Verbatim Minutes (extracts) CANBERRA, 27 August 1947
BASIC OBJECTIVES AND TERRITORIAL PROVISIONS
DR. EVATT:  It is laid down by the Potsdam Declaration that the territory of the Japanese shall be confined to the four main islands, and such islands as may be added; and the context of the documents seem to suggest that those islands should be within close proximity to Japan. Japan would not include, for instance, the islands running down from Japan to Formosa, or the islands running from about Yokohama right down to the Marianas. The previous Japanese Empire included the Kuriles running to Kamchatka, and the southern half of Sakhalin; and the Japanese had effective control of Manchukuo through the puppet king and their physical military control. They had sovereignty over Korea, and all the selected points they had taken, over a period of ten years, and the main Asiatic coast of China. Formosa had been in their sovereignty ever since the nineties. They had control over the Ryukyus, and the islands running from Tokyo down to the Marianas were contained within Japanese sovereignty. In addition, they had the Mandated Territories of the Marianas, the Carolines and the Marshalls. Possession, control and sovereignty in all those areas amounted to a very great empire.
Russia, of course had no warm water port. It had only Vladivostock which for some months of the year could not be used at all by Russian ships of war and, indeed, was not of much use at any time because of the Japanese control of all exits from the Sea of Japan. Under the Cairo Declaration, and the secret agreement of Yalta in 1945, under which Russia came into the war in return for the restoration of their old interests and territories, the position is completely revolutionised. The Kuriles go back to Russia. So, instead of Japan having a salient in that direction, Russia has a salient finishing near the northern-most of the four main Japanese islands. Russia also gets Sakhalin. Manchukuo goes to China; but Russia gets control of the railways running to Vladivostock and Port Arthur; because, although those are to be controlled jointly by China and Russia, the Yalta Declaration says that they are to be controlled by Russia. Korea is to become self- governing; but, in fact, the northern portion of Korea is occupied by Russia, the Americans being in the South. And it is agreed by those on the spot, including General MacArthur that Russian influence will eventually extend throughout Korea. Formosa and the Pescadores go to China. All the Mandated Territories-the Carolines, Marianas and Marshalls-go under American strategic control. The only two outstanding territorial questions for the Peace Conference are the control of the Ryukyu group, including Okinawa, and the Bonins and Volcano Group including Iwo Jima. As I read the Declaration, it seems to me that the Japanese are excluded from regaining control of those groups. If they went to United States control, or sovereignty, we have Japan restricted to four islands and those islands contained in what we might call the curtilage of the four main islands. We have Russian territory extending in and towards Japan proper, and Chinese sovereignty extending towards Japan; and we have the anomalous position in Korea depending upon the attainment of self-government by the Koreans which may take a considerable time.
It seems to me that from every point of view, as the United States of America is here, any attempt to set up a kind of joint control of these two great groups of islands would be doomed to failure.
If it follows that the Empire of Japan disappears and that is a kind of geographical and territorial disarmament, the whole strategical position is altered, and instead of Japan being in the position to become, through its situation, a menace to these countries, the chances of that have practically disappeared, if not gone forever; and, of course, it has enormous consequences on the economic side of Japan's dependence on imports, because they will not have the control of raw materials such as iron ore and food which they obtained from areas like Manchukuo and Formosa.
That is why I mentioned this matter at the outset. It seems to me that if we accept, as I think we shall have to accept, these declarations, especially the Yalta declaration, the only two questions for the peace conference will be the ownership or control of the group of islands running down to Formosa and the group running down to the Marianas. If it goes to the United States of America, the economists could work out in detail the enormous consequences upon the whole economy of Japan. I refer members of the Conference to Clause 11 of the Potsdam Declaration which appears in the publication entitled 'Japanese Peace Settlement'.  This proclamation was signed by the Prime Minister of the United Kingdom, Mr. Churchill, and the President of the United States of America, Mr. Truman, and was concurred in by the President of the National Government of China. The clause reads-
'Japan shall be permitted to maintain such industries as will sustain her economy and permit the exaction of just reparations in kind, but not those which would enable her to re-arm for war.'
That is a very difficult sentence to interpret. If we took it literally, it would exclude from Japan the maintenance of any industry which would enable her to re-arm for war. It might be argued that that would not permit of any form of heavy industry, steel industry or chemical industry. In fact, the Far Eastern Commission has rather interpreted it from the standpoint that some industries must be allowed to sustain the Japanese economy, and when we study the geographical background of it, the problem becomes almost insoluble.
