Press translations [Japan]. Economic Series 0246, 1946-02-02.

Full Translation:

In view of the food situation, TOKYO-TO (Metropolitan Civil Government) has decided to enforce a newly revised system of additional ration of rice for factory workers in the metropolis, effective 1 February.

In the present revision, stress is laid on the stability of public living basic industries and their subsidiary industries, and industries of collateral goods. Such industries as printing and monopoly businesses were emitted from the existing 13 nominated industries, and 24 varieties [illegible]industries have been fixed provided they are restricted to such operations as apply under the Factory Act. According to the now system there are two types, one for heavy workers (HEI Class) an additional ration of 140 grams of rice (1 GO) per head a day, and another for light workers allowing 70 grams (5 SHAKU). The labor division of The Public Living Bureau, MINTSEIKYOKU will take charge of this business. Those factories which cone under the 24 newly fixed industries mast report the typo of business and the number of workers to the labor administration section (ROSEIKA) of the Labor Division (KINROBU) of TOKYO-TO with application forms furnished a t the labor exchange.

In fear of the recurrence of such a case as the ITABASHI incident which caused, trouble with unidentified materials, it has been decided that if there is a change in the number of workers or a suspension of factor y operation, the concern must report to the authorities to that effect without delay so that measures may be taken for stoppage, reduction, or return of the additional rice ration.

The 24 eligible industries are as follows:

Polling stock industries (parts manufacturing and repair worst include

Iron industry

Stool industry

Metal refining

Forging

Roiling mill (Restricted to heavy work)

Foundry

Ship-building

Ship repairing

Automobile industry (parts manufacturing and repair work included)

Bicycle industry (parts manufacturing included)

Motor manufacturing

Chemical fertilizer manufacturing

Agricultural inclement manufacturing

Manufacturing of agricultural chemicals

Hide and skin Industry

Transportation (railways, not including government railway; bus, not including hired bus)

Cement Manufacturing industry

ECONOMIC SERIES: 246 (Continued)

ITEM 1 (Continued)

Gas, water and electric supply business

Limits and briquette manufacturing; industry

Saw-mills

Veneer board manufacturing industry

Electric bulb manufacturing industry

Press (restricted to those works separating night and day).

Full Translation:

The Government has decided on the speedy disposal of Imperial property in view of the current turbulent political situation and also the levying of the Wartime Income Tax and Property Tax. At 1500 30 January MATSH[illegible]AIEA, Minister of the Imperial [illegible]usehold, visited SHIBUZAWA, Minister of Finance at the Finance Ministry, and had a talk with him over the problem of the property of the Imperial Household. It is presumed that the contents of the conversation were relate d to the disposal of the Imperial Household property, and probably the exchange of concrete views on this problem was made on that occasion.

The property of the Imperial Household (art objects, jewels, and ingots of gold and silver not included.) was estimated at about 1,500,000,000 yen according to the publication of Allied Headquarters on 30 October. The above figure is only on approximate amount, and it was directed by Allied Headquarters that the Japanese Government should make a more accurate investigation of this matter. Farther, on 20 November a directive, ordering the blockade of the property of the Imperial Household, was given to the Government. Also on 25 November it was clarified by Allied Headquarters that even Imperial property should be the object of the Wartime Income Tax and the Property Tax. This is a radical innovation to the present Constitition and its subordinate regulations authorizing the Emperor and the Imperial Family to be immune from the duty of tax-paying. As a result it was thought that a fundamental reformation concerning the Imperial property was inevitable. If the Imperial Family pays the property tax and further chares the duty of paying taxes with ordinary people, the readjustment of this property will be neccesary. From the standpoint of democratization it is not appropriate for the Imperial Family to monopolize such an enormous amount of wealth as 1,500,000,000 yen. We hear such opinion from various quarters. Such being the case, the disposal, of the Imperial property is decisive.

It is not yet clear as to what method is to be taken with respect to its disposal. It is a matter to be decided by deliberation between the Government and the Imperial Household. But judging from the contents of the property, the items that will fall under the category of disposal are first of all the Imperial estates and forests. It is predicted that a considerable amount will be disposed of. The point of discussion between the Government and the Imperial Household is in the amount of the property to be disposed of, and its result will save a grave influence upon the reformation of the Imperial Household. As for the technical method of disposal which will be the second step, it is doubtful whether the estates and forests will be sold to the people by the mediation of the Government or whether they will be sold directly to the peoples. The disposal of the Imperial property and the taxation upon the Imperial Family, have a deep connection, with Article 21 of the Constitution, which imposes the duty of tax-payment only upon the people, the supplementary Article 8of the Imperial House Law, and Article 21 of the Imperial Property Law. Henceforward, the future aspect of this problem is worthy of notice.

