427 Forsyth to Department of External Affairs

Cablegram 1088 WASHINGTON, 2 December 1945, 4.54 p.m.

IMMEDIATE SECRET

F.E.C.31.

The following is the text of the document referred to in F.E.C.28 [1] as circulated by the Secretariat for consideration and acceptance (by Commission) as a document suitable for reference to Governments. The next meeting is Wednesday morning 5th December.

Begins:-

POST SURRENDER POLICY FOR JAPAN (F.E.A.C.2/3)

APPENDIX This document is a statement of the general policy relating to Japan after surrender. It does not deal with all matters relating to the occupation of Japan requiring policy determinations. Such matters as are not included or are not fully covered will be dealt with separately.

The extent to which the decisions and recommendations of the Far Eastern Advisory Commission will be given effect will be determined in the terms of reference which will also indicate the nature and extent of the reserve authority of the Supreme Commander.

PREAMBLE (As in F.E.C.29 [2]).

Part I. Ultimate Objectives The ultimate objectives in relation to Japan to which initial policies for the surrender period should conform are:-

(a) To insure that Japan will not again become a menace to the peace and security of the world.

(b) To bring about the earliest possible establishment of a democratic and peaceful Government which will carry out its international responsibilities, respect the rights of other states and support the objectives of the United Nations Organization.

Such Government in Japan should be established in accordance with the freely expressed will of the Japanese people.

These objectives will be achieved by the following principal means.

(a) Japanese Sovereignty will be limited to the islands of Honshu, Hokkaido, Kyushu, Shikoku and such minor outlying islands as may be determined in accordance with the Cairo declaration and other binding international agreements.

(b) Japan will be completely disarmed and demilitarized. The authority of the Militarists and the influence of militarism will be totally eliminated. All institutions expressive of the spirit of militarism and aggression will be vigorously suppressed.

(c) The Japanese people shall be encouraged to develop a desire for individual liberties and respect for fundamental human rights particularly the freedoms of religion, assembly and association, speech and the press. They shall also be encouraged to form democratic and representative organizations.

(d) Japan shall be permitted to maintain such industries as will sustain her economy and permit the exaction of just reparations in kind, but not those which would enable her to re-arm for war. To this end access to, as distinguished from control of raw materials should be permitted. Eventually Japanese participation in world trade relations will be permitted.

Part II. Allied Authority 1. Military Occupation. There will be a military occupation of the Japanese home islands to carry into effect the surrender terms and further the achievement of the ultimate objectives stated above.

The occupation shall have the character of an operation on behalf of the powers that have participated in the war against Japan. The principle of participation in the occupation of Japan by forces of these nations is affirmed. The occupation forces will be under the command of the Supreme Commander designated by the United States.

2. Relationship to Japanese Government. The authority of the Emperor and the Japanese Government will be subject to the Supreme Commander who will possess all powers necessary to effectuate the surrender terms and to carry out the policies established for the conduct of the occupation and the control of Japan.

The Supreme Commander will exercise his authority through Japanese Governmental machinery and agencies including the Emperor but only to the extent that this satisfactorily furthers the objectives stated above. According to the judgment and discretion of the Supreme Commander the Japanese Government may be permitted to exercise the normal powers of Government in matters of domestic administration or the Supreme Commander may in any case direct action to be taken without making use of the agencies of the Japanese Government.

It is the right and duty of the Supreme Commander to require changes in Governmental machinery or personnel if in his opinion such changes are necessary to effectuate the surrender terms or the policies contained in this document. The Supreme Commander is not committed to support the Emperor or any other Japanese Governmental authority. The policy is to use the existing form of Government in Japan and not to support it. Changes in the form of Government in the direction of modifying or removing its feudal and authoritarian character and of establishing a democratic Japan are to be encouraged. In the event that the effectuation of such changes involves the use of force by the Japanese people the Supreme Commander should intervene where necessary to ensure the security of his forces and the attainment of the objectives of the occupation.

3. Protection of United Nations Interests. It shall be the duty of the Supreme Commander to protect the interests, assets and rights of all powers which have participated in the war against Japan and of their nationals.

4. Publicity as to Policies. The peoples of the nations which have participated in the war against Japan, the Japanese peoples and the world at large shall be kept fully informed of the objectives and policies of the occupation and of progress made in their fulfilment.

