Evening star., 1948-12-10
Po|icyStep Will Speed
Jap Program Despite
Criticism, u. 5. Says
By the Associated Press


by the Asseeiafed Press
State Department officials pre-
dicted today that new American
policy statement will speed the
breakup of Japan's great industrial
combines which bolstered her mill
tary might In World War II.
But ut the same time they fore
saw q Russian propaganda attack
charging that exactly the reverse OF
that goal motivated the policy move.
The Russians have been consistently
critical of American handling of the
Japanese occupation.
The new decision was outlined
yesterday to the 11-nation Far
Eastern Commission which shapes
japanese occupation policy. 1t was
an announcement that the United
States is withdrawing its support
from a detailed plan for "deconcen-
trating' the ownership and man
agement of Japanese industry.
Awkward Handling Charged.
This country itself had laid the
original proposal before the commits
sion In the spring of 1947. Thus the
action amounted to a sharp turn
about, and some authorities said
frankly they regarded the handling
Of the matter as awkward.
The awkwardness apparently re-
suited from a deep split running
through both the military establish
ment and the State Department
over the best way to reorganize
Japan economically and at the same
time avoid hampering japanese re-
covery.
A primary United States objective
now is to make both Germany and
Japan self-supporting and end as
soon as possible the drain on the
United States Treasury for main
tanning their economies.
Gen. Mccoy Explains Move.
In his statement to the commits
sion yesterday Maj. Gen. Frank NC
Coy, the American member, said
that many of the steps laid down in
the original proposal had long since
been taken and that others now ap-
peared to be impractical.
The thing to do, he said, was to
scrap the whole project. This
means that it will be scrapped,
since the United States has pow
erful position on the commission.
Gen. McCoy's statement also
brought out for the first time off,
cially that the United States had
stopped taking part in discussions
of its own proposal year ago this
month. He implied that this had
created confusion as to American
policy both among the commission
members and the japanese people.
U. S. Policy Unchanged.
Therefore, Gen. Mccoy empha-
sized that original American pol
Icy, which called for the "dissolu-
ton of certain japanese combines
and q widening in the distribution
Of the income and ownership of
Japanese industry, was then and
continues to be" a fundamental |
occupation objective.
It was on this reaffirmation of
American support for the first policy
directives given Gen. Macarthur
that State Department officials
based their predictions of a more
vigorous attack on the whole prob
lem of Recommendation" !
Officials said that in the year since
discussion of the American plan was
suspended by the American Govern
ment there had been a great deal
of soul searching" on the part Of
officials here and in Tokyo.
See Jap Recovery Retarded.
Essentially some top authorities
apparently felt that to carry out
a free swinging breakup Of the
Industrial concentration, with all
emphasis on characterization and
decentralization of the japanese
economy, would impose q revolu-
tionary system on the Japanese
which would retard their progress
toward self suff1ciency.
Other groups in both the State
Department and military establish
ment evidently favor going forward
with the original program on the
ground that in the end it would
produce a more self reliant and
democratic Japan.
The result is what some officials
describe as a compromise which
leaves the whole thing largely in
the hands of Gen. Macarthur.