Verbatim Minutes (extracts) CANBERRA, 27 August 1947

TOP SECRET

BASIC OBJECTIVES AND TERRITORIAL PROVISIONS

DR. EVATT: [1] It is laid down by the Potsdam Declaration that the
territory of the Japanese shall be confined to the four main
islands, and such islands as may be added; and the context of the
documents seem to suggest that those islands should be within
close proximity to Japan. Japan would not include, for instance,
the islands running down from Japan to Formosa, or the islands
running from about Yokohama right down to the Marianas. The
previous Japanese Empire included the Kuriles running to
Kamchatka, and the southern half of Sakhalin; and the Japanese had
effective control of Manchukuo through the puppet king and their
physical military control. They had sovereignty over Korea, and
all the selected points they had taken, over a period of ten
years, and the main Asiatic coast of China. Formosa had been in
their sovereignty ever since the nineties. They had control over
the Ryukyus, and the islands running from Tokyo down to the
Marianas were contained within Japanese sovereignty. In addition,
they had the Mandated Territories of the Marianas, the Carolines
and the Marshalls. Possession, control and sovereignty in all
those areas amounted to a very great empire.

Russia, of course had no warm water port. It had only Vladivostock
which for some months of the year could not be used at all by
Russian ships of war and, indeed, was not of much use at any time
because of the Japanese control of all exits from the Sea of
Japan. Under the Cairo Declaration, and the secret agreement of
Yalta in 1945, under which Russia came into the war in return for
the restoration of their old interests and territories, the
position is completely revolutionised. The Kuriles go back to
Russia. So, instead of Japan having a salient in that direction,
Russia has a salient finishing near the northern-most of the four
main Japanese islands. Russia also gets Sakhalin. Manchukuo goes
to China; but Russia gets control of the railways running to
Vladivostock and Port Arthur; because, although those are to be
controlled jointly by China and Russia, the Yalta Declaration says
that they are to be controlled by Russia. Korea is to become self-
governing; but, in fact, the northern portion of Korea is occupied
by Russia, the Americans being in the South. And it is agreed by
those on the spot, including General MacArthur that Russian
influence will eventually extend throughout Korea. Formosa and the
Pescadores go to China. All the Mandated Territories-the
Carolines, Marianas and Marshalls-go under American strategic
control. The only two outstanding territorial questions for the
Peace Conference are the control of the Ryukyu group, including
Okinawa, and the Bonins and Volcano Group including Iwo Jima. As I
read the Declaration, it seems to me that the Japanese are
excluded from regaining control of those groups. If they went to
United States control, or sovereignty, we have Japan restricted to
four islands and those islands contained in what we might call the
curtilage of the four main islands. We have Russian territory
extending in and towards Japan proper, and Chinese sovereignty
extending towards Japan; and we have the anomalous position in
Korea depending upon the attainment of self-government by the
Koreans which may take a considerable time.

It seems to me that from every point of view, as the United States
of America is here, any attempt to set up a kind of joint control
of these two great groups of islands would be doomed to failure.

If it follows that the Empire of Japan disappears and that is a
kind of geographical and territorial disarmament, the whole
strategical position is altered, and instead of Japan being in the
position to become, through its situation, a menace to these
countries, the chances of that have practically disappeared, if
not gone forever; and, of course, it has enormous consequences on
the economic side of Japan's dependence on imports, because they
will not have the control of raw materials such as iron ore and
food which they obtained from areas like Manchukuo and Formosa.

That is why I mentioned this matter at the outset. It seems to me
that if we accept, as I think we shall have to accept, these
declarations, especially the Yalta declaration, the only two
questions for the peace conference will be the ownership or
control of the group of islands running down to Formosa and the
group running down to the Marianas. If it goes to the United
States of America, the economists could work out in detail the
enormous consequences upon the whole economy of Japan. I refer
members of the Conference to Clause 11 of the Potsdam Declaration
which appears in the publication entitled 'Japanese Peace
Settlement'. [2] This proclamation was signed by the Prime
Minister of the United Kingdom, Mr. Churchill, and the President
of the United States of America, Mr. Truman, and was concurred in
by the President of the National Government of China. The clause
reads-

'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.'

That is a very difficult sentence to interpret. If we took it
literally, it would exclude from Japan the maintenance of any
industry which would enable her to re-arm for war. It might be
argued that that would not permit of any form of heavy industry,
steel industry or chemical industry. In fact, the Far Eastern
Commission has rather interpreted it from the standpoint that some
industries must be allowed to sustain the Japanese economy, and
when we study the geographical background of it, the problem
becomes almost insoluble.

