694.001/7–651: Telegram
The Secretary of State to the United States Political Adviser to SCAP (Sebald)
priority
Topad 23. Dulles, Allison, and UK Chargé have today completed delivery July 3 draft Embs FEC countries minus China and USSR and plus Indonesia and Ceylon. Copy being sent Sov Emb today. Draft covered by memo reading as follows:
[Here follows the covering memorandum.]
You will have noticed in Depcirtel 9 July 31 that in accordance Jap Govt suggestion in its Observations of July 22 Italian Treaty [Page 1177] language has been substituted in Art 14 (a) 2(I) so that Allies may now only seize Jap property which on coming into force of treaty was subj their jurisdiction. Exception (iv) will exclude from seizure Jap ships in Allied territorial waters at that precise time. UK has agreed to change, subj only to reservation it may wish propose some amendment this language if judgment expected in two weeks in case now before Brit courts throws in doubt hitherto assumed right of UK Custodian Enemy Property under Art 79 Ital Treaty to liquidate property which was Ital-owned and so was vested in Custodian during war with Italy, but which was transferred by Ital owner to a nonenemy owner before treaty came into effect.
You will also have noticed Art 15 (a) revised in manner which shd largely meet similar Jap desires this Art. Obligation to restore Allied property in Jap at any time between Dec 7, 1941 and Sept 2, 1945 remains but obligation to compensate for lost or damaged property is restricted to property within Jap on Dec 7, 1941.
Fact that Jap assets in neutral and ex-enemy countries to be transferred ICRC under Art 16 do not include categories of assets described in Art 14 (a) 2(I) (ii) through (v) is clarified in second sentence that Art, also in accordance Jap proposal.
Consideration other Jap suggestions not completed but possibility adoption some of them July 20 draft not excluded.
Pls provide Jap Govt immed July 3 text (being June 14 text as revised in accordance Depcirtel 9) and, for info, covering memo quoted above, acting in conjunction Clutton if he desires.