We understand from the United Kingdom Government that when discussions begin shortly about renewal of the sterling area trade arrangements SCAP is likely to propose that Japanese be allowed to attend as observers.
2. The United Kingdom Government feels that no good purpose would be served by resisting SCAP on this point if in fact the proposal is put forward. The United Kingdom Authorities would like at the same time to be able to make it clear to SCAP that their acceptance was a concession to United States wishes, and they would also propose to suggest that some provision be made for the exclusion of any Japanese from particular meetings where their presence would be embarrassing.
3. Glad of your comments. If such a proposal is contemplated, we would be inclined to accept it in same terms as United Kingdom unless it contains objectionable features of which we are not aware.