Japan paid the United States $320 million in costs for the 1972 reversion of Okinawa, according to the government’s long-held official position. But on March 12, following an internal probe, Finance Minister Naoto Kan said that he believes the actual amount paid was much greater.
His ministry acknowledged the existence of a Dec. 2, 1969, memorandum of understanding signed by Japan’s top financial diplomat at the time, Mr. Yusuke Kashiwagi, and his U.S. counterpart, Mr. Anthony Jurich, that Mr. Kan said probably served as the “starting point” for negotiations on clandestine financial deals and functioned as a “secret pact in a broad sense.”
Upon the reversion, the Japanese government had to replace all U.S. currency that was in circulation in Okinawa with yen. Under an arrangment outlined in the memorandum, Japan had to deposit an amount equivalent to the U.S. currency withdrawn from Okinawa — about $103 million — into a zero-interest account of the Federal Reserve Bank of New York, where it would be held for at least 25 years. The Japanese government deposited some $53 million, and the Bank of Japan some $50 million, in the account in 1972, where it was held until 1999. The memorandum also said that Japan would pay a further $405 million in reversion costs (in addition to the publicly acknowledged $320 million).
Mr. Kan speculated that the U.S. at the time was suffering from dollar-drain, and did not want to see Japan earn interest in addition to obtaining the dollars from Okinawa.
The probe underlines nonfeasance on the part of the Finance Ministry. It did not keep a copy of the Kashiwagi-Jurich memorandum — Mr. Kan had to send an official to the U.S. National Archives to get a photocopy of it. In 1998, professor Masaaki Gabe of Okinawa University cited the document as evidence that secret deals may have been made, but the ministry took no action. Even more troubling, officials at the ministry did not convey information about the deals from one generation to another. Only in 1999 did the BOJ withdraw the majority of its funds from the account, after reviewing its overseas assets.
Finance Ministry officials must realize that ministry documents are the property of the Japanese people.
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