Your W.97 and 525 to Washington.[1] Japanese peace settlement.

SS.105.

Today the Minister was approached by Dulles who presented a document outlining United States views on the treaty (text of memorandum and of accompanying document are contained in our immediately following telegram). Dulles took the expected line that Japan must be denied to U.S.S.R. and kept on the side of Western democracies. To achieve this object, the Treaty should be designed so as not to engender Japanese resentment. Dulles referred to the Treaty of Versailles and said that restrictive provisions (e.g. prohibition of re-armament) which the Allies had been unable to enforce should not be imposed on Japan.

2. Minister made it quite clear to Dulles that Australia's primary concern was security against future Japanese aggression and said that Australia would not subscribe to any treaty with Japan unless there were adequate assurances that Australia would be protected against Japanese aggression. He stated that Australia considered that amongst other matters long range control, which might be exercised from outside Japan, should apply to prevent stockpiling of strategic materials and limit their flow in order to control Japanese military capacity. The Minister indicated that formal commitment by United States guaranteeing Australia's security against Japanese aggression might go some way to allay our fears. He stressed that the above points were basic to our position, and referred to political consequences if Australian Government were to accept the type of treaty United States has in mind.

3. Dulles recognised our difficulties and said that some compromise solution would have to be found.

4. With regard to paragraph 3 of the United States document, the Minister pointed out that Australia was not bound by the Cairo Declaration and Yalta Agreement[2] and did not accept the United States suggestion that Japan 'accept the future decision of United Kingdom, U.S.S.R., China and United States with reference to status of Formosa, Pescadores, South Sakhalin and the Kuriles'.

5. Informal talks on official level as suggested in the United States memorandum may take place during the Minister's absence in London. The Minister has directed that we inform him of any developments in the light of which he will issue instructions.

6. Comments on paragraph 4 of your W.97 follow by separate telegram.