo families had any rights or interest up to November 1st, 1945. No disposition of property transferred to Holding Company Liquidation Commission will be made without the approval of the Supreme Commander. Intention is to dissolve all combines other than the above and the Japanese Government has been directed to submit plans to this end.

(2) Press and radio codes have been laid down for Japan and requirements are as follows:-

(a) News must adhere to the truth and must not by false emphasis or omission of relevant facts follow any propaganda line.

(b) No destructive criticism of the Allied powers is permitted.

(c) Nothing calculated to disturb public tranquillity is to be printed or broadcast.

(d) In furtherance of the policy of freeing the press, Government control of news agencies has been removed.

(3) Main emphasis is on the elimination of militaristic ideology and to this end curricula, text books and personnel of educational institutions are to be investigated by G.H.Q. Freedom of speech, assembly and religion has been enunciated as an essential principle.

(4) In the interests of public health the Japanese Government has been ordered to make surveys to determine disease prevalence, medical personnel available, hospital facilities. The Japanese Government is required to carry out disease control, to establish port quarantine control with particular reference to Japanese repatriates and to restore all civilian employment involving public health work, civilian hospitals and public water supply and sewerage systems.

1 Document 378.

[AA : A1066, P45/10/33]