338 Shaw to Department of External Affairs
Cablegram 502 TOKYO, 11 September 1948, 11.30 a.m.
My telegram 495 paragraph 6.
1. I had interview with General MacArthur on the evening of September 9th at which I broached the subject of Allied Council discussion on the Japanese Public Service. The Supreme Commander was moderate in his remarks and manner. He indicated by inference that the Japanese Government might have been inaccurate in their interpretation of his letter of July 22nd.  He said that he was open-minded about aspects of the Public Service Law and that when the Japanese Government produced a draft he would send it to the State Department with a view to discussion in the Far Eastern Commission.
2. However, General MacArthur expressed lengthy objection to the presentation of my views at the Allied Council. He said that the world was on the verge of war in which the Anglo Saxon countries would be aligned against the Russians and it was wrong for us to air publicly any difference of opinion. He stressed the use which newspapers, propagandists and also the foreign press made of my remarks. What he called Australian support for the Russians on the Allied Council had resulted in a deterioration in American- Australian relations since the war.
3. I pointed out to S.C.A.P. that prior to the Council meeting I and also members of the staff of the United Kingdom Liaison Mission had endeavoured to convey our ideas to members of his General Headquarters Staff. These ideas were honestly held and we had meant to be helpful, but there was little indication in General Headquarters Government section statement of August 25th , that even S.C.A.P's own views were being pressed on the Japanese. My statement in Council was framed as I thought inoffensively and I purposely confined myself to a limited topic on which the Russians could say nothing.
4. General MacArthur expanded on the danger of Communist Leadership in the inexperienced Japanese trade union movement. On the question of workers in Government enterprises he said that he would insist that Japanese Government recognise the distinction made in his letter. He explained the difficulties in raising civil service pay while maintaining a balanced budget. 
5. Full report by bag. See despatch 195.