FEC.3.

[matter omitted]

2. McCoy also read a lengthy statement which will shortly be
issued by State Department to the press. Full text sent under our
memo JP.57. In brief it emphasises importance of achieving a self-
supporting economy in Japan as soon as possible. Japanese
Government and people, FEC [1] and SCAP [2] should take all
possible and necessary steps to bring this about. Serves notice
that proposal will shortly be introduced into Congress to provide
funds for Fiscal year 1949 not only for subsistence items but also
for procurement of such imports as industrial raw materials and
spare parts to assist Japan to expand output of peaceful
industries towards status of self-support. Statement also exhorts
FEC to give favourable consideration to future policies to be
presented to FEC designed to achieve a self-supporting economy in
Japan.

3. After meeting I entertained all delegates, including Soviet,
French and Chinese Ambassadors, at lunch at the Embassy at which
Mr. Dedman was also present.