comprehensive character of the British version.[14] They left the question of which government
would represent China—the one on Taiwan or the one in Beijing—for solution by the top level.
Dulles and British foreign secretary Herbert Morrison, with the approval of the British cabinet,
reached an agreement in London on June 12, 1951, that neither China would be invited to sign
the treaty and that Japan would be free to determine which China to make peace with. Japan
would be authorized to sign a similar treaty with any eligible nonsignatory state within three
years after the peace treaty came into force. The two governments sidestepped another knotty
issue by agreeing that Japan would renounce its sovereignty over Formosa, South Sakhalin, and
the Kurile Islands without making any final disposition. By June 14 London and Washington had
agreed on most of the other issues.[15]
When Allison visited Tokyo after the London talks, Yoshida expressed some unhappiness that
Japan would have to decide which China it would sign a treaty with, but he knew the Allies were
badly divided on this issue. He had great faith in the experience and sophistication of the British
and often leaned their way, yet he knew the Americans had the might and the money that Japan
needed more. Allison got Yoshida to issue two soothing statements regarding Japanese policy on
shipbuilding and fisheries in order to calm the fears of the British and other Allies. Yoshida was
also complaisant about another concession: he agreed to secure legislation that would enable
Japanese assets in former neutral and enemy countries to be used to make a fund for
compensating Allied prisoners of war the Japanese had held.[16]
Yoshida had asked Dulles earlier to put a clause in the draft treaty providing that the signatories
would carry out the provision of the Potsdam Declaration obligating the Allies to permit
Japanese military forces to return to their homes to lead peaceful lives. Dulles agreed. According
to Japanese data, some 376,000 military personnel presumed to have been captured by the
Soviets were still unaccounted for; Japanese and American experts estimate that most of them
died in captivity. The Soviet Union returned about 1,000 Japanese prisoners of war in 1956,
when the two countries resumed diplomatic relations. The Japanese are
― 299 ―
still bitter toward the Soviet Union because of its uncooperative attitude in refusing to return or
account for prisoners and the bad treatment many of them suffered.[17]
The most significant and abrasive of the last-minute issues was the reparations article, which
stirred resentment in the Philippines and several other badly damaged Asian nations. Dulles
pushed the Japanese hard, and they finally consented in August 1951 to negotiate with nations
they had occupied and damaged, "with a view to assisting to compensate those countries for the
cost of repairing the damage done, by making available the services of the Japanese people in
production, salvaging and other work." The Allied power involved would supply any necessary
raw materials. Japan later made reparations agreements with most of the nations it had occupied
during the war. These reparations arrangements, which turned out to be a good deal for Japan
and for the recipient nations, consisted of various forms of assistance: goods and services (as
provided by the treaty), technical assistance, and long-term credits. Total payments by Japan
were $1.15 billion in reparations, mostly in the form of capital goods manufactured in Japan
from raw materials provided by the recipient nations. In addition, Japan extended $707 million in
loans, paying the largest amounts to the Philippines, Indonesia, and Burma. One result was that
Japanese products got a foothold in various parts of Southeast Asia, thereby helping the Japanese
economy and at the same time mitigating some of the wartime resentment against Japan.[18]
In the summer of 1951 the Americans proposed several changes in the draft security treaty
initialed on February 11. The Japanese did not object. The title of the agreement was changed