From 1945 through 1947, the Allied Powers dealt with Japan as a defeated and potentially dangerous enemy. The official summation of post-surrender policy toward Japan, published by the U.S. State Department on September 6, 1945, declared it the primary Allied aim “to insure that Japan will not again become a menace to the United States or to the peace and security of the world.” To this end, Japan was to be occupied by Allied forces under a supreme commander. Though this supreme commander would use Japanese institutions, including the emperor, to carry out his directives, he was empowered to change these institutions or their personnel at will. His specific instructions included seeing to it that Japan retained no military and paramilitary forces and that, while freedom of association was encouraged, “ultranationalistic and militaristic organizations” were forbidden. Japan’s military industries were dismantled, labour unions were established, and large industrial or agricultural holdings were broken up or redistributed. In short, Japan was to be disarmed, demilitarized, and democratized.

Nominally, the supreme commander acted for all the Allied Powers. In fact, the United States determined occupation policy. The document issued by the State Department on September 6, 1945, asserted flatly:

The occupation forces will be under the command of a Supreme Commander designated by the United States. Although every effort will be made, by consultation and by constitution of appropriate advisory bodies, to establish policies for the conduct of the occupation and the control of Japan which will satisfy the principal Allied powers, in the event of any differences of opinion among them, the policies of the United States will govern.

The formation, after the Council of Foreign Ministers Moscow meeting of December 16–27, 1945, of an Allied Council to sit in Tokyo and of an 11-member Far Eastern Commission to sit in Washington produced no change. The Allies’ supreme commander, MacArthur, ruled in Tokyo. Insofar as he took orders at all, they came exclusively from Washington.

In the course of 1947, the objectives both of MacArthur and of the U.S. government began subtly to change. Before that time, the occupation regime concentrated on breaking up Japan’s military potential and on rooting out possible sources of revanchism. Among other things, the supreme commander arranged for transfers of Japanese industrial equipment to some Allied states as advance reparations payments. By the end of 1947, he was concentrating instead on efforts to rebuild the Japanese economy and to prepare Japan as rapidly as possible for resumption of self-government. One reason for this shift in emphasis was undoubtedly the mounting costs of the occupation. As outlays from the U.S. Treasury increased from $108,000,000 in 1945–46 to $294,000,000 in 1946–47 and to $357,000,000 in 1947–48, a growing number of U.S. policy makers began to call for an early end to the occupation. A second reason was the heightening tension between the Western bloc and the Soviet bloc, coupled with improvement in the Communist position in China. Many Americans began to see Japan less as the enemy of 1941–45 than as a potential source of strength within a global anti-Communist front.

On May 3, 1947, MacArthur put into effect a new Japanese constitution, amalgamating U.S. and British forms, and Western-leaning political parties proved able to capture the large majority of the new Diet. Meanwhile, officials in Washington turned their hand to drawing up a tentative peace treaty. As early as July 11, 1947, a preliminary draft was complete. Having experienced frustration in the Council of Foreign Ministers, the U.S. government did not desire to use that forum for working out a Japanese treaty. Though Truman and secretary of state James Byrnes had intended at the time of Potsdam that the council should deal with Far Eastern as well as with European matters, they had not so committed themselves in writing. Consequently, despite Soviet protests, the U.S. government adopted the position that the treaty draft should go instead to the Far Eastern Commission.

At first, this proposal met objections not only from the Soviet Union but also from nations in the Western camp. Australia and New Zealand, perceiving the shift in U.S. policy, feared that they might be left defenseless against a resurgent Japan. Chiang Kai-shek of China had reservations on other counts. The result was that a combination of states temporarily blocked presentation of the draft treaty to the Far Eastern Commission. The U.S. government dealt individually with the non-Communist nations exhibiting doubts about an early Japanese treaty. By October 13, 1949, the State Department had completed a revised draft which took account of many of their objections. On April 6, 1950, U.S. secretary of state Dean Acheson named John Foster Dulles, a leading figure in the opposition Republican Party, as a foreign policy adviser. Soon afterward, he put Dulles in charge of negotiations for the treaty.

Instead of arranging a conference of interested states, Dulles traveled from capital to capital, negotiating changes in the State Department draft, until he possessed a text which a large number of governments had more or less committed themselves to accept. With this done, the United States and Great Britain could jointly invite 52 states to send delegates to a conference in San Francisco. The delegates were simply to accept or reject the draft treaty; they were not to amend it or negotiate changes in it. With the U.S. secretary of state in the chair, Soviet efforts to upset this arrangement were frustrated. The conference convened on September 4, 1951, endorsed the text on September 8. Of the 49 participating governments, only 3—the Soviet Union, Poland, and Czechoslovakia—refused to sign it.

Under the treaty, Japan renounced all claim to Korea, Formosa and the Pescadores, the Kuril Islands, Southern Sakhalin, the Pacific islands that it had held under League of Nations mandate, the Spratly and Paracel islands in the South China Sea, and any portion of Antarctica. Japan agreed that the United States should hold as sole trustee for the United Nations the Ryukyu Islands, the Bonin Islands with adjoining groups, Marcus Island, and Parece Vela. The treaty provided that Japan should refrain from the threat or use of force in relations with other states but also acknowledged “that Japan as a sovereign nation possesses the inherent right of individual or collective self-defense referred to in Article 51 of the Charter of the United Nations and that Japan may voluntarily enter into collective security arrangements.” Though it did not stipulate any particular sums to be paid in reparations, the treaty bound Japan to negotiate with individual Allied states arrangements to compensate them for damage and suffering resulting from the war.