302 Australian Government to Gordon Walker

Cablegram 100 CANBERRA, 20 April 1948, 5.55 p.m.



Following is text of Australian proposal referred to in our immediately preceding telegram:

1. INDUSTRIAL FACILITIES (a) Amount available. The total amount of industrial facilities from Japan made available as reparations should be those already declared available by the Far Eastern Commission under the interim reparations removals programme, together with such amendments and additions as may be made by the Far Eastern Commission by 31st July, 1948. No further categories should be declared available after that date.

(b) Distribution. The foregoing industrial facilities should be divided on the following basis:

1. 3% to every member of the F.E.C.

2. The remaining 67% to be divided among the devastated countries of the Far East, namely China, French Indo-China, India, Netherlands Indies, the Philippines, British territories in the Far East (Malaya, Hong Kong, British Borneo, Ceylon, etc), Pakistan, Korea (North and South), and Burma. These countries should receive reparations on the basis of needs and ability to use the assets received, the allocation to be determined by an international body of experts set up by the Far Eastern Commission. This body should seek guidance from the United Nations Economic Commission for Asia and the Far East. The decisions of this body should be final, unless changed by the Far Eastern Commission which would have the right to review an allocation at the request of any member or claimant country. However, each of the claimant countries covered in this sub-paragraph 1 (b)ii should be entitled to receive not less than the proportion of total reparations from industrial facilities which it would have received under the United States schedule presented to the Far Eastern Commission on 6th November, 1947. [1]

3 The remaining members of the Far Eastern Commission, namely Australia, Canada, New Zealand, U.S.S.R., United Kingdom (except for her Eastern territories), and U.S.A., should voluntarily forgo all other claims to reparations from industrial assets.

4. No other country which is not a member of the Far Eastern Commission should receive reparations from industrial assets in Japan.

2. SHIPPING (a) Amount available. The Far Eastern Commission should declare as soon as possible the amount of Japanese shipping available as reparations.

(b) Distribution. Shipping should be distributed among all members of the United Nations which declared war on Japan in proportion to proven losses of ships in the war against Germany, Italy and Japan, provided that no member of the Far Eastern Commission should receive less than 3%.

3. JAPANESE GOLD AND PRECIOUS METALS (a) Amount available. All Japanese stocks of gold and other precious metals (other than current production since the surrender) should be made available to pay occupation costs.

(b) Distribution. These assets should be distributed as an occupation cost on the following basis:

83% to the U.S.A.

15% to Australia, United Kingdom, New Zealand and India (which have contributed occupation forces).

1% each to China and U.S.S.R. (as members of the Allied Council for Japan).

4. CURRENT PRODUCTION Reparations should not be exacted from Japan through the transfer of goods which may in future be produced in Japan except that:

(a) shipping which is now under construction should be included in existing Japanese capital equipment and facilities, if such shipping comes within the limits of tonnage and speed as determined by the Far Eastern Commission or is otherwise made available by the Far Eastern Commission.

(b) the foregoing should not be interpreted to prevent the repair of reparations goods or other costs connected with reparations which under decisions of the Far Eastern Commission or in the opinion of SCAP should be borne by the Japanese Government.

5. EXTERNAL ASSETS (a) Amount available. All Japanese external assets should be available for reparations.

(b) Distribution.

1. Each member of the Far Eastern Commission should retain all Japanese external assets within its borders and should not be required to give any account thereof 2. Assets in other countries should be notified to the Far Eastern Commission. Non-enemy countries with legitimate claims against Japan should be allowed to satisfy those claims up to the amount of external assets within their borders but to no greater extent.

All Japanese external assets which remain after the satisfaction of those claims should be pooled and divided equally among the members of the Far Eastern Commission. The disposition of Japanese external assets should be supervised by a Committee of five, consisting of Australia, China, United Kingdom, U.S.S.R. and U.S.A.

1 See Volume 12, Document 391.

[AA:A1838/2, 479/10, V]