Refer my 689.

The State Department have today sent me the following aide-memoire
in reply to mine of May 29th.

'The questions raised by the Australian Ambassador in his aide-
memoire left with the Under Secretary of State on May 29th 1947
have been considered and in reply the Australian Government is
informed as follows:

The Angaur Island Phosphate Industry has been operated by the
United States Navy and employing American contractors to mine the
Phosphate rock. The output has been shipped to Japan to relieve
the fertilizer shortage there, and a certain number of Japanese
labourers have been employed in loading the rock for shipment. It
is expected that control of the Industry will shortly be
transferred to the Supreme Commander for the Allied Powers in
Japan. The Supreme Commander had indicated that when and if this
transfer is effected, he intends to employ Japanese technicians,
labour and equipment in place of the American personnel and
facilities presently working the deposits, in order to reduce
[the] dollar cost of the operations. He has not indicated that
responsibility for the management of the enterprise will be
transferred to the Japanese Government or to Japanese private
interests, or that he has any other intention than to retain this
responsibility in his own hands. However, in order that his
precise intentions may be ascertained, and in order that he may be
acquainted with the Australian Government's view in the matter,
the substance of these views is being transmitted to the Supreme
Commander, and all pertinent information, with his comments
requested. The Australian Embassy will be advised of the United
States position in the matter, following receipt of the Supreme
Commander's reply. [1]

Regarding the second point raised in the Embassy's aide-memoire,
the Japanese have been invited to several International
conferences abroad, in every case at the instance of the
sponsoring organisations and a Japanese recently attended the Rice
Study Conference, held under the auspices of the Food and
Agriculture Organisation in India. This Japanese was authorised to
advise on technical problems of rice production, on the other
problems and was in no sense a representative of the Japanese
Government. It is the Department of States's understanding that
authorisation for Japanese to attend the World Federation of Trade
Unions conference in Prague and the Union Postale Universale
conference in Paris, have not yet been granted by the Supreme
Commander in Tokyo.

A comprehensive programme, subject to appropriate limitations, for
the interchange of persons between Japan and other nations to
assist Japan's re-orientation and democratisation is now under
consideration by the United States Government, and will shortly be
submitted to the Far Eastern Commission.

The Australian Embassy was advised in a separate note dated June
9th, 1947 of this Government's decision in the matter of a second
S.C.A.P. operated, Japanese manned Antarctic whaling expedition.

Regarding the final point in the Embassy's aide-memoire, the
Australian Government may be assured that the United States
Government's position in the matter of Japanese disarmament and
demilitarisation remains as stated in Article 1A of the draft
treaty on the disarmament and demilitarisation of Japan submitted
to the Governments of China, the Soviet Union and the United
Kingdom in April 1946. The Japanese Constitution, moreover
provides that "the maintenance of land, sea and air forces, as
well as other war potential, will never be authorised". If,
contrary to this provision of the Japanese constitution, Japanese
officials are indeed preparing proposals for a Japanese Army, Navy
and Air Force for submission to the Peace conference, the Embassy
may be assured that such proposals will in no way influence the
position of the United States in the matter.'