Press translations [Japan]. Economic Series 0126, 1946-01-04.

ITEM 1 Government Economic Measures - How They Are Working Out - Suggested Improvements - Nippon Sangyo Keizai (TOKYO) 1 Jan 46. Translator: T. Ukai.

• 1.Finance: It is dubious whether it will be possible to achieve financial readjustment and reconstruction of a healthy finance only thru the wartime profits tax and property tax, which are estimated at about 100,000,000,000 yen. Also dubious is the possibility of overcoming the progress of the present inflationary tendency. Even if a revenue of 100,000,000,000 yen were possible, when we see the flood of notes issued by the Bank of JAPAN, the effect of taxation on checking inflation will probably be small.
• 2.Currency: The circulation of notes of the Bank of JAPAN at the termination of the war amounted to 30,200,000,000 yen, and increased to about 50,000,000,000 yen on 15 December. At the end of the year this came very near to 56,000,000,000 yen. On the other hand, deposits in banks in TOKYO have been decreasing since November 1945 because the people suffering under the very high prices of the black market, are drawing out their money in order to get commodities of daily use, as well as food. It cannot be overlooked that the levying of the property tax and wartime profits tax also plays a role in this tendency, for there are people who prefer to change their money into actual articles. The Ministry of Finance made known a special favorable treatment in the taxing of savings deposits, but this is ineffective in checking inflation. At present, wartime profiteers, landlords, agrarian producers, as well as those who escaped war damages, are more favorably situated than those that live on salaried incomes. The one unique

•   ECONOMIC SERIES: 126 (Continued) ITEM 1 (Continued) policy of the Government to meet this present state of things is to forbid to a certain extent the withdrawal of money from banks. In doing this the Government should not wait for the issuance of new yen. Of course, this does not mean a prohibition, but it should be confined to some limited amount. Thus, the people would have a more equal chance to obtain actual goods, and the increased circulation of notes of the Bank of JAPAN could be checked. Loans of industrial funds and capital should be permitted only to those who would convent actively to productive peace time industries.
• 3.Commodity Prices: The Government has failed to establish a firm price system on commodities, while it has removed the outward frame of price control. The prices of scarce articles have, as a result of the black market, jumped so very high that they are as much as ten or 100 times dearer than they had been. The Government made a mistake in removing controls because it thought that commodity prices would be stabilized by some "unknown hand" after they were restored to free market conditions. That the abolition of price control could not really restore the standard of production is obvious. The absolute quantity of commodities was not restored. The advance of inflation does not make prices of commodities come near to product on costs, but it helped brokers make a thriving business in the black markets. To reduce commodity prices, the wholesale destruction of the black market and driving away of these brokers is necessary. The Government must establish standard commodity prices appropriate to the present economic conditions, setting in order again the distribution system. Control of commodity prices will be necessary until the absolute amount of production increases, and the system must be one that is based on economic liberty and not based on the bureaucratic dogmas degenerating, in the long run, to control for control's sake.
• 4.Indemnification for Military Enterprises Must be Checked: The reconstruction of national economy aims at restoring productive capacity. The Government intends to indemnify military enterprises by giving national guarantees of 46,000,000,000 yen. The Government thus intends to establish the basis of thriving peace industries, encouraging wide circulation of commodities of daily use. But this simply means an inflationary policy and makes a strong contrast to the deflationary principles that the Government declares it favors. Moreover, Capitalists and industrialists are continuing to sabotage in silence. They are not producing. This productive sabotage consists in avoidance of paying taxes on their wartime profitant property, and at the same time trying to get the Government-promised guarantee-pay. As the indemnification program really checks productive activities and means a vast expense out of the national treasury and a great burden on national finance, this policy must be controled as much as possible.
• 5.Measures for Food: First of all in this category comes the rice delivery by farmers to the Government Boards and bureaus of the Government must lead the way and stop what is called special distributions and large-scale purchases, A perfect distribution organ must be set up in the very near future which will speed up crop deliveries to the Government.

ITEM 2 Manufacture of Railway Cars Making Little Headway - Nippon Sangyo Keizai - 3 Jan 46. Translator: T, Mitsuhashi.

ITEM 3 Urgent Supply of Rice to TOKYO City and a Supply of Rice from NAGNO-Ken - Nippon Sangyo Keizai - 3 Jan 46. Translator: T. Mitsubishi.