When we are examining the main objectives of the peace settlement, we realise that it must start from something definite and specific, namely, what are the consequences of this loss of control of territories, which amounts, in My view, and I think that it cannot be disputed, to a Carthaginian Peace. I am not saying whether it is right or wrong; but on that footing, I think that we have to look at the other questions which arise in connection with the basic objectives. This is perhaps the most difficult problem which has ever been set a number of nations who want to contribute to a just peace. The difficulty is to do that and, at the same time, start Japan on the march towards democracy internally. The situation is such that it is almost impossible to prevent the feeling arising in Japan in favour of the ultimate recovery of these territories. Already the Prime Minister of Japan has said that he thought that before the Ryukus and especially Okinawa were disposed of and taken away from Japan, a plebiscite should be held. Therefore, that trend is already there.
Remembering that throughout our discussions, we shall agree that the two main points are:-To what Power should the Ryukyu group including Okinawa and the other group including Iwo Jima be assigned? I refer members of the Conference to Clause 8 of the Potsdam Declaration at page 48 of the publication entitled 'Japanese Peace Settlement'. It reads-
'The terms of the Cairo Declaration shall be carried out'- that includes Formosa and Korea- 'and Japanese sovereignty shall be limited to the islands of Honshu, Hokkaido, Kyushu, Shikoku and such minor islands as we determine.'
That is, broadly, the territorial issue. Our provisional view in Australia has been that in view of all these other decisions because they are practically decisions and they will probably have the effect of decisions, we are inclined to favour United States control of these two groups of islands.
LORD ADDISON: I have only one comment. I express general agreement with your summary, Dr. Evatt. I think we are bound to accept, in the main, this as a settled issue, and we cannot go back on it. I have only one point to raise. It affects the minor island of Quelpart. Paragraph 39 of the statement issued by Dr. Evatt states that Quelpart Island shall be recognised as a part of Korea.  I express a note of interrogation there. It is a tiny island between Japan and Korea. It is of considerable strategic importance. If Korea became really Russian territory, or whatever it was, that island would be of considerable consequence. Therefore, I should like to reserve our acquiescence in that particular sentence.
DR. EVATT: Quelpart Island is chiefly important-and this rather reinforces what Lord Addison says-as an air base between Japan and most of the China coast. Historically, it is a part of Korea and the population is Korean. It is about 87 miles from the south of the south-east Korean coast. In area it is 45 miles by 20 miles.
It is at present under the control of the American Commander of Southern Korea. I think that should be reserved.
LORD ADDISON: From the point of view of the interests we are considering, it should be reserved.
DR. EVATT: Whether Quelpart is a minor island will have to be determined by the Peace Conference. You will understand that I am not dealing with this as though it is an open question. I am simply describing the arrangements which have been made. I can see that Quelpart Island is important.
MR. FRASER: There seems to be general agreement that as soon as possible the occupation force shall be withdrawn from the main islands of Japan. The next matter which requires to be determined is to where it is to be withdrawn? What control should be retained of the main islands; what form should it take; and what facilities for regular observation and inspection should be provided? As Dr.
Evatt remarked earlier, we cannot eliminate all possibility of machinery and factories being used for military purposes. Common sense appears to dictate, however, that we should retain some control of Japan's heavy industries. In regard to scientific research and development, the question arises for determination whether we should prohibit entirely the production of chemicals and the conduct of physical research in Japan so as to 'make assurance doubly sure', or whether we should refrain from imposing any such prohibition because we know that such restriction would inevitably stultify the expansion of Japanese industry. We might include a term in the treaty providing, in effect, 'You can go just so far and no farther without consultation with us'. When we consider these questions we inevitably revert to the fundamental one. Is there a change of heart of the Japanese, or is it merely a change of appearance? Do they understand democratic principles? Can we eliminate militarism? MR. RAFI: I agree with the basic principles set forth in the Potsdam Declaration, which are directed against the enslavement of the Japanese as a race or their destruction as a nation, although I realise that there may be some differences of opinion when we come to work out the details of their application. However, I do not think we can improve on the statement of the general principles enunciated in the declaration.
MR. LAWRENCE: I agree.
MR. FRASER: But is not the true position that the Japanese are a slave race now, and is it not rather a question of liberating them than of refraining from enslaving them? DR. EVATT: There is an apparent contradiction between the two objectives; one provides for continuous military control of Japan, and the other for the development of democracy in Japan. Mr.
Fraser raised the very important point, whether there has been a genuine change of heart of the Japanese? I have given most careful consideration to all points of view expressed by observers, but I think it is impossible to formulate a definite conclusion yet.
Democracy is a plant of very slow growth, and it seems to me foolish to dogmatise at this stage. The fact is that the Japanese people are conforming they do obey and they are working the democratic machine provided for them. They could never become a democracy while military occupation remains.