MEMO FOR RECORD: (SCAPIN-800)
1. a. C. L. O. Memorandum No. 649 (a. 1) dated 12 February 1946, subject: "Transactions of Property in Japan Owned or Controlled by Persons Outside of Japan" requests that trust companies in Japan be permitted to pay to beneficiaries in Japan allowances which are the result of previous trust agreements entered into between persons outside of Japan and such trust companies in Japan.
b. Memorandum for the Imperial Japanese Government, this Headquarters, file AG 130 (22 Sep 45)ESS, dated 22 September 1945, subject: "Control of Financial Transactions" prohibits without the prior permission of this Headquarters all transactions of property in Japan which since 7 December 1941 has been owned or controlled by any person outside of Japan. The external assets of Japan will not be changed by permitting payments in Japan in yen by Japanese trust companies between persons outside of Japan and trust companies in Japan. Inasmuch as such trust agreements were entered into for the purpose of effecting the specific payments now being authorized, it is not considered that the claims that foreign offices or other foreign claimants may have upon Japan are jeopardized by this authorization.
2. a. C. L. O. M. No. 649 (2. 1) also requests permission for branch offices or agencies in Japan of companies with head offices outside of Japan to borrow funds from financial institutions in Japan or to dispose of property held in Japan in order to defray expenses and liabilities. Reference is also made to Memorandum, this Headquarters, file AG 386 (14 November 1945) ESS/ FI, dated 14 November 1945, subject: "Transactions of Property in Japan Owned or Controlled by Persons Outside of Japan" which permits branches or agencies in Japan of Concerns with head offices abroad to pay wages, taxes and any expense incurred in maintaining and preserving the property of the branch or agency.
b. This request is not approved as it is considered that borrowing funds from financial institutions or disposing of any property held in Japan in order to defray expenses and liabilities would impair and/ or lower the assets in Japan of such branches or agencies. It is considered that the assets of such branches or agencies should be kept intact as much as possible in view of the possible claims being presented against such branches or agencies at a later date by offices or agencies outside of Japan.
3. This is considered an administrative matter. This directive requires no surveillance by the Eighth Army.
4. Concurrences not necessary.
C. F. T.