The following are my comments on MacArthur's message to Congress.

[1] (1) in referring to the success of the occupation MacArthur's
claims are much more cautious and modest than they were last year.

He continued the description of the ultimate objective of the
occupation as complete spiritual reform of the Japanese people but
he no longer speaks as if these reforms were completed but says
'probably are successful in the accomplishment of this purpose'.

(2) MacArthur says that the American occupation forces are the
'lowest numerical level consistent with either reasonable security
or accomplishment of regeneration of an entire race'.

It is difficult to follow the argument here. If the Japanese
people have proceeded as far as MacArthur and his officers claim,
along the road to pacifism and democracy, it should be possible to
reduce without physical danger the present strength of the Allied
Forces here. Nor can I agree that the presence of tens of
thousands of G.I.'s in Japan will necessarily contribute to the
spiritual regeneration of the Japanese. If MacArthur envisages the
possibility that he may need to intervene more directly and
continuously in the work of the Government here it is trained
civilians rather than soldiers he would need for such a task.

(3) I am confident that MacArthur's analysis of the food situation
is detrimental and misleading. When MacArthur referred, in
conversation with me a fortnight ago, to the urgent need for
relief supplies of food this year I suggested that the need was
not nearly as great as the statements from General Headquarters
would imply. MacArthur seemed deeply concerned that I should
question the validity of General Headquarters' analysis of food
situation. Later at MacArthur's request I discussed this with
[General] Marquat [2] I then summarised my views in a letter to
Marquat. On receiving this letter, Marquat telephoned me to say
that this was one of the most important documents he had received
during his time in Japan, that he was calling for an immediate
report from his food experts and that it appeared to him, after a
careful reading of my letter, that 'some people down here have
been duped'.

I have said in this letter that importation of an emergency
reserve of about 400,000 tons of food was all that could be
reasonably supported. S.C.A.P. had stated on February 3rd that
1,600,000 tons was the minimum necessary imports for 1947. (I am
sending a copy of my letter to Marquat by bag.)
(4) You will notice that when MacArthur asks for increased imports
he goes on to urge the need for increased exports from Japan in
order to save the American taxpayer from loss. This is connected
with reparations for the American view on reparations appear[s to
be] [3] to enable Japan to increase her export trade.

(5) The real danger is that American economic assistance to Japan
whether by food exports or credits will bolster up more
conservative Japanese groups and enable these groups to withstand
internal pressure for social and economic reforms. The temptation
to support these groups must be great since, however much S.C.A.P.

may deplore people like Yoshida and Ishibashi, he now feels that
he can at least rely on Japan as Allies against Communism and the
Soviet Union.