Newly declassified Japanese diplomatic documents showed Friday that the United States in 1969 demanded Japan pay $650 million, worth some ¥234 billion under the exchange rate at that time, to finance unspecified costs related to the 1972 reversion of Okinawa to Japanese sovereignty from U.S. control.
A secret cable dated Oct. 22, 1969, which was sent by Japanese Ambassador to the U.S. Takeso Shimoda a month before the bilateral summit, revealed that Washington strongly pressed Tokyo to make the lump-sum payment, even suggesting it would help Tokyo compile a breakdown of expenditures to gain Diet understanding.
Under an official bilateral pact on the Okinawa reversion, Japan was to shoulder $320 million of the costs. But it remains unknown to this day how much Japan actually paid the United States.
U.S. diplomatic documents have already confirmed that Japan and the United States engaged in negotiations on the reversion costs based on the demanded amount of $650 million.
The confidential cable sent by Shimoda prior to talks between Prime Minister Eisaku Sato and U.S. President Richard Nixon showed that Robert Barnett, deputy assistant secretary of state in charge of financial affairs, told Bunroku Yoshino, minister at the Japanese Embassy, that Tokyo should shoulder the $650 million.
Barnett said the amount had been secretly agreed upon by U.S. Treasury Secretary David Kennedy and Defense Secretary Melvin Laird so it would be conveyed to Tokyo.
Yoshino aired concerns over the payment, saying that if Japan shouldered the expenditures as a lump sum, it would be “tantamount to putting a price tag on Okinawa.”
Yoshino also said the Diet would face questions about the reversion costs and the government would face difficulties providing explanations of the breakdown of the spending, but Barnett said Washington could help Japan explain away the purpose.
He also warned that the bilateral ties would be damaged if the two countries failed to settle the fiscal issue by the time of a summit planned between Sato and Nixon.
The two countries eventually reached an accord on the costs immediately before the summit in November 1969, during which the leaders agreed on the return of Okinawa in 1972.
In December 1969, the vice finance minister for international affairs, Yusuke Kashiwagi and his counterpart at the U.S. Treasury Department, Anthony Jurich, struck a secret pact on the fiscal issue.
The secret accord between Kashiwagi and Jurich said Japan would pay $405 million for purchasing U.S. assets in Okinawa and financing the relocation costs of U.S. bases in the island prefecture, while depositing $60 million into a zero-interest account at a U.S. Federal Reserve Bank.
As for the $320 million in reversion costs Tokyo officially admits to have paid the United States, the Japanese government said $175 million was spent to inherit U.S. assets in Okinawa, $75 million to cover labor costs and $70 million to dismantle the nuclear arsenal deployed to the prefecture.
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