The Evening Star (May 11, 1946)
U.S. reported taking ‘more practical’ view of Jap reparations
TOKYO (AP) – Arrival here of Reparations Commissioner Edwin W. Pauley coincides with disclosure today by well-informed sources that official thinking in Washington is swinging toward “a more practical policy” on the price Japan will have to pay for losing the war.
The new thought, on reparations involves establishment of production capacity levels which will enable Japan to start recovery “so that we won’t have to take care of these people forever.”
The source said the proposed policy, as yet unannounced and which has scuttled some reparations work done by the Allied command, includes setting up two production capacity figures – maximum and minimum.
The maximum capacity figure, based on wartime production, is one the Japanese economy will be judged incapable of sustaining now.
The minimum, which will not be scaled lower, is a level of economy which Japan will be judged capable of maintaining within her own four islands.
Controls will remain
Such policy would enable the Japanese to know what their production totals can be and would encourage resumption of industry by Japanese now timid about starting for fear their facilities might be taken for reparations.
The establishment of such minimum figures would not preclude tight controls on such major industries as steel, petroleum, light metals and chemicals – all of which are war potential.
The Far East Commission, which one source accused of being “laggard” on reparations policy, is known to want to send inspection teams to Japan to check reparations claims which will be entered by various victor nations. The source termed these claims “high, even inflated.”
Reliable reports indicate the Soviets will ask for reparations from Japan for military actions, including the Siberian-Manchurian border clashes.
If Mr. Pauley goes to North Korea and Manchuria, his findings may go far toward settling almost certain arguments anticipated on Russian reparation claims.
Basis of Soviet claim unknown
It is unknown whether Russia will enter her reparation claims on the basis of inventories she herself submits as found in Northern Korea and Manchuria, or on the basis of inventories obtained by the Allied command from Japanese sources.
Mr. Pauley said in a statement today that the reparations program for Japan will not reduce the nation’s production capacity below that reached in 1933. There will remain, he added, “sufficient capacity to make things necessary for civilian requirements.”
He conceded that reparations estimates proposed by the nations which defeated Japan were high, but explained “the needs of those countries are so great they are looking forward to more than they will get.”
In reply to reports that Australia was asking for the Japanese wool industry as a part of reparations Mr. Pauley said “no ceramics, textiles or non-war potential” had been listed as available for reparations. He said the “United States would resist demands for such.”