185 Cablegram From Watt To Department Of External Affairs

24th December, 1956

421. SECRET

TOKYO

1. Ishibashi formed Cabinet yesterday after 4 days of hard bargaining between factions. Kishi is Foreign Minister and Ikeda Finance Minister-both of whom are likely to be favourably regarded by Americans. Shigemitsu, Takasaki and Kono are omitted. The fact that Ishibashi is the only survivor from the old Cabinet, and that remainder of Cabinet, except the two above, are largely untried, means severe loss in continuity.

2. The effect on policy towards Australia is difficult to gauge.

It is believed that Ishibashi was in favour of Australian wheat rather than American surpluses. Views of Kishi and Ikeda could be different, although they lack the direct personal interest that Kono had. New Minister for Agriculture and Forests, Ichitaro Ide is former Co-operative Party member and belongs to the Miki faction. He is young, but has experience in his field and was Chairman of the House of Representatives Agricultural Committee.

Miki, who was appointed Secretary-General of Liberal Democratic Party in place of Kishi, said yesterday that the main task of the new Cabinet would be to dissolve the Diet and hold general elections but this may merely have been a threat to control contending factions. Miki, with his 'progressive' background is regarded as Government's go-between with Opposition.

3. It is too early to make worthwhile assessment of Government's chances of survival, but it is my guess that strong attempts will be made to avoid election in the near future.

4. Details by bag.

[AA : A1838/283, 759/1/7, v]