I must say that I feel somewhat disturbed at the views which
appeared to predominate at the British Commonwealth Conference.

There seemed to be a strong feeling that nothing could be done
except to demilitarise her and that the democratisation of Japan
was desirable, but the Allies could not impose it upon her and
that it was rather futile to try.

In my opinion, if these views prevail, a position of instability
will develop in the Pacific which will be very disappointing to
the Australian people. Japan will be free to resume her
superiority in East Asia and will then be available to move with
all her economic and strategic power into the orbit of the highest
bidder. In saying this, I do not mean in any way to criticise your
own position, either as Chairman of the British Commonwealth
Conference or as leader of the Australian Delegation. In the first
role, you were bound to seek the opinions of the other members,
and did so, if I may say so, most successfully. On the other hand,
you pressed the views put in the Agenda Notes. These represented
the maximum views of the Preparatory Committee with some
modifications made by yourself at the last moment, and were quite
satisfactory. Indeed, they were prepared in order to allow ample
room for compromise. It is the lack of response on important
points by the various other Delegations which alarms me-their
attitude which seems to me to be defeatist-that nothing can be
done by tutelage or pressure to change Japanese policy, and that
the best we can do is to get out and leave them to their own
devices. This, of course, is not stated in so many terms. At any
rate, as a student of politics of considerable experience, it is
the conclusion I feel bound to draw, although formal statements to
the contrary may be found scattered over the notes of the
Conference.

My attitude is not based on any view that a harsh peace should be
imposed upon Japan or that a long military occupation is
desirable, or that control can radically change the habits and
objectives of the Japanese people. It is inspired by the view
that, unless certain changes are achieved and certain changes made
in Japan's policy, and unless stability is achieved in the
Pacific, we shall have fought the war in vain, and in a few years'
time we may have to face similar dangers in an aggravated form.

In these circumstances, I contend that we should not yield to the
first signs of Japanese resistance and accept a non possumus
attitude on behalf of our Allies, but that we should use our
ingenuity in seeking out ways of securing our main objectives. I
am sure that Australian public opinion will demand no less. I
believe that we can get much support in the public opinion of
other countries-we may fail but we can only satisfy our own people
and show that we have made the attempt.

There are, as it appears to me, two obvious defects in the
attitude disclosed at the Conference:-

1. No attempt is made and no plan formulated to deal with the
position of Russia as constituted by the Yalta Agreement. A Peace
Treaty is not a mere contract with the defeated enemy but an
arrangement between all the combatants to produce a stable
situation. An unstable international situation may make any Peace
Treaty meaningless.

2. Japan must be changed from an autocratic aggressive State to a
real democracy of a modern type, with an economy which favours the
democratic elements. A Peace Treaty, which does not provide for
this, will be of little value.

Let me consider these in detail:-

1. Stability in the Far East
I put my views as to the effect of the Yalta Agreement in a long
memorandum
which I gave to Mr. Jamieson. Major Plimsoll has seen it. [1] I
also put the position briefly in a note which you took with you to
Japan. [2] I gather from what you said at the Conference that you
were fully seized with the situation and with the fact that the
superior strategic situation of Russia dominates all
considerations relevant to the Peace. Situated as she is, Russia
could nullify any disposition we might attempt to make in the
Peace Treaty as soon as the Treaty Powers lost their control of
Japan. I say that these circumstances should colour the whole of
our attitude to the terms of the peace and to the question of
control. We must do something about it-we cannot ignore it. The
easy Peace which we might otherwise be disposed to give may be
impossible now. This is not a new situation in peace negotiations.

After the Napoleonic Wars, nine-tenths of Castlereagh's efforts
were directed towards obtaining a workable Europe with a 'just
equilibrium' and, after World War I, most of the efforts made at
Paris were directed to the same end. in this case, we are
rendering far more acute the superiority of Russia in the area by
the complete demilitarisation of Japan, preventing her from
becoming a factor in the equilibrium of the area. I say that we
cannot be satisfied with any arrangement which does not contain
some provision for redressing this balance.

