Japanese Reparations and Basic Policy Paper.
1. Our attitude to treatment of reparations outside peace conference remains the same. We cannot agree that fixing proportions is within jurisdiction of F.E.C. Occupation policy may concern itself with general principles of reparations in relation to level of industry to be achieved for security purposes but does not extend to proportions of reparations which is essentially matter for peace conference. You should move that proportions be not discussed until peace conference. Statements regarding early settlement should help in making point.
2. New Zealand has indicated that F.E. C. may be asked on 24th April to decide on adoption of Part 4 paragraph 4 of Basic Policy Paper dealing with Japanese reparations, and has also stressed the desirability of pressing for question of Reparations to be postponed in order to make every effort to secure early adoption of complete Basic Policy Paper. If this suggestion is made you should give full support, but not on grounds stated by New Zealand but on grounds of paragraph 1 above-it is not postponement we are endeavouring to achieve but reference of matter to peace conference.