135 Cranborne to Chifley
Cablegram D1244 LONDON, 17 July 1945, 9.26 p.m.
IMMEDIATE TOP SECRET AND PERSONAL
My immediately preceding telegram. 
Following is Sir George Sansom's summary.
Its preamble states that American objectives are:-
(1) Unconditional surrender or total defeat of Japan.
(2) Execution of territorial provisions of Cairo declaration.
(3) Prevention of future aggression.
(4) Development of a Japanese government which can be trusted in International relations.
(5) Eventual participation of Japan in the world economic system on terms consistent with (3) and (4).
2. Methods contemplated for realisation of those objectives include:-
(1) Exercise by Supreme Allied Commander of complete authority over all domestic and foreign affairs the suspension of constitutional powers of the Emperor and of all organisations for consideration and formulation of policy (e.g. the Diet), their functions to be assumed by Military Government.
(2) Military Government to be stern but just. It will:-
(a) Repeal obnoxious laws.
(b) Dissolve all political parties, societies etc.
(c) Proclaim freedom of worship.
(d) Institute a new system of public information and exchange existing systems.
(e) Control education.
(3) Civil courts of Justice will continue to function under the control of the Military Government.
(4) There will be three periods.
(a) Severe Military Government.
(b) Close surveillance during which some restrictions may be relaxed and some civil functions allowed to be performed by the Japanese.
(c) Looking forward to the re entry of Japan into (group undecypherable? family) of Nations. The duration of each period will depend upon the behaviour of the Japanese.
3. The general political aims of the United States are abolition of militarism the emergence and encouragement of liberal political elements and the development of a political system consistent with principles of the United Nations. (It is not explained what those principles are whether America, British Chinese or Russian or a synthesis thereof).
4. The document does not enter into detail being only a summary of a much fuller paper but it envisages reparations though not until productive machinery has to some extent been restored while it provides for the destruction of all industries directly related to the war and puts emphasis upon light industries in the process of restoration of normal economy. It lays down that programme of industrial rehabilitation shall not aim at a standard of living 'out of line with' standard in other parts of Asia, a point probably made in deference to the Chinese. It expresses a general intention to encourage local self government and to provide for a more extended ownership of means of production financial organisations etc. This latter clause being probably intended to cover the breakdown of monopolies of the great corporations (Zaibatsu) and perhaps also Agrarian reform.