Following for your information.

1. During the recent week cordial exchanges of mutual respect
between S.C.A.P. and the Japanese Government have increased in
frequency. In two important issues-land reform and operation of
purge Atcheson has publicly and spontaneously commended the
Japanese Government for its good and sincere work. In each case I
believe evidence shows that the Government is evasive and
insincere.

2. During last week, great publicity has been given to expressions
of the eternal gratitude of the Japanese people to MacArthur and
the American people for their generosity and self sacrifices in
sending food here to tide the Japanese over the food crisis. As I
have previously reported, the food 'crisis' in Japan has been and
continues to be grossly exaggerated in S.C.A.P. statements since
S.C.A.P. has been deceived by the Japanese reports of the
shortage.

3. During the last few days the Japanese press gives great
prominence to Senator Ellender's report that MacArthur had told
him that the American troops in Japan could soon be cut down to a
'handful of men'. Similar prominence has been given to Yoshida's
statements, with the Diet's authority, that the Japanese Foreign
Office is now preparing for the peace conference which he expected
to take place some time before next August.

4. Today's Nippon Times editorial states 'Japan of today has
become altogether different from the Japan of a year ago'. This is
the 'result of the work of the incomparable Commander and of the
splendid men who have been his fitting instruments'. These
revolutionary changes have 'torn down and made impossible the
resurrection of the evils which characterised the old regime'.

5. My own view is that this is all humbug and dangerous humbug.

6. The same number of Nippon Times carries slighting reference to
Derevyanko and commendation of Atcheson as well as two 'colour
sketches' written in skittish and suggestive vein on the way the
Americans are finding Japanese young women increasingly
attractive, from a story of one American 'who we suspect is making
a study of Japanese female anatomy in his spare moments'. Nippon
Times is written by the Japanese under S.C.A.P. censorship.

Following is my personal reaction to these developments:

The United States may feel that the danger of war with Russia
overshadows all else in the international politics today and that
Japan cannot in the near future be military menace but may be a
valuable ally against Russia. On this view United States may wish
to initiate now a spirit of cordial collaboration with present
Japanese ruling groups as preparation for future military
contingency. I am unable to say whether this is a sound long term
policy in interests of Australia and the British Commonwealth. In
any case, however, I feel that our pre-occupation with such an
objective should not blind us to the actual situation in Japan
today. In my view there is no substantial change in the outlook or
the ideals of the Japanese people during the last twelve months.