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T Furness, HKD, WH312
HONG KONG: JAPANESE REPARATIONS
1.
Reference....
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14 NOV 1990
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Following the meeting on 18 September about this issue you asked FED in your minute of 19 September to Rodney Cummins to institute inquiries of RAD on a number of points. Mike Cowin, our Research Officer, has delved at length into the archives and I attach copies of two minutes, outlining his findings. I also attach a draft reply to the Hong Kong Reparation Association's letter of 13 September to Lord Caithness.
2. Mr Cowin's findings seem to confirm FED's initial suspicions that the Reparation Association's letter is confused on a number of points. There is no evidence of compensation being made available by the Japanese to other SE Asian countries. If the Association have evidence to the contrary perhaps they could supply it, although we would not want to encourage further lengthy correspondence. The Allied Powers did give thought to the question of Japanese currency before the end of hostilities. It seems there were no specific references to Japanese currency in the 1951 Peace Treaty as the issue had been resolved quite rapidly at the end of hostilities. In Hong Kong the yen was "demonetised" on 13 September. Mr Cowin's point 3.3 in his minute of 18 October may also be relevant, although we should not perhaps use this in our reply!
3. I have tried to cover most of the angles in the draft reply. In paragraph 4 of our minute you picked up a reference to a letter from Austin Mitchell MP in February 1989 and the possibility of the Bank of Japan honouring its own wartime notes (as opposed to military currency). I cannot find a reply from the Bank on this but I have included a reference to Imperial currency in the draft reply.
4.
In conclusion we should reiterate our view that there is no basis for a further governmental approach to the Japanese on this issue.
5. You may wish to clear the final reply with Legal Advisers.
25 October 1990
AL7ADK
CODE 18-77
S Bond
Far Eastern Department WH238
270 2957