Press translations [Japan]. Economic Series 0051, 1945-12-02.

Full Translation:

Recovery Of Rubber Industry

54,000 Tons of Raw Rubber Needed

The Commerce and Industry Ministry, investigating the nature and scope of the future Japanese rubber industry, is of the opinion that it is necessary to import at least 54,000 tons of raw rubber each year. During the war stress was put upon the rubber industry for military purposes, and in 1938 the annual consumption of raw rubber for military use was 5,000 tons. In 1939 this was increased to 30,000 tons. Meanwhile, during the same period the consumption of raw rubber for civilian use decreased from 26,500 tons to 12,000 tons. The average annual consumption during the period from 1931 to 1937, was 60,000 tons, out of which civilian use amounted to 53,500 tons.

In peacetime JAPAN, such rubber products as farming and fishing tools, tires, medical instruments, sporting goods, belts, hoses, railway train equipment, and goods necessary for rehabilitation purposes are needed at moderate prices. Export of rubber products is also expected to flourish because the present production machinery is strong and recovery from war damage should be easy.

CHINA, MANCHURIA, and South ASIA, which were importers of Japanese goods in pre-war days, will demand these products the same as ever, and if we supply only such low-priced consumer goods as rubber-soled tabi, there will be no competition with the high quality goods of the world powers.

For the rubber industry to consume 54,000 tons of raw rubber, there are necessary 570,000 piculs of raw cotton, 131,000,000 kilowatt hours of electric power, 320,000 tons of coal and 80,000 laborers (the same number as at the time of the termination of war). We want 45,000 tons of raw rubber for internal use (691,000,000 yen, estimated at the present fixed price), and an export of 9,000 tons of goods (estimated at 176,000,000 yen), the price of importing raw rubber will be equivalent to the price of exporting goods. In order for JAPAN to import the necessary raw materials necessary to restore her rubber industry to its pre-war state, the good will of the Allies is necessary.

The actual amount of rubber now in stock is 28,000 tons, including 12,000 tons at the KOEKIEI-Trading company and the Material Control Company, as well as in army and navy stock piles. Productive plants number. 572 (monthly consumption of raw rubber 5,248 tons), of which escaped air raids (monthly consumption 3,008 tons). But no more than 2,900 tone monthly are available for immediate use, and even if a speedy recovering of the plants is made the restoration of consumption

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to 54,000 tons per year will not be possible before next March.

The following articles, together with the rubber required in tons, are now being considered for production: rubber-soled tabi 340; rubber boots 379; rubber-cloth shoes motor car tires and tubes 781; bicycle tires and tubes 1,833; tricycle tires and tubes 2l4; belts 273; hoses 180; industrial goods 260; latex 47; farming implements 50; sporting articles 39; rubber-coated cloth 325; toys 64; and medical intruments 70.

Full Translation:

The prefectural authorities of AOMORI-ken will encourage the increased production of the famous AOMORI apples in order to use them as collateral for the import of food and other products from abroad. The production of apples this year was 1,500,000 boxes, considerably less than an average yearly output of 10,000,000 boxes, owing to adverse conditions, including curtailed acreage.

A production goal of 50 boxes per tan has been set for next year in order to achieve the desired output ever on the curtailed acreage of 18,900 chobu. Workers for the apple orchards will be recruited from among demobilized servicemen.

Summary:

The NIPPON Steel Company had the reputation of being the greatest iron and steel trust in JAPAN. This company alone produced 80 per cent of the steel for all the rolled bars made in JAPAN, and it had 110,000 office and factory employees when the war ended. Since then, operation has been stopped due to the inability to import materials and the decreased domestic production of raw materials. Today the company, proud of its magnificent equipment, can produce only a small fraction of its former output. This is the reason given for dissolving the company into four independent factories. Even if coal production should be restored it is impossible for the company to produce one fifth of the amount it formerly turned out because there is a scarcity of both hard coal and of good iron ore in JAPAN.

The company itself thinks that is dissolution will be postponed for the time being but that efforts will be made to reform its structure, cutting down the staff and workers. A begining in this direction was made when 25 directors in the main office agreed to retire.

According to the proposal to charge the company's constitution, approved at the 24 November meeting of stockholders, there will be only one vice-president rather than two, twelve directors instead of twenty and three auditors instead of five. Final settlement of there questions, however, will come only after war reparation's have been decided.

