ALLIED COUNCIL FOP, JAPAN

I have been directed by the Secretary, Department of External
Affairs, Wellington, to inform you of our Department's concern at
the progressive deterioration in the affairs of the Allied
Council, to which Mr. Shaw draws particular attention in his
Ministerial Despatch 1/1948 (6/1947) of 13th January. [1]

The Secretary further states that 'although from the first it was
evident that the Council would be able to play only a very minor
role in Japanese affairs, it fulfils, even under present
conditions, an important function which cannot be performed by any
other control agency. The restrictive interpretation placed by the
United States Government on the terms of reference of the Far
Eastern Commission has meant that many of the most important
measures adopted in Japan fall within the category of
implementation. Even in the case of matters on which F.E.C. might
be expected to make a decision, such as the dissolution of the
Zaibatsu, the course of events will largely be determined by the
way in which policy is implemented by SCAR This necessarily
increases the importance of maintaining in Japan a channel for
independent Allied advice and criticism which, if presented in a
helpful manner, should stimulate SCAP's administration and assist
in the effective implementation of Allied policy.

That SCAP should have developed in so marked a degree a defensive
attitude towards the policies he has sponsored and towards the
actions of the Japanese Government, merely confirms our impression
that responsible advice from outside his headquarters is desirable
and on occasion necessary. In this connection the course which
both Mr. Macmahon Ball [2] and Mr. Shaw have endeavoured to follow
in the Council has been to our mind highly commendable. They have
both been generously appreciative of SCAP's achievements while
expressing honest differences of opinion on particular issues. It
has nevertheless often seemed to us that the Americans would be
satisfied with no less than the complete subservience of the
Council, that anything short of a complete acquiescence in SCAP's
policy would be interpreted as an unfriendly act. Obviously, if
the Council were once reduced to this invidious position (and from
the first there has been a sustained campaign to discredit it), it
could only be a matter of time before it became so utterly useless
that no one would care to resuscitate it. Such a development would
be much regretted here and we would therefore request you to
assure the Australian Department of External Affairs of our
interest in the proceedings of the Council and to express our hope
that the Council will continue to exercise in fact, as well as in
form, the functions for which it was established.

We have at the moment no specific suggestion as to subjects which
might be referred to the Council for discussion. We are enclosing,
however, two memoranda from Mr. Pomles [3], dated 26th November,
1947, and 14th January, 1948, on anti-democratic organisations in
Japan, in which the Australian Department of External Affairs may
be interested.'
I am enclosing the two memoranda referred to in the last paragraph
of the Secretary's communication.