381 Department of External Affairs to Embassy in Washington

Cablegram 206 CANBERRA, 20 February 1947, 11.55 p.m.

MOST IMMEDIATE

Reparations from Japan. Your F.E.C. 41 and related telegrams.

1. We are unable to agree to the United States paper on advance transfers of Japanese reparations, for the following reasons:-

(a) Relief of devastated areas is not a satisfactory basis for reparations policy.

(b) We are opposed to decisions on reparations being rushed. The matter is of great importance and requires full consideration after complete examination of the facts and of the grounds upon which claims should be based.

(c) It is essential that grounds of claims should include compensation in respect of prisoners of war and internees.

(d) If priority deliveries are to be made they should be made in respect of all Allied territories which were actually invaded by Japan, including New Guinea, Papua and Nauru. Percentages to be allotted to the Governments of such territories should be worked out carefully in the F.E.C. Reparations Committee.

(e) The discretion accorded to the Supreme Commander in 1 (c) of the U.S. paper is inappropriate. [1]

2. You should press our views on the above points particularly (a) and (c). [2]

1 The US text proposed delivery of a proportion of assets within Japan to China, the Philippines, the Netherlands (for the Netherlands East Indies) and the United Kingdom (for Malaya and Burma) only, provided, at the discretion of SCAP, that it could contribute to immediate relief and rehabilitation.

2 The Washington Embassy reported, on 22 February, that Australia's objection to decisions being rushed had received strong support from UK, New Zealand, Indian and French members of the Reparations committee.

[AA : A1838,479/10, ii]