Ref my memo GSO45.31SD of 30 Jul forwarding SCAP directive no, five amendment no. seven. Following information reached me from sources which I have never found inaccurate. One. Regarding statements of Australian and Japanese Prime Ministers about a peace treaty there is no repeat no intention of having a peace treaty and any attempts to bring about would be opposed. Intention is to give Japanese conditions of peace but without a peace treaty in order that US Forces may, remain in Japan in role of directing power against external aggression. A peace treaty would give other powers right of direct negotiation with Japanese Government and unless Japan was rearmed might enable other powers to send troops in to take possession. Two. The Occupation Force is to be entirely severed from any official dealings with Japanese Government by end of 1949 and US Forces will merely use present barracks and training areas in Japan for training of an efficient field force whose role is protection of Japan from external aggression.