Dear Mr. MacNamara,
With reference to previous correspondence† concerning financial arrangements for the movement of persons of Japanese origin from Canada to Japan, I am now enclosing herewith a copy of Teletype WA-611 of yesterday's date. You will note from this that, contrary to our understanding, no message has yet gone from Washington to the Supreme Commander with regard to the financial provisions.

The teletype which I am enclosing raises a number of points on which the United States' authorities would apparently like to have additional information. It would appear that one of the factors that is probably causing them some concern is that, under the arrangements we propose, repatriates from Canada will have a distinctly better arrangement than the persons who are being sent from the United States. However, this would be the case whether they were required to take all their assets with them at the time of departure or whether they were allowed to leave part of the value on deposit in Canada.

So far as the question raised in Paragraph 3 of the teletype is concerned, it would seem that Paragraphs 6(1) (b) and 6(2) of P.C. 7355 of December 15th provide a fairly adequate answer. I do not quite know why they have got so involved over the question of appreciation or depreciation of property left with the Custodian, since the Order clearly indicates that what the Custodian is to do is simply sell property and transmit the proceeds. No question of advance valuation or of the issuance of a yen receipt based on such an advance valuation arises.

So far as Paragraph 4 is concerned, I assume there is some danger that yen receipts might be lost by accident or through gambling, as is suggested. In the case of loss through accident, presumably there could be some means of having the receipts numbered and duplicates issued under proper precautionary conditions. Loss by gambling would hardly seem to be a concern of ours. If it would help any, presumably we could, as suggested, cable ahead a statement of the amounts to the credit of each individual person, but I think it would still be desirable for the Japanese themselves to hold some statement in evidence of the assets they left behind.

I am a little surprised at the suggestion that one of the concerns of the United States' authorities is to prevent the Japanese having assets in Canada which would be available to them should they be permitted at any time to re-enter Canada or should their Canadian-born children be allowed to return. It would seem to be a question entirely for decision by the Canadian authorities at a later date whether or not any of the Japanese were to be allowed to return and it is a little difficult to see in what respect the United States authorities are affected. I can only assume that they feel that any concessions that are made by us with regard to the retention of tide to assets in Canada will affect the provisions that they will have to make in the United States.

I am sending copies of the teletype to Mr. Turk of the Foreign Exchange Control Board and to Mr. Hodgkin of the Department of Finance. I shall appreciate it if you could give me your views as to the reply that should be sent to Washington.

Yours sincerely,
[N. A. ROBERTSON]

[PIECE JOINTE/ENCLOSURE]
L'ambassadeur aux États-Unis au secrétaire d'état aux Affaires extérieures
Ambassador in United States to Secretary of State for External Affairs

TELEGRAM WA-611

Washington, February 4, 1946

My WA-490, January 28th,† repatriation of Japanese from Canada to Japan, financial arrangements.

1. On receipt of telephone information this morning from State Department that the message to the Supreme Commander has not, repeat not, been despatched I arranged for a representative of the Embassy to see the State Department officials concerned to enquire the reason for the delay. A long meeting was held this afternoon with State Department officials in the Financial Section and it was learned that it was the State Department and not Treasury which has held up the despatch of the message.

2. State Department objection was that this procedure might contravene the policy which they are endeavouring to carry out that there will be no Japanese in Japan with any rights, property or financial, in foreign countries.

They therefore wondered whether our proposed procedure would be in essence an exception, and they would like information on the status of the property which the Japanese would leave in Canada. This divides itself into two problems:

(a) Cash or liquid assets, and
(b) Assets as yet undisposed of.

3. I would appreciate any information you can supply as to the actual procedure which will be followed in respect to both types of assets. For example, in respect to (b) will the title vest in the Custodian and, if so, how is the property to be valued. Taking as a practical case a farm, if it is valued and a yen non-negotiable receipt is issued, then the farm may either increase or decrease in value, with the result that the Canadian authorities may have a profit or may have to stand a loss.

4. The question of receipts generally was also discussed and the State Department officials seemed to be coming around to the view that, as receipts might be lost or gambled, would it not be better to merely cable the authorities in Japan a list of the individuals and the amount of credit in yen on which they could draw. This amount would, of course, be the same amount in each individual case, as would be shown if the negotiable receipts were issued. From this point the discussion developed that if the Japanese would gain no benefit in respect to their property left in Canada by reason of appreciation in value or change in the exchange rate should the whole amount to their credit not be cabled. They could then draw any amount they desired leaving the balance as a credit in Japan. This thought again arises from the desire of the American authorities to prevent Japanese in Japan having assets in Canada or the United States which would be available to them should they be permitted at any time to re-enter either of these countries, or should their American or Canadian-born children return.

5. From the discussion you will appreciate that this matter is far from being settled and it is difficult for me to press the matter as a final decision is necessary only in respect to the repatriates of Canada, because the repatriates from the United States can still only take a fixed amount of credit irrespective of how much property they own.