HALT ORDERED

Otago Daily Times, Issue 27080, 14 May 1949, Page 7

HALT ORDERED

FURTHER PLANT REMOVALS JAPANESE WAR REPARATIONS NZPA—Copyright Rec. 9 p.m. WASHINGTON, May 12. The United States to-day ordered a halt in further removals of Japanese plants as war reparations. Majorgeneral Frank McCoy told the Far Easterp Commission that Japan needed even industrial plants classed as “ primary war facilities ” to hasten its economic recovery. General McCoy said the United States was convinced that there should be no ceiling on Japanese production for peaceful purposes. “The problem facing us is not one of limitation of Japan’s peaceful industries, but of reviving these industries to provide the people’s barest wants.” General McCoy recalled to the commission that the Potsdam Declaration said reparations from Japan should “be in a form which would not impair the ability of the Japanese people to support themselves.” He said all of Japan's “ specialised war-making facilities ” had been destroyed. He added that' Japanese economy could be made to bear additional economic burdens beyond those directly relating to meeting its own requirements only by prolonging or increasing the staggering costs borne bj r the American taxpayer. Because of disagreement over the share each country should receive, the Far Eastern Commission, which comprises Allies who fought Japan, has never worked out the schedule of final reparations. Pending agreement on final reparations, the'United States, as principal occupying Power, has been making advance deliveries to the Philippines China, the Netherlands, and Britain. To-day’s announcement by the United States means that these advance deliveries must cease. The latest decision marks a full turn of the wheel in United States thinking on Japansee reparations. The original report on the subject was made soon after the war by Mr Edwin Pauley, President Truman’s special representative on the Reparations Commission. Mr Pauley’s report declared that Japan’s industrial capacity wa s considerably more than the country’s peaceful needs, and he recommended reparations on a proportionately heavy scale. Subsequent reports by two missions reduced the volume of industrial equipment considered in excess of Japan’s needs.

The United States policy now is apparently based squarely on the report of the latest mission, which said that Japan’s economy could bear no unnecessary burdens and that Japan could attain a self-supporting condition only if its internal conditions were improved and its foreign trade expanded. It -is pointed out that the United States is entitled to take its latest action without reference to the Far Eastern Commission because the directive authorising advance transfers came unilaterally from the United States, which is now merely rescinding its previous decision. Although there is bound to be some opposition to the United States banning of further Japanese reparations, the United States has veto power on the Far Eastern Commission and can insist on its ideas. There is the recognition within the commission. however, that the United States is bearing by far the greatest burden of the occupation of Japan. Since the end of the war the United States has spent 1,000,000.000 dollars providing food and medical supplies to Japan. American economic aid to Japan cost 500,000,000 dollars in 1948, while a further 400,000,000 dollars were spent on actual occupation costs. There is therefore a good deal of sympathy with the United States desire to relieve itself as far as possible of these heavy costs. Although many of the Pacific Allies expected to benefit from the reparations programme, their greatest concern has been to ensure that Japan will never again be able to build up a vast industrial capacity and hence a warmaking potential. For this reason they will closely scan the latest United States decision to halt further removals of Japanese plants as war reparations.