Your 1130.

SOVIET PROPOSAL ON JAPANESE INDUSTRIAL LEVELS

2. Whilst it can be assumed that Panyushkin's resolution is
designed mainly for subsequent propaganda purposes, it is
outwardly innocuous and unobjectionable as regards its professed
intention. Its general sentiments are difficult to argue with, and
it accordingly seems to us that for other F.E.C. countries to
obstruct it, whether from suspicion of Soviet motives or merely
because of its imprecision, might be to invite the result which
the F.E.C. and in particular the United States apparently fear. If
the Soviet Government intends to use the resolution as propaganda,
it will undoubtedly do so whatever happens in F.E.C. The Soviet
Government will almost certainly allege obstructionism by F.E.C.

in such a way as to increase its propaganda value. The resolution
is admittedly vague and obscure in parts, but it is doubtful
whether any purpose will be served by trying to obtain
clarification from the Russians. In fact we feel it might do no
harm for F.E.C. to accept the resolution broadly as it stands,
while at the same time making it clear that 'peaceful industry'
and 'war industry' are virtually meaningless, in the absence of
closer definition, and that specific levels for certain war-
supporting industries, together with security controls to police
them, still have to be worked out.

3. Glad of your comments.