Diplomatic history shows many devices for dealing with a situation
of this kind. There were the guarantees of Switzerland and Belgium
and the universal guarantee of territorial integrity in the
Covenant of the League and in the Charter of the United Nations.

What I have suggested is the prolongation of the present
occupation until the situation becomes more clear. I am not wedded
to this proposal. Other arrangements may be suggested. An American
guarantee might be sufficient, but military authorities ought to
be asked to say whether American bases in the nearby islands would
be sufficient to enable them to stand up against Russian attack
from continental bases. Another suggestion worth considering is
that of Mr. Gerald Packer [3] at the Advisory Committee (see notes
of 12th September, p.69). Mr. Packer believes that Japan requires
sixteen raw materials for her economy and that these could be
controlled by the Allies and that this control would be proof
against any action by Russia. But, for this purpose, some
machinery would be necessary.

Under the circumstances, I strongly urge that the question be
raised with the United States and that, if no other method be
suggested, we ask for a prolonged occupation or control of Japan.

It does not appear to me to be sensible tactics to assume that the
United States is going out of occupation and that we must accept
it. If all the British Commonwealth members make up their minds
that nothing can be done, then we give up the claim in advance. We
may have to give it up, but we shall not lose any prestige by it.

We shall have plenty of backers and will also prove to the
Australian people that we are not responsible for what happens. I
may say that I had a conversation with Dening [4] after the
Conference. He had the same views as I had about the effect of the
Yalta Agreement and said that he believed the British would put it
up to the United States and ask what they intended to do about it.

He seems to believe that the Americans have not thought the matter
out.

2. Constructive Democracy in Japan
On the second question, the British Commonwealth Conference was
delightfully vague, and it seemed to me did not distinguish
between the control that was necessary to enforce punitive
measures and the control or tutelage necessary to secure
democratic reforms. I would willingly give up all the punitive
measures. I do not think that we will gain anything from
reparations or the purge, and education will follow and not lead
the prevailing pattern of the community. But, if the same
financial and economic structure of the community is retained as
existed before, economic feudalism will produce the same structure
of autocracy and aggression.

Now, the method of progress so far has been to allow the Japanese
Government and Parliament to carry out certain advances to
democracy, but the advance is merely political and constitutional
democracy does not change the economic structure; it may reinforce
the old classes unless the classes who are in an unfavourable
economic position are given some assistance and tutelage. If they
are and they find their feet and a new economic balance is set up,
forces will be unleashed which cannot be held back. Such reforms
will help the masses in Japan and would be eagerly supported if
they understood them.

In the Agenda Notes which you presented to the British
Commonwealth Conference, there is a long series of proposals based
on suggestions of the Preparatory Committee, and which I gather
secured your approval. There are only two points I wish to make
about them:-

(a) they will not be achieved unless they are pressed by the
occupying Power and the old Japanese leaders realise that we are
determined about them. This will mean a period of control, though
occupation may not be necessary for this;

(b) the list is long and elaborate and the suggestions involve
complicated and difficult measures.

I do not under-rate the difficulty, but merely put to you the
consequences of doing nothing. If the landlord system and the
Zaibatsu remain, can we expect a changed Japan? Will we have won
the war? If we think the list too elaborate, cut it down-choose a
number of key measures, e.g., trade unions, land reforms with
credit provisions, central bank control over private banks,
encouragement of co-operatives and dissolution of the Zaibatsu.

None of these is really difficult, except the last. I went into
this very carefully, and, in the Draft Treaty, there is quite a
complicated solution by which the concerns are split up. I was
gratified to find, however, that it bears a strong resemblance to
the scheme which the Japanese Prime Minister is at present
introducing into the Diet (see attached note from Shortwave
Broadcast). What I suggest is not easy, but it is necessary, and
it can only be achieved by determined and skilful policy.

Generally, on the whole question, I would draw your attention to
two matters. The first is an article in the New York Times from
its Tokyo correspondent about 4th to 7th September commenting on
the British Commonwealth Conference, in which it said, according
to a cabled report, that many Japanese believed that occupation
was useful as a protection for Japan. The second is the adverse
reaction from China which appears to regard American policy as an
attempt to treat Japan as a favoured protege. [5]