Part III. Political 1. Disarmament and Demilitarization. Disarmament and demilitarization are the initial tasks of the military occupation and shall be carried out promptly and with determination. Every effort shall be made to bring home to the Japanese people the part played by those who have deceived and misled them into embarking on world conquest and those who collaborated in so doing.

Japan is not to have an Army, Navy, Airforce, Secret Police Organization or any Civil Aviation. Japanese ground, air and naval forces shall be disarmed and disbanded and the Japanese Imperial General Headquarters, the General Staff and all Secret Police organizations shall be dissolved. Military and Naval material, military and naval vessels and military and naval installations and military, naval and civilian aircraft shall be surrendered and shall be disposed of as required by the Supreme Commander.

Inventories shall be made and inspections authorized to insure the complete execution of these [3] as all High officials of the Japanese Imperial General Headquarters and General Staff, other High Military and Naval officials of the Japanese Government, leaders of Ultra-Nationalist and Militarist organizations and other important exponents of militarism and aggression will be taken into custody and held for future disposition. Persons who have been active exponents of militarism and military nationalism will be removed and excluded from public office and from any other position of public or substantial private responsibility. Ultra- nationalistic or militaristic social, political, professional and commercial societies and institutions will be dissolved and prohibited.

Militarism and Ultra-nationalism in doctrine and practice including paramilitary training shall be eliminated from the educational system. Former career military and naval officers both commissioned and noncommissioned and all other exponents of militarism and ultra-nationalism shall be excluded from supervisory and teaching positions.

2. War Criminals. Stern justice shall be meted out to all war criminals including those who visited cruelties upon United Nations Prisoners of War or other nationals. Persons charged by the Supreme Commander or appropriate United Nations agencies with being war criminals shall be arrested, tried and if convicted punished. Those wanted by another of the United Nations for offenses against its nationals shall if not wanted for trial or as witnesses or otherwise by the Supreme Commander be turned over to the custody of such other nation.

3. Encouragement of desire for Individual Liberties and Democratic Process. Freedom of worship and observance of all religions shall be proclaimed and guaranteed for the future. It should also be made plain to the Japanese that ultra-nationalistic and militaristic organizations and movements will not be permitted to hide behind the cloak of religion.

The Japanese people shall be afforded an opportunity and encouraged to become familiar with the historical institutions, culture and the accomplishments of the democracies.

Obstacles to the renewal and strengthening of democratic tendencies among the Japanese people shall be removed.

Democratic political parties with rights of assembly and public discussion and the formation of trade unions shall be encouraged subject to the necessity for maintaining the security of the occupying forces.

Laws, decrees and regulations which establish discrimination on grounds of race, nationality, creed or political opinion shall be abrogated, those which conflict with the objectives and policies outlined in this document shall be repealed, suspended or amended as required and agencies charged specifically with their enforcement shall be abolished or appropriately modified. Persons unjustly confined by Japanese authority on political grounds shall be released. The judicial, legal and police systems shall be reformed as soon as practicable to conform to the policies set forth herein and it shall be the duty of all judicial, legal and police officers to protect individual liberties and civil rights.

Part IV. Economic 1. Economic Demilitarization. The existing economic basis of Japanese military strength must be destroyed and not be permitted to revive.

Therefore a programme will be enforced containing the following elements among others the immediate cessation and future prohibition of production of all goods designed for the equipment, maintenance or use of any military force or establishment, the imposition of a ban upon facilities for the production or repair of implements of war including naval vessels and all forms of aircraft, the institution of a system of inspection and control designed to prevent concealed or disguised military preparation, the elimination in Japan of those industries or branches of production which would enable Japan to re-arm for war, and the prohibition of research and instruction likely to result in the development of war-making power. Japan shall be restricted to the maintenance of those industries which will sustain her economy and permit exaction of just reparations in kind.

The eventual disposition of these existing production facilities within Japan which are to be eliminated in accordance with this programme as between transfer abroad for the purpose of reparations, scrapping and conversion to other uses will be determined after entry. Pending decision no such facilities either suitable for transfer abroad or readily convertible for civilian use shall be destroyed except in emergency situations.

2. Promotion of Democratic Forces. Organizations of labor in industry and agriculture organized on a democratic basis shall be encouraged. Policies shall be laid down with the object of insuring a wide and just distribution of income and of the ownership of the means of production and trade.