When we are examining the main objectives of the peace settlement,
we realise that it must start from something definite and
specific, namely, what are the consequences of this loss of
control of territories, which amounts, in My view, and I think
that it cannot be disputed, to a Carthaginian Peace. I am not
saying whether it is right or wrong; but on that footing, I think
that we have to look at the other questions which arise in
connection with the basic objectives. This is perhaps the most
difficult problem which has ever been set a number of nations who
want to contribute to a just peace. The difficulty is to do that
and, at the same time, start Japan on the march towards democracy
internally. The situation is such that it is almost impossible to
prevent the feeling arising in Japan in favour of the ultimate
recovery of these territories. Already the Prime Minister of Japan
has said that he thought that before the Ryukus and especially
Okinawa were disposed of and taken away from Japan, a plebiscite
should be held. Therefore, that trend is already there.

Remembering that throughout our discussions, we shall agree that
the two main points are:-To what Power should the Ryukyu group
including Okinawa and the other group including Iwo Jima be
assigned? I refer members of the Conference to Clause 8 of the
Potsdam Declaration at page 48 of the publication entitled
'Japanese Peace Settlement'. It reads-

'The terms of the Cairo Declaration shall be carried out'-
that includes Formosa and Korea-
'and Japanese sovereignty shall be limited to the islands of
Honshu, Hokkaido, Kyushu, Shikoku and such minor islands as we
determine.'

That is, broadly, the territorial issue. Our provisional view in
Australia has been that in view of all these other decisions
because they are practically decisions and they will probably have
the effect of decisions, we are inclined to favour United States
control of these two groups of islands.

LORD ADDISON: I have only one comment. I express general agreement
with your summary, Dr. Evatt. I think we are bound to accept, in
the main, this as a settled issue, and we cannot go back on it. I
have only one point to raise. It affects the minor island of
Quelpart. Paragraph 39 of the statement issued by Dr. Evatt states
that Quelpart Island shall be recognised as a part of Korea. [3] I
express a note of interrogation there. It is a tiny island between
Japan and Korea. It is of considerable strategic importance. If
Korea became really Russian territory, or whatever it was, that
island would be of considerable consequence. Therefore, I should
like to reserve our acquiescence in that particular sentence.

DR. EVATT: Quelpart Island is chiefly important-and this rather
reinforces what Lord Addison says-as an air base between Japan and
most of the China coast. Historically, it is a part of Korea and
the population is Korean. It is about 87 miles from the south of
the south-east Korean coast. In area it is 45 miles by 20 miles.

It is at present under the control of the American Commander of
Southern Korea. I think that should be reserved.

LORD ADDISON: From the point of view of the interests we are
considering, it should be reserved.

DR. EVATT: Whether Quelpart is a minor island will have to be
determined by the Peace Conference. You will understand that I am
not dealing with this as though it is an open question. I am
simply describing the arrangements which have been made. I can see
that Quelpart Island is important.

[matter omitted]

MR. FRASER: There seems to be general agreement that as soon as
possible the occupation force shall be withdrawn from the main
islands of Japan. The next matter which requires to be determined
is to where it is to be withdrawn? What control should be retained
of the main islands; what form should it take; and what facilities
for regular observation and inspection should be provided? As Dr.

Evatt remarked earlier, we cannot eliminate all possibility of
machinery and factories being used for military purposes. Common
sense appears to dictate, however, that we should retain some
control of Japan's heavy industries. In regard to scientific
research and development, the question arises for determination
whether we should prohibit entirely the production of chemicals
and the conduct of physical research in Japan so as to 'make
assurance doubly sure', or whether we should refrain from imposing
any such prohibition because we know that such restriction would
inevitably stultify the expansion of Japanese industry. We might
include a term in the treaty providing, in effect, 'You can go
just so far and no farther without consultation with us'. When we
consider these questions we inevitably revert to the fundamental
one. Is there a change of heart of the Japanese, or is it merely a
change of appearance? Do they understand democratic principles?
Can we eliminate militarism?
MR. RAFI: I agree with the basic principles set forth in the
Potsdam Declaration, which are directed against the enslavement of
the Japanese as a race or their destruction as a nation, although
I realise that there may be some differences of opinion when we
come to work out the details of their application. However, I do
not think we can improve on the statement of the general
principles enunciated in the declaration.

MR. LAWRENCE: I agree.

MR. FRASER: But is not the true position that the Japanese are a
slave race now, and is it not rather a question of liberating them
than of refraining from enslaving them?
DR. EVATT: There is an apparent contradiction between the two
objectives; one provides for continuous military control of Japan,
and the other for the development of democracy in Japan. Mr.

Fraser raised the very important point, whether there has been a
genuine change of heart of the Japanese? I have given most careful
consideration to all points of view expressed by observers, but I
think it is impossible to formulate a definite conclusion yet.

Democracy is a plant of very slow growth, and it seems to me
foolish to dogmatise at this stage. The fact is that the Japanese
people are conforming they do obey and they are working the
democratic machine provided for them. They could never become a
democracy while military occupation remains.