Factory organization has also begun to be curtailed. Each factory of the company, that is, YAWATA, WANISHI, KAMAISHI, HIROHATA and FUJI, simplified its structure and reduced its personnel. The administration section, which had been under the chief engineers or the general administration department, will be under the control of the factory manager, and the NIIGATA office has been abolished. The labor force has been reduced to one-fourth. When the war ended, there were 112,000

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Japanese employees, consisting of l6,000 office workers and 96,000 laborers. In addition, there were 4,500 Korean laborers. The first to be dismissed were the mobilized student workers, and other patriotic emergency workers, as well as workers who volunteered for dismissal. Second were all women, except those who would find it impossible to exist if dismissed, as well as men who were applicants for retirement, superannuated or idle. As a result, the personnel was reduced to one-third its wartime, strength. Retired and dismissed employees amount to 1,000 office workers and 65,000 laborers, and applications for dismissal have since increased.

There are 5,000 office workers not yet demobilized or repatriated and 36,500 more in MALAYA, BORNEO and KOREA whose status is not yet clear.

Now that the company's structure and personnel have been reduced, steps must be taken to reduce production.

Finance Minister SHIBUSAWA delivered a speech on national finance. At the house meeting on the budget at the Imperial Diet on 3 December. His speech may be summarized as follows:

"During the long war the public finance of JAPAN depended mainly upon government bonds accepted by the note-issuing Bank of JAPAN. The ratio of the ordinary revenues from taxes and government monopoly industries to the whole government expenditure was very low. This is the cause of all present financial ills. If there is no change in our financial system, the nation will be driven to inflation.

"In making up next year's budget, we are faced with many unfavorable factors. The revenue for next year is estimated at 12 billion yen, or a decrease of 5.7 billion yen from that of this year. This is mainly due to the decrease in the tax and monopoly income caused by the war. Second, in spite of all efforts for the curtailment of expenditures, government expenditure for next year will reach 13.6 billion yen, and a deficit of 1.6 billion yen. Finally, during the next fiscal year we must add several new budgetary items, some of them of tremendous significance. These are funds for (a) reconstruction; (b) relieving the food shortage; (c) rehabilitation of repatriates; (d) social insurance to be set up in place of the present pension systems; (e) compensation for the oversea properties to be confiscated by the Allied Authorities; (f) reparations.

It is difficult to estimate the total value of the national wealth. One may estimate it at 400 yen or 500 billion yen. A considerable portion of this is made up of government bonds and other bonds without collateral assets. The people hold abundant funds of money and money-convertible securities in spite of the impoverished economy of the nation. It is this very fact which directly threatens to increase inflation. Therefore, the Government is contemplating placing national finance on a sound basis by absorbing a great portion of the money and convertible securities through a war profit tax and a property tax, the revenue from which is estimated to reach 100 billion yen. These new taxes will stimulate the democratization of national economy, and at the same time will give the wealthy classes an opportunity to contribute their wealth for the rehabilitation of the fatherland. To carry into execution these tremendously important taxes, every precaution will be taken. For instance, special committees, composed of civilians, will be used for the evaluation of properties. At the same time, every precaution will be taken that no single kind of property will escape taxation. Otherwise, the new taxes would stimulate

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conversion of money into material properties. Currency will be caught up by the exchanging for the new bank notes, which are now under preparation.

"Furthermore, together with the above noted steps, we are considering an increase in ordinary revenue by a revision of the general tax laws. This will he alone by the increase of taxes upon real estate, dividends, and interest. Also excise taxes on wine and the price of tohacco will he raised.

In view of our great financial difficulties, some people argue for the cancellation of many public obligations. They argue that the Government should postpone the payment of interest on bonds or abrogate the compensation to munition industries and war insurance benefits. Certainly this is a possible remedy. But in view of the complicated financial network in the business world, too arbitrary action is dangerous. Our principle is therefore, to fulfill our public commitments with full precautions, and at the same time, freeze accounts at the Bank of JAPAN, to prevent excessive circulation of money. Those frozen accounts will be released when necessary.

On the whole, the national finance is facing an epoch of a determined reform. The problems of black market, rice distribution, wages and salaries are all related to the problems of reconversion of industry, transportation as well as exportation and reparation. All of them in turn are connected with the financial instability. The fate of new JAPAM is closely linked to the financial equilibrium of the Government.

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