IMMEDIATE
I am greatly concerned to see that more and more S.C.A.P. and the
State Department are by-passing Far Eastern Commission and the
[Allied] Control Council.

2. We have come to the conclusion, as I stated in the House that
the United States Government seems not to wish to pursue the peace
treaty, but rather maintaining present position always seeing in
Japan a possible instrument which might be used against Russia.

3. We cannot accept this dangerous policy for the obvious reason
that while Japan might be built up for this purpose there is no
guarantee that her industrial potential will not be used to pursue
her ambitions in this area. Section of S.C.A.P. ever encourages
her to look south as a source of essential supply by focusing
Japanese attention on fishing and on other expeditions which have
recently been rumoured such as departure of Japanese for Hainan
Island for work in the steel industry, pearling and whaling
expeditions.

4. During the war as you will remember we always took the view
that we would welcome United States into the Japanese mandates as
they would form a United States strategic interest and finally
prevent Japanese expansion south. Now, however, United States
interest is not in Japan as an aggressor and we note that Japanese
are being allowed even into the territories which we agreed should
be a United States trusteeship. This is a misuse of the
trusteeship particularly as trust territories have been regarded
as security area'
5. In all these circumstances I consider that you should
personally take up at F.E.C. two of the current questions firstly
the visits of Japanese outside Japan and secondly the question of
fishing outside Japanese waters.

6. Our policy on both is quite clear. We have agreed to Japanese
officials accompanying S.C.A.P. officials to international
conferences as technical advisers but in no other capacity. We
would be prepared to agree to other visits by Japanese subject to
the concurrence not only of the country concerned but of F.E.C. On
fishing and whaling our views have been made perfectly clear, but
S.C.A.P. has ignored them on every occasion. While there might be
a possible case for fishing from the point of view of supplying
food and oil there is no case for pearl fishing. There are reports
of Japanese expeditions being in proximity of our Australian
mandated territories. One Japanese fishing ship has already been
discovered in south of areas authorised by S.C.A.P. and within
Australian territorial waters. We would only be prepared to agree
to fishing outside Japanese waters with the concurrence of the
country particularly concerned and of course F.E.C.

7. I should like you to take these matters up personally not only
in F.E.C. but with State Department, working always in close co-
operation with United Kingdom and New Zealand. [1]