378 Ballard to Department of External Affairs
Cablegram 1 TOKYO, 9 November 1945, 12 noon
Control of Japan exercised by the Supreme Commander for the Allied Powers is effected by the issue of directives to the Japanese or the appropriate agency thereof by the Supreme Commander through the Japanese Central Liaison Office at Tokyo, or Yokohama Liaison Office. Those Liaison Offices are, it is understood, staffed by personnel from the Foreign Office. Where action ordered by the directive is not  by the Japanese authorities further instructions to comply have on occasion been issued and in the last resort appropriate action is taken by the Army authorities.
2. The Supreme Commander is advised in several spheres of activity by special sections of G.H.Q. which have been set up by General Orders and are as follows- (1) Civil intelligence.
(2) Statistics and reports.
(3) Public health and welfare.
(4) Economic and scientific. 
(5) General procurement agent.
(6) Civil information and education.
(8) Natural Resources.
(9) Civil communications.
Copies of these general orders are being sent by bag. The main functions of several sections cover the following matters:-
(1) Advice on policy relating to civil public taxation  agencies and conducting investigations relating to compliance with orders and instructions to the Japanese Government;
recommendations on provisions of Civil police and censorship and prevention of development of activities or conditions inimical to the objectives of the occupation forces; apprehension of persons as directed by the Supreme Commander.
(2) Service as focal point for collection and recording of all data pertaining to non-military activities of the occupation of Japan and administration of civil affairs in F.E.
(3) Recommendations on the re-establishment of normal civil health procedures to meet the minimum human requirements of the civil population and to protect the health of the occupation forces; for example production and traffic in Narcotics; liaison with the Ministry of Health.
(4) Advice on economic and scientific policies to implement the Potsdam Declaration; preparation of inventories of economic, industrial, financial and scientific resources of Japan;
recommendations as to imports, exports, production and equitable distribution of essential goods among the civil population, use of transportation and public utilities, conversion of Japanese facilities to production of civilian goods, stabilization of prices, and as to ultimate form and restoration of Japanese economy.
(5) Co-ordination of procurement of supplies and facilities by Allied forces.
(6) Recommendations to effect the information and educational objectives of the Allied powers, to expedite the establishment of freedom of worship, opinion, speech, press and assembly; liaison with the Ministry of Information and Education, press and radio, educational and social organizations; public opinion surveys;
recommendations to expedite elimination of militarism.
(7) War crimes and general legal matters.
(8) Agricultural, forestry, fisheries and mining surveys and reports, recommendations on policy for organization and exploitation as required for rehabilitation within the terms of the Potsdam Declaration and to meet the needs of the occupation forces.
(9) Measures to co-ordinate signal system to serve internal use and requirements occupation forces.
(10) Advice on a policy concerning internal structure of civil Government in Japan; advice of the Supreme Commander on the relation of the Japanese Government to Military affairs;
subordinate Government agencies and business; recommendations for demilitarization, decentralization, elimination of feudal and totalitarian authority and elimination of relationships between military  and business  continue Japanese war potential.
[3.] A set of directives so far issued to the Japanese Government follows by bag and these documents, with the above mentioned General Orders, are of basic importance. The general sense of some of the more important of them is summarized in my immediately following telegram. 
4. A detailed examination of the directives will enable you to form an opinion as to how far they coincide with Australian objectives, but of course much depends on how far they are carried out, supervised and policed. MacDermott, Foreign Office Liaison Officer, considers that the Americans have done 'an incredibly good job-just as we would have done it ourselves'.
The Canadian Liaison Officer Norman agrees substantially with this view but points out that the Japanese Government while conforming with instructions does not do more than it has to. This attitude he attributes not only to a certain amount of inertia and absence of a cooperative spirit but also to a certain grogginess resulting from blows which some of the directives have dealt.
The abovementioned (small portion omitted in transmission) weeding out of obnoxious personnel. Norman says that attention is now being given to this.
6. Norman also considers that G.H.Q. is hampered in giving effect to directives by a generally insufficient staff and in particular by a lack of expert staff. For example, detailed reports furnished by the Japanese Government on instructions cannot be examined and considered here for this reason.
7. In spite of price fixing there is a black market in food of which there is a great shortage; press reports state that this year rice crop will be 20 per cent less than last year and the lowest for 36 years. Norman considers that the country growers will be disposed to hoard their crops owing to lack of goods on which to spend the price.
8. The main general impression drawn from my four days observation of Tokyo is of orderliness; lack of interest either way in foreigners shown by the people in the streets who are uniformly shabby and a few appear  attempting to carrying out normal daily routines so far as conditions allow.