- 2 -

ECONOMIC SERIES: 246 (Continued)

Summary:

The tightness of money is pointed out by capitalist as the main reason for the recent poor production situation. People call it "Sabotage in production" by capitalists, and it is true that the funds essential for industrial activities are so scarce that most corporations are now placed in a strained situation, and are as a loss to find funds even for personnel expenditures. Unless this financial tightness is removed, the much discussed speedy reconversion from war-time into peace time industry, and the resumption of production by factories will not be realized. In order to ascertain whether or not capitalists are earnestly contemplating concrete measures to meet these difficulties, we have interviewed the JAPAN Mining Company (NIPPON KOGYO KAISHA) and the KAYABA Industrial Company (SANGYO KAISHA). Opinions of financial circles and the Industrial Bank of JAPAN are also revealed.

NIPPON Mining Company: As opposed to such mining corporations as MITSUI, MITSTUBUSHI, and SUMITOMO which are now engaged in coal production, the NIPPON Mining Company was during the war, and is at present, conducting only metal ore mining, and is now in most acute financial difficulties. Present production is only 10 percent of that during the war, and normal operation will not be restored until October. "In the preset situation, the company will come to bankruptcy," stated President MIYAKE speaking of his corporation. According to the president, the company, as an emergency measure plans to place asset s in foreign territories valued at over 500 million yen under a separate account, and at the same time is planning to realize the rational development program, and the renovation of three major refineries under its management.

Unless draft measures to recover financial stability by enacting curtailments in structure and capitalization are taken the corporation will not tide over the difficulties.

KAYABA Industrial Company: The corporation in order to tide over strained financial difficulties reduced the number of employees from 20,000 to 2,000, discharged officials connected with the army, and is collecting unpaid accounts. The company, which is manufacturing bicycles, flour milling machines, air pumps for bicycles will re[illegible]ch maximum production of these products after three months. To get over those throe months, the company decided to curtail all expenditures and pay only the lowest possible salaries to employees regardless of their r[illegible]k or post. Every employee has been paid 600 yen m an average, subject of difference according to individual family circumstances.

Financial Circle: Opinions in financial circle s in connection with the financial tightness are summarized ac follows: The firs t problem is reparations: Almost all equipment and plants were converted into war time industries during the war. But: now that the war is over, they are mostly reconverted to civilian industry. There are many difficulties to solve in this respect. They include problems of technique, moderate reduction of excessively expanded accomodations, repairing of war stricken accomodations and equipment. These organizations during the war received large amounts of funds from banking organizations, but the advancement of funds was suspended with the end of war. Another grave difficulty came when Ambassador PAULEY’S interim report on the reparation policy toward JAPAN was released. According to Ambassador PAULEY'S announcement, equipment and plant s to be transferred are not few and many industrialists, in anticipation of future developments of the reparations program, are afraid to resume the former function of activities by their factori[illegible]Banking organizations, too, are reluctant to provide funds for such industrialists.

- 3 -

ECONOMIC SERIES: 246 (Continued)

ITEM 3 (Continued)

Though the Government promises compensation mounting to several thousand million yen and which these industrialist s are expecting with ke[illegible]n interest, the compensation by the Government will not be realized until a concrete decision on reoperations has been reached.

To make the matter worse, the aggravating inflation booms, and shortage of coal are obstructing resumption of industrial activities, regardless of whether these compensations will be abolished or not. It is premature to expect that factories will resume their activities as soon as compensation has been paid. It is necessary to readjust the financial relationship between industry and finance, which has been brought about since the war.

In this connection, a plan to establish the Renovation Banking Company (FUK[illegible]O KINYU KARISE.) is now much discussed. The projected corporation, which will not deal with usual business, will play the role of a financial readjustment organization until the liquidation for Governmental co pensations has been completed. Others insist that such an organization should not be established and on the other hard an opinion advocating the abolition of special banks is current. Though it is generally believe d that the materialization of the projected corporation will be difficult, many people in financial circles support the project. They advocate the establishment of a civilian renovation banking organization, if the Government organization is not established. Some quarters in financial circles plan to accomodate special account s in the present banks, which handle [illegible]ll accounts with former munitions industries. This project aims at the acceleration of industrial activities, by getting rid of the yoke of munitions finance.

What the banking authorities think of the financial crisis of industrial corporations is manifested in the following views releaser by Director [illegible]KLYAMA of the Industrial Bank of JAPAN: "Banks, from the national standpoint, admit the necessity of accomodating funds to industrial corporations, but in the present situation, banks cannot accomadate so much as industrialist s desire." "The amount of deposits in ordinary banks are on the decline, while the collection of loans is expected to be very difficult." According to the director, it would be difficult for banks to advance funds to manufacturers of their own accord, until concrete programs for reparations future prospect for the supply of raw materials, and measures for industrial recover y have become clear. What industrial corporations require most at present are not funds for production, but funds to pay their employees wages and allowances. Therefore banks refrain from advancing funds to corporations whoso foundation is not stable.

Director [illegible]also stated that it would be necessary for such corporations to decide themselves which should be dissolve d and which should be left, after keeping close contact among themselves. These organizations should greatly assist the reorganization of industries. He also suggested that the highest executives of such corporations should decide whether or not their corporations should continue operations.

DISTRIBUTION "X"

- 4 -