CAB129-53 — Page 195

Printed for the Cabinet. July 1952 Page 195 of 253

CONFIDENTIAL

C. (52) 229

CABINET OFFICE RECORD COPY

Copy No.76

8th July, 1952.

CABINET

:

JAPANESE PEACE TREATY

DISTRIBUTION OF THE PROCEEDS OF JAPANESE ASSETS IN THE UNITED KINGDOM CONFISCATED UNDER ARTICLE 14

MEMORANDUM BY THE SECRETARY OF STATE FOR FOREIGN AFFAIRS

With the coming into force of the Japanese Peace Treaty on 28th April, Japanese assets in the United Kingdom are (under Article 14) freely at the disposal of Her Majesty's Government. Their total net value is estimated at about £1,250,000, of which probably rather less than £900,000 will be available for distribution within six months.

2. My colleagues will be aware that the last Government decided that the proceeds of these assets after liquidation should be distributed to selected benevolent organisations closely linked with the Services or concerned with the interests of civilian internees. This was to be on the understanding that the money should be used primarily for the benefit of prisoners of war, civilian internees, and their dependents, who must be resident in the United Kingdom at the time of payments; that it was to meet need and hardship (on a broad interpretation of these terms) and was preferably not to be in the form of a continuing grant. The money was therefore to be divided up between various organisations representing the three Services and civilian internees in proportion to the number of each of the Services and the civilians who fell into enemy hands; of the total allocated to the three Services 60 per cent. would be divided between the Royal Navy, the Army and the Royal Air Force for use in proportion to the sum of prisoners of war from each Service in all theatres of war. The remaining 40 per cent., after a suitable sum had been allocated to the King's Fund administered by the Ministry of Pensions, would be divided between other welfare organisations whose work covered all three Services.

3. This decision was announced by Mr. Herbert Morrison in reply to a written question on 25th July, 1951. It was endorsed by the President of the Board of Trade when winding up the debate on the Japanese Peace Treaty on 26th Novem- ber, 1951, and by Mr. Nutting on 3rd March, in a written answer to a Parliamentary Question by Major Tufton Beamish.

4. On reflection, however, I consider that the late Government's decision was wrong for two reasons. First, it included as possible beneficiaries all ex- prisoners of war from whatever theatre; secondly, it provided for distribution by a number of benevolent societies to cover only certain selected cases in need or hardship.

5. As for the first point, although the decision has been announced, and it would therefore be inconvenient to reverse it, there is no logical reason for it. Only if assets from other former enemies were to be included in the total for distribution would it be a defensible proposition to distribute the proceeds to prisoners of war from all theatres.

6. With regard to the second point, distribution by benevolent associations will be necessarily lengthy and complicated, since none of the ex-Service organisa- tions covers the whole field. The process of their distribution by so complicated

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