Allied Council for Japan Would appreciate advice on three matters requiring urgent attention:
(a) Instructions to Macmahon Ball on three points referred by him after first meeting of Council;
(b) extent of authority of Allied Council as raised in MacArthur's memorandum  and Ball's report on second meeting. 
(c) procedural aspects such as dealt with in Ball's report of second meeting 17th April.
(a) Three points referred by Ball (see our 171 to Dominions Office  and comments by United Kingdom , New Zealand and India
(ii) It is not desired that you should pursue a settled policy of mediation between Americans and Russians. You should therefore refer important cases for consultation. However you will of course do everything possible to promote harmonious relations in Council.
(iii) Your view concerning Deputy Secretaries General is supported and in the circumstances your action in agreeing to their appointment is endorsed.
(b) Extent of authority of ACJ. While appointment announced today of A[t]cheson of State Department as Chairman and United States member of Council may mean that conditions for settlement of this issue are improving, nevertheless issue remains and is fundamental. Perusal of summary of MacArthur Memorandum would seem to warrant confirmation of preliminary views in our 177 to Dominions Office.  There appear to be two courses for consideration by the British Commonwealth Governments concerned:-
(i) To instruct Ball to oppose MacArthur's interpretation openly in Council and propose reference to higher authority. This, however, would place MacArthur in an invidious position, especially in event of verdict against him and might render understanding virtually impossible. Moreover, prejudicial publicity would be unavoidable.
(ii) To take up question immediately for settlement by diplomatic interchange between Allied Powers or perhaps by Council of Foreign Ministers. (Incidentally a question of control of Japan viz:
reparations may be brought before Council of Foreign Ministers according to confidential advice from our Far Eastern Commission Delegation, Washington. ) If this course were adopted it might be useful meanwhile for Ball to discuss matter privately with A[t]cheson or MacArthur and point out our desire to arrive at a better understanding and smoother working of Allied Council. He could say that in view of the British Commonwealth Governments concerned MacArthur's interpretation of authority of Council is open to doubt, that interpretation of Moscow terms of reference is being sought at Governmental level and that meanwhile it would be desirable to avoid contention in Tokyo of such basic questions.
Macmahon Ball had commented privately to us as follows on MacArthur memorandum to Allied Council and on meeting of 17th April:-
'MacArthur's inaugural speech at the first meeting of the Council, MacArthur's memorandum to the Council Chairman and general conduct of Council meeting are now clear indications that MacArthur desires to torpedo the Allied Council. The account which MacArthur and his representatives gave of the Council's powers and functions is clearly inconsistent with the terms of reference. I feel that members of the Council are placed in an embarrassing and humiliating position. I have held my hand on your instructions but can assure you after full consideration that if MacArthur persists in the present policy the Council will soon become the object of the world's laughter.' 
We think there is ground for believing that MacArthur would like to prevent the Council exercising supervision or gaining prestige.
If he succeeded, Allied participation in control of Japan would be frustrated and application of Allied policy as formulated by Far Eastern Commission in Washington would be in doubt. It is not clear, however that this attitude correctly represents that of the United States Government, which at the least will presumably abide with Moscow communique which lays down Council's terms of reference.
(i) Russian requests for advance information.
Instructions to Ball might be that MacArthur's replies in memorandum of 9th April to Russian requests at first meeting (see 170 to Dominions Office 12th April ) appear on the whole satisfactory. Ball should continue to follow the line he adopted at first meeting I.E. to support Council's right to receive in reasonable time proposed S.C.A.P. orders and relevant information.
(ii) Power of Council to regulate procedure.
We have not yet had report from Ball on meeting of Friday 19th but press report indicated deadlock referred to in report on meeting of Wednesday 17th was not resolved.  We can see no alternative to view that Council must have powers to regulate its own procedure within its terms of reference. In the absence of provisions governing procedure suggest Ball be instructed to request an immediate special meeting limited to Council members and advisers to formulate agreed rules of procedure.
1 See Documents 187 and 190, note 3.
2 See Document 201, note 2.
3 Document 188.
4 Document 194.
5 Both Govts had replied on 18 April, accepting the reply proposed in Document 188, paragraph 2(c), but dissenting from that in 2(b), New Zealand holding that Ball should not be given 'general authority' to mediate between U.S. and Soviet Union viewpoints, and India urging 'the greatest caution'. India also suggested that the 'general authority' proposed in 2(a) should be withheld.
6 Dispatched 15 April to London, New Delhi, Wellington and Tokyo, it summarised Ball's cablegram 156 (Document 187), and the instructions to Ball in paragraphs 1 and 2 of Document 190. It argued a 'preliminary' view that it was inconsistent with the A.C.J.'s terms of reference to describe its functions as 'exclusively advisory and consultative', and that paragraph 1 of the terms (see Document 124, note 2) appeared wide enough to include a power of review.
7 A seperate cable to Evatt on 22 April reported that N. V.
Novikov, Charge d'Affaires at U.S.S.R. Embassy in Washington, had made the suggestion to Moscow following U.S.-Soviet talks in which the Soviet Union had opposed the F.E.C. handling reparations allocations.
8 In cablegram 163 (DEP8), dispatched 18 April.
9 Giving the substance of Document IT, paragraphs 3-9.
10 See Document 201, note 2. Cablegram ACJ4, reporting the meeting, was not received Until 23 April.