Encouragement shall be given those forms of economic activity, organization and leadership deemed likely to strengthen the democratic forces in Japan and to prevent economic activity from being used in support of military ends.

To this end it shall be the policy of the Supreme Commander:

(a) To prohibit the retention in important positions in the economic field of individuals who, because of their past associations, cannot be trusted to direct Japanese economic effort solely towards peaceful ends and, (b) To require a programme for the dissolution of the large industrial and banking combinations accompanied by their progressive replacement by organizations which would widen the basis of control and ownership.

3. Resumption of Peaceful Economic Activity. The policies of Japan have brought down upon the people great economic destruction and confronted them with the prospect of economic difficulties and suffering. The plight of Japan is the direct outcome of its own behaviour and the Allies will not undertake the burden of repairing the damage. It can be repaired only if the Japanese people renounce all military aims and apply themselves diligently and with single purpose to the ways of peaceful living.

It will be necessary for them to undertake physical reconstruction and basically to reform the nature and direction of their economic activities and institutions.

Japan will be expected to provide goods and services to meet the needs of the occupying forces to the extent that this can in the judgment of the Supreme Commander be effected without causing starvation, wide-spread disease and acute physical distress.

The Japanese authorities will be expected and if necessary directed, to maintain, develop and enforce programmes which subject to the approval of the Supreme Commander are designed to serve the following purposes:-

(a) To avoid acute economic distress.

(b) To assure just and impartial distribution of available supplies.

(c) To meet the requirements for reparations deliveries agreed upon by the Allied Governments.

(d) To make such provision for the needs of the Japanese population as may be deemed reasonable by the Allied authorities in the light of supplies available and obligations to other peoples.

4. Reparations and Restitutions.

Reparations. Reparations for Japanese aggression shall be made:-

(a) Through the transfer-as may be determined by the appropriate Allied authorities-of Japanese property located outside of the area to be retained by Japan.

(b) Through the transfer of such goods or capital equipment and facilities as exist or may in future be produced in Japan and should, in the opinion of Allied authorities be made available for this purpose. No form of reparation shall be exacted which will interfere with or prejudice the programme for Japanese demilitarization.

In the allocation and transfer of property abroad for reparations special consideration shall be given to the needs of those Allied Powers who suffered heavily as a result of Japanese aggression.

Restitution. Full and prompt restitution will be required of all identifiable property looted, delivered under duress or paid for in worthless currency.

5. Fiscal, Monetary and Banking Policies. While the Japanese authorities will remain responsible for the management and direction of the domestic fiscal, monetary and credit policies this responsibility is subject to the approval and review of the Supreme Commander and wherever necessary to his direction.

6. International Trade and Financial Relations. Eventual Japanese participation in world trade relations shall be permitted. During occupation and under suitable controls and subject to the prior requirements of the peoples of countries which have participated in the war against Japan, Japan will be permitted to purchase from foreign countries raw materials and other goods that it may need for peaceful purposes. Japan will also be permitted under suitable controls to export goods to pay for approved imports.

Control is to be maintained over all imports and exports of goods and foreign exchange and financial transactions. Both the policies followed in the exercise of these controls and their actual administration shall be subject to the approval, supervision and if necessary direction of the supreme commander in order to make sure that they are not contrary to the policies of the occupying authorities and in particular that all foreign purchasing power that Japan may acquire is utilized only for essential needs.

7. Japanese Property Located Abroad. Existing Japanese External assets and existing Japanese assets located in territories detached from Japan under the terms of surrender including assets owned in whole or part by the Imperial household and the Government shall be disclosed to the occupying authorities and held for disposition according to the decision of the Allied authorities.

8. Equality of Opportunity for Foreign Enterprise Within Japan.

The Japanese authorities shall give all business organizations whether Japanese or foreign equal opportunity to engage in trade and shall be required to give equality of treatment as amongst nationals of all states which have actively participated in the war against Japan both in the domestic and the overseas trade and commerce of Japan.

9. Imperial Household Property. Imperial Household property shall not be exempted from any action necessary to carry out the objectives of the occupation.

1 See Documents 426 and 421.

2 Dispatched 1 December. On file AA : A1066, P45/10/33/2.

3 A sign here indicates 'word omitted'.

[AA : A1066, P45/10/33/2]